France-based TOTAL S.A. (TOT), through its subsidiary TOTAL E&P Kenya B.V., is eyeing at acquiring a 40% interest in five offshore exploration blocks in the Lamu Basin, Kenya. Spread across an area of over 11,776 square miles, the exploration blocks are located offshore the Lamu Archipelago in water depths of between 328 and 9,842 feet. The deal is subject to approval from the Kenyan authorities.
Per the deal, TOTAL’s Kenyan unit will gain stakes in the L5, L7, L11a, L11b and L12 blocks, acquiring a 20% interest from Anadarko Kenya Company, a unit of Anadarko Petroleum Corporation (APC); a 5% stake from Britain-based Cove Energy Plc and a 15% stake from Dynamic Global Advisors Kenya Ltd.
Following the deal, Anadarko said it will retain its 50% interest in the blocks and continue to be the operator, while Cove Energy will retain its 10% interest in the blocks.
The acquisition of the Kenyan blocks forms a part of TOTAL’s bold exploration strategy that consists of acquiring large stakes in high-potential frontier plays.
For quite sometime, now, TOTAL has been focusing on building a solid exploration and production portfolio in East Africa. This is evident from the company’s recent deal to buy blocks in Uganda’s Lake Albert region.
TOTAL has maintained a strong presence in Kenya since 1955, through its subsidiary TOTAL Kenya, headquartered in Nairobi. TOTAL Kenya conducts all of the company’s marketing operations, which include general retail and lubricant, LPG and aviation fuel distribution operations, via a network of 165 service stations.
TOTAL is one of the largest publicly traded, globally integrated oil and gas companies based on production volumes, proved reserves and market capitalization. The company has exploration and production operations across five continents.
TOTAL S.A. currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. The company competes directly with BP Plc (BP).
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