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
With proper investment in youth, Kenya’s potential for progress is unlimited
By- Ruth Kagia and Siddharth Chatterjee
Africa’s demographic boom has been hailed as its biggest promise for transforming the continent’s economic and social outcomes, but only if the right investments are made to prepare its youthful population for tomorrow’s world.
Consider this. Every 24 hours, nearly 33,000 youth across Africa join the search for employment. About 60% will be joining the army of the unemployed. Africa’s youth population is growing rapidly and is expected to reach over 830 million by 2050. Whether this spells promise or peril depends on how the continent manages its “youth bulge”.
President Kenyatta once said that “The crisis of mass youth unemployment is a threat to the stability and prosperity of Africa, and it can amount to a fundamental and existential threat”.
Investing in young people especially so that they are prepared for the world of work is the main mission of Generation Unlimited (GenU), a global multi-sector partnership established to meet the urgent need for expanded education, training and employment opportunities for young people aged 10 to 24.
On 05 August 2020, Kenya will launch the Generation Unlimited initiative. This initiative will bring together key actors from the public and private sector as well as development partners to help put into a higher gear this defining agenda of our time to ensure that we have prepared our children for a prosperous future by giving them the education, training and job opportunities that fully harnesses their potential. With a median age of 18, Kenya’s youthful population represents a real potential to reap a demographic dividend and accelerate its economic progress.
Kenya has one of the youngest populations in the world. With the right investment in their talents, skills, and entrepreneurial spirit, young people present an extraordinary opportunity for transformation, growth, and change.
Three quarters Kenya’s population is under the age of 35. Across Africa there are 200 million people between the ages of 15 and 24, a demographic that is expected to double by 2045.
One of the greatest challenges facing governments and policymakers in Africa is how to provide opportunities for the continent’s youth, in order to provide them with decent lives and allow them to contribute to the economic development of their countries. As things stand, around 70% of Africa’s young people live below the poverty line.
In Kenya, the pillars for achieving GenU objectives are in place, with various initiatives for instance to strengthen education system through the recently-launched competency based curriculum and government promotion of programmes to enhance technical and digital skills.
The fruits of such initiatives can be seen through numerous youthful innovations from Kenya that continue to receive international attention. For instance, inspired by his great urge to communicate with his 6-year-old niece who was born deaf, Roy Allela, a 25-year-old Kenyan invented Sign-10, a pair of smart gloves with flex sensors to aid his cousin’s communication with the other members of the family.
The flex sensors stitched to each finger aid in quantifying the letters formed from the curve of each finger of the glove’s wearer. The gloves are then connected through Bluetooth to a mobile phone application that vocalizes the hand movements. This innovation won him the Trailblazer Award by the American Society of Mechanical Engineers.
Gen U’s solution is to forge innovative collaborations with young people themselves. Since launching in 2018, the movement has brought onboard leaders from governments, foundations, and the private sector around the world. Its launch in Kenya underscores its government’s commitment to engage young people in pursuit of the Big 4 Development Agenda as well as Vision 2030.
President Uhuru Kenyatta is a global leader for the Generation Unlimited initiative. In Kenya, Gen U’s activities are coordinated by the Office of the President and the United Nations.
Shifts in today’s global economy demand that young people acquire skills aligned with dynamic labour needs, but local education systems have been slow to adapt. In many countries in Africa, school enrolment is up, but learning outcomes for young people remain poor. Most leave school without the skills the contemporary job market needs, and are ill-prepared for a world in which low-skilled jobs are increasingly automated.
A million young people join the workforce every year in Kenya, applying for jobs in a formal sector that can only absorb one in five of them. Some, however, find work at least intermittently in Kenya’s vibrant informal sector, which accounts for more than 80% of the country’s economy according to the World Bank.
Rather than focusing on opportunities in the formal sector, partners in the Gen U movement will look at strategies for supporting the informal sector with better infrastructure and an improved business environment. In doing so, it is hoped that it will be transformed into a recognised and legitimate sector.
Such initiatives have the full support of the recently launched Kenya Youth Development Policy, which seeks to underscore issues affecting young people. Technology will play a central role, and sector-based strategies will be central to the government’s approach.
