Much of this is broadly in line with peers, though Shell has cancelled its dividend for the first time in many decades, and the production cut is lower than Chevron Corporation or ExxonMobil which both have large US shale footprints.  

 

It sees the cut coming from "voluntary curtailment measures in Canada, the exceptional quotas announced by OPEC+, lower local demand for gas and the situation in Libya".

 

Net income was US$1.78 billion for the quarter thanks to lower oil and gas prices and refining margins, and the demand crash caused by the COVID-19 pandemic. 

 

Its upstream arm reported a profit drop of 59%, with income at $703 million.

 

CEO Patrick Pouyanne said his company  "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".

 

Acquisitions came to $1.6 billion and asset sales $542 million. It will reduce investments by 25% this year, down to a total of $14 billion. 

 

Gearing is maintained at 21%.

 

Pouyanne will take a 25% pay cut which the company said equates to 30% when other variable factors are worked in. 

 

It does still plan sell upstream assets but will likely focus on infrastructure or real estate and in headline grabbing news has announced its own net-zero by 2050 target.

 

More materially, it confirmed it will spend between US$1.5 billion to $2 billion per year on "low-carbon electricity" and LNG, which it sees fitting into its low carbon plans. 

 

"Confirming its strategy to grow in the integrated gas and low-carbon electricity chain, the group maintains its planned investment level of $1.5 to $2 billion a year in low-carbon electricity and continues to grow in LNG with the anticipated start-up of Cameron LNG Train 3," it said. 

 

Cameron 3 partners are Sempra LNG, Mitsui & Co., Mitsubishi Corporation, Total, and NYK Line. Yesterday Freeport LNG confirmed start up of its third train, with offtakers Total and SK E&S. 

 

Production was up, with LNG production rising driven by Ichthys which the French company shares with operator Inpex and the Novatek-led Yamal LNG project in Russia's far east; however its outlook for LNG is mixed. 

 

LNG sales were up 30% year-on-year and total production was three million barrels of oil equivalent per day

 

"Taking into consideration the lower demand due to the global economic slowdown, Total anticipates deferments in LNG uplifts during the second and third quarters of the year," it said.

 

"Furthermore, the decrease in oil prices will negatively impact the LNG long-term contract prices from the second half." 

 

On the upside its downstream sectors have not yet been as hard hit, though it anticipates an average refinery global utilization rate between 70-75%, compared to 84% in 2019. 

 

Petrochemical volumes have not been affected and have benefitted from the oil price fall. 

 

"The Group anticipates an average refinery global utilization rate between 70-75%, compared to 84% in 2019. Petrochemical volumes are not affected by the crisis and benefit from the drop in raw material prices thanks to the flexibility of steam-crackers that are able to adapt feedstocks to market conditions."

 

Pouyanna expanded on plans for a longer term climate friendly step change, saying it is "in world-step with society, and is in line with Total's reinforced strategy to become a broad energy company".

 

"Total has joined the European Majors' net zero carbon club, committing to achieving carbon neutrality from Scope 1, 2 and 3 emissions (from selected parts of its global business) - significantly increasing its previously stated targets," Wood Mackenzie's vice president of corporate research Valentina Kretzschmar said.

 

"Total has led energy transition efforts among the Majors and is the largest spender, accounting for almost 60% of the European Majors' total M&A spend in renewables, or nearly US$5 billion since 2016.