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Low crude prices hit Total profits

FRENCH oil major Total said third quarter net profits dived 54 per cent as lower oil prices and tight refining margins dented earnings.<br /><br />Total said yesterday that its adjusted net income, which strips out one-off items and unrealised gains on fuel inventories, was &euro;1.87bn (&pound;1.67bn), in line with analysts&rsquo; forecasts.<br /><br />Oil and gas production rose 0.5 per cent in the quarter compared with the same period in 2008 to average 2.243m barrels of oil equivalent per day.<br /><br />A recovery in oil prices since the second quarter allowed the company to reduce gearing to 20.8 per cent from 24.7 per cent.<br /><br />Chief executive Christophe de Margerie said Europe&rsquo;s largest refiner by capacity was countering a tough environment in that sector by cutting costs.<br /><br />He said Total&rsquo;s investment spending was on track to its 2009 target of &pound;18bn, with new oil and gas developments begun in Nigeria, Qatar, Tahiti, the Gulf of Mexico and Angola.<br /><br />Total&rsquo;s share in these projects will add about 230,000 barrels of oil equivalent a day in output in 2010, according to the company. Demand for oil products has fallen as consumers have cut spending on travel and goods, leading to lower profits for refiners, reduced plant operating rates and temporary closures.