Total Terminates Deal with Occidental Petroleum
French multinational integrated oil and gas company, Total, no longer has plans to acquire Occidental Petroleum’s assets in Ghana, which was conditional on the completion of the acquisition of Occidental’s other assets in Algeria, the French energy company said in a statement on Monday, 18 May 2020.
In August 2019, Total and Occidental Petroleum entered into a Purchase and Sale Agreement, PSA, in order for Total to acquire Anadarko’s assets in Africa (Mozambique, Ghana, Algeria, and South Africa). Under the $8.8 billion agreement, Total and Occidental have since completed the sale and purchase of the Mozambique and South Africa assets.
The PSA provided that the sale of the Ghana assets was conditional upon the completion of the Algeria assets’ sale. But Occidental has informed Total that, as part of an understanding with the Algerian authorities on the transfer of Anadarko’s interests to Occidental, Occidental would not be in a position to sell its interests in Algeria.
Why did Total decide to back out of the deal?
“Given the extraordinary market environment and the lack of visibility that the group faces... Total has decided not to pursue the completion of the purchase of the Ghana assets,” Total said in the statement.
“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,” Patrick Pouyanné, Total Chairman and Chief Executive Officer, CEO, said.
Total is a broad-energy company that produces and markets fuels, natural gas and low-carbon electricity. The company has around 100,000 employees that are committed to better energy that is safer, more affordable, cleaner and accessible to as many people as possible. Active in more than 130 countries (including Ghana), Total’s ambition is to become the responsible energy major.
Occidental is an international energy company with operations in the United States, Middle East, Latin America and Africa: It is the largest onshore oil producer in the U.S., including in the Permian Basin, and a leading offshore producer in the Gulf of Mexico.
Founded in 1920, Occidental, says its success is built on technical expertise, business acumen, strong partnerships and their proven ability to deliver lasting results.