Carola Hoyos Total signs deal to search for oil in France (sort of)

It is not often that Total, France’s largest oil and gas company, gets to explore for oil at home. But today the company signed a deal with UK-listed Tullow to look for oil in French Guiana, which politically belongs to France even if it lies 7000km from Paris.

In so doing, Total joins Royal Dutch Shell in believing that the type of rocks that hold Ghana’s giant Jubilee field may run all the way across the South Atlantic Ocean and yield similar results in the tiny French prefecture nestled between Surinam and Brazil. The two regions did after all share a close past, until they split in the early Cretaceous (146 Ma to 100 Ma) in the second major phase of Pangaea’s break up.

The deal between Total and Tullow sees Total taking a 25 per cent stake but does not disclose financial terms. Total is likely to have agreed to bear its share of the exploration costs, giving Tullow room to concentrate on its other promising areas, including Sierra Leone and Ghana.

Analysts at Merill Lynch estimated the value of the so-called farm-in at $100-120m, covering the cost of seismic and the drilling of one well.