Surging oil drives Total back to pre-Covid-19 profits

Photo: AP

The French energy giant Total announced it had managed to offset the negative effect of pandemic on its business, Reuters reported. The surging oil and gas prices on international markets in combination with increased electricity consumption had the key role for the firm’s financial restart. Total posted first-quarter earnings that were very close and matched to levels from before the pandemic. The company, which is shifting into renewable energy and diversifying away from fossil-based fuel activities, benefited from this drive as areas like oil refining suffered.

Total reported an adjusted net income of $3 billion for January-March, up 69% year-on-year, and 9% above first-quarter 2019 levels. This was despite a drop in hydrocarbon production of 7% from a year earlier, to 2.863 million barrels of oil equivalent per day (boepd). Oil prices fell with the start of Covid-19 lockdowns early in 2020 that brought travel to a standstill and crushed fuel demand, pushing companies like Total to cut investments and find cost savings. Recovering prices are now boosting earnings at Total as accelerating Covid-19 vaccination programmes also raise prospects for sustained demand, although lockdowns remain in place in some of Europe.

The group, which is set to rebrand itself as TotalEnergies, said it was eyeing $12-$13 billion in investments this year, with half of that going to maintaining activities and the rest for growth, including furthering its push into renewable energy. Total has already racked up purchases in the renewable energy sector this year, including solar projects in the United States, and a stake in India's Adani Green Energy and its solar power assets for $2.5 billion.

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