Total has posted higher than expected second-quarter profit. As Hayley Platt reports The French oil major was helped by increased refining margins in Europe and accelerated cost-cutting efforts to adjust to a low oil price environment.
Total's cost cutting strategy seems to be paying off. Despite a 44 percent fall in crude oil prices the French oil major reported second quarter profits of just over $3 billion ($3.085 net adjusted) The 2 percent drop from the same period a year ago was well ahead of analysts expectations ($2.61). And Total's own 2015 target. Mike Ingram is from BGC Partners. SOUNDBITE: Mike Ingram, Market Commentator, BGC Partners, saying (English): "They've been quite aggressive in cutting back on capex as well and also they're helped by the fact that they've got rather more refinery cover than many of the other majors." In fact profits at its refining and chemicals sector tripled. And oil and gas production rose, largely thanks to new start-ups. Output though was slightly lower than the previous quarter, due in part to the shutdown of a gas plant in war-torn Yemen. Falling oil prices have prompted cuts across the sector on capital projects and exploration. Total was one of the first to take action, shelving a pricey oil sands pipeline in Canada. It expects to exceed its cost reduction target of $1.2 billion this year. Asset sales are also helping - a 20 percent stake in a North sea project the latest to go for $881 million. Total hopes to make well over five times that from sales this year.