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 favor of areas known to contain commercial levels of oil or gas.
The French major aims to drill 23 wells this year, its senior vice president for exploration, Kevin McLachlan said, in waters off Mauritania, Senegal, Namibia, South Africa, Guyana and Brazil.
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.
Total has broken ranks with some rivals in recent years and largely ignored the rush to U.S. shale. It is looking to eke out conventional resources, particularly in Africa where it has the biggest industry presence. The strategy carries risks though, and has left the company exposed to the kind of political instability that has deterred others.
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.
LAGGING IN DISCOVERIES
Appraisals of discoveries in 2018 could offer signs that Total’s shift in exploration strategy is paying off.
The company announced a 1 trillion cubic feet gas discovery off Shetland in the North Sea last year. Appraisals are ongoing for the Ballymore discovery in the Gulf of Mexico with Chevron, and Calypso in Cyprus with Eni.
A major discovery in 2019 could cement the turnaround after a drought between 2009 and 2014 when it spent billions in exploration with little barrels to show for it, while rivals Eni Exxon Mobil and BP, racked up successes.
Yet there is still work to do in terms of converting exploration dollars into commercial success.
Energy consultancy Wood Mackenzie said Total had aggressively snapped up exploration blocks in 2017 and 2018, which took it to the top of the industry table with over 189,000 square km added since 2015 – around 70,000 higher than its nearest competitor.
But in terms of discoveries since 2015, Total still lags some peers, said Wood Mackenzie analyst Andrew Latham.
“It is clearly behind Exxon Mobil. Exxon’s success in Guyana marks them out as industry leader,” said Latham, adding that Eni’s Zohr gas discovery in Egypt was the next top find.
“Thereafter, it is competing well with the other majors, it has been involved in a string of multi-hundred million barrel big new finds, whereas in the previous four years it would have been one of the weaker or weakest of the majors.”
As part of its turnaround plan, Total has created five regional exploration hubs with a concentration of geoscientists, instead of teams spread out in 38 countries.
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A new, central 10-person leadership team reviews and chooses projects, compared with decisions being made locally before, while people with exploration track records have been placed in executive positions for the first time.
S.AFRICA RESULTS EXPECTED ‘IN DAYS’
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.
While Total has said the field could hold between 500 million to over 1 billion barrels of oil equivalent, one of its partner in the project is more upbeat.
“The outlook for finding hydrocarbons is extremely high. The question is whether it is gas or oil, and whether it is a good-quality reservoir,” Keith Hill, CEO of Africa Oil Corp, a minority stakeholder in the field, told Reuters, adding that the field could hold 1.5 to 3 billion barrels.
Other oil companies and South African authorities are likely to be watching closing.
“Any potential discovery will ultimately result in the attraction of other oil companies and the growing of the oil and exploration and production industry in South Africa,” said Viljoen Storm, acting chief executive of the country’s state-owned Petroleum Agency. -Reuters
-Bate Felix and Wendell Roelf
The Rage And Tears That Tore A Nation
Snapshots of the outrage against foreign nationals and protests against sexual offenders in South Africa in recent weeks, captured by FORBES AFRICA photojournalist Motlabana Monnakgotla.
As the continent’s second-biggest economy, South Africa attracts migrants from the rest of Africa. But mired in its own problems of unemployment and political instability, September saw a serious outbreak of attacks by South Africans on foreign nationals and foreign-owned businesses. And they have been ugly.
The spark that fueled the raging fire was in Pretoria, the country’s capital, when a taxi driver was shot dead by a foreign national who was selling drugs to a youngster in the central business district (CBD).
The altercation caused a riot and the taxi industry brought the CBD to a standstill, blocking intersections. It did not stop there; a week later, about 60 kilometers from the capital in Malvern, a suburb east of the Johannesburg CBD, a hijacked building caught fire, leaving three dead. As emergency services were putting out the fire, the residents took advantage and looted foreign-owned shops and burned car dealerships overnight on Jules Street.
The lootings extended to the CBD and other parts of Johannesburg.
