[LONDON] Faced with a dive in oil prices, French energy giant Total said it would trim investment plans and cut costs in order to protect its dividend on Wednesday.
"Total is entering a phase of financial discipline," chief financial officer Patrick de La Chevardière told a briefing in London.
Like other oil giants, the Total group had already reduced investments by more than 10 per cent, from US$23-24 billion this year to US$20-21 billion in 2016 and US$17-19 billion in 2017, cutting operating costs at the same time.
"We do not know what the price of oil will be... no oil major can control the price of production," de La Chevardière said. "The best solution is therefore to reduce costs as much as possible to increase our margins."
Total intends to "significantly lower its break even point" to US$45 a barrel in 2019, compared to US$70 a barrel this year, he added.
The price of crude oil has more than halved since mid-2014, currently trading at about US$50.
The plans reassured investors with Total shares gaining 2.4 per cent to 40.715 euros by 1300 GMT, after de La Chevardière said the company would "do everything possible to save the dividend".
The annual portion of profits paid to investors rose 2.5 per cent to 2.44 euros a share in 2014. It will be at least that amount in 2015. If oil prices fall further, there is an option of a dividend payment in shares.
Among oil majors, only Italy's Eni has decided to pay out less to shareholders since the decline in the oil price.
Total adjusted its growth strategy last year when oil prices dropped to US$100, ending an expensive drilling programme designed to compensate for decline in its mature deposits.
But the cut-back in investment and delays in other projects has hit production. The group plans to pump 2.6 barrels of oil equivalent per day in 2017, compared to a previous target of 2.8 barrels per day.
Production is expected to grow by over 8 per cent to just over 2.3 million barrels equivalent per day, with the start of eight major projects.
The pace will slow to 6-7 per cent growth per year for the 2014-2017 period, and 5 per cent per year for 2014-2019. Beyond 2019, organic volume growth will be 1-2 per cent year, according to de La Chevardière.
Total, which is trying to cut its workforce by 2,000 people, is also trying to dispose of US$10 billion in assets through 2017, and plans to invest US$500 million a year in renewable energy.