Page 14 - AfrOil Week 31

AfrOil INVESTMENT AfrOil

Pertamina said to be in discussions

with Occidental on African assets

GHANA THE US major Occidental Petroleum (Oxy) is French major has already assumed control of
reported to be in talks with Pertamina, Indo- Anadarko’s shares in a Mozambican LNG pro-
nesia’s national oil company (NOC), regarding ject and a South African block. But in May, it
the potential sale of oil and gas assets in Ghana, confirmed that it was abandoning attempts
Algeria and the UAE. to complete negotiations on the Algerian and
Speaking to Bloomberg last week, sources Ghanaian sites.
close to proceedings said that a $4.5bn deal was At the time, it said it did not intend to pursue
in the works for stakes in various assets. They the acquisition of Anadarko’s assets in either
indicated that Pertamina had also expressed an Algeria or Ghana in line with the terms of the
interest in Oxy’s assets in Algeria and Oman, PSA. Indeed, it pointed out that it had not been
though it is not yet known whether these would able to uphold the terms of the agreement, since
be included in the initial deal. the Algerian government had turned down its
The Indonesian company is believed to offer.
be just one of several interested parties in the “The PSA [stipulated] that the sale of the
Ghana and UAE assets. Ghana assets was conditional upon the comple-
Oxy has been seeking to reduce its debt bur- tion of the Algeria assets’ sale,” the French com-
den following the $37bn acquisition last year of pany explained in a statement. “Occidental has
Anadarko Petroleum, another US-based firm. informed Total that, as part of an understanding
It has been trying to sell some assets in the Mid- with the Algerian authorities on the transfer of
dle East, and efforts to sell its Ghanaian and Anadarko’s interests to Occidental, Occidental
Algerian assets to the French super-major Total would not be in a position to sell its interests in
failed earlier in the year. Algeria.”
Total and Oxy had struck a purchase and The agreement signed between Total and
sales agreement (PSA) last year that provided Occidental is due to expire in September 2020.
for the French company to purchase Anadarko’s The two companies have already signed a waiver
African assets, including stakes in licence areas that allows Occidental to begin marketing Ana-
in Mozambique and South Africa, as well as in darko’s Ghanaian assets to other potential pur-
Algeria and Ghana. Under that agreement, the chasers. ™

PERFORMANCE
NNPC head urges local oil operators to

bring production costs down

NIGERIA MELE Kyari, the group managing director of of the companies reporting the highest costs
Nigerian National Petroleum Corp. (NNPC), were Nigerian firms. “When you come to the
indicated last week that he remained concerned indigenous oil companies – and I’ve made an
about the high cost of producing crude oil in the exception of Seplat and, of course, a few others
West African country. – I can share with you that the highest cost of
Speaking during a webinar organised by production that we have in this industry comes
Seplat Petroleum, Kyari noted that some pro- from companies operated by local oil firms,” he
ducers were spending more than $45 on each said. “Unfortunate as it is, that is the reality.”
barrel of oil they extracted. Given that Brent One of the factors driving costs up is the
crude has been trading at about $43 per barrel, widespread practice of hiring expatriate staff,
these production costs are too high, he said. Kyari explained. The best way to resolve this
“Some of our assets are producing oil in problem would be for Nigeria to invest in local
excess of $45 per barrel. It is simply not feasible capacity and training, he said.
in today’s circumstances,” he remarked. So far, he conceded, the country’s workforce
The NNPC chief also pointed out that most still does not have enough skilled oil workers.

P14 www. NEWSBASE .com Week 31 05•August•2020