To capture this embarrassing moment in South African history, I visited Katlehong, a township 35 kilometers east of Johannesburg, where the residents blocked roads leading to Sontonga Mall on a mission to loot the mall and the foreign-owned shops therein overnight.
Shop-owners and workers were shocked to wake up to no business.
Mfundo Maljingolo, a worker at Fish And Chips, was among the distressed.
“This thing started last night, people started looting and broke into the mall and did what they wanted to do. I couldn’t go to work today because there’s nothing to do; now, we are not going to get paid. The shop will be losing close to R10,000 ($677) today. It’s messed up,” said Maljingolo.
But South African businesses were affected too.
Among the shops at the mall is Webbers, a clothing and footwear store. Looters could not enter the shop and it was one of the few that escaped the vandalism.
Dineo Nyembe, the store’s manager, said she was in disbelief when she saw people could not enter the mall.
“We got here this morning and the ceiling was wrecked but there was no sign that the shop was entered, everything was just as we left it. Now, we are packing stock back to the warehouse, because we don’t know if they are coming back tonight,” lamented Nyembe, unsure if they would make their daily target or if they would be trading again.
Across the now-wrecked mall are small businesses that were not as fortunate as Webbers, and it was not only the shop-owners that were affected.
Emmanuel Nhlane’s home was robbed even as attackers were looting the shop outside.
“They broke into my house, I was threatened with a petrol bomb and I had to stand outside to give them a chance; they took my fridge, bed, cash and my VHS,” said Nhlane.
Nhlane had rented out his yard to foreign nationals to operate a shop. He does not comprehend why his belongings were taken because he doesn’t own a shop. Now, it means that the unemployed Nhlane will not be getting his monthly rental fee of R3,700 ($250).
Far away, the coastal KwaZulu-Natal province of South Africa, was also affected as trucks burned and a driver was killed because of his nationality. This was part of a logistics and transport industry national strike.
Back in Johannesburg, I visited the car dealerships that were a part of the burning spree on Jules Street.
The streets were still ashy and the air still smoky, two days after the unfortunate turn of events.
Muhamed Haffejee, one of the distraught businessmen there, said: “Currently, we are still not trading.”
Cape Town, in the Western Cape province of South Africa, which hosted the World Economic Forum (WEF) on Africa from September 4 to 6, was also witness to protests by women and girls from all walks of life outside the Cape Town International Convention Centre, demanding that the leadership take action to end the spate of gender-based violence (GBV) in the country.
There were protests also outside Parliament. What set off the nationwide outcry was the shocking rape and murder of Uyinene Mrwetyana, a 19-year-old film and media student at the University of Cape Town, inside a post office by a 42-year-old employee at the post office.
There was anger against the ghastly crimes and wave of GBV in the country that continues unabated. According to Stats SA, there has been a drastic increase of women-based violence in South Africa; sexual offences are up by 4.6%, from 50,108 in 2018 to 52,420 in 2019.
A week later, on a Friday, Sandton, Africa’s richest square mile and one of the biggest economic hubs, was shut down by hundreds of angry women and members of advocacy groups from across Johannesburg. They congregated by the Johannesburg Stock Exchange (JSE), the cynosure of business, singing and chanting, to demand “a 2% levy on profits of all listed entities to help fund the fight against GBV and femicide”.
Among the protesters was Cebi Ngqinanbi, holding a placard that read: “I’m not your punching bag.”
“We came here to disrupt Sandton as the heart of Johannesburg’s economic hub. We want to make everyone aware that women and children are being killed every day in South Africa and they [Sandton] continue with business as usual, sitting in their offices with air-conditioners and the stock exchange whilst people on the ground making them rich are dying. That is why we are here, to speak to those that have economic power,” said Ngqinanbi.
She added that if women can be given economic power, they will be able to fend for themselves and won’t fall prey to abusive men, since most women stay in abusive relationships because men are more financially stable.
Amid the chanting and singing of struggle songs, Nobuhle Ajiti addressed the crowd and shared her own haunting experience as a migrant in South Africa and survivor of GBV. She spoke in isiZulu, a South African language.
