Total to sell another £4billion of assets following North Sea deal

French energy giant Total has announced plans to sell another £4billion of assets, mainly from oil and gas, in this financial year.

The news comes following a £510m sale of a package of mature fields in the UK North Sea to Oman-based Petrogas earlier this month.

Total said the divestment strategy supports the firm’s ambitions to grow in the liquefied natural gas (LNG) market, and that most of the upcoming sales will be in exploration and production (E&P).

It comes as the operator posted adjusted net income of £4.5bn for the first half of 2019, a 12% drop on the same period last year at £5.1bn.

Total said this was due to a decrease in operating income as well as factors such as the rise in US dollar interest rates which affected debt.

Chief executive Patrick Pouyanne said: “The Group continues to grow in LNG with the signing of a sales contract with the Chinese company Guanghui, the takeover of Toshiba’s LNG portfolio and the start-up of Cameron LNG in the United States.

“This strategy is complemented by the divestment of high-breakeven assets such as the recent sale of mature assets in the UK North Sea.

“This active portfolio management policy will continue with the sale of 5 B$ of assets over the 2019-20 period, the majority coming from Exploration & Production.”

Meanwhile production saw a nine percent increase in the second quarter thanks to the start-up of new projects such as the Culzean gas field in the North Sea.

The Culzean gas project in the North Sea started production last month.

Total said the development, along with others like Kaombo Sul in Angola and the upcoming Johan Sverdrup in Norway, should see production growth exceed that figure this year.

Meanwhile Culzean, which started producing last month, was also named among the reasons for cash flow increasing by 10% in the second quarter, compared to 2018, to £5.7bn.

The firm said it was one of a number of projects that fueled the growth, including Engina in Nigeria and Icthys in Australia.

Total’s production reached 2.9million barrels of oil equivalent per day in the second quarter, up 9% on the previous year.

The firm said exploration and production (E&P) benefited from higher prices of Brent crude in the second quarter, but gas prices were down 36% in Europe and down 26% in Asia.

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