ExxonMobil Corp. has completed the sale of its 3.7% stake in China Petroleum & Chemical Corp. (Sinopec) for $1.37 billion.
In other recent company transactions:
- Kerr-McGee Corp., Oklahoma City, plans to sell or spin off its chemical business, the world's third-largest producer and marketer of titanium dioxide.
- Kazakhstan agreed to buy half of BG PLC's 16.67% stake in the Agip KCO consortium, which is developing Kashagan oil field and others in the northern Caspian Sea. Terms were withheld, and the transaction is expected to close by Mar. 31.
- Woodside Energy (USA) Inc., a subsidiary of Woodside Petroleum Ltd., Perth, Australia, formed an alliance with Explore Enterprises LLC, Covington, La., to explore, develop, and produce oil and natural gas in the Gulf of Mexico.
- Oil & Natural Gas Corp. (ONGC) of India is negotiating with Russia's OAO Gazprom regarding possible deals involving oil, natural gas, and petrochemicals.
- Total SA agreed to buy a 49% interest in Block 4 of the Plataforma Deltana area of the Venezuelan continental shelf from Statoil ASA. Terms were not disclosed.
- PTT Exploration & Production PLC (PTTEP) plans to realign its portfolio. The Thai state-owned firm wants to reduce risk by reducing its holdings in 10 out of 24 projects in which it has a high ownership stake.
- ConocoPhillips agreed to increase its ownership in Duke Energy Field Services LLC (DEFS) to 50% from 30.3% through a series of transactions with Duke Energy Corp.
- A subsidiary of Enterprise Products Partners LP, Houston, acquired additional interests in Dixie Pipeline Co., increasing Enterprise's ownership interest to 66% from 20% (OGJ Online, Oct. 9, 2000).
ExxonMobil-Sinopec
The earnings impact from ExxonMobil's transaction will be reported in the first quarter, the company said.
ExxonMobil acquired the Sinopec shares in October 2000, and the investment facilitated the development of a strategic alliance between the companies.
ExxonMobil said that it continues to jointly develop refining, marketing, and chemical ventures with Sinopec.
Kerr-McGee's spin off
Separation of Kerr-McGee's chemical business will allow the company to better focus on its core competencies in exploration, exploitation, development, and production, executives said. There is no time schedule yet for the divestiture, a company spokeswoman said.
Kerr-McGee's chemical unit has gross production capacity of 624,000 tonnes/year of TiO2, an inorganic white pigment used in paint, coatings, plastics, and paper.
Separately, Kerr-McGee plans a $1 billion share repurchase program. The timing and final number of shares to be repurchased will depend in part on the outcome of the chemical business separation, the company said.
Banc of America Securities analyst Robert S. Morris, New York, said the sale or spin off of the chemical business was expected. He estimated its value at $1.7-1.9 billion.
Standard & Poor's Rating Services, New York, cut Kerr-McGee's corporate credit rating to "BBB–," the lowest investment-grade rating. Previous, the rating was "BBB."
Kazakhstan's Kashagan deal
Kazakhstan Minister of Energy and Minerals Resources Vladimir Shkolnik said that the state has enacted preemptive rights that allow it to buy shares in extractive projects, enabling the Caspian nation's purchase of BG's share in Kashagan.
The consortium's production-sharing agreement (PSA) covers more than 5,600 sq km. Kashagan reserves are 7-9 billion boe, BG said. Production is expected to start in 2007-08.
Previously, BG attempted to sell its share in the Agip KCO consortium in two transactions to units of CNOOC Ltd. and Sinopec. CNOOC and Sinopec each agreed to acquire an 8.33% interest in the PSA for $615 million (OGJ, Mar. 17, 2003, p. 42).
But the other partners agreed to purchase BG's interest, preempting BG's plans to sell the stake to Chinese companies (OGJ Online, May 16, 2003).
Eni PSA holds a 16.67% interest in the project. Partners are ExxonMobil Kazakhstan Inc. 16.67%, ConocoPhillips 8.33%, Tokyo-based Inpex Corp. 8.33%, Royal Dutch/Shell Group 16.67%, and Total SA 16.67%.
Woodside in the gulf
In the Gulf of Mexico joint venture program, Woodside will hold 95% interest in each project and Explore Enterprises will hold 5%. Explore Enterprises will acquire a 5% interest in Woodside's existing leases in the gulf with the exception of the Neptune and Midway discoveries.
After Woodside recovers the value of its invested capital, Explore Enterprises' interest in each project will increase to 12.5%.
The alliance is set up for 5 years with an option to extend it for 2 years.
ONGC, Gazprom
ONGC Chairman Subir Raha said he met Gazprom Chief Executive Alexei Miller to discuss potential joint projects involving gas production in Sakhalin and LNG facilities on the Pacific coast.
"The investment may go up to $20 billion or more over 5 years, and if we reach an agreement, we could begin investing as early as next year," Raha said.
Previously, the two companies signed a memorandum to jointly develop energy projects in India, Russia, and other countries.
Total in Venezuela
Total's purchase of a 49% stake in Block 4 of the Plataforma Deltana area from Statoil remains subject to approval by Venezuela's Ministry of Energy and Petroleum.
The license covers 1,435 sq km in 200-800 m of water.
Operator Statoil is drilling the first of three planned wildcats on Block 4, Ballena 1-X (OGJ Online, Jan. 4, 2005).
PTTEP portfolio
PTTEP Pres. Maroot Mrigadat said international firms are interested in assets that his company plans to divest.
The Thai state-owned company wants to sell part of its 100% interest in numerous assets, including Block 44 in Oman and several blocks in Myanmar's Gulf of Martaban.
At the same time, PTTEP wants to increase holdings in certain mature projects, including Yadana and Yetagun gas fields in Myanmar.
ConocoPhillips, DEFS
Upon closing of the realigned interests, DEFS would be a 50:50 joint venture between ConocoPhillips and Duke Energy. DEFS is one of the largest natural gas and gas liquids gathering, processing, and marketing companies in the US.
Duke Energy expects to receive, directly and indirectly through its ownership interest in DEFS, a combination of assets and cash worth $1.1 billion. The restructuring, subject to regulatory approvals, is expected to close during the second quarter.
Enterprise, Dixie Pipeline
Dixie Pipeline Co., Atlanta, owns and operates the 1,300-mile Dixie Pipeline, which transports 100,000 b/d of propane from Texas, Louisiana, and Mississippi to the southeastern US.
The pipeline carries propane from Mont Belvieu, Tex., and nine other injection points to its termination points in Apex, NC, and Alma, Ga., as well as seven intermediate delivery terminals.
Enterprise received approvals for separate transactions in which it purchased a 26% interest from an affiliate of ChevronTexaco Corp. for $40 million and a 20% interest from an affiliate of ConocoPhillips for $31 million.
Other interest holders of Dixie Pipeline are affiliates of BP PLC with 23% and ExxonMobil Corp. with 11%.