Voyageur sale drags down Total’s profits

Voyageur upgrader project in Canada28 April 2013 – French giant Total saw profits slide 58% during the first quarter of 2013 as revenue from the company’s upstream segment fell on lower production and oil prices.

Total posted a net income of €1.5 billion (US$2 billion) for the first three months of the year, down from nearly €3.7 billion during the first quarter of 2012.

Dragging down Total’s profits was the sale of its 49% share in the Voyageur upgrader project in Canada resulting in a negative effect on net income of nearly €1.3 billion.

Also hitting the company’s bottom line was a increased loss from depreciation, depletion and amortisation of tangible assets and mineral interests to almost €2.2 billion, compared to €1.8 billion a year earlier.

The decline in profits came as sales revenue for the quarter slid from nearly €51.2 billion in 2012 to just over €48.1 billion this year.

This came as Total saw the performance of its upstream business segment slip during the quarter, posting an adjusted net operating income of just under €2.5 billion, down 19% from the nearly €3.1 billion booked during the same period a year ago.

Total said the decrease was due to “a less favourable environment”, a decrease in production and higher technical costs.

The company saw output dip 2% year-on-year to 2.3 million barrels of oil equivalent per day which it attributed to normal decline and maintenance as well as the shut-in of the high-pressure high-temperature Elgin-Franklin gas condensate development off the UK which only restarted last month following last year’s gas leak.

Also hurting results for the upstream segment was a drop in oil prices, with Total achieving an average price of $77.4 per barrel of oil equivalent, down 6% the $82.1 per barrel average in the first quarter of last year.

The effective tax rate for the upstream segment also increased, from 61% to 62.7%, due mainly to increased non-deductible exploration charges.

The fall in performance from the upstream segment was partly offset however by improved results from the refining and chemicals segment as well as the marketing and services segment.

Total also announced on Friday that its board of directors had decided to pay a first quarter interim dividend of €0.59 per share on 27 September.
*Josh Lewis, Upstreamonline

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