French company Total captures more assets in the Gulf of Mexico

The agreement with Chevron follows a decision by the U.S. company to cancel a rig contract about a year early.
By Daniel J. Graeber  |  Sept. 22, 2017 at 9:16 AM
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Sept. 22 (UPI) -- French energy company Total said Friday it was able to "capture" more opportunities in the Gulf of Mexico through an agreement with Chevron.

"Total has entered into an agreement to capture seven prospects operated by Chevron in the deepwater Gulf of Mexico," the French company said in a statement.

Total through the deal said it was expanding its footprint in deep U.S. waters by gaining between 25 percent and 40 percent participation in the prospects in question. No terms were disclosed.

The agreement followed a notification from rig company Transocean that Chevron terminated a contract for deep-sea drilling in the Gulf of Mexico about a year early.

The Discoverer Clear Leader drillship was last listed in Transocean's fleet status report as deployed in the Gulf of Mexico at a day rate of $575,000, an increase of 1 percent from the previous rate to lease the rig each day. Transocean said it would realize a lump-sum $148 million for contract termination fees.

Chevron had no comment about the early termination or about the agreement with Total. The French company said it valued Chevron's performance as a deepwater company and the agreement expands on pre-existing partnerships.

"This agreement, together with the recently announced participation in the Jack field as part of the Maersk Oil acquisition, increases Total's footprint in the U.S. Gulf of Mexico, where it can apply its exploration expertise and deepwater technologies," Arnaud Breuillac, the president for Total's exploration and production division, said.

Total in August bought off the oil unit of Danish shipping giant A.P. Moller-Maersk for $7.45 billion, taking on $2.5 billion of the debt held by Maersk Oil in the process.

The French company is coming off a strong quarter, with adjusted net income growing by 13 percent from last year to $2.5 billion. Chevron, meanwhile, pegged its exploration and production budget for 2017 at $20 billion, 15 percent lower than last year and 42 percent below 2015 levels.

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