Total to sell more assets

French oil company Total is to sell more assets and cut costs to generate more cash and is to revamp exploration plans after reducing its oil production target.

Total, which has struggled with production outages in Libya, Kazakhstan and Nigeria, cut its 2017 output goal to 2.8 million barrels of oil equivalent per day from a previous 3 million.

France’s biggest company by market value and the West’s fourth biggest oil and gas group launched a “high-risk, high-reward” drilling strategy two years ago. But this has had disappointing results as high-cost investments did not lead to large discoveries.

Total, like other big oil companies, has been under pressure from shareholders to cut costs and raise dividends as rising costs in the oil industry and weaker oil prices squeeze profitability.

It has been selling off businesses, such as its adhesives division Bostik, which French chemicals group Arkema has offered to buy for $2.24 billion.

The company now plans to sell $10 billion worth of assets in 2015-17, having achieved a target of $15-20 billion of sales in 2012-2014.

Since 2010, Total has generated a total of $30 billion from assets sales. That makes it one of the most ambitious sell-off programmes in the industry alongside BP’s $50 billion sell-off plan.

Total CEO Christophe De Margerie last year said the company aimed for a “soft-landing” in capital investments.

Total is part of a consortium developing the giant Kashagan oil project in Kazakhstan, which has been held up by gas leaks in the field’s pipeline network. The country has said it expects the field, one of the world’s biggest oil finds of recent times, to come onstream in 2016.

Total also did not forecast any output contributions in 2015 from its Angola liquefied natural gas project, where a string of missteps has led to multiple delays. The Chevron-led venture expects the shutdown to last until mid-2015.

In Russia, Total believes its Yamal liquefied natural gas joint venture in the Arctic can go ahead on time despite international sanctions against Russia over its role in the Ukraine crisis.