Marathon Confirms Sale of Angola Assets to Sinopec
- Business & Finance
After it was previously announced that China’s Sinopec has reached an agreement to buy Marathon’s stake in Block 31, offshore Angola, the US-based oil company has confirmed the deal today.
Marathon Oil Corporation announced that its subsidiary, Marathon International Oil Angola Block 31 Limited, has entered into a definitive agreement to sell its 10 percent working interest in the Production Sharing Contract and Joint Operating Agreement in Block 31 offshore Angola to SSI Thirty-One Limited (Sonangol Sinopec International). The transaction has a total value of approximately $1.5 billion, excluding any purchase price adjustments at closing. The companies anticipate closing the transaction in the fourth quarter of 2013, with an effective date of Jan. 1, 2013.
The transaction is subject to government, regulatory and third-party approvals, and pre-emption rights which exist on the block. SSI Thirty-One Limited currently holds a 5 percent working interest in the block.
“This transaction highlights the shareholder value we have created through exploration success in Angola, as well as our commitment to financial discipline and efforts to profitably grow the Company,” said Clarence P. Cazalot, Jr., Marathon Oil chairman, president and CEO. “We expect to use the proceeds from this sale to repurchase shares, strengthen the balance sheet and for general corporate purposes.”
With this transaction, the Company has agreed upon or closed on nearly $2.9 billion in divestitures, at the upper end of its targeted $1.5 billion to $3 billion of divestitures over the period of 2011 through 2013.
Production from the PSVM development on Block 31 commenced in the fourth quarter of 2012. The concessionaire of Block 31 is Sonangol, Angola’s state-owned oil company. The operator is BP Exploration Angola with a 26.67 percent working interest. Sonangol E.P. holds 25 percent; Sonangol P&P holds 20 percent; Statoil Angola A.S. holds 13.33 percent; and SSI Thirty-One Limited currently holds 5 percent.
Marathon Oil’s financial advisor for this transaction is Scotia Waterous.
June 26, 2013; Image: Marathon