By Bate Felix and Karolin Schaps
PARIS/LONDON (Reuters) - France's Total (PA:TOTF) beat quarterly earnings expectations powered by high production and refining margins on Thursday but said it plans fresh spending cuts and asset sales in response to one of the worst market downturns in a decade.
Plunging crude prices have forced energy companies to cut costs, jobs and spending and delay projects.
Total said it plans savings of $2.4 billion (£1.66 billion), rising to more than $3 billion in 2017, and capital spending of around $19 billion in 2016, down more than 15 percent from 2015.
Total will also look to sell $4 billion in assets, although Chief Financial Officer Patrick de La Chevardiere said with oil at $30 per barrel selling upstream assets at a reasonable price could be difficult.
"This is not a garage sale," he said. "If we cannot obtain a reasonable price, we cannot sell."
Chief Executive Officer Patrick Pouyanne told investors in London later on Thursday that the divestment plan will focus on non-core assets such as its pipelines and fertilizer businesses but not speciality chemicals.
Total forecast production would grow by 4 percent in 2016 and said it planned five major start-ups including the Laggan-Tormore gas field in the United Kingdom, which began production earlier this week, and Angola LNG.
Pouyanne told investors that an exploration budget of $1.5 billion in 2016 will start delivering results following discoveries in Myanmar and Brazil.
He said the group expected to return to paying dividends with 100 percent cash with oil at $60 per barrel from 2017 after proposing to use a scrip dividend scheme to pay shareholders dividends in 2015 and 2016 in cash and discounted shares.
Total last year boosted upstream production with the start of nine projects. Oil and gas output in the fourth quarter rose 5.5 percent to 2.352 million barrels of oil equivalent per day.
It also saw high margins in refining and chemicals and a strong performance in its retail and lubricant businesses.
Total fared better than many peers in the quarter as its extensive downstream business benefited from weak oil prices.
That helped curb a fall in net adjusted income in the last three months of 2015. It fell 26 percent to $2.1 billion but beat forecasts as analysts polled by Reuters had expected a profit of $1.93 billion.
De La Chevardiere said the cost cutting would involve limiting the number of contractors used by the firm but not direct employees.
He also said stubbornly low oil prices mean the sector is braced for downgrades by debt rating agencies.
"The overall trend for the industry is a negative outlook. Probably most of the industry will be downgraded as they already downgraded Shell (L:RDSa)," he said, adding that a downgrade would have a very negligible impact on Total's business.
Total's shares were down 3.2 percent at the close on Thursday.
(Editing Jason Neely and Susanna Twidale)