Hong Kong: US energy company Marathon Oil Corp. is selling a 20% stake in an Angolan oil field that could fetch almost $2 billion (Rs8,480 crore), attracting bids from Oil and Natural Gas Corp. Ltd (ONGC), China’s top three oil firms and Brazil’s Petrobras, persons close to the matter said.
Asset sale: Marathon Oil’s headquarters in Houston, Texas. The 20% stake sale in Angolan oil field could fetch the firm around $2 billion. Photograph: F. Carter Smith / Bloomberg
Marathon is selling two-thirds of its 30% holding in Angola’s offshore block 32 as part of an asset sale programme the company hopes will raise $2 billion to $4 billion within a year.
At the end of 2007, there had been 12 announced discoveries on block 32, with total resources of about 1.5 billion barrels of oil equivalent, according to Exxon Mobil Corp., one of Marathon’s partners on the block.
The value of the asset was boosted last month when Angola approved development of neighbouring block 31, paving the way for oil companies to book potentially huge reserves there.
Marathon has said it expects to get government permission for the development of block 32 about 12 to 18 months after Block 31. The company holds a 10% stake in block 31.
The remaining interests in bock 32 are held by operator Total (30%), Sonangol (20%), Exxon Mobil (15%) and Petrogal (5%).
The ultra-deepwater offshore field is of interest to China, which covets deepwater drilling experience for development of its own offshore blocks.
Persons familiar with the bidding process said giant Chinese refiner Sinopec had teamed up with China’s offshore specialist Cnooc Ltd to bid. Unusually, top Chinese oil producer China National Petroleum Corp., or CNPC, had also made a separate bid.
One energy banker not directly involved in the process said he expected ONGC, to be a very active bidder, since it had bid aggressively for the last Angolan offshore block that was available. Brazilian deepwater specialist Petrobras was also bidding, while one energy banker said he expected the field to be of interest to US and European companies such as ENI SpA of Italy.
Bidding in the sale process, run by energy consultants Harrison Lovegrove, has now finished and moved to the negotiation stage, which could end within days, with the final price likely to be close to $2 billion, a source familiar with the matter said.
A Marathon spokeswoman said the company does not comment on market rumours or speculation.
It said in January that it planned to sell off mature or non-strategic assets after announcing a 54% increase in its capital spending budget for 2008. The asset review would increase its financial flexibility, the company said.
The company, which has said it is considering splitting its exploration and production business from its refining operations, has already sold off North Sea assets as part of the review.