(Reuters) – French oil company Total (TOTF.PA) is to step up plans to sell off assets, cut investments and reduce operating costs to deliver on a promise to generate $15 billion (9.17 billion pounds) in free cash flow in 2017.
The oil group, which has struggled with production outages
in Libya, Kazakhstan and Nigeria, said on Monday it had reduced its 2017 output goal to 2.8 million barrels of oil equivalent per day from a previous 3 million.
“We have more than 15 major projects to fuel the future growth… Two thirds of those projects are operated by us so that gives us confidence we will achieve the targets,” chief financial officer Patrick de La Chevardiere said at a presentation to investors.
De La Chevardiere declined to comment on what assets the company could sell, adding that during the previous asset sale plan it had sold both upstream and downstream businesses.
Total, like other big oil companies, has been under pressure from shareholders to cut costs and raise dividends. It has been selling off businesses, such as its adhesives division Bostik, which French chemicals group Arkema (AKE.PA) has offered to buy for 1.74 billion euros (2.24 billion US dollar).
Total said it now planned to sell $10 billion worth of assets in 2015-17, having achieved a target of $15-20 billion of sales in 2012-2014.
France’s biggest company by market value and the West’s fourth biggest oil and gas company said last year it would engage in what Chief Executive Christophe De Margerie called a “soft-landing” in capital investments.
Organic investments would fall to $25 billion in 2017 from a peak of $28 billion in 2013 while operating expenses would fall by $2 billion per year by 2017.
The company reiterated an earlier target to generate free cash flows of $15 billion in 2017 but cut the target for next year to $7 billion from a previous $10 billion. It had free cash flows of $2.6 billion in 2013.
Total’s share price was up 1.4 percent by 0843 GMT.
(Reporting by Dimitry Zhdannikov. Editing by Jane Merriman)