Total's profits rising with the cost of crude

4th May 2006, Comments 0 comments

PARIS, May 4, 2006 (AFP) - French oil group Total reported a 15-percent spurt in first-quarter net profit Thursday to a record EUR 3.683 billion in response to rising crude prices that could produce a another strong showing in the second quarter.

PARIS, May 4, 2006 (AFP) - French oil group Total reported a 15-percent spurt in first-quarter net profit Thursday to a record EUR 3.683 billion in response to rising crude prices that could produce a another strong showing in the second quarter.

"I am happy to announce that Total has seen another record quarter," company finance director Robert Castaigne said during a conference call.

Total provided no specific guidance for the second quarter but said that since the start of the quarter "risks seen to be threatening market supply have pushed crude prices to record levels while refining margins are at a level slightly above that of the first quarter".

Added Castaigne: "Production should increase considerably in 2006."

He said that if prices remained close to their current levels, above US $70 a barrel, it was "clear that the second quarter will not be much different from the first".

Castaigne also said it was "too soon" to assess the impact of Bolivia's decision to nationalize its hydrocarbon assets.

"We are in contact with the Bolivian authorities to see if there is a possibility of continuing" our activity in the country," he disclosed, noting that Bolivia accounts for less than one percent of Total's oil production.

Total's sales rose by 25 percent from the equivalent first-quarter figure last year to EUR 39.605 billion.

Adjusted operating profit rose by 24 percent over the figure for the first quarter of 2005 to EUR 6.77 billion, beating market expectations.

Prices of Brent North Sea crude oil in the first three months of the year had averaged US $61.8 a barrel, up 30 percent over the year-earlier period.

"Demand for oil was sustained at a time when production capacities were being affected by major upheavals, notably in Nigeria," said Total chairman Thierry Desmarest.

Total's production came to 2.44 million equivalent barrels of oil a day, down 4.8 percent on first quarter 2005, a decline that partially reflected the effect of prices on volumes from shared production contracts and the impact of unrest in Nigeria.

In its refining activities adjusted operating profit came to EUR 650 million, a decline of four percent from first quarter 2005. Overall refined volumes fell eight percent to 2,421 million barrels a day.

Analysts at Merrill Lynch nonetheless described Total's refining results as "a positive surprise," since the company managed to maintain relatively high refining margins despite the general weakness of such margins in Europe.

Total's chemical division reported adjusted net earnings of EUR 310 million, down 44 percent on the year.

Total shares at mid-day were showing a gain of 2.01 percent at EUR 223.10 on a generally stronger Paris exchange.

Copyright AFP

Subject: French news

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