TOTAL CAN RESIST
French oil major Total SA is well placed to weather the recent oil-price volatility, with new production scheduled to come on stream over the next two years set to bolster the company, its new Chief Executive Patrick Pouyanné told a London industry conference Thursday.
"If one company is well positioned to resist the volatility, we are the one," said Mr. Pouyanné, speaking a week after his appointment following the sudden death of predecessor Christophe de Margerie in an airplane accident last week. Mr. Pouyanné, a Total veteran, was given a standing ovation by delegates at the Oil and Money conference after paying tribute to Mr. de Margerie.
The company's new CEO said, however, that some areas of the business face more pressure than others.
Europe's refining industry has been particularly hard hit by competition from new and more sophisticated plants in the Middle East and Asia and from U.S. plants that benefit from cheaper feedstock costs.
Total, the largest refiner in Europe, plans to focus on its investments in its largest and most integrated platforms, Mr. Pouyanné said.
"We cannot sustain plants that are losing €100 million a year of cash," he said.
Projects in Russia are also facing financing constraints because of Western sanctions on companies and individuals in the country. Mr. Pouyanné said Total may consider financing some of its projects in Russia in euros, because dollar financing is no longer possible. Total’s main investment in Russia is its $27 billion Yamal liquefied natural gas project in Russia’s Arctic region.
The company is also carefully considering future acquisition opportunities, including potential investments in the U.S., though over the last year valuations in the region have seemed expensive, Mr. Pouyanné said.
“We are not against taking more positions in the U.S.,” he said. “The question is to be pragmatic. He added that to grow as big as some of Total’s competitors in the U.S. could be challenging.
“We are strong in other continents. We are strong in Africa; we are strong in the Middle East. We can also have a strategy to continue to reinforce our advantage compared to our competitors,” he added.
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GAZPROM - The parties discussed relevant issues related to bilateral cooperation, including the Baltic LNG project. Emphasis was placed on the priority measures aimed at developing a joint design concept (pre-FEED).
BHGE - U.S. Rig Count is up 11 rigs from last week to 1,063, with oil rigs up 8 to 869, gas rigs up 4 to 193, and miscellaneous rigs down 1 to 1. Canada Rig Count is up 13 rigs from last week to 195, with oil rigs up 8 to 127 and gas rigs up 5 to 68.
REUTERS - Brent crude futures had risen $1.02 cents, or 1.3 percent, to $81.28 a barrel by 0637 GMT. The contract dropped 3.4 percent on Thursday following sharp falls in equity markets and indications that supply concerns have been overblown. U.S. West Texas Intermediate (WTI) crude futures were up 80 cents, or 1.1 percent, at $71.77 a barrel, after a 3 percent fall in the previous session. WTI is on track for a 3.5 percent drop this week.
EIA - Brent crude oil spot prices averaged $79 per barrel (b) in September, up $6/b from August. EIA expects Brent spot prices will average $74/b in 2018 and $75/b in 2019. EIA expects West Texas Intermediate (WTI) crude oil prices will average about $6/b lower than Brent prices in 2018 and in 2019.