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Patrick Pouyanné, Total Group: "Brexit is absolutely not a good thing for anyone"


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Patrick Pouyanné, Total Group: "Brexit is absolutely not a good thing for anyone"

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Interview with President and CEO of Total, Patrick Pouyanné.

The Total group is a French oil and gas conglomerate with a presence in 130 countries worldwide. It is the fifth largest European company and twenty-fourth largest globally. Total is one of the so-called “supermajors”, a member of the six big oil companies in the industry alongside ExxonMobil, Shell, Chevron, BP and ConocoPhillips.

Patrick Pouyanné has held the post of CEO since December 2015.

David Jacquot, EURONEWS;
‘‘We’d like to begin, if you will, by discussing the situation in the middle East. As you know, Saudi Arabia and the Arab Emirates have broken off their diplomatic relations with Qatar. This is a region of the world in which you do business and in which you are active. If this diplomatic crisis deteriorated, would it begin to impact your organisation?’‘

Patrick Pouyanné, Total President and CEO
‘‘Total was founded in the Middle East in 1924 and it’s an area we know well. We are presently very well established in Qatar, Abu Dhabi and Saudi Arabia and soon even Iran, but, you know we are first and foremost a commercial enterprise first and so we behave like Qataris in Qatar, Emiratis in the Emirates and Iranians in Iran, which means that we work in each country in the interests of the countries’‘.

‘‘What I see and observe with interest is that big Western countries are now trying to appease this tension which is frankly not in the interest of many people because the real enemy today in this region is Daesh…and terrorism’‘.

DJ;
‘‘From a business point of view, we know that Total is actively conducting business in several countries around the world with real geopolitical tensions. Do you think the real risks faced by Total today are more geopolitical than economic? Even now Total remains profitable with oil below 50 dollars’‘.

PP;
‘‘Total operates wherever there is oil and gas. We don’t dictate where we find it. Again, we’re principally a commercial enterprise, we don’t have a diplomatic force’‘.

‘‘Gas is produced in Qatar, which is connected to Abu Dhabi by a pipe. Everyone might have taken a moment to consider that during a crisis like this, the pipe could have stopped, on both sides, either from the producer or the consumer end’‘.

DJ;
‘‘And this isn’t the case’‘.

PP;
‘‘It’s not the case, no’‘.

DJ;
‘‘Mr. Pouyanné, what do you say to cynics who claim that geopolitical tensions, wherever they are in the world, are ultimately the business of oil companies like Total, since tensions increase prices a priori and so boost results? How do you respond to them?’‘

PP;
‘‘Our business, well, just a moment…
We’re involved in the commodities market. Price volatility is firstly not driven by geopolitics, even if everyone applies a geopolitical interpretation to everything that is happening, it is mainly – and as markets have unfortunately shown over the last two years – driven by supply and demand. When there is too much supply and not enough demand, prices decrease and vice versa. So these are the fundamentals of oil prices’‘.

‘‘Beyond this, once again, oil and gas are concentrated in just eight to ten countries that have 80 percent of the reserves and these countries include those in the Gulf, Russia, Iran, Saudi Arabia and the United States. You do encounter certain geopolitical powers and it’s this that makes it a combination of geopolitics and oil and gas’‘.

DJ;
‘‘After the lifting of international sanctions, Total was the first of the big Western oil groups to sign a memorandum of understanding to operate the largest gas field in the world, South Pars in Iran…so the question arises of when the final signing of the contract will be? When will we see Total’s first dig in the ground in Iran?’‘

PP;
‘‘We signed a memorandum of understanding in November last year and were the first to do so, the first to be bold. We’re actually operating on a giant gas field which is shared between Qatar and Iran so there too, it acts as a bridge between the two countries. It will be an important development for the domestic Iranian market and the development of the Iranian economy, and we will put pen to paper in the next few weeks’‘.

