Total Q2 results reflect volatile markets

Total has reported an adjusted net income for Q2 2014 of US$ 3.2 billion, down 12% from the corresponding period last year.

Commentary

Commenting on the results, Total Chairman and CEO, Christophe de Margerie, said: “Growing geopolitical tensions marked the second quarter environment and, despite the stability of the Brent price, drew attention to the sensitive balance of the oil markets.

“In this context, the Group reported adjusted net income of US$ 3.2 billion, slightly less than in the previous quarter, essentially due to exceptionally heavy maintenance in the Upstream.

“The highlight of the quarter was the start-up of CLOV in deep-offshore Angola, which demonstrates yet again the excellence of the Group in major project management. Going forward, we are fully mobilized and focused on starting up the next set of operated projects.

“In addition, the final investment decisions to launch Kaombo in Angola and Edradour in the UK, approved only after rigorous cost reductions, illustrate the Group’s capital discipline and strengthen its production portfolio through 2017.

“The Group performed relatively well in the Downstream, despite an unfavourable environment for refining and marketing in Europe and scheduled turnarounds for maintenance on several sites.

“Every segment is playing a role in optimizing the asset portfolio. The sales of Shah Deniz in Azerbaijan, the coal mines in South Africa and Totalgaz have been announced. Finally, all the segments have progressed in setting detailed cost reduction targets within the framework of the 3-year plan announced at the beginning of the year. This plan, which is essential to the Group’s performance and in keeping with the commitments on safety and environment, will bear its first fruits in 2015.”

Second quarter highlights

• Start-up of the deep-offshore CLOV oil field in Angola.
• Launch of the developments in Kaombo in ultra-deep offshore Angola and Edradour in the West of Shetland area of the UK.
• Discovery of oil on Ivory Coast deep-offshore block CI-514.
• Acquisition of a 60% interest in the Glenlivet gas field in the West of Shetland area of the UK.
• Announcement of the sales of the Group’s interests in the Shah Deniz field in Azerbaijan and coal mines in South Africa.
• Signing of an agreement for long-term sales of LNG to Singapore.

Upstream

Hydrocarbon production in the second quarter was 2,054,000 boepd, a decrease of 10% compared to the second quarter of 2013.

Adjusted net operating income from the Upstram segment was US$ 3051 million in Q2 2014, stable compared to the corresponding period of 2013. The negative impact of the decrease in hydrocarbon production and the increase in costs due to the high level of planned maintenance was offset mainly by the higher realized price for liquids and the lower tax rate.

Refining & Chemicals

In Q2 2014, refinery throughput decreased by 8% compared to the second quarter of 2013, reflecting the turnarounds at Leuna and Vlissingen as well as voluntary shutdowns in response to weak refining margins in Europe.

Adjusted net operating income from the Refining & Chemicals segment was US$ 401 million, compared to US$ 518 million in Q2 2013, reflecting the deterioration of the European refining environment.

Outlook

In the Upstream, before the end of 2014, CLOV should reach its production plateau of 160,000 bpd, and the Group should start up Laggan-Tormore and Ofon Phase 2.

In exploration, results are expected in the coming months from high-potential wells currently being drilled in Angola’s Kwanza basin, in South Africa, and in Indonesia.

In the Downstream, all of the units of the Satorp refinery in Saudi Arabia are operational. Since the start of Q3 2014, European refining margins have improved compared to the very low levels in the first half of the year, but remain very volatile.

Image courtesy of Total.

Adapted from press release by Katie Woodward

Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/30072014/total-reports-q2-2014-results-1163/