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Integrated oil and gas company TOTAL S.A. ( TOT ) continues to expand its operation in the Asia-Pacific region. The latest addition to its portfolio in this region is the acquisition of interest in the offshore exploration blocks in Papua New Guinea.

The company entered into an agreement with Oil Search Limited for the acquisition of 40% interest in offshore licences PPL 234 and PPL 244, and a 50% interest in offshore licence PRL 10. The agreement also has an option to acquire a 35% interest in the onshore licences PPL 338 and PPL 339.

The offshore blocks are situated in the Gulf of Papua region in water depth ranging up to 328 ft (100 meters). All these blocks have possibility of high reserve of natural gas, with exploration work expected to begin in the first half of 2013.

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.

TOTAL also agreed to form a strategic partnership with Oil Search to explore other opportunities in Papua New Guniea. Besides, the last few months saw the company acquiring interest in the Philippines, Australia and Thailand.

We believe these strategic acquisitions will enable the company to comfortably meet its 3% yearly production growth target for the 2011-2015 period.

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 ).

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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