Page 7 - LatAmOil Week 40

LatAmOil COMMENTARY LatAmOil

It has also pledged to lower the Scope 3 emis- company also plans to scale back its oil prod-
sions of its customers elsewhere to under the uct sales, partially replacing them with sales of
level in 2015. biofuels.
These goals build on the promise it made in Total recently announced it would convert its
May to bring its Scope 1, 2 and 3 emissions to net 93,000 barrel per day (bpd) Grandpuits oil refin-
zero in Europe by 2050, and slash emissions in ery near Paris to produce biofuel and bioplastics.
the rest of the world by 60%. Meanwhile, it does not intend to build any new
“We want to transform Total to meet a dual conventional refineries, instead scaling back
challenge – more energy and less carbon,” Pouy- its European refining capacity to better match
anne explained. “The time is right to accelerate demand. Europe’s refining sector has struggled
growth in low carbon. The real risk is not partic- with overcapacity for years, especially in France.
ipating in the transition and being left behind.” The COVID-19 pandemic has put unprece-
Total wants to ramp up its overall energy dented pressure on the sector, however, and will
production from 3 to 4mn barrels of oil equiv- likely spur rationalisation.
alent per day (boepd) with increased LNG and While the oil industry is set to reach its peak
mostly renewable electricity generation. It wants in just 10 years, Total will continue advancing
to expand investments in renewables and gen- low-cost oil projects that are resilient to price
eral power from $2bn to $3bn annually, so that volatility, Pouyanne said. He said the Middle
they represent more than 20% of its total capital East and North Africa offered the lowest costs,
spending. and would therefore be Total’s main focuses for
Total is targeting 50 TWh of net power upstream opportunities.
generation and 80 TWh of sales by 2025 from “Oil and gas is the engine of the energy
gas-fired power and renewables. It is striving transition,” he said. “Oil and gas will continue
to become a “world leader” in renewables, with to receive a major part of [investment] because
plans to have 35 GW of gross capacity in opera- we need to deliver cash flow from oil and gas to
tion by 2025. It will add 10 GW per year beyond fund the growth we want to deliver in renewa-
that point. bles and electricity,” he said.
Oil and gas production will be vital for fund- Capital spending will be capped at a “cau-
ing these investments, although Total will work tious” $12bn in 2021, versus $14bn this year, but
to decarbonise its gas by developing biogas will climb to $13-16bn annually between 2022
and hydrogen production, Pouyanne said. The and 2025, Pouyanne said. ™

OPEC+ output levels broadly steady

OPEC+ oil production was more or less steady in September, as increases and decreases balanced out

COMBINED oil production by OPEC+ mem- assertion by Minister of Energy Suhail Al-Maz-
bers increased by 40,000 barrels per day (bpd) in rouei during the OPEC+ group’s September
WHAT: September as the UAE cut its output by around meeting that the output quota of 2.59mn bpd of
A major output reduction 10%, balancing out increases from others that crude would not be exceeded. It had overpro-
by the UAE was offset by have struggled to stay within imposed limits. duced in both July and August.
increases by Iran, Iraq, The Emirates’ cuts brought its oil and con- July’s oversupply came despite Abu Dhabi
Libya and Venezuela. densate output level to 2.43mn bpd – the lowest National Oil Co. (ADNOC) having shut down
for nearly two years, with crude down around the onshore Bab oilfield in late June to carry out
WHY: 310,000 bpd and condensates dropping a fur- maintenance. The field, which had been produc-
The Emirates have been ther 170,000 bpd. The combined total repre- ing more than 370,000 bpd of light, sour Mur-
under pressure from sents a reduction of 480,000 bpd from October ban crude, has a capacity of 420,000 bpd, but had
OPEC+’s de-facto leader 2018, according to tracking data compiled by remained offline until late July.
Saudi Arabia to comply Bloomberg. In June, the UAE had joined Saudi Arabia
with production cuts.
The September reductions offset roughly and Kuwait in cutting extra production vol-
WHAT NEXT: 190,000 bpd of additional output from Iran, umes, with OPEC’s three swing producers
reducing output by 100,000 bpd, 1mn bpd and
Libya and Venezuela, all of which are exempt
Saudi Arabia ramped
up its own exports amid from the OPEC+ reduction agreement owing to 80,000 bpd respectively. Prior to the additional
higher demand from their respective domestic struggles, and another cuts, the emirates committed to limit produc-
buyers in India and South uptick in output from the group’s biggest com- tion to 2.44mn bpd from May until the end of
Korea. pliance offender Iraq. July, giving an estimated net average for the
month of 2.34mn bpd.
UAE cutback During September 1-15 production averaged
The UAE’s reductions suggest that it is edging 2.9mn bpd, dropping by nearly 1mn bpd during
closer to compliance with the cuts, following the September 16-30 when it averaged 1.95mn bpd.

Week 40 08•October•2020 www. NEWSBASE .com P7