Total snatches up Maersk Oil for $7.45 billion

Total snatches up Maersk Oil for $7.45 billion

Assets include the high-pressure, high-temperature Culzean field, now under development (49.99% Working Interest), close to Total's Elgin-Franklin hub, and a stake in the giant Johan Sverdrup oil development (8.44% Working Interest) in Norway.

For Maersk the deal follows through on its plan, announced last September, to abandon the oil sector altogether as it seeks to cement its position as "the world's largest container shipping line".

Shares in Total initially fell, but by afternoon were up 0.3 percent at 42.76 euros per share while Paris's CAC 40 index was down 0.3 percent. Under the deal, Total will issue 97.5 million shares, valued at $4.95 billion, to A.P. Moller, and assume $2.5 billion of Maersk Oil's debt.

For Maersk, the deal concludes a review process that started over a year ago as it looked to combat one of the worst shipping down-cycles and a historic oil-price rout.

Alongside Maersk Oil's UK North Sea assets, Total will also take over its Danish and Norwegian operations.

"Either launch new projects or acquire new reserves at attractive prices", Total Chief Executive Patrick Pouyanne told reporters.

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Total said an "exceptional overlap" of businesses would increase its competitiveness through growing assets and annual cost-savings.

According to WoodMac, The acquisition also strengthens Total's North Sea exposure, through Maersk's core positions in the UK, Norway and Denmark. Coretrax was established in 2008 to provide a bespoke and tailored service, offering a wide range of downhole tools and services which provide up-to-date solutions to improve time efficiency, maximise cost reduction, reliability, damage prevention and technological advancement to the global oil and gas industry.

EOR is a technique that is widely used to maximise production, with the Abu Dhabi National Oil Company looking for its partners to use EOR techniques to help reach its target of 3.5 million barrels per day by the end of next year. That will represent 3.75 percent of the enlarged share capital of Total.

The deal, which is subject to relevant regulatory approvals, is expected to be completed during the first quarter of 2018.

Maersk's main shareholder also has the possibility of a seat on Total's board of directors.

"This may not be the final word from Total", he said.

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