Total Seeks Buyers for Three Packages of North Sea Oil Assets

Total SA, France’s largest oil company, is seeking buyers for three packages of assets in the U.K.’s North Sea that it doesn’t operate, including its stake in the Alba field.

Total is working with Scotia Waterous Inc. to assess bid interest and proposals are due on Oct. 27, according to Scotia’s website. The sale may fetch as much as 500 million pounds ($782 million), said two people with knowledge of the matter who declined to be identified as the details are private.

The properties also include stakes in the Mungo-Monan fields and the Armada area. Paris-based Total has been disposing of assets it doesn’t operate and last year sold an 11.5 percent stake in the Nelson development. At the same time it’s investing in other parts of the North Sea including developing the second phase of the West Franklin field and the Laggan/Tormore natural-gas fields off the Shetland Islands.

“As part of our global, dynamic asset management we might consider selling some non-operated exploration and production assets in the U.K.,” Total spokeswoman Phenelope Semavoine said yesterday.

The Paris-based company joins other large oil companies in seeking to sell mature North Sea assets, The biggest seller is BP Plc, seeking buyers for about $1 billion in fields in the southern North Sea. ConocoPhillips has announced it’s selling as much as $1 billion of fields and Exxon Mobil Corp. has said it is looking to divest U.K. assets.

Decomissioning Costs

The sale of fields has been hampered by the cost of dismantling decades-old platforms. U.K. law holds sellers responsible for decommissioning if the buyer can’t pay, leading sellers to demand letters of credit for the potential costs and adding to the expense of deals. A increased tax on production imposed in the last U.K. budget has also scuppered deals, according to industry group Oil & Gas U.K.

The fields for sale include a 13 percent stake in Alba, a 12 percent holding in the Mungo-Monan fields, 3.4 percent in the ETAP facilities and various holdings in the Greater Armada area including Armada, Everest, Maria and Seymour fields, according to Scotia’s website.

The French oil company produced 207,000 barrels of oil equivalent a day last year in the U.K., the fourth biggest producing region for the company after Norway, Nigeria and the United Arab Emirates, according to the annual report.

The French oil company may slow the pace of its acquisitions after announcing $11 billion of the deals this year, Chief Financial Officer Patrick de la Chevardiere said on July 29.

It purchased 12 percent of OAO Novatek, the second-largest Russian gas company, and agreed to buy 60 percent of SunPower Corp., the U.S.’s No. 2 solar-panel maker this year. It sold a stake in a Spanish oil refiner and the Gassled pipeline network in Norway, and plans to offload the U.K.’s Lindsey refinery.