Total said Tuesday its quarterly profit fell by 99% because of dropping oil prices and announced it would slash investments in response to ongoing turmoil in crude markets.
The French oil major reported a net profit of US$34 million for the first quarter, against $3.1 billion a year earlier.
Oil prices suffered a sharp drop in the first quarter due to overproduction and a price war between Saudi Arabia and Russia, falling to $50.1 from $63.1 a year earlier.
The sharp fall in oil and gas prices depressed Total’s cash flow from operations by nearly two thirds.
Since the end of March, oil has been hit further by a collapse in demand due to the economic impact of the coronavirus, even going negative at one point last month, when sellers had to pay buyers to take oil off their hands.
“The group is facing exceptional circumstances: The Covid-19 health crisis which is affecting the world economy and creating major uncertainties, and the oil market crisis, with the sharp drop in oil prices since March,” CEO Patrick Pouyanne said in a statement.
Total said it was setting a new savings target and would cut both its investment and crude production objectives.
Investments would now be less than $14 billion for this year, down a quarter from what the group had announced in February.
Total did, however, decide to pay out an interim dividend of 0.66 euros per share, the same level as a year earlier.