Total buys Maersk Oil in $7.45bn deal

Robyn Ryan
August 21, 2017

Maersk Oil's assets in the United Kingdom sector of the North Sea include the Culzean gas field.

"We had the feeling that on the North Sea, we had to go a step further to be more competitive", Pouyanne said on a call with reporters.

Maersk said its share of production during the second quarter was around 284,000 barrels of oil equivalent per day, about 14 percent lower than previous year, but better than the first quarter by about 10,000 barrels per day.

For Total, the deal builds on its large existing presence in the North Sea and means it will become the second-largest exploration firm in the region, behind Norway's Statoil.

The takeover is the latest example of consolidation in the North Sea and comes as the industry continues to grapple with the prolonged weakness in crude prices that began three years ago.

As a result of the deal, which will make the firm the second largest operator in the North Sea, Total production will rise to 3 MMboe/d by 2019.

In statements released Monday, the companies said Total will also assume $2.5 billion of Maersk Oil's debt.

Maersk Oil will be sold to French competitor Total in a deal which values the oil company at Dollars 7.45 billion, states Maersk Group in a press release. Total will thus pay a 3-percent interest rate of enterprise value from June 30 2017 until the deal is closed.

Total's shares fell modestly on Monday morning, with stocks trading down about 0.2%.

Total will take over Maersk Oil's entire organisation, portfolio, obligations and rights with minimal pre-conditions.

Total will issue to A.P. Moller–Maersk 97.5 million shares, based on the average Total share price on the 20 business days prior to August 21.

"Total took operatorship of the large Al Shaheen oil field in Qatar last month and will be looking to leverage Maersk's intimate knowledge of the asset", says Kretzschmar.

The deal, which is subject to relevant regulatory approvals, is expected to be completed during the first quarter of 2018. The Danish company's main shareholder, A.P. Moller Holding, could also get a board seat.

"Total is acquiring a deep specialist in unlocking complex reservoirs and boosting recovery factors through enhanced oil recovery techniques", Dr Kretzschmar said.

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