African oil will be central to French energy major Total’s efforts to hit its output targets this decade, its head of exploration and production told Reuters.
Total is set to increase investment in the region, mainly in Nigeria and Angola, and to a lesser extent in Congo, Yves-Louis Darricarrere said.
Around 40% of the $13-billion that Total, the world’s fourth biggest oil and gas company, plans to invest in 2007 will be spent on African projects alone.
”If we want to reach our growth objectives, we clearly need to develop in Africa,” Darricarrere said in an interview.
He expected Total to have doubled its production in the region between 2005 and 2010.
Total is confident it will reach its target to raise oil and gas production by an average of 5% a year between 2006 and 2010, helped by new deep offshore developments, but it will not set a precise objective for 2007.
”We are today in a different world and I prefer to confirm that Total continues to have a production development that is far bigger than that of our competitors rather than set a precise target for 2007,” Darricarrere said.
He was speaking during a visit to Total’s projects in Angola, sub-Saharan Africa’s second largest oil producer.
Total had previously said it expected its hydrocarbon output to rise by less than 6%this year, after supply cuts from Opec and disruptions in Nigeria forced it to abandon its initial growth target of 7%.
”What is important for everyone is that we stick to our 5% average growth medium-term target, by reaching a little more than that one year, and a little less another year,” Darricarrere said.
The development of deep offshore fields, liquefied natural gas and, later on, heavy oils, will be the main engines behind Total’s output growth, he said,
After Dalia — the Angolan offshore oil field developed at a depth of 1 500m and which started production last December — Total has about five key projects in preparation, including the 150 000 barrel per day (bpd) Rosa field, which is due to start producing later this month.
It also expects the 90 000 bpd Moho Bilondo and 225 000 bpd Akpo fields in the Democratic Republic of Congo and Nigeria to come on-stream in 2008.
Angola had not embarked on a drive to regain greater control of its energy wealth, the resource nationalism that analysts see in other producers, he said
”My perception is that Angolan authorities have found a good balance in their relationships with international companies so I don’t particularly perceive in Angola the kind of change in energy policies that you can see elsewhere,” Darricarrere said.
Last month, Total formally handed over control of its 180 000 bpd Sincor project to the Venezuelan government, and is still struggling to enhance its presence in Russia.
”Resource nationalism translates into states going back on the terms of the contracts and also truly reduces our playing ground,” Darricarrere said.
Asked about a compensation for its Sincor project, he said: ”we have until June 26 to negotiate with them [the Venezuelan authorities] on our taking part in the ”mixed enterprise” which is taking over the project.”
He declined to comment further.
Growing uncertainties on access to energy made it essential for Total to develop new projects.
”This is needed to help sustain production growth beyond 2010,” Darricarrere said.
Total is also focused on keeping its technical costs — which he said amount to $10 per barrel of oil produced by the company and are the lowest in the industry — at a time of surging prices in the oil services industry.
”We need to keep our comparative advantage on technical costs and this is also one of the best ways to be selected as operator of new fields,” Darricarrere said. – Reuters