By Adam Whittaker
TotalEnergies expects hydrocarbon production in the fourth quarter to increase slightly, but refining margins to remain weak despite increasing on-quarter.
The French oil and gas company said Thursday that fourth-quarter production is expected to have increased in-line with its guided range. It expects to report production between 2.4 million and 2.45 million oil-equivalent barrels a day, but that the $5 a barrel decrease in oil prices will have dragged on financial performance. Hydrocarbon production in the third quarter was 2.4 million oil-equivalent barrels a day.
The company expects higher gas prices to have softened the hit from falling oil price, a theme analysts expect across the sector.
TotalEnergies also expects to report that refining margins across its downstream division remained weak.
For the fourth quarter, the company said its European refining margin marker was $25.9 a ton, an increase from $15.4 a ton in the prior quarter. This increase will be reflected in its downstream division's results, the company said. However, its margin remains significantly below the $52.6 a ton it reported in the fourth quarter of 2023.
European peers BP and Shell have also reported weak refining margins across their downstream divisions in recent weeks. TotalEnergies' fourth-quarter hydrocarbon production increase, however, sets it apart from its London-listed rivals who both said they expect production to have fallen across their upstream divisions.
Its integrated liquid natural gas division is expected to report a 6% increase in production for the fourth quarter. Meanwhile, Shell recently warned of significantly lower fourth quarter earnings in its integrated gas division.
TotalEnergies' integrated power division should report earnings between $500 million and $600 million for the fourth-quarter, the company said.
Shares are up 1.8% at 56.96 euros in early morning European trade.
Write to Adam Whittaker at adam.whittaker@wsj.com
(END) Dow Jones Newswires
01-16-25 0406ET