Total Rebounds to Profit in Q3
France's Total has posted $202mn in profits for the third quarter, marking a reversal from a $8.4bn loss in the previous months, but down from a $2.8bn profit in the year-earlier period. The major benefited from a lack of the hefty impairments that weighed down on its second-quarter numbers. But its earnings also suffered from low gas prices, weak refining margins and production cuts.
Adjusted net operating income came to $1.46bn, up from $821mn in Q2 2020 but down from $3.67bn in Q3 2019, Total reported on October 30. Exploration and production earnings reached $801mn, versus a $209mn loss in Q2 2020 but a $1.73bn profit in Q3 2019.
The company's integrated gas, renewables and power business earned $285mn, down from $326mn in the previous three months and $574mn a year earlier. Even harder hit was Total's refining and chemicals division, which swung to a $88mn loss from $575mn in profits in Q2 2020 and an income of $952mn in Q3 2019. The bright spot was marketing and services, which saw earnings increase to $461mn, from $129mn a quarter earlier and $413mn a year earlier.
Total CEO Patrick Pouyanne said the group benefited from a "more favourable environment" in the third quarter than the previous one, citing the rebound in oil prices and the recovery in motor fuel demand. "However, the environment was mixed with low natural gas prices and severely depressed refining margins due to excess production capacity relative to demand and high inventories," he said.
Oil and gas production averaged 2.72mn barrels of oil equivalent/day in the three months ending September 30, down 11% year on year, owing to "compliance with Opec+ quotas, notably in Nigeria, the UAE, Angola, Kazakhstan and Iraq, as well as voluntary reductions in Canada and disruptions in Libya." Oil extraction was down 17% at 1.2mn boe/d, while extraction of gas and gas liquids fell 5% to 1.52mn boe/d.
The company has slashed its full-year output guidance to under 2.9mn boe/d, from 2.90-2.95mn boe/d, to reflect "the strict discipline with which Opec+ has implemented quotas and the lack of production in Libya until October 2020."
Total's LNG sales were notably up 9% yr/yr in the third quarter at 8.1mn metric tons, on the back of an increase in trading activity. The recovery in oil prices from Covid-19 lows should have a positive impact in the fourth quarter on Total's LNG sales price, the company said, predicting that it would exceed $4/mn Btu. It averaged $3.57/mn Btu in Q3 2020, down from $4.4 in Q2 2020 and $5.9 in Q3 2019.