In its third-quarter trading report, Total highlights lower LNG sales and rising refining profits.
TotalEnergies, the French oil giant, expects to post a decrease in its third-quarter earnings, it announced on Wednesday. Asset sales and improved margins for refining oil failed to offset lower prices and reduced liquefied gas production.
The European refinery margin of the company averaged $63.0 a ton during the third quarter. This was a 300% increase from the same period in 2013. This was due to increased diesel demand over the driving season, and fewer fuels available because the European Union has banned the importation of fuels made with Russian oil. Total faces pressure to reduce its debt after $3.5 billion worth of acquisitions during the first half. CEO Patrick Pouyanne promised in July that higher income would come from asset sales, retail power and natural gas sales and improved refining margins.
The group stated that the gearing ratio of its vehicles should increase by 0.5% to 1% by the end second quarter 2025. Brent crude oil reached $69.1 per barrel in the quarter July-September, down 14% on the same period of last year. Analysts predict that the price will fall even further in 2019. Total and other majors are therefore cutting back on buybacks and trimming spending to prepare for lower earnings.
Total's net investment is expected to be approximately $3 billion for the third quarter. This will include around $500 million of divestments, minus acquisitions. (Reporting by Mathias de Rozario in Gdansk, editing by Milla Nissi-Prussak)
(source: Reuters)