12 February 2014, Paris – French oil firm Total raised its dividend on Wednesday and confirmed it would cut capital spending even though output was stalling, falling into line with industry peers by reducing investment to try to boost shareholder returns.
Fourth-quarter adjusted net profit fell 19 percent to 2.47 billion euros ($3.38 billion), missing analysts’ forecast for 2.69 billion euros, hit by shrinking refining margins, lower oil prices and delays at key fields such as Kazakhstan’s Kashagan.
Full-year output edged down to 2.299 million barrels of oil equivalent (boe) a day from 2.3 million in 2012 – a figure that will not help the fifth-biggest global oil company shake off a reputation for missing production targets.
Chief Executive Christophe de Margerie’s initial 2-3 percent output growth goal for 2013 was later dropped and the firm’s finance chief still expected an increase last September.
Defending the company’s record at a news conference later, CFO Patrick de la Chevardiere said that unlike other top oil companies the group still had a growth target – to reach 3 million boe per day by 2017 – and “in terms of production we are alone in having a production level that is flat. The others are all falling.”
Production delays at some projects where Total is not operator, including Kazakhstan’s giant Kashagan field, in which Total has a 16.81 percent stake, and Angola LNG are holding back growth overall.
De Margerie told reporters it was too early to say when output at Kashagan, halted late last year due to a leaking gas pipe, might restart. “We haven’t finished studies on the pipes.
Overall, there shouldn’t be leaks on the offshore part, the most worrying part, but certainly leaks onshore, in which case it might not be too difficult to repair,” De Margerie added.
In the fourth quarter Total’s output fell 0.5 percent from a year ago due to declines and maintenance work on mature producing fields such as Elgin/Franklin in the North Sea and OML 58 in Nigeria. Security issues caused a 1 percent fall, with a worsening situation in Nigeria and Libya.
This was itself offset by 1 percent growth from start-ups. Other big oil firms have also reported lacklustre fourth-quarter results, with Shell posting what it said was the least profitable quarter in five years, while Exxon and Chevron also disappointed investors.
Total is betting on a string of start-ups in 2014 to see production rise again, including Angola’s $8 billion CLOV project and the $5 billion Laggan-Tormore field off the coast of Scotland.