The Kenya Youth Agribusiness Strategy, for example, will enable Kenya’s youth to access information technology for various value-addition ventures in Africa’s agribusiness sector set to be worth $1 trillion by 2030.
The Coronavirus pandemic has seen countries face changes in entire social and economic systems. Key industries, including manufacturing, healthcare, public services, retail, transportation, food supply, tourism, media and entertainment have been hard hit by the pandemic. The pandemic is an inflection point that is giving the old system a nudge. The post-COVID-19 world will be founded on a tech-savvy workforce that will inevitably comprise young people.
Calling on urgent action for young people, UN Secretary-General António Guterres has called on governments to “do far more to tap their talents as we tackle the pandemic and chart a recovery that leads to a more peaceful, sustainable and equitable future for all”.
In the run-up to the end of the SDGs era, we must ramp up the current level of investment in young people’s economic and social potential. As the vision of Generation Unlimited states, if the largest generation of young people in history is prepared for the transition to work, the potential for global progress is unlimited.
As President Kenyatta has noted, “the current generation of young people has the potential of expanding Africa’s productive workforce, promoting entrepreneurship and becoming genuine instruments of change to reverse the devastation caused by climate change.”
Ruth Kagia is the Deputy Chief of Staff to President Kenyatta. Siddharth Chatterjee is the United Nations Resident Coordinator to Kenya. Mrs Kagia and Mr Chatterjee co-chair the Generation Unlimited Steering Committee in Kenya.
OPEC And Its Allies Are Ready To Boost Production, But Here’s Why An Oil Market Recovery Isn’t Guaranteed
After record production cuts in April intended to prop up the market amid a demand crisis caused by the coronavirus pandemic, the world’s largest oil producers are expected to ease up on the restrictions and begin to increase their output next month.
- Saudi Arabia, Russia, and the other members of OPEC+ will meet Wednesday to discuss the current market situation and debate future production limits, the Wall Street Journal reported over the weekend, adding that most delegates in the organization support loosening restrictions.
- As lockdown measures ease across the globe, demand for oil is slowly beginning to rise again as shipping and air travel resume.
- Oil prices are still down significantly from pre-pandemic levels, however, with the Brent international benchmark priced at about 30% of January levels.
- The International Energy Agency said Friday that while global demand for oil had recovered strongly in China and India in May, world demand is still projected to decline during the second half of the year before recovering in 2021.
- The recent spike coronavirus cases and new lockdowns are creating “more uncertainty”: additional lockdowns could discourage travel and international trade, which would put more downward pressure on prices.
- The risk to the oil market is “almost certainly to the downside,” the IAE said.
In April, the members of the Organization of Petroleum Exporting Countries (OPEC) and its allies agreed to record oil production cuts of 9.7 million barrels a day as the coronavirus decimated global demand for crude oil. The agreement put an end to a weeks-long price war between Russia and Saudi Arabia that added even more pressure to an already-struggling market.
“If OPEC clings to restraining production to keep up prices, I think it’s suicidal,” a person familiar with Saudi Arabia’s thinking told the Journal. “There’s going to be a scramble for market share, and the trick is how the low cost producers assert themselves without crashing the oil price.”
Zindzi Mandela passes away, aged 59
Zindziswa ‘Zindzi’ Mandela has died. The 59-year-old is believed to have breathed her last in a Johannesburg hospital in the early hours of July 13, Monday, SABC is reporting.
Zindzi was the daughter of struggle icons, South Africa’s former president Nelson Mandela and Winnie Madikizela-Mandela, and currently serving as South Africa’s ambassador to Denmark.
In December 2014, Zindzi graced the cover of FORBES WOMAN AFRICA alongside her mother, a year after her father’s death.
She lost her 13-year-old granddaughter, Zenani, in a car crash after a pre-tournament concert during the 2010 FIFA World Cup that took place in South Africa.
In 2018, her mother Winnie, passed away.
Zindzi is survived by her four children, husband and grandchildren.
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With proper investment in youth, Kenya’s potential for progress is unlimited
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