Total 1Q profit jumps 18 percent on record energy prices

By EMMA VANDORE AP Business Writer

PARIS (AP) - French oil company Total SA said Wednesday its first-quarter net profit jumped 18 percent amid record-high energy prices.

The world's fourth-largest oil and gas company reported net profit rose to 3.6 billion euros ($5.6 billion) in the first quarter from 3.05 billion euros a year earlier. Results were driven by its "upstream" division - which covers the exploration, recovery and production of oil and gas.

Chief Executive Christophe de Margerie noted "new record highs" in oil prices and a substantial increase in gas prices. He said average Brent crude prices in the first quarter of 2008 were 67 percent higher than a year ago, and 9 percent higher than the previous quarter.

Oil prices, which on Tuesday hit a record $122.73 a barrel, are making big profits routine in the oil industry. Total's competitors Chevron Corp., Exxon Mobil Corp., ConocoPhillips, BP PLC and Royal Dutch Shell PLC have also reported booming first-quarter earnings.

Total's results don't fully reflect the price of oil because unlike some of its rivals, the French company reports in euros. Because crude is sold on the global market in dollars, which have been falling compared to the European currency, it translates in to fewer euros for Total.

After stripping out an after-tax inventory effect, special items and other intangibles, adjusted net profit increased 9 percent to 3.25 billion euros ($4.87 billion) in the first quarter from 2.99 billion euros a year earlier.

The upstream business accounted for 85 percent of the adjusted net operating income, contributing 2.7 billion euros ($4.2 billion), a 39 percent increase from a year earlier, Total said.

The results were only slightly above market expectations, said Jason Kenney, an Edinburgh-based oil analyst at ING.

"It's a safe set of results but it's lacking the 'Wow!' factor that they market was looking for," he said.

Total shares dropped 1.1 percent to 53.90 euros ($83.54) in Paris morning trading.

Total, which is France's biggest company by market value, said upstream production was stable at 2.43 million barrels of oil equivalent per day in the first quarter, the same figure as a year earlier.

The ramp-up in production at the Dalia and Rosa field facilities in Angola and the Dolphin gas project in Qatar was offset by the shutdown of the North Sea Elgin-Franklin gas field, de Margerie said.