The offshore assets include a 27% stake in the Jubilee field and 19% in the TEN fields offshore Ghana, which last year delivered gross production of 143,000 b/d; a 26.5% operated interest in Area 1 off Mozambique containing more than 60 tcf of proven deepwater gas resources, of which 18 tcf will be developed under an initial two-train project 12.8 MM metric ton/yr (14.11 MM tons/yr) LNG project, set to come into production by 2024; and exploration licenses offshore South Africa, close to Total’s recent deepwater Brulpadda gas/condensate discovery.
Overall, these assets, plus Anadarko’s field interests onshore Algeria, represent around 1.2 Bboe of 2P reserves, with 2018 equity production of 96,000 boe/d which is likely to grow to around 160,000 boe/d by 2025.
“If completed, the acquisition of Anadarko by Occidental offers us the opportunity to acquire a world class portfolio of assets in Africa, further enhancing our position as the leading IOC on the continent,” said Patrick Pouyanne, Total’s chairman and CEO.
“We would be able to leverage our expertise in LNG 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.”
Wood Mackenzie research director Nicholas Browne said that if the deal went through, Total would become the second-largest IOC LNG seller globally after Shell, and the fourth largest after Qatargas, Shell, and Petronas.
“The potential acquisition of Anadarko’s stake in Mozambique LNG is representative of Total’s ambitious and aggressive expansion of its LNG position. It acquired Engie’s LNG business in 2018 and has a plethora of pre-FID opportunities which it is aiming to sanction within the next two years,” Browne said.
“However, the company is entering a phase of strong cash flow growth. As such, we still expect Total to keep strict investment criteria in terms of deciding which LNG project goes ahead.
“Its focus on LNG investment is part of a wider company shift to ‘cleaner fuels.’ The group views its LNG portfolio as long term in nature, as a facilitator for monetizing its own molecules, but has also become more active as an LNG trader in recent years.”
Anadarko has not so far responded to Total’s move, although the company has confirmed that it has received a revised proposal from Occidental providing greater cash value than the latter’s previous offer.
In accordance with the terms of the earlier agreement with Chevron, Anadarko’s board will review the latest proposal. But the company added that Chevron merger agreement remains in effect and accordingly the board reaffirms its recommendation of this transaction.