French supermajor Total is facing challenges and opportunities in every part of the Gulf. But given recent discoveries, perhaps the firm’s biggest prospect — says Middle East president Arnaud Breuillac — lies in the world of natural gas
If you thought that operating one of the world’s top supermajors in the Gulf was simply a licence to print money, then think again. From sabotage in Yemen to politics in Iraq, the challenges that have built up on Arnaud Breuillac’s desk in Paris are eclipsed only by the opportunities that exist in this part of the world for those companies that are prepared to think innovatively and adapt to the quick-changing world of global demand.
As president of French giant Total’s Middle Eastern operations, Breuillac sits right at the core of what is arguably one of the biggest and most diversified operations ever launched by an international firm into the Gulf. In Abu Dhabi, for example, Total is working hand in hand with local national oil company (NOC) Adnoc on both onshore and offshore operations, as well as owning stakes in local gas, fertiliser and solar interests.
Perhaps Total’s primary focus right now is the Abu Dhabi onshore concession, which is up for renewal in January 2014. Testament to that deal’s importance was the bumper set of executives the French firm sent to ADIPEC last week, including charismatic chairman and CEO Christophe de Margerie. And while you get the feeling that Breuillac does not have ‘favourites’, his association with the UAE capital is a long one; some 30 years ago, the Total executive first cut his teeth on overseas projects at the Abu Al Bukhoosh offshore field.
“Energy demand is growing in Abu Dhabi — with the level of activity and the diversification of the economy, so this is where we want to be a partner of choice,” Breuillac says. “We will not only bring the technology, which we know we can propose to Abu Dhabi, but we can also develop some of the technology because it doesn’t exist today.
“We also need to take a wide view of the needs of Abu Dhabi with regard to its future energy needs,” he adds. “There’s probably a need to look at carbon sequestration and carbon dioxide emissions. Even if we are not the only firm that can propose this sort of mix of technology and strategic input, we have invested a lot in human resources locally.”
Breuillac is firm in his belief that Total can continue to be the best partner for Abu Dhabi, especially given the 75 years the firm has spent operating in the UAE capital. He cites the importance of the onshore concession, describing it as “the treasury of Abu Dhabi”, and also extols the virtues of the French firm’s academy, which has provided vocational training for young Emiratis, many of whom have gone on to work for Adnoc itself. Furthermore, the executive also points out that Total’s long experience in coping with more difficult extraction — he cites the firm’s long-held sour gas extraction expertise as an example — will come in handy as Abu Dhabi moves towards developing its more tricky fields. The lucrative nature of the onshore concession deal is such that it has already been subject to intense media speculation.
Other interested parties include BP and ExxonMobil, although the former was excluded from an initial list of bidders released last month following a reported inter-governmental rift between the UAE and the UK. But a quick visit to Abu Dhabi by British prime minister David Cameron in early November appears to have resolved that issue, with Adnoc director general Abdulla Nasser Al Suwaidi telling reporters last week that “everybody has a chance”.
“The only thing we know is that the concession will end in January 2014 — for the rest there is a lot of information flying around,” Breuillac says. “The reality is that we know Adnoc is working hard on the subject. They are well prepared, the process of consultation is ongoing and I’m sure they will make the right decision on the timeframe, because they have to. This is quite important — the ADCO operation is a key operation for Abu Dhabi’s future and it’s important for all parties involved to know what’s coming next. The countdown is on.”
Needless to say, Abu Dhabi is not the sole focus for Total in the region. In Iraq, production from the Halfaya field is coming onstream, while in Oman, Total’s contributions to liquefied natural gas (LNG) production are considerable. In the former, Total tied up with China National Petroleum Corporation (CNPC) and Malayia’s Petronas to further develop one of Iraq’s existing fields. Right now, Breuillac says Halfaya has an average production level of 90,000 barrels a day — well above the capacity that was expected by this time. However, while Total did not participate in the fourth round of licensing (for exploration, as opposed to already-discovered deposits — due to the type of contract that was on offer from the Iraqi government.
Article continued on next page