TotalEnergies

Energy groups, industry agree on energy transition issues

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Support for industry expressed by Greek power utility PPC and other major European energy utilities through the recent Antwerp Declaration illustrates a common understanding of existing energy-transition problems, or common acceptance that zero-carbon goals in Europe may be right but roads leading to their achievement are not.

PPC is one of many signatories backing the Antwerp Declaration for a European Industrial Deal. It was presented in February following an agreement between seventy-three industry leaders and has since been endorsed by nearly 570 companies representing twenty industrial sectors, as well as 803 organizations and 186 associations and unions.

Besides PPC’s CEO Giorgos Stassis, the Antwerp Declaration has also been endorsed by CEOs of other energy utilities and companies, including Patrick Pouyanné of TotalEnergies, Luc Rémont of EDF, and Adriano Alfani of the ENI group.

The declaration underlines the commitment of industry to Europe and its transformation and outlines urgent industry needs to make Europe competitive, resilient, and sustainable in the face of dire economic conditions.

Industry’s concerns are justified as, despite the sector’s willingness to invest in new clean technologies, European bureaucracy often acts as a deterrent, forcing some industries to consider establishing new bases beyond the continent.

The declaration has brought together major players across Europe who agree that energy costs on the continent are too high and exacerbated by too many regulatory burdens. The consensus expressed by these signatories highlights that Europe is right in pursuing zero carbon targets, but doing so by de-industrializing is wrong.

Energy crisis brings fossil fuels back to the forefront

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The energy crisis has brought about a revival of the hydrocarbons sector, as highlighted by a growing number of energy companies that have decided to reactivate exploration and production projects that had been put on hold as a result of climate-target pressure. Much of this reignited upstream activity is occurring in Europe. Greece must not be left behind.

Yesterday, French oil and gas giant TotalEnergies announced it would boost fossil fuel output over the next five years, a contrast to its reduced production in recent years.

Earlier in the week, on Wednesday, the UK’s North Sea Transition Authority approved plans for production at the new Rosebank oil and gas field in the North Sea, estimated to contain approximately half a billion barrels of oil.

Norwegian upstream giant Equinor, holding the biggest stake in the Rosebank field, estimates production will begin in 2030, with initial investments seen reaching roughly 3.8 billion dollars before totaling approximately 10 billion dollars by 2051.

Two two months earlier, UK Oil & Gas Plc had announced it would recommence production at its Avington oil field, estimated to contain 60 million barrels. Production at this field had been disrupted at an embryonic stage six years ago, with output having reached just several hundred thousand barrels.

In late August, Norway, which has captured the biggest share of Russia’s lost natural gas supply to the EU, announced that a latest round of tenders for licenses at 92 locations, 78 in the Barents Sea and 14 in the Norwegian Sea’s northwest, had attracted interest from 25 companies, including majors such as Shell, ConocoPhillips, Equinor and Aker BP.

The heightened interest expressed by majors highlights a turnaround of their green-focused investment policies of recent years. Shell, for instance, has announced it will disrupt an investment cutback plan of between 1 and 2 percent, annually, until 2030, adding it will increase investments in natural gas.

The hydrocarbons sector is also making a comeback in regions closer to Greece, Italy being a prime example. Italy had stopped issuing new licenses for many years but took a turn in November, when officials announced the country will be holding tenders offering ten-year licenses that offer total production potential of 15 bcm in natural gas from deposits in the Adriatic Sea.

Quite soon, companies operating in Greece will receive results from seismic surveys conducted west and southwest of Crete (ExxonMobil – HelleniQ Energy); Gulf of Kyparissia (Helleniq Energy); Ionian Sea (HelleniQ Energy); and Northwest Ionian (Energean – HelleniQ Energy).

In addition, Energean is awaiting an environmental permit to proceed with exploratory drilling in the Zitsa area, close to Ioannina, northwestern Greece.

Given the international developments and Greece’s energy needs – 6 bcm of natural gas a year and 300 barrels of oil per day – imported at lofty prices, the Greek State must facilitate, it has become clear, the endeavors of companies seeking to move ahead with their projects.

