American oil firm Occidental Petroleum Corporation said if it successfully acquires Anadarko Petroleum Corporation, it will sell Anadarko's assets in Africa for $8.8 billion to French energy giant Total S.A.
Occidental said in a statement on Sunday that it has entered into a binding agreement with Total S.A. to sell Anadarko’s assets in Algeria, Ghana, Mozambique and South Africa.
The sale is contingent upon Occidental acquiring Anadarko, which turned into a bidding war against the U.S.' second largest energy firm Chevron.
After Chevron made an offer to buy Anadarko on April 12 for $33 billion, based on $65 per share; Occidental upped the bid on April 24 by offering $38 billion, based on $76 a share.
On April 30, American business mogul Warren Buffett's multinational conglomerate holding company, Berkshire Hathaway, committed $10 billion to Occidental to level the playing field.
If Occidental wins the bidding war, the Anadarko assets to be sold to Total represent approximately 6% of the expected net production and approximately 7% of the cash flow after capital expenditures of Occidental in 2020, the statement said.
After the assets sale, Occidental said it expects to deliver $2 billion of annual cost synergies and $1.5 billion of annual capital reductions from the Andarko acquisition.
'The $8.8 billion value to be received for Africa represents an attractive value based on our extensive evaluation over the last 18 months,' Occidental President and CEO Vicki Hollub said in the statement.
'Total has extensive experience working in Africa and is well positioned to maximize value from these assets,' she added.
Total Chairman and CEO Patrick Pouyanne noted in the statement that Total and Occidental have worked together for many years.
'These are world class assets with great upside, and we welcome the opportunity to leverage our expertise in LNG and deepwater developments as well as our long history of operating in Africa,' he said.
Anadarko has rich oil and natural resources across the U.S., as well as in Africa, mostly focusing on shale, liquefied natural gas (LNG) and deepwater projects.
By Ovunc Kutlu
Anadolu Agency
energy@aa.com.tr