French oil major Total has scaled back its production target for 2017 after announcing further investment cuts and project delays.
Total says it is executing its plan to reduce capital spending to US$23-24 billion in 2015, from the peak of $28 billion in 2013. The group will then further reduce spending down to $20-21 billion in 2016, before returning to a "sustainable level" of $17-18 billion from 2017 onwards.
Total also aims to make $1.2 billion in operating cost savings in 2015, with 66% of that target already met. The group is targeting a further 50% reduction by 2017, totaling $3 billion 2015-2017.
As a result, Total expects to produce 2.6 MMboe/d, compared with a previous forecast of 2.80 MMboe/d, the company said Wednesday before holding an investor day in London.
Analysts said the measures are a sign that oil majors are extending their belt-tightening into next year and 2017 after companies from Chevron to Shell announced large spending cuts for 2015.
"We are preparing the group to face low oil prices for a long time," Total Chief Financial Officer Patrick de La Chevardiere told reporters in London, according to Bloomberg.
The firm still has a strong pipeline of projects underway, with 20 major startups due by 2019.
The firm is also targeting increasing production efficiency from around 90% in 2014 to 93% in 2017, and plans to increase spending in research and development by 3% a year, from about $1 billion, focusing on seismic imaging, subsea processing, LNG, lubricants and petrochemicals.
It also plans to invest about $500,000 a year in new energies, such as solar and biofuel.
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