France’s Total lifts shareholder dividends as profit jumps

Fourth-quarter net profit at the French oil company rose 19 percent to $2.9 billion, compared with analysts’ average forecast of $2.8 billion. (Reuters)
Updated 08 February 2018
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France’s Total lifts shareholder dividends as profit jumps

PARIS: Higher production drove a 28 percent rise in net profit at Total last year, allowing the French oil and gas group to hike dividends and announce plans to buy back shares.
Adjusted net profit came in at $10.6 billion (SR39.75 billion), helped by a five percent rise in production.
The company said on Thursday it would increase dividends by 10 percent over the next three years, with the 2018 interim dividend rising 3.2 percent. It also said it planned to buy back up to $5 billion of stock over 2018-2020.
Total shares were up 1.7 percent in early trading, outperforming a 0.6 percent decline in the STOXX Europe 600 Oil & Gas index.
Fourth-quarter net profit rose 19 percent to $2.9 billion, compared with analysts’ average forecast of $2.8 billion. Oil output, however, came in slightly below analysts’ mean estimate.
“The numbers were good. In Total’s case, they’ve got enough cash to increase capex and do a share buyback, so it all looks reasonably positive,” said Clairinvest fund manager Ion-Marc Valahu, who owns Total shares.
Chief Executive Patrick Pouyanne said Total planned some $2 billion of acquisitions in 2018, and the company would return to normal staff hiring patterns after a three-year freeze.
Rival BP said earlier this week its 2017 profit more than doubled to $6.2 billion on the back of higher oil prices and output, allowing the British firm to resume share buybacks, as it too recovers from a three-year oil downturn.
However, US groups Exxon Mobil and Chevron posted rare quarterly earnings misses this month, hit by weakness in international refining operations.
Total’s market value of around €115 billion puts it roughly on a par with BP, but below Exxon, Chevron and Royal Dutch Shell, according to Thomson Reuters data.


Saudi Arabia has ‘no intention’ of 1973 oil embargo replay

Updated 12 min 29 sec ago
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Saudi Arabia has ‘no intention’ of 1973 oil embargo replay

  • Falih said that if oil prices went up, it would slow down the global economy and trigger a recession
  • Falih said Saudi Arabia would soon raise output to 11 million barrels per day (bpd) from the current 10.7 million

LONDON: Saudi Arabia has no intention of unleashing a 1973-style oil embargo on Western consumers and will isolate oil from politics, the Saudi energy minister said on Monday amid a worsening crisis over the killing of Saudi journalist Jamal Khashoggi.
“There is no intention,” Khalid Al-Falih told Russia’s TASS news agency when asked if there could be a repetition of the 1973-style oil embargo.
Several US lawmakers have suggested imposing sanctions on Saudi Arabia in recent days while the kingdom, the world’s largest oil exporter, has pledged to retaliate to any sanctions with “bigger measures.”
“This incident will pass. But Saudi Arabia is a very responsible country, for decades we used our oil policy as responsible economic tool and isolated it from politics,” Falih said.
“My role as the energy minister is to implement my government’s constructive and responsible role and stabilizing the world’s energy markets accordingly, contributing to global economic development,” Falih said.
He said that if oil prices went up, it would slow down the global economy and trigger a recession. But he added that with Iranian sanctions coming into full force next month, there was no guarantee oil prices would not go higher.
“I cannot give you a guarantee, because I cannot predict what will happen to other suppliers,” Falih said, when asked if the world can avoid oil prices hitting $100 per barrel again.
“We have sanctions on Iran, and nobody has a clue what Iranians export will be. Secondly, there are potential declines in different countries like Libya, Nigeria, Mexico and Venezuela,” he said.
“If 3 million barrels per day disappears, we cannot cover this volume. So we have to use oil reserves,” he said.
Falih said Saudi Arabia would soon raise output to 11 million barrels per day (bpd) from the current 10.7 million. He added that Riyadh had capacity to increase output to 12 million bpd and Gulf OPEC ally, the United Arab Emirates, could add another 0.2 million bpd.
“We have relatively limited spare capacities and we are using a significant part of them,” he said.
Global supply next year could be helped by Brazil, Kazakhstan and the United States, he added.
“But if you have other countries to decline in addition to the full application of Iran sanctions, then we will be pulling all spare capacities,” Falih said.