France’s Total Posts Record Results for 2017
Thanks to production growth, strategic acquisitions, and a capitalization on the cyclical low to launch upstream projects, Total reported USD 10.6 billion in adjusted net income in 2017 – a 28 percent increase on the previous year – and a return on equity of over 10 percent, the highest among all oil and gas majors.
“These strong results were driven by production growth (five percent in 2017), notably the start-up of Moho-Nord in the Republic of Congo, the ramp-up of Kashagan in Kazakhstan, and the entry into Al-Shaheen in Qatar.”
Patrick Pouyanné, Total
Outlining his mid-term strategy for the company to EnergyBoardroom in 2015, Total’s global CEO Patrick Pouyanné highlighted that “Overall, Total thrives in two major vectors for growth. On the one hand, deep offshore projects – in for example Africa and Brazil – and on the other hand, gas and LNG projects – in for example Australia and Russia.”
2017’s results show that this strategy is bearing fruit, with Pouyanné pointing out in a recent press release that “These strong results were driven by production growth (five percent in 2017), notably the start-up of Moho-Nord in the Republic of Congo, the ramp-up of Kashagan in Kazakhstan, and the entry into Al-Shaheen in Qatar.” In terms of upstream, “In 2017, the Group took advantage of the cyclical low to launch five Upstream projects, including the first phase of the Libra development in Brazil, as well as petrochemical projects in the United States and South Korea” notes Pouyanné. “The Upstream, in particular, increased its results by more than 80 percent and its operating cash flow by close to 40 percent,” he continues. In strategic acquisitions, “the Group is preparing for future growth with the announced acquisition of Maersk Oil, strengthening its position in E&P in the North Sea, and finalized its entry into the Lapa and lara fields in Brazil in early 2018” describes Pouyanné.
“Gas, which will represent a quarter of the world’s energy mix, is growing faster than oil, and still constitutes to this day the cleanest fossil fuel in terms of emissions”
Patrick Pouyanné, Total
In 2015, Pouyanné spoke about gas as a key component of Total’s future strategy, including ‘gas’ as one of his four key words for the Total of tomorrow, alongside ‘safety,’ ‘renewables’ and ‘shared value.’ He suggested that “gas, which will represent a quarter of the world’s energy mix, is growing faster than oil, and still constitutes to this day the cleanest fossil fuel in terms of emissions. The world still hosts populations with limited or no access to energy. As a result, the demand for energy will grow and even if companies like Total invest in renewables, they will never satisfy global needs. At the moment, Total already produces equal amounts of oil and gas in contrast to a 65/35 ratio ten years ago.”
To this end, in 2017 Total started gas exports from Yamal LNG in Russia, one of the largest liquefaction projects in the world with maximum capacity of 16.5 Mt/y of LNG. Pouyanné also highlights the fact that “In the framework of reinforcing its integrated gas strategy, Total announced the acquisition of the Liquefied Natural Gas (LNG) business of Engie to take full advantage of the fast-growing LNG market.”
Writer: Patrick Burton