Total confident despite volatile oil prices

French oil major Total said Thursday it planned to increase its dividend to shareholders as it expressed confidence earnings could withstand the current volatility in oil prices. Total said in a statement that its headline net profit soared 22 percent to $6.2 billion (5.8 billion euros) in 2016.
However, the adjusted net profit, which is tracked by analysts because it excludes one-off items, fell by 21 percent to $8.3 billion. And revenues were down nine percent at $149.7 billion. Oil prices "were highly volatile in 2016, fluctuating between $27 per barrel and $58 per barrel," said chief executive Patrick Pouyanne.
The average price of oil declined by 17 percent and the average price of gas by 25 percent, he noted. In the fourth quarter of 2016 alone, Total said its revenues grew by 12 percent to $42.3 billion and adjusted net profit was up 16 percent at $2.4 billion.
The unadjusted, or headline, earnings figure swung back to a profit from a year-earlier loss, driven by a rebound in oil prices to $50-$55 following a deal reached by oil producers in December to slash output by almost two million barrels per day. The oil market still had not stabilised, said CEO Pouyanne, pointing out that the price of oil was still only half of what it had been in mid-2014. And he predicted "some volatility" in 2017. After investing $18.3 billion in 2016, Total plans to lower investments to $16-17 billion this year and cut costs by $3.5 billion, Pouyanne continued.