By Adam Whittaker
TotalEnergies said it expects lower oil and gas prices to hit its second-quarter earnings, but anticipates hydrocarbon production to rise.
The French energy company joined British peer BP in flagging weaker prices would weigh on its results, while bigger rival Shell said earlier this month that it anticipated its second-quarter performance to be hit by weaker performance in its core integrated gas division.
The updates followed a quarter during which a shift in the policy of major oil-exporting countries, uncertainty about demand due to U.S. tariffs and supply concerns amid tensions in the Middle East all contributed to trigger volatility in energy prices.
TotalEnergies said Wednesday that it expects hydrocarbon production to be around 2.5% higher than the 2.44 million oil-equivalent barrels a day it produced in the same period a year prior.
However, over the quarter, the average price a barrel for its products fell to $65.6 from $72.2 in the first quarter. Earnings from its exploration and production division are, therefore, expected to reflect the decrease in prices, the company said.
Earnings from its integrated liquefied natural gas division are also expected to reflect the fall in LNG prices, which averaged $9.1 a million British thermal unit, down from $10. It will also reflect low volatility in its gas trading division, it said.
Brent crude fell sharply early in the quarter after sweeping U.S. tariffs stoked fears of a global economic slowdown. Prices briefly rebounded later in the quarter on concerns over supply disruptions when tensions between Israel and Iran flared up, but the rally quickly lost momentum.
TotalEnergies' downstream division will be boosted by higher refining margins, which increased to $35.3 a ton from $29.4 a ton in the first quarter, it said. Meanwhile, earnings in its integrated power unit are expected to be between $500 million and $550 million.
TotalEnergies should maintain its $2 billion quarterly buyback when it reports its second-quarter results, RBC Capital Markets analysts Biraj Borkhataria and Adnan Dhanani wrote in a note to clients. Following the update, the analysts lowered their quarterly net income forecast to $3.55 billion from $3.59 billion previously.
In midday European trading, TotalEnergies' shares were up 0.6% at 53.8 euros.
Write to Adam Whittaker at adam.whittaker@wsj.com
(END) Dow Jones Newswires
07-16-25 0648ET
