Bloomberg: Total’s Net Income Rises 64% on Higher Output, Prices (Update2)

By Tara Patel

Feb. 13 (Bloomberg) — Total SA, Europe’s third-largest oil company, said fourth-quarter profit rose 64 percent after new projects in Qatar, Angola and Azerbaijan boosted production and crude approached $100 a barrel.

Net income climbed to 3.6 billion euros ($5.2 billion) from 2.2 billion euros a year earlier, the Paris-based company said today in a statement. Profit excluding one-time items, changes in inventories and the value of a stake in drugmaker Sanofi- Aventis SA beat analysts’ estimates.

“Total came in a little above expectations on production growth,” Chicuong Dang, an analyst at Richelieu Finance in Paris, said by telephone.

Chief Executive Officer Christophe de Margerie plans to increase output by an average 4 percent a year until 2010. Oil prices in New York were 50 percent higher in the fourth quarter compared with a year earlier, touching a record $100.09 a barrel on Jan. 3.

Total added 0.3 percent to 49.65 euros as of 8:07 a.m. local time. The stock is down about 13 percent so far this year, compared with a 15 percent drop for France’s benchmark index.

Adjusted profit gained 14 percent to 3.1 billion euros, beating the 3 billion-euro median estimate of 12 analysts surveyed by Bloomberg.

Shell, BP

Unlike Royal Dutch Shell Plc and BP Plc, Europe’s two biggest oil companies, Total reports earnings in euros rather than dollars. The U.S. currency was 12 percent lower on average during the last three months of 2007 than a year earlier, reducing dollar-denominated earnings when converted into euros.

Shell, based in The Hague, reported a 60 percent gain in net income to $8.47 billion last month. London-based BP said Feb. 5 that fourth-quarter profit climbed 53 percent to $4.4 billion.

“Finally our production is back on track for growth,” de Margerie told a news conference today. Total was “surprised” by how quickly oil prices rose during the past year and predicts they will stay “high,” he said.

Total said upstream production increased 2.4 percent in the fourth quarter to 2.46 million barrels of oil equivalent a day. The increase was due to the Dalia and Rosa fields in Angola, the Dolphin natural gas project in Qatar and Shah Deniz in Azerbaijan.

Angolan Boost

Total’s Dalia and Girassol projects off Angola underpinned 2007 growth, the company said. Girassol and Dalia are in Total’s main Angolan production asset, offshore Block 17.

Dalia reached peak output of 240,000 barrels a day in April, while the Rosa field, connected to the Girassol floating production platform, will maintain production at 250,000 barrels a day until early in the next decade.

Total is a shareholder in Dolphin Energy Ltd. along with Occidental Petroleum Corp. and Abu Dhabi, which operates a pipeline allowing the export of natural gas to the United Arab Emirates from Qatar’s offshore North Dome field.

Snohvit, Europe’s first offshore Arctic field development, is operated and 33.5 percent-owned by StatoilHydro ASA while Total holds 18.4 percent.

Total said its reserve replacement rate was 78 percent last year, excluding acquisitions and divestments in Venezuela. Proven and probable reserves were 20 billion barrels of oil equivalent at the end of 2007.

Production at the N’Kossa oilfield in the Republic of Congo was lower in the fourth quarter after output was halted in May because of a fire that killed two people. The company had said production would reach 45,000 barrels a day in November, short of full output of 65,000 barrels a day to be reached this year.

Total, which is also Europe’s largest oil refiner, said Jan. 15 fourth-quarter profit from producing gasoline, diesel and other products climbed 32 percent. Refining margins advanced to $30.10 a ton from $22.80 in the year-earlier period and were 26 percent above the third quarter.

To contact the reporter on this story: Tara Patel in Paris at [email protected]

Last Updated: February 13, 2008 03:25 EST

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