M&A: TotalEnergies Acquires Carbon Capture Business From Talos Energy

TotalEnergies E&P USA has acquired Talos Low Carbon Solutions (TLCS) from Talos Energy for roughly $148 million. The deal includes the entire Talos carbon capture and sequestration (CCS) business.

CCS is a set of technologies that can greatly reduce CO₂ emissions from new and existing coal- and gas-fired power plants and large industrial sources, the U.S. Environmental Protection Agency notes. Still, critics say few CCS projects have been implemented globally, and there are concerns about the practicality, safety and sustainability of the technology, according to the Institute of Environmental Sciences.

This is M&A deal number 138 that Sustainable Tech Partner has covered so far in 2024. See all M&A deals involving sustainability, climate tech and green IT services listed here.

TotalEnergies Acquires Carbon Capture and Sequestration (CCS) Business: Company Backgrounds

TotalEnergies, founded in 1924, is based in Courbevoie, France. The global energy company, backed by more than 100,000 employees, has been acquiring various sustainability-focused assets worldwide. Annual revenues were $281 billion in 2022. TotalEnergies also runs an accelerator program to assist startups in the electricity and renewable energy markets. (Related: See 40+ startup accelerators listed here.)

Talos Energy, founded in 2012, is based in Houston, Texas. The energy company is focused on the United States Gulf of Mexico and offshore Mexico opportunities. Revenue was $1.46 billion in 2023, down 11.75% from 2022.

After completion of the deal, TotalEnergies says it will own:

• 25% of the Bayou Bend project, alongside Chevron (50%, operator) and Equinor (25%). Bayou Bend project is a major CO2 storage project located along the Texas Gulf Coast.
• 65% operated interest in the Harvest Bend (Louisiana) project; and
• 50% interest in the Coastal Bend (Texas) project.

Among the twists to note: TotalEnergies plans to sell off the Harvest Bend and Coastal Bend projects, since they are not located close to existing company assets.

Robin Fielder, Talos executive VP for low carbon strategy and chief sustainability officer, will remain in her role for a transition period before leaving Talos to pursue other opportunities, the seller said.

TotalEnergies Acquires CCS Business: Executive Perspectives

In a prepared statement about the acquisition, TotalEnergies CEO Patrick Pouyanné said: "TotalEnergies is pleased to enter the Bayou Bend project through the acquisition of Talos Low Carbon Solutions. Ideally located close to our Port Arthur refinery and our petrochemicals assets in La Porte, this project will be instrumental for the reduction of direct emissions from our US operations. This transaction gives momentum to the decarbonization of hard-to-abate US emissions and marks a milestone on our journey to get to Net Zero by 2050, together with society."

Added Talos President and CEO Timothy S. Duncan stated: "Since TLCS's inception, we have successfully applied our energy expertise as an early mover aimed at developing decarbonization solutions along the U.S. Gulf Coast. Strong market interest during our capital raise provided the strategic option to fully monetize the business to TotalEnergies, an established global leader in CCS development. Robin and our entire CCS team did an outstanding job crystallizing value for Talos shareholders for a strong financial return. The transaction will further enable Talos to prioritize cash flow generation and optimal capital allocation in our core Upstream business. We are also continuing to explore business development and strategic M&A opportunities."

M&A: Previous TotalEnergies Acquisitions

TotalEnergies has been active on the M&A front. Previous acquisitions to note include:

• January 2024 - Battery Storage Systems: TotalEnergies acquired Kyron Energy, a battery storage system developer in Germany. Financial terms of the deal were not disclosed.
• EV Charging Infrastructure: TotalEnergies acquired three technology start-ups in the electricity business. The deals involve Dsflow, Nash Renewables and Predictive Layer. The acquisitions will enable TotalEnergies to improve its B2B offers; the development of renewable projects; market analyses; and the deployment of EV charging points, the buyer said. Each of the acquired businesses participated in the TotalEnergies On accelerator program.