FRENCH OIL major Total has pledged to raise its capital expenditure to $24 billion in 2012, joining an industry trend for big oil companies to have to spend more on exploration and development to replenish dwindling supplies.
The increase, which compares with Total’s capital expenditure of $20.6 billion last year, came as Total reported higher fourth-quarter profit on the back of rising oil and gas prices.
Total said net income excluding one-off items related to changes in the value of fuel inventories rose 7 per cent to €2.73 billion.
In dollar terms, Total’s underlying profit was 6 per cent higher than the same period in 2010, compared with a 14 per cent rise at BP and an 18 per cent increase at Royal Dutch Shell.
Brent crude averaged $109 per barrel in the quarter, up 26 per cent on the same period in 2010 due to strong global demand and unrest in the Middle East, while the price Total received for its natural gas rose 21 per cent.
However, Total said its return on average capital employed fell, in part because of higher costs which increased 14 per cent, on a per barrel basis, in the upstream division. – (Reuters)
