Occidental Petroleum intends to keep production flat in 2021 but one bright spot for the company is Algeria.
Ghana, though, remains on the table for offers. Oxy is confident that it will sell more than $2 billion of assets this year. It had hoped to sell around $5bn by mid-year.
Oxy bought Anadarko Petroleum in mid-2019 and it has struggled to pay down debt, which is around $40bn.
“Algeria is not for sale,” said Oxy’s CEO Vicki Hollub. There was “a lot of interest” in the assets, acquired from Anadarko, but “we believe those assets are going to be very competitive with our domestic assets. We want to be in Algeria … It’s a core area.”
Oxy has brought in some of its experts from Oman and Houston to work on subsurface reviews in the North African state.
Initially, the company will focus on existing areas, although Hollub said there was also scope for expansion.
“We’re taking steps to strengthen our capabilities and our joint ventures with Sonatrach. Of particular importance is that our relationship with the government is excellent and we continue to engage with alignment for the future,” Hollub said.
Oxy had struck a deal to sell Anadarko’s African assets to Total, for $8.8bn. While Total did acquire some of its assets, most notably a stake in the Mozambique LNG plant, the Ghana and Algeria parts did not complete. The failure coincided with the major oil price crash this year, which drove a number of companies to recalculate deals.
Hollub, speaking during the first quarter results, said Oxy had decided to remain in Algeria in April. These generate cash even at low prices, she said. At that time Oxy intended to invest $30mn in the country, with the expectation that it would generate around $100mn of free cash flow.
A number of companies have signed initial agreements with Sonatrach, since the passing of the new Hydrocarbons Law in December 2019.