Oxy Promises Bigger Algerian Operation
US Occidental Petroleum (Oxy) is committing to invest more in Algeria jointly with Sonatrach, according to the national oil company August 12. Oxy, which failed to sell its newly acquired Algerian operations to French major Total when it bought Anadarko, has reportedly since then held assets sales talks with Indonesian state Pertamina.
Oxy's head of African business Saamir Elshihabi said the company no longer wanted to sell these Algerian assets and instead confirmed “Occidental's desire to develop its co-operation with Sonatrach in all the fields of hydrocarbons,” according to a statement on Sonatrach's website August 12.
Algeria's energy minister Abdelmadjid Attar said that his department was "ready to support any effort to develop the partnership between Sonatrach and Occidental within the framework of current contracts and especially on new opportunities in all fields of hydrocarbons, especially under the new provisions of Oil Law 19/13." A team has been "mobilised for the finalisation of priority regulatory texts and all of these texts will be introduced into the approval circuit as soon as possible in accordance with the new petroleum law," the statement also said.
It further said that Oxy CEO Vicki Hollub was seeking information on additional opportunities to strengthen Oxy's operations jointly with Sonatrach as it wanted to make Algeria a core asset. Sonatrach said Oxy's relations with the government "are excellent" and allow value creation for both the government and its own shareholders.
Selling all of Anadarko's African assets to Total for the agreed price of $8.8bn would have enabled Oxy to repay some of the debt incurred buying Anadarko but the deal was blocked by the north African country in May. That left Total with Mozambique LNG and an option, which was not exercised, to take Anadarko's Ghanaian assets off Oxy's hands.
Oxy reported late August 10 a Q2 loss of $8.2bn following impairments of $6.6bn on top of an adjusted loss of $1.6bn. Algeria, for its part, has failed to attract investors upstream owing to a combination of poor commercial terms and, more recently, political paralysis.