By GERALDINE AMIEL and BENOIT FAUCON
French oil company Total on Monday reiterated its
hydrocarbon production targets for the medium term, thanks to a
strong investment push over the past years which should start
to trend down from next year.
In a presentation to investors, Total said it anticipates a
strong increase in cash flow from the start-ups of major oil
and gas extraction projects, as well as from the
restructuring of its downstream businesses -- refining and
chemicals, and marketing and services.
The world's fifth largest nonstate oil company by output,
Total has embarked upon an ambitious plan to restore
profitability for its loss-making refining businesses, at the same
time as making a huge investment push to search for new oil and
gas, which is now more difficult to find as it is rarer and
lodged in remote areas such as deep offshore or off the Arctic
The plans highlight the French group's intensive efforts to
maintain and even reinforce its global position, as competition
around the world has grown fierce over the past few years
against a background of rising costs to produce oil and gas,
the race for new hydrocarbon sources to address growing
emerging markets' appetite, while facing the decline of
In the coming months, the group should start-up numerous
production projects such as Laggan-Tormore in
Western Shetlands, and reiterated it expects to reach
production of 2.6 million bpd of oil equivalent in 2015 and a
potential for 3 million bpd in 2017.
The restructuring of refining and chemicals "has begun to
bear fruit," as profitability is increasing towards the target
of 13% return on average capital employed set for 2015, Total
In a briefing with media ahead of a meeting with investors
and analysts, Total's Chief Financial Officer Patrick de la
Chevardiere noted that the group is considering cutting
capacities at some refineries. "We're going to adapt our
footprint to European demand," he said, without
In an earlier interview, Total's head of the marketing and
services unit Philippe Boisseau said that thanks to the
reshuffling of the distribution activities, the second leg of
the restructuring of its declining downstream activities, Total
expects to substantially boost the unit's free cash flow -- a
key gauge of a company's health -- to reach $1 billion in 2017
from around $400 million last year, a level around which it had
stagnated for years.
Total's CFO also said that "the first [vessel] is arriving
at Jubail this morning to [load] some production" of fuel oil.
Jubail is a refining and petrochemical complex in Saudi
Arabia where Total is a shareholder and the arrival of the
tanker will mark its first export.
Dow Jones Newswires