Total plans drastic cut in investments as profit plunges

French oil giant Total announced yesterday a drastic cut in costs and investments after its net profit plunged in 2014 due to crude prices falling by more than 50% since June. Total reported a 62% fall in net profit to $4.24bn last year compared with a year earlier, while revenue dropped 6.0% to $236.12bn, the group said in a statement. The market-watched net adjusted profit, which excludes volatile elements, fell 10% to $12.84bn, 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 $7.1bn write-down in its oil sands in Canada and shale oil operations in the US, which will now undergo a restructuring. With weaker oil demand and prices, Total plans to cut its investments by more than 10%, 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 2.3mn bpd compared with 2.15mn bpd in 2014.