“I survived a gang rape; I was thrown out of a moving car and stabbed several times. I survived it, but am I going to survive xenophobia that is looming around in South Africa? Will I able to share my xenophobia story like I can share my GBV story?” questioned Ajiti.
She said as migrants, they did not wake up in the morning and decide to come to South Africa, but because of the hardships faced in their home countries, they were forced to come to what they perceived as the city of opportunities. And as a foreign national, she had to deal with both xenophobia and GBV.
“We experience institutionalized xenophobia in hospitals; we are forced to pay huge amounts for consultation. I am raped and I need medical attention and I am told I need to pay R5,000 ($250).
“As a mere migrant, where am I going to get R5,000? I get abused at home and the police officer would ask me where I’m from because of my accent, I sound Zimbabwean. What does my nationality have to do with my husband beating me at home or with the man that just raped me?” she asked.
Addressing the resolute women outside was the JSE CEO Nicky Newton-King who received the memorandum demanding business take their plight seriously, from a civil society group representing over 70 civil society organizations and individuals.
The list of demands include that at all JSE-listed companies contribute to a fund to resource the National Strategy Plan on GBV and femicide, to be launched in November; transport for employees who work night shifts or work after hours; establish workplace mechanisms to provide support to GBV survivors as part of employee wellness, and prevention programs that help make workplaces safe spaces for all women.
Newton-King assured the protestors she would address their demands in seven days. But a lot can happen in seven days. Will there be more crimes in the meantime? How many more will be raped and killed in South Africa by then?
Quality Higher Education Means More Than Learning How To Work
When people talk about quality education, they’re often referring to the kind of education that gives students the knowledge and skills they need for the job market. But there’s a view that quality education has wider benefits: it develops individuals in ways that help develop society more broadly.
In Zimbabwe, for example, the higher education policy emphasises student employability and the alleviation of labour shortages. But, as my research found, this isn’t happening in practice.
University education needs to do more than produce a graduate who can get a job. It should also give graduates a sense of right and wrong. And it should instil graduates with an appreciation for other people’s development.
Tertiary education should also give students opportunities, choices and a voice when it comes to work safety, job satisfaction, security, growth and dignity. Higher education is a space where they can learn to be critical. It must prepare them for participating in the economy and broader society.
This isn’t happening in Zimbabwe. Graduate unemployment is high and employers and policy makers are blaming this largely on the mismatch between graduate skills and market requirements.
Investigating Zimbabwe’s universities
My research sought to examine how a human development lens could add to what was valued as higher education, and the kind of graduate outcomes produced in Zimbabwe. I investigated 10 of the universities in Zimbabwe (there were 15 at the time of the research). Four were private and six public.
I reviewed policy documents, interviewed representatives of institutions and held discussions with students. Members of Zimbabwe’s higher education quality assurance body and university teaching staff were also included.
I found that in practice, higher education in Zimbabwe was influenced by the country’s socio-political and economic climate. Decisions and appointments of key university administrators in public universities and the minister of higher education were largely political.
In addition, resources were limited and staff turnover was high. Universities just couldn’t finance themselves through tuition fees.
Different players in the higher education system – employers, the government, academics, students and their families – have different ideas about what “quality” means in higher education. The Zimbabwe Council for Higher Education understands quality as meeting set standards and benchmarks that emphasise the graduates’ knowledge and skills.
To some extent, academics and university administrators see quality as teaching and learning that gives students a mixture of skills and values such as social responsibility.
But lecturers must comply with the largely top-down approach to quality. They tend to do whatever will enhance students’ prospects of getting employment in a particular market.
The educators and students I interviewed acknowledged that developing the ability to work and to think critically were both central to higher education. But they admitted that these goals were hard to attain. This was because of the country’s constrained socio-political and economic environment. Academics and students felt that they couldn’t express themselves freely and critical thinking was suppressed.
Stuck on a road to nowhere
The study illustrates how an over-emphasis on creating human capital – skilled and knowledgeable graduates – limits higher education’s potential to foster broader human and social development.
University education should do more, especially in developing countries such as Zimbabwe that face not just economic, but also socio-political challenges. Before building more universities and enrolling more students, authorities and citizens should consider what quality education means in relation to the kind of society they want.
