Western signs deal to sell Anadarko's assets in Africa to Total

Occidental Petroleum has signed an agreement for the sale of Anadarko Petroleum's oil and gas assets in Africa to French oil company Total for $ 8.8 billion.

The agreement is subject to the conclusion by Occidental of an agreement on the purchase of Anadarko and its conclusion. Occidental is competing with Chevron to acquire Anadarko.

The announcement on Sunday offers insight into how Occidental would finance his purchase in cash and Anadarko shares. Occidental had said that he would seek to sell assets worth $ 10 billion to $ 15 billion to secure the $ 38 billion proposed.

Occidental said that selling the assets of Anadarko in Algeria, Ghana, Mozambique and South Africa to Total would also reduce the integration difficulties of the two drillers. The deal with Total is a binding agreement, and the disinvestment of African assets would occur at the same time that Occidental would enter into an agreement to buy Anadarko or shortly thereafter.

"Given our long tradition of productive collaboration, we are confident that we can achieve this sale quickly and efficiently," said Vicki Hollub, CEO of Occidental, in a statement. "Total has extensive experience working in Africa and is well positioned to maximize the value of these assets."

The divestment would leave Occidental with Anadarko's holdings in American oil shale basins, the Gulf of Mexico and South America. Occidental is mainly interested in the Anadarko area in the Permian Basin, the main American shale deposit located between western Texas and southeastern New Mexico.

Chevron reached an agreement to buy Anadarko for $ 33 billion last month, but Occidental then proposed a higher bid. The Anadarko board of directors is currently reviewing the Western offer.

Analysts generally believe that Anadarko is better integrated with Chevron's portfolio, particularly the Mozambique Liquefied Natural Gas Project. Chevron is a major player in the LNG market, or natural gas cooled in the liquid state for transportation.

The proceeds from the sale of assets to Total would go towards financing the cash portion of the offer made by Occidental to Anadarko. The transaction is structured as a 50-50 cash-stock transaction.

The agreement with Total is the latest Western effort to provide investors with some certainty as to the financing of the transaction. Last week, the company announced a $ 10 billion investment from Warren Buffett's Berkshire Hathaway, which also depends on the conclusion of the deal with Anadarko and which would fund the cash portion of the offer.