French oil major Total is reportedly selling its stake in the North Sea Laggan-Tormore oil and gas field as it seeks to shed assets after a steep fall in oil prices.
According to banking sources, Total hopes to get up to £1billion for its 80% operating stake in the field, located about 78 miles north-west of Shetland.
The company is believed to be looking to complete the deal in June.
A Total spokeswoman said: “We don’t comment on market rumours.”
Laggan-Tormore is considered a high-quality asset as it is planned to start production at the end of this year, eventually reaching peak rates of 93,000 barrels of oil equivalent (boe) per day.
Total had sought to make the gas and condensate field its third major hub in UK waters, after the existing Alwyn North and Elgin-Franklin assets.
As recently as 2013, the company expected Laggan-Tormore to turn it into the number one oil and gas producer in the UK North Sea.
But oil prices roughly halved between last June and January, leading Total – like most of its peers – to cut spending and sell assets in order to boost their balance sheets.
Oil prices have since stabilised at around $60 per barrel, but are still off peaks of more than $100 reached last year.
Lat month, Total said it would cut 2015 investments by up to 13% to £15-16billion and would spend 30% less on exploration work following oil price decline.
“Total is reassigning their portfolio and want higher returns elsewhere in the world,” a banking source said today.
Denmark-based Dong Energy holds the remaining 20% stake in Laggan-Tormore, where production start-up plans have suffered a series of delays.
The sale of one of Total’s key projects – meant to help the group reach its 2.8million boe per day target by 2017 – could signal that after having embarked on one of the largest asset-sale programmes in the industry in recent years, the Paris-based firm now has fewer non-core assets to dispose of.
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