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EurOil PIPELINES & TRANSPORT EurOil

Total extends LNG contract with Sonatrach

FRANCE FRANCE’S Total and Algeria’s Sonatrach have after Algeria blocked the sale of Occidental
agreed to extend their existing LNG supply part- Petroleum assets previously owned by Anadarko
Total was unable to nership by three years. As a result, Sonatrach will Petroleum to the French company.
acquire Occidental’s continue to provide 2mn tonnes per year (tpy) of Total’s CEO, Patrick Pouyanné, said during
Algerian assets because Algerian LNG to the French market, primarily the company’s first-quarter earnings call in May
of objections from through the import terminal at Fos Cavaou, on that it had been officially informed by Occidental
Algiers. the southern coast of France. that it would not be able to acquire the Algerian
The agreement also includes the sub-charter assets on objections from Algiers. Occidental
of a Total LNG tanker by Sonatrach, the French is now expected to hold onto the assets, unless
company said in a June 25 statement. some new way to overcome Algiers’ opposition
“This agreement is part of the long history to the deal can be found.
of co-operation between Total and Sonatrach,” According to the International Group of LNG
Total’s president of gas, Laurent Vivier, stated. Importers (GIIGNL), Sonatrach and Total have
“Thanks to the quality of our relationship we two agreements dating from 1972 that were due
were able to conclude it in an extremely volatile to expire this year. Under these agreements, Total
market environment. This new contract further has been receiving 1.5mn tpy and 2.5mn tpy on a
enhances the flexibility of Total’s LNG portfolio delivered ex-ship (DES) basis.
and strengthens our position as a major partner The extension thus covers a smaller volume
of Sonatrach.” of LNG, but nonetheless is likely to be a welcome
In its own statement, Sonatrach echoed the development for Sonatrach as Europe increas-
message about the partners’ pre-existing rela- ingly diversifies its sources of gas supply. Indeed,
tionship, and how it had helped them to agree to the Algerian company has a number of contracts
the extension. However, Reuters reported, citing that will soon come up for expiry, including a
sources familiar with the situation, that relations 720,000 tpy deal with Greece’s DEPA, which is
between Sonatrach and Total had deteriorated due to end in 2021. ™
INVESTMENT

Energean revamps Edison deal

EUROPE ITALY’S Edison has agreed to slash the sales As it stands now, Energean will only be
price for its upstream operations by two-thirds acquiring Edison E&P’s assets in Croatia, Egypt,
The sales price is much under a deal with Mediterranean-focused Ener- Italy and the UK. The UK properties comprise
lower and Edison’s gean, both companies reported on June 29. stakes in the Glengorm and Isabella discoveries.
Norwegian assets will Energean struck a deal last year to buy Edison Assuming the deal is completed, Energean
be omitted. E&P for $750mn, in a move to build up its Medi- now projects its capital spending this year to
terranean operations. The deal included interests amount to $760-780mn, lower than its earlier
in fields off the UK and Norway, but Energean forecast of $840mn, despite the company having
then agreed to sell these on to North Sea-focused to take on $25-30mn in extra costs relating to its
Neptune Energy. That agreement fell through in UK North Sea projects.
May, however. Its 2P plus 2C reserves will amount to 800mn
The deal’s price tag has now been lowered barrels of oil equivalent (boe), of which 72% will
to $284mn, the companies said, and will be gas. It has set its pro-forma production guid-
exclude Edison E&P’s Norwegian business, ance for the year at 44,500-51,500 boe per day.
valued at $200mn. Earlier, Energean’s Alge- “Following completion, around 70% of our
rian assets were also omitted, after opposition production will be sold under long-term gas
from Algerian authorities, bringing the price sales agreements that insulate our future reve-
down by a further $155mn. An additional nues against oil price volatility,” Energean CEO
$111mn reduction related to the “macro Mathios Rigas commented. “We will continue to
environment.” own and operate the majority of our asset base,
The outlook for the oil and gas market is now and are well-funded for all of our projects.”
unrecognisable compared to projections made Energean’s main focus is on Israel, where it
before the coronavirus (COVID-19) pandemic, developing several major offshore gas deposits.
which triggered a collapse in prices. As such, The company aims to launch gas production
many acquisitions negotiated prior to the down- there using an 8bn cubic metre per year float-
turn have been revised dramatically or simply ing production storage and offloading (FPSO)
cancelled. vessel. ™

P12 www. NEWSBASE .com Week 26 02•July•2020