French oil major Total SA reported bumper earnings on Friday thanks to higher oil prices, and unveiled plans to spend $20-billion this year mainly on new oil and gas projects to boost flagging production.
Europe's third-largest oil group, which spent billions of dollars in 2010 on Canadian oil sands and Australian offshore gas, said it was targeting more acquisitions to renew its production portfolio, and aimed to sell non-core assets.
"We will continue to invest massively," Total chief executive officer Christophe de Margerie told a press conference.
In the final quarter of 2010, Total saw its oil and gas output rise by only 0.4 per cent to 2.38 million barrels of oil equivalent per day as it had no major project start-up in 2010.
Total shares were down 0.82 per cent at €43.12, despite results that analysts said were slightly ahead of expectations.
With oil prices now over $100 a barrel, Mr. de Margerie said he expected them to remain firm but that it would be "unhealthy" to stay above this mark in the short-term. He has said in the past that prices should rise gradually to avoid hurting the economy.
Total's head of strategy Jean-Jacques Mosconi said the group saw oil prices between $80 and $100 per barrel in 2011.
France's biggest company by market capitalization said it targeted a production rise of an average 2 per cent per year in the 2010-2015 period and that it planned to start up its huge Angolan offshore Pazflor project in the fourth quarter.
It also said it targeted "numerous" projects in Russia, Canada, Australia and China, but gave no further details.
Stripping out one-off items, Total's 2010 net profit rose to €10.29-billion ($14-billion U.S.) from €7.78-billion in 2009.
Sales rose 21 per cent to a staggering €159-billion, equivalent to the gross domestic product of Algeria, as oil prices more than doubled on the back of the economic rebound.
Total's annual profit is still some way off their record of €14-billion in 2008, which caused a political outcry and calls for a windfall tax that Total successfully resisted.
Poor demand and strikes in French refineries over pension reform and the closure of a plant in Dunkirk pushed 2010 refinery output down 7 per cent to 2.009 million barrels per day.
Asked whether he was concerned political unrest in Tunisia and Egypt could spread to key producing countries in the region, Mr. de Margerie said: "We know how to work in difficult places. Leaving really is the last resort. It is important to be in a position to be able to stay, and we know how to do that."
Total said it would step up measures to lift profitability in its European refinery business, but gave no further details.
Mr. de Margerie confirmed a Reuters report last month that the firm had not yet entered exclusive talks to sell its U.K. Lindsey refinery but aimed to sell the plant as soon as possible.
Mr. Mosconi said the group was still talking to at least two potential buyers, including Swiss-based oil refiner Petroplus.
The company said it planned to start up new units at its U.S. Port Arthur refinery and boost its presence in growth markets, typically the Middle East and China.
Bigger rival Royal Dutch Shell blamed weak refinery margins for its $4.1-billion fourth-quarter net profit missing a Reuters poll forecast of $4.85-billion.
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