TotalEnergies SE: Nigeria: Production commences at the Akpo West field
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Insights
The commencement of production at Akpo West field signifies a strategic expansion within TotalEnergies' portfolio, directly influencing the company's production capacity and cost-efficiency metrics. The tie-back to the existing Akpo FPSO is a cost-effective method that utilizes existing infrastructure to fast-track production, avoiding the substantial capital expenditure typically associated with new offshore developments. The additional 14,000 barrels of condensate per day, coupled with the future 4 million cubic meters of gas per day, are set to enhance TotalEnergies' output, potentially improving revenue streams and offering a buffer against production declines in other areas.
Furthermore, the projected carbon intensity of below 5 kg CO2e/boe positions the project as a comparatively low-emission initiative within the oil and gas industry, where the average upstream carbon intensity can range from 10 to 20 kg CO2e/boe. This aligns with the increasing investor and regulatory pressures on energy companies to pursue cleaner energy solutions and could bolster TotalEnergies' environmental credentials in a market that is progressively sensitive to climate change impacts.
From a financial perspective, the Akpo West field's production uplift has several implications for TotalEnergies and its stakeholders. The incremental production is likely to have a positive effect on TotalEnergies' top-line growth and could provide a more favorable outlook for the company's stock performance in the medium term. It's essential to note that TotalEnergies holds a 24% interest in the project, indicating that the financial benefits will be shared with partners, including CNOOC, Sapetro, Prime 130 and the Nigerian National Petroleum Company Ltd.
Investors will be interested in the project's break-even price and how it compares to the current and projected oil market conditions. Given the emphasis on cost control and the use of existing infrastructure, the project is likely positioned to be profitable even in a lower oil price environment, which is crucial in a volatile commodity market. Moreover, the early start of production can accelerate cash flows, enhancing TotalEnergies' ability to fund future projects or return value to shareholders.
Considering the environmental impact, Akpo West's low carbon intensity is a noteworthy aspect. It reflects TotalEnergies' strategic focus on reducing the carbon footprint of its operations. This proactive approach to environmental management is likely to resonate well with policy makers and stakeholders who are increasingly advocating for sustainable energy production. The project's alignment with TotalEnergies' broader strategy to decrease the average carbon intensity of its portfolio can be seen as a response to the global energy transition and the Paris Agreement goals.
However, it is imperative to monitor the actual emissions once the field is fully operational to ensure that the projections hold true. Continuous environmental reporting and transparent disclosure of emissions data will be critical for maintaining credibility with stakeholders and for the company to showcase its commitment to sustainable development goals.
TotalEnergies (Paris:TTE) (LSE:TTE) (NYSE:TTE) and its partners announce the start of production from the Akpo West field on the PML2 license in
Located 135 kilometers off the coast, Akpo West is tied back to the existing Akpo Floating Production Storage and Offloading (FPSO) facility, which started-up in 2009 and produced 124,000 barrels of oil equivalent per day in 2023. By mid-2024, Akpo West will add 14,000 barrels of condensate production per day, to be followed by up to 4 million cubic meters of gas per day by 2028.
The Akpo West development leverages the existing Akpo facilities to keep costs low and minimize greenhouse gas emissions. The project’s carbon intensity is expected to be below 5 kg CO2e/boe and will contribute to reduce the average carbon intensity of TotalEnergies’ portfolio.
“After Ikike in 2022, TotalEnergies is pleased to start production of another tie-back project in
TotalEnergies is the operator of PML2 with a
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About TotalEnergies in
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About TotalEnergies
TotalEnergies is a global multi-energy company that produces and markets energies: oil and biofuels, natural gas and green gases, renewables and electricity. Our more than 100,000 employees are committed to energy that is ever more affordable, more sustainable, more reliable and accessible to as many people as possible. Active in nearly 130 countries, TotalEnergies puts sustainable development in all its dimensions at the heart of its projects and operations to contribute to the well-being of people.
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Cautionary Note
The terms “TotalEnergies”, “TotalEnergies company” or “Company” in this document are used to designate TotalEnergies SE and the consolidated entities that are directly or indirectly controlled by TotalEnergies SE. Likewise, the words “we”, “us” and “our” may also be used to refer to these entities or to their employees. The entities in which TotalEnergies SE directly or indirectly owns a shareholding are separate legal entities. This document may contain forward-looking information and statements that are based on a number of economic data and assumptions made in a given economic, competitive and regulatory environment. They may prove to be inaccurate in the future and are subject to a number of risk factors. Neither TotalEnergies SE nor any of its subsidiaries assumes any obligation to update publicly any forward-looking information or statement, objectives or trends contained in this document whether as a result of new information, future events or otherwise. Information concerning risk factors, that may affect TotalEnergies’ financial results or activities is provided in the most recent Universal Registration Document, the French-language version of which is filed by TotalEnergies SE with the French securities regulator Autorité des Marchés Financiers (AMF), and in the Form 20-F filed with the United States Securities and Exchange Commission (SEC).
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TotalEnergies Contacts
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Source: TotalEnergies SE
FAQ
What is the name of the operator of PML2 in Nigeria?
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How much gas production is expected by 2028?
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