TOTAL S.A. (TOT - Free Report) announced that it signed agreements with Sonangol, covering certain upstream and downstream operations in Angola. These agreements will further strengthen TOTAL’s operation in the country. TOTAL has been operating in Angola for the past seven decades and is the leading oil operator. The company produced 229,000 barrels of oil equivalent per day (Boe/d) in 2017 from Angola.
The agreement with Sonangol will allow TOTAL to operate Block 48 ultra-deepwater resource offshore Angola and jointly develop a network of service stations in the country.
Operation in Africa
TOTAL has operation throughout the globe, and Africa is a major contributor to its total liquids and gas produced on a global scale. During the first quarter of 2018, 673,000 Boe/d was produced from Africa, reflecting a year-over-year improvement of 6%. Nearly 24.9% of its total production of 2,703,000 Boe/d in the first quarter came in from Africa.
Earlier this month, TOTAL entered into an agreement with Sonatrach to expand its operation in Algeria. Both will jointly invest $1.4 billion to develop a propane dehydrogenation unit and a polypropylene production unit, with an output capacity of 550,000 tons per year.
Tie-ups like this along with other upcoming startup of projects will help TOTAL achieve its target of 750,000 boe/d production from Africa in 2020.
TOTAL has a wide presence in resource-rich Africa and plans to develop in different regions of the continent, to hold its leadership position in the oil and gas production in Africa.
Huge Oil & Gas Reserves in Africa
Africa at present has in excess of 500 trillion cubic feet of proved natural gas reserves and more than 130 trillion barrels of oil reserves. Given the huge reserve potential, the big oil and gas companies are braving the risk of poor infrastructure, security threats, regulatory uncertainty and political turmoil to invest in Africa.
No doubt, Africa’s oil and gas reserves have been drawing international giants like Exxon Mobil (XOM - Free Report) , BP Plc. (BP - Free Report) , and Chevron Corporation (CVX - Free Report) among others to this continent.
Year to date, TOTAL’s shares have returned 5.9% compared with the industry’s growth of 1.2%.
TOTAL currently has a Zacks Rank #3 (Hold). You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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