Exclusive: Gulf firms consider bid for Occidental MidEast stake - sources

Mon Dec 9, 2013 11:01am EST
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By Dinesh Nair and David French

DUBAI (Reuters) - Three state-owned Gulf firms are considering a joint bid for a minority stake in Occidental Petroleum Corp's (OXY.N: Quote) Middle East and North Africa (MENA) unit, a deal that could be worth between $8 billion and $10 billion, three banking sources said.

Abu Dhabi's Mubadala Development Co MUDEV.UL, Qatar Petroleum QATPE.UL and Oman Oil Co have formed a consortium and have picked Citigroup (C.N: Quote) to advise them, the sources with knowledge of the matter said on Monday. They spoke on condition of anonymity as the information is not public.

Occidental, the fourth-largest U.S. oil company, said in October it planned to sell a minority stake in its MENA operations as part of a restructuring meant to lift its valuation. On Monday two of the sources said it could sell a 40 percent stake to the three Gulf firms.

Occidental and Qatar Petroleum were not immediately available for comment, while Citi and Mubadala declined to comment. Oman Oil could not be reached for comment.

Occidental's planned sale fits a trend of U.S. oil companies disposing of assets elsewhere in the world in order to tilt strategy towards the shale gas boom in North America.

ConocoPhillips (COP.N: Quote) is offloading assets in Kazakhstan, Algeria and Nigeria in deals generating around $9 billion in total.

The proposal from the Gulf marks a rare three-way collaboration between state-owned energy firms. One of the stumbling blocks to any deal will be how the trio overcome political hurdles to managing its acquisition, one of the sources said.

Among the positives - given the cost associated with buying the stake on offer, it is unlikely that other bidders will emerge to challenge them.   Continued...

The Occidental Petroleum Corp headquarters is pictured in Los Angeles, California September 16, 2013. REUTERS/Mario Anzuoni