By OGJ editors
HOUSTON, July 14 -- Statoil ASA agreed to buy 49% of BP PLC's interest in the In Salah natural gas fields and 50% of BP's interest in the In Amenas gas development project, both in Algeria, for $740 million total.
The transaction marks Statoil's entry to Algeria. Statoil and BP agreed to work with Algerian state oil and gas company Sonatrach to jointly operate the two projects, aimed at delivering gas to the European markets.
Upon closing, Statoil will have a 31.85% interest in the In Salah revenue sharing contract and a 50% interest in the In Amenas production sharing contract. Statoil and BP will have equal representation on all project management committees and boards.
"This transaction gives Statoil an excellent position working with BP and Sonatrach in a major gas province with significant growth potential," said Statoil CEO Olav Fjell. "This is an important step towards fulfilling our international growth and gas strategy, and the transaction supports our key performance targets in 2007."
The two projects' gross reserves are estimated to be 2.275 billion boe. In Salah reserves are 170 billion cu m of gas (1 billion boe). In Amenas reserves are 140 billion cu m of gas (880 million boe) and 325 million bbl of liquids.
Production from In Salah is expected to start in mid-2004 and from In Amenas in late 2005 (OGJ Online, Oct. 31, 2002).
The European Commission must approve In Salah's change of control (OGJ Online, Aug. 13, 2001). The Algerian Ministry of Energy and Mines also must approve the transaction. In addition, Sonatrach has preemption rights over the partial assignment of BP's interests in both assets.
