Statoil takes Total’s Martin Linge field stake for $1.45B

Statoil will take over Total’s stakes in the Martin Linge field (51%) and the Garantiana discovery (40%) on the Norwegian continental shelf (NCS). Statoil will take over both operatorships and pay Total a consideration of $1.45 billion.

Total E&P Norge is the operator of the Martin Linge field, which is located offshore Norway near the British part of the North Sea, about 42 kilometers west of the Oseberg field.

The Martin Linge development plan includes integrated wellhead, production, and accommodation platform with a jacket, in addition to a floating, storage and offloading (FSO) vessel used for oil storage.

Total has explained that its recently announced acquisition of Maersk Oil contributed to the company reviewing its North Sea portfolio.

Arnaud Breuillac, President, Exploration & Production at Total said that the upcoming acquisition of the Maersk Oil portfolio lead the company to review its portfolio in the area, to”focus on the assets in which Total will be able to generate synergies and reduce their breakeven points.”

“In this context, given that Martin Linge is Total’s only operated asset in Norway, there is limited scope to optimize operations, whereas with Statoil’s leading operating position on the Norwegian Continental Shelf, Statoil is in a better position to optimize this asset for the benefit of all stakeholders,” he added.

Production start-up is expected in the first half 2019. The Martin Linge oil and gas field is located in the North Sea approximately 180 kilometers west of Bergen, Norway. The project partners – before the transaction with Statoil – are Total E&P Norge (51% operator), Petoro (30%) and Statoil (19%).

Martin Linge

The  Martin Linge field is an oil and gas field under development west of the Oseberg field in the North Sea, with estimated recoverable resources in excess of 300 million barrels oil equivalent. The expected production lifetime extends into the 2030s.

Martin Linge is being developed with a manned wellhead platform. The jacket substructure is already installed on location in the North Sea, while the topside is being completed at the Samsung yard in South-Korea and will be transported to Norway early 2018. The project has experienced schedule delays and cost increases due to delayed topside engineering, construction and currency impact.

Electrification is made possible through a 160 km cable from shore, the longest AC power link in the world

The project was also hit by a fatal accident at the Korean yard in May 2017, when six people died, forcing Total to delay productions start plan for 2019.

According to Statoil, recoverable resources have increased since the initial Plan for Development and Operation due to additional resources discovered.

Operations will be controlled remotely from an onshore digital operations centre, enabling reduced operational expenditures. Electrification is made possible through a 160 km cable from shore, the longest AC power link in the world. This will reduce CO2 emissions by 200,000 tonnes per year. Following completion of the transaction, Statoil will increase from 19% to a 70% interest in the field.

As result of the transaction, Statoil will also receive remaining tax balances with a nominal post-tax value of more than $1 billion.

Garantiana

As for the Garantiana, which Statoil is also buying, it an oil discovery north of the Visund field in the North Sea with a recoverable resource potential between 50 to 70 million barrels oil equivalent. Development concepts are currently being evaluated. Following completion of the transaction Statoil will have a 40% interest in the discovery.

Statoil will take over relevant employees from Total in accordance with the applicable legislation including required information and consultation process. The transaction is subject to certain conditions, including government approval.

The exit from the Martin Linge project does not mean Total is looking to exit Norway, and that is what Total’s Arnaud Breuillac said: “Norway remains a strategic country for Total as one of the largest contributors to the Group’s production and we of course intend to continue bringing our expertise to Norway by focusing in particular on major non-operated assets such as Ekofisk, Snohvit and Johan Sverdrup.”