Paris (AFP)
The oil group Total recorded in the second quarter its first net loss since 2015, weighed down by heavy asset write-downs as well as falling crude prices and refining margins.
The net loss reached $ 8.4 billion, from a profit of 2.8 billion a year earlier, the French oil and gas giant said in a statement Thursday.
Adjusted profit, which excludes in particular the accounting effects related to the valuation of inventories and exceptional items, for its part reached 130 million dollars in the second quarter, a drop of 96%.
"During the second quarter, the group faced very exceptional circumstances: the Covid-19 health crisis which affected the world economy and the crisis in the oil markets with the price of Brent falling sharply to $ 30 per barrel on average, historically low gas prices and very degraded refining margins given the fall in demand, "commented CEO Patrick Pouyanné, quoted in a press release.
Total's hydrocarbon production also fell by 4% to 2.85 million barrels of oil equivalent per day (Mboe / d), reflecting in particular the will of certain members of the Organization of the Petroleum Exporting Countries (OPEC) and their allies to pump less in order to support prices.
These have fallen following the Covid-19 pandemic, which has virtually shut down certain activities such as air transport. Prices have since recovered somewhat with a recovery in demand and the limitation of production in some countries.
Total considers that the environment remains "volatile", however, and in passing confirms its desire to save money and reduce its investments.
- abandoned assets -
The losses announced Thursday morning are no big surprise after the announcement the night before of heavy asset write-downs for $ 8.1 billion. This accounting revaluation, motivated by the depression of prices but also the dynamics of the energy transition, relates mainly (7 billion) to the tar sands in Canada.
Other industry giants such as BP, Shell and ExxonMobil had already massively downgraded several of their assets in recent weeks.
The revision announced by Total first follows the fall in prices due to the Covid-19 pandemic (for 2.6 billion).
The group retains the hypothesis of a barrel of Brent worth $ 35 this year, then going back to $ 60 in 2023. For the rest, Total imagines a long-term price of $ 50.
Total also reviewed its assets with regard to the energy transition and the fight against climate change, an area in which the company recently announced new objectives.
For this calculation, Total has used reserves that are more than 20 years old and have high production costs, of which all of the reserves may not be produced before 2050.
In other words, the group assumes that in a future where oil demand will tend to fall, part of its reserve hydrocarbons may remain underground, and it will naturally be the most expensive to produce. first abandoned.
According to Total, the only projects affected are the Canadian oil sands projects of Fort Hills and Surmont. This translates into an additional exceptional depreciation of 5.5 billion recorded in the second quarter.
The tar sands are indeed criticized for the economic cost, but also environmental, of their extraction. Present in sandy form in the subsoil, petroleum is produced at the end of a long polluting and energy-consuming process.
© 2020 AFP