COP Sells Algerian Assets

Sale of Algerian subsidiary with three major onshore oil fields.

ConocoPhillips plans to sell its wholly-owned subsidiary, ConocoPhillips Algeria Ltd., which holds interests in three major onshore oil fields located either fully or partially in Block 405a, Menzel Lejmat North (65%, operated), Ourhoud (3.7%, nonoperated), and EMK (16.9%, nonoperated).

ConocoPhillips’ 2012 net production from these fields averaged 11,000 BOE per day through October, and at Oct. 31, 2012, the net carrying value of ConocoPhillips’ Algerian assets was approximately $850 million.

“The sale of our Algerian business unit represents another important step in transforming ConocoPhillips’ asset base, and advances the strategic interests of both Pertamina and ConocoPhillips,” said Don Wallette, executive vice president, commercial, business development, and corporate planning.

The deal is still dependent on the partner of ConocoPhillips at the block who holds the first right to buy shares and the approval from Aljazair authority. This transaction is expected to be finalized in the first semester of 2013. During 2012, block 405a produced 35,000 bpd, of which 23,000 bpd went to ConocoPhillips, Karen said. In addition, Pertamina will also have the chance to increase its reserves by 100 million barrels of oil with the acquisition.

"The acquisition is expected to boost Pertamina's oil output significantly, from 23,000 barrels of crude oil per day to 35,000 barrels of oil per day next year as the EMK field is projected to begin its production in 2013. This will be a milestone of Pertamina's upstream business development. We are ready to form a strong, close partnership with Sonatrach in a bid to maximize the output from the oil block," said Pertamina chairman and chief executive Karen Agustiawan.

Including these two transaction, the company has announced total asset sales of about $11 billion during 2012.