French oil and gas giants, Total have agreed a deal to buy Maersk Oil for £5.8bn.
The French oil and gas company, Total is set to add to its already large portfolio by purchasing Danish exploration & production company, A.P. Moller Maersk Group in a deal worth almost £5.8bn.
The agreement would see Total buy Maersk Oil in its entirety, making them the second largest operator in the North Sea, however, a number of major oil firms have cut down their operations in the area in recent years.
A.P. Moller Maersk would receive £3.8bn in Total shares, with Total accruing £1.9bn of Maersk’s oil debt in what would be the region’s largest takeover in a decade.
Total claim the acquisition will improve competitiveness and value within various areas of its business, with the help of assets such as the Culzean Gas project.
Culzean is a high-pressure gas field in the UK Continental shelf, which Maersk acquired a 66% stake of in 2004. Scheduled to go live in 2019, Culzean is expected to produce 5% of the UK's total gas consumption by 2020/21.
Patrick Pouyanne, Total’s Chairman and CEO, said: “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 Organisation for Economic Co-operation and Development (OECD) countries.”
The deal is subject to approval by the relevant regulatory authorities and should be finalised in the first quarter of 2018.