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Abu Dhabi, UAEMonday 10 December 2018

Exclusive: Total eyes UAE licensing rounds and regional renewables projects

The French oil major picked up $1.45bn worth of concession stakes in Abu Dhabi in March

Hatem Nuseibeh, president of Total UAE, said the French oil major had made 'good offers' to Adnoc. Victor Besa / The National
Hatem Nuseibeh, president of Total UAE, said the French oil major had made 'good offers' to Adnoc. Victor Besa / The National

French oil major Total is eyeing opportunities to invest in oil and gas blocks in Abu Dhabi, Ras Al Khaimah and other emirates, even as it looks to drive business for its newly established solar entity.

“Ras Al Khaimah and Umm Al Quwain are having licensing rounds and we’re looking at them. We’re looking at everything. If there is something that is interesting we will do it,” Hatem Nuseibeh, Total president for the UAE, told The National.

The French oil company in March won US$1.45 billion (Dh5.3bn) of concession stakes offshore Abu Dhabi, which accounts for 4.2 per cent of the world’s total crude production. Total, one of the oldest investors in the energy sector in the UAE, is also looking to participate in Abu Dhabi National Oil Company’s licensing round this year, as it examines further investments downstream.

In April, Adnoc offered six oil and gas blocks in its first licensing round. Government petroleum regulatory authorities in Ras Al Khaimah and Sharjah have offered blocks for international exploration. One of the RAK concessions includes a field from Umm Al Quwain.

In an interview with The National in March, Total group chairman and chief executive Patrick Pouyanne said the company would explore development of downstream ventures with Adnoc.

In May, Adnoc unveiled its downstream strategy and said it would invest Dh165bn with partners in expanding its refining and chemical facilities, as it looked to earn higher revenues from the sale of products.

Mr Nuseibeh said the French company had made “good offers” to the state oil company both in developing downstream facilities as well as with Abu Dhabi’s newly formed oil trading arm.

Adnoc in April set up a non-speculative trading unit as it looked to expand revenue streams and beef up sales of crude and products.

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“We know what their needs are and we’re in a win-win situation, and so if we can find something that fits together, we’ll definitely go in,” Mr Nuseibeh said.

Total renewed its partnership with Adnoc following the split of the Adma-Opco offshore concessions into newer segments, with the Abu Dhabi company retaining a 60 per cent stake across the blocks.

Total’s Abu Dhabi assets currently maintain a production rate of 300,000 barrels per day, nearly 12 per cent of the company’s total worldwide production of 2.5 million bpd.

Mr Nuseibeh declined to give a figure for the expected increase in output from expanding production, but said development of gas caps in Abu Dhabi from existing concessions would bring “additional value with additional production”.

The UAE last year outlined $109bn to be spent in unlocking sour gas caps as well as developing and acquiring downstream assets abroad in the next five years.

Total, which is a 5 per cent stakeholder in Adnoc’s liquefied natural gas subsidiary along with Japan’s Mitsui, said talks were under way to renew gas agreements set to expire next year, as well as “potential new LNG buyers”.

Mr Nuseibeh also said discussions were ongoing to find a partner to expand Total’s newly established solar affiliate in the region. Total Solar, as the entity is known, is looking for regional partners to develop renewable projects across the Middle East.

Total is not likely to rely on the resources of its majority-owned American renewable energy company SunPower Corporation in the Middle East, which leans towards lower-cost solar developers, he added.

“Sunpower will stay in the US and South America. Total Solar will work in the other parts of the world, but we’re looking at regional partners,” Mr Nuseibeh said.

Separately, Total has officially quit its $4.8bn gas project in Iran, Oil Minister Bijan Namdar Zanganeh said on Monday, following the reimposition of US sanctions, AFP reported.

"Total has officially left the agreement for the development of phase 11 of South Pars (gas field). It has been more than two months that it announced that it would leave the contract," he told parliament's news agency ICANA, the French news agency said.