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TOTAL
Total Swoops for Oil Giant TOTAL
PRODUCTION: Rod Stone
Total is major energy operator: the world’s fourth-largest oil and gas company as well as a major integrated player in the global solar industry, while a multi-billion dollar swoop for Danish oil and gas firm Maersk Oil now sees it assume to title of the second largest North Sea operator.
// The colossal $7.45bn deal to see Maersk Oil become part of a leading global oil and gas operator is the largest North Sea takeover in a decade, and even more surprising given other oil majors’ current preference to quietly retreat from UK waters. It is a move which the French major said would strengthen its operations in the North Sea, while simultaneously raising its output to three million barrels per day by 2019. When completed, Total will hold a stake in the one of the basin’s largest oil discoveries ever made; the Johan Sverdrup field. The is in addition to the Culzean gas project, which will be capable of providing 5% of the total UK gas demand by the end of the decade. Patrick Pouyanne, Total’s Chief Executive and Chairman,
commented: “The combination of Maersk Oil’s North-Western Europe businesses with our existing portfolio will position Total as the second operator in the North Sea with strong production profiles in the UK, Norway and Denmark, thus increasing exposure to conventional assets in OECD countries. This transaction delivers an exceptional opportunity for Total to acquire, via an equity transaction, a company with high quality assets which are an excellent fit with many of Total’s core regions.” Many of the world’s top oil companies have resumed action on the takeover front in the last year, prompted by signs of a recovery in the oil market. Total expects its biggest oil deal since the acquisition of Elf in 2000 to generate financial synergies of more than $400 million per year. For Danish company A.P. Moller Maersk, meanwhile, the sale of Maersk Oil, with reserves equivalent to around one billion barrels of oil, fits its strategy of focusing on its shipping business and other activities to create an integrated transport and logistics company, and this transaction will contribute significantly to upholding its strong capital structure.
“In determining the best future ownership structure for Maersk Oil, it has been imperative for us that the capabilities and assets created in Maersk Oil continue to be developed, and that long-term investments are upheld, especially in the Danish part of the North Sea,” explained Søren Skou, CEO of A.P. Moller Maersk.
“The valuation of Maersk Oil and Total’s commitment is a testament to the quality and standing of Maersk Oil. In addition, the agreement will strengthen the financial flexibility of A.P. Moller Maersk and free up resources to focus our future growth on container shipping, ports and logistics.”
Denmark will become the regional hub for all Total’s operations in Denmark, Norway and the Netherlands, based on Maersk Oil’s capabilities and strong position in the North Sea region. “Maersk Oil’s activities across the North Sea will become part of a leading global operator with a strong performance record and long-term growth interest in the sector. The combination of Total and Maersk Oil’s global footprint and geographical overlap will ensure the continued development of Maersk Oil’s worldwide strategic and selective assets,” concluded Claus V. Hemmingsen, Vice CEO of A.P. Moller Maersk and CEO of the Energy division.”
TOTAL
020 7339 8000 www.total.co.uk
