[Premium] Total 'Committed' to Denmark's Tyra: Pouyanne
Total, as expected future new owner of Maersk Oil assets, indicated August 21 that it is looking to sanction the big Tyra gas redevelopment offshore Denmark early 2018 – so somewhat later than the end-2017 target indicated by Maersk itself as operator in March 2017.
The Tyra offshore hub handles 90% of Denmark’s roughly 4.5bn m³/yr gas production. In April 2016 Maersk had warned that, without an investment agreement, it would have to decommission the Tyra platforms and halt their production from October 2018 as they had been undermined by subsidence. A new fiscal agreement with the government in March promised to extend Denmark's gas production but remains subject to a final investment decision.
Total CEO Patrick Pouyanne told analysts about his company's intentions with regard to Denmark and Tyra: “Denmark is also important. There will be no synergies in Denmark, as we are not present. But Maersk operates 90% of Danish oil and gas production. They have a big redevelopment project that they call ‘Tyra Future’ which we will carefully look at. The parliament of Denmark has enacted a law which gives some fiscal incentives to make some redevelopments in the Danish North Sea and also in marginal fields, so we will benefit from that. We are committed to this Tyra Future development and we think also that we have some competencies that could be applied to develop the oil potential. We have a long list of marginal fields and other additional resources that could be developed in Denmark.
“Tyra Future would be sanctioned in early 2018; we want to benefit from this low-cost development in order to secure the future growth of the company,” added Pouyanne, describing it as part "active decommissioning" and part creation of new platforms that would add some production. He was neither asked, nor divulged, details about Total's likely capital expenditure on Tyra Future.
But he was asked about the $2.9bn decommissioning liabilities that Maersk said that Total will pick up. Of these, he said $2.1bn would be in Denmark but would not be incurred until around 2035-40.
Pouyanne also told analysts: “We want to build on the Danish heritage, so the decision we have taken, in order to ensure that we will integrate and execute that transaction in the best possible way, we will move our North Sea base which is based today in London to Copenhagen in order to be able to drive this integration. We will still have a strong operational base in Denmark, the one of Maersk, the other strong operational base in the North Sea will be in Aberdeen where obviously both companies are present.” But he did not say how many jobs might be lost or redeployed from the UK.
Danish energy minister Lars Christian Lilleholt described Total as "a really strong buyer" adding: "I have the greatest confidence that Total will continue to ensure that Denmark receives large revenue from activities in the North Sea." His ministry said that Total will take over all Maersk's obligations, including the full reconstruction of Tyra.
Mark Smedley