2nd UPDATE: Total CEO: Hints At Possible Capex Cuts By End-09
April 02 2009 - 6:00AM
Dow Jones News
Delays could mean French oil giant Total SA's (TOT) capital
expenditure will fall short of $18 billion this year, Chief
Executive Christophe de Margerie said Thursday.
While Total is maintaining a capex program of $18 billion for
2009, de Margerie said he doesn't know if the company will spend
the full amount, adding that there might be delays.
"It's a huge amount $18 billion," de Margerie told delegates at
an oil conference, adding: "Will it be this at the end of the year?
I don't know."
"I have a feeling that, for different reasons, there might be
delays," he said.
De Margerie later expanded on the comments, telling reporters on
the sidelines of the conference that financial constraints would
not be the cause of any delay.
"We notice simply that in the partnerships we are in, there are,
for all sorts of reasons, with other partners, things that mean
projects have a tendency to be delayed," he said. Delays wouldn't
be caused or wanted by Total, he said.
"We have enough cashflow and financial capacity to live up to
our commitments without a problem," de Margerie added.
During his speech, de Margerie also reiterated that more
expensive oil projects, such as extra-heavy crude, will "definitely
need higher prices" than the current level. A price of $75 to $80 a
barrel might be the right level, he said.
Total's CEO also emphasized the need to keep investing in
research and development. R&D "cannot be cut in this time of
crisis," he told delegates.
He went on to speak about renewable energy.
"Yes there is a future for solar," de Margerie said, emphasizing
the need to invest in research to make it viable without subsidies.
He added he doesn't expect "major progress" in that regard until
around 2020.
-By Adam Mitchell, Dow Jones Newswires; +33 1 40171756;
adam.mitchell@dowjones.com