The European Commission has approved Statoil ASA's $750 million agreement to acquire 49% of BP PLC's interest in the In Salah dry gas project and 50% of its interest in In Amenas gas condensate field, both in Algeria.
Sonatrach, Algeria's state oil and natural gas company, approved the deal in October (OGJ, July 21, 2003, p. 37).
Meanwhile, the In Salah portion of the deal had to be submitted to the EC, which concluded that the change in control complies with European Union regulations.
In other upstream news:
- Chesapeake Energy Corp., Oklahoma City, announced three transactions in which it will pay a total of $510 million for oil and gas assets in the US Midcontinent, Permian basin, and the onshore Gulf Coast.
- Quest Resource Corp., Benedict, Kan., agreed to purchase Oklahoma City-based Devon Energy Corp.'s Cherokee coalbed methane project in southeastern Kansas and northeastern Oklahoma for $126 million.
In recent midstream news:
- Enbridge Energy Partners LP, Houston, agreed to acquire crude oil pipeline and storage systems from Shell Pipeline Company LP and Shell Oil Products US for $131 million.
Statoil-BP
This agreement, which marks Statoil's entry into Algeria, still requires approval by the Algerian Ministry of Energy and Mines, the national oil and gas industry regulator. Statoil anticipates that approval because it already has Sonatrach's approval.
Statoil and BP will collaborate with Sonatrach in both projects, with Statoil holding 31.85% of the In Salah profit-sharing contract and 50% of the In Amenas PSC.
Production from In Salah is expected to start in mid-2004 and from In Amenas in late 2005 (OGJ Online, Oct. 31, 2002).
Chesapeake
Chesapeake is buying Concho Resources, Midland, Tex., a private company, for $420 million. That deal is expected to close on Jan. 30.
In addition, Chesapeake is buying two smaller properties for $90 million, and one of those transactions already closed. The other transaction is expected to close this month.
The smaller transactions involve assets in the Permian basin and in Goliad County, Tex.
Taking these pending transactions into account, Chesapeake already increased its 2004 production forecast. The transactions are expected to enable the company to produce 890 MMcfed compared with its initial 2004 production forecast of 820 MMcfed.
Chesapeake said 89% of its anticipated 2004 production is gas with 11% from oil and natural gas liquids.
Quest-Devon
Quest Resource will receive 330 producing wells, some 200 miles of gathering pipelines, and interests in 375,000 leasehold acres.
Previously, Quest Resource had 120,000 acres under lease in the Cherokee basin, of which it has developed fewer than 50,000 acres (OGJ, Oct. 27, 2003, p. 40).
Devon said the sales price equals its net investment in the assets.
Enbridge Energy-Shell
Enbridge Energy Partners anticipates closing on its $131 million package during the first quarter, subject to regulatory approvals and one right of first refusal on the Osage pipeline.
The assets being acquired serve refineries in the Midcontinent from the Cushing, Okla., hub and consist of 615 miles of active crude oil pipelines and 9.5 million bbl of storage capacity.
Assets being acquired include:
The 433 mile, 170,000 b/d crude oil Ozark pipeline that extends from Cushing to Wood River, Ill.
58.8% interest in the 135 mile Osage pipeline and associated 1.2 million bbl storage terminal. The pipeline delivers 110,000 b/d and is connected to two refineries in Kansas.
The 47 mile West Tulsa pipeline that transports 55,000 b/d to two refineries in Oklahoma.
The Shell storage terminal at Cushing with 8.3 million bbl of storage capacity.
"These systems provide stable cash flows from toll or fee-based revenues derived from a combination of regulated assets and contracted unregulated assets. We anticipate that these assets will contribute immediately to distributable cash flow per unit," said Dan C. Tutcher, president of the partnership's general partner and management company.
Concurrently, the Calgary-based Enbridge Inc. plans to acquire Shell's Patoka West Tank Farm and its 60% interest in the Woodpat Pipeline for $9.5 million.
These assets complement Enbridge's initiative to access new markets for Canadian crude oil. The initiative will benefit the partnership by facilitating throughput on its Lakehead system.
