Underinvestment, Opec+ production restraints and cracks in the US shale model risk a 10mn b/d global oil supply shortfall between now and 2025, Total said today.
The speed and extent of oil demand recovery from falls arising from the Covid-19 pandemic depend largely on vaccines and the implementation of economic recovery packages around the world, Total's president of strategy and innovation Helle Kristoffersen said.
"What is clear, on the other hand, is that there is a risk of a supply crunch in the mid-term," Kristoffersen said. "Given the natural declines in existing oilfields… the message is simple: we need new oil projects and that is true even if you take a very cautious view on short-term demand recovery and on future demand levels."
Total will continue to invest in oil and gas, which it says is key to funding its transformation into a broader energy company — to be rebranded TotalEnergies — that will have sharper focus on low-carbon products.
Total expects its hydrocarbons production to remain stable from 2020 at around 2.84mn b/d of oil equivalent (boe/d) this year, as a recovery in Libyan production and a relaxation of quotas in Opec+ countries offset declines elsewhere, and then sees its production rising to 3.3mn-3.4mn boe/d by 2025, with the majority of this growth from 2023.
It expects first oil from the Lake Albert oil development in Uganda and from the Mero 3 project offshore Brazil from 2024, and is targeting first oil from Block 58 offshore Suriname in 2025. It has few projects coming on stream in the next two years, chief executive Patrick Pouyanne said today.
Total has an exploration budget of $800mn in 2021, which is "lower than before" and focuses on "low-cost development projects," Pouyanne said.