New projects should help French oil group Total confirm its 2010-2015 output target in a strategy update on Monday, although analysts will be keen to hear its big exploration budget is yielding more discoveries.

While several setbacks will push production down this year, analysts say new projects from Britain to Thailand should allow Total to catch up subsequently and achieve its goal of growing annual output by 2.5% on average at an oil price of $100 a barrel, from 2.38 million barrels of oil a day (boed) in 2010.

Over the past two years Total has taken a bolder approach in running its business, by more actively selling and buying assets, merging its refining and chemical units and hiking its exploration budget - like its peers - to drill wells in riskier, but potentially higher-yielding areas, to add reserves.

"Projects in the pipeline make us confident that the latest round of targets can be met," said analyst Rob West at BersteinResearch. "There was even a point earlier in the year before Elgin when they could even exceed them."

Total stopped a gas leak at the Elgin Franklin platform in the North Sea in May. Production could resume by the end of this year although Total acknowledged that would be challenging.

"At points in the past it's looked very challenging for Total to meet its future production guidance and it's fallen short but the outlook now really looks strong," West said.

Analysts said that Total's current output guidance was less aggressive than other years, such a 2008, when it guided for 4% growth and ended up missing the target.

For this year, Total has set aside $24 billion in capital expenditure, $20 billion of which is for its upstream business.

Until 2015, some 25 start-ups should add 600,000 boed to output and boost cash flow by about $10 billion.

Showing its confidence that it can grow production and cash flow, Total raised its quarterly dividend in July, lifting its shares by around 9% since. Cash flow from operations rose 6% to €11.43 billion in the first half of this year.

Still, output this year will be down - by 0.7% some analysts expect - due to rebel attacks on pipelines in Nigeria and Yemen and the Elgin gas leak.

Total has begun production in Usan in Nigeria, Islay in the UK, Bongkot South in Thailand and Halfaya in Iraq and is expected to start up production in Angola LNG, Sulige in China and Kashagan in Kazakhstan.

"Behind the curve"

Higher oil prices, up 2% in the first half of 2012 at $113.6 a barrel on average compared to the year-ago period, have helped the industry to fund bolder exploration strategies.

Analysts are hoping that Total will elaborate on its exploration discoveries, which so far have remained limited to a gas and condensate prospect, controlled by Norway's Statoil, in the Norwegian North Sea.

"Given the increase in the exploration budget in 2012 to $2.5 billion and the increase of the number of wells targeted to 60 in 2012, we believe this is an area where investors will be expecting more material information," said RBC Capital Markets analyst Peter Hutton.

"They are behind the curve compared to Statoil and ENI in announcing successes," he said. Italy's ENI recently made an oil discovery in Ghana and natural gas discovery in Mozambique.

Total has also said it expects to sell assets worth $4 billion more than planned acquisitions. Acquisitions so far include raising its stake in Australia's Ichthys liquefied natural gas project and minority stakes in exploration blocks in Iraq's semi-autonomous Kurdistan region.

Investors have yet to find out what this year's merger of Total's refining and chemical businesses will yield, in terms of cost savings or job cuts.

Total, Europe's largest refiner, and peers have been struggling with overcapacity in Europe and weak demand for fuel products.

"Only recently did they implement the restructuring, they haven't actually quantified it. But it's a very sensitive issue," said Societe Generale' Himona.