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Low Break-evens
Total’s legacy upstream position in Angola will also fit into its future plans. It offers strong cash flows to support low-carbon growth, low break-evens and shorter development cycles with a focus on tie-backs, infill drilling and other near-hub projects.
Recent exploration efforts tapping South Africa’s frontier Outeniqua Basin could also fit into transition plans. Africa will account for 30% of Total’s US$1bn exploration budget this year. Before year’s end, it plans to drill at record depths of 3,628 metres on Angola’s Block 48 and on the ultradeep giant Venus prospect in Namibia’s Orange Basin.
The company also has plans to explore offshore Mauritania, Senegal, Cote d’Ivoire, and tiny Sao Tome and Principe in the future. In Nigeria, meanwhile, plans to sanction the deepwaterPreowei project are delayed again, potentially until early 2022 Elsewhere, the company sold Perenco, a clutch of noncore assets offshore Gabon and its operating stake in the Cap Lopez oil terminal for up to $350 million in July.
Vision for the future
While laying out the company’s strategy update, Total executives outlined their vision of how the former oil and gas company will move into new markets at its investors’ day. A company statement said it will focus on growing its liquefied natural gas (LNG) and electricity businesses.
The company plans to use these sources equally, aiming to generate another one million barrels of oil equivalent per day (Mboe/d) by 2030. It will also increase its renewable investment to US$3bn, making up 20% of Total’s capital investment.
The statement summarized: “In the next decade, oil products sales from Total will diminish by almost 30% and Total’s sales mix will become 30% oil products, 5% biofuels, 50% gases, 15% electrons.”
Solar and wind Total aims to have 35GW of renewable generation active in 2025, predominantly solar photovoltaic power. Total came to prominence as an oil and gas company and it expects transport will still require some oil products in 2050, predominantly in emerging markets.
But from 2024, it plans to expand its business into the biofuels sector. The company’s models show that the large majority of biofuel business will come from bio-gasoline and bio-diesel. However, refining and chemicals president Bernard Pinatel said the low barrier to entry for these markets made profit margins small.
Instead, he said Total would focus on renewable diesel. Pinatel said: “We have hydrogenation technology that would help us in this market. We also believe there is a lot of potential because renewable diesel can be used by aeroplanes. At the moment, it is the only option for airlines wanting to make large cuts to their emissions.
“We have in front of us a brand new nascent market, and it’s pretty attractive. On the supply side, there is a clear need for additional capacity to meet demand. We expect the market will stay tight, and that will support profit margins for years to come.”
Total will aim to become a market leader in renewable diesel, with a 15% share of the biofuel market. The company has already converted one refinery to produce biofuels, aiming to ramp up production to 300,000t in 2020. Eventually, this will increase to 500,000t, and the company plans to convert another French refinery to operate from 2024.
Otherwise, the company aims to make 300,000t per year from co-processing biofuels with other products. Additionally, it will use its existing infrastructure to develop projects producing 500,000t per year.
EV charging: focusing on cities
Marketing and services president Alexis Vovk said: “Mobility is about to change drastically.
It has already started, and we have integrated that into our strategy.” Total subsidiary Saft currently works with Tianneng on a joint venture in China. The venture has become the country’s leading two-wheel electric vehicle (EV) manufacturer, and Total wants to scale up production to 5.5GWh by 2025.
Total gas and power general manager Dave Cranfield said: “We believe that by continuing to develop our product range as well as offer excellent service, we are well placed to supply all customers – large and small – with their current and future energy needs.”
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“Africa is to remain at the Heart of Total’s Strategy.”
When such a statement is made by notorious colonizers who just months ago threatened to teach Uganda a lesson because we insisted on due taxes being paid… we have every reason to be very suspicious of what they are scheming when they say “Africa is to remain at the Heart of Total’s Strategy.”
Their statements have consistently confirmed that they cannot be trusted at all.