PARIS: Europe should stop thinking about cutting its dependence on Russian gas and focus instead on making those deliveries safer, including options to bypass Ukraine, the head of French oil major Total said in an interview.
In his strongest backing for Russia and its energy policies so far amid the conflict in Ukraine, CEO Christophe de Margerie (pictured) said Europe could see a repeat of a big gas supply crisis this winter.
“There are plenty of solutions that are being suggested to avoid the Ukrainian problem, including by Russia,” he said, citing as an example the Nord Stream pipeline built in 2011 under the Baltic Sea to Germany, which bypassed Ukraine. “(Nord Stream) was built to avoid passing through Ukraine, not to avoid Russian gas,” he said.
“Can we live without Russian gas in Europe? The answer is no. Are there any reasons to live without it? I think — and I’m not defending the interests of Total in Russia — it is a no.”
De Margerie dismissed a European Commission proposal for EU member states to pool their bargaining power to negotiate gas contracts with Russia and prevent Moscow playing countries off against each other with different prices.
“Should there be a central purchasing body? I don’t think so,” he said. “Today Russian gas prices are in line with international market prices. They’ve even cut their prices to keep customers.”
Several chief executives of energy giants, including BP and Royal Dutch Shell, have defended a long-term commitment to Russia despite Western sanctions to punish Moscow for annexing Crimea and destabilisation in eastern Ukraine.
Total is one of the majors most exposed to Russia, where its output will double to represent more than a tenth of its global portfolio by 2020. Soon after the Ukrainian conflict erupted, the European Commission put Russia’s second gas pipeline project to bypass Ukraine, South Stream, on hold, saying it violates EU law.
Russia has halted gas deliveries to Ukraine in a payments dispute but European gas prices haven’t reacted sharply so far because of high stocks and low summer demand. Reuters
PARIS: Christophe de Margerie is giving himself until the end of the year to strike oil at a big new field somewhere in the world before considering whether to change direction and cut the exploration budget. The oil major, which launched a drilling strategy that it termed “high-risk, high-reward” two years ago, has had disappointing explorations results so far. “It’s not a success in terms of results for the moment,” Christophe de Margerie said. “But exploration takes more than two years to yield results.” De Margerie was asked whether the group could drop the expensive strategy. “Not before the end of the year; at the end of the year we’ll see if we didn’t get enough.” Reuters