Total May Sell Assets to Pay for Higher Project Costs, BoA Says
Total, Europe’s third-largest oil company, may have to sell assets to pay for projects designed to raise production in coming years, according to Bank of America Merrill Lynch.
“We are cautious on the profitability of Total’s project pipeline and believe extra disposals may be needed to offset capex inflation,” analysts including Hootan Yazhari and Fiona Maclean wrote in a report published today. The bank added the company to its “least preferred” list.
Total hasn’t made a decision on whether to sell its French natural-gas network TIGF, Chief Executive Officer Christophe de Margerie said Aug. 31. The company has announced sales of non- strategic assets without specifying them.
Total has quickened the pace of acquisitions and disposals in recent years as part of a policy to “actively manage” its asset portfolio in a bid to boost output. The Paris-based company is also pushing harder to drill more exploration wells and add to its reserves.
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