French energy giant Total ramps up cost-cutting measures to combat low oil prices
French oil major Total today announced plans to ramp up its cost-cutting measures, to combat the oil price rout which has wrought havoc on balance sheets across the industry.
Total will reduce its capital expenditure to around $19bn (£13.1bn) this year, down more than 15 per cent from 2015. It's also targeting asset sales of $4bn in 2016, a figure that's in line with last year.
It comes as the company reported net adjusted net income fell 18 per cent to $10.5bn, with its downstream operations helping to cushion some of the fallout from oil prices tumbling around 70 per cent over the last 18 months.
Upstream's adjusted net operating income, the sector which explores and drills for the black stuff, fell 55 per cent during this period.
Net operating income in its refining and marketing sectors rose 96 per cent and 35 per cent respectively. These sectors have been buoyed by low oil prices, which effectively make their products cheaper to produce.
"Hydrocarbon prices fell sharply in 2015 with Brent decreasing by around 50 per cent," Patrick Pouyanné, chairman and chief executive, said.
"In this context, Total generated adjusted net results of $10.5bn, a decreased of 18 per cent compared to 2014, the best performance among the majors."
"The resilience in a degraded environment demonstrates the effectiveness of the group's integrated model and full mobilisation of its teams."
Total also said it will keep its annual dividend at €2.44 per share, in line with 2014.
Nevertheless, investors were unimpressed, and Total's shares fell as much as 3.3 per cent to €35.31 in Paris today.