Algeria's state-owned gas supply company Sonatrach is reportedly interested in buying the 30% stake in Spanish oil and gas player Cepsa that is currently owned by Banco Santander, Thompson Financial has reported, citing Spanish daily El Mundo. The news follows reports that Algeria has ended Spanish participation on an LNG project in the region.
According to Thompson Financial, El Mundo reported that unnamed sources close to the deal have confirmed that Banco Santander and Cepsa have already held first round talks on the issue. Thompson Financial also reported that although Banco Santander declined to comment, it has made no secret of the fact that it would be prepared to divest the stake at a strategic juncture.
Reuters revealed that, at present market prices, the 30% stake in Cepsa, which would add to Sonatrach’s existing 30% interest in Cepsa’s gas marketing arm, would be valued at approximately E5.58 billion. The publication also revealed that Sonatrach was recently granted permission to sell up to two billion cubic meters of gas in Spain.
Earlier in the week, Algeria put an end to a joint venture that had been forged with a consortium led by Spanish firm Repsol, for the development of an extensive natural gas project in Algeria. The consortium, which also comprised Spain’s Gas Natural, will no longer by able to participate on the E5 billion Gassi Touil venture, the Financial Times said.
The Financial Times reported that although Sonatrach had a minority 20% in the project, with Repsol holding 48% and Gas Natural holding 32%, the Algerian government expelled the companies, accusing them of delays and of exceeding cost projections. The publication added that the Spanish companies are planning to seek international arbitration.
Repsol appears to be having a bad week all round as, according to Thompson Financial, citing El Economista, a Spanish court has thrown out the firm’s appeal regarding accusations that it fixed its petrol retail prices. It is believed that Repsol will now be required to pay the E3 million anti-trust penalty that was originally imposed in 2001.