BP BP Plc

By Inti Landauro 

French oil giant Total SA reported a $1.63 billion fourth-quarter loss on Thursday and said it would cut billions more in spending, rocked by low oil prices that forced it to devalue projects.

Total joined other big international peers like BP PLC and Chevron Corp. in turning in fourth-quarter losses. Exxon Mobil Corp. said its net income for the quarter was the lowest in more than a decade, as oil prices fell 70% in 20 months.

Oil prices have fallen so low that Total had to reassess the value of its assets, writing them down by $3.7 billion. Much of the blow came from impairments at its LNG Gladstone project in Australia that started operating in 2015 and on the Usan project in Nigeria that it was unable to sell.

Total said it would cut capital spending to around $19 billion in 2016, lower than previously expected and down from $23 billion last year. The company also said it would cut its operating costs by $2.4 billion this year by squeezing contractors and cutting spending at all levels.

The company is trying to make its operations profitable at $45 a barrel, compared with $52 a barrel in 2015.

The company's revenue fell 28% to $37.75 billion in the three months to end-December from $52.51 billion in the same period a year earlier.

As dismal as the results look, they were better than some analysts expected. On an adjusted basis, stripping out one-time charges such as write-downs and oil-price effects on inventories, the company notched up profit of $2.08 billion in the quarter. That is down 26% from the same period last year, but Total executives said they were happy with it.

"Honestly, this is the best performance among all oil and gas majors," the company's Chief Financial Officer Patrick de la Chevardière told reporters Thursday morning.

Total's $1.63 billion quarterly loss was smaller than the $5.66 billion net loss it posted in the same period a year earlier, which resulted from a massive $6.5 billion write-down on oil-producing assets made unprofitable by the oil price collapse.

Chief Executive Patrick Pouyanné said oil prices would rise later this year. "I am ready to put a few pennies on that," he said, without elaborating on how much.

Total's share price fell 3% in early trading on Thursday, in line with the sector.

Oil prices were also down again, with the U.S. benchmark falling below $27 a barrel.

Total is an integrated oil company, meaning it explores and produces oil while also refining it into products and selling it to consumers.

The group leaned on refining and retail in the fourth quarter. Operating profit for its gas stations and lubricants more than doubled, while operating profit from refineries and petrochemicals rose 5%. Those units do well when oil prices are low.

Total managed to sell assets worth $2.1 billion in the quarter and $6 billion in the full year. The company expects to sell assets worth $4 billion this year.

"This isn't a garage sale," Mr. de la Chevardière said. "If we cannot get a reasonable price, we don't sell."

The company also wrote down a number of projects that it won't develop, though Mr. de la Chevardière declined to detail any of them.

For the full year, Total has written down $5.43 billion on its assets, notably in Libya and Yemen, where output was suspended because of civil wars in these countries, and on the oil-sands project Fort Hills in Canada.

Total will keep its dividend this year at the same level as last year at EUR2.44 a share. Like last year, it will offer to pay part of it in shares instead of cash.

Write to Inti Landauro at inti.landauro@wsj.com

(END) Dow Jones Newswires

February 11, 2016 15:19 ET (20:19 GMT)

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