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.



<h4 class="wp-block-heading">LAGGING IN DISCOVERIES</h4>



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 &#8211; 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.



<h4 class="wp-block-heading">S.AFRICA RESULTS EXPECTED ‘IN DAYS’</h4>



Like some competitors, including Exxon and BP, Total is looking to deepwater exploration at a time when technological advances &#8211; particularly in 3D digital seismic imaging &#8211; 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

Daily Life As Malawi Looks To Economic Growth

Oil Major Total Plans Biggest Exploration Drive in Years

In the 1800s, Europeans referred to Africa as the “dark continent”, although the Victorian term has fallen from usage, until recently it accurately described the approach of foreign investors to Africa. Risk was thought to be too high, returns too low. A decade ago, the region’s share of FDI was less than one-tenth of the amount flowing into Asia or Latin America. Until a few years ago, a single company, Exxon Mobil, was worth more than all of Africa’s listed companies put together, excluding those of South Africa.
But what a difference a few years can make. Since the financial crisis hit in 2008, there has been a dramatic shift in how investors view Africa. One of the markets that has best epitomized this change is Ghana.
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The West African county was near the top of worldwide tables in 2011 in terms of GDP growth with a rate of more than 14%. 2012 figures were equally robust, coming in at above 8.5% buoyed by strong growth in the non-oil sector of 8%. While the country is largely dependent on commodities for export revenues, increased activity in housing, construction and banking has spurred an expansion of the services sector, which makes up more than half of GDP.
Last year saw a gradual depreciation in the cedi, which fell by around 14% against the dollar, driven by increased demand for imports. While the country’s robust growth also stoked inflationary pressures, at least over the short-term, the CPI fell to 8.8% in December—its thirty-first consecutive month of single-digit inflation.
The country benefited from a statistical rebasing a few years earlier, which dramatically improved data collection and accuracy. As a result, the country was catapulted into middle-income status.
The biggest recent watershed moment for the country is as a result of its newfound oil and gas reserves. The offshore Jubilee field, discovered in 2007, began production in record time, with the first barrel being lifted at the end of 2010. The speed with which Ghana went about capitalizing on its new oil wealth, 42 months from discovery to production, led to a few hiccups. For four months, light, sweet crude flowed without a regulatory framework to determine how the revenue would be channeled and how future production would be handled. Eventually, the Petroleum Revenue Management Bill was put in place. It allocates a proportion of revenue to future generation funds and price stabilization funds and some $444 million worth of oil revenue flowed into government coffers by the end of 2011. The production, in relation to the country’s overall economy, is modest and by some estimates will work out to around $50 per capita annually but the rush of investment into the sector—and ancillary industries, such as construction and services—helped ensure the country was one of the largest FDI destinations in Africa last year.
Associated gas deposits in the field brim with equally promising potential, particularly in terms of domestic industrial and electricity production, although timing has been problematic. Currently, with a ban on flaring and no offtake infrastructure, gas has been re-injected into the deposits but at a certain point this will negatively affect oil production. As a result, the country has been racing over the past year to finalize infrastructure for its gas master plan, which will see the construction of more than $750 million worth of new processing and pipeline infrastructure by China’s SINOPEC. Gas is due to begin flowing to the newly-built Aboadze power plant over the next month or two—and none too soon, given the blackouts last year when the country’s alternative gas supply, the West African Gas Pipeline, experienced supply shortages.
While hydrocarbons dominate the headlines, Ghana’s traditional commodities have provided the bulk of revenues in recent years. Cocoa, which indirectly supports more than one-sixth of the population, had a successful year with an estimated production figure of 860,000 tons, down slightly from the previous year but enough to make it the world’s second largest producer. The distribution of more than 20,000 new hybrid seedlings and efforts to improve the ability of small farmers to tend and replace their crops, looks set to strengthen output over the medium-term.
Similarly, gold, which accounts for roughly 40% of exports, grew by double-digit figures over 2012. Although production fell slightly, higher prices on international markets helped keep prices afloat and fund new exploration in marginal deposits. Ghana has revamped its regulatory scheme, introducing a new bidding system and increasing the fiscal burden for operators, including a windfall tax and higher royalties.
Of course, with all this laudable growth comes a note of caution. This rapid change must be managed carefully, for the downside risks facing the country are sizable. Ghana was the third-largest recipient of FDI in Africa last year, but it remains worryingly dependent on commodities. Gold, cocoa and oil dominate exports and while Ghana is not as sensitive to price fluctuations as it was in the 1980s, when the economy seesawed according to international prices, volatility still impacts overall performance. Furthermore, labor-intensive activities such as manufacturing remain marginalized, exacerbating unemployment and weakening the balance of payments. The benefits of the economic boom have been disproportionately concentrated in the south and development in the north lags significantly.
However, Ghana has the ideal foundation for future growth. It has natural resources, policy stability and reasonable infrastructure and it has benefited accordingly. But exporting raw materials, by sending gold and cocoa elsewhere for processing, is a short-term solution. The country has begun aggressively encouraging increased value-added production in the secondary and tertiary sectors, to improve the sustainability and inclusiveness of growth and to ensure that the country’s current performance is not a temporary blip.

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Oil Major Total Plans Biggest Exploration Drive in Years

Gas And Cocoa Oils Ghana Growth