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The Wall Street Journal: Total’s Profit Falls 34% As Production Declines


November 9, 2006; Page D5

PARIS — French oil company Total SA Wednesday reported a 34% drop in third-quarter net profit due to financial effects.

Net profit fell to €2.42 billion ($3.09 billion) from €3.65 billion a year earlier. Stripping out financial effects stemming from the takeover of drug maker Aventis by Sanofi-Synthelabo — in which Total held a significant stake — as well as other items, profit would have dropped slightly to €3.11 billion from €3.13 billion, the company said, as high oil prices failed to offset a weaker dollar and disruptions in Nigeria. The adjusted profit expressed in dollars would have risen 4% to $3.96 billion, Total said.

Sales grew 3.5% to €38.36 billion from €37.06 billion. The company’s total hydrocarbon output fell 6% to 2.29 billion barrels of oil equivalent a day in the third quarter, from 2.43 billion barrels a year earlier.
Total Chief Financial Officer Robert Castaigne said he expected production for the full year to be 2.35 million barrels of oil equivalent a day, just short of a previous forecast of 2.40 million barrels a day due to a greater than expected impact from disruptions in Nigeria.

But Total expects production to pick up in 2007 as new projects come on stream, including the giant Dalia field offshore Angola, which is expected to start up in mid-December. Mr. Castaigne said production at Dalia would be built up progressively over a period of around six months and would eventually contribute around 4% of group output.

This would put it on track to achieve its target of average annual output growth of close to 4% between 2005 and 2010, broadly in line with BP PLC’s plans but exceeding expectations for many other oil majors, including Royal Dutch Shell PLC.

Under some production-sharing contracts, Total is entitled to fewer barrels to cover its exploration costs when oil prices climb above a certain level. Total’s earlier output estimates were based on a price of $60 a barrel, but prices were around $65 a barrel, Mr. Castaigne said.

Total’s oil sands Joslyn project in Canada will cost about $12 billion to develop, Mr. Castaigne said, adding that Joslyn’s proven and probable reserves amount to two billion barrels of oil equivalent. Total is the operator of the project, with an 84% interest. and its sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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