Integrated oil and gas company
) expanded its presence in Australia by acquiring additional
interest in the Ichthys liquefied natural gas ("LNG") project from
its Japanese partner INPEX CORPORATION.
The new 6% interest will increase TOTAL's share in this LNG
project to 30%. Although the company has kept the financial
consideration confidential, we believe TOTAL will leverage its
strong financial position to consummate the acquisition. Cash and
cash equivalents as of March 31, 2012, were a healthy $17.78
billion (€13.33 billion).
In January 2012, TOTAL and INPEX made a joint investment of $34
billion to develop the Ichthys LNG project in Australia. We believe
the increasing demand for LNG in Asia has led TOTAL to increase its
stake in Ichthys.
This Ichthys project will develop reserves of approximately 3
billion barrels of oil equivalent , including around 500 million
barrels of condensate and is expected to start commercial
production in the second half of 2016. The construction on this
project began during the second quarter of 2012.
The operators were successful in securing a 15-year contract for
the estimated 8.4 million tons of annual production from this
project. The increase in TOTAL's share in the project will not
impact the LNG offtake agreements.
TOTAL has been an active operator in the LNG market and its
first quarter 2012 LNG sales of 3.24 metric tons surpassed 3.11
metric tons sold in the preceding quarter. TOTAL's LNG
projects are spread out across the globe. It has also entered into
long-term re-gasification capacity agreements in three continents,
namely North America, Europe and Asia.
The re-gasification capacity will allow the company to
capitalize on the increasing use of natural gas worldwide. TOTAL
will purchase 0.9 million tons per year of LNG from the Ichthys
project and utilize its re-gasification terminal to reconvert the
same to natural gas and cater to the increasing demand of natural
gas in Asia.
With more and more LNG projects coming into operation, the gas
production capability of the company has increased in tandem. In
the first quarter of 2012, the total gas produced was 6,226
thousand cubic feet per day (Mcf/d) versus 5,880 Mcf/d in the
year-ago quarter. The addition of Sulige in China and Angola LNG
this year will further enhance the production capabilities of the
TOTAL S.A. currently retains a Zacks #3 Rank, which translates
into a short-term Hold rating. Both
Exxon Mobil Corporation
), peers of TOTAL, have extensive global portfolios of oil and gas
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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