Oil exploration is still at the heart of Total's strategy:
It is thus the CEO of the Total Group, Patrick Poyanné, who spoke at the end of last week about the decisions taken by the group on the continuation of its activities in the oil sector. In particular, he explained that oil exploration will continue in the future, even if demand is likely to decline due to the climate emergency.
Indeed, let us recall the objectives of reducing global warming below 2 degrees per year, which implies a drastic reduction in the use of fossil fuels in favour of renewable energies. According to the group's estimates, a warming of 1.5 degrees per year would lead to a decline of 1.5 to 2% each year for oil. The group also underlines its anticipation of a decline in oil demand by 2030 with a scenario that correlates with the objectives set by the Paris Climate Agreement and which aims to limit warming to a maximum of 2° and ideally 1.5°.
Low-cost oil activities are favoured:
As the group states in its communication, however, let us not forget that oil is a particular activity that requires investment so as not to lead to a more significant decline (4 to 5% per year). Thus, even if demand is declining, it is necessary to maintain certain investments in view of the decline in oil reserves, which is even more marked.
It is therefore a strategic choice that the group has made by deciding to focus on low-price oil essentially. The head of the Total group mentioned a break-even point of less than 20 dollars a barrel and also cited the African and Middle East regions for its investments, areas in which it is particularly well established, as in Brazil and Suriname.
The group also indicated that it does not favour deep or remote exploration, which is considered too expensive in terms of development for an oil that would never be produced anyway.
Reaffirmed ambitions in the renewable energy sector:
Of course, the French group has once again affirmed its ambitions in the field of renewable energies with a year 2021 that will be at least as active as the year 2020 in this field. Total has thus warned that we should expect a strengthening of its positions in countries such as the United States and India and in the biogas sector in the coming days.