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Interview

Guillaume Chalmin, Managing Director of Total E&P Qatar

12.05.2014 / Energyboardroom

Present in Qatar for over 80 years, Total has extensive experience in the country. Here, the company’s MD for E&P in Qatar explains how the IOC is doing business in Qatar today, and what the main challenges are.

What are the challenges for Qatar‘s gas sector today? What are Total’s intentions and what steps have you taken to participate in further exploration?

Since the early 1990s, Qatar has been ramping up the gas production from the North Field in a very impressive way. As soon as Barzan project is completed, the North field production capacity will reach around 22 bcfd. Qatar will then have the ability to satisfy its domestic needs for the coming years, while meeting its LNG and gas pipe commitment and feeding its GTL, refining and petrochemical facilities. The challenge for the country will then be to sustain this production capacity during the coming decades.

Of course, Total intends to support Qatar in this challenge. We will keep on bringing our assistance to both Qatar Gas and DEL (Dolphin), like we always did as an active and historical shareholder.

As far as gas exploration is concerned, things are moving. Two discoveries have already been made by Wintershall and more recently by Gdf. Exploration is also conducted in other licenses, including in the Block BC where Total has a 25% equity. We actually spud the first exploration well in Block BC early May this year. We should get the results of the well in the coming months.

A year ago, Total was able to reach an agreement with Qatar Petroleum to extend the license to operate the Al Khalij offshore oil field. How significant is this new agreement for Total?

Al Khalij offshore field was discovered in 1991 and put on stream in 1997. Up to end January 2014, Total held a Production Sharing Agreement with 100% equity. In February 2014, Qatar Petroleum and Total put in place a Joint Venture for managing the field in the coming 25 years. Under the new concession agreement, Qatar Petroleum and Total hold respectively 60% and 40% interest. Total remains the operator.

The Joint Venture start-up was a very important milestone for Total. We are extremely happy and honored to enter this new partnership with QP. We believe it reflects the mutual trust that QP and us have been able to build in the last decades.

The new contractual frame offers 25-years visibility. Getting such a visibility is key, as it is necessary to be able to work out a long term plan for further developing the field. The full-field 4D seismic that we will shoot in the coming weeks shows the confidence we have in the remaining potential of Al Khalij. It well reflects QP and Total willingness to revitalize the field and enhance as much as possible the oil recovery.

Our ambition on Al Khalij is to reach operational excellence. It means to run our operations safely, to minimize their impact on the environment, to sustain production with a strict investment discipline, to keep on bringing new technology and innovation, and of course to recruit and train the people who will be in charge of operating the field in the coming decades.

What are the challenges facing Qatar‘s oil sector today?

Today a number of oil fields are mature, their production having started many years or even decades ago. Qatar crude production has been steadily declining since the middle of the last decade. One of the challenges that Qatar faces in the oil area is to minimize this decline. I mentioned the case of Al Khalij, but I could also take the example of Dukhan, Bul Hanine, Maydan Mahzam or Idd El Shargi fields. In all these fields, further development plans are studied and implemented to sustain production, or even increase it, in the coming years.

Total is the most diversified oil and gas major in the country. With such an ambitious program, how do you ensure the best balance between upstream and downstream?

Total is the only IOC with close to 80 years of continuous presence in Qatar. During all this time, we have built positions across the whole value chain of the oil and gas business. Our activity goes from exploration and oil & gas production to gas liquefaction, gas pipe export, condensates refining, petrochemicals and lubricants marketing.

We are proud of such a wide presence in the country. It is the result of our fidelity and perseverance as well as of the long-lasting partnerships that we have built with the local authorities and Qatar Operating Companies like Qatargas, DEL or QAPCO….

There are not so many countries in the world where we have such a diverse portfolio.

We, at Total, have always been convinced that being vertically integrated in the oil and gas sector brings a lot of value. It allows better understanding the overall business and developing synergies between upstream and downstream. It also gives us more credibility vis-a-vis our stakeholders. We see that in Qatar.

Yves-Louis Darricarrère, Total president (upstream) recently said: “Qatar is a very important country for the Group and it is true for both for upstream and downstream branches. Total has been working closely with Qatar Petroleum for many years with an objective of operational excellence in mind”. Is Total planning more co-operation initiatives with QP?

Qatar is indeed a key country for Total because of our long history here and also because of the size of our assets, being in the upstream or in the downstream area.

We intend to strengthen as much as possible our partnership with QP. The new JV that I mentioned on Al Khalij is a good illustration of this willingness. We are also committed to assist QP as and when they need it, being through the technical support we may bring on specific topics (seismic, reservoir modeling, field development, training…) or through our secondees.

