PARIS: French energy firm Total, recovering from the death of its chief in a plane crash, reported a profit fall in the third quarter on Wednesday because of declining oil and gas production.
Net profit fell by 6.0 percent between July and September to $3.4 billion (2.67 billion euros), compared to the same quarter last year.
The group warned that it was yet to feel the negative effects of falling oil prices but stood by cost-cutting and increased output targets.
Turnover also declined by 2.0 percent to $60.36 billion, a statement said.
Profit excluding changes in inventories fell by 2 percent to $3.56 billion.
Hydrocarbon production fell 8.0 percent during the third quarter, partly due to the loss of concessions in the United Arab Emirates.
Results improve
"The results are better than the last quarter," said finance director Patrick de La Chevardiere.
Total's chief executive Christophe de Margerie died last week when his private jet crashed in Russia. He was largely credited with the group's international expansion and had focused on raising production, in particular through operations in Russia.
Total is the fifth-biggest quoted oil and gas group in the world by market value, and is one of the biggest companies on the French CAC 40 stock index.
On Tuesday, British oil major BP reported a 63.0-percent fall in net profit for the quarter to $1.29 billion. It blamed that on the fall of the price of oil and the value of the ruble.
On Wednesday, Norwegian energy group Statoil said it had switched into a quarterly loss equivalent to 558 million euros because of asset depreciations but also the fall in the oil price.
Total has not been badly set back so far by the plunge of oil prices in recent months, but acknowledged that this could yet undermine results in the fourth quarter.
Total recommended an increase in the dividend with a payment for the third quarter rising to 0.61 euros per share from 0.59 euros in the second quarter.
The price of Total shares rose by 1.29 percent to 46.08 in morning trading on Wednesday. So far this year they were showing a gain of 3.44 percent.
The group said that its upstream activities had held up well despite weak oil prices.
The refining and chemical downstream divisions had also done well, Chevardiere said.
Total, in common with many oil companies, has suffered from weak refining conditions in Europe in recent years.
Sanctions crimp Russian financing
European refining margins nearly tripled in the quarter to $29.9 per tonne from $10.4 during the same period of last year and $10.9 in the second quarter of this year.
But production of hydrocarbons fell again, to 2.12 million barrels of oil equivalent per day, a decline of 8.0 percent.
Total held that it was reversing this trend.
Chevardiere also noted than on a quarterly basis, as opposed to a 12-month basis, production had risen by 3.0 percent, boosted by advanced production from the CLOV field off Nigeria.
Production should be close to 2.2 million barrels per day at the end of this year, he said, standing by a target of 2.3 million barrels per day in 2015.
The new chief executive, Patrick Pouyanne, would apply the new strategy of strict cost controls throughout the group to achieve total savings of $2.0 billion per year in 2017, and to reduce investment to $25.0 billion in that year.
Meanwhile Total was pushing ahead with new projects, 15 of which would be realised by 2017. One of these was for a giant natural gas liquefaction plant in Russia called Yamal LNG in which Total has an interest of 20 percent, Russian company Novatek 60 percent and Chinese group CNPN 20.0 percent.
Management of the project is hampered by lack of access to $27 billion in international financing because of western sanctions against Russia over the Ukraine crisis.
Total now hopes to complete the financing with funds from China and from Russia, and with credits from export credit agencies, notably in Europe, Chevardiere said. (AFP)
