Total: Fourth quarter and full-year 2017 results123

Paris,  - Total's Board of Directors met on February 7, 2018, to review the Group's 2017 accounts. Commenting on the results, Chairman and CEO Patrick Pouyanné said:

“Brent rose to $54/b on average in 2017 from $44/b in 2016 while remaining volatile. The Group demonstrated its ability to capture the benefit of higher prices by reporting adjusted net income of $10.6 billion, a 28% increase (compared to a 24% increase in Brent) from 2016, and a return on equity above 10%, the highest among the majors. The Upstream, in particular, increased its results by more than 80% and its operating cash flow by close to 40%.

Financial discipline was successfully maintained. Organic investments were $14.4 billion, in line with guidance of $13-15 billion, and cost savings reached $3.7 billion in 2017, more than the target of $3.5 billion. Production costs fell to $5.4/boe in 2017 from $9.9/boe in 2014.
These strong results were driven by production growth (5% in 2017), notably the start-up of Moho-Nord in the Republic of Congo, the ramp-up of Kashagan in Kazahkstan, and the entry into Al-Shaheen in Qatar. The Downstream confirmed again this year its ability to generate around $7 billion of operating cash flow and reported a return on capital employed of more than 30%.

In 2017, the Group took advantage of the cyclical low to launch five Upstream projects, including the first phase of the Libra development in Brazil, as well as petrochemical projects in the United States and South Korea. In E&P, the Group is preparing for future growth with the announced acquisition of Maersk Oil, strengthening its position in the North Sea, and finalized its entry into the Lapa and Iara fields in Brazil in early 2018. In the US Gulf of Mexico, the Group participated in a major discovery at the Ballymore prospect. In the framework of reinforcing its integrated gas strategy, it announced the acquisition of the LNG business of Engie to take full advantage of the fast-growing LNG market. Marketing & Services continues to grow, notably by expanding its retail network into Mexico.

The strategy implemented since 2015 has enabled the Group to reduce its pre-dividend organic breakeven to $27/b in 2017 and generate $22 billion of debt-adjusted cash flow (DACF). The Group also continued to strengthen its balance sheet, ending the year with 14% gearing, a significant decrease compared to 2016.

In this context, considering the anticipated growth in cash flow from 2018 forward from increasing production and leverage to oil prices, the Board of Directors decided to eliminate the discount on the scrip dividend and to propose a shareholder return policy for the coming three years.”

Highlights since the beginning of the fourth quarter 2017

  • Started gas exports from Yamal LNG in Russia, one of the largest liquefaction projects in the world with maximum capacity of 16.5 Mt/y of LNG

  • Started giant Libra field in Brazil with first production from the 50 kboe/d Libra Pioneiro FPSO and launched first phase of large-scale development with a new 150 kboe/d FPSO

  • Started production on the 180 kb/d Fort Hills project in Canada

  • Major US Gulf of Mexico deep-offshore oil discovery on the Ballymore prospect, which Total entered with a 40% interest in September 2017

  • Acquired 12.5% interest in the Anchor permit in the deep-offshore US Gulf of Mexico

  • Entry of Total, as operator, on exploration Block 48 in Angola

  • Acquisition of Engie's upstream LNG business for $1.49 billion; Total ranks second in global LNG

  • Sold interest in Martin Linge field in Norway for $1.45 billion

  • Launched Total Spring in France to target residential market with gas and green power

  • Sale in Italy of fuel distribution and refining activities of TotalErg (Total 49%)

  • Strategic agreement between Total and CMA CGM to provide 0.3 Mt/y of LNG for future CMA CGM container ships

  • Entered petroleum product retail sector in Mexico in agreement with GASORED to rebrand network of 250 stations as Total


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