TotalFinaElf earnings increase as production rises 8 percent

Allen Baker, PNA contributing writer

European oil giant TotalFinaElf reported a profit of 1.37 billion Euros as higher production and prices were counterbalanced by a strengthening of the Euro and sharply lower refining margins.

Net income rose 110 percent, but excluding non-recurring items the improvement was just 13 percent. Fourth-quarter earnings declined from the third quarter, when TotalFinaElf made 1.64 Euros.

For the year, profits came to 5.94 billion Euros, down 22 percent from 7.52 billion Euros in 2001.

Liquids production hit 1.6 million barrels a day in the fourth quarter, up 5 percent from a year ago and even with the third-quarter number. Natural gas volumes notched up 15 percent from the year-ago figure to 5 billion cubic feet. That was a significant rise from 4.1 billion in the third quarter. Higher North Sea production and new fields in Norway and Syria contributed to that growth.

Operating income for the upstream segment rose 56 percent, excluding non-recurring items, to 2.52 billion Euros.

Downstream earnings were weak, in line with much of the industry, with a drop of 64 percent in operating income to 229 million Euros. Refinery throughput slipped 8 percent compared with the number a year earlier to 2.22 million barrels a day. The refineries ran 2.33 million barrels daily in the third quarter.

Profits in chemicals were also down, in this case by 44 percent, to 145 million Euros.

Sales for the quarter totaled 26.9 billion Euros, up 14 percent from a year ago and up 6 percent from the third quarter. For the year, sales slipped 3 percent to 102.54 Euros.

The Euro has been strengthening markedly, which hurts the company since oil is priced in dollars in world markets. That means TotalFinaElf gets fewer Euros for each barrel of oil than it would if the dollar were stronger. A Euro now buys about $1.08. By comparison, in the third quarter of 2001 it was buying just 89 cents.