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Total joins Chevron in GoM exploration

Written by  OE Staff Friday, 22 September 2017 03:15

French oil major Total says it has agreed to capture seven prospects, over 16 Chevron-operated blocks in deepwater Gulf of Mexico (GoM), in a move that analysts say could revitalize Total's GoM portfolio. 

Map from Chevron depicting some of the company's GoM assets. 

Total, which recently increased its footprint in the US Gulf of Mexico through its acquisition of Maersk Oil, will participate in the seven wells through sharing between 25-40% interest. 

The prospects are in two plays and areas of the Gulf of Mexico: the Wilcox, in central Gulf of Mexico, next to the Anchor discovery, and Norphlet, in eastern Gulf of Mexico, near the Appomattox discovery. The first well already spudded late July on the Ballymore prospect in Mississippi Canyon. 

“This agreement, together with the recently announced participation in the Jack field as part of the Maersk Oil acquisition, increases Total’s footprint in the US Gulf of Mexico where it can apply its exploration expertise and deepwater technologies," said Arnaud Breuillac, President Exploration & Production.

"Total values Chevron’s performance as a Gulf of Mexico deepwater company and this agreement expands a successful co-ownership already in place on the Tahiti field. As a continued effort to highgrade its portfolio, Total won six offshore exploration licenses in the August Lease Sale.”

Total has been active in exploration and production in the US since 1957. In the Gulf of Mexico, Total focuses on the deepwater with a participation in two producing fields, Tahiti with 17%, operated by Chevron, and Chinook with 33.33%, operated by Petrobras, as well as in the world-class discovery of North Platte with 40%, operated by Cobalt International.

As part of the acquisition of Maersk Oil, Total will also become a 25% partner in the Chevron operated Jack field. Total also has a participation in over 160 exploration leases.

Onshore, Total owns and operates 100% of the former Chesapeake properties in the Barnett and is a 25% participant in the Utica field.

Analysts weigh in

Valentina Kretzschmar, director, Corporate Analysis, Wood Mackenzie, says that Total is sharpening its long-term focus by increasing its exposure to deepwater exploration and renewables.

“The move is an indication that Total's appetite for exploration is coming back. Since 2009, Total’s GoM drilling has been operated by Cobalt under their strategic alliance for the basin. This led to the large North Platte discovery in 2012, followed by several dry exploration wells, says Kretzschmar. “The new Chevron partnership could revitalize Total’s portfolio in the GoM.”

“We expect Total to focus on accessing long-life, low-cost resources, while continuing to high-grade its portfolio.

“Mergers and acquisitions, discovered resource opportunities and exploration are all on the cards, supported by its strong financial position. Increasing exposure to gas and renewables will remain strategic priorities,” says Kretzschmar.

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