TotalEnergies Pauses Middle East Production Until Hormuz Transit Stabilizes

TotalEnergies will not resume Middle East production until shipping transit through the Strait of Hormuz has stabilised, its CEO said on Wednesday.

About 15% of Total's upstream oil and gas production is offline because it is unable to ship cargoes through the Strait of Hormuz as the Iran war continues, though resulting higher oil prices and increased output in other regions have offset the company's Middle East losses.

The French oil major has nine tankers stuck in the strait, after one managed to make it out over the weekend of April 17. A second tanker chartered by the company tried to exit, only to be forced back into the Gulf when an Indian vessel in front of it was attacked, causing Total's tanker to lose its insurance cover.

"We will wait for a real stabilisation in the Strait of Hormuz before restarting operations. Before the war you had 50 oil tankers moving out of the Gulf every day," CEO Patrick Pouyanne told analysts after the company reported bumper first-quarter profit.

"Restarting the wells is not complicated, but you need to first let the full tankers out and offload somewhere, then bring in empty tankers to reload. Trips to Asia are 25 days, longer to Europe, and for LNG the global fleet is smaller ... This is why we say it will take 2-3 months."

MIDDLE EAST PROJECTS STILL PROGRESSING

In Saudi Arabia, the SATORP refinery co-owned by Total is back on and will ramp up to more than 300,000 barrels per day next month, the CEO said.

Total's $5 billion Amiral petrochemical complex project in the country is 70% complete and expected to begin operations by the end of 2027 or early 2028.

In Qatar, Pouyanne said he expects the North Field East gas expansion to be delayed by a maximum of two months, with first offloading by the end of 2026 or early 2027.

In Iraq, a solar plant has started up but the first phase of the Ratawi oilfield expansion will be later this year.

(Reuters)