Total chief executive Christophe de Margerie said that the company was hopeful of being successful when Abu Dhabi's Adco concessions are relicensed 75 years after the rights were first established.
France’s Total said yesterday it was “optimistic” ahead of the renewal of lucrative onshore oil rights in Abu Dhabi next year.
The chief executive Christophe de Margerie said during a presentation to brief investors on strategy that the company was hopeful of being successful when the Adco concessions are relicensed 75 years after the rights were first established.
Total plans to “adapt its positions in Europe and expand in growing markets particularly in Africa and the Middle East”, the company said.
The fields in the Abu Dhabi Company for Onshore Oil Operations (Adco) concession account for 1.4 million barrels per day (bpd) of the emirate’s current 2.8 million bpd capacity, and complex technologies ranging from injecting carbon dioxide to 3D reservoir imaging will need to be evaluated for each one.
An Emirate-wide target to ramp up production from 2.8 million to 3.5 million bpd by 2017 is also under way. Abu Dhabi accounts for more than 90 per cent of the UAE’s crude output.
Abdulla Nasser Al Suwaidi, the director general of Abu Dhabi National Oil Company (Adnoc), Adco’s parent, has said that the relicensing process could be completed this year.
Abdul Munim Al Kindy, the chief executive of Adco, said earlier this year: “We are not in a rush. We look forward in 2014 and 2015 to establishing a new relationship after 75 years. There was turmoil, political changes and collapse of oil prices, and yet the government respected its partnership. With that heritage we look forward for the future.”
The legacy bidders – Total, the UK’s BP, ExxonMobil of the US and the Anglo-Dutch Shell have held production rights in the emirate since the Second World War – are competing with new entrants such as Norway’s Statoil and the US’s Occidental, which have competitive technologies of their own.
Abu Dhabi is also evaluating how to include the interests of its customers in Asia, who buy the majority of the emirate’s oil, by introducing the China National Petroleum Corporation, the Korea National Oil Corporation and Japan’s Inpex – itself a player in Abu Dhabi since the 1960s offshore – as minority partners.
For the bidders, the fields are particularly attractive for being in a politically stable area and for being one of the few places in the Gulf where foreign companies can book reserves.
Awarding a separate tender for the Bab sour gasfield to Royal Dutch Shell earlier this year has also freed Adnoc to focus on the onshore oil auction.
Shell beat Total for the gasfield, which is 50 per cent carbon dioxide and 15 per cent hydrogen sulfide – a cocktail of corrosive compounds that can be deadly when released.
Total also said yesterday that its annual production will rise in the next three years as capital expenditure peaks.
Total will start up projects in Norway, Angola and the North Sea in the coming months and keep output growth targets, the company said. Capital spending is expected to fall to US$24 billion to $25bn in 2015 to 2017 compared with $28bn to $29bn this year, according to the company.
“The biggest part of the investment programme is now behind us,” Mr de Margerie said. “The next step is to bring the cash in.”
Mr de Margerie has pledged to raise oil and natural gas output, explore more aggressively for new deposits and sell assets. A second-quarter production increase was the first year-on-year gain since the last three months of 2010. The explorer has also set a goal of $15bn to $20bn in asset sales from 2012 to 2014.
The oil explorer reiterated a goal to raise output potential to about 3 million barrels of oil equivalent a day in 2017 and said it would reach 2.6 million barrels of oil equivalent a day in 2015. Production advanced 1.3 per cent to 2.29 million barrels of oil equivalent a day in the second quarter.
* With Bloomberg