Our performance levels and achievements are inextricably linked to the company’s evolving business model.
We are prepared to face difficult conditions, we have chosen to invest in technologies and we foster our people and know-how.
The results we have achieved in recent years are structural, in the sense that they derive from a process of transformation and restructuring of our business model. This arises from the need to deal with a complex energy scenario and ensure growth, operational excellence and value creation in the long term. We have overhauled the structure of our company so we can cope with even the most unfavourable market conditions. Our policy has been to invest in technology and boost capacity to develop our assets by making the best possible use of the skills and resources we possess. Our resilience has enabled us to bring some of our fields to full production capacity in record time, while exploiting synergies has been fundamental to our success: performing analyses in preparation for new developments right from the start of our exploratory campaigns and using the technological tools essential for managing the uncertainty inherent in the early stages.
Investing in research and development creates value for the company, increases productivity and improves operational and energy efficiency. In 2017, our overall spending on R&D in the Exploration & Production sector was €83 million. The investment planned for our green businesses in the period 2018-21 is more than €1.8 billion, including expenditure on R&D in our drive towards decarbonisation.
The Upstream sector is one of the pillars of our new strategy. Our chosen model is well adapted to the complexity of the situation, enabling us to reduce time to market, costs and risks, while achieving a lower break-even point and growth in production and cash flow. Our series of records in exploration continues: we have added 1 billion boe (barrels of oil equivalent) to our portfolio, 800 million of which derive from exploration, at a competitive cost of around $1/barrel. With production touching 1.82 boe/day – our highest ever level – we have recorded growth of 5.3 per cent, thanks to a contribution of 243 boe/day from start-ups and steady output from fields that have recently come onstream. This is net of the price effects of production-sharing agreements (PSAs) and OPEC cuts. Growth is up 14 per cent on 2014, achieved despite 40 per cent of the income generated being reinvested. Moreover, further exploration in promising new areas is planned for the near future.
We have continued to invest in safety in the workplace with excellent results: in 2017, our total recordable injury rate fell to 0.33, which is 7 per cent down on 2016, demonstrating our seriousness in seeking to achieve a “zero accident” figure.
Where protection of the environment is concerned, we can claim progress across the board. Our index of GHG emissions per barrel is down by roughly 3 per cent on 2016 (19 per cent on 2014), in line with our long-term objective of a 43 per cent reduction by 2025. Over the past 10 years, we have reduced our gas flaring in the Exploration & Production sector by 75 per cent and are aiming to eliminate it completely by 2025. Compared with 2016, our consumption of fresh water is down by 3.5 per cent and our GHG emissions per kilowatt-hour from electricity generation have shown a reduction of 0.8 per cent on the previous year, thanks to our ongoing energy-saving initiatives. In the Refining & Marketing sector, meanwhile, all our industrial projects are geared towards achieving greater energy efficiency and strengthening our “green platform”. These initiatives, together with the prevalence of gas in our portfolio and steady reductions in the break-even point of our upstream projects, will consolidate the compatibility of our portfolio with the most conservative (conservation-oriented) energy scenarios.
All our Mid-Downstream sectors are now able to finance their own investments and we are achieving good results in terms of innovation, efficiency savings, care for the environment and sustainability. Thanks to progress in restructuring this sector of the business, in 2017 we recorded a 10-year high in operating profits and are continuing to improve our cash flow (€7.9 billion over the past three years, as against losses of €3.7 billion in the three years from 2012 to 2014).
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