Total's earnings rise 9 per cent as output growth resumes

Paris: Total, Europe's third-largest oil producer, posted a 9 per cent increase in first-quarter earnings and forecast further output growth after ramping up projects in Nigeria, the Gulf of Mexico and Angola.

Profit, excluding changes in inventories and the value of a stake in Sanofi-Aventis SA, rose to 2.3 billion euros (Dh11.17 billion) from 2.1 billion euros a year earlier, the Paris-based company said yesterday in a statement. That compared with the 2.37 billion-euro median estimate of 16 analysts surveyed by Bloomberg.

"The results are solid with strong production growth," Irene Himona, an analyst at Exane BNP Paribas in London, said by telephone.

Total has pledged to revive output growth after Opec reductions and disruptions in Nigeria caused a 3 per cent drop in production last year. The company is waiting for permission from local authorities to push ahead with the Clov project in Angola and will decide on Ofon II and Egina in Nigeria before the end of the year, Chief Executive Officer Christophe de Margerie has said. Total sanctioned new investment in the North Sea last month.

"The official launch of the Clov project in Angola, already approved internally by Total, is expected very soon," according to the statement.

Total fell 1.9 per cent to 41.24 euros in Paris yesterday morning. The stock is up 7.6 per cent in the past year.

Production at Total rose 4.5 per cent in the first quarter to 2.43 million barrels of oil equivalent a day from a year earlier. Output fell to a nine-year low in the second quarter of last year. Six analysts surveyed by Bloomberg News were expecting average output of 2.39 million barrels of oil a day in the latest quarter.

"The first quarter 2010 confirms our return to production growth," de Margerie said in the statement, which added that "production growth over the past quarters is expected to continue" this year.

New fields

Total has said it plans to boost output by about 2 per cent on average annually from this year through 2014 after starting fields in Nigeria, the Gulf of Mexico, Angola and Norway, as well as liquefied natural gas projects in Yemen and Qatar.

Crude prices averaged $78.88 a barrel in New York in the first quarter, about 82 per cent higher than $43.32 last year.

Total, Europe's biggest refiner, is trying to cut refining capacity because of lower European fuel demand. The company, which came under government pressure to keep jobs as it announced the permanent halt to its Flanders plant near Dunkirk, is seeking to sell the Lindsey refinery in the UK.