PARIS (AFP) – French oil giant Total announced Thursday a drastic cut in costs and investments after its net profit plunged in 2014 due to crude prices falling by more than 50 per cent since June.
Total reported a 62 per cent fall in net profit to $4.24 billion last year compared with a year earlier, while revenue dropped 6.0 per cent to $236.12 billion, the group said in a statement.
The market-watched net adjusted profit, which excludes volatile elements, fell 10 per cent to $12.84 billion, after “oil prices fell dramatically in the second half of 2014, ending the year at $55 per barrel,” the statement said.
The group had a $7.1 billion writedown in its oil sands in Canada and shale oil operations in the United States, which will now undergo a restructuring.
With weaker oil demand and prices, Total plans to cut its investments by more than 10 per cent, including in its North Sea and West Africa operations, and to reduce its workforce by some 2,000 people mainly through a hiring freeze.
The group still plans to increase production this year to just over 2.3 million barrels per day compared with 2.15 million bpd in 2014.