Oxy Selling Stake in Plains All American for $650M

Source Press
Company Occidental Petroleum CorporationPlains All American Pipeline 
Tags Assets for Sale
Date September 19, 2019

As Occidental Petroleum seeks to trim down after buying Anadarko Petroleum for $30 billion, the company said it would sell its stake in Plains All American Pipeline for $650 million.

Oxy placed its stake in Plains and the parent Plains GP Holdings up for sale on public markets after owning a position in the Houston oil pipeline firm for more than a decade.

The Houston oil and gas producer is in the process of cutting costs and focusing on debt reduction after buying Anadarko in the biggest energy deal in years.

Oxy is taking on roughly $40 billion in debt to complete this deal, including loans and Anadarko's existing debt load, while making a bet on relatively healthy oil prices going forward.

Oxy previously agreed to sell Anadarko's Africa assets to the French energy major Total for $8.8 billion, including a massive liquefied natural gas development and export project in Mozambique.

Oxy formed a joint venture with Colombia's state-owned oil company Ecopetrol in August to develop nearly 100,000 net acres in the Permian's more mature Midland Basin.  Ecopetrol will pay Oxy $750 million up front and carry another $750 million in capital into the partnership. Oxy plans to put the first chunk of cash toward debt reduction.

Anadarko also is considering selling at least a stake in Anadarko's pipeline spinoff firm, Western Gas Partners. Oxy's stake in Western is estimated at $7 billion or so.

Oxy also may consider selling assets in the deepwater Gulf or in Colorado's DJ Basin, where Anadarko was the leading producer, energy analysts said.

Source: EvaluateEnergy® ©2020 EvaluateEnergy Ltd