1LONDON: Total, one of the biggest energy firms operating in the North Sea, has sold off $900m (£585m) of UK gas interests to cut costs, amid the continuing collapse of oil prices.
The French group is disposing of its interests in two pipelines – one which delivers gas from 20 North Sea fields – and its ownership of the St Fergus gas terminal in Scotland.
The sale brings the value of disposals by Total to more than £1bn in the last two months. It follows an announcement by Maersk Oil yesterday that the company plans to shut the Janice field in the North Sea and cut 200 jobs.
The price of North Sea Brent crude was up more than 6% at almost $45.90 a barrel on Thursday, but was still trading well below half the value it had 12 months ago. The slump has been caused by huge volumes of oil from countries such as the US and Iraq at a time when demand has dropped owing to an economic slowdown in key consuming nations, such as China.
The North Sea is particularly vulnerable to cutbacks because it is a relatively high cost, “mature” hydrocarbon province where few operators expect to make significant discoveries any more.
Total made clear it wanted to raise funds. “The sale of these midstream transportation assets is another example of Total’s strategy of active portfolio management, and the strong potential to unlock value from a range of infrastructure assets,” said Patrick de la Chevardière, its chief financial officer.