The Scotsman

Energy giant Total inks deal worth £5.8bn with Maersk

● Increases Total’s North Sea presence in key deal for area

- By EMMA NEWLANDS

French energy group Total has struck an agreement to acquire the oil division of Danish firm Maersk in one of the biggest North Sea deals in more than a decade.

The $7.45 billion (£5.8bn) deal will see Total seize control of Maersk Oil’s assets in the UK’S sector of the North Sea, including the Culzean gas field. Under the terms of the transactio­n, Maersk will receive $4.95bn of Total shares while the French-headquarte­red group will assume $2.5bn of Maersk Oil’s debt.

Total said the combinatio­n offers it an “exceptiona­l overlap” of upstream businesses that will increase its competitiv­eness through growing assets and $400 million in annual cost-savings.

The cost savings will be seen “in particular by the combinatio­n of assets of Total and Maersk Oil in the North Sea”.

The deal will give Total, whose history dates back to 1924, access to around a billion barrels of oil reserves, 85 per cent of which are in OECD countries, with more than 80 per cent in the North Sea.

Alongside Maersk Oil’s UK North Sea assets, Total will also take over its Danish and Norwegian operations.

Total chairman and chief executive Patrick Pouyanne 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 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.”

The deal is the biggest North Sea-weighted deal since the merger of Statoil and Norsk Hydro in 2006.

Valentina Kretzschma­r, a director in Edinburgh analytics specialist Wood Mackenzie’s corporate services unit, commented: “For Total, the deal is first and foremost about consolidat­ion in the North Sea. Cost synergies should add value, with the North Sea a key area of overlap.”

Wood Mackenzie also said the deal strengthen­s Total’s North Sea exposure, through Maersk’s core positions in the UK, Norway and Denmark.

Kretzschma­r also noted: “It will further shift Total’s weighting towards OECD regions, a core strategic driver for the company as it looks to balance the portfolio away from areas of high above ground risk.” Carling Property Group has claimed a first after receiving affordable housing support from the Scottish Government. The firm qualified for a “substantia­l” six-figure sum from the government’s Rural and Islands Housing Fund (RIHF). It is believed to be the only private property developer to have received RIHF money. Graeme Carling, co-founder of the business alongside his wife Leanne, said demand continued to be high for affordable housing across Scotland.

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