Skip to comments.Total (French Oil) throws gauntlet to U.S. on Iraq deals
Posted on 02/21/2003 7:06:35 PM PST by sam_paine
UPDATE - Total throws gauntlet to U.S. rivals on Iraq deals
Thursday February 20, 1:34 pm ET
By Emelia Sithole
PARIS, Feb 20 (Reuters) - Oil giant TotalFinaElf (Paris:TOTF.PA - News) threw down the gauntlet on Thursday to U.S. rivals eyeing Iraq's vast reserves, saying it was confident of winning its share of deals there despite French opposition to a U.S.-led war in Iraq.
TotalFinaElf, which is shortening its name to Total, made the comments as it reported a 13 percent rise in fourth quarter profit, slightly below expectations.
Media speculation has been mounting in recent months that French President Jacques Chirac's opposition to Washington's stand on military action against Saddam Hussein would hand the advantage to U.S. oil firms further down the line.
France, backed by ally Germany, is trying to rally international opposition to U.S. pressure for war in Iraq and is threatening to veto a planned new resolution seeking U.N. Security Council support for possible military action.
Total Chief Executive Thierry Desmarest conceded that the French stance could make the company's position in Iraq "more complicated," but said it was confident of winning some deals if Total were based on an equal footing with its rivals.
"We have shown in the past that we are able to defend ourselves on an equal footing with our peers even in some areas where there was a reputation of significant American influence," Desmarest said at a news conference on the company's results.
Iraq's reserves are the second largest in the world after Saudi Arabia, but the sector has been starved of foreign investment for years because of war and economic sanctions.
"If there is a change in government, then when it comes to carving up deals, the Americans will want to be seen to be transparent and fair," said SSSB analyst Jonathan Wright.
Total's interest in Iraq dates back to 1922 when it took up a stake in Iraqi Oil Co. and it is widely seen as France's top candidate to win business deals there when they are again on offer. Some industry analysts estimate a post-war Iraqi oil industry would need investments estimated at up to $40 billion.
HIGH CRUDE PRICES HELP NET INCOME
Desmarest said oil prices would ease from current 29-month highs around $37 a barrel after what he described as a probable war in Iraq, adding he expected OPEC (News - Websites)to offset any disruption to Iraqi production that might occur.
Total said fourth-quarter net income before exceptionals rose to 1.609 billion euros ($1.73 billion), from 1.424 billion a year ago, as higher crude oil prices offset the impact of a weaker U.S. dollar.
However, net income for the full year fell 17 percent to 6.260 billion euros, undermined by weakness in both the dollar and European refining margins as well as a 500 million euro provision for the economic crisis in Argentina.
Total shares closed Thursday down 0.9 percent at 121.50 euros, after see-sawing for most of the session. Total, which has a 14.4 percent weighting in the blue-chip CAC-40 component (Paris:^FCHI - News), outperformed the key market index but lagged the pan-European sector (Zurich:^SXEP - News), which was slightly firmer.
"Its EBIT (earnings before interest and tax) was in line with our expectations ... and it gave encouraging production targets," one London-based energy analyst said.
Merrill Lynch analysts were concerned about the group's slightly lower 2005 target of 15.5 percent return on average capital employed, as it appeared to be driven by lower expectations for production and exploration profitability.
Desmarest said he saw no need to resume the 1990s acquisition frenzy, which saw its name expand to TotalFinaElf as it bought European rivals. (-- Additional reporting by Sue Landau, Marie Maitre, Tim Hepher, Alison Tudor)
France: We're might not be right, but at least we're arrogant.
I've got news for you, ChIraq. You're Iraqi policy has long since lost you any share of the spoils. Pump that into your gas tank.
If I were GW, I'd let them know that we'll deal with them EXACTLY the same way they tried to deal with us. If they can get a Security Council Resolution approved saying Total -- or any French companies -- will share in the Iraqi booty, then we'll agree to it. Then, what Great Britain doesn't veto, we will.
They respect the UN so damn much, let them try to tame that international brothel of whores.
They won't need it here. No one will buy it. We pass Total to go to BP.
Now, there's an unfortunate name.
There should be a Rebuild Iraq tax that is only enforced against companies that do business in Iraq that did not participate in the liberation of Iraq. I'd say a fair amount would be. . . .oh. . . .110% of the profit.
Yep, and if their auntie were plumbed a little differently, she might be their uncle.
Should have seen it before her ancestors changed it..........
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