As demand reduces due to global recession, output dips to 9 year lows at Total

03-Aug-09

Europe’s third-largest oil producer Total SA has reported a drop in its output to 9 year lows - 7.3% in Q2 to 2.18 mln bpd; despite gains from new projects in Nigeria and the Gulf of Mexico, as demand dwindled due to the global recession. The company attributes fall in production mainly to lower output quotas by OPEC, weak demand for natural gas, as well as shutdown of the Alwyn area in the North Sea for maintenance and disruptions in output in Nigeria for security reasons. Net income fell 54% to €2.17 bln which included provisions for the modernization of refining and petrochemicals sites in France. Total plans to cut 555 jobs at its refining and petrochemicals operations in France. It will also reduce output at the Gonfreville refinery in Normandy by 25% to 12 mln tpa, and shut a fluid catalytic cracker, lowering gasoline output by 60%. Increased turnarounds and voluntary throughput reductions in the second quarter led the refinery utilization rate to 84% from 86% in the first quarter and 88% percent last year. Five new developments are scheduled to start this year, including the Akpo oilfield off Nigeria, which came on stream in March, LNG plants in Yemen and Qatar, the Tahiti venture in the Gulf of Mexico, which started pumping in May, and Angola’s Tombua-Landana field. Total started production this month at the Tyrihans oil and gas field in the Norwegian Sea. The company’s share of these projects will add as much as 200,000 barrels of oil equivalent a day in output.