Plateau theory drives Total to oil sands

The French energy giant thinks conventional oil production will top out in a decade at 95 million barrels. The long-term plan is to diversify into nukes and other sources. But for now, its eye is squarely on oil sands

PARIS — For Total SA, it’s all about 95. The French oil giant builds its business with 95 in mind, as if the figure were tattooed on its executives’ foreheads. The figure refers to Total’s belief, not shared by the majority of Big Oil players, that global production will top out at 95 million barrels a day after 2020. That’s only about 10 million more than current production.

Many oil gurus refer to the top-output theory as “peak” oil. Total prefers to call it “plateau” oil, a subtle variation on the theme that suggests production, having reached 95 million barrels a day, will remain at that level for some time in spite of every effort to squeeze more from Earth’s desiccated bowels (the peakists think production will fall relentlessly after reaching a peak, which may come well before 95 million).

Whether peak or plateau, the upshot is the same: Total thinks conventional oil production is approaching its practical limit. That’s why Canada and Venezuela figure so large in the company’s future. They hold the world’s biggest reserves of heavy crude (known as “oil sands” in Canada and “extra heavy oil” in Venezuela). As the easy-to-pump conventional reserves dry up, the thick goo from the frozen north and tropical south will have to fill the gap to forestall a precipitous drop in world production.

At least that’s Total’s theory.

“We believe that, because of plateau oil, the oil sands are necessary to supply demand growth,” said Yves-Louis Darricarr