Maersk oil to spend up to $845 million on African expansion

A.P. Moeller-Maersk agreed to buy African oil assets for as much as $845 million to revive an energy unit struggling with declining output in the North Sea.

Maersk Oil will acquire half of Africa Oil Corp.’s shares in three onshore exploration licenses in Kenya and two in Ethiopia, the Copenhagen-based company said on Monday in a statement.

The value of the deal is split between $365 million upfront and as much as $480 million in future payments depending on the performance of the Lokichar Project.

Maersk Oil, which has started a cost cutting plan to remove up to 12 percent of its global workforce, last week, reported an 86 percent plunge in third-quarter profit as energy prices fell. Its parent Maersk, Denmark’s biggest company has said it’s willing to spend money on investments to help the oil unit grow.

“As part of the Maersk Group, we are in a position where we can take advantage of opportunities arising in current market conditions,” Maersk Oil Chief Executive Officer Jakob Thomasen said in the statement.

Maersk shares rose as much as 2.5 percent in Copenhagen and were little changed as of 9:58 a.m. Africa Oil rose as much as 48 percent in Stockholm trading, the most since May 2012.