French oil giant Total has reported a small dip in net profits for the second quarter of this year of US$2 billion, down from $2.12 billion a year ago despite a rise in revenues and production.
In the Exploration & Production segment, second quarter 2017 operating cash flow increased by almost 50 per cent compared to the same quarter last year, benefiting from production growth of more than 3 per cent.
Total Chairman and CEO Patrick Pouyanné mentioned why production has grown.
"It was driven by start-ups and ramp-ups of new cash-accretive projects, as well as the cost reduction program, which continues to be implemented with determination The Group is also continuing to prepare for the future, with the signing of a contract related to the development of Phase 11 of the giant South Pars gas field in Iran and the final investment decision for Phase 3 of the Halfaya project in Iraq."
The company is targeting production growth of more than 4 per cent this year supported by the continued ramp-up of new projects, notably Kashagan in Kazahkstan and Moho Nord in Congo. As well as start-ups of new projects will continue in the second half, mainly with Libra Pioneiro in Brazil and Edradour-Glenlivet in the United Kingdom.
Pouyanné concluded: “Total has a stronger balance sheet and the flexibility to take advantage of the low-cost environment by being able to launch profitable projects and acquire resources under attractive conditions.”