French oil giant Total has confirmed that it has signed an agreement to divest several UK non-core assets to Petrogas NEO UK Ltd, the exploration and production arm of the Oman-based conglomerate MB Holding. According to a Total release, Petrogas has partnered with Norway-based private equity investor HitecVision.
The assets, formerly owned by Maersk Oil, are located in the Eastern North Sea. The release said that the overall consideration for this deal amounts to 635 million dollars with an effective date of January 1, 2019. It said the transaction remains subject to approval from the relevant authorities and is expected to close in December 2019.
“This transaction is consistent with our portfolio management strategy, aiming at lowering our break-even point by optimizing capital allocation and divesting high technical costs assets. Our primary objective is to maintain the organic break-even before dividend below $30 per barrel and high-grading our portfolio will help us achieve this” commented Arnaud Breuillac, President Exploration & Production at Total.
The release said that following the Maersk Oil acquisition in 2018, Total became the second largest operator in the North Sea, considered one of its core areas. The release noted that the region is home to some of the Group’s current major projects: “Culzean, which started up last month in the UK, and Johan Sverdrup in Norway with first oil planned later this year.”
Total in the United Kingdom
According to its press release, Total is present across the energy value chain in the UK and has been present in the country for over 50 years, employing over 2,000 people.
Total, in terms of upstream, is one of the UK’s leading oil and gas operators, with equity production of 179,000 boe/d in 2018. It principally comes from operated offshore fields in three major zones: the Alwyn/Dunbar area in the Northern North Sea, the Elgin/Franklin area in the Central North Sea, the Laggan-Tormore area in the West of Shetland area.
“Downstream, Total is one of the UK’s largest suppliers of gas and electricity to businesses and the public sector. The Group is also present in refining through the Lindsey Oil Refinery in Lincolnshire, with a capacity of 110,000 barrels per day, and in the marketing of petroleum products including lubricants, aviation fuel, bitumen and specialty fluids,” the release said.
As a result of a farm in Total has a 25 percent stake in the Orinduik Block offshore Guyana along with the operator Tullow which has 60 percent and Eco Atlantic whose share has been reduced to 15 percent.