Being a Market Leader in Africa Brings Both Advantages and Responsibilities
Guy Maurice, Senior Vice President, Africa in Exploration & Production, and Momar Nguer, Senior Vice President, Africa/Middle East in Marketing & Services, talk about Total in Africa.
Punctuated by security and health crises, 2014 was a difficult year for Africa, raising the question of whether the continent is riskier than other regions of the world.
Guy Maurice In Africa, as elsewhere, Total conducts rigorous risk assessments. But you have to remember that most of our operations take place in an untroubled environment. Here, just like everywhere else, Total sets the highest standards, not only for safety and security, but also for human rights and business integrity, especially in the fight against corruption. Our spending projects are part of a long-term process grounded in respect for and from governments and civil society. It’s an ongoing dialogue.
Momar Nguer Over the past 80 years, we have amply demonstrated our ability to develop sustainable, long-term operations in Africa. The continent has also changed a lot and, as in other regions, the key question is how we, as a company, can help to drive growth in our host countries. Today, our core strength for meeting crises head on and pursuing our development derives from the fact that we have always believed in Africa, have long relied on outstanding local teams and have helped local suppliers to meet our standards.
The projects you are pursuing are technology intensive, especially in the deep offshore. Has the drop in oil prices led you to rethink your commitment to Africa?
G. M. Africa is strategically important for us. It accounts for one-quarter of our reserves and one-third of our production and will see its production grow 25% between 2011 and 2017. As a market leader, we must respond to ensure the continued viability of our operations. We are deploying a proactive strategy that includes cost reductions and greater selectivity with regard to our projects. The goal is to make our operations more profitable. But if we are going to continue investing in Africa, pursue our production projects and create jobs — as in Angola, where the number of hours worked by local teams on major deepwater developments has more than tripled in recent years — it's important that our partners, contractors and host countries work to ensure conditions that will once again support the growth of the oil industry. The Kaombo project is demonstrating that this can be done. By working together closely, the stakeholders slashed costs by $4 billion, making development possible.
In the area of marketing and services, Total clearly stands out from the competition. Why are you pursuing your spending programs at a time when other international oil companies are pulling out of African markets?
M. N. Unlike many of our competitors, we are continuing to expand our retail network in Africa, both under the Total brand and through partnerships with local operators. Africa is becoming more and more urban, car ownership is on the rise and roads are being developed. Middle-class city dwellers are looking for greater convenience. While they may not always have the means to shop in supermarkets, they no longer want to frequent the local market. They can purchase groceries, get something to eat, pay with (and charge) their cell phones and transfer money in our service stations. Located in cities as well as in rural areas, our retail outlets are growth drivers for the continent and, with their contemporary flavor and diversity of offerings, they reflect today's vibrant Africa.
So to conclude, is Africa a land of risk or opportunity for Total?
G. M. Africa is definitely a land of opportunity. That’s why it’s so important for all stakeholders concerned to work together to find solutions. Developing operations and pursuing spending programs require a shared responsibility. We’ve been operating in Africa for more than 80 years. The situation may be difficult at the moment, but we intend to remain the most African international oil company.
M. N. Our strategy is clearly to grow while also creating opportunities for Africa. The performance objectives that we have set in terms of safety, environmental stewardship and diversity also demonstrate to others that this is possible. For example, by 2017 we expect to achieve our objective of having at least 60% local managers in our marketing affiliates and 25% women on their management committees.
In line with this trailblazing spirit, we have also set up our first VIE co-op program designed to provide African students with international experience. We will host 100 volunteers this year and our goal is to have 500 in the program in 2017. We are paving the way and hope that other companies will join us in this initiative.