TotalEnergies fully acquires Total Eren after successful 5-year strategic alliance

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Paris, July 25, 2023 – TotalEnergies is pursuing its profitable growth in the renewable energy sector with today’s announcement that it is buying out Total Eren’s other shareholders, increasing its stake from close to 30% to 100%. The Total Eren teams will be fully integrated within TotalEnergies’ Renewables business unit. The deal follows the strategic agreement signed between TotalEnergies and Total Eren in 2017, which granted TotalEnergies the right to acquire all of Total Eren (formerly EREN RE) after a five-year period.

As part of this transaction, Total Eren is valued at an Enterprise Value of €3.8 billion based on an attractive EBITDA multiple negotiated in the initial strategic agreement signed in 2017. The acquisition of 70,8%1 represents a net investment of around €1.5 billion for TotalEnergies.

Total Eren’s integration should result in an increase in TotalEnergies’ Integrated Power Net Operating Income of around €160 million and CFFO of around €400 million in 2024.

A global player with a 3.5 GW renewables production and a 10 GW pipeline

Total Eren has 3.5 GW of renewable capacity in operation worldwide and a solar, wind, hydroelectric and storage projects pipeline of over 10 GW in 30 countries, of which 1.2 GW are in construction or late-stage development. TotalEnergies will leverage Total Eren’s 2 GW assets in operation in merchant countries (notably Portugal, Greece, Australia, and Brazil) to build up its integrated power strategy. TotalEnergies will also benefit from Total Eren’s footprint and ability to develop projects in other countries such as India, Argentina, Kazakhstan, or Uzbekistan.

A complementary fit with TotalEnergies’ footprint and workforce

Total Eren will not only contribute high-quality operated assets, but also the expertise and skills of nearly 500 people based in more than 20 countries. Total Eren’s successful organic growth testifies to the expertise that its teams have built up internally and in connection with partners and suppliers since its creation in 2012. The teams and the quality of Total Eren’s portfolio will strengthen TotalEnergies’ ability to deliver production growth while optimizing its operating costs and capex by leveraging its size and purchasing bargaining power.

A pioneer in green hydrogen

Further to its activities as a renewable energy producer, Total Eren has launched pioneering green hydrogen projects in recent years, located in various regions, such as North Africa, Latin America, and Australia. These green hydrogen activities will be pursued through a new partnership in an entity named “TEH2” (80% owned by TotalEnergies and 20% owned by EREN Group).

“Our partnership with Total Eren has been very successful, as shown by the size and quality of the renewables portfolio. With the acquisition and integration of Total Eren. we are now opening a new chapter of our development as the expertise of its team and its complementary geographical footprint will strengthen our renewable activities and our ability to build a profitable integrated power player,” said Patrick Pouyanné, Chairman & CEO of TotalEnergies. “I want to thank Total Eren’s founders, Pâris Mouratoglou and David Corchia, as well as their teams, for their incredible development work, which led to this successful achievement. Today, we are welcoming Total Eren’s experienced teams, who will continue their remarkable work with the added resources of a bigger company.”

Pâris Mouratoglou, Chairmanof Total Eren, stated: “With Total Eren, we have successfully created a best-in-class renewable energy player. I want to thank BPI France, Tikehau Capital, NextWorld and Peugeot Invest, for their constant support since 2015. I also want to thank Patrick Pouyanné for his trust and for the spirit of partnership that has led to such achievements with TotalEnergies over the last five years.”

David Corchia, CEO of Total Eren, added: “This success belongs first to Total Eren’s teams around the globe. They will undoubtedly make a huge contribution to TotalEnergies’ highly ambitious plan in the renewable sector. Together with Pâris Mouratoglou, we will continue creating and developing new companies for the energy transition and the planet’s decarbonization, as well as, within our new promising partnership with TotalEnergies, the development of giant green hydrogen production projects worldwide.”

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TotalEnergies and renewables electricity

As part of its ambition to get to net zero by 2050, TotalEnergies is building a portfolio of activities in electricity and renewables. At the end of March 2023, TotalEnergies’ gross renewable electricity generation installed capacity was 18 GW. TotalEnergies will continue to expand this business to reach 35 GW of gross production capacity from renewable sources and storage by 2025, and then 100 GW by 2030 with the objective of being among the world’s top 5 producers of electricity from wind and solar energy.

