Total to sell several North Sea oil assets to Petrogas for $635m

11 July 2019 (Last Updated July 28th, 2020 13:05)

Energy giant Total has agreed to divest several North Sea oil assets, which were purchased as part of the French company’s 2017 agreement for Maersk Oil.

Energy giant Total has agreed to divest several North Sea oil assets, which were purchased as part of the French company’s 2017 agreement for Maersk Oil.

Norway-based private equity investor HitecVision and Petrogas NEO UK have partnered to buy Total’s UK non-core assets for $635m. Formerly owned by Maersk Oil, the assets are situated in the eastern North Sea, off the coast of Aberdeen.

Total is divesting 100% interest in the Dumbarton, Balloch, Lochranza, Drumtochty fields; 65.94% in Flyndre, 66.67% in Affleck and 60.6% stake in Cawdor.

The deal also covers smaller shares of three fields operated by China’s CNOOC, including 31.56% of Golden Eagle, 5.16% of Scott and 2.36% of Telford. The assets are expected to produce 25,000 barrels of oil equivalent per day in 2019.

Subject to approval from the relevant authorities, the transaction is expected to close in the fourth quarter of 2019.

Petrogas CEO Usama Barwani said: “Five years back, Petrogas stepped into Europe by acquiring Chevron’s assets in the Netherlands, opening a new international heartland with vision of consolidation and growth in the North Sea.

“This acquisition in the UK is a significant step in line with a wider vision, adding material asset base, a diverse portfolio and valuable talent pool.”

Total president of exploration and production Arnaud Breuillac said: “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.”

Total has been operating in the UK for more than 50 years and employs over 2,000 people.

The company’s equity production, which was 179,000 boe/d in 2018, principally comes from operated offshore fields in three 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.