French energy company says its pegging part of its growth strategy on natural gas reserves locked in Iranian waters. File photo by Maryam Rahmanian/UPI | License Photo
Feb. 9 (UPI) -- Future investments geared toward growth include signing agreements to work with Iran on its giant South Pars gas field, French supermajor Total said.
Total released results for the fourth quarter, saying its net income of $8.3 billion last year represented the "highest profitability" of any of its peers. As a result, the company said it was increasing its return on dividends by 1.6 percent.
Patrick Pouyanne, the company's chairman and CEO, said in a statement the year ahead looked promising as crude oil prices recover from a low point of around $27 per barrel last year to the mid-$50 range so far this year. Production growth last year was around 4.5 percent.
"The group is preparing for future growth with the signing of major deals in Brazil with Petrobras, in Uganda and in Iran on the giant South Pars 11 project," the CEO said in a statement.
Total is among the major European energy companies moving into the Iranian energy sector with the recent signings of memoranda of understanding with its Iranian counterparts. Austrian energy company OMV in late January hosted representatives from Iran's Dana Energy Co., a player in exploration and development, to sign new arrangements for potential work.
The U.S. government increased the sanctions pressure on Tehran following recent missile tests and President Donald Trump has threatened to move away from a multilateral nuclear deal that brought sanctions relief to Iran. For its part, Tehran said Washington was making a mistake by sidelining itself from the opening of the Iranian energy doors.
Elsewhere, Total said its strong balance sheet gave it the opportunity to look for new spending opportunities and potential acquisitions. The market still presents challenges and Pouyanne said his company would continue to work to drive down production costs.
Looking ahead, the company said investments were moving into "the sustainable range" at between $16 billion and $17 billion for the year.