Total Confirms Output Targets, Sees Further Growth After 2017

SHETLAND, Scotland - French company Total SA still expects its oil and gas output to grow 3% on average on an annual basis between 2011 and 2015, and then sees accelerated growth after 2017 as new projects come on stream, the head of the exploration and production division Yves-Louis Darricarrere said, ahead of the group's release of its first-quarter earnings later this week.

By 2017, the group expects to have increased its production capacity potential to 3 million barrels of oil equivalent per day, from currently around 2.3 mboe/d, Mr. Darricarrere said during a press presentation there Monday.

The group is strongly competing with peers to find more oil and gas as energy demand keeps growing in emerging markets and while most conventional hydrocarbon reservoirs around the world are believed now to be depleting. Total has engaged in a strategic change and has become more aggressive in terms of exploration, allowing it to recently make substantial discoveries, notably in risky areas also called "frontier basins," such as the rough seas of West Shetlands and the Barents Sea, at the most northern tip of Europe.

Total even sees its output growth accelerating after 2017, as "already 90% of the 2017 potential is either in production or in development," Mr. Darricarrere said.

"We're seeing the results of our revitalized exploration strategy. Accepting to take more risks and looking for larger projects are our new focuses," Mr. Darricarrere said, adding the group's potential resources has doubled in the last three years to six billion barrels of oil equivalent.

In the North Sea alone, the group plans to invest as much as $20 billion over the five coming years, he said.

The strategy has allowed Total's production decline rate to remain steady, at around 3%, he said.

"We're able to control the decline, but this is because attention has been brought to existing fields and all our projects must be on time... Any delay of a project is a destruction of growth," he added.

Total has currently 15 projects under development, four of which are located in the North Sea and the Barents Sea. Mr. Darricarrere said "these projects, for the time being, are on time" and should add around 175,000 boe/d to Total's production.

The group will release its first-quarter earnings on Friday at 0600 GMT. Analysts polled by Dow Jones Newswires expect Total's first-quarter output to have dropped 2.1% from a year earlier to 2.323 mboe/d from 2.372 mboe/d.

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Total Confirms Output Targets, Sees Further Growth After 2017

SHETLAND, Scotland - French company Total SA still expects its oil and gas output to grow 3% on average on an annual basis between 2011 and 2015, and then sees accelerated growth after 2017 as new projects come on stream, the head of the exploration and production division Yves-Louis Darricarrere said, ahead of the group's release of its first-quarter earnings later this week.

By 2017, the group expects to have increased its production capacity potential to 3 million barrels of oil equivalent per day, from currently around 2.3 mboe/d, Mr. Darricarrere said during a press presentation there Monday.

The group is strongly competing with peers to find more oil and gas as energy demand keeps growing in emerging markets and while most conventional hydrocarbon reservoirs around the world are believed now to be depleting. Total has engaged in a strategic change and has become more aggressive in terms of exploration, allowing it to recently make substantial discoveries, notably in risky areas also called "frontier basins," such as the rough seas of West Shetlands and the Barents Sea, at the most northern tip of Europe.

Total even sees its output growth accelerating after 2017, as "already 90% of the 2017 potential is either in production or in development," Mr. Darricarrere said.

"We're seeing the results of our revitalized exploration strategy. Accepting to take more risks and looking for larger projects are our new focuses," Mr. Darricarrere said, adding the group's potential resources has doubled in the last three years to six billion barrels of oil equivalent.

In the North Sea alone, the group plans to invest as much as $20 billion over the five coming years, he said.

The strategy has allowed Total's production decline rate to remain steady, at around 3%, he said.

"We're able to control the decline, but this is because attention has been brought to existing fields and all our projects must be on time... Any delay of a project is a destruction of growth," he added.

Total has currently 15 projects under development, four of which are located in the North Sea and the Barents Sea. Mr. Darricarrere said "these projects, for the time being, are on time" and should add around 175,000 boe/d to Total's production.

The group will release its first-quarter earnings on Friday at 0600 GMT. Analysts polled by Dow Jones Newswires expect Total's first-quarter output to have dropped 2.1% from a year earlier to 2.323 mboe/d from 2.372 mboe/d.

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ZaZa to Further Develop Eaglebine Assets with Latest JV

ZaZa Energy Corporation announced that it has signed a Joint Exploration and Development Agreement with one of the largest independent crude oil and natural gas companies in the United States to further develop ZaZa's Eaglebine assets.

