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French supermajor Total plans to drill 23 wells this year, three times more than it drilled in 2016 and 2017, with a focus on Africa and Brazil, Reuters reports, quoting the company’s senior VP for exploration, Kevin McLachlan.
All the wells will be drilled offshore, in Namibia, Senegal, Mauritania, and South Africa, and also Guyana and Brazil, McLachlan told Reuters.
The strategy is a marked departure from Total’s traditional prioritizing of high-risk but also high-return frontier areas and a turn to already producing regions where the chances of striking commercial quantities of oil and gas are higher.
Still, the French company will remain focused on conventional resources, unlike most other supermajors who have joined the rush to U.S. shale throwing billions at acreage and drilling there.
The latest news in this respect came earlier today: Total, together with China’s CNOOC, announced a new gas and condensate discovery in the North Sea, where the two operate the Glengorm prospect. The discovery, according to Total, could contain a recoverable 250 million barrels of oil and the superlight crude oil grade.
“We were spending a lot of money in frontier,” McLachlan said, adding “Now we want balance.” This balance apparently does not require any major adjustments in Total’s budget. The executive said this year Total will keep its capex in line with last year’s, which was US$1.2 billion, and slightly higher than its 2017 budget, which was US$1.1 billion.
Its spending on frontier regions, however, has declined substantially over the last five years, from as much as 40 percent in 2015, to just 15 percent budgeted for this year. During just two years—2017 and 2018—according to Wood Mackenzie data, Total bought the rights to explore a total of over 189,000 sq km, which made it the biggest buyer of new blocks among the Big Oil majors. Discoveries, however, have been slow to come – something Total hopes to reverse with its focus on mature producing regions.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.