French oil major Total is to sell out of its delayed Martin Linge development and the Garantiana discovery offshore Norway, in a US$1.45 billion deal with part-state-owned operator Statoil.
Statoil will take Total's 51% stake in Martin Linge, in the Norwegian Sea, taking its total stake to 70%. Statoil will also take Total's 40% in the Garantiana discovery. Total says the move is part of a portfolio review, following the acquisition of Maersk Oil earlier this year.
“The forthcoming acquisition of the Maersk Oil portfolio, which will make Total the second largest operator in the North Sea, leads us to review our portfolio in this area so as to focus on the assets in which Total will be able to generate synergies and reduce their breakeven points. In this context, given that Martin Linge is Total's only operated asset in Norway, there is limited scope to optimize operations," said Arnaud Breuillac, President, Exploration & Production at Total.
The Martin Linge (formerly "Hild") field, a complex, high-pressure field, was discovered in 1975, about 42km from the Oseberg field. Statoil estimates the field contains mor ethan 300 MMboe recoverable resources and says production is expected to run into the 2030s.
The field development involves an integrated wellhead production and accommodation platform on a jacket, with power from shore using what will be the world's longest subsea high voltage AC power cable, at 160km-long, with a floating storage unit.
The jacket substructure is already installed on location in the North Sea, while the topside is being completed at the Samsung yard in South-Korea and will be transported to Norway early 2018.
According to Statoil the project has experienced schedule delays and cost increases, due to delayed topside engineering, construction and currency impacts. An accident at the yard in May 2017, in which six people were killed, also impacted progress. Statoil says Total expects first oil in 1H 2019 (it had been 2016).
The Garantiana oil and gas field was discovered in 2012, in the northern Norwegian North Sea , in 382-405m water depth. It contains an estimated at 11-14 MMcum of and 0.5-0.6 Bcm of gas, says Total. Statoil puts the estimate at 50-70 MMboe. According to an environmental statement submitted in May, Total planned to drill on Garantiana in 2019-2020, with first production targeted for 2020/2021.
In June, Wood Group was awarded two contracts by Statoil to deliver concept and feasibility studies including a concept study evaluating the tie in of the Garantiana field development to Statoil’s Gullfaks B and Visund facilities.
Total will still have stakes in assets in Norway including Ekofisk (operated by ConocoPhillips), Snohvit and Johan Sverdrup (operated by Statoil).
The transaction remains subject to final due diligence and approval from the relevant authorities.
Breuillac added: "Norway remains a strategic country for Total as one of the largest contributors to the Group's production and we of course intend to continue bringing our expertise to Norway by focusing in particular on major non-operated assets such as Ekofisk, Snohvit and Johan Sverdrup."
Total has been working in Norway for more than 50 years. The firm holds stakes in 85 production licenses and operates 32 of them. Total E&P Norge equity production was 235,000 boe/d in 2016.
Most recently, Total has signed an agreement with Shell and Statoil to mature the development of a full scale carbon storage on the Norwegian Continental Shelf.