French oil major Total said Monday it’s walking away from the acquisition of Occidental Petroleum’s Ghana assets, after the Algeria deal was blocked, Kallanish Energy reports.
In August 2019, Total and Occidental entered into a Purchase and Sale Agreement (PSA) in order for the French company to acquire Anadarko’s oil and gas assets in Africa.
Anadarko was bought by Occidental, which has since competed the sale of its Mozambique and South Africa assets to Total.
The companies said in separate statements that under the PSA the sale of the Ghana assets was conditional to the completion of the Algeria assets’ sale. However, Algerian authorities decided Occidental “would not be in a position to sell its interests” in the country.
Considering the assets would be non-operated by Total and given the “extraordinary market environment,” Total decided to discontinue the deal.
“This decision not to pursue the completion of the purchase of the Ghana assets consolidates the group’s efforts in the control of its net investments this year and provides financial flexibility to face the uncertainties and opportunities linked to the current environment,” said CEO Patrick Pouyanné.
Occidental said that because the PSA expires in September, the companies executed a waiver of obligation to purchase and sell the Ghana assets. That way, Occidental can begin marketing the sale of the assets to other third parties.
“These assets in Ghana are world class and function economically well at low oil prices with upside potential over the long term,” Occidental said.
This post appeared first on Kallanish Energy News.