Total, Europe’s third-biggest oil company, has said that annual production will rise in the next three years as capital spending peaks.
“The group anticipates investments to trend down starting in 2014 as it enters a growth phase for production and free cash flow,” Total said in a statement ahead of a presentation to investors in London.
Total expects a “strong increase in cash flow from upstream start ups and downstream restructuring.”
The company plans to start projects in Norway, Angola and the North Sea in the coming months and will keep output growth targets, it said.
Total chief executive Christophe de Margerie has pledged to raise oil and natural gas output, explore more aggressively for new deposits and sell assets.
A second-quarter production increase was the first year-on-year gain since the last three months of 2010. The explorer has also set a goal of $15 billion to $20 billion in asset sales between 2012 and 2014.
Total is planning to drill “high potential” wells in the Gulf of Mexico, Iraq, Brazil and Angola by the end of 2014, it said today.
The oil explorer reiterated a goal to raise output to reach about 3 million barrels of oil equivalent a day in 2017 and said it would reach 2.6 million barrels of oil equivalent a day in 2015. Production advanced 1.3% to 2.29 million barrels of oil equivalent a day in the second quarter.
The number of projects starting up in the next three years will nearly double, Total said in its presentation. It also plans to sanction investment in the Yamal LNG project as well as one at Fort Hills in Canada this year, both of which would begin production in 2017.
Total confirmed a target to reduce its European refining and petrochemicals business by 20% from last year to 2017. It pledged to raise a profitability target to 13% from 9.5% currently.
As the biggest refiner in western Europe, where it operates eight plants including five in France, the company has borne the brunt of lower margins and a drop in the consumption of fuel products.
As well as investing in new fields, Total has sold assets such as a gas network in France and a field offshore Nigeria.