MELBOURNE, Sept 27 Asia Pulse – Woodside Petroleum Ltd’s (ASX:WPL) existing African portfolio is facing the chop after the oil and gas producer decided to sell its troubled Mauritania assets to Malaysian-government owned group Petroliam Nasional Berhad.
The oil and gas producer said the $US418 million ($A477.52 million) sale would include all of Woodside’s onshore and offshore producing, development and exploration interests in the African country.
Woodside’s $1 billion Chinguetti project in Mauritania has been a constant thorn in the side for the company since it began production early last year.
Chinguetti was slated to produce up to 75,000 barrels of oil per day, but the project has not lived up to expectations, suffering a significant cut in reserves and lower than anticipated output.
Production has slowly declined since start-up, with Woodside reporting output had dropped to about 15,000 barrels of oil per day in August.
The project has also been shrouded in controversy.
Woodside became embroiled in a dispute with the Mauritanian government around amendments to offshore production contracts and was investigated by the Australian Federal Police amid allegations of bribery.
Woodside had flagged the potential sale of Chinguetti in August.
At the time, Woodside managing director and chief executive Don Voelte said the company’s entire African portfolio would come under review.
Woodside’s African portfolio is extensive, with the company holding exploration acreage in Kenya, Liberia, Libya and Sierra Leone, along with producing assets in Algeria.
Woodside spokesperson Roger Martin said the company would continue to review its entire African portfolio, including its producing assets in Algeria.
“We indicated that we were considering a range of options in relation to our African assets, which could include and exit, and this is the result of that,” Mr Martin said of Chinguetti.
“We are continuing to look at our options for our remaining African assets.”
The Chinguetti sale is expected to be completed by November, subject to regulatory approvals.
PETRONAS Australia Pty Ltd, a subsidiary of Petroliam Nasional, will house the Mauritania assets in its portfolio.
This is the second significant transaction for PETRONAS this week after the Malaysian oil and gas producer signed an agreement with Shell for a stake in the Evans Shoal liquefied natural gas (LNG) project in the Timor Sea.
The agreement gives PETRONAS a 25 per cent stake in the joint venture, which includes Shell, Santos Ltd and Osaka Gas.
Woodside shares gained 59 cents to $49.28 by 1200 AEST.AAP)