Anadarko-TOTAL S.A. Deal ‘Mother Of All Takeovers’
Anadarko Petroleum Corporation has set a new record in Ghana’s nascent petroleum sector by selling its assets in the Jubilee Field and the Tweneboah-Enyera-Ntomme (TEN) Project to its global competitor at a price never seen before.
The company used 13 years to nurture its two stakes in Ghana’s foremost oil and gas fields for them to be worth US$2.5 billion in a deal that is now set to introduce the French oil giant, TOTAL S.A., into the country’s upstream petroleum sector.
In fact, despite witnessing four major transfers of assets, technically called assigning and assumption of interest, in the period following oil discovery in 2007, none of the sales hit the one billion US dollar mark.
And if one is minded to extend it to the general economy, the Anadarko-TOTAL S.A. deal could as well be the ‘mother of all takeovers’ in the history of mergers and acquisitions (M&As) in the country.
Mr Michael Cobblah, who has led the successful execution of series of M&As in the country, told the GRAPHIC BUSINESS on March 2 that “in recent times, I am not sure there has been a deal worth up to that amount”.
Until the Anadarko-TOTAL S.A. deal last year, the priciest takeover in the industry, which was also the second of its kind, involved the controversial acquisition of Sabre Oil and Gas Holdings Ghana Limited by PetroSA in 2012.
It involved the takeover of Sabre’s operations in Ghana, which had a 4.05 per cent stake in the Jubilee Fields, South Africa’s national oil company.
That deal was reportedly worth US$480 million although PetroSA later reported that the value had increased to US$500 million after including “contingencies” in the cost of transaction.
Be it US$480 million or US$500 million, the value of that transaction is now five times lower than the US$2.5 billion that TOTAL S.A. reportedly agreed to pay for Anadarko’s assets in Ghana.
And there are genuine reasons why.
Volume of assets
Although both sales occurred in fields that were producing oil in the Jubilee Fields (in part), Anadarko used more years to nurture its assets than Sabre did prior to the sale.
Also, this is the first time that an oil exploration and production company has sold such a sizeable amount of its interest in an oil filed that is in active production in Ghana.
Thus, beyond the value, the deal is also the largest transfer of interest in the industry.
Until the sale last year, Anadarko had been operating in Ghana since 2006, within which period it owned 24.077 per cent in the Jubilee Field, which is Ghana's first and jewel oil field, and 17 per cent in the TEN Project, an integrated oil and gas project.
Now, those assets are set to become the assets of TOTAL S.A., the Paris-based E&P firm that reported revenue of about US$209.4 billion in 2018, should the government approve the transaction.
The petroleum sector witnessed its first acquisition in May 2011 when the E.O. Group, a Ghanaian-owned firm, sold its stake in the Jubilee Fields to Tullow Oil Ghana.
The transaction involved the transfer of the company’s 3.5 per cent stake in the field to the operator in return for US$305 million.
After that transaction came the Sabre-PetroSA deal in 2012 which was followed by six years of no transfers in the sector.
In 2018, however, Norwegian billionaire, Mr Kjell Inge Roekke, made a strong entry into the country through a controversial deal that introduced his petroleum company, Aker Energy, into the country.
The company paid US$100 million for Hess Ghana’s 50 per cent stake in the Deepwater Tano Cape Three Points block (DWT/CTP).
Genesis of Andarko sale
But how did the Anadarko-TOTAL S.A. deal come into being?
Last year, Occidental Petroleum, an American petroleum company, acquired the global operations of Anadarko in a transaction that would later introduce TOTAL S.A. into Africa’s burgeoning upstream petroleum sector.
As part of the agreement to acquire Anadarko, Occidental agreed to sell Anadarko’s operations in Africa to TOTAL SA.
That transaction led to the transfer of Anadarko’s assets in Ghana, Mozambique, Algeria and South Africa to TOTAL S.A. at US$8.8 billion.
If one is minded to extend it to the general economy, the Anadarko-TOTAL S.A. deal of US$2.5 billion could, as well, be the ‘mother of all takeovers’ in the history of mergers and acquisitions (M&As) in the country.