PT Pertamina, Indonesia’s state-owned oil company, agreed to buy stakes in three Algerian oil fields from ConocoPhillips for $1.75 billion, expanding its overseas assets.
The onshore oil fields produce the equivalent of 11,000 net barrels a day, Houston-based ConocoPhillips said in a statement yesterday.
The acquisition would be the largest by announced value this year for Pertamina, which last month dropped a bid to buy Houston-based Coastal Energy Co. after failing to agree on a price. Indonesia’s oil production has been declining since 1998 as the nation’s fields matured. Pertamina, based in Jakarta, was formed in 1957 after the government seized control of Dutch oil fields in Indonesia.
The company has said it’s seeking acquisitions at home and overseas for growth. In June, it agreed to buy all of Harvest Natural Resources Inc.’s interests in Venezuela for $725 million in cash. Pertamina may pump 127,889 barrels of oil a day this year, according to government data, making it Indonesia’s biggest oil producer after a unit of Chevron Corp.
The transaction, expected to close by mid-2013, is subject to approval from the Algerian government and ConocoPhillips’s partners in the fields. It would bring to about $9 billion the proceeds from ConocoPhillips’s current asset sales program. The company has previously targeted $8 billion to $10 billion in asset sales this year and next to focus on investment in more profitable businesses.
“The sale of our Algerian business unit represents another important step in transforming ConocoPhillips’ asset base, and advances the strategic interests of both Pertamina and ConocoPhillips,” Don Wallette, executive vice president of corporate planning, said in the statement.
The sale includes 65 percent of Menzel Lejmat North, 3.7 percent of Ourhoud and 16.9 percent of EMK. ConocoPhillips’s partners in the fields include Talisman Energy Inc., Anadarko Petroleum Corp., Eni SpA and Sonatrach Petroleum Corp., Algeria’s state-owned oil company.
ConocoPhillips rose 1.8 percent to $59.30 at the close in New York. The shares, which have 11 buy, nine hold and four sell ratings from analysts, have climbed 6.8 percent this year.