We are also eager to develop our partnership oversea. In this frame, Qatar Petroleum International (QPI) took a 20 percent interest back in 2008 in two exploration blocks operated by Total in the Taoudeni Basin in Mauritania.

Moreover, QPI became a shareholder of Total E&P Congo at the end of 2013, acquiring 15 percent of the capital. Thanks to this partnership, QPI get access to oil fields in Africa and has the opportunity to be involved in the Moho North development, which is a large deep-offshore project.

In 2009, Total opened a research center inside the Qatar Sciences and Technology Park, Doha. What is the role of this center? How successful has been until today?

Total Research Centre – Qatar (TRCQ) is one of our six decentralized E&P research centers, along with those in Canada, USA, UK, Norway and Russia.

In the TRCQ, we work in areas linked to the Energy and Environment theme, which is one of the four pillars identified in the Qatar’s national research strategy. We have three main research programs: carbonates, metering and petrochemicals. Carbonate research covers acid stimulation and geochemistry, while research in Petrochemicals addresses the conversion of CO2 into chemical products with high commercial value.

We consider that all what we are doing in our R&D, including in Qatar, is key for the future of our business. We need R&D to push technological barriers and bring solutions to produce tomorrow’s barrels. R&D is also a must to produce better energy, which means with the slightest possible impact on the environment and a greater energy efficiency for our facilities and products. R&D is also a way to find more cost-effective solutions, which is more important than ever today, as our industry is facing a major cost inflation issue.

Besides research, the TRCQ is active in academic partnerships and supports student development at Qatar University. The center also offers training to QP, Qatargas and Dolphin staff, with Total experts giving a full-day lecture once a month.

How is Total contributing to the Qatar National Vision?

Corporate Social Responsibility is of paramount importance for Total in all the countries where we are present. It is particularly the case here in Qatar, where we are organizing our initiatives around the four pillars of the Qatar National Vision 2030.

We are here of course to do our job as an industrial company and to provide people with the energy they need. But beyond that, we feel it is our duty to contribute to the development of our host countries. We do it with passion. We believe it is key to foster mutual trust, to be well integrated to the country and to get our license to operate.

There are many actions that we undertake in this spirit being in the education, environment protection, culture, sport… etc.

For instance, the Total Scholarship Program for Qatar, started in 2004, sponsors talented engineers, including from Qatar Petroleum, to complete their masters degree studies in science or business in France. Also, the leading business school HEC Paris has introduced its highly-regarded Executive MBA courses in Qatar thanks to our support. Since 2011, we have been organizing lectures by Total experts to students at Qatar University under the Total Professors Associate program. Students at Qatar University as well as Hammad Bin Khalifa University are also invited to attend the annual Total Summer School in Paris.

Another initiative that we are very proud of is the ‘Total Alreyada: Connecting Young Leaders Summit” that we organized last April in Doha. It is an event that every year takes place in a given country of the Middle East. Dozens of students and young professionals who will form the next generation of decision makers charting the development of the Middle East’s oil and gas sector came together for four days of lectures, workshops and team-building. They had the opportunity to meet with top executives from National or Operating Oil Company, including Qatar Petroleum, Qatargas, DEL, Qapco or Petroleum Development Oman.

In the environment field, Total partners with Friends of the Environment Qatar to encourage a better understanding and protection of the natural environment of Qatar. We sponsor a long-term research project on the insects of Qatar, which led to the discovery of a number of new species.

We are also active in the sport area. We are partner with the Qatar Racing and Equestrian Club for the sponsorship of the Emiri Sword Race, and with the Qatar Tennis Federation for the sponsorship of Qatar Total Open and the Qatari Youth tournament. We believe sport is one of the best ways to transcend cultural barriers and develop the taste for effort.

All these initiatives show how much we feel committed to our corporate social responsibility!

Before arriving in the Qatar, you spent years working in senior positions for Total in Indonesia, Angola, Russia and Venezuela. What is unique about working in Qatar compared to the other countries? 

I am really impressed by the dynamism of Qatar. It is amazing to see what the country has been able to achieve in only few years.

As well, I really appreciate the long-term vision that drives the country development, and that is described in the Qatar National Vision 2030. Qatar has identified what it wants for its future and the country is working hard to achieve it. Of course Qatar has been blessed by huge natural resources. But they are able to make the most of these resources in a very clever way. They perfectly understood that diversifying the economy is a must to prepare the future.

On top of that, it is a country that gives confidence to investors, as the political and economical environment is quite stable. This is extremely important for an efficient and sustainable development of the country.

To read more articles and interviews on Qatar, and to download the latest free report on the country, click here.

 

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