Total scraps plans to buy Occidental Petroleum’s assets in Ghana

French Total has announced that it has discontinued the acquisition of Occidental Petroleum’s assets in Ghana and Algeria.

The deal was part of an $8.8bn agreement reached between Total and Occidental last year to buy Anadarko’s assets in Mozambique, Ghana, Algeria, and South Africa.

While a deal over the Mozambique assets has already been reached, Total noted that an agreement over the Ghana assets fell through after the Algerian authorities blocked Total’s acquisition of Occidental’s assets in Algeria.

According to Total, the acquisition of assets in Ghana was conditional upon the completion of the sale of the Algeria assets.

Total added that Occidental had informed Total that it would not be in a position to sell its interests in Algeria. Occidental has taken the decision after it held talks with the Algerian authorities.

Total said in a statement: “Given the extraordinary market environment and the lack of visibility that the Group faces, and in light of the non-operated nature of the interests of Anadarko in Ghana, Total has decided not to pursue the completion of the purchase of the Ghana assets and, as a consequence, to preserve the group’s financial flexibility.”

Commenting on the discontinuity of the acquisition, Total chairman and CEO Patrick Pouyanné said: “This decision not to pursue the completion of the purchase of the Ghana assets consolidates the group’s efforts in the control of its net investments this year and provides financial flexibility to face the uncertainties and opportunities linked to the current environment.”

In August last year, Occidental acquired oil and gas assets in Africa as part of its purchase of Anadarko Petroleum in a $55bn deal.

Earlier this month, Total said it is keeping its dividend stable despite reporting a sharp drop in first-quarter (Q1 2020) net adjusted profit.