Total boosts profit 15 percent, warns of tight global oil capacity

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PARIS: The Total oil group raised its adjusted first-half net profit by 15 percent to ?6.977 billion on high oil prices, but warned on Friday that world oil production capacity remained tight.The group said that the main driving factor behind its profits growth, to the equivalent of $10.7 billion, had been exploration and production activities.Group investment rose by 8.0 percent to ?5.5 billion euros in the six months and the group stood by its plan to invest a total of $19 billion (?12.2 billion) in the whole of the year, finance director Patrick de la Chevardiere said.Managing director Christophe de Margerie said of the results: This performance was carried by upstream activities which showed once again the good sensitivity of results to high prices for hydrocarbons. He said: In the second quarter, demand for oil remained strong, still pulled by Asia and the Middle East, despite signs of a slowing in the Atlantic basin. However tensions on world production capacity remain, despite the increase in the contibution from Saudi Arabia. The group said its production of hydrocarbons had risen slightly, by 1.0 percent, to 2.39 million barrels of oil equivalent per day in the first half and by the same amount in the second quarter to 2.353 million barrels.The net figure was given on an adjusted basis which excludes exceptional items and is widely used by the industry.The net figure showed a 29-percent rise on the equivalent figure last year to ?8.33 billion euros. Sales rose by 21 percent to ?92.4 billion.In the second quarter alone, adjusted net profit rose by 20 percent to ?3.7 billion, and the net figure by 39.0 percent to ?4.7 billion.Sales in the second quarter rose by 23 percent to ?48.2 billion.De Margerie said that world supplies of oil had again been affected by geopolitical uncertainties or problems over security in several zones of growth, and continuing decline in mature regions. Total noted that the average price of oil had jumped by 72 percent in the first half of the year from the level in the first half of last year.De Margerie also noted that refining margins in Europe rallied, supported by the vigor of demand for distillates. But the group said that since the beginning of the third quarter refining margins are in retreat from the average level in the second quarter, while margins on distillates are still good. Total s chemicals division was weighed down by weak margins for petrochemicals owing in particular to the rapid increase of prices for naphta and the fall of demand in the Altantic basin in the second quarter . Net adjusted profit fell by 56.0 percent to ?228 million.The group said that the next few months would be marked by the progressive rise of output from fields at Moho Bilondo in the Congo and Jura in the British North Sea.Output from the Al Jurf field in Libya should be resumed in the fourth quarter. -AFP

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