Total Reports Relatively Mild Results

French major Total saw its 2015 net operating income fall by only a fifth to $11.36bn, with upstream taking the biggest hit, down 55% to $4.774bn. Profits in that division were beaten by Refining & Chemicals, which doubled to $4.889bn.

CEO Patrick Pouyanne said February 11 that the drop of just 18% in adjusted net results to $10.5bn – while the price of its main product, oil, fell by half – reflected the strength of the company’s integrated model. He said it was the best performance among the majors.

This year’s capital expenditure of $19bn will be down 15% on last year’s $23bn, which itself was down 15% on 2014. "This marks a transition to a sustainable level of investments of $17-19bn from 2017 onwards. The cost reduction programme launched in 2014 will be reinforced, enabling opex savings of $2.4bn in 2016 and underpinning the objective of more than $3bn in 2017," the company said.

Asset sales announced reached $4bn last year, leaving it two more years to sell another $6bn to achieve its target of $10bn by 2017. Overall it spent $3.44bn on acquisitions and banked $5.97bn from disposals with more cash to come from the agreed sale of the stake in Frigg UK gas line, for example.

Production is expected to go up by 4% in 2016, following record 9.4% year on year growth in 2015 and so keeping it on course for its target of 5% for 2014-19. Gas output was almost unchanged at 6.054bn ft³/d compared with 2014’s 6.063bn ft³/d but the gas price was down from an average $6.57/mn Btu to $4.75/mn Btu. Its reserve replacement rate was 107% and it has enough to last it 20 years at 2015 production rates.

Adjustment items included a write-down of $5.43bn for the year, of which the biggest component was its stake in the $18.5bn Gladstone LNG project. The Santos-operated Australian facility made its first delivery last year in a relatively depressed gas market with no sign of higher prices.

William Powell