Total Backs Profitable Growth Strategy, To Sell $10 Bln Worth Assets In 2015-17

(RTTNews) - French oil and gas giant Total SA (TTA.L, TTFNF.PK, TOT) Monday confirmed its strategy for profitable growth and its objective to generate $15 billion of free cash flow in 2017. Further, the company announced an additional asset sale program of $10 billion in 2015-17, and a major program to reduce operating costs by $2 billion per year by 2017, with an immediate impact as of 2015.

Regarding the expected cash flow growth from operations, the company stated that the increase would be from the start up of major Upstream projects, the ongoing restructuring of Refining & Chemicals and the expansion of Marketing & Services in high growth areas. Total is also emphasizing strict capital discipline, cost reduction and portfolio optimization throughout the firm.

According to Arnaud Breuillac, president, exploration & production, the key points to improve Upstream performance are to reinforce capital discipline, to deliver projects on time and on budget and to reduce costs.

Total's production is expected to grow to about 2.8 million barrels of oil equivalent per day in 2017, despite some delays. The company expects that the start-up of about 15 additional major projects by 2017, following first oil from the Clov field in June, will significantly grow production.

Total also announced that Kevin McLachlan will take over as senior vice president, exploration in early 2015. McLachlan is already working with the exploration teams on the definition of a new exploration strategy for 2015 and beyond.

Regarding its asset sale program, Total is focusing on strategic assets providing growth and high profitability. Over the 2012-14 period, the company has achieved its objective to sell $15 billion to $20 billion of assets.

Further, Total said the entire firm has been mobilized to contribute to a sustainable cost reduction program. Organic investment is projected to decrease to $26 billion in 2014 and to $25 billion in 2017, compared to $28 billion in 2013.

In Paris, Total shares were gaining 0.20 euros or 0.40 percent, and trading at 50.24 euros.