TotalEnergies is anticipating a significant decline in its Q3 earnings, primarily due to a substantial decrease in refining margins across Europe and other regions.
In a preview of its Q3 earnings, the French energy giant attributed it to a 65% reduction in refining margins and a concurrent fall in global oil prices.
The European Refining Margin Marker for TotalEnergies was reported at $15.4 per tonne (t) in Q3, a stark contrast to the $44.9/t recorded in the preceding quarter.
The energy sector has been facing headwinds, with BP, Shell and ExxonMobil also issuing warnings of weaker earnings.
A 17% fall in oil prices during Q3 – the most significant quarterly drop in a year – has raised concerns about the global demand for oil.
TotalEnergies' production is expected to reach 2.4 million barrels of oil-equivalent per day (mboe/d), which is at the lower end of the company's previously issued guidance.
The company has faced challenges including security-related disruptions in Libya due to political disputes that led to oilfield shutdowns, and a technical outage at the Ichthys liquefied natural gas (LNG) plant in Australia, where TotalEnergies has a 30% interest.
Despite these setbacks, TotalEnergies has managed to partially offset the production losses. The company has increased production at the Mero 2 oil development in Brazil, where it holds a 19.3% stake, with a capacity of 180,000 barrels per day.
For the quarter, TotalEnergies reported an average LNG price of $9.91 per million British thermal units (MBtu), slightly below the $10/MBtu forecasted in Q2.
The integrated LNG results are projected to exceed $1bn, although this is lower than the $1.3bn achieved a year ago due to less market volatility and production.
The Integrated Power division is expected to post results that are largely consistent with those of Q2.
TotalEnergies is scheduled to release its full Q3 results on 31 October.
