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TOTAL to Carry on in Al Khalij

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TOTAL S.A. (TOT - Free Report) signed a new Heads of Agreement on Al Khalij field with the management of Qatar Petroleum. Thanks to the agreement, TOTAL will continue to operate this field for another 25 years. The initial agreement of 25 years between these two parties is due to expire in 2014.

This field, located 80.8 miles (130 kilometers) east of the Qatari coast, was incidentally discovered by TOTAL in 1991. Qatar Petroleum and TOTAL have operational interest in this field in the ratio of 60% and 40%, respectively. TOTAL with its technological expertise and proven skills has ably donned the role of operator of this field for the past 23 years.

Besides the extension of the alliance for another quarter of a century, the agreement signed will have clauses for further development of the field.  

Qatar Petroleum hopes to develop its natural resources and increase its hydrocarbon reserves. In this context, TOTAL will leverage its latest know-how and expertise to fulfill the goals. Its integrated research center, opened in Qatar in 2009, will duly serve this purpose.

The Middle East operation in fact plays a key role in TOTAL’s production portfolio. This region contributed 22% of the total production in the third quarter of 2012, with Qatari production providing a substantial amount. This new agreement will ensure a continuous stream of supply from Qatari fields.

TOTAL is an integrated oil and gas company and has operations across the globe. The strong financial position of the company allows it to expand through acquisition as well as continue with its aggressive exploration and drilling programs. TOTAL has also held on to the fields it has initially developed, cementing its exploration successes.

In the final quarter of the year the company has plans to explore new opportunities in the Gulf of Mexico, Iraq, Ivory Coast, Kenya and Gabon. We expect these drilling programs to enhance the reserves of the company.
TOTAL S.A. currently retains a short-term Zacks #3 Rank (Hold rating). Another global oil and gas operator BP Plc. (BP - Free Report) also retains a short-term Zacks #3 Rank (Hold rating).

The global operation of TOTAL automatically implies enhanced responsibility for security and safety. The negligence on BP’s part had led to the devastating oil spill in the Gulf of Mexico. BP Plc. has recently agreed to pay $4.5 billion to the U.S. government as damages over the 2010 oil spill. The company has also pleaded guilty to criminal charges related to the deaths of 11 workers and lying to Congress.

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 across five continents. With a market capitalization of $107.07 billion, the company has 96,000 full time employees.

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