Marathon to acquire CMS Interests in Africa
6 Nov 2001
US-based Marathon Oil has signed a purchase and sale agreement with CMS Energy to acquire all of the company's upstream and downstream interests in Equatorial Guinea, West Africa.
Through the transaction, Marathon will acquire a 52.4% interest in, and operatorship of, the offshore Alba Block, which contains the currently producing Alba gas field, as well as a 45% interest in an onshore methanol production plant, and a 43.2% interest in an onshore Liquefied Petroleum Gas (LPG) processing plant.
The total cash consideration of the acquisition is $993 million. The transaction is subject to appropriate government approvals and is expected to close in early January 2002.
The Alba field, which began producing in 1991, is estimated to contain a producible resource of 5 trillion cubic feet of dry gas and 300 million barrels of condensate. Currently, 230 million cubic feet per day (mmcfd) gross of wet gas is produced, from which approximately 17,000 barrels per day gross of condensate and 2,400 barrels per day gross of LPG are recovered through process facilities on Bioko Island.
Approximately 115 mmcfd of the remaining lean gas is then fed to the methanol plant. Marathon's net share of production is expected to average almost 18,000 barrels of oil equivalent per day (BOE/d) in 2002.
Plans have been submitted to increase gross production to about 800 mmcfd and expand the condensate recovery and LPG facilities to significantly increase the liquids processing capabilities. This should result in Marathon's net production increasing to 35,000 - 40,000 BOE/d by 2004.
