French energy company TotalEnergies said its high profits came in part as a result of improved sales of liquefied natural gas. Photo courtesy of TotalEnergies.
Feb. 8 (UPI) -- French energy company TotalEnergies on Wednesday added its name to the growing list of energy companies posting record-setting profits on the back of higher commodities after reporting net profits doubled from year-ago levels.
TotalEnergies reported full-year 2022 profit of $36.2 billion, twice as high as the previous year. Adjusted net income for the three-month period ending in December was $7.6 billion, compared with $6.8 billion during the same period in 2021.
CEO Patrick Pouyanne said gains were supported by the elevated commodity prices that came largely as a result of the western sanctions on Russian energy that followed its invasion of Ukraine.
"While down from the previous quarter highs due to uncertainties about the demand outlook, fourth quarter oil and gas prices, as well as refining margins, remained strong in a supply-constrained market," he said.
The company sold its crude oil at an average price of $88.8 per barrel for Brent, the global benchmark, compared to $79.8 per barrel from the same period in 2021. Third quarter 2022 levels, however, were closer to $100 per barrel for TotalEnergies.
Its realized price for natural gas, referencing the U.S. benchmark Henry Hub, was $6.10 per million British thermal units in the fourth quarter, compared to third quarter levels of $7.90/MBtu. Fourth quarter 2021 levels were closer to $4.80/MBtu.
Brent was trading around $84 per barrel, while Henry Hub was around $2.50/Mbtu during mid-day trading on Wednesday.
Prices declined during the latter half of the year as global markets adjusted to the loss of Russian supplies. Pouyanne added that total hydrocarbon production increased by 5% during the period, while sales of liquefied natural gas -- an important bridge to European energy security -- increased by 22%.
"Continuing its growth momentum in LNG, TotalEnergies is strengthening its unique position in Europe in 2023 with the commissioning of two floating regasification terminals, the first of which, located in Lubmin, Germany, is operational," the company stated.
For the year, however, the company reported that total crude oil production increased by 3% compared with 2021 levels, while natural gas production declined by 6% from year-ago levels.
Bloated profits and a focus on shareholder returns over new investments in production are a growing source of concern.
"It's outrageous," U.S. President Joe Biden said during his State of the Union address. "They invested too little of that profit to increase domestic production and keep gas prices down."
Energy prices are among the largest contributors to consumer inflation.