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TOTAL and Partners Launch Phase 3 of Mero Field in Brazil

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TOTAL SE , along with its partners in the Libra Consortium, has taken a decision to launch the third phase of the Mero project (Libra block), located deep offshore, 111.8 miles (180 kilometers) off the coast of Rio de Janeiro.

The Libra Consortium is operated by Petrobras (PBR - Free Report) that holds a 40% interest. Other partners include TOTAL and Royal Dutch Shell with a 20% stake each, and CNOOC Limited (CEO - Free Report) and CNPC having a 10% interest each.

This Phase 3 floating production storage and offloading (FPSO) vessel will have a liquid treatment capacity of 180,000 barrels per day and is expected to start operations by 2024. Phase 1 is expected to begin operation in 2021 and Phase 2 is likely to be operative in 2023. Both Phase 1 and Phase 2 FPSO will have a liquid processing capacity of 180,000 barrels per day.

Development in Sync With TOTAL’s Strategy

The development of the huge Mero project, which is estimated to have 3-4 billion barrels of oil resources, is in sync with TOTAL's growth strategy. Production of oil at competitive cost from the field will help the company withstand oil price volatility.

In 2019, TOTAL’s total production from Brazil averaged 16,000 barrels of oil per day. With different FPSOs of the Mero project coming online in the next few years, it expects total production from Brazil to touch 150,000 barrels per day in 2025.

When all major producers are concerned about the ongoing volatility in commodity prices and decline in demand due to the COVID-19 outbreak, this huge project raises hope about a gradual recovery in demand in a post-pandemic world.

Zacks Rank

TOTAL currently has a Zacks Rank #3 (Hold).
 
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Price Performance

In the past three months, TOTAL’s shares have outperformed the industry.

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