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BP, Eni close in on Africa deals
Eni and BP are close to finalising agreement on deals to combine their Angolan oil and gas subsidiaries and transfer two BP Algerian gas stakes to Eni, Reuters reported on March 11.
The oil and gas output of the Angolan 50-50 joint venture would be around 200,000 barrels of oil equivalent (boe)/day, funded by a $2.5bn financing package that is reportedly nearing completion.
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Eni's operations and reserves in Angola are larger than BP's, which poses a stumbling block for asset valuations, the sources told Reuters. The Italian major's production sharing agreements with Algerian state-owned Sonatrach include non-operated stakes in blocks 404 and 408, and an extension at block 403 that will feed gas into a new gas duct, the BRN-MLE pipeline.
Elsewhere, the Italian major is developing three oil and gas concessions in the North Berkine Basin, Sif Fatima II, Zemlet El Arbi and Ourhoud II, with an estimated 75mn boe of reserves. It subsequently signed a contract for further development of the Berkine oil and gas basin with Sonatrach on December 14.
The second deal in Algeria would involve BP offloading two major gas holdings – a 33% stake in the Salah gas plant and 45.9% of the In Amenas gas processing plant. Eni would seek to ramp output to support an expansion of Algeria's energy infrastructure, including for gas exports to Italy through the 100mn m3/d Transmed route, and to Spain via the 27mn m3/d Medgaz link.
Not only is Italy looking to Algeria to limit purchases from Russia's Gazprom amid the Ukrainian crisis, but it could also link gas producers in northern Africa to other European markets. Transmed currently ships around 60mn m3 to Italy, or around 54.5% of its capacity, to Italy, but that's expected to increase following a trade visit by the Italian foreign minister to Algeria in February. Medgaz, meanwhile, increased its annual capacity by a quarter late last year, from 8bn m3/yr to 10bn m3/yr.