Solution sought for supply ship unit as Maersk sells oil business

Aug 21, 2017, 20:28
Solution sought for supply ship unit as Maersk sells oil business

By selling to Total, we ensure a continued Danish stronghold in the North Sea based on Maersk Oil's leading position within technology development and its track record as a lean, efficient and trusted partner.

In addition to the shares, Total is assuming a short-term debt of 2.5 billion dollars via debt push down from Maersk into Maersk Oil. In January, Exxon Mobil Corp. agreed to pay $5.6 billion in shares, plus a series of contingent cash payments totaling as much as $1 billion, for drilling rights in the Permian shale region of Texas.

Maersk lost out to Total in June, when the French company won a 30 per cent stake in a 25-year agreement to operate Qatar's largest offshore field, Al Shaheen, which is currenlty run by Maersk and whose license expires this year.

Total said it expects to generate operational, commercial and financial synergies of more than $400mn/yr, in particular by the combination of North Sea assets at both firms. Moreover, the deal adds significant volumes to the North Sea reserve base. The deal is already approved by both boards and expected to close in 1Q 2018 and have an effective date of July 1 2017. Maersk had been considering spinning off the oil and gas assets in an initial public offering, but "we offered them another option". Neither TOTAL S.A. nor any of its subsidiaries assumes any obligation to update publicly any forward-looking information or statement, objectives or trends contained in this document whether as a result of new information, future events or otherwise.

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Total said the acquisition would make it the second largest operator in the North Sea and strengthens its business in the United Kingdom and Norway. "Maersk Oil is the first of the four energy companies of A.P. Moller-Maersk for which a future structural solution has now been identified".

"Total is acquiring a deep specialist in unlocking complex reservoirs and boosting recovery factors through enhanced oil recovery techniques", Dr Kretzschmar said. Known as a scrip dividend, paying investors in shares has allowed Total to preserve cash but has also diluted its share pool and weighed on its value.

The proposed transaction is subject to the applicable legally required consultation and notification processes for employee representatives and to approvals by the relevant regulatory authorities.