euro adhoc: BP PLC
BP TO BRING A NEW STRATEGIC PARTNER, STATOIL, TO ALGERIA (E)
Disclosure announcement transmitted by euro adhoc. The issuer is responsible for the content of this announcement.
June 23, 2003
BP TO BRING A NEW STRATEGIC PARTNER, STATOIL, TO ALGERIA
BP said today it had agreed in principle to sell a portion of its Algerian interests to Statoil for $740 million in cash.
The sale comprises 50 per cent of BP's stake in the In Amenas gas condensate project and 49 per cent of BP's interest in In Salah gas. Following the sale, BP and Statoil will jointly operate the projects with Algeria's state oil and gas company, Sonatrach.
In Salah and In Amenas, Algeria's third and fourth largest gas developments, are expected to achieve first gas in 2004 and 2005 respectively.
Tony Hayward, BP's chief executive of exploration and production said: "We are pleased to bring Statoil into these projects and look forward to working with them and Sonatrach to bring the projects on to production in 2004 and 2005".
Olav Fjell, Statoil's chief executive said: "This transaction gives Statoil an exciting position as a joint operator working with BP and Sonatrach in proven gas fields with significant growth potential. It is an important step towards fulfilling our international growth and gas strategy."
Subject to Sonatrach and Algerian regulatory consent and other approvals, the sale is expected to complete by the end of 2003.
Goldman Sachs acted as exclusive financial advisor and Linklaters as exclusive legal advisor to BP in connection with the transaction.
Notes to editors:
· In Amenas
The In Amenas project, the largest wet gas joint development project in Algeria, is located approximately 850 kilometres south of Hassi Messaoud, in the south-east of the country. The project includes development of four primary gas fields and gas gathering and processing facilities. The project will produce approximately 9 billion cubic meters a year of gas and some 60,000 barrels a day of liquids and is on schedule to begin production in 2005. BP's share of reserves at the end of 2002 was 252 million barrels of oil equivalent, according to Securities and Exchange Commission definition.
Gas from In Amenas will be transported via pipeline to Hassi R'Mel and from there to the ports of Arzew, Isser, and Skikda, or via two export pipelines routed directly from Hassi R'Mel to Spain and Italy respectively.
In 1998 BP entered into a production-sharing contract with Sonatrach extending to 2022, with the potential for an extension to 2027 with compensation by way of freely marketable liquids stemming from the project.
· In Salah
The In Salah project, located some 1200 kilometres south of Algiers, includes development of seven proven gas fields, gas processing facilities at Krechba and pipeline infrastructure stretching 579 kilometres north to Hassi R'Mel. The project is expected to produce 9 billion cubic metres a year of dry gas and is on schedule to achieve first gas in 2004. BP's share of reserves at the end of 2002 was 403 million barrels of oil equivalent, according to Securities and Exchange Commission definition.
BP entered into a 30-year contract of association with Sonatrach in February 1997 regarding In Salah's development and production. Sonatrach, BP and Statoil will market gas until the end of the contract in 2027. Gas sales contracts are in place with Enel for 4 billion cubic metres a year through to 2017 and with Sonatrach for 5 billion cubic metres a year through to 2019.
- ENDS -
This information is provided by RNS
The company news service from the London Stock Exchangeend of announcement euro adhoc 23.06.2003
Further inquiry note:
Further enquiries: Toby Odone, BP Press Office, London, tel: +44 (0)20 7496 5256 Kai Nielsen,
Statoil Press Office, Oslo, tel +47 97 04 1332
Branche: Energy
ISIN: GB0007980591
WKN: 850517
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