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THE WALL STREET JOURNAL: Total’s Profit Jumps 62% as Oil Prices, Output Rise: ‘Shell took the worst hit, with output falling 4.5%’

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THE WALL STREET JOURNAL: Total’s Profit Jumps 62% as Oil Prices, Output Rise

By ADAM MITCHELL
February 14, 2008; Page A13

PARIS — French oil company Total SA said net profit rose 62% in its most recent quarter, helped by rising production and higher oil prices, and announced a $2.2 billion investment to expand its Texas refinery.
 
Total, one of the world’s largest non-state-owned oil companies by market value, said net profit rose to €3.6 billion ($5.3 billion) in the fourth quarter of 2007 from €2.23 billion a year earlier. Fourth-quarter revenue rose 19% to €43.19 billion.

Total said that despite resurgence in “resource nationalism” — meaning oil-rich countries wanting a bigger share of the oil windfall — it has enough projects under development to increase oil and gas output by an average of 4% a year between 2006 and 2010.

Total’s upstream production rose to 2.46 million barrels of oil equivalent a day in the fourth quarter of 2007, an increase of 2.4% from a year earlier. Hydrocarbon production in 2007 was up 1.5% on 2006 to 2.39 million barrels of oil equivalent per day.

The increase in output contrasted sharply with figures released by Total’s oil-industry rivals over the past few weeks. BP PLC, Royal Dutch Shell PLC, Exxon Mobil Corp and Chevron Corp all revealed that their production fell in 2007. Shell took the worst hit, with output falling 4.5%.

Total Chief Executive Christophe de Margerie said the company continues to study nuclear projects, including possible investment in uranium mining, but said that it would take several years before the strategy bears fruit.

He said the company wouldn’t pull out of refining and announced a $2.2 billion investment to expand and upgrade the group’s refinery in Port Arthur, Texas. Mr. de Margerie also said Total was in advanced talks with Saudi Arabian Oil Co. to build a 400,000-barrel-a-day refinery in the kingdom.

Total said capital expenditures will increase to $19 billion this year, up from around $16 billion in 2007, as it invests in new projects and as the cost of oil equipment continues to rise.

The company said it sold €316 million worth of Sanofi-Aventis shares in the fourth quarter, or 0.4% of its stake in the French drug maker. Total, which held a 13.1% interest in Sanofi-Aventis as of May 31, 2007, has said it wants to divest the asset progressively.

Write to Adam Mitchell at [email protected]

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