Results of the Year
TOTAL – A Partner of Choice
Pascal Bréant, Total’s Country Chair in Kazakhstan, Managing Director Total E&P Kazakhstan
The 2018 year had been significant for Total Group in Kazakhstan for several reasons.
First of all, in 2018 we had celebrated the 25th anniversary of Total E&P Kazakhstan activities in Kazakhstan. It is not a simple jubilee celebration for Total: behind this figure there is a long way that Total and the Republic of Kazakhstan had made together to take its part in the history of the country. Second, Total is a proud shareholder of the North Caspian Operating Company, the operating company of Kashagan project in which we hold 16.81% and where we have been directly involved since the very beginning, at the stage of the seismic campaign when the discovery was made. Today the oil from Kashagan has been exported to international markets for 2 years now, and the field is producing at the level we planned and with a good level of reliability.
This is payback time for the Republic of Kazakhstan, for Kazakhstani people and all members of the consortium. Total is taking part in this unprecedented technical adventure by bringing its best expertise directly or indirectly to NCOC on some specific domains for which we have similar experience in other places in the world.
From an investor perspective, what makes Kazakhstan an attractive place to invest is certainly the size of natural resources, notably in the Caspian Sea. Kazakhstan is a well-established major energy player globally. On the other hand, the main difficulty encountered by the projects in the region, is that they are complex, and more expensive to develop than in most of other places around the world.
In this regard, we need to be very clear that our projects in the region are exposed because of the volatility of oil price. Even if we experienced relatively high price environment lately, oil market is expected to remain volatile in the long-term. It is therefore in the interest of investors, but also of paramount interest for our host country, Kazakhstan, to reduce the costs dramatically in order to effectively operate projects or to develop new projects in the region. That means to make them resilient to a next possible downturn in the volatile price environment, to make them more profitable today, and to secure more capital for future development.
While there will never be any compromise on safety of the operations and protection of the environment, we have to be able to grow the level of production while, at the same time, reduce the costs of operations. Total has already demonstrated this at the global scale: Total Exploration and Production branch has grown its production by 20% over the last few years and in parallel, has reduced the cost per barrel by 40% over the same period of time. And we believe reducing costs of operations and development is necessary for the Oil and Gas sector in Kazakhstan, to enhance its attractiveness for future projects, and we believe that it is possible to achieve if all stakeholders are working together on this objective.
I would like also to point out the very ambitious plan of modernization of its economy that Kazakhstan is implementing and to say how enthusiastic we are about it. There again, we are ready to bring our expertise and to share our technologies to foster even more innovation and progress. Digitalization of the energy industry is one of the important solutions that Total is now implementing in its operations for cost saving purposes and to increase its competitiveness. Cooperating towards a more competitive environment is really a question of driving the performance of our assets and projects in Kazakhstan to be «the best in class». This is what Total is promoting in its venture for the benefit of all stakeholders, including our host and partner, the Republic of Kazakhstan, but also the consortium of Kashagan.
Another point I would like to highlight is that Total is extremely sensitive to climate change issue that we have integrated into our global strategy. Today, when the environmental concerns become critically important, we are steadily expanding our positions along the entire low-carbon energy value chain. We have strengthened our position as renewable energies producer thanks both to Sunpower, but also to Total Eren, the renewable power entity which is implementing our strategy here in Kazakhstan. Total Eren has now started the construction of a first solar plant with a capacity of 28MW in Kyzylorda region. This is only the beginning and we have a strong ambition to progress in our portfolio of renewable assets with Total Eren in other regions of the country.
To cover the full spectrum of our activities in Kazakhstan, I would also mention our onshore operations in Mangistau region with the Dunga field, but also the ambitious plans to expand our Marketing and Services activities with sell of lubricants and specialty products in Kazakhstan, Kyrgyzstan and Uzbekistan.
In conclusion, I would like to elaborate on the issue that we are very keen on. It would be wrong to limit our perception of Kazakhstan only to abundant natural resources. The main energy driver of Kazakhstan, is its people. Kazakhstan people are unique. By their culture, their faith in the future, and the energy they deploy to put the Republic of Kazakhstan on the right path towards even greater success. Since the beginning of our activities in Kazakhstan we have drawn a lot of attention to projects related to development of human capital, especially to Education and Local content development projects. We have developed strong partnerships with several Kazakh Universities with which we have experienced different ways of collaboration. Today we are implementing a unique educational program, the so-called «Total Energy Summer School» that aims to develop a curriculum of Universities with a focus on Energy matters.
The objective of Total Energy Summer School is to share the knowledge and experience on industrial projects that we have developed, on some specific professional skills, but also on business or public affairs side that we have encountered in other countries all over the world. The 1st edition of Total Energy Summer School took place in June 2018 in Almaty where close to 300 students from 5 top Almaty universities (Al-Farabi Kazakh National University, Kazakh-British Technical University, Satpayev Polythechnical University, Abay-Sorbonne University, Caspian University) were lectured by 7 experienced experts from Total. The program covered not only Energy specific topics but also some associated to Energy topics like Management and International corporate law.
We will definitely continue to hold Total Energy Summer School on an annual basis because we are convinced that sharing knowledge drives the progress and fosters innovation.
This is a clear objective for Total to remain what we believe we are: “A Partner of Choice” for the Republic of Kazakhstan which, we hope, will contribute further to raising the level of Human Capital for the Energy industry here for the medium and longer term. We are very happy that Total and Kazakhstan are sharing the same view and same ambition on this very important topic. This is for the best, and clearly our common interest.
