Olivier Jouny, Managing Director of Total Exploration & Production Angola (TEPA) spoke to Africa Oil & Power about how the French multinational has maintained production throughout the COVID-19 crisis, producing more than 600,000 bpd on Blocks 17 and 32 between March and May.
What is the current status of 2020/2021 work programs for Block 17 and 32, and which developments still remain on track?
The crisis caused by COVID-19 and the dramatic drop in the oil price is impacting the worldwide economy and Total is not immune. To respond to the low oil price environment and cope with cash constraints, Total has immediately reacted and designed an action plan at Group level to reduce its investments, OpEx and buy-back program.
In parallel, we are pursuing sanctioned projects, like Zinia Phase 2 and Clov Phase 2 on Block 17 or Caril Pop-Up and Mostarda East on Block 32. TEPA project teams are working closely with contractors to ensure the delivery of those projects as planned, without any compromise on safety. We are now ramping-up our activities offshore and will restart drilling wells, perform seismic acquisitions and non-routine production and maintenance operations on both Block 17 and 32. The Skyros rig is already on Block 32 and the Maersk Voyager is due to restart end-August. TEPA is the first operator restarting its offshore non-essential activities to ensure future production and revenues for the country.
What is the revised timeline for development of short-cycle satellite field projects and what is the potential for development of marginal resources to offset declining production at larger installations?
TEPA is restarting its drilling activities offshore Angola and has taken the decision to defer exploration wells initially planned in 2020-21 to give priority to development wells and accelerate oil production.
To offset declining production, in addition to Blocks 17 and 32 tie-back and infill projects, Total is studying developments on Begonia (Block 17/06) and Chissonga (B16) fields. These two developments, along with the foreseen development of Cameia and Golfinho in newly acquired Blocks 20 and 21, will sustain Total operated production levels for the mid-term. TEPA is currently working on those fields to propose development concepts that will ensure sufficient economics, considering their fiscal framework and the volatile environment.
How can E&P companies maximize their liquidity and keep afloat until the market rebounds and drilling can resume?
As commodity players, E&P companies do not control the oil price at which they sell their production. In a volatile price environment, our job is therefore to control costs. We have no other choice but to introduce very strict financial discipline, reduce our costs, boost the efficiency of our operations, deliver our projects under development on time and budget, defer or cancel few projects and in general, demonstrate that we can thrive in a low oil price environment without compromising our values and HSE.
Will the recent license extension granted in Block 17 before COVID-19 alleviate time and financial pressure on the completion of drilling programs?
We are pleased to have executed, in April, despite the crisis, the license extension of Block 17 announced in December last year, and to welcome Sonangol as a new partner in continuing to develop the oil potential of this block. The achievement illustrates the excellent collaboration with the National Agency of Oil, Gas and Biofuels and the Ministry of Mineral Resources, Petroleum and Gas. The extension provides the necessary visibility to produce the billion barrels of resources remaining on the block and gives us the opportunity to continue demonstrating our excellence in deep offshore. Over the past 20 years, we have never stopped innovating to produce the three billion barrels already produced on the block. This adventure will continue, with technical challenges and unprecedented solutions to be developed so that our installations produce again for many years.
How will current market conditions affect Total’s evaluation of new exploration opportunities?
In Angola, TEPA has two exploration blocks that it will drill in the coming years: B48, where a world record water depth well shall be drilled soon, and B29. TEPA is also active in nearby exploration on Blocks 17 and 32 to develop reserves rapidly through existing installations. Total remains committed to play its role of leader with regards to exploration activity in Angola in the mature Lower Congo basin, through nearby exploration on Block 17 and ultra-deep water on Block 48; in the Kwanza basin, through our recent entry in the Blocks 20-21; and in the Namibe Basin, where we are finalizing the terms of the producing sharing contract of B29.
What is Total’s short, medium and long-term outlook for Angola post-COVID-19?
Short-term, TEPA is restarting its non-essential activities to maintain production and deliver its short-cycle projects. Thus, after remobilizing Skyros rig, we will also restart West Gemini and Maersk Voyager in the coming weeks, in a logistical environment still highly impacted by COVID-19. Mid-term, TEPA is pursuing the development of its sanctioned projects and the drilling of its exploration wells. Finally, TEPA is working in the longer term to keep its leader position in the country.
