Total reports sharply higher 1st quarter earnings

AP News
Posted: Apr 29, 2011 6:47 AM
Total reports sharply higher 1st quarter earnings

French oil giant Total SA said Friday its net profit grew by half in the first quarter as recovering economies and unrest in the Middle East pushed the price of a barrel of crude to three-year highs.

Total said in a statement that it made euro3.9 billion ($5.8 billion) in the first quarter, up from euro2.6 billion a year earlier, when the Brent oil price averaged only $76.40 a barrel. From January to March it averaged $105.40 a barrel and has continued to rise since then, and now tops $120.

France's largest company by market capitalization said it pumped 2.3 percent less oil in the quarter, producing an average of 2.37 million barrels a day, from 2.43 million a year earlier. Ongoing violence in Libya, which caused Total and other oil companies to halt production, caused a 0.5 percent drop in production.

Total's earnings growth was matched by its larger competitors Exxon and Royal Dutch Shell, both of which reported booming profits for the period on Thursday.

The French company has pledged to invest $20 billion this year, mainly to seek out new development projects in oil, gas and renewable energy.

On Thursday Total launched a bid to take control of U.S.-based solar panel maker SunPower Corp., in a deal that values the San Jose, California company at $2.3 billion.

Total is also pursuing acquisitions in a natural gas field in Russia's far north and has recently concluded deals in Uganda, Argentina, China and Bolivia.

Total said "geopolitical tensions" and the aftermath of the Japan earthquake "will shift the balance of the global energy markets."

"Total confirms its strategy of investing to increase is production to better respond to changes in energy demand and in the energy mix," Chief Executive Christophe de Margerie said in a statement.

Shares in the company fell 0.3 percent in early trading on the Paris stock exchange to euro42.89.