Profits at French oil company Total plunge more than 20 percent
French oil company Total said on Tuesday that it expects 2015 profits to plunge by more than 20 percent from a year earlier because of falling oil prices.
Total chief Patrick Pouyanne told Europe 1 radio that Total's earnings were supported by its transformation, refining and distribution activities.
"We're present all along the chain," he said.
"But at the same time our profits are falling. They will be down a bit more than 20 percent this year (2015) because the oil price fell by 50 percent."
Total officials, contacted by AFP, said Pouyanne's remarks were based on results for the first nine months of 2015, but that the full-year results were headed for a similar drop, as predicted by analysts.
Total in September announced cuts in spending and investment, citing the weak oil price.
It expects to invest between $20 billion and $21 billion this year, and $17 billion to $19 billion in 2017, against $23 billion to $24 billion in 2015.
Operating costs are to be cut by $3 billion and Total wants to sell $10 billion worth of assets as well as cut its payroll by 2,000 out of 100,000 employees, it said.
The figures coincided with a warning by the International Monetary Fund (IMF) that the sharp collapse in the oil price was proving more of a drag on the global economy than a stimulus.
The financial strains on exporters and the deep investment cutbacks in the industry are more than offsetting the expected gains from cheap oil enjoyed by key importers like Japan and the United States, the IMF said.
Low oil prices, while hurting both oil producers and oil companies, can often be positive for consumers and non-oil corporates and therefore for global growth.
The oil price this week hit 12-year lows and is currently trading at or below $29 dollars per barrel.
Fears over China and the global economy on top of a persistent supply glut have sparked a dizzying fall in oil prices which have been compounded by the recent return of major oil exporter Iran's return to the market.
The Paris-based International Energy Agency (IEA) also warned Tuesday that prices had not yet bottomed out.
"Can it go any lower?" the IEA asked in its monthly oil market report. "Unless something changes, the oil market could drown in over-supply. So the answer to our question is an emphatic yes. It could go lower."
Growth in world demand for oil is also expected to ease off, it said.
Shares in Total were 3.15 percent higher on the Paris stock exchange at around 1145 GMT.
Total's official 2015 results announcement is due on February 11.
© 2016 AFP