By Daisy Okanga | Total Oil reported a first-quarter net profit of $1.8 billion (Ksh191.2 billion), down from $2.8 billion (Ksh297.5 billion) over the same period last year, reflecting 35% decline in profits.
The company’s board confirmed that its first-quarter dividend would be 0.66 euros per share, stable on the same period last year.
The significant sharp fall in first-quarter net profit came as oil prices tumbled to historic lows following a drop-off in demand due to the coronavirus crisis.
In its earnings report on Tuesday, Total also laid out plans to cut its emissions with the aim of reaching carbon neutrality from its operations and energy products sold to customers in Europe by 2050.
The board of the Anglo-Dutch energy company explained the decision was taken to provide the firm with greater financial flexibility given the risk of a prolonged period of economic uncertainty, weaker commodity prices, higher volatility and an uncertain demand outlook, according to CNBC.
Total’s results follow those of oil giant Royal Dutch Shell last week, which slashed its dividend to shareholders for the first time since World War II.
Total entered into an agreement in late April with Tullow Oil on April 22, 2020 and bought entire stake in the Lake Albert Development Project in Uganda from Tullow for US$575 million (Ksh61.4 billion).
According to the Chief Executive of the Tullow Dorothy Thompson, the move was instigated by the firm’s interest to raise $1 billion (Ksh107 billion) in 2020 to slash on its Ksh299 billion debt.
“This deal is important for Tullow and forms the first step of raising in excess of US$1 billion to strengthen the balance sheet and secure a more conservative capital structure.” Said Thompson.
Tullow said cash Consideration consists of US$500 million (Ksh53.6 billion) payable at completion and US$75 million (Ksh8 billion) payable following FID of the Lake Albert Development Project.