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While some firm’s may be cutting back their work on capital intensive projects in Africa, as well as in other areas around the globe due to the drop in crude prices, French firm Total is not one of them, it will instead try to bring costs down. The company said that it will meet its long-term production targets with the help of major projects in Africa.
Guy Maurice, head of the French firm’s exploration and production activity in Africa, told reporters on the sidelines of an industry even said that projects in Nigeria, Angola and the Republic of Congo (ROC) will help the country meet its production target of 2.8 boepd by 2017. Projects in Africa that will contribute to the production boost include Kaombo in Angola, Egina in Nigeria, and the Moho in the ROC. These deepwater and ultra-deepwater projects in West Africa are where Total is a self-proclaimed specialist, unfortunately the projects also require expensive technologies.
“These projects have been engaged and we certainly won’t stop them, which means thousands of jobs will be preserved for projects up to a 2017-2018 horizon,” Maurice said. “All the big projects are in the pipeline today. This will allow us to meet our production targets for 2017-2018 as planned.”
While the drop in crude prices has led Total to review certain projects on a country by country basis, Maurice said no major project was at a stage that required a FID be taken. “What could come up tomorrow, in 2025 or something, is not at a pre-sanction stage, it’s still very early in the study phase, we’re not in a phase when we have to arbitrate between doing it or not,” he said. Maurice went on to say that the company would work with subcontractors, as well as producing countries to help bring project costs down.
Maurice sited the Kaombo project in Angola, which was launched after a $4 billion reduction in costs last year, as an example of cost cutting. “Half of the reduction came from us, we changed our requirements, a quarter from our suppliers, and a quarter from the Angolan government, which has accepted a lower level of local content,” he said.