Why Total drops controversial offshore exploration in Brazil's Foz do Amazonas basinAURÉLIE BARBAUX Factory New on 07/09/2020
Total has announced that it is resigning from its role as operator in the offshore exploration of five blocks in the Foz DO Amazonas basin in Brazil. The reason given, regulatory uncertainty, is not the only one.Helped by the oil crisis and the Covid, Greenpeace has just scored a point against Total. The major has decided to give up its role as operator in the oil exploration of five blocks of the Foz do Amazonas basin, 120 kilometers off Brazil, in front of the mouth of the Amazon.
In a press release dated September 9, 2020, Total indicates that it notified its partners on August 19, 2020 of its resignation from its role of operator of blocks FZAM-57, FZA-M-86, FZA-M-88, FZA-M- 125 and FZA-M-127. He also informed the National Petroleum, Natural Gas and Biofuels Agency (ANP) of this decision. Total will nevertheless have to continue to carry out the administrative processes, on behalf of its partners Petrobras and BP until February 2021, the time to designate a new operator and transfer the activities to it.
AN ECONOMY PLAN
This decision in no way marks Total's withdrawal from exploration and production in Brazil, a country where it has been present for 40 years and where it employs 3 people. On the contrary, on August 000, the Frenchman announced the launch of phase 17 of the Mero field, operated since 3 with a floating production, storage and unloading unit located in deep water 2017 kilometers from the coast of Rio de Janeiro. Mero 180 will have a liquid processing capacity of 3 barrels per day. It is scheduled to start up by 180. In November 000, Total also announced the start of production on the Iara project (block BM-S-2024A), located in the deep waters of the Santos pre-salt basin.
But Total, hard hit by the crisis of oil overproduction amplified by the health crisis, must make savings to cover the 13 billion shortfall forecast for 2020. And its savings plan includes, among other things, a reduction of 4 billion of its exploration production investments in 2020.
ENVIRONMENTAL AUTHORIZATION REFUSED
This is not the main reason for Total's withdrawal from this block exploration project acquired in 2013, following a call for tenders from the ANP. Despite Total studies showing that exploratory drilling would be carried out 40 km from a coral massif that Greenpeace ecologists wish to defend, the environmental authorization request, filed in 2014 was refused in December 2018, with confirmation in April 2019 , to the joint venture managing this project. It is made up of Total (40%), BP (30%) and Petrobras (30%).
Total, already under the fire of other criticisms from NGOs on exploration sites in Mozambique and Uganda, is thus closing a front line of struggle with environmental NGOs.
This is only the beginning, because Total remains, for the moment, a shareholder in the project. The French could seek to disengage. The Brazilian oil company Petrobras might be better able to develop these blocks.