By Inti Landauro
PARIS--French oil major Total SA said Wednesday aggressive
cost-cutting and an increase in oil output helped offset the
fallout from the collapse in the price of oil on its bottom
line.
Total said net profit fell 4% to $2.97 billion in the second
quarter from the same period a year ago while revenue contracted
29% to $44.72 billion. When adjusted to exclude the effect of
inventories and other nonrecurring items, the company's net profit
fell to $3.09 billion down from $3.15 billion in the same quarter a
year ago.
The adjusted profit data was higher than the $2.75 billion
median forecast of eight analysts polled by FactSet.
Profit would have fallen even more if the French major hadn't
scrambled to raise output to an average 2.3 million barrels of oil
equivalent a day in the second quarter, from 2.05 million barrels a
day in the same period a year ago, the company said.
Total's strategy for stubbornly low oil prices has been similar
to other major energy companies: extract as much oil and gas from
current operations while cutting back aggressively on all costs and
reducing investment in long-term projects. Along with boosted
revenue from units like refineries and petrochemical plants--which
do well when prices are low--Total, like other majors, has shown
signs of resilience in the face of a historic market collapse.
The company's second-quarter profit report contrasts sharply
with the gaping loss reported by BP PLC on Tuesday. The U.K.-based
company said it posted $6.3 billion loss in the second quarter,
which resulted mainly from a settlement for the Gulf of Mexico
spill five years ago. Even after excluding the effect of the
settlement, BP's pre-tax earnings on oil and gas production shrunk
to $400 million down from $4 billion a year ago.
Total has said it is on track to cut its costs to $1.2 billion
this year. The company added it expects three projects to start
hydrocarbon production in thia year.
Separately, the oil major announced it sold a 20% stake in its
assets in the West Shetland Islands in the North Sea for GBP565
million ($797 million) to SSE PLC . Total retains a 60% stake in
the project.
Write to Inti Landauro at inti.landauro@wsj.com
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