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9 Pages

Total acquires a 12.09% interest in NOVATEK

Total acquires a 12.09% interest in NOVATEK

Report summary

Total and NOVATEK have formed a strategic relationship that will boost Total's mid to long-term growth outlook, and give NOVATEK access to the Majors' global industry experience and know-how. The companies have signed 'Memoranda of Cooperation' covering two separate transactions: 1) Total will acquire a 12.08% stake in NOVATEK for US$4 billion, with plans to increase this to 19.40% within 36 months; 2) Total will gain a 20% stake in Yamal LNG - a proposed greenfield LNG ...

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  • Total acquires a 12.09% interest in NOVATEK PDF - 900.02 KB 9 Pages, 5 Tables, 3 Figures


The upstream oil and gas industry conducts activities against a backdrop of growing energy and environmental challenges. Political instabilities, international conflicts and government and environmental regulation have all impacted the production process.

This has forced companies to re-examine their corporate strategy, moving away from high-risk exploratory drilling to lower-risk exploration in mature basins as they search for increased returns.

This Upstream Oil and Gas Deal Insight report provides an in-depth analysis of this deal. You will also find information about upstream assets and the strategic rationale behind the deal.

For investors and businesses, this deal insight report provides an understanding of the effect this deal will have on the market, including oil and gas pricing and assumptions. Use it to keep up to date with deal announcements, gain expert insights and analyse potential developments that might affect your strategy.

Wood Mackenzie goes beyond company-reported data and announcements to give you an independent and informed view. Our unique valuation metrics are underpinned by our deep understanding of upstream assets and companies. We help you objectively benchmark and evaluate asset and corporate deals so you can compare deal economics around the world.

  • Executive summary
  • Transaction details
  • Upstream assets
    • 1) Equity stake in NOVATEK
      • Technical resource base offers upside
  • Deal analysis
    • Domestic gas pricing reform is a key valuation sensitivity
    • Significant hurdles to a 2016 start-up
    • Progress will require a politically backed shift in dynamics
  • Strategic rationale
    • Total boosts near-term growth and further expands long-term opportunity set
      • Equity stake in NOVATEK provides Total with another production growth stream
      • Deal adds to Total's range of LNG growth options but lack of control is a concern
      • Total's appetite for above-ground risk appears undiminished
  • Oil & gas pricing and assumptions

In this report there are 8 tables or charts, including:

  • Executive summary
  • Transaction details
  • Upstream assets
    • Upstream assets: Table 1
    • Wood Mackenzie forecast of NOVATEK production, plus best-case Yamal LNG upside* (gross)
  • Deal analysis
    • Deal analysis: Table 1
    • Deal analysis: Table 2
  • Strategic rationale
    • Impact of NOVATEK equity on Total production outlook and resource base *
    • NOVATEK and Total Russian assets
  • Oil & gas pricing and assumptions
    • Oil & gas pricing and assumptions: Table 1
    • Oil & gas pricing and assumptions: Table 2
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