Nov. 4 (Bloomberg) -- Total SA, Europe’s third-largest oil producer, said third-quarter profit fell 54 percent as the global recession eroded energy demand, slashing crude and natural-gas prices.

Profit excluding changes in inventories and the value of a stake in Sanofi-Aventis SA declined to 1.9 billion euros ($2.8 billion) from 4.07 billion euros a year earlier, the Paris-based company said today in a statement. The company was estimated to make 1.8 billion euros, according to the median estimate of 15 analysts surveyed by Bloomberg News.

Exxon Mobil Corp. and Royal Dutch Shell Plc, the world’s biggest energy companies, last week posted declines in third- quarter net income of 68 percent and 62 percent, respectively. Oil futures in New York fell 42 percent to an average of $68.24 in the quarter from a year earlier.

Total in September said it expects production to drop this year, reversing a prediction of a gain, and estimated annual growth of about 2 percent through 2014 as five developments this year offset an annual decline rate projected at 5 percent.

Total has started four of five developments planned this year, including the Akpo oilfield off Nigeria in March, liquefied natural gas plants in Qatar, the Tahiti field in the Gulf of Mexico and Angola’s Tombua-Landana field. A Yemen LNG project will export its first cargo on Nov. 7, two people familiar with the matter said. It also started output at the Tyrihans field in the Norwegian Sea.

Output Boost

Total’s share in these projects will add as much as 230,000 barrels of oil equivalent a day in output in 2010 and 70,000 barrels to 80,000 barrels of oil equivalent a day this year, according to Chief Financial Officer Patrick de la Chevardiere.

Europe’s biggest refiner has shut refining operations because of eroding margins for turning crude into gasoline and other fuels. Refining margins in Europe slumped 85 percent to $6.6 a metric ton in the quarter, the lowest in at least seven years, from $45 a ton a year earlier, Total said. It was $12.40 a ton in the second quarter.

The company may sell refining assets and will continue a program to improve profitability amid overcapacity in Europe and the U.S., Chief Executive Officer Christophe de Margerie has said. Total plans to cut 555 jobs at its refining and petrochemicals operations in France. It will also reduce output at the Gonfreville refinery in Normandy by 25 percent to 12 million tons a year, and shut a fluid catalytic cracker, lowering gasoline output by 60 percent.

Demand for oil products has fallen as consumers cut spending on travel and goods, leading to lower profits for refiners, reduced plant operating rates and temporary closures.

To contact the reporter on this story: Tara Patel in Paris at tpatel2@bloomberg.net

Last Updated: November 4, 2009 02:04 EST