French oil major Total reported on Friday that its third quarter 2016 profit was down by 25 percent compared with the same quarter last year while its production grew by over 4 percent.
Namely, Total’s third quarter 2016 adjusted net income fell 25 percent to $2.07 billion, compared to $2.76 billion in the same period last year. Adjusted net income excludes inventories and other non-recurring items. The company’s net income for the quarter rose 81 percent to $1.95 billion when compared to net income of $1.08 billion in the prior-year quarter.
Total’s third quarter revenues fell to $37.4 billion, from $40.6 billion in 3Q 2015.
Further, hydrocarbon production in the quarter increased 4.3% to 2,443 barrel of oil equivalent per day (kboe/d), compared to the third quarter of 2015, due to the new start-ups and ramp-ups.
Commenting on the results, Total’s Chairman and CEO Patrick Pouyanné said: “In the Upstream, production increased by more than 4% compared to a year ago. Following the start up of Laggan-Tormore, Vega Pleyade and Angola LNG in the first half of the year, Incahuasi was put on stream in August and Kashagan in October. The five major projects of the year are thus all in production.
He added: “Discipline on cost control continued. Organic investments were $4.1 billion in the third quarter, and the Group plans to invest $18 billion in 2016. Operating costs continue to fall and savings are expected to increase to more than $2.7 billion in 2016, or 10% above the objective set at the start of the year.”
With the market expected to remain volatile, the company said it is trying to lower its breakeven.
Total also said the group’s cost reduction program is ahead of schedule, underlining its ability to deliver the $4B savings target by 2018. Given the capex guidance of 15-17 B$ from 2017 and increase in operating cash flow, the company stated that its net cash flow is entering a growth phase.
Offshore Energy Today Staff