Tuesday, March 8, 2011

BP backs off from Algeria Asset sale - What makes BP stay back "Government intervention or Algerian gas potential"???

BP has backed off from plans to sell assets in Algeria, The surprise announcement also comes after Russian joint venture TNK-BP Ltd., which is half-owned by BP, said Tuesday it was still interested in buying the assets owned by the British company--the largest foreign oil and gas investor in the North African nation.

Earlier this year, BP agreed to sell its stake in the two fields, which each have production of up to nine billion cubic metres, for $3 billion, but the government's decision to withhold the data has led to speculation that it is interested in snapping up the assets for itself.
It is not the first time the Algerian government has intervened - in 2000, it blocked BP's proposed sale of a 40% share in the Rhourde El-Baguel field to energy giant Elf, opting to exercise its pre-emptive right of purchase.
A major blow to the potential Russian buyer TNK BP

While confirming its interest in the BP Algerian assets, TNK-BP had cautioned it didn't expect a breakthrough in negotiations soon. Algeria's state energy firm, Sonatrach, had signaled an interest in exercising a right of first refusal to the BP assets. Separately, TNK-BP's Russian shareholders are in a dispute with BP over the possible participation in an Arctic deal signed by the U.K. company with Russian oil company OAO Rosneft. It is unclear if the spat affected the Algerian considerations.

Asset portfolio in Algeria

In Algeria, BP has two large natural-gas projects, In Salah, which covers seven fields in the southern Sahara desert, and In Amenas. BP also participates in the Rhourde El Baguel oil project, and is exploring for oil in the Bourarhet block next to In Amenas. 

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