Posted on 05/04/2005 10:32:29 AM PDT by LSUfan
PARIS (AP) - Total SA said Wednesday that net profit rose 53 percent in the first quarter thanks to higher crude oil prices, strong refining profit margins and the continued recovery of its chemicals unit. The French petroleum company said net profit rose to 3.21 billion euros ($4.13 billion) in the first quarter of 2005, from 2.09 billion euros a year earlier.
Both figures were reported under the International Financial Reporting Standards being introduced by many European companies this year.
Stripping out one-time charges for restructuring and amortization, adjusted net profit climbed 50 percent to 2.92 billion euros ($3.75 billion) from 1.95 billion euros in the first quarter of 2004.
The numbers came in at the top end of analysts' expectations and exceeded a consensus forecast of 2.63 billion euros ($3.38 billion).
JPMorgan analyst Mark Lacey told Dow Jones Newswires that the results were "very good," and credited "amazing cost control in the upstream (division)" - Total's exploration and production activities.
Total shares rose 0.2 percent to 173.70 euros ($223.93) in Paris trading.
While crude oil futures have fallen from their peak above $58 a barrel, prices remain about 30 percent higher than a year ago. New York crude fell below $50 a barrel on Tuesday - its lowest close since mid-February.
Total said hydrocarbon production fell 3 percent in the first quarter to 2.56 million barrels of oil equivalent partly because of shutdowns in the Gulf of Mexico following Hurricane Ivan.
Total's oil and gas production unit posted a 42 percent rise in operating profit to 4 billion euros ($5.14 billion), and operating profit from refining and marketing operations rose 61 percent to 891 million euros ($1.15 billion), reflecting strong refining profit margins.
Operating profit of the chemicals division almost tripled to 555 million euros ($713.51 million) thanks to a rebound in petrochemical margins that began in the second half of 2004, Total said.
Arkema, the chemicals unit, which Total plans to spin off in the second quarter of next year, reported operating profit of 89 million euros ($114.42 million) on revenue of 1.36 billion euros ($1.75 billion).
Total, the world's fifth-largest non-state oil company, also said it's concerned by the lack of response from Russian antitrust authorities to its proposed purchase of a 25 percent stake in Russian natural gas producer Novatek.
Total SA
Total SA, headquartered in France, is among the leading energy investors in terrorist-sponsoring states, including Iran, Libya, Sudan, Syria and, prior to the Iraq war, Saddam Hussein's Iraq. Its ties to these countries include ownership and development stakes in oil and gas fields that have generated significant revenues for the governments of these countries. Total's projects in these countries are valued at more than $3 billion and possibly much higher.
Through close cooperation with Iran's state-owned National Iranian Oil Company, Total is involved in joint research projects and contracts for the development and operation of numerous onshore and offshore oil fields in Iran. Included in these are projects at Kharg Island and Dorood field, projects at the Balal oil field and a 40% stake in the South Pars natural gas field. Total has openly stated its intention to spend as much as $2 billion on the development of South Pars alone.1
In the run-up to the Iraq war, it was reported that, in March 2003, Total SA negotiated a major contract with Saddam Hussein's regime to develop Iraq's southern oil fields. The value of this contract was estimated at some $40-60 billion. In Sudan, the company has been in control of Block B oilfield together with Kufpec and Marathon for a number of years.2
Total also has a number of energy-related production and development operations throughout Libya. These activities have resulted in large increases in overall Libyan oil production and have helped upgrade the country's oil sector and revenue-generating capability. In Syria, it has been the lead developer of the $400 million Desgas project. The project reportedly processes some 740 million cubic feet of gas per day. Total's oil industry investments generate an estimated 50,000 barrels of oil per day in close coordination with the state-owned Syrian Petroleum Company.3
Total's activities place it on the "Dirty Dozen" list for the following reasons:
U.S. Sanctions Violator: In 1997, Total became the first company to flout openly the U.S. Iran-Libya Sanctions Act. That law was specifically designed to ensure that Iran and Libya were unable to realize substantial energy-related revenues that could be used to advance those countries’ sponsorship of terrorism. Once Total ignored the law with impunity, a flood of foreign companies rushed to enter the energy market of those countries. Revenues: The primary source of hard currency for most of the U.S.-designated terrorist-sponsoring states is the export of oil and natural gas. 75 percent of all of Libya's government receipts come from oil exports, as does some 40-50 percent of Iran's overall budget.4 Syria and Sudan are likewise dependent on such revenues. Put simply, without the revenues provided by companies like Total, these governments would be unable to support terrorism and maintain expensive weapons programs. GeopoliticalMotives: It is widely accepted that a government's sponsorship of terrorism plays no role in Total's strategic planning. Yet, the company has been accused of using its willingness to defy U.S. sanctions to its advantage in negotiations with sanctioned nations. For example, some have speculated that the enormity of the reported $40-60 billion deal Total inked near the end of Saddam Hussein's reign reflected the Iraqi dictator's expectation that French political support would be assured by such a lucrative agreement. It strains credulity that the U.S. would knowingly wish to hold the stock of a company whose corporate interests may lead it and its government to pursue an agenda antithetical to Western security interests and at odds with U.S. policies and laws for crass commercial reasons. Yet, Total is one of the most widely held foreign stocks in the portfolios of public pension funds throughout the 50 states.5 Moral and Political Cover: When leading global companies such as Total SA partner with terrorist-sponsoring states, it sends a clear message to these governments: Sponsoring terrorism is not a concern as long as there are corporate profits to be made. This message undermines U.S. sanctions and international diplomatic efforts. 1. Company Global Report, 2001; The Regulatory News Service, 5/13/02; and Agence France Presse, 12/13/01.
2. The New Republic, 3/17/03; and Africa Energy Intelligence, 3/6/03.
3. Bloomberg News, 8/7/02; Platt's Oilgram News, 8/8/02; Africa Review World of Information, 9/23/03; WWP- Report on Oil Gas & Petrochemicals in the Developing World, 1/1/03; and AFX/Regulatory News Service, 1/28/02.
4. Country Analysis Briefs, Energy Information Administration, Department of Energy, May 2002; and Country Analysis Briefs, Energy Information Administration, Department of Energy, July, 2002.
5. The New Republic, 3/17/03.
Total joins all the other American oil companies with bloated profits taken from the consumers. Ah, yes, all of them are laughing all the way to the bank.
Yeah, but US companies cannot and do not do business in the world's most active state sponsor of terrorism: Iran.
Oh... I thought Halliburton was the first, my mistake.
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