Total Invests in Guyana, Farms Down S African Acreage
Total is entering two exploration licences offshore Guyana that sandwich ExxonMobil’s giant Liza oil discovery there (see map, courtesy Total) and has brought in Qatari state QP as a partner in an offshore South Africa block.
Offshore Guyana, Total is entering the Canje Block and the Kanuku Block. It already had an option agreement to enter the nearby Orinduik Block. Subject to the approval of relevant authorities, Total will thus own exploration rights to an area covering over 12,000 km² in the Guyana Basin.
Total, which had in common with other majors, reined in its upstream spend following the 2014 price crash, said the three blocks were in “a very favourable petroleum context, evidenced by the Liza discovery in 2015. Acquiring interests in these highly prospective licenses is in line with the new exploration strategy in place since 2015.”
Total now has a 35% working interest in the Canje Block in water depths of 1,700 to 3,000 metres, alongside Canadian company JHI Associates and Guyana-based company Mid-Atlantic Oil & Gas, Inc. Thes latter two will now retain a shared 30% interest, alongside operator ExxonMobil (35%). Total also has a 25% working interest in the Kanuku Block in water depths of 70 to 100 metres, under the terms of the agreement signed with Spanish operator Repsol (37.5%) and will be a partner alongside Tullow (37.5%).
Total holds an option to purchase a 25% working interest in the Orinduik Block, in water depths of 70 to 100 metres, under the terms of the agreement signed in September 2017 with an affiliate of Canadian company Eco Atlantic Oil & Gas, who will retain a 15% interest following exercise of the option, alongside operator Tullow (60%). Guyana is a former British colony and is located between Venezuela to the west and Suriname to the east.
Farm-out to Qatar
Total has signed an agreement to sell a 25% interest in the Exploration Block 11B/12B, offshore South Africa, to Qatar Petroleum (QP), subject to regulatory approval. The two are already partners in Africa, where Qatar has a 15% stake in Total E&P Congo; and Total also partners Qatar Petroleum in LNG facilities in the Gulf state.
“This transaction enhances the partnership on Block 11B/12B in preparation for the high potential exploration well scheduled to be drilled on the block at the end of 2018. Total is delighted to broaden its long-standing relationship with Qatar Petroleum and combine efforts to explore this promising region offshore South Africa,” Total said.
Commenting on the agreement, QP CEO Saad Sherida Al-Kaabi said: “We are pleased to join our long-time partner Total in exploration activities in this frontier block offshore South Africa. This is an important milestone in our strategy to expand our international upstream footprint. We hope that the exploration efforts are successful, and we look forward to collaborating with Total, [Canada's] CNR, Main Street, and the South African authorities on this project.” Block 11B/12B is in the Outeniqua Basin, about 175km off the southern coast of South Africa, and covers an area of 19,000 km² with water depths ranging from 200 to 1,800 metres. Assuming the deal is approved, Total (operator) will have 45%; Qatar Petroleum, 25%, CNR International 20%; and Main Street 10%. Commercial petroleum resources found offshore South Africa to date have been gas, but majors are now targeting oil there.
Like many majors, Total is keen to promote its relationship with QP, given the latter's announcement last year that it intends to expand Qatar's LNG production by 30% to 100mn mt/yr within seven years.