Two deepwater players are joining hands in the U.S. Gulf of Mexico (GoM) on a mission to capture seven prospects spread across 16 blocks.
Paris-based Total said Sept. 22 that its subsidiary Total E&P USA entered an agreement with Chevron U.S.A. in the deepwater GoM. The targeted prospects are located in what Total described as “two promising plays” in the GoM. They are Wilcox, which is located in central GoM next to the Anchor discovery, and Norphlet in Eastern GoM near the Appomattox discovery, the company said in a news release.
Valentina Kretzschmar, director of corporate analysis for Wood Mackenzie, said “The move is an indication that Total’s appetite for exploration is coming back. Since 2009, Total’s GoM drilling has been operated by Cobalt under their strategic alliance for the basin. This led to the large North Platte discovery in 2012, followed by several dry exploration wells.
“The new Chevron partnership could revitalize Total’s portfolio in the GoM,” Kretzschmar said in a statement.
Total said its participation in the wells, the first of which was spudded in late July on the Mississippi Canyon’s Ballymore prospect, will be between 25% and 40%.
“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 USA GoM where it can apply its exploration expertise and deepwater technologies,” Arnaud Breuillac, president of Total’s E&P unit, said in the release. “As a continued effort to high-grade its portfolio, Total won six offshore exploration licenses in the August Lease Sale.”
Total is already active in the GoM, having a 17% interest in the Chevron-operated Tahiti Field, 33.33% interest in the Petrobras-operated Chinook Field and a 40% interest in the Cobalt International-operated North Platte discovery.
As part of the acquisition of Maersk Oil company, Total said it will also become a 25% partner in the Chevron-operated Jack Field.
“The acquisition of Maersk Oil ticked many boxes, but it did not address Total’s long-term growth challenge,” Kretzschmar added. “We expect Total to focus on accessing long-life, low-cost resources, while continuing to high-grade its portfolio. Mergers and acquisitions, discovered resource opportunities and exploration are all on the cards, supported by its strong financial position. Increasing exposure to gas and renewables will remain strategic priorities.”
Total stepped up interest in the renewables sector with its purchase of a 23% stake in EREN, a renewable energy company focused on solar, wind and hydro, in a $285 million deal. The deal was announced Sept. 19.
As a majority shareholder in SunPower, a Silicon Valley-based solar panel company with more than 750 solar technology patents, Total has been active player in the solar energy sector since 2011.
Total also announced this week that it is acquiring GreenFlex, which specializes in energy efficiency. The transaction is expected to close in fourth-quarter 2017.
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