Major oil profit down 66%

LONDON – France’s total reported a massive year-over-year drop in earnings on Tuesday after 12 tumultuous months in which commodity prices plummeted amid the coronavirus pandemic.

The energy major said the net profit for the whole year 2020 reached $ 4.06 billion, exceeding the expectations of $ 3.86 billion from analysts surveyed by Refinitiv. It compared to $ 11.8 billion for fiscal year 2019, reflecting a 66% year-over-year decrease.

Total also posted a net profit in the fourth quarter of $ 1.3 billion, exceeding analysts’ expectations of $ 1.1 billion.

Shares in total increased by about 0.8% over the previous year, after falling by more than 28% last year.

“Total faced two major crises in 2020: the Covid-19 pandemic that severely affected global energy demand and the oil crisis that drove Brent below $ 20 a barrel in the second quarter,” said Patrick Pouyanne, CEO In total, in a statement.

“In this particularly difficult context, the Group immediately implemented an action plan and proved its resilience due to the quality of its portfolio,” he added.

Total said it will propose a fourth-quarter dividend payment of 0.66 euros ($ 0.8) per share, in line with previous quarters, and will set the dividend for 2020 at 2.64 euros per share.

The oil and gas industry was shipped last year, as the coronavirus pandemic coincided with a historic shock to demand, falling commodity prices, evaporating profits, unprecedented cuts and tens of thousands of job cuts.

Last week, Britain’s main oil and gas company, BP, reported its first net loss in a decade, while US oil giant Exxon Mobil reported its fourth consecutive quarter of losses. Anglo-Dutch oil giant Royal Dutch Shell also reported a sharp drop in year-round profits.

BP CEO Bernard Looney described 2020 as “the toughest” of his career, while Exxon Mobil CEO Darren Woods said the past 12 months “have seen the most difficult market conditions in the world. which Exxon Mobil has ever experienced ”.

Leading energy companies have warned that the ongoing coronavirus crisis will continue to have an impact on their short-term performance while trying to reassure investors about their future profitability.

Total reaffirmed this trend in its results throughout the year, saying that the oil environment “remains uncertain and dependent on the recovery of global demand, still affected by the Covid-19 pandemic.”

The international benchmark index for Brent crude traded on Tuesday morning at $ 61.22 a barrel, up about 1.1%, while West Texas Intermediate futures were at $ 58.54 a barrel. increase by almost 1%.

Brent prices topped $ 60 a barrel on Monday, for the first time since January 2020.

Oil prices have steadily improved in recent weeks, supported by continued reductions in production and the mass launch of Covid vaccines.

Last month, Total became the world’s largest energy company to give up the American Petroleum Institute following a review of its lobbying influence on oil and gas.

Total said it has decided not to renew its API membership this year, citing disagreements over climate policies and the group’s support for facilitating drilling regulations.

This move is seen as a growing rift between oil and gas companies on both sides of the Atlantic.

Most European oil and gas companies have generally been more willing to accelerate their plans to reduce carbon emissions in recent years, while US counterparts such as Chevron and Exxon Mobil have resisted calls to diversify their portfolios.

It is happening as the global oil and gas industry faces increasing pressure from climate emergency activists, activist investors and decision-makers around the world.

S&P Global ratings – one of the most influential rating companies – warned last month that it could lower its credit score for a number of major manufacturers, including Total, Royal Dutch Shell and ExxonMobil.

The rating firm said it believed that “the energy transition, price volatility and lower profitability are increasing risks for oil and gas producers”.