Oxy decides against selling Algerian assets after government pushback

HOUSTON (Bloomberg) --Occidental Petroleum Corp.’s Algerian oil and gas assets are a core holding and will no longer be listed for sale, Chief Executive Officer Vicki Hollub said on a conference call with analysts.

In May, Occidental’s proposed sale of its Algerian assets to Total SE was blocked by the North African country, putting further pressure on the shale driller as it tries to shrink a massive debt pile.

The decision was a major stumbling block for Occidental, which had earmarked the proceeds from the sale to help reduce debt after buying Anadarko Petroleum Corp. for $37 billion last year. The pandemic-driven plunge in crude demand put further stress on the Houston-based oil producer’s balance sheet, forcing it in May to cut a quarterly dividend to the lowest level in decades. Occidental reported a $6.6 billion writedown in the second quarter, equivalent to more than 40% of its market value.

“It’s not that we gave up on selling Algeria,” Hollub said on the call. “We believe that those assets there are such high quality, they’re going to be very competitive with our domestic assets. We want to be in Algeria.”

Offloading assets in Algeria and Ghana was supposed to raise about $5 billion for Occidental, which has large debt repayments due beginning next year. Occidental is in talks about a potential sale of energy assets in Africa and the Middle East to Indonesia’s state-owned PT Pertamina, people with knowledge of the matter said last month.