BP is seeking buyers for its stake in a major Algerian gas plant deep in the Sahara desert after recent talks on a sale to Russian oil giant Rosneft failed, three industry sources told Reuters.
BP hopes to raise around $2 billion from the sale of its 45.89% stake in the In Amenas natural gas plant that was the target of a deadly attack by Islamist militants in 2013. The sale is part of a $15 billion disposal programme BP is targeting by the middle of 2021, two of the sources said.
The approval of a sale of the Algerian assets will be one of the first major decisions for Chief Executive Bernard Looney who took office on Wednesday after his predecessor Bob Dudley stepped down following a decade at the helm.
The sale is politically sensitive for BP and its partners, Norway’s Equinor and Algerian state-owned Sonatrach, in the wake of the January 2013 attacks when gunmen raided the site and 40 employees died after a four-day siege.
A BP spokesman declined to comment. Equinor and Sonatrach declined to comment. Rosneft did not immediately respond to a request for comment.
BP has in recent months contacted a number of major international oil and gas companies to test the appetite for the stake after talks with Rosneft failed last year, the sources said.
The collapse in the discussions with Rosneft, in which BP itself holds a 19.75% stake, were partly a result of Equinor’s reluctance to partner with the Russian company, which faces U.S. sanctions, the sources who were close to the discussions said.
BP and Equinor in December 2017 signed a five-year extension agreement for the In Amenas production sharing agreement with Sonatrach which was ratified in April 2018.
Equinor holds a 45.9% stake and Sonatrach has the remaining 8.21% of the In Amenas plant, which has a production capacity is 9 billion cubic meters per year. The plant produced around 46,000 barrels of oil equivalent per day in 2018.
Security at Algeria’s southern oil and gas facilities has improved in recent years due to a boosted military presence.
In 2016, BP and Equinor temporarily withdrew staff from the In Amenas and In Salah gas plants after an attack on In Salah.
An investigation carried out in 2013 by Equinor, known then as Statoil, concluded that the operators of the In Amenas site did not have the necessary security measures.
BP has sold nearly $10 billion of oil and gas assets around the world since the start of 2019 and expects to announce an additional $5 billion by the middle of 2021, it said on Tuesday.
The disposals follow BP’s $10.5 billion acquisition of BHP’s U.S. shale oil and gas assets and are part of a drive to focus BP’s operations on higher profit assets in regions such as the Gulf of Mexico and Brazil.
Source: Reuters.com