ERHC Energy Inc (ERHE)

[Southern Man]

Total says Nigeria remains core area despite delays in oil reform
Cape Town (Platts)--4Nov2010/817 am EDT/1217 GMT


French oil major Total has no intention of reducing investment in African countries, in particular Nigeria, despite uncertainty over planned reforms to the energy sector, a senior executive said Thursday.

"We have a lot of investments on the go. Nigeria is a core area for us to invest," Total's head of Africa, Jacques Marraud des Grottes, said on the sidelines of an energy conference in Cape Town.

Des Grottes also said none of the group's projects had been delayed bythe stalled passage of the Petroleum Industry Bill, a key piece of legislationwhich will change the fiscal and regulatory framework in the OPEC member.

"No major investment has been suspended for that reason," he said.

In Nigeria, it brought the Akpo field on stream in March, 2009, and production is expected to peak at 225,000 b/d.The group intends to put the Egina field in the same block OML 130 into production in 2015, Des Grottes said. Total is equally developing the Usan field on OML 138, which will pump
first oil in the second half of 2011.

Industry sources say the uncertainty around the fiscal issues in the Bill is already stalling development of major discovered resources and discouraging companies from undertaking the aggressive exploration programs they launched
under the 1993 production sharing contracts.

But the government regards the PIB as an instrument to reposition Nigeria's hydrocarbons industry and bring it up to international standards, and insists it will be investor friendly.

Total, which first entered Nigeria in 1962, pumped out 235,000 b/d from the nation last year.

CONSOLIDATING ANGOLA PROJECTS

Although des Grottes confirmed it was selling its 5% in ultra-deepwater block 31 (see story at 1035 GMT), Total is not reining in its efforts in Angola, des Grottes said.

Its $9 billion development plan for Pazflor, offshore Angola is on track to produce first oil in the fourth quarter of 2011, targeting 220,000 b/d.

Pazflor is Total's third production hub in the prolific block 17 where the Girassol and Dalia fields are already producing, and will bring total output for the block to 700,000 b/d.

Next up in Block 17 will be the Clov project, with drilling scheduled to start in 2012 and first oil expected in 2014, adding a further 160,000 b/d to the group's total output, des Grottes said.

The project incorporates four fields -- Perpetua, Zinia, Acacia and Hortensia -- spanning 148,263 acres (600 sq km) on the eastern edge of the block. In the ultra-deepwater, Total expects to pump first oil from Block 32 in 2016. Total holds a 30% operating share in the block.

Total will shortly get its 33% of blocks 1-2 and 3A operated by Tullow Oil on Lake Albert, marking it debut in Uganda. "The joint venture with Tullow and CNOOC could be seen as a dream team to produce, explore in Uganda and benefit all stakeholders," des Grotte said.

The company will help build a pipeline linking future oil production to the Kenyan city of Mombasa.

MAKES FORAY INTO SAO TOME

The group made its foray into the offshore Joint Development Zone shared between Nigeria and Sao Tome and Principel in July when it agreed to buy Chevron's 45.9% stake in block 1.
In October, Total agreed to buy a 60% interest in the CI-100 license from Yam's Petroleum. Yam's Petroleum retains a 25% interest and Cote d'Ivoire's national oil company Petroci holds the remaining 15%.

The transaction has been approved by the Cote d'Ivoire authorities.

--Jacinta Moran, [e-mail]

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