Total up despite the decline in oil prices

  •   07/02/2020 - 08h45
  •   Adeline HARMANT

The announcement of (BFM Bourse) - Total on Thursday, reveals the slight decline in annual earnings which is estimated at around -2%. This slight decline is due to the fall in oil prices, which is nevertheless slightly offset by the increase in production. Thus, satisfied with the resilience of the super-major, investors testify to these efforts, which are well above those of competitors.  

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Total up despite the decline in oil prices
Image copyright: Jean Balczesak - Flickr

Total in the aftermath of the turbulence

In the world of commerce, Total is being praised for its steadfastness in the face of unfavorable changes and tensions in the market atmosphere. As a result, the Total share price rises 2.1% to 46.4 euros at around 9:45 a.m. However, according to the announcement of the super major, we can see a 2% drop in net profit for the year 2019 to 11.27 billion euros. However, it is noted that this decline in profit appears rather flattering when the results of Total's competitors are exposed.

Total's competitors, in the wake of market tensions, find themselves in a bad position. In fact, Exxon Mobil ended up with a melted net profit of 31%. The Anglo-Dutch Shell is down 32%, unlike Chevron, which is resigned to a net profit divided by five. Analyst Neil Wilson concludes that BP has defended itself better in this crisis. Total's exceptional performance in 2019 does not reflect the oil giant's immunity to the turbulence in the market sector, but rather the excellence of its annual balance sheet, which is significantly better than that of most of its potential competitors, according to analyst Biraj Borkhataria.


What can we learn from Total and its ambitions to enter the floating market?

There are several reasons why the group is venturing into low carbon. We have the volatility of the oil environment, due to the uncertainty about the demand for hydrocarbons, which is linked to the overall outlook related not only to the growth of the world economy, but also to the geopolitical context, which is unstable. Investments in 2019 have been propelled to $17.4 billion, with a particular focus on the strategy and techniques for strengthening the LNG business.(LNG) added to the deep offshore, as evidenced by the award of Mozambique LNG and the opening of the Arctic LNG 2 project in Russia and the Mero 2 project in Brazil. Thus, one third or even more of the net investments have been implemented in the IGRP (Integrated Gas, Renewables Power) sector, bringing the group's low carbon objective, according to Patrick Pouyanné. It should also be noted that the IGRP sector alone will account for $20.99 billion in direct revenues in the future, or 11.6% of revenues.

Also, according to the manager, Total's interest in buying out Anadarko's assets remains unchanged.