Danish shipping giant AP Moller-Maersk to sell oil and gas unit to France's Total
21 August 2017
Danish container shipping giant AP Moller-Maersk will sell its oil and gas unit to France's Total for $7.45 billion as it looks to focus on its core transport and logistics businesses.
Maersk will get $4.95 billion worth of Total shares and Total will assume $2.5 billion of Maersk Oil's debt under the agreed terms. There is also a possibility of AP Moller Holding being offered a seat on the Total board, according to commentators.
"The agreement will strengthen the financial flexibility of AP Moller - Maersk and free up resources to focus our future growth on container shipping, ports and logistics," said Soren Skou, chief executive of Maersk.
Subject to approval, the deal would close in the first quarter of 2018 and help significantly increase Total's presence in the North Sea.
According to commentators, with the transaction, the French oil major will get around an additional one billion barrels of oil equivalent (boe), more than 80 per cent of which are in the North Sea.
Patrick Pouyanne, chairman and chief executive said, ''By adding such a portfolio of growing conventional offshore North Sea assets, we confirm our strategy for value creation of, on the one hand, playing to our core strengths in order to grow further and, on the other hand, to constantly seek to lower our break-even by delivering significant synergies.''
Pouyanne added, "The combination of Maersk Oil's North Western Europe businesses with our existing portfolio will position Total as the second operator in the North Sea with strong production profiles in UK, Norway and Denmark, thus increasing exposure to conventional assets in OECD countries."
"We are also very pleased that we will have a new anchor point in Denmark which will host our North Sea Business Unit and supervise our operations in Denmark, Norway and the Netherlands."
According to Total the combination with Maersk Oil offers it an "exceptional overlap" of upstream businesses which will increase its competitiveness through growing assets and $400 million in annual cost-saving synergies.