French oil company TotalEnergies said Thursday that its third-quarter profit soared 43 percent from the same quarter of 2021 to $6.6 billion, benefiting from record gas prices, which have soared since Russia invaded Ukraine.
In the midst of the debate on the super profits of energy companies in the context of the climate crisis, and while the French political class is debating a possible tax, TotalEnergies has already made more profits in nine months than last year: $17.3 billion compared to $16 billion in total last year.
“So much the better”, immediately rejoiced the Minister of Economy Bruno le Maire to the microphone of BFM Business. “We should all be proud to have a major energy company that is French like Total,” the minister said, pointing out that its earnings make it possible to “pay a discount on fuel” to French motorists, and “to increase Total’s salaries.”
The group has announced a 13th month pay rise for all its employees worldwide, and has just signed a wage increase agreement in France with two majority unions after a long strike in its refineries that continues to create fuel shortages in French service stations.
Two of the group’s sites remained on strike on Thursday, on the call of the CGT union.
In a statement sent in advance on Wednesday, the collective 350.orga for its part denounced “new obscene profits” of TotalEnergies “to the detriment of people and the planet”, stressing that the group “responsible for some of the most destructive fossil fuel projects on the planet” continues to “ruthlessly profit from the war in Ukraine”.
– 9.9 billion without Russia –
Oil and gas have largely boosted the group’s profits. The average price of liquefied natural gas (LNG), on which TotalEnergies has been betting for several years, soared by 50% compared to the second quarter, as Europe, deprived of Russian gas, sought to fill its reserves for the winter.
The profit was achieved despite a new provision of $3.1 billion related to risks on Russia, after provisions of $7.6 billion in the first two quarters.
“In a context marked by a Brent price averaging $100 per barrel and gas prices exacerbated by Russia’s military aggression against Ukraine, TotalEnergies was able to leverage its integrated model, particularly in liquefied natural gas (LNG), to generate results in line with previous quarters,” commented group CEO Patrick Pouyanné in a statement.
The gas and renewables business achieved a “record” adjusted net operating income of $3.6 billion in the quarter, up $1.1 billion from the second quarter, the statement said.
Although the group’s LNG production was down by 6% in the third quarter year-on-year and its total LNG sales were down by 10% this quarter compared to the previous quarter due to maintenance or shutdowns at various plants, total LNG sales increased by 5% year-on-year “due to increased spot purchases to maximize the use of TotalEnergies’ regasification capacities in Europe”, TotalEnergies said.
For the coming months, the group is counting on support for oil prices, particularly from the decision of OPEC+ countries to reduce production quotas by 2 million barrels per day, and on gas prices “which should remain high, driven by the need to import LNG into Europe to replace Russian gas imports”.
Excluding one-off items including provisions due to Russia, the group’s adjusted net income reached $9.9 billion in the quarter, above the expectations of a Factset consensus of analysts who were expecting $9.6 billion.
