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 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>
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> 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.
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"The stake is pretty big for a single buyer. It was always a deal
which made sense for a consortium to look at but this is not a done
deal yet and there are several dynamics to it which needs to be
addressed," the source, a Gulf-based banker, said.
"We don't see much international interest for an asset like this and
the chances of another consortium being formed are limited but not
impossible."
The Middle East accounts for more than a third of Occidental's
worldwide oil and gas production with net developed and undeveloped
oil and gas assets in the region totaling more than 15 million
acres, according to its website.
Among its assets are the Al Hosn Gas Project in the United Arab
Emirates, one of the largest natural gas fields in the region which
it is developing in a joint venture with Abu Dhabi National Oil
Company.
The firm also has assets in Qatar, Oman, Bahrain, Iraq, Yemen and
Libya.
(Additional reporting by Michael Erman
in New York and Amena Bakr in Doha; editing by Mark Potter and
Sophie Walker)
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