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It is up to governments to drive decarbonization and consumers will have to pay more to achieve carbon neutrality, Total’s chief executive said, adding the French firm has no intention of moving away from oil and gas production.
Oil firms should not be seen as “villains†amid growing pressure from investors and climate activists, chief executive and chairman Patrick Pouyanne told Reuters at Total’s headquarters in the Scottish oil hub of Aberdeen.
Giving up on oil and gas would be “a huge mistakeâ€, partly because it pays for investment in green technology, he said, echoing Shell CEO Ben van Beurden who told Reuters last year that it had no choice but to invest in oil and gas..
“Suppose we announced today that we have stopped producing oil, do you think cars will suddenly be driven without gasoline? No, it doesn’t work. It is not black and white,†he added.
“We don’t want to go away from oil and gas. We have all the financial capacities to be in the driving seat (of the energy transition) and not to be the villains of the story,†he said.
Since Pouyanne, 56, became CEO in 2014 after his predecessor Christophe de Margerie died in a plane crash, Total has introduced targets to cut carbon emissions, although critics say it is still not aligned with the United Nations-backed 2015 Paris climate agreement to limit global warming.
“Society wants to be carbon neutral, but the energy companies will not be carbon neutral,†Pouyanne
“Maybe it will take 20 years. It will take time, and this will have an impact on demand, so we need to position the company to be ready,†Pouyanne said.
Pouyanne said Total will choose at some point whether to abandon oil and gas, but for now fossil fuel profits remain the engine of its growth in renewable and low-carbon energy.
Revenue from its largest segment is needed to grow in power markets, electric vehicle charging technologies and biofuels which are less profitable, and in some cases, loss-making.
But as Total’s new low-carbon businesses become larger and more profitable, that could change.
“At a certain point, we’ll probably have to choose; do we insist more on this one or this one. Today we have the financial capacity to look at various axis.â€
Total, which has rebranded itself in recent years as an energy rather than oil and gas company, is targeting a near ten-fold expansion in renewable power generation by 2025, but Pouyanne said this will not come cheap.
“Maybe society wants oil to be green, but to be green that means we are ready to pay for it,†he said.
For example, if European governments decided that all domestic flights should have around 2% of biofuels in the jet fuel, it could increase costs for an average French airline company by around 100 million euros ($109 million) a year, which would be passed on to passengers, Pouyanne calculated.
Total and rival energy companies had been used as “scapegoatsâ€, Pouyanne said, adding that the debate should be about demand not supply.
“Today, car engines consume oil. If tomorrow car manufacturers decide that most of the cars are electric-driven, the demand will just disappear,†he added
Pouyanne said that while oil and gas account for most of its operations, 50% of Total’s activities will focus on gas by 2040, 30% on oil and biofuels and 20% on electricity.
Total’s oil and gas production grew 9% last year when net profits reached almost $12 billion, allowing it to boost dividends.
And although only 10% of its $17.4 billion investments in 2019 went into renewables, Total has expanded further in recent weeks with projects in Qatar, India and Spain. ($1 = 0.9142 euros)
Source: Reuters
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Valaris Limited announced new contracts awarded subsequent to issuing the Company’s most recent fleet status report on February 21, 2023. Three-year contract with Petrobras for drillship VALARIS DS-8. The rig will be reactivated for this contract. The total contract value is approximately $500 million, including a $30 million mobilization fee. 100-day contract with a TotalEnergies affiliate for drillship VALARIS DS-12. The contract is expected to commence in second quarter 2023. 70-day contract with Beach Energy offshore New Zealand for heavy duty modern jackup VALARIS 107. The contract is expected to commence in third quarter 2023. The total contract value is approximately $26 million. President and Chief Executive Officer Anton Dibowitz said, “We are particularly pleased to have secured the award for preservation stacked drillship VALARIS DS-8, for a contract that is expected to generate a meaningful return over the firm contract term, and we remain focused on exercising our operational leverage in a disciplined manner. This most recent award represents the sixth contract awarded to one of our high-quality stacked floaters since mid-2021, and speaks volumes about our demonstrated track record of project execution when reactivating rigs.” Dibowitz added, “Following the reactivation of VALARIS DS-17 and DS-8, we will have ten floaters working across the golden triangle, including four drillships in Brazil, a market where we expect to see continued growth over the next several years.” Updated Guidance As a result of the contract awarded to VALARIS DS-8, which will require the rig to be reactivated from preservation stack, we are updating our first quarter 2023 and full-year 2023 guidance provided on our fourth quarter 2022 conference call on February 21, 2023. First Quarter 2023 Contract drilling expense is expected to increase by approximately $5 million to $385 million to $395 million. Adjusted EBITDA is expected to decrease by approximately $5 million to negative $5 million to breakeven. Adjusted EBITDAR, which adds back one-time reactivation expense, is expected to be $25 million to $30 million, unchanged from the guidance provided on our fourth quarter 2022 conference call. Full-Year 2023 Revenues are anticipated to be $1.8 billion to $1.9 billion, unchanged from the guidance provided on our fourth quarter 2022 conference call. Contract drilling expense is expected to increase by approximately $60 million to $1.49 billion to $1.59 billion. Adjusted EBITDA is expected to decrease by approximately $60 million to $180 million to $220 million. Adjusted EBITDAR, which adds back one-time reactivation expense, is expected to be $280 million to $320 million, unchanged from the guidance provided on our fourth quarter 2022 conference call. Capital expenditures are expected to increase by $60 million to $320 million to $360 million. Source: Valaris Join our mailing list here We are #1 on Google and Bing for the "Largest Mobile Energy Network" Come join our community! Download the Rig Lynx app here
Seadrill Limited announced that the West Neptune has executed approximately six months of term extensions with LLOG Exploration Offshore, L.L.C in the US Gulf of Mexico. The extensions will commence in direct continuation of the existing term, and will keep the rig busy until Q3 2024, furthering Seadrill and LLOG’s long-term association. Total contract value for the extension is approximately $79 million. Source: Seadrill Join our mailing list here We are #1 on Google and Bing for the "Largest Mobile Energy Network" Come join our community! Download the Rig Lynx app here
Semisub rig owner Dolphin Drilling has inked a new contract with Peak Petroleum in Nigeria for its 1974-built Blackford Dolphin. The firm contract, which follows the letter of award in January, gives the Euronext Growth-listed owner of three rigs the potential to extend the unit’s backlog by a minimum of 120 days and up to 485 days. The deal adds to and will be a direct continuation of the previously announced 12-month contract with General Hydrocarbon Limited (GHL). Øystein Stray Spetalen-backed company said the effective dayrate associated with the minimum firm period of the contract is $325,000, including the mobilisation fee. “The final award of the contract for Blackford Dolphin shows the opportunities in Nigeria at a strong dayrate, in addition to building on the backlog for the rig. It also underlines the attractiveness of our assets, and we look forward to returning to revenue-generating operations in 2023,” noted Bjørnar Iversen, CEO of Dolphin Drilling. Source: Dolphin Join our mailing list here We are #1 on Google and Bing for the "Largest Mobile Energy Network" Come join our community! Download the Rig Lynx app here
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