Total Fina 1st-Quarter Profit Rises 49% on Oil Prices (Update3)

By Jad Mouawad and Tom Cahill

Paris, May 6 (<a href=quote.bloomberg.com>Bloomberg) -- Total Fina Elf SA, Europe's third- largest oil company, said first-quarter profit jumped 49 percent after prices surged amid a war in Iraq and disruptions in supplies from Nigeria and Venezuela.

Net income rose to 2.12 billion euros ($2.4 billion), or 3.28 euros a share, from 1.43 billion euros, or 2.13 euros, last year, Chief Financial Officer Robert Castaigne said in an interview. Sales rose 19 percent to 28.3 billion euros.

Oil companies such as Royal Dutch/Shell Group and Exxon Mobil Corp. have posted record profits in the first quarter as crude oil prices climbed to a 12-year high. Prices have fallen by about a third since February, signaling earnings are poised to slide, analysts have said.

Total shares rose as much as 1.1 euros to 123.9 euros on the Paris stock market. The stock has lost 9 percent this year, compared with a 2 percent drop for the Paris benchmark CAC 40 index. Shell has lost almost 5 percent in London.

Unlike its larger rivals, Total's results were crimped by a drop in the dollar, Castaigne said. A stronger euro reduces the profit from dollar-based oil sales.

`Sensitive' to Dollar

Our company is very sensitive to the dollar,'' he said. When there is a decrease of the dollar by 10 percent, our earnings also decrease by 10 percent.''

The Paris-based company repeated a forecast that production will grow by 5 percent this year, after a 10 percent growth rate in 2002. The company holds its annual shareholders meeting today and plans to change its name to Total SA.

Oil and gas production in the first quarter rose by 5 percent, equaling 2.516 million barrels a day, the company said. Total is on track to invest 8.7 billion euros in its operations this year, it said.

Oil prices advanced over recent months on concern a war in Iraq would disrupt supplies from the Persian Gulf. That boosted profitability from pumping oil, while its refining unit benefited from declining inventories. Crude oil in New York averaged $33.75 a barrel in the first quarter, compared with $21.59 in the same period a year earlier.

Total Fina was expected to report profit of 2.06 billion euros, according to the average estimate of seven analysts surveyed by Bloomberg. Last Updated: May 6, 2003 03:20 EDT