Total switches focus to emerging economies
Company has acquired gas stations in Egypt and Pakistan
Total plans net operating income of $2 billion by 2017 from $1.3 billion last year. Photograph: Reuters/Vasily Fedosenko
Total is backing out of European oil processing and sales as home demand shrinks for the region’s third-biggest oil company and gains in faster growing economies.
“Growth is no longer in the OECD in terms of oil products but definitely in emerging markets,” Philippe Boisseau, head of marketing and services, told a presentation today in London, referring to the developed-country grouping. Lubricants are a “booming high margin business” in emerging economies, he said.
The explorer doesn’t plan to spin off marketing operations in the near term, chief executive Christophe de Margerie said.
Reducing European refining and chemicals will be carried out “smoothly and smartly” without any big announcements. Total plans to cut the proportion of investment in western and eastern European marketing and services over four years and raise it in Africa, Asia and the Middle East, according to the presentation to investors.
Total spending will decline. Oil-product demand will drop 5 per cent in the OECD by 2020 from 2010 and grow 25 per cent in other nations, Total said. Lubricant growth in non-OECD countries will jump 40 per cent, compared with a 5 per cent expansion inside the grouping.
Total plans net operating income of $2 billion by 2017 from $1.3 billion last year.
It expects to have 5,400 retail stations in Africa and the Middle East in 2017, from 4,400 last year and seeks a doubling of lubricant sales. – (Bloomberg)