It’s possible to take a broader view of development, quality and the role of higher education. This broader approach – one that appreciates social justice – can equip graduates to address the country’s problems.
The road ahead
Universities can’t change a society on their own. But their teaching and learning practices can make an important difference.
Because quality teaching and learning means different things to different people, people need to talk about it democratically. Institutional and national policies must be informed by broad consultations to identify the knowledge, skills and values they want graduates to have.
University teaching and learning should emphasise freedom of expression and participation so that students can think and act critically beyond university.
Also, academics don’t automatically know how to teach just because they have a PhD. Universities should therefore ensure that academics learn how to teach and communicate their knowledge. Curriculum design, student assessment and feedback, as well as training of lecturers should all support this goal of human development.
When universities see quality in terms of human development, their role becomes more than production of workers in an economy. It gives them a mandate to nurture ethically responsible graduates. These more rounded graduates are better equipped to imagine an alternative future in pursuit of a better society, economically, politically and socially.
–Patience Mukwambo: Researcher, University of the Free State
Roadmap For African Startups
Francois Bonnici, Head of the Schwab Foundation for Social Entrepreneurship, explains how African impact entrepreneurs will continue to rise.
Does impact investment favor expats over African entrepreneurs? If so, how can it be fixed?
There is a growing recognition all over the world that investment is not a fully objective process, and is biased by the homogeneity of investors, networks and distant locations.
A Village Capital Report cited that 90% of investment in digital financial services and financial inclusion in East Africa in 2015-2016 went to a small group of expatriate-founded businesses, with 80% of disclosed funds emanating from foreign investors.
READ MORE | It’s Time For Africa’s Gazelles To Shine
In a similar trend recognized in the US over the last decade, reports that only 3% of startup capital went to minority and women entrepreneurs has triggered the rise of new funds focused on gender and minority-lensed investing.
There has been an explosion of African startups all over the continent, and investors are missing out by looking for the same business models that work in Silicon Valley being run by people who can speak and act like them.
In South Africa, empowerment funds and alternative debt fund structures are dedicated to investing in African businesses, but local capital in other African countries may not also be labelled or considered impact investing, but they do still invest in job creation and provision of vital services.
There is still, however, a several billion-dollar financing gap of risk capital in particular, which local capital needs to play a significant part in filling. And of course, African impact entrepreneurs will continue to rise and engage investors convincingly of the growing and unique opportunities on the continent.
What are the most exciting areas for impact investing and social entrepreneurship today?
After several decades of emergence, the most exciting areas are the explosion of new products, vehicles and structures along with the mainstreaming of impact investment into traditional entities like banks, asset managers and pension funds who are using the impact lens and, more importantly, starting to measure the impact.
At the same time, we’re seeing an emergence of partnership models, policies and an ecosystem of support for the work of social entrepreneurs, who’ve been operating with insufficient capital and blockages in regulation for decades.
The 2019 OECD report on Social Impact Investment mapped the presence of 590 social impact investment policies in 45 countries over the last decade, but also raises the concern of the risk of ‘impact washing’ without clear definitions, data and impact measurement practices.
In Africa, we are also seeing National Advisory Boards for Impact Investing emerge in South Africa and social economy policies white papers being developed; all good news for social entrepreneurs.
What role does technology play in enabling impact investing and social entrepreneurship?
The role of technologies from the mobile phone to cloud services, blockchain, and artificial intelligence is vast in their application to enhancing social impact, improving the efficiency, transparency and trust as we leapfrog old infrastructures and create digital systems that people in underserved communities can now access and control.
From Sproxil (addressing pirated medicines and goods), to Zipline (drones delivering life-saving donor blood to remote areas of Rwanda) to Silulo Ulutho Technologies (digitally empowering women and youth), exciting new ways of addressing inclusion, education and health are possible, and applications are being used in many other areas such as land rights, financial literacy etc.
While we have seen a great mobile penetration, much of Africa still suffers from high data costs, and insufficient investment in education and capacity to lead in areas of the fourth industrial revolution, with the risk that these technologies could negatively impact communities and further drive inequality.
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