Total has accepted an offer from INEOS Styrolution to acquire its polystyrene business in China. The French oil major has together with its partners agreed to sell the Joslyn oil sands project in Alberta, Canada, to Canadian Natural Resources Limited (CNRL).
The deal in China includes in particular two facilities with a production capacity of 200,000 tons per year each, located in Ningbo, Zhejiang Province, and in Foshan, Guangdong Province.
Total said it did not have the required critical mass in China, unlike its positions in Europe and the United States. The sale is subject to the approval of the relevant regulatory authorities.
“The sale is in line with our active portfolio management strategy” commented Bernard Pinatel, President, Refining & Chemicals at Total. “Our polystyrene business will be now focused on Europe and North America, two markets where we are the No. 2.”
The transaction in Canada will be for an overall consideration of 225 million Canadian dollars. Total explained that following the oil price fall in 2014, the Joslyn project partners decided to put its further development on hold. Therefore, activities have since been limited to fulfilling regulatory requirements and ensuring the safety of the site.
“Reducing our exposure to Canada’s oil sands by selling this asset is in line with our global strategy to focus our oil investments on low breakeven resources and develop a resilient portfolio in the mid and long term. It is also consistent with the gradual reduction of our stake in the Fort Hills oil sands project in 2017”, stated Patrick Pouyanné, Chairman and CEO of Total.
The closing of the transaction is subject to authorisation by the Canadian Competition Bureau. The Joslyn project partners are Total (operator, 38.25 per cent), Suncor Energy Joslyn Partnership (36.75 per cent), Joslyn Partnership (15 per cent) and Inpex Canada Ltd (10 per cent).