Eni (MIL:ENI) has agreed a deal to buy BP’s (LON:BP) local business in Algeria for an undisclosed price.
The Italian company said the deal had “great strategic value”. It will contribute to European energy security and strengthen Eni’s presence in Algeria.
The deal includes BP’s 45.89% stake at In Amenas and 33.15% stake at In Salah. These projects produced 11 billion cubic metres of gas in 2021, in addition to 12 million barrels of condensates and LPG.
As a result of this deal, and Eni’s plans in the Berkine Basin, the company expects production to rise. Eni forecasts its Algerian production to reach 120,000 barrels of oil equivalent per day in 2023. Its current production is around 100,000 boepd.
“BP has worked successfully with Algeria and our partners for over almost 30 years, developing and supporting operations on two major gas projects for the country,” said BP executive vice president for gas Anja-Isabel Dotzenrath. “We believe this agreement represents a good outcome for bp and Eni and for Algeria.”
In Salah covers seven gas fields, around 1,200 km south of Algiers. It began producing in 2004, with a second phase starting up in 2016. In Amenas is in the Illizi Basin, in southeast Algeria, and it started up in 2006.
BP works on the two projects with Sonatrach and Equinor. The company reported net gas production of 126 million cubic feet per day in 2021, down from 141 mmcf per day in 2020 and 186 mmcf per day in 2019.
Various authorities will have to approve the deal for it to complete. There are also pre-emption rights to consider.
BP senior vice president for Egypt, Algeria and Libya Karim Alaa said the company appreciated the Algerian government’s support over the years.
“With its significant existing presence in Algeria and wider region, we believe Eni will be well positioned to work with partners and the government as they continue to take these assets forward,” he said.