Total chief executive Patrick Pouyanne said he expects two or three new wells will be drilled offshore Guyana this year, but, dismissed rumours that the French major may launch a takeover for exploration partner Tullow Oil PLC (LON:TLW).
Tullow and Total are partnered with AIM’s Eco Atlantic Oil & Gas Ltd (LON:ECO) in the Orinduik exploration project, offshore Guyana, where two successful discoveries were made last year – albeit, news that the crude was ‘heavy’ clouded what had initially been deemed a ‘blue sky’ success.
Subsequent exploration results in the next-door acreage, where Tullow and Repsol are partnered, more recently buoyed sentiments after a light crude discovery was made in a Cretaceous age exploration play.
Such plays have also proved successful nearby with Exxon unearthing billions of barrels of crude resources in the Stabroek acreage.
It is anticipated the Total, Tullow and Eco will meet later this month to discuss plans for the 2020 campaign.
Total takeover rumours denied
Speculation had surfaced that Total may take out Tullow at a potential ‘bargain’ discount price.
Tullow launched a formal strategic review in late 2019 amid a major management overhaul, and, said it would be evaluating all its assets.
Total shares an interest in the Guyana venture as well as projects in Uganda and Kenya so it is likely an obvious point of speculation, however, Pouyanne rejected the notion when questioned by Reuters about a possible M&A manoeuvre.
“Stop dreaming... No,” Pouanne is quoted in a Reuters report.
Previously, Total and Tullow had an agreement in place for an asset acquisition with the French oiler set to take the London listed firm’s stake in a large oil field development only for the deal to falter amid a tax dispute.
That dispute was resolved in December and yet no further deal news has emerged. Reuters added that Pouyanne said discussions are ongoing but Tullow must deal with its financial issues.
Both firm’s are understood to be seeking a partial divestment of stakes in Kenya, though Reuters pointed to the possibility that Tullow could look to sell out of the project altogether.
Tullow chose not to comment on Reuters article.
In January, Tullow in a statement updated on its business review stating: “The board is confident that the outcomes will deliver significant improvements to the group's organisational structure, major reductions in G&A and a more efficient and effective business.”
“The board is confident that the outcomes will deliver significant improvements to the group's organisational structure, major reductions in G&A and a more efficient and effective business.”
At the end of December, Tullow’s net debt stood at US$2.8bn.