Total SA, Europe’s second-biggest oil company, is considering a sale of its gas pipeline in Britain’s North Sea as it seeks to offload assets amid a drop in oil prices, three people with knowledge of the matter said.
The French company has reached out to several potential buyers for the Frigg network, which could fetch about US$1 billion, two of the people said.
A sale might draw interest from pension funds seeking stable returns and energy-focused private-equity firms, they said.
Total chief executive officer Patrick Pouyanne has said he would curb spending and quicken the pace of asset sales after the price of crude oil crashed to six-year lows.
The company wants to raise US$5 billion through disposals this year, and is targeting a total of US$10 billion through 2017.
The French company might decide to sell all of the Frigg pipeline or a majority stake in the asset, depending on buyer interest, the people said.
It is already exploring the sale of part of the Laggan-Tormore natural gas field, which lies west of the Shetland Islands, one of the people said.
BEHIND SCHEDULE
Total operates and has an 80 percent stake in the project, which is about a year behind its original production schedule. The company might also sell a 20 percent stake in Nigeria’s Usan field.
A Total representative declined to comment.
British Chancellor of the Exchequer George Osborne used his final annual budget this week to cut taxes on North Sea oil, reducing a supplementary levy so producers are to pay a total of 50 percent tax on profit, down from 60 percent.
OIL PRICE IMPACT
The drop in global oil prices has rendered as much as a third of UK fields uneconomic, BP PLC chief executive officer Bob Dudley said last month.
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