TOTAL sells stake in Shah Deniz field

3 June 2014

TOTAL has sold its 10% stake in the Shah Deniz field and South Caucasus pipeline to the state-owned Turkish Petroleum (TPAO) for $1.5 billion.

The deal gives TPAO a 19% stake in the project, which is based off the coast of Azerbaijan and run by the UK's BP, reports tce today. It is due to enter a second phase, which will see an expansion of production and construction of the pipeline connecting the field to Europe.

Total says that the deal is part of wider plans, and does not represent a move out of Azerbaijan, where it operates the Absheron gas field.

"The sale of our interest in Shah Deniz is in line with Total's active portfolio management and the focus of its investment capability on more strategic assets," says Michael Borrell, who heads Total's business in the region.

He adds that once the deal is complete, the company will have sold nearly $16 billion worth of assets since 2012, and may look to sell as much as $4 billion more.

Shah Deniz is Azerbaijan's largest gas field, and already hosts a development producing around ten billion cubic metres of gas a year. The Shah Deniz II project is expected to produce 16 billion cubic metres of gas a year from around 2019, most of which has already been earmarked for export to Europe, and may help reduce the region's reliance on politically unstable Russian imports.

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