Total Says It Won't Bid for Overvalued Oil Explorers, Producers

  • CFO says some listed E&P are valued at $70 to $80 per barrel
  • Total is in talks with potential partners on Port Arthur

Total SA Chief Financial Officer Patrick de La Chevardiere said the company won’t seek to buy oil exploration and production companies listed in the U.S., U.K. and Australia because their valuations don’t take into account the slump in oil prices.

Those companies are trading on a “scenario” of $70 to $80 per barrel, the Total executive said Thursday on a conference call. A takeover would require an additional premium, boosting their valuations to $100 per barrel, he said. The CFO didn’t name any companies.

“We are completely unable to do such a thing,” said de La Chevardiere, who added that Total was nevertheless reviewing potential targets.

The slump in crude to less than $50 a barrel in the past year has prompted Total and other oil companies to cut investment, slash spending and sell assets to preserve dividends. Total, which on Thursday reported a 23 percent decline in third-quarter adjusted net income, has said it plans to raise $5 billion through asset disposals this year and is targeting a total of $10 billion through 2017.

The company is “discussing with potential strategic partners” its Port Arthur refinery, the CFO said.

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