PARIS: French group TotalEnergies reported on Wednesday the highest profit of its history for 2023, underpinned by performances in its liquefied natural gas and electricity divisions as it continues to invest heavily in fossil fuel production.

Net profit came in at $21.4 billion, an increase of four percent over 2022. Its bottom line put the French energy conglomerate ahead of its global peers Shell, BP, Exxon-Mobil and Chevron which all reported lower earnings in the face of weaker energy prices.

But TotalEnergies’ 2022 net profit had been weighed down by a huge exceptional charge — $15 billion—from its withdrawal from Russia following that country’s invasion of Ukraine. Once non-recurring items were stripped out, profits suffered a sharp downturn last year, with adjusted net profit falling 36 percent to $23.2 billion.

In the fourth quarter alone, adjusted net operating income from business segments dropped 31 percent from the same period in 2022, to $5.7 billion. Oil and gas prices dropped some 10 percent on average last year from 2022 when spiking oil prices had boosted earnings at energy companies worldwide.

Chairman Patrick Pouyanne called the results “robust”, saying in a statement they had been achieved in “an uncertain environment”. Hydrocarbons had performed well, he said. Still, the 2023 net profit figure fell short of forecasts by financial analysts, who had been looking for a figure of up to $23.7 billion. In reaction, the company’s share price was down around 1.3 percent in mid-morning Paris stock exchange trading at 59.49 euros ($64), having recovered somewhat from its 58.50 opening price.

TotalEnergies has pursued its diversification towards low-carbon electricity production, but continues to be criticized by environmental groups for its ongoing investment in fossil fuels because of their climate impact. The group announced in September that it would increase hydrocarbon production by an annual two to three percent over five years. Several court cases against the company are pending, including for its land acquisition practices for controversial projects in Uganda and Tanzania slammed by environmentalists. TotalEnergies is pushing ahead with its Tilenga drilling project in Uganda and the 1,443-kilometre (897-mile) East African Crude Oil Pipeline (EACOP) to transport crude to the coast in Tanzania.

Tilenga targets oil under the Murchison Falls nature reserve in western Uganda with a planned 419 wells, triggering fears for the region’s fragile ecosystem among the people who live there and environmentalists. Drilling began in mid-2023 and production is slated for 2025.

TotalEnergies has argued that such projects are needed to meet world demand for energy, and points to its efforts to transition to low-carbon production, notably in solar and wind energy.

However there was “scant mention about renewables” in Wednesday’s statement, observed Kathleen Brooks, research director at the XTB trading platform. “Oil majors are shifting away from renewables,” she said.

They were, meanwhile, offering “sweeteners for shareholders” in the shape of share buybacks and large dividend payouts, Brooks said. TotalEnergies proposed a 7.1 percent increase in its annual dividend paid out to shareholders for 2023, and bought back $9 billion worth of shares. — AFP