Total confirms talks to sell $2.4b Nigeria assets

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French oil giant, Total, has confirmed talks to sell some assets, valued
at about $2.4 billion, in Nigeria. The company’s Chief Executive Officer,
Christophe de Margerie, who made the confirmation to  an international
news agency yesterday, however, assured that Total is not pulling out of
Nigeria. “Yes we are discussing with certain buyers about
selling certain assets in Nigeria,” Christophe de Margerie said.

“But it doesn’t mean we are scared and intend to
start some kind of walking out of Nigeria…Total is happy to develop its
projects in Nigeria.”

The China Petroleum & Chemical Corp., better
known as Sinopec, is reportedly close to buying stakes in Nigerian onshore oil
blocks from Total. De Margerie said that while he could not comment on whether
there were such talks Sipopec, he would not deny the report.

The Bloomberg News agency had last week Tuesday
reported that Sinopec, which is seeking to reverse a decline in oil reserves,
was close to buying stakes in Nigerian onshore oil blocks from Total SA, for
about $2.4 billion, citing two anonymous people familiar with the matter.

According to the report, quoting one of the two
sources, who asked not to be identified because the agreement has not been made
public, Sinopec has signed a preliminary deal to acquire the stakes.

China’s state-backed energy companies are
seeking new oil and gas reserves abroad to feed the world’s second-largest
economy, especially from regions like Africa where government scrutiny is
lighter than in North America or Europe. Sinopec has also approached the French
oil firm Etablissements Maurel et Prom, which operates in Gabon, about an
acquisition, people familiar with the matter said this month.

“We like the potential upstream asset
acquisition in Nigeria because it could help Sinopec replenish its dwindling
oil reserves and improve the firm’s overall profit margin amid sustained high
oil prices in the long term,” said Gordon Kwan, Hong Kong-based head of energy
research at Mirae Asset Securities Ltd.

Total, Europe’s third-biggest oil company, is
seeking to divest $15 billion to $20 billion of assets from 2012 to 2014 in
order to raise cash for oil and gas projects. Chief Executive Officer
Christophe de Margerie has said most of that will come from the exploration and
production division.

A Total official in Paris declined to comment. A
spokesman for Sinopec was not immediately available for comment.

Total gained 0.1 percent to close at 38.89 euros
in Paris trading last Tuesday. Sinopec lost 0.2 percent to HK$8.20 at 10:20
a.m. in Hong Kong today.

Nigeria was tied with Norway last year as
Total’s biggest source of hydrocarbons, accounting for 287,000 barrels of oil
equivalent a day, or about 12 percent of the total. The company plans to pump 3
million barrels a day of oil and gas in 2017.

Total’s asset-sale target, announced during an
annual investor conference in London last month, compares with $15 billion of
“finalized” sales in 2010 and 2011, according to figures given in February. A
portion of these came from the divestment of shares in French drugmaker Sanofi.

Total has quickened the pace of deals in recent
years as part of a policy to “actively manage” its portfolio of exploration
acreage, refineries and pipelines around the world. 

The Paris-based company agreed last year to sell
its stake in the Norwegian Gassled pipeline system, while de Margerie has said
he’s studying a sale of the TIGF network in southern France. Total also sold a
stake in a Spanish oil refiner and tried to sell the Lindsey refinery in the
U.K.

Sinopec’s reserves of crude oil declined from
3.3 billion barrels in 2007 to 2.8 billion barrels at the end of last year,
enough for nine years of production at 2011 levels, according to data compiled
by Bloomberg. Its parent, China Petrochemical, said in January that it will
seek to produce 50 million metric tons of crude a year overseas by 2015. Last
year, foreign production was 23 million tons.

China Petrochemical bought Addax Petroleum Corp.
in 2009, adding reserves in Nigeria, Cameroon and Gabon.

Source: Compass

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