Chevron expands Africa exposure through Anadarko acquisition
The $50 billion deal will entrench its position in Algeria, Mozambique, Ghana, and South Africa.
U.S-based oil company Chevron announced that it has signed an agreement to acquire Anadarko, an exploration-production company based in Texas that has assets in Algeria, Mozambique, Ghana, and South Africa.
The total cost of the transaction amounts to $50 billion, taking into account a cash and stock deal for $33 billion and Anadarko’s $15 billion debt, which will be assumed by Chevron. The transaction amount will be settled in cash and shares.
Under the transaction, Anadarko shareholders will receive 0.3869 shares of Chevron and $16.25 in cash for each Anadarko share. The acquisition of Anadarko is expected to strengthen Chevron positions in large, attractive shale, deepwater and natural gas resource basins.
“The combination of Anadarko’s premier, high-quality assets with our advantaged portfolio strengthens our leading position in the Permian, builds on our deepwater Gulf of Mexico capabilities and will grow our liquefied natural gas business,” said Chevron’s chairman and CEO Michael Wirth.
“It creates attractive growth opportunities in areas that play to Chevron’s operational strengths and underscores our commitment to short-cycle, higher-return investments.”
“This transaction will unlock significant value for shareholders, generating anticipated annual run-rate synergies of approximately $2 billion and will be accretive to free cash flow and earnings one year after close,” Wirth added.
In Africa, Anadarko has held a production sharing agreement with Algerian national oil company Sonatrach since the 1980s. Last year, the company celebrated 20 years of oil production in the country.
Anadarko is also present in Ghana’s Jubilee field and the adjacent TEN field, for a total of 250 million barrels of oil equivalent produced since 2010.
In Mozambique, Anadarko made its first discovery in 2010 in the Offshore Area 1 of the deep-water Rovuma Basin, launching one of the most important natural gas discoveries in the last 20 years, while in South Africa, it is in early exploration stages operating offshore Block 5/6/7, which covers more than 23 million acres.