PARIS: French oil company Total is on the hunt to buy assets from struggling rivals, it said on Thursday, after reporting better than expected fourth quarter net profit thanks to cost cuts, and raising its dividend.
Adjusted net profit climbed 16 per cent year-on-year to $2.4 billion (£2 billion), beating analysts’ average forecast of $2.3 billion, while the quarterly dividend was set at 0.62 euros per share, up from 0.61 euros in the previous three quarters.
CEO Patrick Pouyanne said the results outperformed peers and showed Total’s resilience during a prolonged downturn in oil prices. Earlier this week, rival BP reported a second straight drop in annual earnings.
Pouyanne said Total was benefiting from a drive to push its production costs down to $5.9 per barrel of oil equivalent (boe), compared with $9.9/boe in 2014, and from savings of $2.8 billion in 2016, beating its target of $2.4 billion.
He added Total’s strong balance sheet meant it could look for opportunities to pick up assets. Total plans to make final investment decisions on about 10 projects within the next 18 months.
“We are in a field of opportunities,” Pouyanne told reporters. “After two years of very low prices, there are companies around the world that have good assets but are struggling.”
Total said it was aiming to make a further $3.5 billion of savings this year and reduce production costs to $5.5/boe. It expects to invest $16-$17 billion in 2017, including resource acquisitions, compared with $18.3 billion in 2016.
Production is forecast to grow by more than 4 per cent, supporting the company’s goal to increase output on average by 5 per cent per year from 2014 to 2020. — Reuters