PARIS: French oil group Total suffered a profit and production setback in the second quarter, it reported on Wednesday but said it expected output to rebound despite uncertainty over the impact of sanctions on Russia.
The key quarterly net profit on a current cost basis, excluding the effects of changes in inventory values, fell by 12.0 percent to $3.15 billion (2.3 billion euros).
The headline net profit fell by 8.0 percent to $3.10 billion, and sales rose by 2.0 percent to $62.56 billion from the comparable figures last year.
The results fell short of analysts' expectations, and the price of Total shares was down by 2.72 percent to 50.80 euros in late morning trading.
The group blamed weak refining conditions in Europe and a fall of output, but expressed confidence that production would rise following the launch of a project in June for a giant offshore field called CLOV off Argentina.
Output was also hit by the ending of a production licence in Abu Dhabi, maintenance operations, and worsening unrest in Libya.
Production of hydrocarbons in the quarter fell by 10.0 percent to 2.054 million barrels of oil equivalent per day, but finance director Patrick de La Chevardiere told a telephone press conference that this was "an absolute low point".
However, the group had not yet estimated the possible impact of new economic sanctions against Russia decided by the United States and European Union on Tuesday, he said.
"So far we have not stopped our operations on the site of the Yamal project," he said referring to a giant plant for liquefying natural gas to be built in Siberia.
Total has an interest of 20 percent, and its partners Novatek of Russia has 60 percent and Chinese oil group CNPC 20 percent.
"As partners, we have decided to assess the situation at the end of August," he said.
Total has increased its stake in Novatek from 17.0 percent to slightly more than 18.0 percent at a cost of about $270 million.
"The group has reported results which are disappointing given expectations," said brokers Aurel BGC.
This was because the climate for refining in Europe was still unfavourable and because the group's production figures were down 10.0 percent, they said. (AFP)