PARIS: Total is set to increase its target for $4 billion of cost savings by 2018 in the light of its planned acquisition of Maersk Oil, Chief Executive Patrick Pouyanne said on Monday.
Overlap between the UK operations of the two companies means some jobs could be at risk there, he added.
Total has offered to buy the oil and gas business of Denmark’s A.P. Moller Maersk in a $7.45 billion deal which the French energy major said would strengthen its operations in the North Sea and boost earnings and cash flow.
Total said the deal was expected to generate operational, commercial and financial synergies of more than $400 million per year, in particular by combining assets in the North Sea.
“At least $200 million are costs synergies, so we target cutting costs by $200 million out of this combination on top of what Total has already done, and it will be a part of our new target for cost savings,” Pouyanne told journalists.
Total previously planned to cut costs by $4 billion by the end of 2018, adjusting to lower oil prices.
“By mid September we will revise this target, we will upgrade the target,” he said. The company will hold an investor day in September.
Pouyanne said the North Sea was one of the areas where the company would have to go further in cost savings to remain competitive, and the Maersk Oil deal offers it the opportunity to do so.
Maersk lost a long-standing agreement to operate Al-Shaheen in Qatar to Total last year, but is according to media reports in talks with Iran to develop the oil layer of the South Pars field, which is an extension of the Qatari field.
Total last month signed a major deal with Iran to develop the gas part of South Pars.
Total also said it was investing $3.5 billion over five years in Qatar's offshore Al Shaheen oilfield.
Total set to raise cost savings target after Maersk Oil deal
Total set to raise cost savings target after Maersk Oil deal
Free trade negotiations between GCC, India mark new phase of partnership, says sec-gen
RIYADH: The Gulf Cooperation Council’s secretary-general affirmed that the negotiations for a free trade agreement between the GCC and India, and the signing of the joint statement, represents a new phase of strategic partnership.
Jasem Mohamed Al-Budaiwi said that this contributes to enhancing close cooperation and strengthening economic and trade ties, according to the Saudi Press Agency.
This came during the signing ceremony of the joint statement on launching the free trade agreement negotiations between the Al-Budaiwi and India’s Minister of Commerce and Industry, Piyush Goyal, which took place in New Delhi, on Tuesday.
During the signing ceremony, Al-Budaiwi said that the Terms of Reference, signed on Feb. 5, provide a comprehensive and clear framework for these negotiations. The two nations agreed to discuss enhancing cooperation in vital strategic areas, including trade in goods, customs procedures, and services.
Additionally, the framework covers Sanitary and Phytosanitary measures, intellectual property rights, cooperation on Micro, Small, and Medium Enterprises, along with other topics of mutual interest. This reflects the comprehensive nature of the agreement and its ability to keep pace with the future economy.
Al-Budaiwi expressed hope that these negotiations would lead to a comprehensive and ambitious free trade agreement that works to remove customs and non-customs barriers, enhance the flow of quality investments in both directions, and achieve further liberalization in trade and investment cooperation between the GCC and India for mutual benefit.
This would provide a stimulating economic environment and an investment climate that opens broad horizons for the business sector, supports supply chains, and accelerates the pace of economic growth in line with the ambitious developmental visions of the GCC states.
The top official affirmed the full readiness of the General Secretariat to host the first round of negotiations at its headquarters in Riyadh during the second half of this year.
The two sides held a meeting during which they reviewed the existing cooperation relations between the GCC and India and discussed ways to develop and elevate them to broader horizons, serving mutual interests and enhancing opportunities for strategic partnership between the two sides, particularly in the economic, investment, and trade fields.
They praised the role undertaken by the negotiating teams from both sides, appreciating the efforts contributing to reaching a comprehensive agreement that enhances economic integration and supports the smooth flow of trade between the two nations.
