TotalEnergies Q4 2024 Earnings Report

TotalEnergies EPS Results

• Actual EPS: $1.90
• Consensus EPS: $1.74
• Beat/Miss: Beat by +$0.16
• One Year Ago EPS: N/A

TotalEnergies Revenue Results

• Actual Revenue: N/A
• Expected Revenue: $42.77 billion
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

TotalEnergies Announcement Details

• Quarter: Q4 2024
• Date: 2/5/2025
• Time: Before Market Opens
• Conference Call Date: Wednesday, February 5, 2025
• Conference Call Time: 9:00AM ET

TotalEnergies (NYSE:TTE), a multi-energy company, produces and markets oil and biofuels, natural gas, green gases, renewables, and electricity in France, rest of Europe, North America, Africa, and internationally. It operates through five segments: Exploration & Production, Integrated LNG, Integrated Power, Refining & Chemicals, and Marketing & Services. The Exploration & Production segment is involved in the exploration and production of oil and natural gas. The Integrated LNG segment comprises the integrated gas chain, including upstream and midstream liquified natural gas (LNG) activities, as well as biogas, hydrogen, and gas trading activities. The Integrated Power segment includes generation, storage, electricity trading, and B2B-B2C distribution of gas and electricity. The Refining & Chemicals segment consists of refining, petrochemicals, and specialty chemicals. This segment also includes oil supply, trading, and marine shipping activities. The Marketing & Services segment supplies and markets petroleum products. The company was formerly known as TOTAL SE and changed its name to TotalEnergies SE in June 2021. TotalEnergies SE was founded in 1924 and is headquartered in Courbevoie, France.

TotalEnergies Q4 2024 Earnings Call Transcript

Presentation

[Operator]

Good afternoon. Good morning. If you are connecting from The U. S, welcome to TotalEnergies twenty twenty four Results and twenty twenty five Objectives Meeting. We are today in the city in London.

[Operator]

I hope that you will appreciate that we brought the sun in London today, and you will appreciate also the view. For the people who want to follow us live, you can connect on our website, totalenergies.com. The program today, we will start with the presentation of the 2024 results with Jean Pierre, and then we will move to the outlook presentation for 2025 with Patrick. The presentation should last one hour. And then we will move to the Q and A session where you will be, of course, able to ask all the questions you want.

[Operator]

We have as usual a dedicated line for the people who could not attend and we will bring from time to time questions online. We should be finished around 04:15, four thirty. But before to start our journey today, I invite Stephane Michel, our President Gas and Power to come on stage to launch the meeting with a sequence on safety. Stephane?

[Stéphane Michel, President of Gas, Renewables & Power at TotalEnergies]

Thank you, Renaud. Good afternoon, everyone. As you are aware, TotalEnergies is building an integrated power pillar. And like any other industrial activity, this new development is coming with new HSE risk. One of them is the risk of fire and explosion while operating our battery energy storage system or BESS.

[Stéphane Michel, President of Gas, Renewables & Power at TotalEnergies]

In the industry, around 16 incidents happen every year. And the most serious one was in March in Japan, where several firefighters were injured by an explosion. Within TotalEnergies, our last incident occurred in 2023, hopefully without injuries. But since then, we have worked on the design specification of batteries. And we have done so with our battery affiliate, SAFT, which happen to be one of the top five best supplier in the world.

[Stéphane Michel, President of Gas, Renewables & Power at TotalEnergies]

Thanks to their know how we've been able to include new innovative safety barrier that you can see on the slide by adding early detection of thermal runaway to prevent the fire to spread over by adding as well water fire suppression system in addition to the passive one and by adding extra ventilation to avoid the risk of explosion. In addition, we are implementing now systematically a dedicated training for firefighters on how to fight a battery fire because it's quite specific. Thanks to all that, we are confident that we can develop our multi gigawatt pipe of batteries while protecting our people, of course, and by limiting as well the risk on our assets. Thank you. Jean Pierre?

[Executive]

While Jean Pierre will be on stage, you have the first one.

[Stéphane Michel, President of Gas, Renewables & Power at TotalEnergies]

Okay, Peko. On safety, sorry. That was for the battery and that's a good transition for our results in 2024. The first one is on the result on the three, as you can see on the left side of the chart, the fact that we are continuing progressing and we are actually in the lower, if not the best of our peers in terms of comparison. That's one on the left part of our activity.