About TotalEnergies

TotalEnergies is a global multi-energy company that produces and markets energies: oil and biofuels, natural gas and green gases, renewables and electricity. Our more than 100,000 employees are committed to energy that is ever more affordable, cleaner, more reliable and accessible to as many people as possible. Active in nearly 130 countries, TotalEnergies puts sustainable development in all its dimensions at the heart of its projects and operations to contribute to the well-being of people.

Energy transition fund to cover DEPA Commercial for LNG cancellations

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DEPA Commercial will be compensated through the energy transition fund for its cancellation of two LNG orders made with TotalEnergies a few months ago as part of the country’s overall effort to bolster energy security ahead of this winter period.

A multi-bill submitted to Parliament yesterday by the energy ministry includes a special revision facilitating this compensation payment to DEPA Commercial, which cancelled two LNG orders submitted to TotalEnergies as a result of a sharp reduction in domestic natural gas consumption.

The legislative revision specifies the compensation payment to DEPA Commercial will be made within a two-month period once all supporting documents have been forwarded by the gas company to DAPEEP, the RES market operator.

The two DEPA Commercial orders were planned for delivery between November, 2022 and March, 2023 as cover in the event of a disruption of Russian gas supply to Greece. But the orders ended up proving excessive given the prevailing conditions.

DEPA cancels 2 LNG orders submitted to TotalEnergies

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A sharp reduction in domestic natural gas consumption has prompted gas utility DEPA to cancel two LNG orders submitted to TotalEnergies a few months ago as part of the country’s overall effort to bolster energy security ahead of this winter period, energypress sources have informed.

The cancellation will not come without repercussions as DEPA, based on the agreement’s terms, will be required to pay TotalEnergies compensation of approximately 10 million euros for each cancelled order. This sum may be covered by the Energy Transition Fund, as foreseen by law.

DEPA’s cancellations concern two LNG orders submitted in September, each for 10 TWh quantities. These orders were secured at particularly competitive prices as other indices besides the TTF were also factored into the pricing formula to lower the price level. At the time, the TTF was as much as 90 euros per MWh higher than other platforms also used for such transactions in the European market.

The two DEPA orders were planned for delivery between November, 2022 and March, 2023 as cover in the event of a disruption of Russian gas supply to Greece. But the orders have ended up proving excessive given the prevailing conditions.

Offshore Crete seismic surveys pave way for drilling in 2025-26

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A consortium headed by ExxonMobil plans to begin conducting seismic surveys at licenses south and southwest of Crete this winter, Prime Minister Kyriakos Mitsotakis announced yesterday, confirming previous energypress reports.

The timing of the prospective surveys is in line with a schedule announced earlier this year by HEREMA, the Hellenic Hydrocarbons and Energy Resources Management Company, which envisaged surveys for the winter of 2022-2023.

The seismic surveys are expected to be followed by higher-definition 3D surveys in 2024. If all goes according to plan, initial drilling at the offshore Cretan blocks could take place in 2025 and 2026, which, if successful, would result in development of hydrocarbon deposits in 2027, leading to production in 2029.

ExxonMobil increased its stake in a consortium holding licenses for two offshore Cretan blocks following a recent decision by France’s TotalEnergies to withdraw from the venture. ExxonMobil acquired TotalEnergies’ share to now hold a 70 percent share in the consortium as the venture’s operator. Helleniq Energy, formerly named ELPE, is the venture’s junior partner.

Older seismic surveys conducted in 2015 by Norway’s PGS for Helleniq Energy – operating, at the time, as ELPE – at the two offshore Cretan blocks south and southwest of the island showed promising signs of a major natural gas deposit.

 

ExxonMobil-Helleniq Energy seismic surveys off Crete

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US oil and gas corporation ExxonMobil has been conducting seismic surveys under complete secrecy and at a rapid pace over the past week or so at two offshore block licenses, west and southwest of Crete, held with Helleniq Energy, formerly named ELPE, as its junior partner.

The two blocks share similar geological traits with Egypt’s giant offshore Zohr gas field and, according to early estimates, may contain rich natural gas quantities.

