Company News - Nexen to acquire EnCana UK unit, North Sea assets
Nexen Inc., Calgary, agreed to acquire EnCana Corp.'s UK subsidiary, EnCana (UK) Ltd., for $2.1 billion, effective retroactively to Sept. 30.
The deal includes EnCana's interests in the Buzzard oil and gas discovery, along with Scott and Telford fields plus other satellite discoveries, and interests in exploratory blocks totaling 740,000 net undeveloped acres.
In other recent international company transactions:
- Canadian Natural Resources Ltd. (CNR), Calgary, announced plans to buy a western Canadian subsidiary from Anadarko Petroleum Corp., for $698 million (Can.).
- South African Sasol Ltd. and Malaysia's Petronas have signed definitive agreements outlining a merger to create a South African liquid fuels business combining Sasol's liquid fuels business and Engen Ltd.
- Gaz de France, bolstering its position in Central and Eastern Europe, is taking a 51% stake in the Romanian gas distribution company Distrigaz Sud under an agreement signed Oct. 18 in Bucharest.
- Repsol YPF has signed an agreement with Copenhagen-based Borealis AS to purchase Borealis' Polímeros Lda. petrochemical complex at Sines, Portugal.
- Mitsui & Co. Ltd. signed an agreement with Royal Dutch/Shell Group to acquire a 25% equity stake in the Altamria LNG regasification terminal project.
- Shell announced plans to sell 111 retail service stations and 30 distribution depots in the Caribbean to Sol Group, a petroleum affiliate of Interamericana Trading Corp., Cayman Islands.
- Quest Oil Corp., Arlington, Tex., has abandoned efforts to acquire two petroleum prospecting licenses in Papua New Guinea and will instead focus on "more immediate prospects" in Alberta and the US Illinois basin.
Nexen's UK deal
Nexen acquisition also gives the company a proven UK management and technical team, officials said.
Buzzard field, 100 km northeast of Aberdeen, is the largest oil discovery in the past decade in the UK North Sea. Its development is on schedule, with first oil expected in late 2006. The remaining capital investment to bring Buzzard on stream is projected at $650 million, net to Nexen.
Production is expected to reach peak levels of 80,000 b/d, net to the acquired interest, in 2007. Pending approval of the transaction by the UK Department of Trade and Industry, Nexen will operate the field with 43.2% working interest.
Anadarko divestiture
Anadarko announced it was selling a smaller package of Canadian properties to an undisclosed buyer for $155 million (Can.). Anadarko declined to release any information about the second buyer, including whether it's a private company.
Both transactions are expected to close by yearend, Anadarko said. The transactions are part of Anadarko's previously announced plan to sell properties representing 15% of its yearend 2003 proved reserves and 25% of its current oil and gas production (OGJ Online, June 10, 2004).
In a news release concerning both sales, Anadarko said it was divesting various assets in Alberta and northeastern British Columbia, representing 55 million boe of proved reserves as of Sept. 1. The average production in September for the properties was 22,200 boe/d.
Anadarko Pres. and CEO Jim Hackett said the company is "ahead of schedule on the sale process and exceeding our value estimates."
CNR said its initial assessments identified 90 new well locations and 200 well recompletion opportunities on the properties it is acquiring. The transaction will extend CNR's North Alberta core region into the light oil operating area of Dawson, executives said.
Sasol-Petronas
The value of Sasol and Petronas's deal was not disclosed.
The companies earlier this year affirmed that discussions were under way (OGJ Online, Feb. 19, 2004.) Petronas owns 80% of Engen, a refiner and marketer.
Upon closing, Engen will be renamed Uhambo Oil Ltd., based in Cape Town, South Africa.
Terms call for Sasol and Petronas to each have 37.5% interest in Uhambo. Black Economic Empowerment (BEE) partners will hold a combined 25% interest in the new company. BEE participation will include Worldwide African Investment Holdings, which owns 20% of Engen.
The transaction is subject to approval of South African and European Union competition authorities. Sasol said approvals are expected during the first half of 2005.
Uhambo will own the 150,000 b/cd Engen Petroleum Ltd. refinery at Durban, Sasol's share in the 87,547 b/cd National Petroleum Refiners of South Africa Pty. Ltd. refinery at Sasolburg, and about 1,600 service stations in South Africa as well as liquid fuel operations in 14 sub-Saharan countries.
GDF's Romanian stake
Distrigaz Sud operates a 13,400 km distribution network serving 900,000 customers in Bucharest. Sales involve 5.6 billion cu m/year of natural gas.
Under the transaction, which totals 330 million euros, GDF will immediately acquire 30% of Distrigaz Sud for 150 million euros and will increase its stake to 51% through a later investment of 180 million euros.
Romania will retain the remaining 49%.
Repsol YPF in Protugal
The assets being acquired by Repsol YPF include a cracker with a 2003 production volume capacity of 350,000 tonnes/year of ethylene and 180,000 tonnes/year of propylene and two polyethylene plants—a 145,000-tonne/year low-density plant and a 130,000-tonne/year high-density plant.
The deal will increase Repsol's cracker production capacity by 38%, its total polyolefins production capacity by 28%, and its polyethylene production capacity by 55%.
Completion of the transaction is subject to European Commission approval.
Mitsui in Mexico
Details and terms of Mitsui's agreement with Shell were not outlined.
If approved by Mexican authorities, the transaction will mean that interest holders in the LNG terminal will be Shell Gas BV 50%, Total SA 25%, and Mitsui 25%.
Terminal de LNG de Altamira S de RL de CV is to be built near Port of Altamira on the eastern coast of Mexico near Tampico and is expected to start operating during the fourth quarter of 2006.
All of the terminal regasification capacity continues to be contracted to a separate marketing company, Gas del Litoral, owned by Shell, 75%, and Total, 25%. The Comisión Federal de Electricidad awarded Gas del Litoral a contract to supply 5 billion cu m/year of natural gas from the regasification terminal for 15 years starting in October 2006 (Dec. 19, 2003, OGJ Online).
Shell divests retail stations
The terms of Shell's transaction with Sol were not disclosed.
Shell said it was divesting its oil products businesses in Barbados, St. Lucia, Netherlands Antilles, St. Kitts & Nevis, British Virgin Islands, Anguilla, Grenada, St. Vincent, Antigua, Dominica, Belize, Guyana, and Suriname, excluding the aviation business.
The companies being sold include Shell Antilles & Guianas Ltd. and Shell Belize Ltd.
The agreements relate to Shell's retail, commercial, marine, and liquefied petroleum gas businesses.
The sale remains subject to regulatory approval, and completion is expected in early 2005. Sol will use the Shell brand and will be the sole distributor of Shell's fuels and lubricants in this region. In addition, Sol will act as an agent and partner on behalf of Shell Aviation.
Quest abandons prospects
Quest hired a consultant to identify and negotiate the acquisition of oil and natural gas prospects in the Alberta foothills. It also created Quest Canada Corp., Edmonton. Quest Oil is negotiating directly for the acquisition of a company based in the Illinois basin.
Quest Oil, formerly known as GameState Entertainment Inc., Vancouver, BC, has dropped its efforts, announced in September, to acquire Grey Creek Petroleum, also of Vancouver. Grey Creek has two licenses, PPL 257 and PPL 258, covering 4 million acres total in Papua New Guinea.
PPL 257 is off Papua New Guinea in the Cape Vogel basin, and PPL 258 is in the East Sepik region.
