The National Gas Company (NGC) has acquired French energy giant Total’s Trinidad and Tobago exploration and production assets for US$473 million (almost TT$3 billion).
The move, Energy Minister Kevin Ramnarine said, is a fulfilment of the view that the NGC should be vertically integrated in the value chain, venturing into upstream activities, beyond its traditional middleman role of distributor to downstream customers.
The signing ceremony to transfer the holdings from Total to NGC was held yesterday at Hyatt Regency (Trinidad) in Port of Spain.
The transaction includes Total E&P Trinidad BV and Elf Exploration Trinidad BV, two of Total’s subsidiaries that comprise a 30 per cent working interest in Block 2(c) and 8.5 per cent in Block 3(a), with a production capacity of approximately 15,000 barrels of oil equivalent per day and a gas volume of 220 million standard cubic feet per day.
Total’s project director for New Ventures and Asset Management Juan Marcos Braga said the company was seeking to simplify its portfolio and divest non-core assets; they have already divested assests in Cameroon, France and Colombia.
Nevertheless, the company has been in Trinidad since 1996, Braga said, and will maintain a presence through its marketing business, Total Marketing and Refining Trinidad and Tobago.
This is the second major acquisition the State-owned natural gas distributor has made this year. In August, NGC paid US$600 million (TT$3.9 billion) for ConocoPhillips’ 39 per cent share in Phoenix Park Gas Processors Ltd. For the year ended December 31, 2012, NGC recorded a $3.930 billion after-tax profit, more than $670 million lower than the $4.604 billion profit it made in 2011.
The company did, however, end the year with $12.34 billion in cash and cash equivalents.
Ramnarine said the company had almost $17 billion in cash that it was looking to strategically spend and these acquisitions represent investments that will deliver very good returns for the company in the future.
He said he personally examined the economics of the Total acquisition and was “very pleased”.
He added that the outlook for Trinidad and Tobago in 2014 was “very positive”, with the last of the major maintenance projects in the energy sector completed on schedule, and the Dolphin and Cassia platforms, which had been out for several weeks last month for upgrades, starting to come back online.