CNBC Business | The Next Nuclear Power

The Next Nuclear Power

French oil giant Total is now embracing nuclear. Simon Hobbs hears why

In May, Total became the first major oil company to invest in the new wave of nuclear power projects by agreeing to buy 25% of GDF-Suez’s share in a plant to be built at Penly in France. CEO Christophe de Margerie is the man behind this dramatic U-turn.

As someone who helped build one of the world’s largest oil companies, it must now seem odd that you’ve ended up pushing nuclear.
We are here to deliver energy to our customers. We know that oil and gas will not be suﬃcient. You can sit on it [oil and gas] true; and yes, oil and gas remains our priority at Total. But it is a shrinking market. Nuclear is an option yes, if it is good for Total.

And good for politics? Having lambasted the presidential candidates in 2007 and been twice arrested by the French authorities for alleged kickbacks in Iraq and Iran, now you are aligning yourself with the big export bet of this country, nuclear. Sarkozy goes over to Abu Dhabi and announces two reactors, and you’re going to work with Areva and GDF Suez. Here we have a completely new political environment in which Total is working. You’ve solved it.
Don’t repeat it [shaking his head]! We do what we think is good for the company and our clients. If it is so sensitive, as nuclear is in view of Iran, that we have to work with the French government, then we’ll work with them.

But you don’t just want fees, you want share of equity, right?
True. We are not go-betweens.

Wouldn’t it make sense to take over or merge with Areva?
We’re not yet sure how it should be done with nuclear power; for now, partnerships with any of several companies is our preferred policy. An acquisition is not right in my view.

So you couldn’t imagine taking over or merging with Areva?
It just doesn’t make any sense. Areva is a supplier of services and of a beautiful technology, but Areva is building one sort of nuclear solution. We want to stay free [open to solutions]. We are investors not constructors.

Total has a reputation for working with authoritarian regimes, what do you say to that?
Ideally it goes like this: A discussion begins with oil and gas. You listen to a government about what they want. If you cannot do it in accordance with your code of conduct, then you say no; if you have a good chance of doing it, you move. The trouble is, it’s not like this at all. Total began in 1924 and has had enduring partnerships across that time. Our activity is heavy industry, big investments over very long periods. This is very diﬃcult to explain to people. We cannot just say ‘cheerio, we don’t like your face, we don’t like your policies’.

How do you deal with your emotions? Take Myanmar. I expect you found the crack down on its population repugnant, and yet you have to justify to people why you won’t leave its offshore gas fields.
I know this country. I have been there. I have met with the opponents of the regime here in France. All I can say is that what we are doing there is definitely better than if we were not there. I am proud of what Total is doing in Myanmar.

Has your skill set changed as such regimes have become more powerful in energy?
If you want to be in our business 30 years from now, you cannot base it on liking or not liking Chávez or Putin, or for that matter liking or not liking Obama or Sarkozy. They change but you do not change. I will always try to avoid the accusation that Total is an ostrich, but you simply have to recognise the long-term nature of the business we’re in.

You were born 58 years ago in 1951, the grandson of Pierre Taittinger the Champagne king.
Yes I got a lot from him, particularly my grandfather’s capacity to do what he needed to do. He went to jail after the [Second World] war; I have always paid attention to how he dealt with this. [Taittinger was president of the municipal council of Vichy Paris between May 1943, as the Germans occupied the city, and the Liberation of Paris in August 1944, on the brink of which he switched to the side of the resistance.]

Back in the early days you trained within the company on the financial side. It seems you made a watershed decision fairly quickly in your thirties because in 1989 we suddenly find you in the Middle East on the operational side at the age of 38.
We were slipping in the ME — and known to our dear English friends as CFP, ‘Cannot Find Petroleum’ — so we developed a more aggressive policy.

You were able to increase Total’s reserves for the first time in years, and made long-term equity partners out of several national governments — achieving an 8% share of Abu Dhabi’s gas liquefaction project, and 10% of Qatar Gas. But how did you corral these governments into longer-term associations?
Basically, by listening a lot and figuring a way of making it work. Gas was a relatively new opportunity in the Middle East [in the 1990s]. Oil had always been about power and it was a diﬃcult business to break into. The trouble with gas was that it was very complex, very expensive and very long-term. But that automatically meant you achieved a long-term partnership if you could make it work. I have always been a strong believer in partnerships.

People say that you have an exceptional memory for names, an interest in people, and a good sense of humour; have you developed a larger than life character as a deliberate business tool?
I was a shy person but you cannot be a CEO and shy, so I manage my shyness. When you want to promote ideas and take your vision, you need empathy. I use it not as a tool, nor as an actor acting, but as a strength; it’s what people expect of you.

Of your 35 years at Total what are you most proud?
Total itself! In 1974 I was told that Total couldn’t find any oil. Today it’s a respected company and number five in the world, not by itself important, but it proves a strategy based on technology, understanding people, capacity to work together; and keeping skills above all, because without skills you are nothing.

CURRICULUM VITAE
Christophe de Margerie

Born: August 1951
1974: Joins Total after graduating from the Ecole Supérieure de Commerce in Paris.
1974-95: Serves in several positions in the Group’s finance department and exploration and production division.
1995: President of Total Middle East
1999-2002: Joins the executive committee as president of the exploration and production division. Named senior executive vice-president of the unit when the company becomes TotalFinaElf. Becomes president of division when Group is renamed TOTAL.
2006: Member of the board of directors. Placed under a criminal investigation over suspected bribes to acquire supplies in the UN Oil-for-Food programme in 1999-2003.
2007: Chief executive officer of TOTAL. Detained by police over suspicions that the company paid bribes for its operations in an Iranian offshore gas field.