French oil major Total recorded a decrease in its 3Q 2019 profit affected by lower oil and gas prices despite an increase in production.
Total’s adjusted net profit was $3.02 billion in the third quarter of 2019, a 24% decrease when compared to the same period last year and the adjusted net profit of $3.96 billion.
The company’s net profit totaled $2.8 billion in 3Q 2019, a 29% decrease compared to 3Q 2018.
The company achieved hydrocarbon production of 3,040 kboe/d in 3Q19, an increase of 8.4% compared to 3Q 2018 and production of 2,804 kboe/d.
This was due to a 12% increase related to the start-up and ramp-up of new projects, including Yamal LNG in Russia, Ichthys in Australia, Kaombo in Angola and Egina in Nigeria, and Culzean in the United Kingdom, offset by 3% due to the natural decline of the fields, and 1% due to maintenance, notably in Norway.
During the period, the oil price was $62/b, an 18% decrease when compared to $75.2/b in the corresponding period of 2018.
Total Chairman and CEO, Patrick Pouyanne, said: “The group continues to achieve solid results despite a third quarter environment compared to a year ago that was marked by an 18% decrease in the Brent price to $62/b and gas prices that fell by about 55% in Europe and Asia.”
Since the start of the fourth quarter 2019, Brent has traded around 60 $/b on average. According to Total, the environment remains volatile, with uncertainty about hydrocarbon demand growth related to the outlook for global economic growth and in a context of geopolitical instability.
The company said it would continue its cost reduction program with more than 0.5 B$ of additional savings this year to reach cumulative savings of more than 4.7 B$ by the end of 2019. It will continue its 5 B$ asset sale program over the 2019-20 period (1.6 B$ was completed at the end of September) and 2019 net investments should be less than 18 B$.
Production growth should reach 9% in 2019, thanks to ramp-ups on projects started in 2018, start-ups since the beginning of the year, including Kaombo Sul in Angola and Culzean in the UK North Sea, Johan Sverdrup in Norway, and the upcoming lara 1 in Brazil.
The board of directors decided on September 23, 2019, to accelerate dividend growth for the coming years with guidance of increasing the dividend by 5-6% per year.
Offshore Energy Today Staff
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