Despite acknowledging the Paris agreement as “a watershed” and predicting that low oil prices will persist through 2020, Total SA CEO Patrick Pouyanne is doubling down on his commitment to increase his company’s oil production by 5% per year through 2022.
“Thirty months ago, we were in a survival mood. Today, we want to grow,” Pouyanne told investors in London last week.
It was a different story in May 2016, when Total announced it was withdrawing from Arctic drilling, limiting its tar sands/oil sands production, and adopting a policy of “strict investment discipline”, to avoid wasting capital on fossil projects that won’t be needed.
“The 2°C scenario highlights that a part of the world’s fossil fuel resources cannot be developed,” stated a company strategy paper developed in the aftermath of the Paris conference. “Total’s growth strategy takes this into account.” Total has also announced investments in solar and energy storage, and projected less than three months ago that low oil prices have another two or three years to run.
But now, “Total has emerged from the prolonged oil downturn with a stronger balance sheet than its rivals and has said it is ready to launch new projects and acquire attractive assets from struggling competitors,” Reuters reports. “The company said it was taking advantage of the current low-cost environment in the sector to approve projects with high returns and add resources that will allow it to boost production to meet a target of three million barrels per day by 2019.”
Arnaud Breuillac, president of Total’s exploration and production operations, said the company would hit its targets by watching its expenses. “We are focusing on projects where production costs can be the lowest,” he told analysts.