The AIM-quoted firm will be able to participate, with between 15% and 49% interest, in solar and wind power projects in Africa.
On the face of it, a partnership deal with Total is very much the type of deal that the small-cap firm has coveted for years, but, the fact it arrives in the form of a wind and solar power venture is perhaps a sign of the times.
Chariot and the French energy major – now with a tweaked name, ‘TotalEnergies’ – are finding their way in a new era of reimaged energy companies.
Phrased slightly differently, they are oil companies at different ends of the value scale that are both ‘in transition’, prioritising more sustainable sources of growth and revenue.
Digging into the detail, Chariot has signed an agreement with Total Eren (a power generation unit that has actually been around since 2012) to co-develop renewable power solutions for mining projects in Africa.
For the uninitiated, it is not uncommon for mining installations to rely on diesel and other petroleum-based generators to power their operations. Larger projects, meanwhile, can become orphaned if they don’t have a reliable electricity supply, which can demand major coincident investment in infrastructure.
So, delivering renewable and on-site power generation appears to be a ‘no-brainer’ of a business idea.
That Chariot’s (acting) chief executive Adonis Pouroulis has brought to the company a depth of contacts in the African mining industry largely completes what is something of a paint-by-numbers investment proposition.
Pouroulis, in Wednesday’s statement, said: “This partnership is looking to provide clean, sustainable, and more competitive energy to operational mines in Africa.
“A market of significant scale, that is largely untapped, where Chariot’s management has a deep understanding and high-level commercial networks and we look forward to announcing our significantly progressed projects when appropriate.”
Stockbroker SP Angel described the Total tie-up as “an interesting update” as Chariot continues to diversify its core business away from pure exploration into renewables.
Under the terms of the partnership agreement, Chariot will be able to take interests between 15 and 49% in future projects alongside Total.
The deal runs for an initial three years with an option to extend for a further two.
Elsewhere, back in Chariot’s hydrocarbons business, Chariot last month announced an early-stage agreement with what it described as “a leading international energy group” with the memorandum of understanding teeing up a potential collaboration to develop and deliver the Anchois gas project offshore Morocco.
That deal comes ahead of a planned appraisal operation at Anchois, slated for December.
In October, Chariot said it would advance further talks with the unnamed third-party with a view to signing final agreements that would maintain a timeframe targeting a final investment decision in 2022 to enable ‘first gas’ by 2024.
Read More: Chariot Ltd’s tie-up with Total kicks its renewable energy business up a gear