Total Profits Up, Claims Best Returns of Majors
French major Total reported an 86% rise in profit for Q4 2017, at $1.021bn, compared with $548mn the year before. Higher commodity prices helped, it said in a statement February 8, but the company also continued to cut costs and to raise production by almost 6%. Gas was up 4% at 6.832bn ft³, while liquids were up 11%, to 1.389mn barrels, or just over half the combined output of 2.613mn barrels of oil equivalent (boe/d).
CEO Patrick Pouyanne said that the full-year return on equity was above 10%, which was better than for any other major.
Upstream profits were up 80% in 2017 compared with 2016, while cost savings overall were $3.7bn, compared with the target of $3.5bn. Production costs were $5.4/boe. It is aiming this year for savings of $4bn and production costs of $5.5/b for the whole of 2018, while also raising production by 6% again, beating its 5% growth goal. Profits might have been even higher but for the enforced shut-in of gas from the UK Elgin-Franklin fields following a problem with the Ineos-operated Forties pipeline system, which at time of press has again been down for a day.
Despite a volatile environment over the past three years, Total said it has "successfully reset its business model, delivering solid results in 2017 thanks to strong operational performance and reducing its pre-dividend organic breakeven to $27/b Brent," which is lower than its rivals.
Highlights in the quarter included the commissioning of the first 5.5mn mt/yr of three trains at the overall 16.5mn mt/yr Yamal LNG project, operated in Arctic Russia by Novatek, in which it is a minority partner as well also as a direct shareholder in Novatek. Other start-ups were Glenlivet and Edradour gas fields in the UK west of Shetland basin; and Angola LNG production ramped up after its two-year 2014-16 outage and a short outage at the turn of 2016-17. (The banner photo above is courtesy of Total)
Eni confirmed February 8 the discovery of the Calypso gas field, in Cyprus offshore block 6, which it says marks an extension of the "Zohr-like" gas play into Cyprus. Total is Eni's 50% partner in block 6. Eni operates the supergiant Zohr field offshore Egypt.