OREANDA-NEWS. Total has cut its 2017 production target by about 200,000 b/d of oil equivalent (boe/d) to 2.6mn boe/d, with about half of the cut coming from project delays and the other half from reduced capital expenditure.

Delayed projects include Martin Linge offshore Norway, which has slipped from 2016 to 2017-18, and Tempa Rossa in Italy, delayed from 2016 to 2018. But the company includes expected output from the Kashagan project in Kazakhstan from 2017 in its projections.

Total will reduce its capital expenditure (capex) budget to $20bn-21bn next year from $23bn-24bn in 2015, and is targeting annual production growth of 6-7pc between 2014 and 2017.

"Main drivers for production growth include 20 major start-ups, eight of which are in 2015, and increasing production efficiency," the company said today. Output growth is expected to average about 5pc a year between 2014 and 2019.

Total plans to cut capex further from 2017, to "a sustainable level" of $17bn-19bn/yr. The firm expects this level of capex to deliver 1-2pc/yr of production growth from 2019.

The company has also increased its target for reducing operating expenses (opex), to $3bn from $2bn by 2017 compared with its plans announced in September last year, taking into consideration this year's performance and future cost deflation. It has aimed to achieve $1.2bn of savings this year alone, and said today that 66pc of this target had already been reached by July.

"Capital discipline, further opex reduction and growing production will deliver improving cash flows. The group confirms organic free cash flow will cover the dividend by 2017 at $60/bl," the company said.