Total Profit Rises 13% on Higher Oil Prices; Output Drops 1%

Total SA, Europe’s third- largest oil producer, said profit rose 13 percent on higher oil prices.

Third-quarter profit excluding changes in inventories and the value of a stake in Sanofi-Aventis SA climbed to 2.8 billion euros ($3.97 billion) from 2.48 billion euros a year earlier, the Paris-based company said today in a statement. That beat the 2.69 billion-euro average of 14 analysts surveyed by Bloomberg.

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Net income rose 17 percent to 3.31 billion euros. Production in the third quarter fell 1 percent. Chief Executive Officer Christophe de Margerie has said output will be little changed this year because of a lull in startups. Total raised a target for production growth in September and said it would drill twice as many frontier exploration wells in a bid to make big discoveries.

The French company expects output to rise an average of 2.5 percent a year from 2012 to 2015 with growth coming from the start of projects in Angola and Nigeria. Total has said it may raise investment to about $23 billion a year from about $21 billion to pay for new ventures.

In a bid to boost future output, Total plans to make final investment decisions on the Ichthys LNG project off Australia, Egina in Nigeria, Moho Bilondo in the Republic of Congo and the Shtokman gas field in Russia’s Barents Sea by the end of the year. Total has said the acquisition of a 12 percent stake in OAO Novatek will add about 120,000 barrels equivalent a day in output while the Pazflor project in Angola is being ramped up to full capacity of 220,000 barrels a day.

Crude Futures

Brent crude futures, the benchmark for two-thirds of the world’s oil, jumped 46 percent during the July-through-September period to average $112.09 a barrel. Royal Dutch Shell said yesterday that earnings doubled to $7 billion, while Exxon Mobil Corp. reported net income exceeded $10 billion for a third consecutive quarter.

The French oil company pledged to explore more aggressively for oil and gas. It reversed a production slump that touched a nine-year low in 2009 by starting new fields and LNG projects. The company plans to drill about five frontier exploration wells this year and the same number in 2012, more than twice last year’s count.

Drilling is ongoing in Brunei deep water Block CA-1, an “elephant-size” oil prospect that could open a new deep- offshore basin, Total said. A new producing field could also be opened at Malaysia’s offshore Saujana-1 where drilling will also start.

Total, Europe’s biggest refiner, unveiled a plan earlier this month to merge its refining and petrochemicals operations and create a separate fuel-marketing division. Profits from turning crude into fuels such as gasoline and diesel in northwest Europe dropped to $13.40 a ton in the third quarter.

The refiner has pledged to trim its exposure to European crude-processing. Total last year halted fuel processing at the Dunkirk plant in northern France and is trying to sell its Lindsey refinery in the U.K.

–Editors: Stephen Cunningham, Vidya Root

To contact the reporter on this story: Tara Patel in Paris at tpatel2@bloomberg.net