Stéphane Michel, heir apparent to Patrick Pouyanné, CEO of Total, is due to join the group's Executive Committee in March 2021. Actively supported by the Corps des Mines, this ascent, prepared for several years, coincides with the desire for the ecological transition of the oil tanker.

There is little doubt about it: patrick Pouyanné, 57, whose term ends in 2021, will be renewed next year until 2024. But, traditionally, Total has been preparing the succession of its captain for a long time as part of an internal recruitment.

Workaholic Stéphane Michel, 47-year-old X-Mines, current director middle east North Africa of the "Exploration & Production" division led by Arnaud Breuillac, has been identified for several years as the dolphin designated by the powerful Corps des Mines. Before joining Total in 2005, he began his career in 2000 at the Agence France Trésor, then from 2002 to 2004 he was Technical Advisor to Francis Mer at the Ministry of Economy and Finance.

Long-term ambition

His appointment scheduled for March 2021 as CEO of the "Gas, Renewables & Power" branch - one of the group's five - replacing Philippe Sauquet, and his simultaneous entry into the Executive Committee, make Stéphane Michel a good candidate to succeed Patrick Pouyanné in 2024, or even in... 2027.

This clearly stated ambition does not facilitate his relationship with the CEO, who operates very vertically and naturally authoritarian. His future will of course depend on his ability to impose himself in his next functions. But first, he will have to succeed in placing Total in a prominent place, in the coming weeks, in a particularly strategic file for the group: the mega-call for tenders launched by Qatar to increase the annual production of the huge North Field gas field, and increase it from 77 million tonnes of liquefied natural gas (LNG) to 110 million tonnes.

The Qatari challenge

Stéphane Michel first arrived in Qatar in 2008 as Director of Joint Venture and Business Development and then became Managing Director of Total in the country in 2011, and has continued to develop his relationship there as Director of the Middle East and North Africa from 2014 to the present. He is particularly close to Saad Sherida al-Kaabi, Minister of State for Energy and at the same time CEO of Qatar Petroleum, the state-owned company that manages all the emirate's oil and gas activities.

Anxious to keep as much control as possible over its gas production (the emirate is the world's largest exporter of liquefied natural gas), the Qatari government imposes very strict conditions on oil operators. The call for tenders for the North Field Expansion Project (NFEP) thus sees fierce competition between the six groups that have been the subject of an initial selection. These are, in addition to Total, the American ExxonMobil, Chevron and Conoco-Phillips, the Anglo-Dutch Royal Dutch Shell, and the Italian ENI.

Postponed several times, the result of the call for tenders should come at the end of January 2021. Stéphane Michel hopes that Total will be one of the three groups finally selected to participate in the expansion of the North Field. For him, this would be the culmination of several years of efforts before leaving the "Exploration & Production" division, in order to take the head of the "Gas, Renewables & Power" division. Created in September 2016, this last entity meets the objective of energy transition that has been accelerated since the beginning of the year under the strong impetus of Patrick Pouyanné.

The American revelation

It is said at Total that the CEO triggered a real awareness, after a stay in the United States, to which he had invited the Comex to a conference on Greentechs and a visit to the Consumer Electronics Show (CES) in Las Vegas. He would then have become convinced that the oil era would inexorably decline and that reducing the carbon intensity of the group's energy mix was becoming a top priority. It has since launched many studies to reinforce this orientation.

However, while environmentalists and climate change experts consider gas production to be as harmful to the climate as oil production, Patrick Pouyanné has made gas one of the company's main development axes, believing that it is a "lower carbon energy" than the petroleum. It is true that the profitability of gas is expressed in double digits when that of wind and solar is still very low (less than 4%).

Gas, this fossil energy of the future

Total is also counting on strong Asian demand: China is phasing out its coal-fired power plants and replacing them with gas-fired equipment. In India, where the government has made a major shift to reduce its coal-related CO2 emissions, the group has also strengthened itself by entering into an agreement in October 2019 with the country's local distributor, Adani, on the supply of LNG.

Gas also has the advantage of being easily extractable, where untapped oil resources are now found in hard-to-reach areas such as deep seas. These deposits, Patrick Pouyanné has said for several years that he does not want to touch them because of the costs to bear. The CEO prefers to focus on low breakeven assets. This ceiling, below which the tanker loses money, is estimated at Total at $25 per barrel.

No more oil by 2030

This strategy reached a new milestone in front of investors at the end of September. Patrick Pouyanné has announced: the major's oil production will stagnate or even decline by 2030, while he still explained the opposite at the beginning of the year. In its 2019 results, production continued to increase: Total released 3.014 million barrels of oil equivalent (boe) per day, compared to 2.566 million in 2017, an increase of 17.5%.

However, these figures have been upset by the Covid-19 crisis and the fall in prices - the barrel of brent fell below $ 20 in April, even if the price has now risen above $ 50. For the group's exploration and production division, net income fell by 76% in the first nine months of 2020, compared to the same period in the previous year, while it recorded only a 4% decline in its "Gas, Renewables & Power".

Greening the mix

In fact, Total's ambitions for electricity production, generated by gas-fired power plants and increasingly via solar and wind, have also accelerated. Until recently, however, the company had very little presence, with 5% of its sales dedicated to this energy in 2019. With a production target of 40% renewable energy by 2050, Total has multiplied acquisitions at gold prices to penetrate a market that has become considerably concentrated in a few years.

In 2016, it took control of the battery manufacturer Saft as well as the Belgian electricity and gas producer Lampiris. In 2018, it was the turn of the third French electrician, Direct Energie, and in 2020 the renewable energy specialists Global Wind Power France.

Another challenge of the "Gas, Renewables & Power" division, of which Stéphane Michel will become the pilot, will be to give its activities a greener color. To do this, Total is counting in particular on the development of CO2 capture and storage projects, the results of which are still in their infancy.

Store and compensate

On the most emblematic, Northern Lights (in Norway), the group, operating alongside Shell and Equinor, announced in May 2020 a project to transport and store up to 1.5 million tons of CO2 per year in the underwater rocks of the North Sea. The operation aims to decarbonize on an industrial scale, the only possible one for these technologies.

For the rest, Total intends to compensate with investment in natural carbon sinks - including forests and ecosystems - or by buying back carbon credits. The group, which is committed to achieving carbon neutrality by 2050 both on its production and the use made of it by its customers (in Europe), has entrusted these projects to the Carbon Neutrality Businesses department (LLA of 02/12/20).