- Decision reflects ‘extraordinary market environment,’ CEO says
- Separately, Total snaps up power and gas customers in Spain
The breakdown of both sales is a setback for Occidental, which had earmarked the proceeds to help reduce debt after buying Anadarko Petroleum Corp. for $37 billion last year. After the Algeria deal was blocked earlier this month, Total Chief Executive Officer Patrick Pouyanne said the French company would continue working on the Ghana purchase, but now had “less appetite” for it.
The decision announced Monday reflects “the extraordinary market environment and the lack of visibility that the group faces,” as well as the “non-operated nature of the interests” in Ghana, Pouyanne said in a statement. The move “provides financial flexibility” to Total.
The shares rose as much as 4.3%, and were up 4.1% at 32.11 euros as of 9:17 a.m. in Paris.
In August last year, Total and Occidental agreed that the French major would acquire Anadarko’s assets in Africa. Under that deal, the companies have since completed the transfer of assets in Mozambique and South Africa.
Despite the failure of the deals, Total is making acquisitions elsewhere. In a separate statement on Monday, the company said it had bolstered its position in the Spanish energy market by acquiring 2.5 million customers from Energias de Portugal SA, as well as two gas-fired power plants.
The agreement follows Total’s entry into Spain’s solar market in February with the acquisition of a portfolio of almost 2 gigawatts of renewable-power projects. The latest transaction, based on an enterprise value of 515 million euros ($558 million), will see the company become the fourth-largest supplier of gas and power in the country.
Banco Santander SA advised EDP on the deal, according to a spokesperson for the bank.