Total to buy Anadarko's Africa assets for $8.8 billion

If Occidental wins takeover fight.

French energy giant Total said it has reached a binding agreement with Occidental to acquire Anadarko’s assets in Africa for a consideration of $8.8 billion (R127 billion) – only in the event of a successful completion of Occidental’s ongoing bid for Anadarko.

Mid-sized US firm Occidental is in a fierce takeover battle for Anadarko with the much bigger Chevron.

Total said the transaction is contingent upon Occidental entering into and completing its proposed acquisition of Anadarko and to approval by the relevant authorities and is expected to close in 2020. Total wants to acquire Anadarko’s assets in Africa mainly in Algeria, Ghana, Mozambique, South Africa.

These assets represent around 1.2 billion barrels of oil equivalent (boe) of 2P reserves (meaning proven reserves), of which 70 percent is gas, plus 2 billion boe of long-term natural gas resources in Mozambique. 2018 equity production was 96 kboe/d (barrels of oil equivalent per day) and is expected to grow to around 160 kboe/d by 2025. 

Patrick Pouyanne, Total’s chairman and CEO, said the proposed transaction is “a win/win for Total and Occidental.”

“Total would get access to around over 3 billion boe of resources and Occidental would be able to strengthen its post completion balance sheet by monetising immediately the international assets of Anadarko,” said Patrick in a statement.

He said if completed, the acquisition of Anadarko by Occidental offers Total the opportunity to acquire a world class portfolio of assets in Africa.

“We have said consistently that our M&A activities will add value by playing to our strengths and focussing on upgrading our portfolio. This is exactly what we would do here. We would be able to leverage our expertise in LNG (liquefied natural gas) by operating a major project in Mozambique and in Deepwater in Ghana and we would become operator of major Algerian oil assets where we are already a partner,” Patrick added.

“We would also be able to generate value through adding volumes to our growing LNG portfolio where we are already the 2nd largest private player. We have demonstrated the success of this strategy through the recent acquisitions of Maersk Oil.”