Total to slash capex by $3 bln

France’s Total has announced long-term plans to further cut capital expenditure. In 2015, the company had scheduled capex spending of $23 billion-$24 billion.

“The group will further reduce investment down to $20 billion-$21 billion in 2016, before returning to a sustainable level of $17 billion-$19 billion from 2017 onwards,” the company reported on Wednesday in a media presentation. From 2013, that represents a fall of about $10 billion.

The cut will coincide with a redistribution of capex – five percent will be taken from upstream activities and directed at downstream operations. With the redistribution, Total will now direct 75 percent of its spending towards the former sector.

The company is also set to cut its operating expenditure $1 billion, mostly from its upstream activities. It predicts an average growth of 5 percent year-on-year until 2019 from its investments.

“We wanted to dramatically reduce capex again next year so that we can reach the very important target of covering the dividend at $60 per barrel in 2017. This is the cornerstone of everything we are doing,” Patrick de la Chevardiere, Total’s chief financial officer, said to reporters on Wednesday.

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