MOSCOW (MRC) -- Total's oil and gas production hit a record-high 3.04 million b/d of oil equivalent in the third quarter, up more than 8% on the year, with a 46% jump in gas output for LNG production, according to S&P Global.
As with other big producers, Total's profits were hit by lower prices for its upstream production. They were also dented by depreciation, depletion and amortization of newly producing projects.
"The environment remains volatile, with uncertainty about hydrocarbon demand growth related to the outlook for global economic growth and in a context of geopolitical stability," Total noted in a results statement.
It reiterated it is able to break even at oil prices below USD25/b, excluding dividend payments.
"The group continues to high-grade its portfolio," CEO Patrick Pouyanne said, referring to Total's upstream division.
Total's adjusted profit was down 24% at USD3.02 billion, while its net debt ratio, or gearing, was up half a percentage point compared with the end of the second quarter, at 21.1%, it said.
However, the company noted half its gas production had been priced with a link to oil prices, providing some cushion against recent gas market weakness.
In the upstream, adjusted profits were down 29% at USD1.73 billion, while its downstream segment was buoyed by strong refining margins, offset by maintenance at its Normandy refinery and repairs to a pipeline at its Grandpuits refinery that lasted into July.
The surge in Total's upstream oil and gas production followed 9% year-on-year growth in both Q1 and Q2, and the company affirmed plans for an overall increase of 9% in 2019. It expects its output to grow by 5%/year on average in 2018-21, followed by a flattening in 2022-23 and then further increases.
Total's oil output was up by 7% on the year, at 1.72 million b/d, on the back of projects such as Egina, offshore Nigeria, and the Kaombo field offshore Angola, which came on stream in July last year and is now producing from two floating production, storage and offloading vessels. A further boost should come from the expected start of oil production in Brazil's sub-salt Iara area this year.
The company's gas production increased by 13% to 7.40 Bcf/d. Out of this total, gas production within its LNG division increased by 46% to 2.75 Bcf/d, reflecting rising volumes from the Yamal LNG project in northern Russia, operated by Novatek, and Ichthys, offshore Australia. Its LNG sales were up 20% at 7.4 million mt and sales from its own production were up 50% at 4.2 million mt.
In the downstream, Total's refining throughput was down 12% on the year at 1.72 million b/d, with a 23% drop in France due to work at the Normandy and Grandpuits facilities. But firm margins meant adjusted operating profit from refining and chemicals was up 1% at USD952 million.
The company's return on average capital employed for the 12 months to the end of September was 9.6%.
As MRC informed earlier, Total has decided to double the production capacity of its affiliate Synova to meet growing market demand for high-performance recycled materials. By early 2021, Normandy-based Synova, a French leader in its sector, will produce 40,000 tons per year of recycled polypropylene (PP) that meets the demanding quality standards of automotive OEMs and carmakers.
According to MRC's ScanPlast report, the PP consumption in the Russian market was 909,260 tonnes in January-August 2019, up by 10% year on year. Shipments of PP block copolymer and homopolymer PP increased.
Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world with business in Europe, the United States, the Middle East and Asia. The company's petrochemical products cover two main groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.
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