Yemisi Izuora
Oil major, Total, would be investing between $15 billion and $17 billion on annual basis through 2020.
The announcement is part of the firm’s 2018 Strategy and Outlook presentation by Chairman and Chief Executive Patrick Pouyanne for the financial community in New York.
“Going forward, Total reaffirm its strong position with outstanding production growth of 6-7 per cent per year from 2017 to 2020, $15-$17 billion per year of capital investment over the same period and an Opex reduction target of $5 billion per year by 2020 compared to the 2014 base, increased from $3.7 billion in 2017,” the company said in a statement on the highlights of the presentation.
It added the company has taken advantage of the cycle since 2015 to acquire, at a cost of less than 2.5 $/boe, more than 7 billion boe of low breakeven resources, representing 25 per cent of the Upstream portfolio, significantly high-grading the asset base.
“Total is now seizing the favorable cost environment to sanction both major projects and short-cycle opportunities. The upgraded portfolio has a rich pipeline of major projects to be sanctioned by 2020 that will add more than 700 barrels of oil equivalent kboe/d of production, thus contributing to a 5 per cent average growth from 2017 to 2022.” the firm said.
The Group also has a number of short-cycle projects such as deep-water tie-backs and infill drilling which can be developed at a cost of less than 7 $/boe and offer high returns and quick payback.
As part of a strategy to integrate climate issues, the Group also plans to focus on low breakeven oil projects, expand along the full gas value chain and develop a profitable low carbon electricity business.
The company also plans to update its reporting structure from 2019 by creating a new segment called Integrated Gas, Renewables and Power (iGRP) which will consolidate its current Gas, Renewable and Power perimeter as well as the Upstream and Midstream LNG assets currently reported in Exploration & Production.
The firm said it aims to reduce the carbon intensity of its energy sales by 15 per cent from 2015 to 2030. Total said its ambition is to reach a further reduction of around 25 per cent to 35 per cent by 2040 as new technologies become available and public policies are put in place.
Total said it has clear visibility on cash flow growth to 2020 which is expected to increase by 7 billion from 2017 to 2020 driven by project start-ups and recent acquisitions.