Capital expenditure will be around $13 billion in 2020, falling to $12bn in 2021. These cuts will not have an impact on the company’s two major projects, Arctic LNG 2 and Mozambique LNG, the latter of which should start up in 2024-25. Total’s capex was $19.2bn and, before the pandemic struck, had planned to spend $18bn this year. Instead, Total will take advantage of its short-term opportunities, where it has flexibility around investments and harvesting cash. Total has said capex may range from $13 to $16bn, between 2022 and 2025. “It’s a matter of environment. Spending this year is clearly linked to the current price environment and $12bn next year is based on a lack of visibility.
Total would be willing to invest in new LNG plans in Qatar. Demand will plateau in 10-15 years but oil will continue to be a significant part of the energy mix. As such, our strategy is to position ourselves on low-cost oil assets. Total is making progress in acquiring Tullow Oil’s stake and securing approval from governments. Another way in which the French company aims to position itself will be through its focus on low-cost LNG, in order to supply the growing Asian market. The executive noted there was a benefit to moving at this point in the cycle, locking in cost deflation and eager contractors. Shale is “completely inconsistent with our strategy of low-cost resources. We continue to think it is not the right or most efficiency way to allocate capital.