Total and Imperial Oil Companies Report Decline In Profit, While Shell Sells Assets
By Jason Simpkins
Two international oil companies yesterday (Thursday) reported a drop in second-quarter profits, while a third announced it was selling assets.
French energy company Total (NYSE: TOT) reported a slight drop in second quarter profits. Net income fell to $4.66 billion, a 1% decline from the $4.7 billion taken in a year ago. Shares of Total fell 2.3% to $76.59 in Paris. The drop in profit came despite a 1.4% average increase in production. Total revenue dropped 4% to $53.41 billion.
Total levied partial blame on the weaker U.S. dollar. While Total sells oil in dollars, it reports its profits in Euros. Spanish-Argentine oil company, Repsol (NYSE: REP), also attributed much of its 11% drop in profit to the weak U.S. dollar.
However, Total should find comfort in a joint venture it is set to undertake with Russian oil monopoly OAO Gazprom. The two companies will combine forces to work the Shtokman field off the Arctic shore. The field is estimated to hold as much as 3.7 trillion cubic meters of natural gas.
Imperial Oil Ltd. (AMEX: IMO), Canada’s largest oil producer and refiner, also reported a decline in second-quarter profits. Its net income fell 15% to $676 million. Total revenue fell to 5.2% to $6.02 billion. Exxon Mobil Corp. (NYSE: XOM) owns a majority stake in the company.
Also, Royal Dutch Shell (NYSE: RDS.A), which saw an 18% rise in second quarter profits this year, said yesterday that it intends to sell three oil refineries in France. Two of the holdings will be sold to Petroplus Holdings AG for $875 million.
The third is the Berre-l’Etang refinery site, which for $700 million will go to Bassel, a French chemicals company. The refineries have a combined capacity of 220,000 barrels a day. Shell will also sell its 28% stakes in the Skarv and Idun fields to E. On Ruhgras Norge AS for $893 million.
