TOTAL Expands In Brazil With Offshore Exploration License
Zacks Investment Research | Oct 10, 2019 10:26PM ET
TOTAL S.A. (NYSE:TOT) and its co-venturers Qatar Petroleum and Petroleo Brasileiro S.A. (NYSE:PBR) have won an exploration license in the C-M-541 deep offshore block, which is located in the pre-salt Campos Basin in a water depth of about 9,842 feet (3,000 meters). TOTAL will be the operator of this block with a 40% interest, and Qatar Petroleum and Petronas will hold 40% and 20% shares, respectively. First exploration well in this block is expected to drilled in 2021.
TOTAL will make better use of its expertise in exploring deepwater assets to explore this block in Brazil. It is operating in Brazil over the last four decades, and has a presence in the entire oil and gas value chain of the country.
At the end of 2018, TOTAL produced 19,000 barrels of oil equivalent per day from Brazil. Petrobras’ hydrocarbon production from Brazilian assets is expected to further increase on the back of this strategic alliance.
Production Outlook
TOTAL is aiming to increase production by an average of 5% per year between 2018 and 2021. After a stable period between 2022 and 2023, growth will resume at more than 3% per year. We expect TOTAL’s tie up with partners to explore and produce oil and gas from new fields across the globe. This will further help it to achieve production goals.
The company has one of the best production growth profiles among the oil super majors, characterized by an upstream portfolio with above-average industry exposure to faster growing hydrocarbon producing regions of the world.
TOTAL is concentrating on expanding LNG assets on a worldwide basis, as natural gas is expected to be the primary energy source that will help utilities to lower emissions from the electricity generation process. The company will face competition from the likes of Exxon Mobil (NYSE:XOM) and Royal Dutch Shell (LON:RDSa) Zacks Investment Research
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