For the first nine months of 1999, sales in the three operating sectors (Upstream, Downstream and Chemicals) increased 8.8% compared with the same period 1998. Consolidated sales for the first nine months of 1999 amounting to 25,549 million Euros increased 1.4% compared to the same period 1998.
Using total sales as a base (i.e. sales to third parties outside the Group and sales between the Group’s divisions), the different sectors of activity were as follows:
| |
Third quarter |
Nine months to September 30 |
|
Millions of Euros |
1999 |
1998 |
Variation |
1999 |
1998 |
Variation |
| Upstream |
1,684 |
1,039 |
62.0% |
4,277 |
4,105 |
4.2% |
| Downstream |
6,592 |
4,448 |
48.2% |
16,392 |
13,962 |
17.4% |
| Chemicals |
2,159 |
2,288 |
(5.7%) |
6,380 |
6,793 |
(6.1%) |
| Sub-total |
10,435 |
7,775 |
34.2% |
27,049 |
24,860 |
8.8% |
| Health |
- |
931 |
- |
1,407 |
2,896 |
- |
| Inter-segment sales |
(1,263) |
(706) |
78.9% |
(2,907) |
(2,553) |
13.9% |
| Total |
9,172 |
8,000 |
14.6 % |
25,549 |
25,203 |
1.4 % |
Comments on the first nine months of 1999
Upstream: Sales in this sector increased 4.2% to 4,277 million Euros. Essentially this reflects the cumulative effects of an increase in the price of oil expressed in dollars a barrel, from $13.27 to $15.79, and to a lesser extent the favorable parity between the Euro and the dollar (1 Euro = $1.08 on average, or a 1.5% decline). The reductions in North Sea Gas prices and a decline in oil and gas production have in part offset these positive elements.
Commercialized oil and gas production in the first nine months to September 30, 1999 amounted to 967,000 barrels of oil equivalent a day. This is slightly less (-3%) than the level of 998,000 barrels of oil equivalent a day for the same period last year. It is recalled that in 1998, the Group proceeded with the reclassification of deductions by government authorities, contractually payable in cash, as production taxes. This 3% decrease in production was due in part to the difficulties experienced in Nigeria (reductions in quotas and community problems). New production coming onstream, notably in the Congo and in Brunei, and the acquisition of interests in Algeria reduced the effects of the decline in the production of mature fields and the disposal of non-strategic assets.
Downstream: Sales increased 17.4% to 16,392 million Euros. This is a result of a more than 7 % increase in the quantities sold, essentially on the International trading activity and the increase in the price of refined products resulting from the increased oil price. Theoretical refining margins in Europe (TRCVA), calculated using the Brent oil price, averaged $1.59 a barrel compared to $2.64 a barrel for the first nine months of 1998.
Chemicals: Sales decreased by 6.1% to 6,380 million Euros reflecting a significant decline in raw material prices while demand remained globally satisfactory.
This price decline primarily effected sales of basic chemicals and, to a lesser extent, fine and industrial chemicals.
Performance products continued to progress and perform well as a sector.
Health: Sanofi was deconsolidated on May 18, 1999, the date of the merger with Synthélabo. Sanofi-Synthélabo is now consolidated on an equity basis and no longer fully consolidated. From this date therefore, the Elf Group no longer accounts for sales from the Health sector.
* * *
Since October 28, 1999, Totalfina (NYSE: TOT) holds approximately 95% of the share capital of Elf Aquitaine. The combination of the two companies is conditional upon the approval of the European Commission, which is expected mid-February 2000. |
