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Integrated oil and gas company TOTAL S.A. (
- Analyst Report
announced that it has acquired a 40% interest in offshore Block M-11 in the Martaban basin from Thailand's national company, PTT Exploration and Production Plc (“PTTEP”).
The block covers a total area of around 2074.52 sq mile (5,373 sq km), in water depths ranging from 656 ft to 7546 ft (200 meters to 2,300 meters). PTTEP will continue to be the operator of the block, with the first well expected to be drilled in the third quarter of 2013.
This current acquisition will further increase TOTAL's existing production capacity in Myanmar. The company produced 15,000 barrels of oil equivalent per day in 2011. The company’s decision to expand its base in this area was driven by the possibility of new finds and a ready market. The developing countries in this region ensure a steady rise in demand for fossil fuels.
Worldwide liquid production of the company in the second quarter of 2012 was 1,218 thousand barrels of oil per day, up 2% from the year-ago quarter. Liquid production from the Asia-Pacific region in the second quarter was 25 thousand barrels of oil per day, down 11% year over year.
Most of TOTAL's liquid production in the Asia-Pacific region comes from Myanmar. Once operational, this new field will further boost oil production from this region.
Although TOTAL did not divulge the financial consideration of the deal, we expect the company to make full use of its strong financial position. Cash and cash equivalents of TOTAL as of June 30, 2012, were $18.85 billion.
The strong financial standing allows the company to make strategic acquisitions globally. TOTAL recently acquired a 75% interest in the offshore Block SC56, located in the Sulu Sea, from Mitra Energy (Philippines SC-56) Limited (“Mitra”).
TOTAL S.A. currently retains a Zacks #3 Rank (short-term Hold rating). Numbering among its competitors in the global arena is BP Plc. ( BP - Analyst Report )
France-based TOTAL is one of the largest publicly traded, globally integrated oil and gas companies based on production volumes, proved reserves and market capitalization. The company has exploration and production operations spanning five continents.
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