Global oil and gas exploration play,
) will divest its 20% interest inOil Mining Lease ( OML) 138
Block located in offshore Nigeria to Chinese petroleum firm
Sinopec Corporation for an amount of $2.5 billion. The agreement
will be handled in cash and is subject to the sanction of the
The Usan oil field is positioned 62 miles (100 kilometers)
from the southeastern coast of Nigeria. The facility has
witnessed production ramp-up with present capacity hitting
roughly 130,000 barrels a day. Besides, the Usan unit has a
storage capacity of 2 million barrels and a maximum production
capacity of 180,000 barrels per day.
Operations at the field were initiated in early 2012 and have
Nigerian National Petroleum Corp. as its concession holder along
with partners like
), Esso E&P Nigeria Ltd and Nexen Petroleum Nigeria Ltd, a
business wing of Canada's
The oil stake sellout is part of the French company's planned
asset sales program of $15 billion to $20 billion through 2014.
TOTAL intends to accumulate cash gains from these divestitures to
invest in other high-return ventures which would add to its
profitability. The company meanwhile is aggressively expanding
its foothold in the Middle East through high-profile purchases
Recently, TOTAL signed an agreement with the management of
Qatar Petroleum to extend its operations at the Al Khalij play
for another 25 years. This will enable TOTAL to maintain its
supply from the Qatari fields. Qatari production contributes
substantially to TOTAL's production from the Middle East
operation. Middle East operation contributed 22% of the total
production in the third quarter of 2012.
The company was involved in acquisitions totaling $0.4 billion
during the third quarter 2012. TOTAL is also seeking various
business options in the Gulf of Mexico and in the West Coast of
Africa and Kenya as well.
The Zacks Consensus Estimates for the fourth quarter and full
year 2012 currently stand at $1.78 per share and $6.99 per share,
TOTAL is currently having a short-term Zacks #3 Rank (Hold
rating). Another global operator,
) presently has a short-term Zacks #3 Rank (Hold rating). The
latter is currently concentrating in expansion of its operation
and has ventured in offshore Nova Scotia, Canada by purchasing
four exploration blocks.
With global oil price declines moderating, we believe this
simultaneous asset shedding and high-quality agreements will
provide a stable earnings stream for TOTAL. The company's
aggressive exploration strategies and diversified operations will
balance its financials from the current downturn in the U.S. and
Based in France, TOTAL SA 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
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