Total has called off a plan to acquire Occidental Petroleum’s assets in Ghana, which was conditional on completing the acquisition of Occidental’s other assets in Algeria, the French energy company said on Monday.
The deal was part of an US$8.8billion agreement reached between Total and Occidental to take over Anadarko’s assets in Mozambique, Ghana, Algeria, and South Africa. Occidental in 2019 decided to unload those assets as part of a US$38billion deal to buy Anadarko Petroleum that has soured due to the global downturn in fuel demand.
While a deal over the assets in Mozambique has been reached, Total said that an agreement over the assets in Ghana fell through after authorities in Algiers blocked Total’s acquisition of Occidental’s assets in Algeria.
The acquisition of assets in Ghana was conditional upon completion of the Algeria asset sale, Total said. Algeria blocked Occidental’s deal to sell those assets earlier in the month.
Total added that Occidental had informed the company that as part of an understanding with the Algerian authorities, Occidental would not be in a position to sell its interests in Algeria.
“Given the extraordinary market environment and lack of visibility that the group faces… Total has decided not to pursue completing the purchase of Ghana assets,” Total said in a statement.
Occidental shares have been under pressure all year, and it has cut staff and reduced expenses to deal with its high levels of debt taken on during the Anadarko acquisition. Shares rose US$1.26 on Monday, or 9%, to US$15.08 each. Total shares rose 7.4% on Monday.
Credit : Reuters