Integrated oil and gas company TOTAL S.A. (TOT) expanded its operation in the major Belgium port of Antwerp by acquiring the 35% interest owned by ExxonMobil (XOM) in Fina Antwerp Olefins.
TOTAL already has a 65% interest in Fina Antwerp Olefins, which is one of the largest base chemical producers in Europe. The acquisition of the remaining interest, which is subject to approval of the European authorities, will make the company the sole owner.
This strategic move would help TOTAL to consolidate and reap the benefits of its Antwerp presence. The Fina Antwerp Olefins plant produces ethylene, propylene and benzene, which are used by its Antwerp and Feluy polymer plants to manufacture polyethylene, polypropylene and polystyrene.
Antwerp houses TOTAL’s largest and most complex refinery Total Raffinaderij Antwerpen and the polyethylene plant Total Petrochemicals Antwerpen. The sole ownership of the monomer plant, Fina Antwerp Olefins, will enforce its presence in the region.
TOTAL continues to leverage its strong financial position to carry out strategic operations. While it works at expanding its global reach, the oil major prudently sheds assets that are not in sync with its long-term strategy. Early December, the company expanded its North Sea Operation by acquiring a 22.5% interest in Elgin Franklin Oil and Gas (“EFOG”) for €590 million ($792.3 million), thereby gaining 100% control.
TOTAL’s recent restructuring plan of carving out two disparate units – Refining & Chemical and Supply & Marketing – from the erstwhile Downstream and Chemical segments would make its operations more profitable and competitive. We feel that the consolidation of the refining and chemical operation in Antwerp is a concrete and tactical step in that direction.
TOTAL S.A. currently retains a Zacks #3 Rank, which translates into a short-term Hold rating.
France-based 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 spanning five continents.
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