French oil major Total is pulling out of the agreed acquisition of Occidental Petroleum's Ghana assets.
The two companies in 2019 signed a deal whereby Total was to acquire all of the assets of Anadarko in Africa for about $8.8 billion, following the completion of Oxy's takeover of Anadarko.
So far, Total has completed the acquisition of Oxy's assets in Mozambique and South Africa.
According to a statement by Total on Monday, the sales and purchase deal provided that the sale of the Ghana assets was conditional upon the completion of the Algeria assets’ sale.
"Occidental has informed Total that, as part of an understanding with the Algerian authorities on the transfer of Anadarko’s interests to Occidental, Occidental would not be in a position to sell its interests in Algeria," Total said.
"Given the extraordinary market environment and the lack of visibility that the Group faces, and in light of the non-operated nature of the interests of Anadarko in Ghana, Total has decided not to pursue the completion of the purchase of the Ghana assets and, as a consequence, to preserve the Group’s financial flexibility," Total said.
The Ghana acquisition would've included a 27% interest in the Jubilee field and a 19% interest in the TEN fields. These fields represented a gross production of 143 kb/d in 2018.
"This decision not to pursue the completion of the purchase of the Ghana assets consolidates the Group’s efforts in the control of its net investments this year and provides financial flexibility to face the uncertainties and opportunities linked to the current environment,” said Patrick Pouyanné, Total Chairman and CEO.
In a statement issued a few hours after Total's announcement on the decision to drop the pursuit for Oxy's Ghana assets, Oxy said the following: "Total has informed Occidental that it is not interested in purchasing Anadarko’s interests in Ghana in the current circumstances.
"Because the purchase and sale agreement expires in September, Total and Occidental have executed a waiver of the obligation to purchase and sell the Ghana assets, so that Occidental can begin marketing the sale of the Ghana assets to other third parties."
"These assets in Ghana are world-class and function economically well at low oil prices with upside potential over the long term," Oxy said.