PARIS: French oil major Total reported a 10 percent drop in first-quarter net profit to $3.3 billion on Wednesday, dragged down by shrinking margins at its European refineries and a drop in oil and gas output.
Production was hit by the loss of barrels from Libya and Nigeria because of security issues and the United Arab Emirates, where Abu Dhabi took over control in January of oilfields that had been run by oil majors including Total for decades.
The group also booked a $350 million depreciation charge on the giant Russian project it once hoped to develop with Gazprom, but was shelved due to the huge costs of the Arctic offshore gas project.
Total said earlier this month that European refining margins fell to a four-year low in the first quarter. Its margin indicator was 75 percent lower in the first quarter this year compared with the same period a year ago.
"The impact of sharply lower European refining margins was limited thanks to the implementation of performance improvement plans by the segment," Chief Executive Christophe de Margerie said in a statement on Wednesday.
The economic slowdown has hit European oil demand in the past few years, leaving European refineries operating at overcapacity.
Total said European margins had started to recover in the second quarter, but expected maintenance at its German and Dutch refineries in Leuna and Vlissingen to hit output.
On future projects, the group said it expected the start-up of the big CLOV project in Angola at the end of June this year, the coming on stream of the Laggan-Tormore field in Scotland and Nigeria's Ofon Phase 2 in the second half of the year.
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