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Total cuts production targets for Nigeria, others

By on September 24, 2014

Oil major, Total, has cut its 2017 output goal to 2.8 million barrels of oil equivalent per day from the previous three million.

The firm, which has struggled with production outages in Libya, Kazakhstan and Nigeria, said on Monday that it would step up asset sales and overhaul exploration after cutting its oil output targets.

Total, France’s biggest company by market value and the West’s fourth biggest oil and gas group, unveiled a “high-risk, high-reward” drilling strategy two years ago. But this has had disappointing results as high-cost investments did not lead to large discoveries.

“We have more than 15 major projects to fuel the future growth. Two thirds of those projects are operated by us so that gives us confidence we will achieve the targets,” the chief financial officer for the firm, Mr. Patrick de La Chevardiere, was quoted by Reuters as saying on Monday.

De La Chevardiere also said Total believed its Yamal joint-venture project in the Arctic could go ahead on time despite international sanctions against Russia for its role in the Ukraine crisis.

“We had meetings with European Union authorities and they confirmed that onshore Arctic gas projects are not under sanctions,” he said, adding that the $27bnYamal liquefied natural gas project could no longer raise dollar financing but could still get funding in euros, renminbi and roubles.

Total, like other big oil companies, has been under pressure from shareholders to cut costs and raise dividends as rising costs in the oil industry and weaker oil prices squeeze profitability.

It has been selling off businesses, such as its adhesives division, Bostik, which French chemicals group, Arkema, has offered to buy for €1.74bn ($2.24bn).

The company plans to sell $10bn of assets in 2015-17, having hit a target of $15-20bn of sales in 2012-2014.

Since 2010, Total has generated a total of $30bn from assets sales, according to De La Chevardiere. That makes it one of the most ambitious sell-off programmes in the industry alongside BP’s $50bn sell-off plan.

 

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