TOTAL Grows Indonesian Footprint - Analyst Blog
16 September 2011 - 9:30PM
Zacks
Oil and gas producer TOTAL S.A. (TOT) has tied
up with Talisman Energy Inc. (TLM) to jointly
develop three deep-offshore exploration blocks in the Makassar
Strait in Indonesia. Located in the offshore South Makassar Basin
at water depths of 1,312 to 6,561 feet, the three blocks cover an
area of 4,128 square miles. The three blocks are operated by
Talisman.
As part of the deal, TOTAL has acquired stakes in Talisman’s
production sharing contracts (PSC) related to the blocks. The
company has gained a 50% interest in the Sageri PSC, with Talisman
holding the remaining 50% interest; a 35% interest in the South
Sageri PSC, alongside Talisman (35%) and PTTEP (30%); and a 20%
interest in the Sadang PSC, alongside Talisman (40%) and PTTEP
(40%).
These acquisitions contribute to TOTAL’s strategy to further
expand its acreage in new exploration areas, namely in deep
offshore. The company hopes to continue investing in Indonesia in
line with the government of Indonesia's efforts to tap potential
hydrocarbon reserves of the country.
Per the joint exploration plan the companies will acquire 2D and
3D seismic as well as drill two exploration wells in the region.
The first exploration well is planned to be drilled in the Sageri
block by the end of 2011.
TOTAL will make use of its deep-offshore experience in
contributing to the Makassar Strait project. Further, the company
expects to benefit from potential synergies of its existing
operations in the area, if a discovery is made.
TOTAL is present in Indonesia through its affiliates, Total
E&P Indonesie (upstream) and PT Total Oil Indonesia
(downstream). The company’s presence in the country dates back to
1968, with operations concentrated in the Offshore Mahakam block in
East Kalimantan. It is also the largest gas producing operator in
Indonesia, which accounted for 7.5% of TOTAL’s production in 2010,
amounting to 180,000 barrels of oil equivalent per day.
France-based TOTAL is one of the largest publicly traded,
globally integrated oil and gas companies based on production
volumes, proved reserves and market capitalization. The company has
exploration and production operations across five continents.
TOTAL S.A. currently retains a Zacks #3 Rank, which translates
into a short-term Hold rating. The company competes directly with
BP Plc (BP).
BP PLC (BP): Free Stock Analysis Report
TALISMAN ENERGY (TLM): Free Stock Analysis Report
TOTAL FINA SA (TOT): Free Stock Analysis Report
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