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Total to lower investments starting in 2014

September 25/2013

MOSCOW (MRC) -- French oil company Total, Europes third-largest oil company, has reiterated its hydrocarbon production targets for the medium term, thanks to a strong investment push over the past years which should start to trend down from next year, reported Hydrocarbonprocessing

In a presentation to investors, Total said it anticipates a strong increase in cash flow from the start-ups of major oil and gas extraction projects, as well as from the restructuring of its downstream businesses -- refining and chemicals, and marketing and services.

The world's fifth largest nonstate oil company by output, Total has embarked upon an ambitious plan to restore profitability for its loss-making refining businesses, at the same time as making a huge investment push to search for new oil and gas, which is now more difficult to find as it is rarer and lodged in remote areas such as deep offshore or off the Arctic circle.

The plans highlight the French group's intensive efforts to maintain and even reinforce its global position, as competition around the world has grown fierce over the past few years against a background of rising costs to produce oil and gas, the race for new hydrocarbon sources to address growing emerging markets' appetite, while facing the decline of crisis-hit Europe.

In the coming months, the group should start-up numerous production projects. The restructuring of refining and chemicals "has begun to bear fruit," as profitability is increasing towards the target of 13% return on average capital employed set for 2015, Total said.

As MRC informed previously, Total intends to invest EUR160m before 2016 to adapt its petrochemical platform in Carling, in the Lorraine region of eastern France, and to restore its competitiveness. The company plans indeed to develop new activities on the platform in the growing markets for hydrocarbon resins (Cray Valley) and for polymers, while shutting down the acutely loss-making steam cracker in the second half of 2015. The Carling plant, which makes petrochemicals such as ethylene and propylene at the site near the German border, employs 350 Total workers as well as sub-contractors. These chemicals are used to make plastics.

Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world with business in Europe, the United States, the Middle East and Asia. The company's petrochemical products cover two main groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.
Author:Margaret Volkova
Tags:PP, PS, PE, propylene, ethylene, Total Petrochemicals, France.
Category:General News
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