Nigeria's Oil Output Boosts Total's Income to $2.47bn
Energy
By Mike Oduniyi
French oil giant, Total, posted a 35 percent increase in its second-quarter net income to $2.47 billion (N333.45bn) in an environment marked by sharply higher prices and refining margins.
Chief Executive of Total, Thierry Desmarest, said that results were not only attributable to the favourable environment -- with oil prices at record highs -- but also to the group's continued hydrocarbon production growth, primarily from Nigeria.
"Net operating income from the upstream segment adjusted for special items rose by 23 percent. This more moderate increase is due to a high average average tax rate in the second quarter 2004...which reflects in particular, the higher relative contribution of volumes from Nigeria concenssions," Total said.
Hydrocarbon production by the company increased by 3.7 percent to 2.601 million barrels of oil equivalent per day (bpd) from 2.509 million bpd, despite the negative effect of high oil prices on volumes of production sharing contract (PSC) and buy-back contracts, it stated.
Total, whose Nigerian subsidiary, Elf Petroleum Nigeria Limited, is the country's fifth largest oil producer, said the production growth came from "start-up and build-ups at the Amenam in Nigeria, Matterhorn in the US as well as higher production in Norway, Netherlands, Indonesia, Venezuela and Argentina."
During the period, the price of the international market benchmark crude, the Brent, rose by 36 percent to $34.50 per barrel lfor the quarter from $26 in second quarter 2003, while European refining margins increased to $34.40 per metric tone mainly due to strong gasoline demand in the Atlantic Basin and low refined product inventory levels.
Year-to-date investments of $3.5 billion, the company said, are in line with the 2004 CAPEX budget of $10 billion, which remains heavily geared towards upstream growth projects.
The company's chief financial officer Robert Castaigne said the group was "totally on track" to achieve its long-term production growth target of 4 percent per year to 2008, helped by a raft of new projects including Nigeria's Akpo, Angola's Rosa and Qatar's Dolphin project.
He said the company was currently drilling in several countries including Libya, Algeria, Nigeria, Congo and the UK. "We think we will have good news to report in the coming weeks or months," he said.
Castaigne also said the company had "very recently" been given the go-ahead by Angola's state-owned Sonangol to launch the development of the Rosa deepwater field in block 17. The company also expects the Federal government to "soon" award the Oil Mining Licence for the Akpo development, with production start up anticipated in 2008.
"It is a major discovery and now the engineering studies are progressing very well," he said.
Castaigne, however, said it was not a good time to consider acquisitions due to high oil prices. "Now the oil prices are relatively high at $40 a barrel so it is not a good time to envisage making an acquisition," he said on. "If later on, there are some possibilities, of course we will study them, but we have nothing in mind now."
Rather than outright acquisitions, Castaigne said the company's 2008 plus strategy was focused on raising its portfolio within OPEC
countries. "We've had some talks with these countries and we will see if we have possibilities in enlarging our business in these OPEC countries."
The group' consolidated quarterly sales rose by 8 percent to Eur28.97 billion from Eur24.347 billion. Earnings per share, adjusted for special items and expressed in dollars, increased by 34 percent, thanks to the accretive effect of share buybacks over the past 12 months, the company said.
Income from the upstream segment, adjusted for special items, rose by 23 percent to $1.49 billion compared to $1.21 billion in second quarter 2003.
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