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Falling oil prices will not hit Total’s Middle East operations

Dubai: French oil major Total, undeterred by a collapse in global oil prices in recent months, has no plans to curtail Middle East operations, the company’s senior executive for the region said on Tuesday

The Brent crude oil price, a global market indicator, has lost more than a quarter of its value since June when it peaked at around $115 a barrel in June to about $82.40 on Tuesday afternoon.

“We are clearly adjusting to the situation … there is not panicking on our side. It doesn’t change our long-term strategy,” said Stéphane Michel, Total’s Senior Vice President for the Middle East and North Africa, by phone.

Prices have slid off the back of weaker economic growth, particularly out of China, and excess supply on the global market. While the United States’ demand on energy imports have lessened due to a pick up in domestic shale oil production.

Sliding prices have raised concerns among some Opec members with many relying heavily on oil revenues to bolster their economies. However, so far, it appears Opec is not ready to engineer a price increase with Secretary General Abdullah Al Badri saying last week the groups oil production is unlikely to change much in 2015.

While Total recognises the impact of shale oil on the market, Michel suggested the European energy company is not overly concerned as it does not see production “happening outside the US.”

China, one of the largest cruder importers, has been identified as the next big market for shale oil if exploration and production becomes more viable.

In the UAE, Total is currently locked in a new concession bid with the Abu Dhabi National Oil Company (Adnoc) after the 75 year old concession, which also included Shell, BP, Exxon Mobil and Partex, ended in January.

Michel declined to comment on the new concession bid citing a confidentially agreement, however, said the oil major was finding the process “competitive.”

The existing international oil companies have been invited to bid for a new agreement, however, Abu Dhabi also green lighted other energy firms from the US, China, Japan, Korea, Norway and Russia to partake in the bid.

Elsewhere, Michel said Total was remained optimistic across the region including in its operations in Iraqi, Libya, and Yemen, where violence has threatened the stability of the each country in recent months.

Total did not stop production in Iraqi Kurdistan over the summer when other oil firms pulled out over concerns over the advancement of terrorist group Da’esh.

Michel said the Total is confident in the safety of its staff under the security conditions in Kurdistan.

Published on:
November 4, 2014
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