This content is not available in your region

Glencore puts Chad oilfields up for sale - sources

Access to the comments Comments
Glencore puts Chad oilfields up for sale - sources
FILE PHOTO: An employee of a private security company stands in front of the logo of commodities trader Glencore during the company's annual shareholder meeting in Cham, Switzerland May 24, 2017. REUTERS/Arnd Wiegmann   -   Copyright  Arnd Wiegmann(Reuters)
Text size Aa Aa

By Julia Payne and Dmitry Zhdannikov

LONDON (Reuters) – Mining and trading giant Glencore has put its oilfields in Chad up for sale, three sources familiar with the matter said, in a retreat from its foray into oil production following asset writedowns over the past decade.

Like its oil trading peers, Glencore expanded in the upstream sector around a decade ago in order to secure oil flows, but the value of the assets tumbled with the oil price slump in late 2014.

News of the Chad oilfields sale coincides with the retirement of Glencore’s head of oil Alex Beard at the end of this month and the separation of its upstream oil interests from marketing.

The main producing fields are Mangara and Badila.

Glencore’s net oil production from the West African country accounted for more than half its net production at 7,700 barrels per day (bpd) out of a total net 12,700 bpd. By comparison, oil majors BP produces close to 4 million barrels of oil equivalent per day.

The sources said that Glencore put the assets up for sale less than a month ago and a data room including drilling and seismic details had recently been opened.

The sale is being jointly run by U.S. bank Morgan Stanley and French bank Natixis.

A spokesman for Glencore declined to comment. Morgan Stanley declined to comment and Natixis did not immediately comment.

Glencore was started by trader Marc Rich more than 40 years ago specialising in oil trading.

Over the past 20 years, it expanded into coal and metals mining but oil production constituted a small part of its business. Oil trading meanwhile grew to 5 million barrels per day, making Glencore the world’s second largest oil trader.

It entered Chad in 2012 by buying minority stakes in some licences owned by Calgary-based Caracal Energy and in 2014, the miner acquired the Chad-focused operator for $1.6 billion (1.26 billion pounds).

However, the purchase was ill-timed taking place just months before a major oil price slump and since 2015, Glencore has booked impairments of $1.9 billion on its Chad assets after it scaled back its development programme and froze drilling between early 2016 and the second half of 2017.

In its 2018 report, Glencore said the recoverable value of its Chad assets was $1.2 billion and gross production was around 10,500 barrels per day. In total, Glencore’s upstream gross production was 35,000 bpd.

Glencore has also booked impairments at its assets in Equatorial Guinea, though partially recovered, and in Cameroon. The company also holds an interest in Russian upstream company Russneft.

(Additional reporting by Ron Bousso, Shadia Nasralla and Pamela Barbaglia; editing by Emelia Sithole-Matarise)

euronews provides breaking news articles from reuters as a service to its readers, but does not edit the articles it publishes. Articles appear on for a limited time.