* Total targets 5-6% a year dividend growth, up from 3%
* Sees cash flow increasing by $5 bln by 2025
* Oil majors taking steps to lure investors
* Sector under pressure to address climate change
(Updates with graphics, context on rivals, shares)
By Sudip Kar-Gupta
PARIS, Sept 24 (Reuters) - French oil and gas group Total
raised its dividend outlook on Tuesday after issuing a
positive forecast for its prospects through to 2025, echoing
moves by rival energy companies to boost shareholder returns.
Total said it would increase its dividend by 5-6% per year,
up from a previous target of 3%, which would result in a third
interim dividend of 0.68 euros ($0.75) per share for 2019.
The group said its confidence in its general strategy meant
it was now forecasting an increase in its cash flow of more than
$5 billion by 2025 in a $60-per-barrel oil price environment, or
an average increase of about $1 billion per year.
Oil majors have been increasingly trying to lure investors
with higher returns amid growing pressure to demonstrate
concrete action against climate change, and as several
high-profile funds decided to sell out of fossil fuel stocks
altogether.
At its biggest annual gathering in Davos this year, oil
industry bosses identified higher returns as one of the main
tools to help offset that pressure on their companies.
An anticipated listing of Saudi Aramco is also expected to
present a challenge if it sucks out capital from rival energy
firms as investors reallocate funds within their shrinking pot
for fossil fuel stocks.
In June, Total's rival Royal Dutch Shell also
outlined plans to boost shareholder returns after 2020.
Total's shares initially rose by around 1% but then slipped
back to fall 0.2% by 0851 GMT, tracking a retreat in oil prices
which have risen since an attack on Saudi oil facilities earlier
this month.
Nevertheless, Clairinvest fund manager Ion-Marc Valahu said
Total's update was positive for investors.
"Most oil majors have not raised their capital expenditures
in recent years but are still generating lots of cash, and the
stock prices of most oil companies have been lagging behind the
moves in the price of oil," said Valahu, who owns Total shares.
Oil prices have been comparatively elevated since the Sept.
14 attack on Saudi Arabia's largest crude processing facility
halved output in the world's top oil exporter, with benchmark
Brent crude currently near $64 a barrel.
In July, Total said it would sell about $5 billion of
assets, mostly from its exploration and production business as
it sharpens its focus on low-breakeven projects that can weather
any weakness in oil prices.
The company said it would maintain its "strong discipline on
investment and cost" in the period through 2025.
($1 = 0.9098 euros)
(Reporting by Sudip Kar-Gupta; Additional reporting by Dmitry
Zhdannikov in London, Editing by Kim Coghill, Sherry
Jacob-Phillips and Jan Harvey)
