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Total – Maersk Deal Sees Total Buying Maersk Oil Business

  • August 22, 2017
  • By Pete Nisbet
  • 0

A Total – Maersk deal has led to Total buying the Maersk oil operation for $7.45 Billion (£5.8 bn). Maersk Oil is a Danish company that has the concession for the exploration and production of oil and gas in the Danish sector of the North Sea. By purchasing Maersk, the French oil giant Total has suddenly become the second biggest oil operator in the North Sea.

 

It will see French firm Total take control of Maersk’s Danish assets in the UK sector of the North Sea, including the Culzean gas field. While other firms are moving away from this part of the Atlantic, Total has just got itself a stake in the Culzean gas project and the Johan Sverdrup oilfield. The Culzean project will be able to provide 5% of the UK’s gas requirement by the end of this decade.

Total - Maersk Deal

Total – Maersk Deal ‘Surprising’ – But Maybe Not!

The Total – Maersk deal surprised many people. However, Total says the deal has enabled the company to become the second largest operator in the North Sea. The company’s chairman and CEO, Patrick Pouyanne, states that the merger of Total with “Maersk Oil’s North Western Europe businesses” would provide the combined business with “strong production profiles in UK, Norway and Denmark.”

 

This would enable the company to increase its competitiveness through cost-savings and asset growth. There is nothing surprising about this since Total is one of the seven “Supermajor” oil companies in the world. Total obviously wanted a strong North Sea presence, and this deal gives it that.

Implications of Total-Maersk Overlap of Business Activities

This is not good new for everyone. Any merger will normally lead to staff overlaps and inevitable redundancies. Total’s comment about an “exceptional overlap” of businesses infers a potential for job losses. Any overlap between Total and Maersk operations would undoubtedly lead to employee rationalization.

 

That means job losses as the combined company seeks annual cost savings and streamlining. These jobs are likely to be lost in the UK, if for no other reason than that Total is French and Maersk is Danish.

Total – Maersk Deal Completed 2018

The Total – Maersk deal is expected to be completed in the first quarter of 2018. According to Total, the deal could see some job cuts. These might particularly be in Britain. Total also said that it could make additional cost savings of about $200 million per year. However, it is not yet all cut and dried. The deal will require the approval of regulators.

About Pete Nisbet

Pete has been working in the field of website design and content for many years. He has a great interest in technology and current affairs, particularly business affairs. Pete's interests are technology, writing and world affairs and he is widely traveled. Pete also holds an Honors BSc from the University of Edinburgh.