…To sell some of its interests Africa
…Oil pipeline tenders launched
…Nigeria LNG Train7 expansion key target
French oil giant, Total has said that Africa will remain at the heart of the company’s strategy. Speaking ahead of Total’s strategy update at which he outlined the company’s long-term energy transition plans, the chairman and chief executive officer, Patrick Pouyanné, said Africa will be at the “heart” of the company’s long-term energy transition plans.
But he also spoke of plans by the French major to sell some of its African interests as it focuses on its most profitable assets.
“Our ambition is to be recognised as a major, broad energy company in Africa with the largest oil and gas production, the biggest retail network and the ability to supply electricity from renewable sources,” Pouyanne told the recent Africa E&P summit hosted by Frontier Energy.
In an interview titled `Climate: a conversation with Patrick Pouyanné’ on the Total website on a fortnight ago, Pouyanné, explained that he believes Total’s main responsibility is to help provide safe, affordable energy solutions to as many people as possible, while managing energy consumption and the related emissions.
“The next 20 years will be decisive in building a low-carbon future that does not curb economic and social development. That includes two billion people in Africa alone, where over 600 million people today do not have access to electricity. That figure worldwide is 1.2 billion,” he said.
Pouyanné was responding to a question about what Total’s objectives for 2035 are. “I am also convinced that being `the most African international oil company’ is another one of our strengths. Africa, where these challenges are crucial, will lead the way in energy innovation.
“We intend to be the responsible energy major that meets these challenges. We are, after all, “Committed to Better Energy.”
The Independent said in a report yesterday that the company’s emphasis on Africa makes economic sense given that it has long been a rich source of cash flow for the company, according to analysts.
“In 2019, Africa generated around US$10 billion of Total’s US$26 billion cash flow from operations, and 30% of its oil and gas production (900,000 barrels of oil equivalent per day),” the medium noted.
The wider region, including North Africa, account for roughly 30% of the group’s $19 billion of global spending last year. And although Total slashed its 2020 investment budget by 22% to less than $15 billion following the Covid-led price drop, the profits it makes in Africa will continue to help it fund its low-carbon investments.
“These green investments will equate to almost 15% of capital spending this year,” The Independent said, adding that Total has expanded its footprint across the resource-rich continent consistently over the years. The medium also reported that the Train 7 expansion at Nigeria LNG is another key African LNG project for Total.
More recently it has targeted East Africa and Southern Africa. Earlier last month, it signed agreements with Uganda’s government that it says will pave the way to a long awaited final investment decision on the Lake Albert oil project.
Total is also set to double its interest to 66% in Lake Albert and the associated pipeline to the Tanzanian coast after pouncing on struggling Tullow Oil’s assets in April. Pouyanne said tenders for the pipeline have been launched and “we expect to award contracts before yearend.”
The Lake Albert project should produce around 230,000 barrels of oil per day. Total, on behalf of the partnership company; the East Africa Crude Oil Pipeline (EACOP co.), is responsible for providing project information including tenders.
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The chairman said tenders for the East Africa Crude Oil Pipeline (EACOP) project have been anticipated since Uganda in July gave Total the go-ahead to take-over the stake of the Irish exploration company, Tullow, in various oil blocks in the Albertine region. All suspended project tenders were expected to be re-launched by this time.
The next milestone is the issuance of the project Final Investment Decisions (FID) by partners by December. But Total’s primary focus will be Mozambique, where the company operates the $20bn, 13.1 million tonne per year Mozambique LNG project now in progress in Area 1.
There, where the estimated resources amount to some 60 trillion cubic feet of natural gas, start-up is set for 2024. However, the project could face potential delays due to an insurgency in the northeastern Cabo Delgado region where the onshore facilities are being built.
By Chibisi Ohakah, Abuja