Total to increase investment in France

15th February 2007, Comments 0 comments

PARIS, Feb 14, 2007 (AFP) - French oil giant Total said Wednesday that 2006 adjusted net profit soared to 15.8 billion dollars, a record figure for any French company that revived pressure on the group to make a greater contribition to the common good.

PARIS, Feb 14, 2007 (AFP) - French oil giant Total said Wednesday that 2006 adjusted net profit soared to 15.8 billion dollars, a record figure for any French company that revived pressure on the group to make a greater contribition to the common good.

Powered by high oil prices, Total's adjusted net earnings rose 5.0 percent to 12.585 billion euros, or 15.8 billion dollars from sales that gained 12 percent to 153.802 billion euros.

"When Total makes profits it's good for the taxpayer," budget minister Jean-Francois Cope said, noting that Total's bounty will boost the country's overall tax receipts.

The consumer association UFC-Que Choisir and French Socialist Party presidential candidate Segolene Royal have called for heavier taxes on oil profits to finance the development of public transportation.

Responding to these calls, outgoing Total president Thierry Desmarest said Wednesday that such ideas were driven by "demagogy" and "populism."

Total is also among 15 parties that went on trial here this week in connection with a 1999 environmental disaster that erupted when the tanker Erika, chartered by Total, sank off France's Brittany coast, polluting vast stretches of the Atlantic coastline and killing thousands of seabirds.

The French state is seeking 153 million euros in damages to cover the cost of the cleanup and recovery of the wreckage while many of the 70 plaintiffs in the case are demanding hefty compensation.

"Total must pay for its ecological crime," Green Party head Noel Mamere insisted. The company could be fined up to a million euros if convicted of causing maritime pollution.

"What I expect of Total is first that it contribute to the reparation of what happened off the coast of Brittany and that it invest in the French economy," said Thierry Mariani of the center-right UMP party.

"I don't favour a tax but a return on investment in the French economy with the creation of jobs in France."

Added Jean-Marc Ayrault of the Socialist Party: "Total's superprofits could be used for investment, for environmental innovations and for public transport."

The group's new chief executive, Christophe de Margerie, meanwhile told a press conference after the release of the results that Total had no current plan to diversify into nuclear energy even if "it will certainly come one day."

A comment by Margerie last week about the company's interest in nuclear power triggered speculation that Total could seek some of Suez' nuclear operations if a planned merger between Suez and Gaz de France was not concluded.

The net figure profit was on an adjusted basis, excluding non-recurrent items. The absolute net result showed a fall of 4.0 percent to 11.800 billion euros in contrast to broad forecasts by analysts that it would rise by 2.27 percent to 12.551 billion euros.

In recent years the company has increased profits in line with the rise of the price of oil, from 7.0 billion euros in 2003 to slightly more than 9.0 billion euros in 2004, and then a record at the time of 12.003 billion euros in 2005.

In the fourth quarter alone, net profit fell by 10.0 percent on a 12-month basis to 2.737 billion euros and sales fell by 6.0 percent to 36.433 billion euros, owing to a recent slide in the price of oil and a slight reduction of production.

The group said that from 2006 to 2010 it expected to increase production by more than 5.0 percent per year.

For 2007, it expected to increase output by 6.0 percent, taking account of the effect of a decision by the Organization of Petroleum Exporting Countries to reduce its output seiling by 1.0 percent.

The group said it would achieve this particularly by increasing production from its Dalia resources in Angola, and by exploiting new reserves in Angola and Indonesia.

Production of liquefied natural gas should increase strongly, by nearly 13.0 percent per year.

Total shares ended the day with a gain of 1.43 percent to 53.25 euros on a Paris market that closed 0.76 percent stronger.

Copyright AFP

Subject: French news

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