Total trims 2016 capex by 15%

Total SA is setting its organic capital expenditure for 2016 at about $19 billion, a reduction of 15% compared with that of 2015.

The French firm says the cut “marks a transition to a sustainable level of investments of $17-19 billion from 2017 onwards.” Asset sales of $4 billion are expected in 2016, the same level as in 2015.

Total also reported an adjusted net income for 2015 of $10.52 billion, down 18% from the total a year earlier. Its fourth-quarter adjusted net income was $2.08 billion, down 26% year-over-year.

Strong downstream results in 2015 offset some of the upstream declines that resulted from lower oil and gas prices. Adjusted net operating income for the year from its refining and chemicals segment was $4.89 billion, twice that of 2014 because of industrial performance during a period of high margins and cost reduction programs.

Adjusted net operating income for the year from its upstream segment was $4.77 billion, a drop of 55% compared with that of 2014, essentially due to the lower commodity prices, partially offset by an increase in production, a decrease in operating costs, and a lower effective tax rate.

Hydrocarbon production in 2015 was 2.35 million boe/d, an increase of 9.4% compared with the 2014 level.

Companywide production is expected to rise 4% in 2016 compared with the 2015 total—when it posted a year-over-year increase of 9%—which is in line with Total’s average growth target of 5%/year during 2014-19.

Five major startups are planned by the firm in 2016, the first of which was reported Feb. 8 from the Laggan and Tormore gas-condensate fields in the West of Shetland area (OGJ Online, Feb. 8, 2016).

Downstream, Total says its target to reduce European refining capacity by 20% will be met by yearend, a year ahead of the initial plan announced in 2012.

The cessation of traditional refining activities at La Mede in view of its conversion to a biorefinery (OGJ Online, Apr. 16, 2015), the restructuring of the Lindsey refinery, and the modernization of the Antwerp refinery will be finalized before yearend (OGJ Online, Sept. 24, 2014).

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