LNG

ExxonMobil Corp., the largest US oil company and leading LNG producer and a partner of Qatar, continues in talks to acquire Texas-based Pioneer Natural Resources in what would be its largest acquisition since the historic tie-up between Exxon and Mobil in 1999. 

French energy major Total said it paid $3.9 billion to close the acquisition of Anadarko Petroleum’s 26.5 percent operated interest in the Mozambique LNG project from Anadarko purchaser Occidental Petroleum.

Anadarko Petroleum, the US company that has just agreed to be taken over by Occidental Petroleum and whose liquefied natural gas and African assets will be sold to French major Total in a side deal, has made additional LNG volume sales to Japan and Taiwan for the Mozambique LNG project.

Anadarko said the Mozambique LNG Company Ltd., the jointly owned sales entity of the Mozambique Area co-venturers, has signed a joint sale and purchase agreement with JERA Co. Inc, Japan’s biggest LNG buyer, and CPC Corp. of Taiwan.

The deal is for the sale of 1.6 million tonnes per annum for a base term of 17 years from the commercial start date and on a delivered ex-ship basis whereby the sellers, Anadarko’s successors and its partners, supply the shipping.

“This co-purchasing agreement with JERA and CPC brings together two prominent Asian foundation customers and will ensure a reliable supply of cleaner energy to meet the growing demands of both Japan and Taiwan,” said Mitch Ingram, Anadarko Executive Vice President for the international business.

“We are excited to take the next step with the expected announcement of a final investment decision (FID) for the Mozambique LNG project on June 18, as we remain on track to complete the project financing process and secure final approvals,” added Ingram.

“This new SPA brings our total long-term agreements to 11.1 MTPA, and we are extremely pleased and grateful to JERA and CPC for selecting Mozambique LNG to be part of their long-term energy portfolio,” state the Anadarko executive.

Anadarko has agreed to a takeover by Occidental after a bid valued at $55Bln when Anadarko’s debts are included, was chosen in preference to a rival bid from Chevron Corp.

Occidental has already offset $8.8Bln of its acquisition agreement for Anadarko by agreeing to sell Total its Mozambique LNG stake and its African oil and gas assets.

Anadarko is operator of the Mozambique project and has a 26.5 percent stake and operatorship of the Area 1 Rovuma Basin reserves that underpin the LNG venture.

Other shareholders in the Area 1 licence and LNG project include the Japanese trading house Mitsui and Co. and three Indian companies, Bharat Petro Resources, ONGC Videsh and Oil India Ltd., as well as Thailand’s national energy company PTTEP and the Mozambique state-owned oil and gas firm ENH.

The onshore Mozambique project will have phase one output of almost 12.9 MTPA.

Anadarko and its partners have signed up previous sales agreements for 9.5 MTPA of cargoes from the Mozambique project with Royal Dutch Shell, China National Offshore Oil Corp., Tokyo Gas, the UK’s Centrica, France's EDF and Indonesian energy company Pertamina.

Two other projects are planned in Mozambique from the Area 4 licence resources held by Italian energy company Eni and partners.

These include the Coral floating LNG joint venture with capacity of around 3.4 MTPA already under construction and scheduled to come on stream in 2022.

The Area 4 onshore Mamba LNG project is also expected to be sanctioned in 2019 and production is scheduled to start in 2024.

The Area 4 consortium is formed by Mozambique Rovuma Ventures, comprising Eni 25 percent, ExxonMobil 25 percent and China National Petroleum Corp. (PetroChina) with 20 percent.

The remaining 30 percent of shares in that licence are held in parcels of 10 percent by South Korean utility and energy company Korea Gas Corp., Galp Energia of Portugal and Mozambique’s ENH.

Chevron Corp. has pulled out of the bidding battle for Anadarko Petroleum and its Mozambique liquefied natural gas stake and US assets, leaving the way clear for Occidental Petroleum to acquire Anadarko and for French major Total to own the African and LNG assets.

Occidental Petroleum, the Texas-based company competing with Chevron Corp. to take over Anadarko Petroleum for around $55 billion including debt, has had its revised offer endorsed by the Anadarko board, including the sale of its Mozambique LNG stake and other African assets to French major Total if the deal is finalized.

“Anadarko’s board of directors, in consultation with its financial and legal advisors, has unanimously determined that the revised acquisition proposal it received from Occidental Petroleum on May 5 constitutes a ‘Superior Proposal’ as defined in Anadarko's previously announced merger agreement with Chevron Corp.,” said Anadarko.

The US takeover target added that Chevron has four business days ending on May 10 to increase its offer in accordance with the terms of the Chevron Merger Agreement signed on April 12.

