BHP Ltd. said Thursday it will reduce its exposure in North African projects by selling a parcel of oil and gas exploration interests in Algeria to Woodside Petroleum Ltd for $22.5 million.
A statement issued by BHP said Woodside would take a 15 percent interest in the Ohanet Risk Service Contract (RSC), a 50 percent stake in the Boukhechba Production Sharing Contract and a half interest in the Ouest Hassi R'Mel Gas Study Agreement.
However, the Algerian government and Sonatrach, the state-owned oil and gas company, must sanction the sale before the deal can be finalised.
BHP said its exposure and capital commitment to the Ohanet project would be reduced by around 150 million US dollars through Woodside's purchase.
However, it will retain a 45 percent stake in the project, alongside venture partners Japan Ohanet Oil and Gas Co. Ltd, which has a 30 percent holding, and Petrofac Resources (Ohanet) LLC.
BHP and its partners inked a contract in July to develop four gas and condensate reservoirs in the Ohanet region.
The risk service contract commits the venture partners to produce 710 million cubic feet of wet gas per day, scheduled to begin in October, 2003.
The region's reservoirs contain an estimated 3.4 trillion cubic feet of pipeline quality gas, 107 million barrels of condensate and 116 million barrels of liquid petroleum gas.
Woodside's investment similarly eases BHP's exposure in the other two Algerian-based projects.
"The joint venture with Woodside in the Boukhechba Production Sharing Contract enables BHP to mitigate risk in the company's previously 100 percent-owned exploration blocks, ahead of next year's exploration drilling program," the BHP statement said.
"In addition, Woodside's involvement in the Ouest Hassi R'Mel Gas Study Agreement signals closer cooperation between the two companies in pursuit of future development opportunities in Algeria and elsewhere in North Africa."
BHP currently owns rights to analyse seismic and well data covering 84,000 square kilometres (34,000 sq miles) to the north and west of Algeria's Hassi R'Mel gas field.
Woodside described the deal as the beginning of a "long-term cooperative agreement in North Africa".
Woodside's managing director, John Akehurst, said the company's investment strategy was based on international growth through the development of self-sustaining businesses in a limited number of countries.
He said Woodside looked "forward to a mutually beneficial business relationship with the government of Algeria and Sonatrach". –AFP.
©--Agence France Presse.
© 2000 Mena Report (www.menareport.com )