French player Total will be favouring gas through the next decade under its new strategy, as it moves to transform itself into a broad energy player called Total Energies and races to meet a new 2030 emissions target.

The Paris-based supermajor on Wednesday released its strategy covering the next 10 years to 2030, with a push for “low-carbon growth” to meet growing global energy demand.

“Strategically, we recognise sustainability is the key to long-term growth and that we need to reduce our exposure to the oil price volatility,” chief executive Patrick Pouyanne said.

Total’s energy production in the next decade will grow by one third — from approximately 3 million to 4 million barrels of oil equivalent per day — with half of the total coming from liquefied natural gas.

"'Total the oil company', as we are often designated, will become Total EnergieS with a big S," Pouyanne told investors.

LNG focus

“LNG is at the core of our ambitions. We have seen a strong 10% growth per year since 2015, supported by the switch from coal to gas. This year, despite Covid-19, there was a 7% growth compared to 2019,” Pouyanne said.

“Chinese demand is increasing, and as the country moves to meet their new Climate Change goals, there is a strong case for gas to replace coal.

“Also, projects sanction delays due to the crisis will tighten supply, benefiting Total’s (LNG) projects already sanctioned, with start-ups by 2025,” he said.

Total holds interest in the Arctic LNG 2 in Russia, where first LNG is expected by end of 2023; the seventh train expansion at Nigeria LNG, where production is also expected by end of 2023; and Mozambique LNG, where first production is expected in 2024 and where it is operator.

In addition, Total is “keen” on Papua LNG, which has been delayed due to the Covid-19 pandemic, but Pouyanne said “it will still be developed”.

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The company will, however, focus on decarbonising natural gas with biogas and hydrogen as well as continuing to reduce methane emissions as it moves to meet its climate ambition.

Pouyanne said that, in the next five years, Total will have a green hydrogen project (at Le Mede biorefinery in France) and a blue hydrogen project (in the Netherlands) “to fully understand the technology”.

Exploration still on the table

“With the underinvestment in the upstream sector this year, which is globally around $300 billion – the lowest in years – we expect the impact of this reduced supply to help oil prices rebound in the medium term to $50, maybe $60 per barrel,” Pouyanne said.

Therefore, Total is keeping its eye on exploration in Suriname, where it was involved in three discoveries this year on a single block operated by US independent Apache.

Pouyanne said a fourth well on the block will be drilled “soon”, as the goal is to bring the light oil with gas project into production by 2025.

Moving forward, Total will choose projects based on their carbon intensity, as it confirmed its ambition to get to net-zero emissions by 2050.

New 2030 target

On its way to carbon neutrality, Total said it now aims to reduce the Scope 3 emissions of its European customers by 30%, in absolute value, by 2030.

This decrease in Europe is expected to allow Total to later take the commitment to reduce the absolute level of the worldwide Scope 3 emissions of its customers in 2030 compared to 2015.

In the next decade, oil product sales from Total will diminish by almost 30% and Total’s sales mix will become 30% oil products, 5% biofuels, 50% gases and 15% electrons.