Total suffered a 19 percent decline in third-quarter profit as refining margins in Europe dropped, Europe’s second-largest oil producer reported yesterday.
Profit excluding changes in inventories fell to e2.72 billion (R37bn) from e3.36bn a year earlier, the company said. That was in line with the e2.73bn expected by analysts. The dividend was unchanged.
Production advanced 1 percent to 2.3 million barrels of oil equivalent a day, the French firm said, after output resumed at the North Sea Elgin platform and the Ibewa field in Nigeria. New fields were started in Kazakhstan and Norway.
“The refining environment remains very difficult right now,” chief financial officer Patrick de la Chevardiere said. “Margins are extremely weak; we still have an endemic problem of overcapacity” in Europe.
Total’s shares fell as much as 2.5 percent in Paris.
Its refining margin, a generic measure of profitability, shrank to the lowest level in almost five years of $10.60 (R105) a ton, compared with $51 a ton a year earlier, the company said on its website on October 15.
Total has pledged to boost production to reach 2.6 million barrels of oil equivalent a day in 2015 and to about 3 million barrels a day two years later. It has also promised to explore more aggressively for new deposits. – Bloomberg