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AfrOil COMMENTARY AfrOil

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.
growth in low carbon. The real risk is not partic- Europe’s refining sector has struggled with
ipating in the transition and being left behind.” overcapacity for years, especially in France. The
Total wants to ramp up its overall energy COVID-19 pandemic has put unprecedented
production from 3 to 4mn barrels of oil equiv- pressure on the sector, however, and will likely
alent per day (boepd) with increased LNG and spur rationalisation.
mostly renewable electricity generation. It wants While the oil industry is set to reach its peak
to expand investments in renewables and gen- in just 10 years, Total will continue advancing
eral power from $2bn to $3bn annually, so that low-cost oil projects that are resilient to price
they represent more than 20% of its total capital volatility, Pouyanne said. He said the Middle
spending. East and North Africa offered the lowest costs,
Total is targeting 50 TWh of net power and would therefore be Total’s main focuses for
generation and 80 TWh of sales by 2025 from upstream opportunities.
gas-fired power and renewables. It is striving “Oil and gas is the engine of the energy tran-
to become a “world leader” in renewables, with sition,” he said. “Oil and gas will continue to
plans to have 35 GW of gross capacity in opera- receive a major part of [investment] because we
tion by 2025. It will add 10 GW per year beyond need to deliver cash flow from oil and gas to fund
that point. the growth we want to deliver in renewables and
Oil and gas production will be vital for fund- electricity,” he said.
ing these investments, although Total will work Capital spending will be capped at a “cau-
to decarbonise its gas by developing biogas tious” $12bn in 2021, versus $14bn this year, but
and hydrogen production, Pouyanne said. The will climb to $13-16bn annually between 2022

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-
190,000 bpd of additional output from Iran, umes, with OPEC’s three swing producers
WHAT NEXT: Libya and Venezuela, all of which are exempt reducing output by 100,000 bpd, 1mn bpd and
Saudi Arabia ramped from the OPEC+ reduction agreement owing to 80,000 bpd respectively. Prior to the additional
up its own exports amid their respective domestic struggles, and another cuts, the emirates committed to limit produc-
higher demand from
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.

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