Total's 2010 profits jump on higher oil prices

City A.M. Reporter
French oil major Total reported bumper earnings on Friday thanks to higher oil prices, and unveiled plans to spend $20bn (£12.43bn) this year mainly on new oil and gas projects to boost flagging production.

Europe's third-largest oil group, which spent billions of dollars in 2010 on Canadian oil sands and Australian offshore gas, said it was targeting more acquisitions to renew its production portfolio, and aimed to sell non-core assets.

"We will continue to invest massively," Total Chief Executive Christophe de Margerie told a press conference.

In the final quarter of 2010, Total saw its oil and gas output rise by only 0.4 per cent to 2.38 million barrels of oil equivalent per day as it had no major project start-up in 2010.

Total shares were down 0.82 per cent at €43.12, despite results that analysts said were slightly ahead of expectations.

With oil prices now over $100 a barrel, de Margerie said he expected them to remain firm but that it would be "unhealthy" to stay above this mark in the short-term. He has said in the past that prices should rise gradually to avoid hurting the economy.

Total's head of strategy Jean-Jacques Mosconi said the group saw oil prices between $80 and $100 per barrel in 2011.

France's biggest company by market capitalisation said it targeted a production rise of an average two per cent per year in the 2010-2015 period and that it planned to start up its huge Angolan offshore Pazflor project in the fourth quarter.

It also said it targeted "numerous" projects in Russia, Canada, Australia and China, but gave no further details.

Stripping out one-off items, Total's 2010 net profit rose to €10.29bn from €7.78bn in 2009.

Sales rose 21 per cent to a staggering €159bn, equivalent to the gross domestic product of Algeria, as oil prices more than doubled on the back of the economic rebound.