Total 1Q net profit falls 36 percent

PARIS — French oil giant Total SA said Wednesday its net profit dropped 36 percent in the first quarter from a year earlier as oil prices fell sharply amid the global economic downturn.

Paris-based Total, France’s largest company by market capitalization, said net profit dropped to €2.29 billion ($2.98 billion) in the January to March period from €3.6 billion a year earlier.

In a statement, Total Chief Executive Christophe de Margerie said that despite “an environment dominated by global recession,” the decline in Total’s replacement cost profit measured in dollars — a key earnings measure for oil companies — was “the most limited decrease among the majors.”

Replacement cost profit — which at Total fell to $2.8 billion from $4.9 billion — is viewed by many analysts as the best measure of an oil company’s underlying performance because it excludes changes in the value of crude inventories, measuring the amount it would cost to replace assets at current prices.

Total’s shares lost 3.8 percent during the first quarter, but have risen 4.3 percent since the start of the second quarter as equity markets rebounded around the world.

The company’s production arm reported a 53 percent decline in earnings to $1.93 billion, with both oil production and sales prices down.

Its refining arm saw earnings rise to €600 million, almost twice the €311 million a year earlier, but the company said low demand meant the outlook for the business was weak, despite lower raw material costs.

Total said it pumped 4.3 percent fewer barrels of oil during the quarter — 2.32 million barrels and equivalents per day — due to quota restrictions by OPEC and a shutdown of some of its facilities in Nigeria because of security problems.

Total’s average selling price per barrel in the quarter was $41.50, down from $90.70 a year ago.