Total needs to cover $12bn shortfall due to Covid-19 crisis

French oil and gas major Total anticipates a $12bn revenue shortfall due to a fall in oil prices triggered by the novel coronavirus (Covid-19) outbreak.

The latest announcement by Total CEO Patrick Pouyanne is significantly higher than the previous deficit forecast of $9bn. The increase is expected to force Total to devise deeper cost cut measures, reported Reuters.

According to Pouyanne, Total had expected oil prices to stand at around $60 a barrel this year, but with prices currently at around $30, the company faces a much bigger shortfall.

Reuters quoted Pouyanne as saying in a shareholders’ general assembly meeting: “It is globally at least $12bn that we believe we must cover through our action plan due to the crisis.”

Total plans to launch its 230,000 barrel per day (bpd) project in Uganda by the end of this year.

Pouyanne also confirmed that Total has finalised plans to completely acquire oil and gas exploration firm Tullow Oil’s stake in the Lake Albert development project in Uganda for $575m, which also includes the purchase of the East African Crude Oil Pipeline (EACOP).

Earlier last month, Total kept its dividend stable despite reporting a sharp drop in first-quarter (Q1 2020) net adjusted profit due to to the collapse in oil prices and the economic slowdown caused by Covid-19.

Total reported 14 cases of Covid-19 in its operations in Congo in April this year.