Under the terms of the Agreement, ZaZa's joint venture partner will receive up to a 75 percent working interest in up to 55,000 net acres and operate the JV acreage comprising 73,000 of ZaZa's 92,000 net mineral acres. ZaZa will retain a 25 percent working interest in the 73,000 acres. These assets include certain lands located in Walker, Grimes, and Madison, Trinity and Montgomery Counties, Texas, which are wholly owned by ZaZa, and also incorporate certain properties that are covered within the Participation Agreement with Range Texas Production, LLC, a wholly-owned subsidiary of Range Resources Corporation.

Early-stage drilling preparations are already underway for the first two JV wells and the Company expects that the joint venture partner will have drilled the first three earning wells by January 2014.

According to Todd A. Brooks, ZaZa's president and CEO, "Partnering with one of the largest unconventional oil focused operators in the country validates the Eaglebine work program that has been executed by ZaZa to date. Our new joint venture will benefit from economies of scale and focus on optimizing field development and accelerating production at a reduced cost."

The development program consists of three phases, each covering a three well drilling program plus associated cash payments. Phases two and three are electable by our partner upon satisfaction of the preceding phase's work obligations.

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BG, Statoil, ExxonMobil Further Boost East African Gas Resources

LONDON - BG Group PLC Monday said it had completed an appraisal program that further confirmed the natural gas resource and production potential offshore Tanzania, underscoring East Africa's importance as one of the energy industry's hottest new regions.

Separately, Statoil ASA and partner ExxonMobil Corp. announced Monday their third discovery in Block 2 offshore Tanzania.

The mounting volume of gas discoveries off the coast of East Africa has stimulated a wave of interest in the region, culminating in China National Petroleum Corp.'s $4.21 billion acquisition last week of 20% of Eni SpA's giant Mozambique offshore natural gas field.

Anadarko Petroleum Corp. has also attracted interest from several companies including Exxon Mobil, Royal Dutch Shell PLC, India's state-run Oil & Natural Gas Corp. and Oil India Ltd. with the offer of a share of its natural gas discoveries offshore Mozambique, people familiar with the matter told Dow Jones Newswires last week.

BG Group said testing on its Jodari-1 field offshore Tanzania showed better-than-expected reservoir properties, demonstrating that wells could produce at higher rates. BG Group holds a 60% interest in the discoveries offshore Tanzania, with Ophir Energy holding 40%.

"The test results confirm the Jodari reservoir's world-class quality; and the potential for the field to underpin the LNG development," said Nick Cooper, chief executive of U.K.-listed Ophir Energy PLC. Mr. Cooper was referring to a liquefied natural gas terminal that could be part of gas development in Tanzania.

BG Group is in the process of selecting a site for an onshore LNG terminal. The capacity of the terminal will be determined by further exploration and appraisal results across the company's three offshore blocks. BG estimates the total resource in Tanzania at nearly 10 trillion cubic feet.

Statoil said its latest Tanzania find brings recoverable gas volumes now discovered in the country to between 10 trillion and 13 trillion cubic feet. "[This] brings further robustness to a future decision on a potential LNG project", said Statoil's executive vice president for Exploration, Tim Dodson.

Statoil has a 65% stake in the discoveries, with Exxon Mobil holding the remaining 35%.

Eni and Anadarko have also said they are studying plans to build a LNG plant in Mozambique. Analysts say the region is well-placed to serve growing energy demand in Asian markets.

Kjetil Malkenes Hovland in Oslo contributed to this story.

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Further Scrutiny for Australian Coal Seam Gas Projects

SYDNEY - Australian coal seam gas projects or large coal mines that could lower the quality of water resources will now be assessed by federal lawmakers under new laws proposed Tuesday.

It comes as big international oil companies and miners invest billions of dollars developing resources for export to fast-growing Asian economies, while facing opposition from other land users like farmers and horse breeders. The most contentious projects are clustered on the eastern seaboard in Queensland and New South Wales states.

Adding a new layer of approvals is likely to push up costs of projects at a time when returns are coming under increasing pressure. Coal seam gas developments led by BG Group PLC, Origin Energy Ltd. and Santos Ltd. in Queensland have all overrun budgets due to technical challenges and issues ranging from labor shortages to the high Australian dollar.

The impact of coal seam gas and coal mines on water resources is only monitored by state governments at present. Federal lawmakers are able to take account of water issues if they relate to threatened species or internationally significant wetlands.

"The proposed amendments will ensure that coal seam gas and large coal mining developments must be assessed and approved under national environment law, if they are likely to have a significant impact on a water resource," Environment Minister Tony Burke said in a statement.

To comply with the federal approval process, additional information will be required on top of what's needed in the state-based approvals process. Mr. Burke, however, said most of the data would have already been addressed in state-based procedures.

Companies already undergoing an assessment will need to work on providing additional information for the federal approvals process "straight away", Mr. Burke said.

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