(TOT) TOTAL S.A. Sheds U.K. Downstream Business

Integrated oil and gas company TOTAL S.A. (TOT) decided to sell most of its downstream assets in the United Kingdom to Rontec Investments LLP for £400 million or $647.4 million.

The downstream assets earmarked for sale include TOTAL’s UK retail network, comprising 810 TOTAL-branded service stations, its Butler heating oil business, the associated logistics infrastructure, plus TOTAL’s Channel Islands and Isle of Man businesses.

One of the leading independent forecourt groups in the United Kingdom, Snax24, independent principal investment firm, Grovepoint and Investec, an international specialist bank and asset manager joined hands to form the Rontec Investments consortium.

The selling of TOTAL’s European assets is in sync with the company’s strategy to downsize its downstream portfolio while giving more emphasis to its Exploration and Production (E&P) operations.

Despite the sale of its downstream assets in the United Kingdom, TOTAL said it will carry out its E&P operations and retain a direct market presence in the country through its lubricants, aviation fuels, special fluids and chemicals businesses.

TOTAL continues to prudently acquire and dispose assets to make its asset base more tuned to its long-term business strategy. During first quarter 2011, TOTAL made acquisitions worth $3.46 billion while in tandem disposed of assets worth $0.4 billion in the quarter.

Earlier this month, TOTAL agreed to shed its entire 6.4% stake in Gassled and related entities to Silex Gas Norway AS for $870 million. Gassled is a joint venture formed in 2003 that transports natural gas from fields on the Norwegian Continental Shelf to Continental Europe and the UK. However, the company, consistent with its policies, continued its E&P operationsin Norway.

In a separate deal this month TOTAL acquired a 60% stake in solar power company SunPower Corp. (SPWRA) to create a new global leader in the solar industry.

TOTAL S.A. currently retains a Zacks # 3 Rank (short-term Hold rating). The company competes with BP plc (BP) and Exxon Mobil Corporation (XOM).

France-based TOTAL is one of the largest publicly traded, globally integrated oil and gas companies based on production volumes, proved reserves and market capitalization. The company has exploration and production operations across five continents.

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