France's Total has acquired Marathon Oil's 16.33 per cent stake in Libya’s Waha Concessions for US$450 million as it looks to access low-cost oil and consolidates its existing position in Libya.
France's Total has acquired Marathon Oil's 16.33 per cent stake in Libya’s Waha Concessions for US$450 million as it looks to access low-cost oil and consolidates its existing position in Libya.
The deal will give Total access to reserves and resources in excess of 500 million barrels of oil equivalent, with immediate production of around 50,000 barrels of oil equivalent per day (boe/d) and a significant exploration potential across the area of 53,000 square kilometers covered by the Concessions in the prolific Sirte Basin.
“This acquisition is in line with Total’s strategy to reinforce its portfolio with high quality and low-technical cost assets whilst bolstering our historic strength in the Middle East and North Africa region,” said Patrick Pouyanné, Chairman and CEO of Total.
In a statement Total said that the Waha Concessions currently produce around 300,000 boe/d. Thanks to the ongoing restart of the existing installations and the resumption of development drilling, the output is expected to ramp up and exceed 400,000 boe/d by the end of the decade.
Luke Parker, vice president, Corporate Analysis, Wood Mackenzie commented: "Production and reserves growth is a key deal driver. There's certainly upside from where we are today. Total believes production can increase from 300k boe/d (gross) today, to 400k boe/d by 2020, with plenty of upside – discovered resource and exploration – beyond then. Realising this upside would see Total create significant value through the deal. "
Pouyanné added: “It builds on the Group’s long-term presence in Libya, a country with very large oil and gas resources, and demonstrates our commitment to continue supporting the recovering oil and gas industry of the country.”
Total has been present in Libya since 1954. In 2017, the Group’s production was 31,500 boe/d. This production comes from the offshore Al Jurf field (Total, 37.5 per cent) and the El Sharara onshore area (Total, 15 per cent on block ex-NC 115 and 12 per cent on Block ex-NC 186).
Parker noted: "The Waha acquisition is an interesting one for Total. It comes at a time when Libya's production resurgence continues, with unofficial sources reporting exports of 1.1 million b/d for February, which would be the highest levels since 2014. But there are risks to the growth story. In recent times production has been constrained for prolonged periods due to shut-ins at export terminals."
The NOC (59.18 per cent), Total (16.33 per cent), ConocoPhillips (16.33 per cent) and Hess (8.16 per cent) jointly own the Waha Concessions. The Waha Oil Company, a 100 per cent NOC owned entity, operates the asset.
Source: Pipeline ME
