Russia: Algeria Wants Sonatrach To Buy BP Assets   Leave a comment

MOSCOW -(Dow Jones)- Algeria is leaning towards letting state-owned oil company Sonatrach use its preemptive right to buy U.K. oil major BP’s (BP) Algerian assets, Russia’s energy minister Sergey Shmatko said Friday, indicating a deal between BP and Russia’s TNK-BP Ltd. could fall through.

TNK-BP, whose shareholders include Russian businessmen as well as BP, has lobbied hard in recent months to buy BP’s assets in Algeria, which the company is selling as part of a $30 billion asset-disposal plan designed to cover the costs of the Gulf of Mexico oil spill.

But the deal could be blocked by Algeria’s Sonatrach, if the company chooses to exercise a right of first refusal over BP’s stakes.

“As far as I understand, Algeria is more inclined to Sonatrach’s entering the projects,” Shmatko said. Sonatrach is studying if it can develop the assets on its own, he added. “The decision will depend on its understanding of the technological solutions,” Shmatko said.

Meanwhile, the TNK-BP talks aren’t the only Russia-related deal under negotiation in Algeria. Russian mobile provider VimpelCom Ltd (VIP) has sought to buy half of Egypt’s Orascom Telecom (ORTE.CI) but has faced opposition in Algiers, where the government is seeking to nationalize Orascom’s local unit, a major contributor to revenue.

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.

Algeria’s oil minister Youcef Yousfi said last week the sale of BP assets to TNK-BP was still a “matter of discussion” between BP and the Algerian oil company Sonatrach.

TNK-BP said the negotiations with Algeria are at an initial stage, but declined to comment on Schmatko’s remarks. BP declined to comment.

Source: Echourouk


Posted January 25, 2011 by newworldconsulting in Uncategorized

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