Total SA has just canceled its well-reported plans to acquire oil assets from Occidental Petroleum Corp. in Ghana, walking away after a proposal to buy Algerian projects from the U.S. company also collapsed.
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.
It be would be recalled that Total announced August last year, that it agreed with Occidental to acquire Anadarko’s assets in Africa. Under that deal, the companies have since completed the transfer of assets in Mozambique and South Africa.
The disposal of the projects in Algeria and Ghana was supposed to raise about $5 billion for Occidental, which is on the hook for large debt repayments beginning next year.