Total OKs Argentina Shale Gas, 1Q Profits Soar
Total increased adjusted 1Q2017 net profit to $2.6bn, a 56% increase year on year, it said April 27, also sanctioning a key investment in Argentina's Vaca Muerta shale gas basin -- one of its ten major E&P sanctions in 2017-18. Total's net income grew even more, up 77% to $2.85bn.
Upstream net production grew by 4% with the start-up of the Moho oil field offshore Congo-Brazzaville, to 2.57mn barrels of oil equivalent per day.
That figure included a 7% rise in gas output to 6.8bn ft3/d and a 1% increase in liquids to 1.3mn b/d. Moho gross production capacity is 100,000 b/d. Total added that its entry into Qatar’s al Shaheen oilfield concession would also boost its production.
Ramp-ups of the UK Laggan-Tormore field and of Angola LNG helped lift its gas production, while the company also noted “improved security conditions in Libya and Nigeria.” But it benefited from a 36% rise in its Americas gas production to 1.17bn ft3/d. Total’s average worldwide realised 1Q gas price increased 18% year on year to $4.10/mn Btu.
Absheron stake increased to 50%
Total also said April 27 it had increased its stake in the Absheron licence, currently under development offshore Azerbaijan in the Caspian Sea, to 50%.
Early Absheron gas production from the field is now expected late 2019, according to its Azeri state partner Socar.
France's Engie previously had a 20% interest in Absheron but is understood to have relinquished its share, enabling both Total and Socar each to increase their 40% stakes in the licence to 50%, although no financial details if any are yet available.
Total also signed strategic alliances with Petrobras and Sonatrach during 1Q2017.
Total has sanctioned development of a key Argentinian shale gas project
Shale gas from Argentina’s Vaca Muerta
Total also said April 27 it had sanctioned development of the first phase of its operated Aguada Pichana Este license in the giant onshore Vaca Muerta shale play in Argentina, and also expects to increase its interest in the license from 27.27% to 41%. Gas production from the project will be treated at the existing Aguada Pichana gas plant which will thus reach its full capacity of 16mn m3/d (100,000 boe/d, or 5.84bn m3/yr).
CEO Patrick Pouyanne told an oil conference in Paris April 27 that this first phase of Vaca Muerta represents an investment by Total of $500mn over the next three to four years.
However Total later corrected its earlier statement to NGW earlier April 27 when it said the sanction represented a final investment decision (FID), noting in the afternoon that the FID is still pending.
Results of pilot wells drilled to date on Aguada Pichana Este had been excellent, said Total’s E&P chief Arnaud Breuillac: “The development will benefit from the use of existing facilities, enabling the production of shale gas at a very competitive cost. This is one of the ten major projects that [Total’s] Exploration & Production plans to sanction in 2017-2018.” It would boost Total’s E&P well beyond 2020, he added.
Aguada Pichana partners (state YPF, Total and Wintershall each 27.27%, with BP affiliate PanAmerican Energy 18.18%) had entered into a memo of understanding that includes an increase of Total’s participation to 41% in the Aguada Pichana Este project being developed, subject to the approval of Neuquen provincial authorities, said Total.
The French major's net 2016 production in Argentina was 78,000 boe/d, much of it offshore.
Mark Smedley