French oil giant Total said Friday it plans to go ahead and invest in additional production capacity, even while crude prices are falling in the wake of OPEC's latest output decision.
"In raw materials sectors such as ours, the right strategy is to invest counter-cyclically," Total's chief executive Patrick Pouyanne told the group's annual shareholder meeting.
This means that Total will invest in additional capacity even at a time of falling prices so that it can ratchet up output quickly once oil prices start to rise again.
"Our aim... is to decide within the next 18 months on around 10 new projects representing additional production capacity of around 350,000 barrels per day and which will be profitable" with an oil price of $50 per barrel or more, he said.
Crude prices plunged almost five percent on Thursday as traders were disappointed by the outcome of OPEC's latest output meeting.
In a bid to address an ongoing supply glut and support prices, the cartel decided at the end of last year to reduce output by 1.8 million barrels per day over a six-month period.
At its meeting in Vienna on Thursday, OPEC decided to extend that deal for another nine months, but voted against deepening the cuts.
Total insisted it had no intention on easing up on its current programme of cost discipline, under which it had decided to scale back investments to a "durable and sustainable" level of 15-17 billion euros ($17-19 billion) per year between 2018 and 2020.
While the OPEC deal had enabled oil prices to stabilise at around $50 per barrel, "the environment we operate in is characterised by high market volatility and also a number of geopolitical uncertainties," Pouyanne said.