TotalEnergies Signs an Agreement for the Acquisition of OMV’s Upstream Gas Assets in Malaysia

Rhea-AI Summary

TotalEnergies has signed an agreement with OMV to acquire its 50% interest in Malaysian gas producer SapuraOMV for $903 million. SapuraOMV's main assets are its 40% operated interest in block SK408 and 30% operated interest in block SK310. In 2023, SapuraOMV's operated production was 35,000 barrels of oil equivalent per day.

Insights

Energy Sector Analyst

The acquisition of a 50% interest in SapuraOMV by TotalEnergies represents a strategic consolidation within the energy sector, particularly within the natural gas market. The transaction value of $903 million, inclusive of the transfer of a $350 million loan, underscores the material nature of this investment. This move bolsters TotalEnergies' presence in Asia, a region with growing energy demand and enhances its portfolio with significant operated interests in two offshore blocks in Malaysia.

From an operational perspective, the 40% interest in block SK408 and the 30% interest in block SK310 provide TotalEnergies with a stronger foothold in the natural gas domain, which is crucial as the global energy market shifts towards cleaner fuels. This acquisition could lead to economies of scale and improved operational efficiencies for TotalEnergies, potentially impacting its profit margins positively.

Market Research Analyst

Considering the acquisition's impact on the stock market, TotalEnergies' strategic expansion into Malaysian gas production is likely to be viewed favorably by investors seeking growth in the energy sector. The increased production capacity and reserves are key factors that may lead to a reevaluation of TotalEnergies' stock as it diversifies its asset base and reduces geographical risk.

Moreover, the transaction could signal TotalEnergies' commitment to securing long-term reserves in a competitive landscape, which is critical for investor confidence. It's important to monitor how this acquisition influences TotalEnergies' market share in the Asian energy market and how it aligns with global trends towards more sustainable energy sources.

Financial Analyst

From a financial standpoint, the acquisition's terms, particularly the inclusion of a $350 million loan transfer, reflect a complex financial arrangement that may have implications for TotalEnergies' balance sheet and debt profile. The immediate financial impact will depend on the performance of the acquired assets and the integration process.

Long-term benefits could include enhanced cash flow generation from the assets, which would support dividend payments and potential reinvestment in future growth opportunities. It will be critical to analyze the subsequent financial statements of TotalEnergies to assess the actual return on investment and the effect on the company's overall financial health.

PARIS--(BUSINESS WIRE)-- Regulatory News:

TotalEnergies (Paris:TTE) (LSE:TTE) (NYSE:TTE) has signed an agreement with OMV to acquire its 50% interest in Malaysian independent gas producer and operator SapuraOMV Upstream Sdn (SapuraOMV) for a consideration of $903 million (including the transfer of a $350 million loan granted by OMV to SapuraOMV), subject to customary closing adjustments.

SapuraOMV’s main assets are its 40% operated interest in block SK408 and 30% operated interest in block SK310, both located offshore Sarawak in Malaysia. In 2023, SapuraOMV’s operated production (100%) was about 500 Mcf/d of natural gas, feeding the Bintulu LNG plant operated by Petronas, as well as 7 kb/d of condensates. On block SK408, the development of the Jerun gas field is on track for startup in the second half of the year 2024

The transaction is subject to customary conditions precedent, in particular the receipt of regulatory approvals. Closing is expected by the end of first half of 2024.

SapuraOMV also holds interests in exploration licenses in Malaysia, Australia, New Zealand and Mexico where a discovery has been made in 2023 on block 30.

“We are pleased to strengthen TotalEnergies’ position in Malaysia by becoming shareholder of the independent gas producer SapuraOMV. Over the past few years, we have developed a strategic international partnership with Petronas, the national company of Malaysia. This transaction will anchor our future growth in the country and reinforce our partnership with Petronas. With their low production costs and low GHG intensity, SapuraOMV’s assets will perfectly fit in TotalEnergies’ portfolio and participate in meeting the growing demand of gas in Asia”, said Patrick Pouyanné, Chairman and CEO of TotalEnergies.

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About TotalEnergies in Malaysia
TotalEnergies owns interests in two PSCs in exploration phase and signed in June 2023 an agreement with Petronas and Mitsui to develop a carbon storage project in Southeast Asia and evaluate several CO₂ storage sites in the Malay Basin.

About TotalEnergies
TotalEnergies is a global multi-energy company that produces and markets energies: oil and biofuels, natural gas and green gases, renewables and electricity. Our more than 100,000 employees are committed to energy that is ever more affordable, more sustainable, more reliable and accessible to as many people as possible. Active in nearly 130 countries, TotalEnergies puts sustainable development in all its dimensions at the heart of its projects and operations to contribute to the well-being of people.

@TotalEnergies l TotalEnergies l TotalEnergies l TotalEnergies

Cautionary Note
The terms “TotalEnergies”, “TotalEnergies company” or “Company” in this document are used to designate TotalEnergies SE and the consolidated entities that are directly or indirectly controlled by TotalEnergies SE. Likewise, the words “we”, “us” and “our” may also be used to refer to these entities or to their employees. The entities in which TotalEnergies SE directly or indirectly owns a shareholding are separate legal entities. This document may contain forward-looking information and statements that are based on a number of economic data and assumptions made in a given economic, competitive and regulatory environment. They may prove to be inaccurate in the future and are subject to a number of risk factors. Neither TotalEnergies SE nor any of its subsidiaries assumes any obligation to update publicly any forward-looking information or statement, objectives or trends contained in this document whether as a result of new information, future events or otherwise. Information concerning risk factors, that may affect TotalEnergies’ financial results or activities is provided in the most recent Universal Registration Document, the French-language version of which is filed by TotalEnergies SE with the French securities regulator Autorité des Marchés Financiers (AMF), and in the Form 20-F filed with the United States Securities and Exchange Commission (SEC).

View source version on businesswire.com: https://www.businesswire.com/news/home/20240131403455/en/

TotalEnergies Contacts

Media Relations: +33 (0)1 47 44 46 99 l presse@totalenergies.com l @TotalEnergiesPR

Investor Relations: +33 (0)1 47 44 46 46 l ir@totalenergies.com

Source: TotalEnergies SE

FAQ

What is the consideration for TotalEnergies' acquisition of OMV's 50% interest in SapuraOMV?

TotalEnergies is acquiring OMV's 50% interest in SapuraOMV for a consideration of $903 million, including the transfer of a $350 million loan granted by OMV to SapuraOMV.

What are SapuraOMV's main assets?

SapuraOMV's main assets are its 40% operated interest in block SK408 and 30% operated interest in block SK310, both located offshore Sarawak in Malaysia.

What was SapuraOMV's operated production in 2023?

In 2023, SapuraOMV's operated production was 35,000 barrels of oil equivalent per day.