Total chief still keen on UAE despite setbacks

The loss to a Korean consortium, led by Korea Electric Power Corp and initially seen as the underdog, was widely acknowledged as a major upset. It has prompted the leader of the French group, Areva, to rethink its strategy, including considering offering older, cheaper reactors.
Christophe de Margerie, Total’s chief executive, said in an interview that he was fully aware of the controversy Total’s potential investment could cause in France. “If Abu Dhabi wants a partner, we can be that partner. But if it were to be considered anti-Areva, we’d have to think about it,” he told the Financial Times.
He added that Total had to be careful not to appear “anti-Areva”.
He believed the Koreans won, not because they offered the superior product, but because their reactors were cheaper and quicker to build.
“Our adventure is as an investor,” he said. “It is clear that we are a company interested in managing big projects, being in charge of operations. Areva is not our cup of tea because they are a manufacturer.”
Mr de Margerie unleashed a firestorm of speculation in France that Total was about to buy Areva when he revealed in 2007 that he was considering moving Total into the nuclear arena.
His exact nuclear plans remain unclear, causing concern – especially in France – about how such a big and rich new entrant, run by a man not known for his predictability, would fit in.
Mr de Margerie acknowledged Total needed to tread carefully. “We cannot start having enemies; we are newcomers.”
Total is perhaps the boldest western oil company when it comes to moving into countries with inclement investment climates. Among the most controversial are Burma and Sudan.
In Sudan, Total is on the cusp of finding a new Middle Eastern partner to replace Marathon, the US company that was driven out in 2008 by US sanctions and investors angered by the company’s presence in a land wracked by genocide.
Mr de Margerie said the political situation between northern and southern Sudan was still too unclear to begin seriously exploring for oil.
But he dangled a carrot to the Sudanese, saying a pipeline could be built to eventually export oil from southern Sudan to Uganda,– where Total has just signed a large field development deal – and then to the coast.
He said that investing in an environmentally sustainable way was “a must,” but warned that such responsibility came with additional cost that would eventually be passed on to the consumer. “Can it be changing the strategy of companies? No. It just means that to develop those oil and gas resources, we need to pay more. It is one of the reasons to think that the price of oil... can only go upwards,” he said.
But there is at least one area in which Mr de Margerie was quick to quash any recent market buzz.
With regards to Total’s US oil exploration partner Cobalt International Energy, he said: “The intent has been definitely not to buy them. We have proved not very good at finding oil in the Gulf of Mexico. It is better we have them alone and they operate independently.”

"The Financial Times"