Total SA's (TOT) Chairman and Chief Executive Christophe de Margerie said Thursday he expects the Organization of Petroleum Exporting Countries to act to avert a slide in oil prices when oil ministers meet next week in Vienna, underscoring the energy major's concerns about the sharp drop in crude.
Total SA's (TOT) Chairman and Chief Executive Christophe de Margerie
said Thursday he expects the Organization of Petroleum Exporting Countries to
act to avert a slide in oil prices when oil ministers meet next week in Vienna,
underscoring the energy major's concerns about the sharp drop in crude.
"OPEC has all the means to prevent (crude) oil prices falling too
low," Mr. de Margerie said in an interview with Dow Jones Newswires, on
the sidelines of the World Gas Conference in
Kuala
Lumpur
.
With
Europe
facing a major economic crisis that threatens to
engulf the European single currency, and with the latest data casting doubt on
the strength of the
U.S.
economic recovery, it is unlikely that OPEC will announce any plans to cut
production to boost the crude oil prices, Mr. de Margerie said.
Saudi Arabia, the world's largest oil producer and OPEC's eminent member, has
already substantially increased its production to compensate for the drop in
output resulting from the implementation of an embargo against Iran, another
OPEC member, which will come in full force on July 1st, said Mr. de Margerie.
The Saudi's move created a temporary oversupply of the market which should be
reabsorbed as geopolitical tensions remain acute, he said, in a reference to
the sanctions against
Iran
and
the civil unrest in
Syria
which
forced the French major to stop production there earlier this year.
Yet "the fundamentals plead for higher oil prices, as underlying demand is
still high and the geopolitical tensions are higher than ever," Mr. de
Margerie said.
A balanced price which supports long term investments is around one hundred
dollars a barrel, he said, adding that Total has also estimated $80 a barrel as
sustainable for short term investments.
The situation in
Europe
isn't that worrisome, Mr. de
Margerie said, as he believes that the single currency won't disappear. Yet he
didn't rule out that the scope of the euro zone (and therefore of the euro)
might change, in a veiled reference to a potential exit of
Greece
from
the bloc.
Such an event is unlikely to dent the group's business directly, he said.
But any strengthening of the euro does dent the group's refining margins, which
are expressed in U.S. dollars and have been suffering from overcapacities in
Europe
. "When
the euro is lower to the dollar, it's better for our margins," he said.
Asked if the group would consider further cutting its refining capacities in
Europe
, Mr.
de Margerie noted that the group was turning its refinery in
Rome
into
a storage plant, after having recently transformed its
Dunkirk
plant
in
Northern France
into a storage unit and cut some capacities of its
Normandy
refinery, also in
Northern France
.
"We'll adapt our refining capacities to the market," he said, noting
that European governments were all pushing for lower gasoline and diesel
consumption. "If there is less consumption, less capacities will be
needed."
As for the dividend, the group will resume proposing one from the second
quarter, after the gas leak at its Elgin North Sea platform stopped production
and forced Total to suspend any dividend announcement in the first quarter, he
said, noting that the payment of a dividend is fully covered by the group's
cashflow.
The group, which has increased its capital expenditures to boost its production
profile in the coming years, has also divested around $15 billions over the
last two years, he insisted.
"Our policy is of course to have shareholders taking part in the group's
expansion," he said.
Mr. de Margerie will travel to
Vienna
ahead
of the OPEC International Seminar (featuring some of the OPEC ministers and
other industry players), which takes place next Wednesday and Thursday.
Διαβάστε ακόμα
Τρι, 24 Σεπτεμβρίου 2024 - 19:58
Τρι, 24 Σεπτεμβρίου 2024 - 19:54
Τετ, 18 Σεπτεμβρίου 2024 - 18:32
Τετ, 18 Σεπτεμβρίου 2024 - 18:27
Τρι, 17 Σεπτεμβρίου 2024 - 20:01