Total partners with Cyprus in oil search as it divests gas unit

FRENCH oil major Total said yesterday it had signed a deal with Cyprus to search for offshore oil and gas, as the Mediterranean nation hopes to become an energy hub.

Signing a production sharing agreement yesterday with the third energy major this year, Cyprus hopes for a windfall from hydrocarbons beneath the seabed in a largely untapped area of the east Mediterranean.

Any finds are not expected to come ashore until 2018 at the very earliest for domestic consumption, and in 2019 for export.

Total said yesterday it had been awarded two production blocks south-west of Cyprus, in water depths ranging from 1,000 to 2,500 metres.

“This acreage acquisition is aligned with Total’s ambitious exploration strategy focused on new acreage and plays,” Arnaud Breuillac, senior vice president of the Middle East, said yesterday.

Cyprus first struck natural gas offshore in late 2011, when US-based Noble reported an estimated seven trillion cubic feet natural gas find, close to a major gas discovery by neighbouring Israel.

Separately, the energy behemoth said it was in exclusive talks with a French energy consortium – including EDF – over the sale of its unit Transport et Infrastructures Gaz France (TIGF) in a deal worth around €2.4bn (£2.07m).

Much like British oil major BP, Total is divesting non-core parts of its portfolio, and the company said yesterday that the sale was in line with its “active portfolio management strategy”.

“The consortium selected, consisting of industry-leading operators and long term investors, will support TIGF in its further development, while meeting the commitments made to TIGF’s employees and partners”, said Christophe de Margerie, chairman and chief executive of Total.

TIGF supplies gas and storage services in 15 departments in South West France. The agreement will protect TIGF jobs, benefits as well as its headquarters in Pau, south west France.