Optimism has returned to the global oil market with the recovery in oil prices, Patrick Pouyanne, Total chairman and CEO, said Wednesday.
"I see a lot of optimism. Market is more optimistic than last year. The oil market is bullish thanks to the OPEC deal," he said, speaking at the IHS CERAWeek 2017 energy conference in Houston.
Pouyanne said he expects the global oil markets will continue to be volatile, awaiting "if the U.S. shale will return to the market in 2017."
As OPEC and Russia cut their production at the beginning of the year, oil prices recovered from below $30 per barrel in January to around $55 a barrel in recent months.
"With $50-$55 a barrel, we will have more cash flows. But the most important thing is to have lower break-even prices. All projects with lower break-evens have more profitability," Pouyanne said.
The executive noted that French energy giant Total was quiet in 2015 and 2016, but will begin new projects this year.
"We will sanction 10 projects in the next 18 months," he said, noting that some of them will be in Brazil, the U.S. and Nigeria.
He emphasized that adapting to the low oil price environment has been crucial, as Total developed new business model to lower costs.
"We managed to benefit from the low cost projects," he said.
"Capacity to adapt has been important. Cost in the industry decreased by around 30-50 percent ... We will continue to maintain our discipline and our structural changes to the way we operate," he concluded.
By Ovunc Kutlu in Houston, Texas