Since arriving at the head of Total, Patrick Pouyanné has prioritized diversifying the activities of the petrol giant toward clean energy, but without neglecting the black gold that made the company’s fortune. This balanced strategy has borne fruit.
Year took up current function: 2015
Turnover in 2018: $200bn
Growth in 2018: 33%
October 22nd 2014. Christophe de Margerie, the talismanic CEO of Total, loses his life in an air crash in Moscow. After a wait of several months, in May 2015 the company’s board of directors name a successor: Patrick Pouyanné. The 56 year old had been with the group since 1997 and chaired the refining and chemicals branch of Total at the time of his appointment as CEO. The Normandy native, who wears the twin caps of technician and engineer of the Corps des Mines, has served as telecoms minister in the cabinets of French prime ministers Edouard Balladur and François Fillon. Useful preparation for a leading a company sometimes referred to as the ‘second Quai d’Orsay’, shorthand for the French Ministry of Foreign Affairs.
The current king of the French petrochemicals sector has a deeply held conviction, that oil alone cannot be a source of long-term growth. This assessment is in line with ecological imperatives, but also economic ones since Total’s bottom line is at the mercy of variations in the price of crude. Patrick Pouyanné has, therefore, decided to put a strong emphasis on clean energy by creating, from the moment he became CEO, a new branch of activity at the Paris-headquartered company, called Gas, Renewables and Power. The objective? To see Total become one of the top five suppliers of non-polluting energy in the world by 2035.
In order to achieve this, Pouyanné – who leads a group of more than 100,000 staff – has decided to allocate whatever funds are necessary. Between 2015 and 2019, Total plowed $8 billion into R&D, with 25% of that sum dedicated to renewable energy. This has allowed the company to establish SolarStar, a 579 mega-watt photovoltaic power station in the Mojave Desert. In 2017 Total Spring, offering customers natural gas and other clean sources of energy, was launched.
To accelerate Total’s diversification away from being a majority petroleum company, Pouyanné also embarked on an ambitious acquisition strategy. In 2016, he authorized the $1 billion purchase of French advanced battery manufacturer Saft. The following year it was the turn of energy optimization specialists GreenFlex to come under the Total banner. Also that year, the CEO decided to acquire Belgian gas and electricity company Lampiris, which has over a million customers in Belgium and France. Then, in 2018, Total purchased a 74% stake in Direct Energie, which became Total Direct Energie.
Prospecting continues apace
If all of the above gives the impression that Pouyanné has given up on petrol, nothing could be further from the truth. Across Africa, rigs have been modernized, and new ventures launched in Angola, Benin and Mozambique. Prospecting for new oil fields continues apace, and a record number of oil related patents have been registered under the Legion of Honour recipient. Total is also playing the geopolitical game and was the first Western oil company to return to Iran following the lifting of sanctions in in 2017.
And M&A activity has continued to flow in recent times, with the purchase of the petrol arm of Denmark’s Maersk in 2018 for $7.4 billion, and the acquisition of the African oil activities of American firm Anadarko for $8.8 billion. But Total is not just in the buying business; buy the end of 2019 the company plans to have divested itself of $5 billion worth of exploration and production assets – a task that will be difficult considering many of Total’s competitors, namely Exxon, BP and Chevron Texaco, are trying to do the same.
Nevertheless, with such a proactive CEO in place, the future would appear to be rosy for Total, and the present equally so: between 2015 and 2018, turnover has grown from $159 to $202 billion, an increase of 21% which has strengthened Total’s position as the biggest company in France.