French oil giant Total has decided to sell its interest in a block located offshore Brunei to Shell for $300 million.
Total said on Wednesday it had signed an agreement to sell its wholly owned subsidiary Total E&P Deep Offshore Borneo BV to Shell for $300 million.
The subsidiary holds an 86.95% interest in Block CA1, located 100 kilometers off the coast of Brunei.
Block CA1 covers 5,850 square kilometers in the deepwater areas of Brunei in water depths ranging from 1,000 to 2,750 metres. It is located about 100 kilometres northwest of the coast of Brunei Darussalam.
The transaction is subject to approval by the competent authorities and is expected to close by December 2019, Total added.
Total currently operates the block alongside partners Murphy Oil (8.05%) and Petronas (5%). Upon completion of this acquisition, Shell will have an 86.95% equity interest in CA1 PSA and will assume operatorship.
“This transaction fits with our strategy of actively managing our portfolio and will contribute to our program to dispose of $5 billion of non-core assets over the period 2019-2020,” said Arnaud Breuillac, President Exploration & Production at Total.
Also on Wednesday, Total said in its quarterly report it would continue its $5 billion asset sale program over the 2019-20 period – 1.6 B$ was completed at the end of September – and 2019 net investments should be less than $18 billion. The company recorded a decrease in its 3Q 2019 profit affected by lower oil and gas prices despite an increase in production.
Commenting on the deal with Total, Managing Director for Shell Deepwater Borneo, Ivo Verstralen, said: “This transaction is consistent with Shell’s deep water strategy to deliver competitive growth from a diverse international portfolio.”
Offshore Energy Today Staff
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