French oil giant Total posted a forecast-beating 14 percent rise in fourth-quarter adjusted net
profit on Wednesday, saying record oil prices and slightly higher production offset increased exploration costs.
Total predicted a significant rise in production in 2008 and stuck to its long-term target of increasing oil and gas production by an average 4 percent a year between 2006 and 2010.
The fourth-biggest western oil major earned an adjusted net profit -- stripping out one-off items and changes in the value of inventory -- of 3.107 billion euros in the final quarter.
This was up from 2.737 billion euros in the year-ago period and beat the 3.051 billion euro average forecast of nine analysts polled by Reuters.
For the full year 2007, Total reported a total adjusted net profit of 12.203 billion euros, down 3 percent from 12.585 billion in 2006 after a weak first half, and announced an 11 percent rise in full-year dividend of 2.07 euros.
Total bucked an industry-wide trend of falling oil and gas output, raising production by 2.4 percent to a fourth quarter average of 2.461 million barrels of oil equivalent per day. The start-up of new projects helped compensate for disruptions in Nigeria and lower volumes from production-sharing agreements.
Surging oil prices -- which averaged $88.8 a barrel in the fourth quarter for U.S. crude, up 43 percent year on year -- has proved a double-edged sword for oil majors such as Total as they automatically reduce the amount of oil they are entitled to in production-sharing agreements with producer countries.
Production rose by far less than the 7 percent growth Total had initially targeted for 2007, though the group still outshone rivals Exxon Mobil , Royal Dutch Shell and BP, which all saw oil and gas output fall last year.
The French company also announced a $2.2 billion project to to expand its Port Arthur refinery in Texas.