London, 30 July (Argus) — Total registered a 72pc rise in second-quarter profit from a year earlier to €3bn ($3.8bn), underpinned by upstream profits that were up 52pc to €2.2bn.
The upstream results were supported by a “globally favourable” economic environment, with Brent crude prices averaging $75/bl during the quarter and 32pc higher than a year earlier.
An increase in hydrocarbon production also boosted performance, rising 8pc from a year earlier to 2.4mn b/d of oil equivalent (boe/d) during the quarter. Liquids production was flat at 1.3mn b/d, but natural gas production rose 18pc against the previous year to 5.6bn ft³/d during the quarter, aided by an 80pc rise in Middle East gas production to 1.1bn ft³/d. US natural gas production rose from 9mn ft³/d in last year's second quarter to 191mn ft³/d.
The recovery in the profitability of Total's downstream operations continued, as it booked a €483mn second-quarter profit compared with €155mn in the first quarter and €156mn against a year earlier. Total's European refining margin indicator averaged $31.20/t during the quarter, an 82pc increase from a year earlier and 6pc up on this year's first quarter. Refinery runs fell 2pc from a year earlier to 2.1mn b/d.
The firm's limited exposure to the US Gulf of Mexico meant Total avoided financial charges as a consequence of the oil spill from BP's blown-out Macondo well. Shell yesterday reported a $56mn identified item charge for impacts related to the drilling moratorium in the Gulf of Mexico, with “further impacts likely” in the third quarter. Shell's production will be reduced by 8,000 boe/d for this year.
While Total, which holds 224 exploration permits in the US Gulf of Mexico in partnership with independent Cobalt, escaped unscathed financially and operationally, it said it launched a “complete review of all its existing procedures and drilling operations” after the 20 April Deepwater Horizon explosion and subsequent oil spill.
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