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Paris - Areva chief executive Luc Oursel, his job at risk from an imminent government overhaul, still believes the French nuclear group can win new contracts with its out-of-favour mega-reactor model in India and China.
The state-owned firm has not sold a reactor since 2007 and is building only 4 of about 70 now being constructed worldwide. After the failure of other strategies, like its purchase of an African uranium mine, it has had to sell assets and slash investment to cut net debt of €4.7bn - which narrowly escaped a downgrade to junk status last week.
Frustrated by Areva's mistakes, the French government plans to impose a new governance structure by the end of the year. Critics say many of the company's problems stem from the size, cost and complexity of its huge 1650 megawatt EPR reactor, ill suited to the small grids and budgets of developing countries that are the main source of market growth.
In an interview as part of the Reuters Global Climate Change Summit, Oursel stuck to his company's current strategy, saying big reactors still made more sense because they were safer, provided more capacity on the same surface area, and offered economies of scale.
"Once you have a site, you have an interest in installing as much capacity on it as possible," Oursel said.
The EPR - the sole model Areva is building at the moment - is so huge because of its multiple safety features, such as a 1.8 metre thick plane-crash resistant second hull, aimed at containing the consequences of a major accident like Fukushima or a 9/11-style attack.
The company is currently working on a proposal to build six EPRs in Jaitapur, India, which has been delayed by local protest and the run-up to elections in May. Areva is negotiating with the state-owned Nuclear Power Corporation of India Limited (NPCIL). No other competitors are in the running for this site.
"We waited for the election, now discussion can restart," Oursel said.
Areva also hopes to sell more EPRs in China, where two EPRs are under construction in southern Taishan. It is set to sell two more to Britain as part of a £16bn ($25.61bn) deal to build two reactors in Hinkley Point, Britain..
Two further EPRs under construction in France and Finland have been plagued by multi-year delays and cost overruns as the company underestimated the complexity of building a completely new reactor model.
Against that background, Areva has been working on a smaller reactor in an attempt to broaden its offer. It is now waiting for approval from the Turkish parliament in order to go ahead with a $22bn build of 4 1100MW 'Atmea1' reactors that it developed with Japan's Mitsubishi Heavy Industries.
If that project proves successful it hopes to sell more of this kind of reactor to Vietnam.
Areva also mines uranium, produces and recycles nuclear fuel, and services its own and other vendors' reactors.
France's public auditor has criticised Areva for this integrated business model, saying it saw few synergies between the firm's different activities, though it did not specify why.
Oursel said the strategy was valid because fuel sales provide a steady income when new construction projects are slow.
Referring to the new reactors being built around the world, he said: "Those 70 reactors under construction will consume uranium," and added that some 80% of Areva's revenue comes from servicing existing plants, including those built by other vendors.
Areva services some 300 of the 440 reactors in operation around the world.
Oursel shot down the idea of a merger with EDF to create a single French nuclear player, a suggestion mooted by outgoing EDF chief executive Henri Progli. Progli will be replaced by the current head of defence electronics firm Thales Jean-Bernard Levy next month.
"It is a sound business principle not to get into your client's business," he said, pointing out that other utilities companies would be reluctant to negotiate fuel supply contracts with a combined EDF-Areva group because it would give EDF insight in their business requirements.
EDF and Areva have had a difficult relationship as Proglio and Oursel's predecessor Anne Lauvergeon did not get along, and EDF has bought more nuclear fuel from foreign suppliers.
In an attempt to control future strategy at Areva, the government has said it will replace the company's current supervisory board, to which Oursel reports, with an executive board that would have more power to vet decisions by the chief executive, who would report to it.
Industry and government sources have told Reuters that Oursel may not survive that reshuffle. A top corporate source with close government connections told Reuters this month he thought Oursel had a less than 50% chance to hang on to his job.
Oursel declined to discuss the topic of his succession.
