Total expands in North Sea with Maersk buy

FRENCH supermajor Total has become the second largest North Sea operator at a stroke with a surprise multi-billion dollar swoop on Danish oil and gas firm Maersk Oil.

The $7.45bn (£5.79bn) deal is the largest North Sea takeover in a decade and is even more of a rarity at a time when other oil majors are quietly retreating from UK waters.

The move will hand Total a stake in the one of the basin’s largest oil discoveries ever made. In addition to the Johan Sverdrup field it will include the Culzean gas project, which will be capable of providing 5pc of UK gas demand by the end of the decade. Patrick Pouyanne, Total’s chief executive and chairman, described the takeover as an “exceptional opportunity” for Total to snap up high quality assets that fit with the group’s core regions.

He told investors the deal would unlock savings of $400m a year and an immediate production boost of lowcost oil to take the company over the 3 billion barrel of oil a day threshold. Maersk’s oil portfolio is profitable at prices of $30 a barrel.

Total will hand Maersk $4.95bn in Total shares, and assume $2.5bn of Maersk’s short-term debt to fund the remainder of the deal. It will also take on responsibility for decommissioning Maersk’s older assets, which is likely to cost around $2.9bn.

The takeover marks the start of a major dismantling of Danish conglomerate AP Moller-maersk, which is refocusing on transport and logistics.

Maersk Oil employs 2,800 people, 688 of whom are based in Aberdeen, which the company said would remain a headquarters for the combined group’s UK activities.

Meanwhile, US utility owner Sempra Energy agreed to buy Texas power distributor Oncor in a move worth around $19bn to Oncor parent Energy Future Holdings. The move is a blow for billionaire investor Warren Buffett, who had hoped to buy Oncor.