American presence is being assured, through ExxonMobil, in the southeast Mediterranean region at a particularly critical geopolitical period, both because of the Russian invasion of Ukraine and Turkey’s provocative moves against Greece (aggressive rhetoric and the Libya pact), political analysts told energypress.

ExxonMobil acted swiftly to increase its stake in a consortium holding licenses for the two offshore Cretan blocks following a recent  decision by France’s TotalEnergies to withdraw. ExxonMobil acquired TotalEnergies’ share to now hold a 70 percent share in the consortium as the venture’s operator.

The ExxonMobil-led seismic surveys off Crete, which began on October 24, are being conducted by Norway’s PGS and the company’s Sanco Swift seismic vessel. It is conducting 3D surveys, meaning ExxonMobil is focusing on specific areas for possible natural gas deposits.

DEPA’s TotalEnergies LNG deal a break away from Russia, TTF

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A gas supply agreement reached between DEPA Commercial and France’s TotalEnergies, securing, for the former, French LNG quantities totaling 10 TWh, nearly one-third of annual Russian gas supply, based on references prices not linked to the Dutch TTF hub, up to 90 euros per MWh more expensive than other hubs, paves the way for further agreements not connected to the TTF and Russian supply.

According to sources, DEPA Commercial is currently working on a strategic long-term LNG supply agreement with another major international player, once again using a pricing formula linked to a hub other than the TTF.

These moves are ensuring energy sufficiency for DEPA Commercial’s customers as well as the country, at competitive prices.

DEPA Commercial’s 10-TWh LNG agreement with TotalEnergies, which, according to sources, will result in supply from November until March next year, is equivalent to five months of Russian gas consumption in the Greek market.

The TotalEnergies amount should be enough to cover the country’s needs during this five-month period if Russia completely disrupts gas supply to Europe. In 2021, Greece’s gas imports from Russia totaled 35.37 TWh.

The Greek energy ministry’s leadership and DEPA Commercial officials are preparing for a trip to Azerbaijan, postponed three weeks ago, to seek an agreement for further gas quantities, at prices that are more competitive than the current Azerbaijani supply deal, DEPA Commercial’s most expensive.

 

 

Crete’s Hydrocarbon Potential to be Unveiled by the End of 2023⏐Upstream Development Programme in Full Swing⏐HEREMA’s Role in the Advancement of Offshore Windfarms

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Greece’s upstream exploration programme offshore Crete is proceeding without delays, with a first assessment of the two concessions’ natural gas potential expected by the end of 2023. This was the message delivered by the CEO of the Hellenic Hydrocarbons and Energy Resources Management Company (HEREMA), Aris Stefatos, during a press conference held alongside the company’s Chairman Rikard Scoufias. 

Following the withdrawal of TotalEnergies earlier this year from the blocks dubbed “West of Crete” and “Southwest of Crete”, U.S. energy giant ExxonMobil significantly upped its stake in both concessions, raising this from 40% to 70% for E&P activities, while also assuming the operatorship. Likewise, Greece-based Hellenic Petroleum increased its participation in both areas from 20% to 30%.

ExxonMobil has prepared an upgraded work programme for the first phase of upstream exploration activities – anticipating faster and higher quality results – with delivery expected within a 2-year period instead of the 3 years companies have at their disposal for said exploration stage.

According to Stefatos, any delays in the Cretan concessions can be attributed to the fact that the previous operator did not complete the minimum work programme within the stipulated three-year term. He added that HEREMA’s exploration program is well underway, in accordance with the company’s underlying strategy “Hydrocarbons 2.0”, underpinned by three pillars:

  • Accelerating the development of Greece’s upstream sector with a particular focus on natural gas.
  • Expanding the scope of HEREMA to new energy technologies that can support Greece’s country’s energy transition.
  • Strengthening governance and ensuring HEREMA has the capacity and resources to meet all aspects of its mandate.

Regarding the first pillar, in February 2022 the leadership of HEREMA launched an ambitious investor outreach programme targeting energy majors.  The company’s management noted that the results so far have being particularly encouraging.

Discussions are ongoing with companies that have expressed an interest in entering the Greek upstream sector, with priority being placed on concessions where there is a single investor. While Mr. Stefatos confirmed that another licensing round is not off the table, he stressed the importance of drawing in investors to pre-existing concessions.

