** Sagar Sandesh print version ceases to be published from December 31, 2017. New look E-paper would be available from Jan. 1, 2018 onwards. free of cost.**

Maersk inks deal with Total S.A. to sell Maersk Olie og Gas for $7.45 bn

A.P. Møller - Mærsk A/S [A.P. Moller - Maersk] on 21st August has  signed an agreement to sell Mærsk Olie og Gas A/S [Maersk Oil] to Total S.A [Total] for USD 7.45bn in a combined share and debt transaction. Maersk Oil will become part of a leading global oil and gas operator with a long-term investment interest in the sector. Total will take over Maersk Oil’s entire organisation, portfolio, obligations and rights with minimal pre-conditions. Planned development schedules and investments in strategic and sanctioned projects will be upheld.

 With the agreement A.P. Moller - Maersk is taking a material step forward in its strategy to separate out its oil and oil related activities to create an integrated transport & logistics company, and this transaction will contribute significantly to upholding its strong capital structure.

“In determining the best future ownership structure for Maersk Oil, it has been imperative for us that the capabilities and assets created in Maersk Oil continue to be developed, and that long-term investments are upheld, especially in the Danish part of the North Sea,” says Søren Skou, CEO of A.P. Moller – Maersk.

 APMM will receive an enterprise value per 30 June 2017 of USD 7.45bn paid by 97.5m shares in Total S.A. with a value of USD 4.95bn equal to approx. 3.76% of Total S.A. (post issuing shares to APMM). In addition to the shares Total S.A. is assuming a short-term debt of USD 2.5bn via debt push down from APMM into Maersk Oil. Total S.A. will pay an interest of 3% p.a. of the enterprise value from 30 June 2017 and until closing of the transaction. Total S.A. will take over all decommissioning obligations currently amounting to USD 2.9bn.

 The short-term debt will be repaid to APMM at or shortly after closing of the transaction and the proceeds will be used by APMM to reduce debt. Subject to meeting its investment grade objective, APMM plan to return a material portion of the value of the received Total S.A. shares to the APMM shareholders during the course of 2018/19 in the form of extraordinary dividend, share buyback and/or distribution of Total S.A. shares.

Total S.A. will maintain Maersk Oil’s strong position in the North Sea with strong Copenhagen and Esbjerg bases and with Denmark being the operating hub for Total S.A.’s combined operations in Denmark, Norway and the Netherlands.

 Regional hub for Oil economy

 Denmark will become the regional hub for all Total’s operations in Denmark, Norway and the Netherlands, based on Maersk Oil’s capabilities and strong position in the North Sea region.“Maersk Oil’s activities across the North Sea will become part of a leading global operator with a strong performance record and long-term growth interest in the sector. The combination of Total and Maersk Oil’s global footprint and geographical overlap will ensure the continued development of Maersk Oil’s worldwide strategic and selective assets.  

Patrick Pouyanné, Chairman and CEO of Total, commented that:

 “I welcome Maersk Oil to the Total family. Building on Maersk Oil’s high safety standards, strong technological leadership, operational excellence and strong Danish heritage, we will intensify and accelerate the push to optimise and extend the Danish oil and gas production. The addition of Maersk Oil’s strong capabilities and high quality assets to our business will create a leading international operator in the North West European offshore region, making Denmark a regional anchor point for Total’s North Sea business”.  

 A.P. Moller - Maersk has been the main operator in the Danish North Sea for half a century, establishing and maintaining Denmark’s position as self-sufficient within oil and gas. With Maersk Oil at the forefront, the Danish oil and gas industry has contributed DKK 400bn in taxes to Denmark over the past 50 years, and provides employment to 15,000 people in the sector. In addition, Maersk Oil has significant presence in the British and Norwegian sectors, with nine licenses in Norway, including an 8.44% ownership of Johan Sverdrup, one of Norway’s largest discoveries ever.  

“Our future position as the regional hub for Total’s operations in Denmark, Norway and the Netherlands, recognises Maersk Oil’s status in the North Sea region. In Denmark, the focus will continue to be on investing in safe, efficient growth from existing fields. The capabilities, experiences and partnerships, which made Maersk Oil a globally recognised technology leader and trusted operator, will contribute to Total’s position in the entire North Sea and worldwide. In addition, the agreement presents new opportunities for our employees, as Maersk Oil joins a global industry leader,” says Gretchen Watkins, CEO of Maersk Oil.

 Logistics, oil verticals biz Seperation plan

 The separation of the energy businesses was decided as part of last year’s strategic decision to focus A.P. Moller - Maersk’s future activities on transport and logistics, as well as a result of recent years’ oil and gas industry and market developments. Maersk Oil is the first of the four energy companies of A.P. Moller - Maersk for which a future structural solution has now been identified. The solutions for Maersk Drilling, Maersk Supply Service and Maersk Tankers remain to be defined before the end of 2018.

 In a comment to the transaction, Chairman of A.P. Møller Holding A/S, Ane Mærsk Mc-Kinney Uggla states: 

 “In my heart and mind, this is a very difficult, but right decision. Maersk Oil has for almost half a century been at the forefront of the Danish oil development, been vital to A.P. Moller - Maersk and to this very day plays a decisive role in the Danish and international oil and gas industry”.  

 The transaction is subject to regulatory approval from relevant authorities including the Danish Minister of Energy, Utilities and Climate and competition authorities as well as required consultation and notification processes with Total S.A.’s employee representatives. Closing is expected to take place during Q1 2018. Calculated as of 30 June 2017, the transaction gain after tax for APMM amounts to USD 2.8bn.


Copyright © 2017 PORT TO PORT - Shipping Services Portal ( Sagar Sandesh ). All rights reserved.

Follow Us