Slump in demand: TOTAL share ignites Turbo: slump in profit does not scare investors | message

—While the group wants to invest less money in oil and gas projects, management has set itself more ambitious targets for reducing its CO2 emissions. The investment in low-carbon electricity generation should not be affected by the cut in investments, as the company announced on Tuesday in Paris. TOTAL wants to become almost CO2 neutral by 2050.

The news was well received on the stock exchange. The shares of other oil companies also rose noticeably, as did oil prices. Stock traders referred to reports that crude oil floods in the markets could subside. Apparently, the reduced oil production is already noticeable.

TOTAL is now planning to reduce production to 2.95 to 3 million barrels of oil equivalent per day this year. This is at least five percent less than previously planned. The forecast takes into account the voluntary cut in funding in Canada and the cut funding plans of Opec +, an association of the Opec countries and allied countries such as Russia.

Meanwhile, the group is cutting its investments this year by almost a quarter to around $ 14 billion (€ 12.8 billion). By contrast, investments in low-carbon power generation should remain at the planned level at 1.5 to 2 billion euros. TOTAL has invested billions in wind power, solar energy and storage technology in recent years. The company plans to make its own operations carbon neutral by 2050. In the business that accounts for its customers in Europe, this should apply to the entire production and all energy products of the house.

The slump in oil demand as a result of the coronavirus pandemic is also leading to weak utilization of TOTAL refineries. After the plants were still 84 percent full in 2019, management expects only 70 to 75 percent for the current year.

In the first quarter, TOTAL barely remained in the profit zone due to the slump in demand and the drop in the oil price. The surplus fell 99 percent year-over-year to $ 34 million.

The group management is now tightening the austerity measures already initiated. Operating costs are now expected to drop by at least a billion dollars. There should also be savings of a similar amount in energy costs. The company has raised $ 3 billion in bonds in the wake of the April crisis and has drawn $ 6 billion in credit lines./stw/men/fba

At Euronext in Paris, TOTAL shares have meanwhile gained 7.53 percent to EUR 32.785.

/ stw / jha /

PARIS (dpa-AFX)