The jockeying around Anadarko Petroleum has crossed the pond, after Total (Fr: FP) offered Occidental Petroleum $8.8bn (£6.72bn) for the takeover target's African assets. The deal would make the French major the fourth-largest LNG capacity owner behind Qatargas, Royal Dutch Shell (RDSB) and Petronas.
The acquisition is not a sure thing as Occidental does not yet own Anadarko, although the smaller company’s board has backed its $38bn offer backed by a $10bn financing agreement from Warren Buffett.
Total would get a portfolio of assets across Mozambique, Ghana, Algeria and South Africa producing 96,000 barrels of oil equivalent per day in the deal. Around half of the value lies with the Area 1 natural gas project in Mozambique, according to RBC Capital Markets. The French oil and gas major said it expected the assets to be free cash-flow (FCF) positive from next year at an oil price of $50 a barrel, and hitting $1bn a year in FCF from 2025 once Area 1 is producing.
RBC analyst Biraj Borkhataria said the acquisition going through would be a win for all parties, cutting Occidental’s debt load and giving Total “one of the largest LNG resources globally”. Total has added several major LNG projects to its portfolio in recent years, including Engie’s whole gas business for $1.5bn in 2018.
