Integrated oil and gas company TOTAL S.A. has agreed to acquire an 85% interest in Block SK317B, offshore Malaysia. The company has entered into a pact with the national oil company Petronas for interest in the Malaysian assets encompassing an area of 700 square kilometers.
Under the terms of the agreement, TOTAL will operate the Block alongside its partner Petronas Carigali holding the remaining 15% interest.
The Block SK317B is located near Sarawak in the water depths of 200 to 1,000 meters. The acquisition of these assets will benefit TOTAL as the exploration work at the site includes seismic data acquisition and deep offshore exploration drilling, in which TOTAL enjoys thorough expertise.
This acquisition reflects TOTAL’s strategy to expand its exploration acreages in new areas while developing its partnerships with national oil companies such as Petronas.
TOTAL already has operations in Malaysia in Blocks PM303 and PM324 (70% interest), located offshore Peninsular Malaysia, in partnership with Petronas Carigali (30%). The company has Production Sharing Agreement signed in 2008, which covers the Blocks PM303 and PM324. The company started a seismic study of these two blocks in 2009 and plans to start high-pressure exploration drilling campaign in 2011.
France-based TOTAL is among the top five publicly traded global integrated oil and gas companies based on production volumes, proved reserves, and market capitalization. TOTAL has operations in more than 130 countries across five continents with approximately 97,000 employees. The company’s major integrated oil and gas peers include BP Plc., Exxon Mobil Corp. and Chevron Corp.
We continue to like TOTAL for its positive production growth profile, attractive returns and balance sheet strength. The company has one of the best upstream exposures in the industry besides, being the largest European refiner. The company’s ongoing alternative energy projects add a silver lining to its already positive profile.