DJ;
‘‘A brief word on Donald Trump’s foreign policy in this region… do you understand the logic and coherence of the American President who does business with Saudi Arabia and Qatar while allowing diplomatic tensions to mount with Qatar and at the same time maintaining a military base in Qatar?’‘

PP;
‘‘You have to ask President Trump what his policy and strategy are…I think that President Trump has stumbled across a number of diplomatic issues… I’m not sure we can talk yet about strategy and policy…on the subject of American diplomatic policy, it’s going to take a little time, I think, to be put in place’‘.

‘‘If you take note, you’ll see that the main request made to Qatar these days is to stop their support for Hamas, which is regularly, I would say in the background of the US administration’s agenda and also in this crisis. So I think that maybe the most important agenda item for President Trump in the Middle East is the Israeli-Palestinian issue, that he might like to move forward on’‘.

DJ;
‘‘On the European agenda, we have the Brexit negotiations, which open this week… Theresa May has recently been snubbed by losing her absolute majority in the general elections…doesn’t Europe now have everything to gain, following a weakening of the British Prime Minister and can they not finally forge a better deal in these negotiations?’‘

PP;
‘‘I think that what has happened regarding Brexit is absolutely not a good thing for anyone. Either for Great Britain or Europe. I think that now the real subject for Europe, which is thrown into relief by Brexit, is the revival of the European project. The British probably separated from this project because it was not attractive enough. But the people in our countries also partially dispute the European project’‘.

‘‘We have a euro zone with a single currency, we should strengthen this area, and equally clarify – and this is important with respect to European citizens – what the duties of the Commission and the States really are’‘.

‘‘We have a continent with 500 million people, which is a big market, the free market is not complete in many areas, it has not been completed in the field of energy which promotes as much investment in solar energy in the north of the Germany as in the south of Spain. It isn’t complete in the digital domain either. Why are all major players in the digital arena Americans, with no European players? It’s not a question of scientific expertise, it’s that the U.S. market is a 350 or 400 million people market that is completely unified. When you develop and you invest you have immediate access to this market. In Europe, markets are still fragmented and that’s the real challenge facing Europe’‘.

DJ;
‘‘You travel very frequently, do you think that the election of President Macron has changed the view of decision-makers and foreign investors in France, and France as a potential location?’‘

PP;
‘‘Yes, this is very much the case. This election was a leap into modernity. Our country is right at the cutting edge due to the age of our new president and the speech and rhetoric he uses, which is also open actually. The political divide that Emmanuel Macron proposes is, I would say, different to the old liberalism/socialism split…what he is asking instead is: do we want a policy of openness, openness to new technologies, opening our doors to Europe, openness to entrepreneurship as opposed to the phenomenon of looking inward? Don’t discard the fact that in this election half the people voted against the political system… I think that from this point of view, clearly, our country, our location, in terms of competition, becomes totally attractive and this was really an important event’‘.

DJ;
‘‘That lends the image of a France that wants to modernise…Is it too early to tell? Wouldn’t you perhaps prefer to be more cautious?’‘

PP;
‘‘You know, what struck me in this election, and again during several political moments…was this debate on globalisation, this refusal somewhere along the line…almost 50% of the people voted against. Against the market economy. For a group like ours, which is a global group that has succeeded in taking advantage of this market economy, we are part of the winners of globalisation, I think we need to find ways and bring answers to the people who are against it’‘.

DJ;
‘‘Precisely what is the most urgent reform that must be implemented by President Macron to make France more attractive as a location?’‘

PP;
‘‘The country is afflicted by youth unemployment. Work must be found for the young. Everything must be done, absolutely, to give them work. There are several mechanisms and one of these without a doubt is the right to work, which we know is too complicated and which stifles entrepreneurship. Of course you have to have good systems of protection but people must be more incentivised to work than to stay at home…it’s not a criticism, I’m not going to say that you mustn’t take that option but I think it’s very important that the value of work is recognised in this country and takes primary value’‘.

DJ;
‘‘Patrick Pouyanné, President and CEO of Total, thank you very much for coming’‘.

PP;
‘‘Thank you’‘.

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