(MENAFN- AFP) French oil and gas group Total reported a sharp fall in net profit for the third quarter on Thursday, owing to a surge of exploration costs and a slump in European refining margins.
But the group confirmed an increase in its production which began earlier this year.
In the third quarter, net profit fell by 17.0 percent from the equivalent figure last year to 2.8 billion euros ($3.8 billion).
The adjusted net figure, which excludes some volatile factors and is closely watched by analysts, fell by 19.0 percent to 2.7 billion euros.
The group said that the figures reflected an increase of $400 million (290 million euros) for exploration costs in line with an ambitious drilling programme.
The other main factor was a tough environment for refining in Europe, the group said in a statement.
Refining margins in the region had slumped to $10 dollars per tonne from $50 dollars in the same period of last year, finance director Patrick de la Chevardiere told a telephone press conference.
But the group said that its refining and chemicals activities had stood up well to this difficult environment and had remained profitable owing to restructuring in recent years.
The group's production of hydrocarbons had risen by 1.0 percent to 2.299 million barrels of oil equivalent per day. Output had begun to rise in the second quarter.
Total said that it expected output for the whole year to show an increase.
However a few months ago the company had mentioned an increase of 2.0-3.0 percent. It now says that the scale of the increase will depend on the rate of extraction from the Kashagan field in the Kazakh sector of the Caspian Sea.
Production from this field has been halted after two false starts in September and October.
Chevardiere said that the investment programme would reach a peak this year, as the group had announced in September when it made its annual adjustments to the outlook.
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