French oil major Total posted on July 27, 2017, lower profit for the 2nd quarter of the year despite increase in production and revenues as it looks to further cut costs.
The company recorded a net income for the 2nd quarter 2017 of $2.03 billion, a decrease when compared to the 2nd quarter of 2016 and net income of $2.12 billion.
On the other hand, the company’s revenues for the 2nd quarter of this year increased to $39.9 billion from $37.2 billion in the corresponding period of 2016.
Hydrocarbon production in the 2nd quarter 2017 was 2,500 thousand barrels of oil equivalent per day (kboe/d), an increase of 3% compared to the 2nd quarter 2016, due to project ramp ups, notably Kashagan, Moho Nord, Incahuasi, Surmont and Angola LNG, acquisition of an additional 75% interest in the Bamett shale in the US and asset sales in Russia and Norway, improved security conditions in Libya and Nigeria, offset by natural field decline, the PSC price effect and OPEC quotas.
Total achieved a 9 % increase year-over-year in average crude oil price.
The exploration&production segment’s adjusted net operating income was $1.359 billion in the 2nd quarter 2017, an increase of 30% compared to the 2nd quarter 2016, notably due to production growth, cost reduction, and the increase in oil and gas prices.
Adjusted net operating income for the gas, renewables&power segment increased to $95 million in the 2nd quarter 2017, notably due to the contribution of gas activities.
Total CEO Patrick Pouyanné commented: «In a price environment that remains volatile, Total again delivered an excellent set of quarterly results with adjusted net income of $2.5 billion, a 14% increase compared to a year ago, and operating cash flow before working capital changes of $5.3 billion, a 33% increase, while Brent only increased by 9%.»
Pouyanné continued: «In the Exploration&Production segment, 2nd quarter 2017 operating cash flow before working capital changes increased by almost 50% compared to the same quarter last year, benefiting from production growth of more than 3%, driven by start-ups and ramp-ups of new cash-accretive projects, as well as the cost reduction program, which continues to be implemented with determination.»
The company also said that, in the Upstream, annual production growth should be more than 4% in 2017, supported by the start-up in mid- July of operations on the A1-Shaheen field in Qatar and the continued ramp-up of new projects, notably Kashagan in Kazahkstan and Moho Nord in Congo.