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Total's purchase of Anadarko assets fits 'perfectly' with its strategy, CEO says

Total SA's planned purchase of African assets from Anadarko Petroleum Corp. fits "exactly and perfectly" into the oil major's strategy to transform itself into a broader energy company, Total CEO Patrick Pouyanne said May 16 during an event in Washington, D.C.

"We play to our strengths. What are the strengths of Total? ... The Middle East, Africa, North Sea, deep water and LNG," Pouyanne said.

Contingent on its revised $57 billion bid to acquire Anadarko, Occidental Petroleum Corp. agreed to sell Anadarko's assets in Algeria, Ghana, Mozambique and South Africa to Total for $8.8 billion.

The Anadarko holdings represent about 1.2 billion barrels of oil equivalent proved and probable reserves — of which 70% is gas plus 2 billion boe of long-term natural gas resources in Mozambique. Equity production from the assets was 96,000 boe/d in 2018 and is expected to grow to about 160,000 boe/d by 2025.

Pouyanne said Total had been eyeing the assets for more than a year and held initial discussions with Anadarko about purchasing them.

In 2018, pushing into the natural gas and electricity space to focus on a shift to cleaner fuels, Total acquired Engie SA's upstream LNG business for almost $1.5 billion, paving the way for the company to manage an overall volume of about 40 million tons per annum by 2020. The acquisition positioned Total as the second-largest global LNG player among the majors, with a worldwide market share of 10%.

At the end of 2018, Total wrapped up a deal to acquire a 74.33% interest in French power and gas retailer Direct Energie, and in April, it merged its French retail power subsidiaries to form a new entity: Total Direct Energie.

"Natural gas will have a bright future, particularly if we are able to make it competitive against coal," Pouyanne said. "Electricity demand should almost double in 20 years. We want to produce electricity either from natural gas or from renewables and market it."

In the first quarter, the French oil giant reported adjusted net income of $2.76 billion, or $1.02 per share, down 4% from $2.88 billion, or $1.09 per share, in the year-ago period.