Oil giants plan to go nuclear in Middle East
Carola Hoyos | Saturday, 19 July 2008
Total and Eni, two of Europe's biggest oil and gas companies, each plan to bring nuclear power to countries in the Middle East in what would be a controversial shift in an industry that is finding itself squeezed out of many of the world's biggest oil and gas fields.
Total intends to facilitate the building of nuclear power plants in return for better terms and access in the oil and gas industry in countries with which it already has long-running relationships, Christophe de Margerie, the company's chief executive, said in an interview with the Financial Times.
He said this strategy was behind plans unveiled in January for Total, French nuclear group Areva and the utility Suez to build two pressurised water reactors in the United Arab Emirates.
Mr de Margerie said he expected to sign a deal with another Middle Eastern country soon.
Nuclear companies such as Areva have failed to gain a significant foothold in the Middle East because executives assumed that the gas-rich region would not need their services.
But other than Qatar, many countries in the region have failed to tap their gas resources and now face looming shortages amid booming economies and growing gas-heavy industries, such as petrochemicals.
"I told the UAE: Why don't you think about nuclear?" Mr de Margerie said.
In the longer term, Total could also help India build nuclear reactors to produce power, he added.
But he said Total would not settle for a broker's fee for such an arrangement. "Why should we get rewarded just as electricity contractors?"
In a separate interview, Paolo Scaroni, chief executive of Eni, said he was actively looking to follow Total's lead.
He said Egypt and Algeria were possible candidates for the Italian company.
Eni would suggest nuclear power capacity as an alternative to gas to countries that either needed gas for their growing internal market or wanted to sell it abroad.
"It is logical for us [to say to them]: We make nuclear and you keep the gas," he said.
Oil companies already had the experience of running and financing big, complex projects and the contacts in the countries that could benefit from nuclear power, he said.
Mr Scaroni admitted that, in spite of Mr Berlusconi, Italy's prime minister, having embraced nuclear power, it would be a more difficult challenge for Eni to go nuclear than for Total.
"For us it is difficult, but not impossible," he said.
The strategy has its critics, not least those who oppose it because of the dangers of bringing nuclear power to such a volatile region.
But industry sources said Total had the full support of the French government.
The oil company's new-found interest fits well with France's ambitions to advance its nuclear technology internationally so that it forms the basis of the nuclear renaissance in countries such as the UK, China and Russia.
Mr de Margerie ruled out any interest his company might have in taking over Areva, the French nuclear giant whose office tower faces that of Total on the outskirts of Paris.
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Total intends to facilitate the building of nuclear power plants in return for better terms and access in the oil and gas industry in countries with which it already has long-running relationships, Christophe de Margerie, the company's chief executive, said in an interview with the Financial Times.
He said this strategy was behind plans unveiled in January for Total, French nuclear group Areva and the utility Suez to build two pressurised water reactors in the United Arab Emirates.
Mr de Margerie said he expected to sign a deal with another Middle Eastern country soon.
Nuclear companies such as Areva have failed to gain a significant foothold in the Middle East because executives assumed that the gas-rich region would not need their services.
But other than Qatar, many countries in the region have failed to tap their gas resources and now face looming shortages amid booming economies and growing gas-heavy industries, such as petrochemicals.
"I told the UAE: Why don't you think about nuclear?" Mr de Margerie said.
In the longer term, Total could also help India build nuclear reactors to produce power, he added.
But he said Total would not settle for a broker's fee for such an arrangement. "Why should we get rewarded just as electricity contractors?"
In a separate interview, Paolo Scaroni, chief executive of Eni, said he was actively looking to follow Total's lead.
He said Egypt and Algeria were possible candidates for the Italian company.
Eni would suggest nuclear power capacity as an alternative to gas to countries that either needed gas for their growing internal market or wanted to sell it abroad.
"It is logical for us [to say to them]: We make nuclear and you keep the gas," he said.
Oil companies already had the experience of running and financing big, complex projects and the contacts in the countries that could benefit from nuclear power, he said.
Mr Scaroni admitted that, in spite of Mr Berlusconi, Italy's prime minister, having embraced nuclear power, it would be a more difficult challenge for Eni to go nuclear than for Total.
"For us it is difficult, but not impossible," he said.
The strategy has its critics, not least those who oppose it because of the dangers of bringing nuclear power to such a volatile region.
But industry sources said Total had the full support of the French government.
The oil company's new-found interest fits well with France's ambitions to advance its nuclear technology internationally so that it forms the basis of the nuclear renaissance in countries such as the UK, China and Russia.
Mr de Margerie ruled out any interest his company might have in taking over Areva, the French nuclear giant whose office tower faces that of Total on the outskirts of Paris.
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