DAVOS, Switzerland (Reuters) - Oil and gas major Total will announce “very good” 2017 results and has the means for more major acquisitions, although its main focus for 2018 will be on absorbing Maersk Oil and other deals made last year, its chief executive said.
“We have the means if we wish but it is not my priority, there are still many operations that we need to absorb, so 2018 will be rather the time to digest,” Total CEO Patrick Pouyanne told French TV station BFM Business at the World Economic Forum in Davos.
He added, however, that if there were “great” opportunities, Total could consider them.
French group Total will announce 2017 results on Feb. 8.
“We are going to announce results that once again will be very good,” Pouyanne said. “We should be reporting profits on the rise. Above $10 billion.”
Total reported net profit of $8.2 billion for 2016, with earnings helped by cost cuts made due to a prolonged downturn in the price of oil.
The company is expected to report 2017 net profit of $10.5 billion, according to Thomson Reuters I/B/E/S estimates.
“We must not lose that discipline on cost. I always say we cannot control oil prices but can only control our costs,” said Pouyanne.
“Today, oil is at $70 per barrel because of strong demand. However, demand also depends on price, thus, if the price goes higher we could see demand weaken. At $70, we’ll see U.S. producers re-launch their machines. Output will rise again and could hit prices again,” added Pouyanne.
Total bought the oil and gas business of Danish company A.P. Moller Maersk in a $7.45 billion deal which Total said would strengthen its operations in the North Sea and raise its output to 3 million barrels per day by 2019.
The Maersk deal is set for completion by the first quarter of 2018.
Reporting by Bate Felix and Benjamin Mallet; Writing by Sybille de La Hamaide; Editing by Gus Trompiz/Sudip Kar-Gupta