“If Anadarko terminates the Chevron Merger Agreement in order to enter into a definitive agreement with Occidental, Anadarko will pay Chevron a $1 billion termination fee as required by the Agreement,” explained Anadarko.

Occidental’s latest offer amounts to 78 percent cash and 22 percent in Occidental shares, rather than the previous 50-50 split.

The bid is valued at around $38Bln versus $33Bln for the Chevron offer. In addition, the winning bidder would have to assume around $17Bln of Anadarko debts.

In connection with Occidental’s proposal to acquire Anadarko, Occidental has entered into a binding agreement to sell Anadarko’s Algeria, Ghana, Mozambique and South Africa assets to France's Total for $8.8Bln.

Anadarko, whose headquarters are near Houston, is being targeted because of the Mozambique LNG holdings and its strength in US shale production, especially in the Delaware Basin of Texas and New Mexico. Its other main US assets are in Colorado and the Gulf of Mexico.

Anadarko had said it was positioned to take a final investment decision on Mozambique LNG in the first half of this year.

The Anadarko-led Mozambique venture will be the African nation’s first onshore development, initially consisting of two liquefaction Trains with nameplate capacity of 12.9 million tonnes per annum.

Feed-gas would come from the Golfinho-Atum gas fields located within Anadarko’s offshore Area 1 licence of the Rovuma Basin. 

Analysts noted that Chevron is a substantial LNG player and operates two world-class plants in Western Australia and would fit with Anadarko’s development plans for Mozambique.

Occidental, a major North American chemicals manufacturer, has no LNG assets and is centred on US oil and gas as well as midstream, marketing and refining.

France’s Total is now hoping that the Occidental takeover bid for Anadarko is successful because of its deal with Occidental for Anadarko's Mozambique LNG stake and other African holdings.

“If completed, the acquisition offers us the opportunity to acquire a world-class portfolio of assets in Africa, further enhancing our position as the leading IOC on the continent,” said Total Chief Executive Patrick Pouyanne.

“We would be able to leverage our expertise in LNG by operating a major project in Mozambique and in Deepwater in Ghana and we would become operator of major Algerian oil assets where we are already a partner,” he explained.

Anadarko Petroleum Corp., the US energy company in the midst of a takeover duel between Chevron Corp. and Occidental Petroleum, reported a net loss in its first-quarter earnings, though this was offset by advances made in its Mozambique LNG export project.

The company, whose headquarters are near Houston, reported a net loss of $15 million with one-off charges of $274M amid total cash flow of $1.12 billion, lower than the 1.43Bln posted in the same quarter of 2018.

Anadarko's first-quarter 2019 sales of oil, natural gas and natural gas liquids totaled 64 million barrels of oil equivalent, or an average of 715,000 barrels per day and which included 412,000 barrels of oil.

Anadarko is the subject of the takeover bids because of its strength in US shale production, especially in the Delaware Basin of Texas and New Mexico. Its other main US assets are in Colorado and the Gulf of Mexico.

It also owns valuable assets in deep water oil and LNG, including Anadarko’s planned onshore development in Mozambique which is advancing, according to its latest earnings statement.

“The company continued to make significant progress with its Mozambique LNG project, announcing Sale and Purchase Agreements (SPAs) now totaling more than 9.5 million tonnes per annum (MTPA), with two additional SPAs in the final stages of execution that, if executed, would bring the total volume to more than 11 MTPA,” said Anadarko.

“During the quarter, the project also was designated as the first mover by the Government of Mozambique for the marine facilities to support the onshore LNG industry in Mozambique,” it added.

“The company remains positioned to take a final investment decision during the first half of this year,” stated Anadarko.

In the past week, Anadarko received a take-over offer of $38 billion from Occidental after accepting a $33Bln offer in mid-April from Chevron.

The competition to acquire Anadarko may force Chevron to consider whether it should make a higher offer.

Anadarko said its stockholders were advised to take no action at this time.

Analysts noted that Chevron is a substantial LNG player and operates two world-class plants in Western Australia and would fit with Anadarko’s development plans for Mozambique.

The $33Bln bid from Chevron and the $38Bln offer from Occidental would be valued at an additional $17Bln because of the scale of Anadarko’s debt commitments.

Anadarko had said on April 12 it had accepted Chevron’s bid after rejecting an initial approach from Occidental that fell short of a full bid.

Occidental, a major North American chemicals manufacturer, has no LNG assets and is centred on US oil and gas as well as midstream, marketing and refining.

The Anadarko-led Mozambique venture will be the African nation’s first onshore development, initially consisting of two liquefaction Trains.

