ConocoPhillips (NYSE:COP) saw its shares rise 1.7% last week as it moved to unload its Algerian assets for $1.75 billion.
The company is seeking to offload a number of assets over a three-year period to improve its financials and move into less risky areas.
This week, ConocoPhillips announced it would sell its interests in three major onshore Algerian oil fields to Indonesia’s state-owned PT Pertamina.
So far, ConocoPhillips has raised around $9 billion in asset sales, already meeting its goal of between $8 and $10 billion for 2012-2013. The Algerian sale should close by mid next year.
While the juniors are increasingly braving the risky new frontiers, the majors are moving toward more immediately profitable unconventional plays in North America. Hence the Algeria offload.
For ConocoPhillips, we’re talking about three major onshore Algerian oil fields with average production of about 11,000 barrels of oil equivalent per day.
The company is relinquishing some nice shares. To wit: 65% of the Menzel Lejmat North field—the biggest sale—along with 3.7% of the Ourhoud field and 16.9% of the EMK field. It has been operating these fields with Algeria’s state-owned Sonatrach Petroleum Corp. and three foreign partners: Canada’s Talisman Energy Inc. (TLM), US-based Anadarko Petroleum Corp. (APC) and Italy’s Eni SpA (ENI).
The divestiture comes at a time when Algeria is a turning into a hot venue—especially for Europe, which is eyeing the country’s natural gas reserves as a bulwark against Russia.
Algeria has an estimated 321 trillion cubic feet of recoverable shale gas.
ExxonMobil Corp (XOM) is reportedly in talks with the Algerian government over shale, and Royal Dutch Shell Plc (RDSA) has already signed an exploration agreement.
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Algeria plans to outpace its neighbors, and is already working out how to import hydraulic fracturing technology to speed things along.
By, Charles Kennedy of Oilprice.com
