Total Profits Up in Volatile Q2
French oil major Total reported a second-quarter profit of $2.5bn, up 14% on the same period last year, despite only a 9% increase in oil prices and a 15% rise in gas prices. Further, Total has lowered its debt gearing to 20%, which gives it some head room if it wants to buy, it said.
Its average sale price was $3.93/mn Btu. Gas accounted for a little under half the output in the first half of the year, with 1.234mn barrels of oil/day compared with 1.3mn boe/d liquids (1H 2017: 1.183mn boe/d gas, 1.269 boe/d liquids). Gas output was up 1% quarter on quarter while liquids output was up 4%, with an average of 3%; it expects to see 2017 output 4% higher than 2016 output.
Output in the quarter rose 5% on Q2 2016, owing to new project ramp ups, including the sour oilfield Kashagan in Kazakhstan where production was halted for some years; Angola LNG and Laggan-Tormore in the UK West of Shetland. Offsetting that growth was a 4% reduction from natural field decline and the effect of prices on output under production-sharing contracts; and the reduced Opec quotas.
Operating cash flow was up by a third to $5.3bn. Its upstream divison saw a major surge, with profit up 9% to $1.36bn, and operating cash flow up by 50% despite just a 3% rise in output, thanks to new cash-accretive production and the continuing cost-cutting programme.
Adjusted net operating income for the gas, renewables and power segment more than doubled to $95mn in the second quarter, "notably due to the contribution of gas activities," it said. Reporting the same day, Statoil also reported more flexible sales at higher prices.
Highlights for the quarter include a contract for the development of Phase 11 of the giant South Pars gas field in Iran; a comprehensive partnership agreement with Sonatrach in Algeria; offshore exploration permits in Mauritania, Senegal and Ireland (Porcupine basin); the launch of the first development phase of Vaca Muerta shale resources in Argentina where it also raised its stake in Aguada Pichana Este from 27% to 41%; and the start-up of the Badamyar gas project in Myanmar, on time and 20% below budget.
William Powell