France’s Total booked a $6.5 billion fourth quarter impairment Thursday as it prepares to cut 2,000 jobs in response to low oil prices.
The write downs were tied to the value of the company’s North American oil sands and shale assets and European refineries, Reuters said.
Total said it will cut 2,000 jobs globally this year although the majority of the cuts will come through natural attrition and a hiring freeze.
Adjusted fourth quarter net profit slid 17 percent to $2.8 billion over the same period in 2013 but managed to beat analysts expectations.
Fourth quarter revenue dropped 19 percent to $52.6 billion.
The company widened cuts to its 2015 operational costs to $1.2 billion, up from its previous target of $800 million.
Organic investments will be cut by up to 13 percent to about $23 billion while exploration spending will be slashed by 30 percent to $1.9 billion.
The cuts are intended to bring the company’s break even point down to $40 per barrel from $70 per barrel, CFO Patrick de La Chevardiere said.
CEO Patrick Pouyanne said the exploration spend cuts are partially tied to low oil prices but are also part of an effort to redesign the company’s exploration process after three years without a major oil find.
“We consider that after having spent a lot of money in exploration in the last three years without the results we expected, it was preferable that exploration teams be put under a certain pressure, that they get forced to make choices,” Pouyanne said.