Oil major Total is launching its biggest exploration campaign for years in 2019 as part of a turnaround plan that is ditching the company’s focus on risky long-shots in favour of areas known to contain commercial levels of oil or gas.
Nigeria’s oil industry remains dormant and not included in the list as the French major aims to drill 23 wells this year. Total’s senior Vice President for exploration, Kevin McLachlan said the drilling will be in waters off Mauritania, Senegal, Namibia, South Africa, Guyana and Brazil, according to Reuters.
While the company declined to say how many wells it drilled in 2018, McLachlan said 2019 would be Total’s largest program in years. The 23 wells planned represent about a trebling of the levels of 2017 and 2016, and is higher even than the 20 drilled in 2013, before the oil price crash.
The company’s new game plan is to concentrate efforts on emerging and mature basins, which offer a greater chance of exploration success. It is moving away from its higher-risk, higher-reward strategy of targeting “frontier” areas that have not been commercially exploited, an approach which yielded scant rewards and saw outlier Total fall behind rivals.
As a result the proportion of its exploration capital the African-focused company is spending on frontier areas has dropped to 15 percent, from 40 percent five years ago.
“We were spending a lot of money in frontier,” said McLachlan, a Canadian geophysicist who joined Total in 2015 to lead the five-year revamp of its exploration strategy. “Now we want balance.”
Most of the wells it aims to drill this year will target known giant fields, he added.
McLachlan said Total’s exploration budget would remain broadly in line with 2018, when it was $1.2 billion, and 2017, when it was $1.1 billion. That is still less than half the level of 2014, when the price crash forced all majors to cut spending.
Like some competitors, including Exxon and BP, Total is looking to deepwater exploration at a time when technological advances – particularly in 3D digital seismic imaging – is aiding a comeback in that area following a decade when industry advances have been focused on onshore shale.
Of the 23 wells in Total’s drill program this year, it has already started work at the deepwater Brulpadda field off South Africa. Two industry sources close to the project say the potential for a discovery is high and could signal a game-changer not only for Total, but also for the country.
“We are expecting the results in the coming days,” Total’s Chairman and Chief Executive Patrick Pouyanne said.
Pouyanne, recently called on Nigeria to issue new exploration licences, saying the country’s oil and gas sector had been dormant in recent years in terms of exploration and new projects.
He said uncertainties and the ongoing discussions over Nigeria’s oil industry regulation, the Petroleum Industry Bill (PIB) has made the oil sector dormant for years.
“There is a huge potential in Nigeria,” he said, “it is probably the most prolific country in west Africa in terms of oil and gas and it is time to launch new projects,” Reuters quoted Pouyanne as saying on the sidelines of a meeting of Nigerian and French businesses in Paris.