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Total's net profit down 54 pct in 2nd quarter

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[July 31, 2009]  PARIS (AP) -- Total SA added to the oil industry's worst midyear showing in years Friday as slumping global energy demand and falling prices caused its net profit to drop 54 percent in the second quarter.

Europe's third-largest oil producer said net profit for the three months ended June 30 was euro2.17 billion, down from euro4.73 billion a year earlier.

Total is the latest of the oil industry giants to report weak quarterly earnings. On Thursday Exxon Mobil and Royal Dutch Shell both reported disappointing profit figures, stung by a slowdown in demand that threatens to further hinder exploration and production.

Total's stock price fell 2.7 percent in early trading in Paris to euro38.90.

The Paris-based oil company said its production in the second quarter averaged 2.18 million barrels of oil a day, down 7.3 percent from 2.35 million barrels a year earlier.

In a statement, Total blamed high maintenance, the impact of higher prices and weak gas demand for the drop in production from the previous quarter. Over the rest of the year, Total said it expects to benefit from ramped up production at its recently launched Akpo, Tahiti and Tyrihans fields, as well as the planned start up of a new liquefied natural gas projects in Yemen and Qatar, and the Tombua Landana field in Angola.

Total's adjusted net profit, its preferred earnings yardstick, fell 54 percent to euro1.72 billion in the second quarter, down from euro3.72 billion a year earlier. Expressed in U.S. dollars to ease comparison with other international oil companies, Total said its adjusted net profit was $2.35 billion, down from $5.82 billion a year earlier.

Total's sales fell 35 percent in the quarter to euro31.4 billion.

The company also said it would pay an interim dividend to shareholders of euro1.14 per share in November, the same as last year's interim and final dividends.

Oil prices rose off first-quarter lows during the second quarter, with Brent Blend oil averaging $59.13 a barrel in the second quarter compared to $44.46 in the first quarter -- but still way below the $121.18 seen in the second quarter of 2008.

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Oil prices sagged early in the year as economies around the world went into recession, but then rose again somewhat amid expectations of at least limited economic recovery later this year.

European rivals BP PLC and Royal Dutch Shell also reported sharp drops in their second quarter earnings. BP's net profit for the period was $4.39 billion, down from $9.36 billion a year earlier but better than market forecasts. Royal Dutch Shell, Europe's largest oil explorer, said net profit fell 67 percent in the second quarter to $3.82 billion, reflecting the sharp drop in prices and worse refining margins. The company also blamed weak energy demand, excess capacity and high industry costs, and warned that it doesn't expect a quick recovery in the global economy.

Total said it expects production to increase markedly in the coming months at its Akpo field in Nigeria, the Tahiti field in the Gulf of Mexico, and the Tyrihans field in Norway. A liquefied natural gas project in Yemen will be launched in the third quarter and Qatargas II train B and the Tombua Landana field in Angola will begin production by the end of the year, Total said.

[Associated Press; By GREG KELLER]

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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