The European Commission has concluded that the agreement by Statoil ASA (OSE: STL, NYSE: STO) to acquire 49 per cent of BP's interest in Algeria's In Salah dry gas project accords with European Union regulations. This brings the deal to its commercial closure.
Statoil and BP signed two purchase agreements in June – one covering In Salah and the other giving the group 50 per cent of BP's holding in Algeria's In Amenas gas condensate field.
Both contracts were approved in October by Sonatrach, the Algerian state oil and gas company, but the In Salah deal also had to be submitted to the European Commission for consideration. That assessment has concluded that the contract accords with EU regulations.
This agreement also requires the approval of the Algerian Ministry of Energy and Mines as the national oil and gas industry regulator.
Statoil and BP are to collaborate with Sonatrach over both In Salah and In Amenas.
Totalling USD 740 million for the interests in both projects, the purchase price was paid in October for In Amenas and December for In Salah.
Statoil will hold 31.85 per cent of the revenue sharing contract for In Salah, and 50 per cent of the production sharing agreement covering In Amenas.
The agreement marks the group's entry to the Algerian market, and will provide an important platform for future growth in this country.
Statoil's gross (equity) share of reserves in the two fields is estimated at 944 million barrels of oil equivalent. This corresponds to 300-400 million barrels of oil equivalent in net (entitlement) reserves.