BowLeven to End $500 Million Pact With Petrofac in Cameroon

BowLeven Plc, the U.K. oil explorer focusing on Cameroon, will end its strategic alliance with Petrofac Ltd. after selling part of its project in the country.

BowLeven today agreed to sell part of the Etinde Permit off the coast of the west African nation for about $250 million to OAO Lukoil, Russia’s second-largest oil producer, and New Age (African Global Energy) Ltd. The explorer will now start talks on ending the accord with Petrofac, which in 2012 agreed to provide as much as $500 million for the oil and gas field development, according to BowLeven.

“The implications for the strategic alliance agreement are yet to be worked through,” Alison Flynn, a spokeswoman at London-based Petrofac, said by phone.

The sale “provides BowLeven with much-needed financial resources to fund its share of development,” Alessandro Pozzi, an analyst at Barclays Plc, wrote today in an e-mailed report. “Given the reduced equity interest and the cash payment” from the new partners, BowLeven doesn’t now need money from Petrofac.

BowLeven will be focusing on exploration projects in Cameroon, Zambia and Kenya after reducing its stake in the Etinde discoveries, a spokesman for BowLeven said by phone. The Edinburgh-based company has been planning to supply gas from the fields to Ferrostaal GmbH’s planned fertilizer plant and to GDF Suez SA’s liquefied natural gas plant to be constructed in Cameroon.

BowLeven rose 5.7 percent to close at 42 pence in London, valuing the company 136 million pounds ($231 million).

New Age, where Steven Lowden is a founder, will become the project operator after acquiring an additional 12.5 percent stake from BowLeven. It bought a 25 percent holding in the Etinde Permit last year from Vitol SA, which exited the venture.

Lowden also serves as a non-executive director at Zoltav Resources Inc., an investment firm of Arkadiy Abramovich, son of Russian billionaire Roman Abramovich.