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Boston Globe: Total net falls but tops forecasts

November 7, 2007

PARIS (Reuters) – French oil giant Total posted a 3 percent drop in third-quarter adjusted net profit on Wednesday, despite higher oil prices and production, but the result beat forecasts and it maintained a key output target.

Adjusted net profit — stripping out gains from changes in the value of fuel inventories and one-off items — fell to 3.004 billion euros ($4.37 billion) due to lower gas prices and refining margins and a weaker dollar.

Total, the world’s fourth biggest non-government controlled oil and gas group by market capitalization, said adjusted net profit was up 4 percent in dollar terms.

Thirteen analysts polled by Reuters had expected Total to post adjusted net profit of 2.935 billion euros.

The Paris-based group published its figures amid growing political controversy in France as car and truck drivers are hit by oil prices nearing $100 a barrel.

French President Nicolas Sarkozy has promised not to abandon hundreds of fishermen in western France who went on strike and blocked ports and oil depots last Friday to protest against soaring fuel costs.

Total reiterated a target for an average annual production rise of 4 percent between 2006-2010, but made no reference to a forecast for a hydrocarbon production increase of between 1.5 percent and 2 percent in 2007.

Unrest in Nigeria, a fire at a its Nkossa offshore oilfield in the Republic of Congo, and changes to its Sincor project in Venezuela have forced Total to trim output targets.

But the French group continued to buck an industry-wide trend of falling oil and gas output, with a 3 percent rise in third-quarter output at 2.352 million barrels of oil equivalent, helped by the start-up of its Dolphin gas project in the United Arab Emirates and the Rosa offshore oilfield in Angola.

A recovery in production at Nkossa also helped lift Total’s output, which analysts had on average forecast at 2.338 million barrels of oil equivalent.

This performance contrasted with that of bigger industry rivals such as BP , Exxon Mobil and Royal Dutch Shell , which all reported declines in oil and gas production for the third quarter.

Total shares closed 0.4 percent higher at 54.61 euros on Tuesday. They have lagged the European oil and gas sector by 8 percent so far this year, according to Reuters data. (Reporting by Marie Maitre, editing by Erica Billingham)

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