Drilling for 'black gold' can be a dirty job, but someone has to do it
Straight-talking boss admits he feels sorry for rival BP
Published 17/06/2010 | 05:00
WHILE many Irish investors are hopeful that Total will soon join forces with Tullow Oil in Uganda, the French company is pondering the unfolding disaster in the Gulf of Mexico and what it means for the oil industry in the years to come.
Total chief executive Christophe de Margerie is a well-known character in the industry -- known affectionately among staff as "Big Moustaches" -- and is renowned for his straight talking, his approachability and his off-beat sense of humour.
But even the ebullience of Mr de Margerie is dampened by the scale of the disaster off Florida, where its rival BP is fighting to fix the 25,000-gallons-per-day oil spill threatening the American coastline. "I shouldn't even smile," Mr de Margerie says with real sympathy. "Look at (BP boss) Tony Hayward's face. It is a disaster and he knows it."
Belying its reputation for cutthroat competition, the whole industry is on stand-by to offer any help it can. Total's nearby Matterhorn rig was used as a staging post for evacuated people caught in the explosion on the Deepwater Horizon that killed 11 of their colleagues two on April 20.
And the French supermajor is also closely involved in the local pollution control co-operatives that the industry runs precisely for such crises.
There is no question that BP is doing everything possible to stop the spill, Mr de Margerie says. "Frankly, we all admire BP technically. The real thing today is to stop the leakage and there is nothing anyone can do more than BP can do."
But the damage to the oil industry will not be over when the leak is finally plugged, the last damages paid, and the last seabird washed clean.
"When something like this happens it is bad news for all of us and the whole industry is hurt," Mr de Margerie says, gazing resignedly from his 44th-floor office windows to the streets of Paris's La Defense below.
The big danger is not only from falling stock prices and the rumblings from US President Barack Obama about suspending plans to open up new acreage in the Gulf of Mexico. The real harm will be to the reputation of a highly unpopular industry.
On the issue of reputation, Mr de Margerie knows what he is talking about. As Europe's third-largest oil company, with net income of €7.8bn last year and interests in some of the trickiest places in the world, Total has long been a whipping boy for critics of big oil, lambasted by green campaigners and pro-democracy groups alike.
The Total chief executive himself could not be further from the amoral, buccaneering oil boss of stereotypes.
Mr de Margerie is softly spoken, even gentle, with a ready twinkle in his eye and a reputation for rubbing shoulders as easily with doormen as with Saudi princes. He is an expert on the Middle East, having passed on a job with Taittinger -- the family champagne company -- to join the oil industry in 1974. Famously bad at time-keeping, he draws embarrassed attention to his office clockface emblazoned with the question "who cares?".
The answer, at least when it comes to global energy supplies, is that Mr de Margerie cares a great deal. And he is keen to tackle critics head on.
"We have to (be) realistic," he says, stressing "realistic", rather than "pragmatic". Realism means facing up to the fact that oil may be a dirty business, but it is unavoidable. "The world is desperate for energy," he says. "That doesn't mean we are against a reduction in consumption, or that we are against producing cleaner products, or that we are not part of (the) fight against climate change."
He dismisses environmental arguments as "stupid" -- not because the environment is not a concern, but because the us-and-them dynamic is a distraction from the more nuanced discussion needed about global energy demands.
"It is not oil or the environment, it is oil and the environment," he says with feeling. "We are living in the same world. We are not enemies.
We have to be frank -- but frank in a nice way -- so people understand the impact of what they are deciding."
Vast sums of money are being spent on developing alternatives to fossil fuels. For Total, the focus is on solar, biomass, and carbon capture and storage technology to clean up coal-fired power production. The group is also moving into the nuclear sector, although a recent bid in the United Arab Emirates was beaten by the South Koreans. But nothing will be a substitute for the 'black gold' of oil. "Fossil fuels will not be enough on their own, it will only be the combination that will make it."
Meanwhile, the Gulf of Mexico spill will make the case even harder to make. "We are always on the verge of having something like this spill to face," Mr de Margerie says.
"But until we can say this will never happen again, it will be difficult to change our image, because some people who are more than happy to use fossil fuel products still do not accept the possible damage."
Green groups are not Big Oil's only opponents. Total also faces sharp criticism for its involvement in politically difficult countries such as Burma and Sudan. Mr de Margerie is unapologetic. "We are driven by where the oil is," he says.
He also stresses that the company is not entirely passive. In Burma, for example, Total has expressed public disapproval of the treatment of Aung San Suu Kyi, the pro-democracy leader under house arrest. The company also has responsibilities, Mr de Margerie says. Once involved in a country, it is not easy to pull out. The group's Burmese assets, for example, not only provide much-needed gas for Thai power stations but also offer stable employment and community programmes for local Burmese people.
"We think that we are adding more in being present than being not present," Mr de Margerie says.
The overriding priority is to provide affordable energy supplies, in response to demand. "We don't go to new places for fun or to be provocative."
Rather, it is a question of responsibility. "We have to be careful because if one day the world is short of energy, it will be our responsibility. Everybody will ask Total, why don't you have more oil?"
Recent events in France are emblematic of the contradictions confronting the industry. In February, Total faced week-long strikes at its six French refineries in response to plans to close the facility at Dunkirk.
The fracas is now smoothed over, but only by a government-brokered deal under which the company guaranteed to keep its remaining five refineries open for another five years.
Mr de Margerie is careful to stress that he has no real beef with the trade unions, whose job it is to fight for their members' interests. But the government should be focusing on the bigger picture, he says, or else no one can. "I don't want to appear to be complaining," he says. "But it is difficult when people are telling you to produce less and be cleaner, and then when you do it you are told that you can't change anything but must keep refinery capacity the way it was."
As the battle to contain the spill in the Gulf of Mexico continues to dominate the headlines, it is hard to imagine the oil industry will ever rid itself of the taint.
Mr de Margerie says the business needs acceptance. "Will we ever be loved? No," he says. "But can we be accepted? Yes. It is easy? No. Will it take time? Certainly.
"But is that a reason to stop what we are doing?"