French oil major Total has followed in Statoil's footsteps this morning, announcing 2Q profits which beat predictions as it increased production and refining.
The firm saw new projects start in Angola (CLOV), the North Sea (West Franklin Phase 2) and Russia, increasing output by 12% to 2.3 MMboe/d while refining margins increased to the highest in 12 years. Total also said it expected to exceed its 2015 objective to cut operating costs by US$1.2 billion and confirmed it would be cutting capex by $23-24 billion.
The firm also announced it had signed an agreement to sell 20% of its interests in the Laggan, Tormore, Edradour and Glenlivet fields, in the West of Shetland area of the UK North Sea, to an arm of Scottish utility SSE for £565 million (US$876 million), subject to the customary approvals.
“The sale of these minority interests is aligned with Total’s portfolio management strategy and target of divesting $5 billion of assets in 2015," said Total. "It allows us to capitalize fully on this new deep offshore development, while retaining a majority interest and operatorship,” said Arnaud Breuillac, President, Exploration & Production.
Start-up on Laggan, is expected in coming months, followed by Tormore, Edradour (2017) and Glenlivet (2018), in coming years, opening a new area for gas production in the UK, via a 140km tie-back to shore.
Following completion of the transaction, Total will hold a 60% operated interest in the Laggan, Tormore, Edradour and Glenlivet fields, alongside partners DONG E&P (UK) (20%) and SSE E&P UK (20%). The sale also includes 20% of Total’s interest in the Shetland Gas Plant and interests in several exploration licenses located in the West of Shetland area, including the Tobermory discovery.
Total's net adjusted 2Q 2015 income was $3.1 billion, up 2%, compared to the same period last year, despite sales being down 29%, at $44.7 billion in the period.
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