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Total SA unveiled a plan to neutralize its greenhouse gas emissions by 2050 and deepen cost cuts as its first-quarter profit plunged with oil and gas prices.
The French major rounds out a weak quarter for the oil supermajors, forcing them to slash spending, curb production and even reduce the dividend. It could get worse in the months ahead as the public health crisis destroys energy demand. Despite the financial hit, Big Oil remains under pressure from investors and society to tackle the long-term environmental challenge.
“While responsibly taking on the short-term challenges, the group continues to implement its medium and long-term strategy,” Chief Executive officer Patrick Pouyanne said in a statement Tuesday.
Total has invested billions of dollars in recent years in batteries, wind and solar energy, but it is also catching up with European rivals such as Royal Dutch Shell Plc, BP Plc and Repsol SA, which have already set ambitious climate targets.
Total’s first-quarter adjusted net income fell 35% from a year earlier to $1.78 billion, the company based near Paris said. Analysts polled by Bloomberg had forecast $1.57 billion on average.
The company offered to pay its final 2019 dividend of 68 euro cents in share, and set the first quarter dividend at 66 euro cents, unchanged from a year earlier.
Royal Dutch Shell Plc last week surprised the market by reducing its payout for the first time since at least the Second World War. Norway’s Equinor ASA also slashed its dividend and Exxon Mobil Corp. froze it for the first time in 13 years.
Total decided to slash capital expenditure to less than $14 billion this year, a further reduction of $1 billion compared to March. It will cut operational spending by more than $1 billion, a deeper reduction than a target of $800 million set back in March.
