French oil major Total said Thursday it would trim back costs and investment in 2017-2018 in the face of continued low oil and gas prices. Total said it would cut annual investment to between $15 and 17 billion from next year instead of previous plans for $17-19 billion, and that it now intends to shave $4 billion from operating costs instead of $3 billion by 2018. In February, Total said the global collapse in oil prices, which have fallen amid massive over-supply some 70 percent since 2014, made cost-cutting inevitable.
In 2015, it had ploughed $23 billion into investments before ramping that down this year ahead of Thursday's announcement of further cuts. Chief executive Patrick Pouyanne said earlier this year that the entire industry was facing "quite a crisis" albeit forecasting prices would increase by year end. He also announced a hiring freeze at Total, which employs some 96,000 people in around 130 countries.
In a statement Thursday, Total said the firm was targeting further capital expenditure discipline and cost deflation but said the group's integrated business model was strong as it manages its operations "to position itself for profitable medium term growth."