Occidental agrees to contingent sale of Anadarko African assets to Total

Occidental has announced that, in connection with its proposal to acquire Anadarko Petroleum, it has entered into a binding agreement to sell Anadarko’s Algeria, Ghana, Mozambique and South Africa assets to Total for $8.8bn. The sale is contingent upon Occidental entering into and completing its proposal to acquire Anadarko.

The assets to be acquired are:

  • 24.5% participating interest and operatorship of blocks 404a and 208 (Hassi Berkine, Ourhoud and El Merk fields) in the Berkine Basin, in which Total already owns 12.25%. These fields represented a gross production of 320,000 boe/d in 2018;
  • 27% participating interest in the Jubilee field and 19% participating interest in the TEN fields. These fields represented a gross production of 143,000b/d in 2018;
  • 26.5% participating interest and operatorship in Area 1 where a 12.8mn t/y LNG project is largely derisked and close to sanction. Area 1 contains more than 60tn cf of gas resources, of which 18tn cf will be developed with the first two-train project which is expected to come into production by 2024; and
  • exploration licences close to Total’s recent Brulpadda discovery.

Overall, these
assets represent around 1.2bn boe of 2P (proved plus probable) reserves, of which 70% is gas, plus 2bn boe of long-term natural gas resources in Mozambique. Equity production in 2018 was 96,000 boe/d and is expected to grow to around 160,000 boe/d by 2025. 

Commenting on what the announcement means for Total, Wood Mackenzie Research Director Nicholas Browne, says: ‘Total will now comfortably be the second largest international oil company (IOC) LNG seller after Shell, and the fourth largest LNG seller after Qatargas, Shell and Petronas.’

He continues: ‘The potential acquisition of Anadarko's stake in Mozambique LNG is representative of Total's ambitious and aggressive expansion of its LNG position. It acquired Engie's LNG business in 2018 and has a plethora of pre-FID opportunities which it is aiming to sanction within the next two years. Total also has stakes in Russia's Arctic LNG-2, Papua LNG, Nigeria's NLNG 7, the Cameron LNG expansion and Tellurian, which is developing the Driftwood project in the US. It is seeking to participate in the Qatari megatrain expansion. Finally, Total recently signed a preliminary contract for LNG from Costa Azul in Mexico, in addition to a further offtake contract from Tellurian.’

‘The company is entering a phase of strong cash flow growth. As such, we still expect Total to keep strict investment criteria in terms of deciding which LNG project goes ahead. Its focus on LNG investment is part of a wider company shift to “cleaner fuels”. The group views its LNG portfolio as long term in nature, as a facilitator for monetising its own molecules, but has also become more active as an LNG trader in recent years.’

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