The feed-gas will come from the Golfinho-Atum gas fields located within Anadarko’s offshore Area 1 licence of the Rovuma Basin.

The Mozambique plant is being built near the port of Pemba in the northeast Cabo Delgado Province, about 900 kilometres north of Beira.

The Anadarko venture already has supply deals with European utilities Centrica of the UK and French utility EDF, the Japanese utilities Tokyo Gas and Tohoku Electric and energy companies, Royal Dutch Shell, China National Offshore Oil Corp. and Bharat Petroleum of India.

Anadarko Petroleum Corp., the company with US onshore assets and a valuable stake in Mozambique LNG, has received a rival take-over bid of $38 billion from Occidental Petroleum Corp. after accepting a $33Bln offer in mid-April from Chevron Corp.

The competition to acquire Anadarko is expected to force Chevron to consider whether it will make a counter-bid.

“Following unanimous approval from the company's board of directors on April 12, 2019, Anadarko entered into a definitive agreement with Chevron under which Chevron would acquire all of the outstanding shares of Anadarko in a stock and cash transaction valued at $33Bln, or $65 per share,” said Anadarko.

“In accordance with the terms of the Chevron Merger Agreement, and in consultation with its financial and legal advisors, Anadarko's board of directors will carefully review Occidental's proposal to determine the course of action that it believes is in the best interest of the company's stockholders,” added the company.

“The Anadarko board has not made any determination as to whether Occidental's proposal constitutes, or could reasonably be expected to result in, a superior proposal under the terms of the Chevron Merger Agreement,” said Anadarko.

“The Anadarko board expects to respond to Occidental's proposal upon completing its review, and accordingly reaffirms its existing recommendation of the transaction with Chevron,” it stated.

Anadarko said its stockholders were advised to take no action at this time.

Analysts pointed out that Chevron is a substantial LNG player and operates two world-class plants in Western Australia and would have fitted with Anadarko’s development plans for Mozambique LNG.

The $33Bln bid from Chevron and the $38Bln counter-offer from Occidental would both be valued at an additional $17Bln because of the scale of Anadarko’s debt commitments.

Anadarko said on April 12 it had accepted Chevron’s bid after rejecting an initial approach from Occidental that fell short of a full bid.

Occidental’s business has no LNG assets and is centred on US oil and gas as well as midstream, marketing and refining. Houston-based Occidental is also a major North American chemicals manufacture.

The Anadarko-led Mozambique venture will be the African nation’s first onshore development, initially consisting of two liquefaction Trains with total nameplate capacity of 12.9 million tonnes per annum with feed-gas coming from the Golfinho-Atum gas fields located within Anadarko’s offshore Area 1 licence of the Rovuma Basin.

The Mozambique plant is being built near the port of Pemba in the northeast Cabo Delgado Province, about 900 kilometres north of Beira.

The Anadarko venture already has supply deals with European utilities Centrica of the UK and French utility EDF, the Japanese utilities Tokyo Gas and Tohoku Electric and energy companies, Royal Dutch Shell, China National Offshore Oil Corp. and Bharat Petroleum of India.

Before the Chevron bid was accepted, Anadarko had been planning to seek long-term charters for around 16 LNG carriers to ship volumes to customers from Mozambique.

The Mozambique LNG project and natural gas assets would also add to Chevron’s global LNG given its volumes from Australia’s Gorgon plant on Barrow Island in Western Australia and the Wheatstone facility at Ashburton in the Pilbara region, both operated by Chevron.

Anadarko shareholders are being offered 0.3869 shares of Chevron and $16.25 in cash for each share, valuing the equity at a total of $33Bln.

Under the Occidental bid, Anadarko shareholders would receive $38.00 in cash and 0.6094 shares of Occidental common stock for each Anadarko share held.

Chevron Corp., the second-largest US oil and gas company and a leading participant in the LNG market with two plants in Western Australia, has agreed a $50 billion deal to buy US energy company Anadarko Petroleum, one of America’s leading independent producers and a key stakeholder in Mozambique LNG assets.

Anadarko Petroleum Corp. of the US said the joint venture partners developing the onshore LNG export project with feed-gas assets from the Rovuma Basin in Mozambique have signed yet another Sale and Purchase Agreement and this time with a subsidiary of stakeholder Bharat Petroleum Corp. of India.

Anadarko Petroleum of the US, a main shareholder in the onshore Mozambique LNG export project in southeast Africa using feed-gas from the Area 1 licence block of the Rovuma Basin, said its joint venture continued to make progress on the offtake agreements necessary for project financing.