Pressurized by continuous crude oil price fall in the international market, Total, one of the biggest energy firms operating in the North Sea, has sold off $900 million or £585 million of its UK gas interests to cut costs.
Two pipelines, one that delivers gas from 20 North Sea fields and the v were given up the French group Total. The sale brings the value of disposals by Total to more than £1 billion in the last two months.
This announcement by Total follows an announcement by Maersk Oil on Wednesday about its decision to shut down the Janice field in the North Sea and cut 200 jobs as a consequence.
The value of the North Sea Brent crude has fallen to nearly half its price a year ago even as the stocks picked up and prices gained 6% to reach $45.90 a barrel on Thursday.
Global crude prices have hit a six and half year low. The primary factor is the anticipated poor performance by the Chinese economy and the possibility of the return of Iran into the oil market after sanctions against it were lifted last month. China is one of the major importers of crude. In the US too, the gas production picked up in the last quarter and that led to a decline in demand for crude.
International crude prices are hovering around the $45 dollar mark per barrel for more than three weeks.
Oil exploration in the North Sea is relatively costly and hence that rig is particularly vulnerable to cutbacks. Moreover the region has “mature” hydrocarbon province where few operators expect to make significant discoveries any more.
Total hopes to raise funds from this disposal of the two pipelines.
“The sale of these midstream transportation assets is another example of Total’s strategy of active portfolio management, and the strong potential to unlock value from a range of infrastructure assets,” said Patrick de la Chevardière, Total’s chief financial officer.
Total sold the two assets to a relatively lesser known, new and relatively small oil company North Sea Midstream Partners. The company is backed by the US-based private equity firm ArcLight Capital and as formed just three years ago.
This is the second significant disposal of assets by Total following the July sale of its a gas field off the Shetland Islands to SSE, one of Britain’s big six domestic energy suppliers, at £565 million. Analysts anticipate that the French group could sale a few more of its assets to raise money.
This was made clear by Patrick Pouyanné, chief executive of Total, in February when he had announced that the company might sell off up to $5 billion of its assets in 2015 and reiterated that not all of the assets would be would be in the North Sea.
Reports said that Total is planning to shortly start up the deepwater field Laggan-Tormore, off the west of Shetland.
“By the end of 2015 Total is expected to become the largest producing oil and gas company in the UK and will remain a major player in the North Sea offshore industry for many years to come,” the company said in a statement on Thursday.
(Source:www.theguardian.com)
Two pipelines, one that delivers gas from 20 North Sea fields and the v were given up the French group Total. The sale brings the value of disposals by Total to more than £1 billion in the last two months.
This announcement by Total follows an announcement by Maersk Oil on Wednesday about its decision to shut down the Janice field in the North Sea and cut 200 jobs as a consequence.
The value of the North Sea Brent crude has fallen to nearly half its price a year ago even as the stocks picked up and prices gained 6% to reach $45.90 a barrel on Thursday.
Global crude prices have hit a six and half year low. The primary factor is the anticipated poor performance by the Chinese economy and the possibility of the return of Iran into the oil market after sanctions against it were lifted last month. China is one of the major importers of crude. In the US too, the gas production picked up in the last quarter and that led to a decline in demand for crude.
International crude prices are hovering around the $45 dollar mark per barrel for more than three weeks.
Oil exploration in the North Sea is relatively costly and hence that rig is particularly vulnerable to cutbacks. Moreover the region has “mature” hydrocarbon province where few operators expect to make significant discoveries any more.
Total hopes to raise funds from this disposal of the two pipelines.
“The sale of these midstream transportation assets is another example of Total’s strategy of active portfolio management, and the strong potential to unlock value from a range of infrastructure assets,” said Patrick de la Chevardière, Total’s chief financial officer.
Total sold the two assets to a relatively lesser known, new and relatively small oil company North Sea Midstream Partners. The company is backed by the US-based private equity firm ArcLight Capital and as formed just three years ago.
This is the second significant disposal of assets by Total following the July sale of its a gas field off the Shetland Islands to SSE, one of Britain’s big six domestic energy suppliers, at £565 million. Analysts anticipate that the French group could sale a few more of its assets to raise money.
This was made clear by Patrick Pouyanné, chief executive of Total, in February when he had announced that the company might sell off up to $5 billion of its assets in 2015 and reiterated that not all of the assets would be would be in the North Sea.
Reports said that Total is planning to shortly start up the deepwater field Laggan-Tormore, off the west of Shetland.
“By the end of 2015 Total is expected to become the largest producing oil and gas company in the UK and will remain a major player in the North Sea offshore industry for many years to come,” the company said in a statement on Thursday.
(Source:www.theguardian.com)
