European Supermajors Show Upstream Difficulties, Total Best Performer

European oil supermajors continue showing the negative impact of low oil prices, while flexing their muscles to increase production and maintain their geopolitical clout. Despite significant differences, this is the case for both France’s Total and Royal Dutch Shell.

Royal Dutch Shell showed the most difficulties, reporting a $7,416 million loss in the third quarter of the year, compared to $4,463 million in income in the same period for 2014.

‘Third quarter 2015 CCS earnings excluding identified items were $1.8 billion compared with $5.8 billion for the third quarter of 2014, a decrease of 70%. Earnings were impacted by non-cash charges of some $1.0 billion related to adverse currency exchange rate effects on deferred tax positions and financing items which were not included as identified items’ the company wrote on Thursday. 

Shell announced interim dividends equal to the US dollar dividend for the same quarter last year.

Similarly, Total maintained the 3Q interim dividend on 2014 levels. The only difference is that the dividend will be payable in April (2016), while the 3Q14 interim dividend was payable in March 2015. 

All in all, Total performed better, capitalising on strong downstream results.

“The Group is benefiting from its integrated model, production growth and discipline on both investments and operating costs. For the first nine months of 2015, the Group’s adjusted net income decreased by only 16% while the oil price fell by 48%” CEO Patrick Pouyanné commented in a note released on Thursday. 

INCREASE IN PRODUCTION

Both companies reported an increase in production.

“We continue to improve the operational performance of our assets, and production volumes are up” Shell CEO said. The company The company reported a production of 2.880 million barrels of oil equivalent per day in the third quarter, representing a 3% year-on-year increase. 

Total reported a 10% year-on-year production increase.