Total targets Africa for 25% rise in output

FRENCH OIL group Total is banking on a string of African projects to help fuel a 25 per cent rise in output over the next five years, with growth accelerating after 2015 to top three million barrels of oil and gas a day for the first time.

Europe’s number three oil and gas company said yesterday that 70 per cent of the fields on which it is basing its forecast for the 2015-17 period are already either producing or in development. Three of the projects that will help deliver the post-2015 surge are Egina (Nigeria), Kaombo (Angola) and Moho (Republic of Congo) – all west African projects in deep and ultra-deep water – an area where Total is a self-proclaimed specialist.

Total and other top oil firms like BP and Shell are ramping up spending on exploration, often in relatively underdeveloped regions like Africa, to take advantage of the historically high price of oil, which averaged $113.6 a barrel in the first half of 2012, up 2 per cent on the year.

At its annual investor day in London, Total also announced it had joined the race to exploit the potentially huge resources offshore Mozambique in east Africa, where it already has operations in Uganda and Kenya.

Total said it had signed a so-called “farm-in” deal with Petronas, the Malaysian state company, for a 40 per cent interest in a production sharing contract covering offshore blocks three and area six in the Rovuma Basin for an undisclosed sum.

Total stressed its output projection of three million barrels of oil equivalent a day for 2017, up from about 2.4 million today, was not a production target, but an estimate of capacity based on an assumed oil price of $100 a barrel.

Much of Total’s output comes from projects where it is not the operator and where national governments can claw back production when oil prices rise.

For 2011-2015, Total forecast output to grow about 3 per cent a year on average.

The company said it planned to sell assets worth between $15 billion and $20 billion in the period up to 2014 as part of a bolder approach to managing its business, which has seen it buy and sell assets more frequently and also merge its refining and chemicals businesses. – (Reuters)