Total (NYSE:TOT) plans to increase oil and gas production to as much as 3 million barrels of oil equivalent (BOE) per day by 2017, as the company looks to exploit its pipeline of development projects over the next five years. This goal and other details of the company's strategy were delivered to investors at Total's annual analyst meeting held last week.
Forex Broker Guide: Using the right broker is very essential when competing in today's forex marketplace
Total is one of the world's largest integrated oil and gas companies with an average daily production of 2.346 million BOE in 2011. The company reported proved reserves of 11.4 billion BOE at the end of 2011, with approximately 50% of these reserves composed of crude oil and other liquids.
Total has operations spread across various areas, with production in Africa comprising 28% of the company's output in 2011. The Middle East and Europe are also important areas for Total and provided 24% and 22% of the company's total production in 2011, respectively.
SEE: A Natural Gas Primer
Total plans to increase production to 3 million BOE per day by 2017 and believes that it can accomplish the majority of this growth through projects that are already under development. These projects are in Angola, Nigeria, Kazakhstan, the North Sea and other areas across its global portfolio.
One major project for Total is the CLOV development project, which is operated, and 40% owned by the company. CLOV consists of four offshore oil and gas fields in Block 17, located in offshore Angola. The fields will be developed into a floating production, storage and offloading (FPSO) unit and will be the fourth producing development project brought on line by Total on Block 17.
Total estimates that the four fields hold proved and probable reserves of 500 million BOE and expects crude oil production to reach a peak of 160,000 barrels per day. The project is set to start up in 2014 and will increase crude oil production from the entire block to 800,000 barrels per day. Statoil (NYSE:STO), BP (NYSE:BP) and Exxon Mobil (NYSE:XOM) are also involved with Total on Block 17, and own 23.33%, 20% and 16.67%, respectively, in this license.
SEE: Commodities: Natural Gas
Another project operated by Total that is expected to start producing in 2014 is the Laggan Tormore development located in the United Kingdom section of the North Sea. The project will produce natural gas from two fields and also include a large natural gas processing facility that can process up to 500 million cubic feet per day of natural gas.
One large project that Total is involved with on a non-operated basis is the Ichthys liquefied natural gas (LNG) project in Australia. This project is expected to begin production in 2016 and is estimated to hold recoverable reserves of 12.8 Tcf of natural gas and 527 million barrels of condensate. Ichthys will involve the construction of a two-train floating LNG plant that will export natural gas to several buyers in Asia.
SEE: 4 Reasons Natural Gas Is So Cheap
The Bottom Line
Although Total has set an ambitious oil and gas production goal of 3 million BOE per day by 2017, the company believes that it has enough sanctioned development projects in its portfolio to make this a feasible target.
At the time of writing, the author did not own any shares in the companies listed.