Total's Profit, Output Rise, Costs Go Down

French major Total reported February 9 an adjusted net income of $2.4bn for Q4 2016, up 16% on the year-ago period. Consolidated net income was $487mn, up from a loss of $1.8bn in Q4 2015.

Liquids production was unchanged on the year at 1.257mn barrels/day with security problems in Nigeria and Yemen offsetting gains elsewhere such as Kashagan; but gas output was up 10%, at 6.6mn ft³/d, with boosts coming from Laggan-Tormore in the UK, which started up February 2016, and Angola LNG's ramp-up since mid-2016 among other contributory factors.

LNG sales of 2.75mn metric tons were up 11% on the year. Yemen LNG has not exported since April 2015.

The company is targeting $3.5bn of cost savings this year, given the volatility of prices. It sees high stock levels and aims to bring production costs down to $5.5/barrel of oil equivalent from $5.9/boe, with capital expenditure set at $16-17bn including acquisitions, down from $18.3bn last year. Operating costs were down $2.8bn, ahead of the targeted $2.4bn.

Production is set to grow at an average of 5%/yr until 2020.Taking advantage of low prices the company plans to launch ten projects over the next 18 months and add resources to its portfolio. Total's breakeven will fall below $40/b this year, it said.

CEO Patrick Pouyanne

(Credit: Total)

Reporting a return on equity of 8.7%, it said it was the most profitable of the majors. It has sold $8bn of its $10bn target.

William Powell