Total’s major oil and gas projects in Africa will not be stopped by the sudden fall in crude oil prices and will help the French company meet its long-term production targets, a top executive said recently.
Total has bet on a string of African projects such as Egina in Nigeria, Kaombo in Angola and Moho in the Republic of Congo to help it boost production to a target of 2.8 million barrels of oil equivalent per day in 2017.
These are West African projects in deep and ultra-deep water – an area where Total is a self-proclaimed specialist but that require costly technologies.
“These projects have been engaged and we certainly won’t stop them, which means thousands of jobs will be preserved for projects up to a 2017-2018 horizon,” Guy Maurice, head of Total’s exploration and production branch in Africa, told reporters on the sidelines of a conference.
“All the big projects are in the pipeline today. This will allow us to meet our production targets for 2017-2018 as planned,” he said.
He said the recent drop in oil prices, which has seen Brent crude oil plunging by more than half since June, will prompt the group to review certain projects in Africa, country by country, but that no major project was at a stage that required a final investment decision.
“What could come up tomorrow, in 2025 or something, is not at a pre-sanction stage, it’s still very early in the study phase, we’re not in a phase when we have to arbitrate between doing it or not,” he said.
He said Total would work with partners – subcontractors and producing countries – to help bring the cost of projects down, on the model of what was achieved with the Kaombo project in Angola, which was launched after a $4 billion reduction in costs last year.
“Half of the reduction came from us, we changed our requirements, a quarter from our suppliers, and a quarter from the Angolan government, which has accepted a lower level of local content,” he said, referring to producing countries’ increasing demands for the use of often more costly local suppliers and untrained staff for oil projects.