FRENCH oil giant Total said yesterday that it would bring its investment spend down next year while its oil and gas production will grow to 2.6m barrels of oil equivalent per day (boepd) in 2015, boosting the company’s available cash flow.
Investors were eager to know how the French oil major would taper its unprecedented investment drive, set to peak this year, and instead find more cash for dividends.
“The group anticipates a strong increase in cash flow from upstream start-ups and downstream restructuring,” Total said in a statement.
“This increase in cash flow combined with the decrease in investments to more moderate levels should generate notable growth of free cash flow.”
The group’s organic capital expenditure between 2015 and 2017 will fall to between $24bn (£14.96bn) and $25bn per year, down from $28bn in 2013, chief financial officer Patrick de La Chevardiere said.
However, Total did not elaborate on where the dividend could stand, only saying the group would stick to a policy of “competitive returns to shareholders”.
Taking advantage of historically high oil prices, Total has undertaken record investments over the past three years, boosting its exploration budget to drill in areas that are harder to get to and costlier.
The group confirmed a production target of 2.6m boepd in 2015, and a potential for 3m boepd in 2017. Output slid by two per cent to 2.3m boepd last year. Shares climbed 0.8 per cent in Paris to close at €42.71.