French Total to Buy the Oil and Gas Business of Maersk

Maersk Oil

Credit: Maersk Oil

On August 21, 2017 the French energy major Total announced that it has struck a deal to buy the oil and gas exploration and production business of the Danish company AP Moller-Maersk for $7.45 billion.

The deal will facilitate the Total to have better control on its North Sea operations from Denmark and supervise its operations in Denmark, Norway, and the Netherlands. The Danish transport and logistics group Maersk will get approximately US$4.95 billion in the form of Total shares and the French company will take care of the Maersk Oil’s short term debt of US$2.5 billion so as to complete monetary transactions. The deal is expected to be completed by the end of the first quarter in the year 2018.

After completion of the deal, the French company Total will take complete control of Maersk Oil’s UK North Sea assets, which includes the GBP3 billion (US$4 billion) Culzean gas field. The projected peak output from this gas field is around 60,000-90,000 boepd when it will become fully operational in the year 2019. As per Patrick Pouyanne, Total’s CEO,  the acquisition of Maersk’s assets is a major step forward in his company’s progress towards the goal of the output of 3 million boepd by the year 2019.

With the combination of Maersk Oil’s North Western Europe and the existing businesses, Total will be the second largest operator in the North Sea with production facilities in UK, Norway, and Denmark, thus it will increase its conventional assets in OECD (Organisation for Economic Co-operation and Development) countries. NW Europe offshore region is the 7th largest oil and gas producing region across the globe. This is the biggest deal the oil industry has seen since the time Royal Dutch Shell’s US$5 billion takeover of BG Group.

Earlier Maersk was planning to launch an initial public offering (IPO). But finally , hey accepted Total’s lucrative deal.

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