The acquisition is expected to bolster Total’s existing offshore producing business in the UK and Norway parts of the North Sea.
It will also enable the French oil and gas giant to become the second largest operator in North West Europe offshore region where it will operate more than 500kboe/d with the addition of Maersk Oil.
As per the terms, the Danish business conglomerate A.P. Møller – Maersk will be entitled to $4.95bn worth shares of Total, which will also assume a debt of $2.5bn of Maersk Oil.
Part of the acquisition will be Maersk Oil’s world class assets like the Culzean UK gas field where the Danish firm is an operator with a 49.99% stake and the Johan Sverdrup oil development in Norway where it has a stake of 8.44%.
Culzean is located close to the Total-operated Elgin-Franklin hub. Total expects that its new stakes in Culzean and Johan Sverdrup will boost its production profile in the UK and Norway.
Total would also gain a new production hub by taking Maersk Oil’s operatorship and 31.2% ownership of the DUC producing assets in Denmark. The assets have been estimated to see net production of nearly 60 kboe/d in 2018.
Total chairman and CEO Patrick Pouyanne said: “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 UK, Norway and Denmark, thus increasing exposure to conventional assets in OECD countries.
“Internationally, in the US Gulf of Mexico, Algeria, East Africa, Kazakhstan and Angola there is an excellent fit between Total and Maersk Oil’s businesses allowing for value accretion through commercial, operating and financial synergies.”
For A.P. Moller – Maersk, the sale of Maersk Oil is part of its strategy to separate its oil and oil related operations to focus on becoming an integrated transport and logistics company.
A.P. Moller – Maersk CEO Søren Skou said: “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.”
Completion of the transaction will be subject to regulatory approval from concerned authorities including the Danish Minister of Energy. It will also be based on the outcome of the consultation and notification processes with Total’s employee representatives.
If everything goes as planned, then the transaction is anticipated to be closed during the first quarter of 2018.
Image: Maersk Oil is the operator of the Tyra gas condensate field in the Danish North Sea. Photo: courtesy of THE MAERSK GROUP.
