12 March 2015, News Wires – French giant Total is reportedly selling its stake in the North Sea Laggan-Tormore oil and gas field.
Total is hoping to get up to $1.5 billion for its 80% operated stake in the field, located about 125 kilometres north-west of the Shetland Islands in Britain’s North Sea, Reuters reported, citing “banking sources”.
The company aims to complete the deal in June, the news wire said.
Total said the company does not “comment on market rumours”.
Many oil companies are trying to sell assets in the ageing and high-cost North Sea oil province. However, the Laggan-Tormore is considered a high-quality asset as it is planned to start production at the end of this year after initial delays.
Peak production is expected to be 93,000 barrels of oil equivalent per day.
Total had sought to make the Laggan-Tormore gas and condensate field its third major hub in British waters, after the existing Alwyn North and Elgin-Franklin provinces. As recently as 2013, the company expected Laggan-Tormore to turn it into the top oil and gas producer in UK waters.
But oil prices roughly halved between last June and January leading Total, like most of its peers, to cut spending and sell assets in order to boost their balance sheets.
Total last month said it would cut 2015 investments by up to 13% to between $23 billion and $24 billion and would spend 30% less on exploration work following oil price decline.
“Total is reassigning their portfolio and want higher returns elsewhere in the world,” one banking source said.
Denmark-based Dong Energy holds the remaining 20% stake in the field.