Yemisi Izuora
French energy major Total is planning eyeing further strong growth in oil and gas production in 2019 after record output in 2018 enabled it to post a 28 per cent jump in full-year earnings.
Total said production is expected to rise by 9 per cent to reach over 3 million barrels of oil equivalent per day in 2019.
Total reported a rise in full-year profit to $13.6 billion, following on from strong results from other oil majors, while its cash flow was at around $26 billion, up 18 per cent compared with the previous year.
“These excellent results reflect the strong growth of more than 8 percent of the group’s hydrocarbons production,” Total’s Chief Executive Officer Patrick Pouyanne said, adding its output growth was strongest among its peers.
“Between production growth and spending discipline, we have a clear visibility of the growth of our cash flow in 2019. At $60 per barrel, we will be better than at $71 per barrel in 2018,” he said.
Total said it was targeting cost reductions of $4.7 billion in 2019 after beating its 2018 target, and expected net investments to be in the range of $15-16 billion.
Brokerage Jefferies kept a “buy” rating on Total, saying the company’s results had beaten most market forecasts, although the shares slipped on the back of a drop in oil prices.
The company said on Thursday output reached an all-time high of 2.8 million barrels of oil equivalent per day in 2018 thanks to the start-up of various operations and increased production in liquefied natural gas (LNG) and deep sea projects in Australia, Angola, Nigeria, Russia and Brazil.
Total also announced a major, new discovery off the coast of South Africa that could contain around 1 billion barrels of total resources of gas condensate and light oil.
On Tuesday, BP reported a doubling of profit, driven by strong growth in oil and gas output following a large U.S. shale acquisition.
Royal Dutch Shell, Exxon Mobil and Chevron also reported stronger-than-forecast earnings, driven by higher production in U.S. shale basins where oil majors have invested billions in recent years.
Total said the results would enable it to continue its shareholder returns policy announced last year. After increasing dividends by 3.2 percent in 2018, it planned a 3.1 per cent rise in 2019.
It will also buy back $1.5 billion of its shares in 2019 after buying back the same amount last year, but this could increase if oil prices rose, Pouyanne said.
Total added it would eliminate its scrip dividend scheme from June 2019.