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Glencore puts Chad oilfields up for sale

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Mining and trading giant, Glencore has put its oilfields in Chad up for sale. This is coming after a retreat from its foray into oil production following asset write-downs over the past decade.

The company which expanded in the upstream sector in order to secure oil flows saw the value of the assets decrease with oil price slump in late 2014. Also, news of the Chad oilfields sale coincides with the retirement of Glencore’s head of oil Alex Beard at the end of this month and the separation of its upstream oil interests from marketing.

Reuters reported that the main producing fields are Mangara and Badila. The company’s net oil production from the West African country accounted for more than half its net production at 7,700 barrels per day (bpd) out of a total net 12,700 bpd. By comparison, oil majors BP produces close to 4 million barrels of oil equivalent per day.

Apparently, Glencore had put the assets up for sale less than a month ago and a data room including drilling and seismic details had recently been opened. Also, the sale is being jointly run by U.S bank Morgan Stanley and French bank, Natixis.

Recall that the company entered Chad in 2012 by buying minority stakes in some licenses owned by Calgary-based Caracal Energy and in 2014, the miner acquired the Chad-focused operator for $1.6 billion. However, the purchase was ill-timed taking place just months before a major oil price slump and since 2015, it then booked impairments of $1.9 billion on its Chad assets after it scaled back its development programme and froze drilling between early 2016 and the second half of 2017.

In its 2018 report, Glencore said the recoverable value of its Chad assets was $1.2 billion and gross production was around 10,500 barrels per day. In total, Glencore’s upstream gross production was 35,000 bpd. Also, it has also booked impairments at its assets in Equatorial Guinea, though partially recovered, and in Cameroon.

The company also holds an interest in Russian upstream company Russneft.

 

Source Reuters
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