Nicolas Bac, Analyst at Total, tells us how the company plans to remain a key competitor in the energy industry and prepares to embrace the energy transition by working closely with its clients, governments and partners to minimise environmental impact; and how ESCP Business School’s MSc in Energy Management (MEM) equipped him with the right tools to start an exciting career in the industry.
An S&P Global Platts report looked at the impact of COVID-19 on the energy industry. The assessment showed that after a challenging year, the recovery is already under way, with energy demand and prices in the oil, gas and electricity sectors already close to, or even above, pre-pandemic levels.
The COVID-19 vaccine is the light at the end of the tunnel in this global crisis. How will widespread vaccine deployment impact electricity and gas demand and the wealth of societies?
Vaccine deployment would allow economies to work normally in Europe (restaurants, coffee shops, cinemas, etc.). Nevertheless, electricity and gas consumption are driven by industrial needs, residential demand, and winter peak loads (through electrical or natural gas heating). We are not far from pre-COVID levels in terms of consumption, according to RTE: in March 2020, consumption decreased by more than 20% compared to 2019. In reference to society wealth, I would say it helps companies have a better view of their future, thus restoring employment opportunities and saving small and medium businesses from bankruptcy.
In terms of geopolitics, what would be the reliance on Middle East and OPEC Countries?
The oil and gas industry cannot dictate oil price; however, it can reduce its operating cost to produce oil. This explains why Total’s main objective has been to lower its oil breakeven point to $25 per barrel of oil (bbl). OPEC and Russia reduced their oil output in order to sustain the market price during the COVID-19 crisis and the fall in demand. As I answer this question, the price for Brent Crude Oil has reached $65 per bbl vs. $20 per bbl in May 2020. Discipline will be key to keeping oil prices at a $50per bbl level and thus, oil & gas company profitability.
What will be the role of natural gas, coal and power in the energy transition?
Fossil fuels represent roughly 70% of energy primary usages. With regard to electricity generation, renewables are here and developing quickly within Europe. In my opinion, 100% renewable energy is unrealistic as we need dispatchable power to face times when there is no wind or sun. Furthermore, batteries are too expensive and not yet economical without subsidies. The role of thermal electricity generation will remain important, but with room to improve CO2 emissions by closing coal power stations and using natural gas (50%-70% less emission compared to coal) or biogases to produce electricity.
Two of the most crucial challenges we face are meeting the energy demand of a growing population and contributing to limiting climate change. How has Total diversified its operations to become a Responsible Energy Major?
Total comes from a more traditional oil and gas industry where profitability and project IRR are relatively high. It is a European Energy Major and it is in line with the Paris Agreement objectives. The company understands that oil usage needs to decrease if we want to keep the planet safe. Since 2016, Total has diversified to the low-carbon business through M&A (renewables, batteries, power and gas supply, and gas-fired generation), whereas American majors prefer not to diversify from oil. It is important to remember the oil business finances renewable expansion.
With increasing environmental concerns around the globe, the energy and utility sector has shown to be one of the most innovative and adaptable. What is the expected growth of renewables at Total?
Total’s objective is to be part of the top five worldwide renewable players. It seeks to reach a renewable generation capacity of 35 GW by 2025 and 100 GW by 2030 by investing a minimum of $2bn a year in project developments.
Tell us more about your current responsibilities and the workplace culture at Total.
I am currently working within the Gas & Power Europe affiliate of the GRP branch (Gas, Renewables & Power) at Total. It is a vastly different business compared to the rest of Total as it deals with the gas and power supply and CCGT (Combined Cycle Gas Turbines) electricity generation in Western Europe. I am part of a business development team that aims to develop existing businesses, either internally through new product offers (PPA, biogas, DSR, self-consumption) or externally through M&A, which is the part I focus on. I participated in deals such as the acquisition of EDP España in 2020 (2 CCGTs and 2.5 million clients) and Orsted B2B UK in 2020.
The culture at Total is great. You have the opportunity to learn a lot every day by working on concrete projects in affiliate companies, while being part of something bigger that wants to adapt with the energy transition.
What do you like about your current job? What is your view on Corporate M&A?
I enjoy working on several deals at the same time which consider different companies and businesses (power and gas supply, thermal assets etc.). I also like building financial models to represent business assumptions and expected business valuation. I can interact with experts from all fields, such as Engineering, IT, Marketing, Finance, Fiscal, and Sales and Digital, while also gaining visibility within the Total Group. I find it much more interesting to do M&A in a corporate company, as you work on projects for months and acquire a deeper knowledge of various businesses while performing classic M&A tasks.
Tell us why having a holistic, 360-degree view of the energy industry has been key to your success.
When you work at Total, you do not only participate with electricity and gas, oil, or refining businesses: you are part of a corporation that is multi-energy. Understanding oil and gas is key to understanding how energy demand functions.
What does the future hold for you at the company?
I have been working within the M&A and Business Development team of Power & Gas Europe since September 2019. After almost two years, I have the opportunity to move to Total EP Congo, to work as an economist and produce shareholder presentations for both Qatar Petroleum and Total. I believe that participating in diverse projects that have nothing to do with each other is an opportunity to never grow bored in my professional life, while also ensuring continuous self-questioning to take me out of my comfort zone. Depending on future opportunities, I would enjoy building a career within Total to discover more of the multi-energy business and participate in the energy transition.
How did the content of the MSc in Energy Management (MEM) programme help you to secure your next role?
To summarise, at ESCP Business School we had many career fairs and presentations from companies in energy and finance, such as Perenco, Tiko, Sonnen, UBS, and many others. In addition, we studied several sectors of the energy industry, which gave me a foundation to build a robust understanding of the electricity, gas and oil professions.
Collaborating with classmates from all over the globe also enhanced my capacity to adapt to different ways of working.
In my current position, strong knowledge of the energy business; the company and its operations; plus the capacity to adapt and to look at the bigger picture are key to executing projects and understanding both management and business expectations.
Tell us how studying on the MEM in London and Paris helped your career in terms of job opportunities.
London was one of the greatest experiences of my life: I loved living and studying there and would love to relive that experience. The programme was holistic and provided a clear view of the energy industry (oil & gas, power markets, strategy, and project finance, to mention a few).
Low-Carbon Energy plays a key role in Western Europe, particularly in France, where most of the old nuclear power stations are to be renewed or diversified. After my term in Paris, it was easy to reach a few key players in the industry, such as Total, EDF and ENGIE, and find a suitable position to kickoff my career in the industry.
It was relatively easy for me to get a job thanks to the MEM programme. It gave me a clear advantage among candidates as my profile was complementary in both energy and finance areas: quite useful for M&A in the Energy Industry, in my opinion.
Feeling inspired by Nicolas’s career? To follow in his footsteps, check out ESCP Business School’s MSc in Energy Management programme.