MOSCOW (MRC) -- Total plans to cut costs and sell more assets after Europe’s second-biggest oil company lowered its forecasts for growth in production, as per Hydrocarbonprocessing.
Output may be 2.3 million bpd of oil equivalent in 2015, short of the prior 2.6 million-bbl target, and 2.8 million in 2017, down from 3 million, it said in a statement.
"We are more confident" in reaching these production goals because most new projects are operated by the company, chief financial officer Patrick de La Chevardiere told reporters in London at the company’s annual investor day.
Investment will be cut to USD25 B in 2017 from USD26 B this year and a peak of USD28 B in 2013, Total said.
The French company maintained a target of generating USD15 B of free cash flow in 2017, even as next year’s figure was cut to USD7 B from USD10 B, the CFO said.
Total plans to sell another USD10 B of assets by 2017, adding to the USD15 B to USD20 B targeted from 2012 to 2014. It has achieved USD16 B so far under that plan, with USD4 B under way, including sales of a stake in Nigeria’s Usan field and the Bostik chemicals business, the CFO said.
"It is obvious that in Europe there is overcapacity in refining and that we will adapt our production to the market," de La Chevardiere said. There isn’t a plan to reduce the size of the workforce in France. No decision has been made on whether capacity will be adapted or assets sold, the CFO said.
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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