Total wraps $3.9B acquisition of Anadarko’s Mozambique LNG project interest

Total has completed the acquisition of Anadarko’s 26.5% interest in the Mozambique LNG project for $3.9 billion.

The transaction is part of Total’s May 2019 agreement with Occidental to buy all of Anadarko’s assets in Africa (Mozambique, Algeria, Ghana and South Africa) for $8 billion. The Mozambique assets acquisition is the first transaction covered by the agreement, and Total has become the operator of the Mozambique LNG project. To remind, Occidental completed the acquisition of Anadarko in August.

Commenting on the completion of the Mozambique transaction, Patrick Pouyanné, Chairman & CEO of Total, said: “Mozambique LNG is one of a kind asset that perfectly fits with our strategy and expands our position in liquefied natural gas”

“As the new operator, we are fully committed to the Mozambique LNG project and we will bring the best of our human, technical, marketing and financial capacities to further strengthen its execution. Total will of course work on the strong foundations established by the previous operator and its partners, in order to implement the project in the best interest of all those involved, including the government and the people of Mozambique.”

Mozambique LNG is the country’s first onshore LNG development. The project includes the development of the Golfinho and Atum fields located within Offshore Area 1 and the construction of a two-trains liquefaction plant with a capacity of 12.9 million tonnes per year (Mt/y). The Area 1 contains more than 60 Tcf of gas resources, of which 18 Tcf will be developed with the first two trains. The Final Investment Decision (FID) on Mozambique LNG was announced on June 18, 2019, and the project is expected to come into production by 2024.

Total has stressed that the Mozambique LNG project is largely derisked since almost 90% of the production is already sold through long-term contracts with key LNG buyers in Asia and in Europe. Additionally, the project is expected to have a domestic gas component for in-country consumption to help fuel future economic development, the company said.

Anadarko made a final investment decision for the development of $20 billion Mozambique’s Offshore Area 1 via the Area 1 Mozambique LNG project in June.

Total is now the operator of Mozambique LNG with a 26.5% participating interest alongside ENH Rovuma Área Um, S.A. (15%), Mitsui E&P Mozambique Area1 Ltd. (20%), ONGC Videsh Ltd. (10%), Beas Rovuma Energy Mozambique Limited (10%), BPRL Ventures Mozambique B.V. (10%), and PTTEP Mozambique Area 1 Limited (8.5%).

Total also said that closing operations are still ongoing in relation to Anadarko’s assets in Algeria, Ghana, South Africa.

Below is the breakdown of the assets Total is set to acquire:

Algeria – 24.5% participating interest and operatorship of blocks 404a and 208 (Hassi Berkine, Ourhoud and El Merk fields) in the Berkine basin in which Total already owns 12.25%. These fields represented a gross production of 320 kboe/d in 2018.

Ghana – 27% participating interest in the Jubilee field and 19% participating interest in the TEN fields. These fields represented a gross production of 143 kb/d in 2018,

South Africa – exploration licences, close to Total’s recent Brulpadda discovery.