Total Hit by Struggling Refining, Lower Output
PARIS, April 30 (Reuters) – French oil major Total reported a 10 percent drop in first-quarter net profit on Wednesday, dragged down like its rivals by shrinking margins at its European refineries and a drop in oil and gas output.
Security issues hurt output from Libya and Nigeria while in the United Arab Emirates Abu Dhabi in January took over control of oilfields that had been run by oil majors such as Total for decades.
The group also booked a $350 million depreciation charge on a Russian Arctic gas project it hoped to develop with Gazprom but shelved due to the huge costs.
Total shares were down 1.3 percent in early trade, underperforming the European oil and gas index and rival Shell which was up 3 percent despite booking a $2.9 billion charge related to refineries in Europe and Asia.
Shell said was it was in the process of divesting refineries in four countries.
"The miss came from the downstream business," said Bernstein analysts in a note on Total. "Upstream net income per barrel was $15.8/boe versus expectations for $14.3/boe due to higher equity income (from affiliates Novatek and Angola LNG)."
Total said this month that European first-quarter refining margins had fallen to a four-year low.
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