Guy, thank you for joining us today. To kick things off, could you tell us a bit more about your background and the transition into your new wider African role at Total E&P.
Guy Maurice: I joined the Group in 1983 as a Reservoir Engineer, initially in Paris, then in China and later in Indonesia. In 1993, I was assigned to Total Austral, Buenos Aires, where I headed the Planning Department for three years before returning to Total E&P, Paris as Head of Pre-Project.
From 1997 to 2001, I served in Abu Dhabi, in the UAE, where I headed the Technical Division, Middle East. Three years later, I was assigned to Venezuela as Director of Sincor Upstream Project, now known as Petrocedeno.
My African adventure truly started in 2004, when I moved to Total E&P Congo as the affiliate’s Managing Director/Chief Executive, a position I held until September 2008 when I was then assigned to Nigeria as Managing Director/Chief Executive Officer of Total E&P, Nigeria as well as the Total Group representative in Nigeria.
On April 1st, 2014, I was appointed Senior Vice President, E&P Africa.
Total E&P has extensive experience across Africa. How has the business evolved in recent years in light of massive growth, especially across West Africa but also looking at new frontier plays such as South Africa.
Guy Maurice: Total has long been established as one of the continent’s leading integrated energy companies. The Group has been present in Africa for over 80 years, developing with success a strong local knowledge and building long-term relationships. Total’s continued confidence in Africa is clearly demonstrated in the level of our investments, which currently stands at about 6 billion USD per year. The scope of our activities is also very significant.
Today Africa accounts for 10% of Total’s workforce, which is around 10 000 employees in 45 nations. In the upstream, Africa accounts approximately for one third of the group’s hydrocarbon production. And our E&P strategy, which I will go into later, foresees Africa continuing to provide one third of Total’s global production. In the downstream, Total holds interests in 5 refineries and some 3,500 service stations. And in terms of marketing and supply Total holds on average 15% of the African downstream market, which in some countries we expect to increase further, even double in the coming years.
All the above are clear indicators of Africa’s importance to Total, and Total’s strong commitment to Africa.
West Africa is still at the heart of Total’s activities. Total is the leading deep water operator in the Gulf of Guinea. 2014 is a key year for us, with the advancement of the Egina project that was launched in 2013 in Nigeria, with the mega-project CLOV in Angola that will come on stream in the middle of this year and the ultra-deep offshore Kaombo, also in Angola, for which we took a FID in April this year.
Total is also engaged in a move towards new growth drivers, especially in East and Southern Africa. Regarding East Africa, a first development is expected in Uganda. In South Africa, Total acquired an exploration license in block 11B/12B last year and will drill the first well later this year.
How important is relationship building to the conduct of Total’s business in Africa, and how has it been developed and managed over the years?
Guy Maurice: Respecting the societies and cultures where we operate is at the heart of Total’s business model. Africa accounts for nearly 90% of the group’s corporate social responsibility spending. Working in close cooperation with local communities and governments is key to developing a long term sustainable relationship. In line with its CSR strategy, Total views education, training, and employment as key drivers for innovation and for building the future of a society. Other examples of our large-scale societal actions: Our program to improve access to energy which resulted in 201 ,000 lamps and solar kits being sold in Africa as at the end of March 2013. Another one, focused on healthcare, resulted in 125,000 consultations being held in the group’s clinics in Africa in 2012.
These few examples, among many others, along with considerable efforts to foster a climate of dialogue and cooperation with our partners underline Total’s willingness to develop a long term relationship of mutual confidence.
There seems to be a rapid increase in activity from local and, indeed, international NOCs in Africa. What opportunities are there for IOCs to continue to affirm their position on the continent?
Guy Maurice: At Total we believe that in Africa there is room for everybody. In fact all types of players have a role to play in the development of Africa’s resource capital and in the successful transformation of its various economies.
Total E&P has been following a fairly aggressive exploration strategy across the continent – can you detail your advances in recent years?
Guy Maurice: Total is conducting a dynamic exploration strategy, we call it high risk, high reward. Africa is the object of a significant exploration budget, which in 2013 represented a third of Total’s exploration spending. A growing part of this budget is spent on risky frontier basins, searching for big targets. Since 2010, 30 new licenses have been signed in Africa, and 31 wells have been or will be drilled on significant stakes between 2012 and 2014.
Moreover, our exploration strategy in Africa is characterized by a desire to diversify our portfolio, by searching for new basins in existing or new countries over the whole continent. Total E&P is present in 16 countries in Africa: 10 are new to Total E&P and 21 licenses have been or are being signed in those countries.
West Africa is still at heart of Total’s exploration strategy in Africa as underlined by some success (Ivory Coast, Nigeria) and new basins such as the Kwanza basin or offshore Ivory Coast. In East Africa, Total is also engaged in a challenging move towards countries new to Total’s portfolio, such as Kenya, Mozambique, South Africa. Regarding North Africa, even if we have recently proceeded to a reorganization of our regional portfolios which resulted in a merger of our Middle East and North Africa E&P divisions, frontier areas such as onshore and offshore Mauritania are part of Total’s strategy there.
The acquisition of assets offshore South Africa last year looks like an interesting play, especially when considering the recent sale of your asset stake a little further north in Angola. Can you please elaborate on your plans there?
Guy Maurice: In September 2013, Total acquired a 50% interest in Block 11B/12B located in the Outeniqua Basin, around 175 km off the southern coast.
Total became Operator of the Block which covers an area of around 19 000 square kilometers and in 2014 will drill the first deep offshore exploration well in South Africa, here we intend to leverage on our deep offshore expertise and experience in this extremely challenging environment.
In August of the same year, Total also received approval from the South African authorities to convert its Technical Cooperation Permit on the Block Outeniqua to an Exploration Right. This Block covers an area of 76 000 square kilometres and is located south of Outeniqua Basin and we plan to shot 7000 km of 2D seismic as soon as the Exploration Right is approved.
Following these acquisitions Total set up the new EP affiliate, Total E&P South Africa based in Cape Town, under the leadership of Henry Delafon. A first exploration will is foreseen in the coming weeks.
As the oil and gas industry grows rapidly across the continent, what gaps do you see in the future skills base and knowledge base of the local oil and gas industry? What could be done to remedy this situation?
Guy Maurice: As a leading actor in the African oil and gas industry, we feel responsible for supporting our stakeholders in the challenges they face.
To respond to the expectations of our host countries regarding industrial capabilities building, Total seeks to prioritize its support for local content in each and every project it undertakes. For example in Angola, from Girassol to the CLOV project (first oil due in mid 2014), Total has been able to increase the amount of locally fabricated FPSO tonnage from 1,020 tons to 7,700 tons.
In pursuit of the same goal, Total promotes economic development and entrepreneurship. For example, we have a program where 1.500 pump attendants benefited from the “young dealer” program, allowing them to boost their career.
Education and training are also key to addressing the industry needs. Total has been promoting the development of innovative projects, such as “Empowering the Teachers” – this program is conducted in Nigeria and Uganda, in partnership with the Massachusetts Institute of Technology.
Finally Guy, the question we ask all executives, a little off key but what three luxury items would you take to a desert island? (NB: You are not allowed ‘Practical Raftbuilding for Dummies’, a satellite phone, tickets for the ferry, etc!)
Guy Maurice: I would love to give the typical answer, to say a full set of Shakespeare’s master pieces which would demonstrate how cultivated one is. But I believe that in real life one has to be pragmatic. And in real life, being on a desert island requires only practical things (no luxury) so I choose matches, knife and a cup.