MOSCOW (MRC) - French oil company Total is to step up plans to sell off assets, cut investments and reduce operating costs to deliver on a promise to generate USD15 billion in free cash flow in 2017, Reuters.
The oil group, which has struggled with production outages in Libya, Kazakhstan and Nigeria, said on Monday it had reduced its 2017 output goal to 2.8 million barrels of oil equivalent per day from a previous 3 million.
"We have more than 15 major projects to fuel the future growth ... Two thirds of those projects are operated by us so that gives us confidence we will achieve the targets," chief financial officer Patrick de La Chevardiere said at a presentation to investors.
De La Chevardiere declined to comment on what assets the company could sell, adding that during the previous asset sale plan it had sold both upstream and downstream businesses.
Total, like other big oil companies, has been under pressure from shareholders to cut costs and raise dividends. It has been selling off businesses, such as its adhesives division Bostik, which French chemicals group Arkema has offered to buy for 1.74 billion euros (2.24 billion US dollar).
Total said it now planned to sell USD10 billion worth of assets in 2015-17, having achieved a target of USD15-20 billion of sales in 2012-2014.
France's biggest company by market value and the West's fourth biggest oil and gas company said last year it would engage in what Chief Executive Christophe De Margerie called a "soft-landing" in capital investments.
Organic investments would fall to USD25 billion in 2017 from a peak of USD28 billion in 2013 while operating expenses would fall by USD2 billion per year by 2017.
The company reiterated an earlier target to generate free cash flows of USD15 billion in 2017 but cut the target for next year to USD7 billion from a previous USD10 billion. It had free cash flows of USD2.6 billion in 2013.
As MRC wrote before, Total, Europe’s third-largest oil company, 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. Total 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.
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.
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