HEREMA is also set to play a key role in the development of offshore wind parks in Greek seas, in accordance with its legally expanded work scope, leveraging upon the company’s wealth of expertise in offshore operations. It’s important to underline that offshore oil and gas installations boast strong similarities to the platforms used in offshore wind installations. To this end, the company is being strengthened with specialized technical personnel and the relevant logistical infrastructure to enable it to deliver upon its expanded remit.

HEREMA has been carrying out one-to-one discussions with interested parties, including potential domestic and foreign investors, in an effort to understand their concerns and priorities – deemed key for the development of Greece’s newly-established offshore wind sector. Last but not least, HEREMA recently inked a memorandum of cooperation with the Hellenic Centre for Marine Research (HCMR) focused on technical and environmental synergies.

Within the scope of new energy technologies, HEREMA’s expanded work scope additionally includes the licensing of carbon capture and storage (CCS) and underground gas storage (UGS) projects in Greece. Such projects could focus on the storage of natural gas and hydrogen in the future.  

Imminent key challenges 

While assessing key challenges moving forward, HEREMA’s Board of Directors underlined the importance of maintaining the momentum built during the last 12 months, while ensuring the company is provided with the necessary administrative and financial resources. Strengthening HEREMA’s capacity and resources is a primary challenge and will become even more critical as the company assumes its broader remit including natural gas storage, CO2 and greenhouse gas management, and supporting the offshore wind sector. It is noted that draft legislation for the modernization of HEREMA has been ready for adoption since January 2021 and will contribute to the creation of a more modern and efficient administrative framework.

More specifically, the board concludes “This is an important factor in maintaining investor confidence, but most importantly it serves to build an organisation with the staff, resources, and expertise required to manage a Greek “Hydrocarbons 2.0” programme that should only be initiated once the financial and human resources are in place to monitor and enforce the strictest standards for environmental protection and socio-economic impact management.” 

ExxonMobil, like Total, seems disinterested in Cretan blocks

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American multinational oil and gas corporation ExxonMobil appears likely to follow the way of France’s TotalEnergies towards a possible withdrawal from two offshore blocks, west and southwest of Crete. The two companies each hold 40 percent stakes in these offshore licenses, Greece’s ELPE maintaining the other 20 percent.

Indications of a reduction in interest by the two corporations run contrary to  growing interest expressed by Greek officials for domestic exploration as a result of the EU’s decision to drastically reduce Europe’s reliance on Russian natural gas.

EDEY, the Greek Hydrocarbon Management Company, recently forwarded letters to these upstream companies, informing them of the Greek government’s intentions for a renewed, more ambitious hydrocarbon strategy.

EDEY officials declined to comment on the retreats by ExxonMobil and TotalEnergies but noted that a new round of talks for upstream investments is beginning. Other corporations are interested in Greece’s upstream sector, EDEY officials informed.

EDEY is determined to keep a tight schedule and secure seismic surveys at the two Cretan offshore areas this coming autumn and in spring, 2023.

Drilling for natural gas to begin with licenses in country’s west

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Exploratory drilling for natural gas deposits at a total of six licenses in Greece will begin in the country’s west with two Greek companies, Hellenic Petroleum (ELPE) and Energean, leading the way, according to the outcome of talks yesterday at the headquarters of EDEY, Greek Hydrocarbon Management Company, which were headed by Prime Minister Kyriakos Mitsotakis.

Drilling is expected to begin in mid-2023 at Energean’s onshore Ioannina block; followed, a year later, by drilling at Block 2, an offshore license northwest of Corfu that is held by Energean (75%) and ELPE (25%), following Total’s withdrawal; as well as Block 10 and Ionio, two offshore licenses held by ELPE.

Two further licenses, west and southwest of Crete, both held by a consortium that has brought together TotalEnergies (40%), ExxonMobil (40%) and ELPE (20%), are regarded as the most promising of all six licenses but, at the same time, are the least developed in terms or preliminary exploratory work. The consortium aims to conduct, next winter, seismic surveys covering 6,500 square kilometers.

Energean has already conducted a seismic survey at its Ioannina block, the most developed of all six licenses in Greece, and has set a drilling target.