[Stéphane Michel, President of Gas, Renewables & Power at TotalEnergies]

And then you have the right part of our activity, where we have introduced the comparison as well on integrated power three, comparing our result to the one of the peers in that industry, where you can see that we have been able to progress from above 1.5 in terms of TRU in 2020 to 0.78. And that's today something which is very at the leading edge of what is done in that industry of integrated power that has been realized by working on the technological risk, as I've just mentioned in the previous slide, and as well working on behavioral safety with two things: one, the way we operate our facility and second, the way we build because we have huge exposure to construction and our That was for 50. Thank you. Jean Pierre?

[Executive]

I should introduce in the room because you have over executive committee members, so that you can identify them. So Nicolas is just there Nicola Terras, Vincent from Refining and Chemicals, Bernard is next to Renault, and we have in the back of Orion, and Namita, which are there. I think I did not forget anybody. Helu is in Japan, so she's not in London, but she's probably listening to us. So Jean Pierre, floor is yours now.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

Thank you very much. It's a real pleasure to be here with you tonight, today to present the 24 results and the main achievements of the year. So as you know, our strategy, balanced and consistent strategy is anchored in two years. So Oil and Gas, mainly LNG on one side and Integrated Power on the other side. We have made great progress in 'twenty four, executing this strategy and incurring free cash flow growth on both Pillar, Oil and Gas and Integrated Power.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

So let's start with the highlights of the year, 2024. On the first pillar, Oil and Gas, we started production at five major projects, so MERO2 and MERO3 in Brazil, Deepakshore Brazil, APO West in Nigeria, Encore in the Gulf Of Mexico in The U. S. And Phoenix in Argentina. We launched four major oil projects: Grand Margo in Suriname, Ataputu and Sepia2, another two offshore projects in Brazil and Camino in Angola.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

We progress in EMEA, where we are working towards sanctioning the first oil developments, but Patrick will give you more details later on. In LNG business, we further derisked our exposure to spot gas prices in accordance with the strategy we presented to you during the CMD in New York in October. That means that we continue to successfully market our LNG volumes by signing several new contracts middle term with Agen buyers, representing in 2024 more than 6,000,000 tonnes a year, mostly with an oil indexation. And secondly, we increased upstream gas integration in The U. S.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

By acquiring interest in dry gas assets in the Eagle Ford play in Texas. We launched also the Marseille LNG project in Oman, and we became a significant gas operator in Malaysia through the acquisition of 100% of Sapura OMB, which provide us LNG pricing exposure and a platform for future low cost, low carbon growth in terms of production. In summary, on this first pillar, Oil and Gas, we incurred our upstream production growth forecast of 3% per year through 02/1930 in a cash accretive way. And we record approved reserve replacement ratio above 150%, one of our records in total energy history. Moving now to the second pillar, Integrated Power.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

We were very active in 2024 in that business as well. You see on the slide some of the achievements of the year, the main highlights of the year. I will come back on that later. But very important, we reached our cash flow targets to have a cash flow from operation above 2.5. We are at 2.6 in 2024.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

And I think, obviously, it's a very good achievement. Let's move to the figure. We believe that the company delivered once again solid results in 2024. In a software environment, price environment compared to the previous year, 2023, The company generated almost $30,000,000,000 20 9 point 9 billion dollars of FFO, coming from all the different businesses. And you see here the repetition of this cash flow generation segment by segment.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

First, E and P contributed very strongly to this performance with the cash flow generated in 2024 at $17,000,000 benefiting from the oil project startup I already mentioned in my introduction. Integrated LNG business performed with a cash flow at $4,900,000,000 It was negatively impacted by lower average LNG prices compared to the year before, low market volatility during the first three quarters of the year that impacted gas trading results. But on the positive side, you will see that the Q4 results shown LNG trading performance back to the level of the first quarter twenty twenty three. I will make a zoom on that later. Integrated Power continues to track record of strong performance through the year with high cash flow year over year, billion twenty twenty four.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

Downstream cash flow reflects in fact the global weak margin environment, especially in Europe, with refining margins down by almost 45% year over year after the two exceptional years we had benefited from in 2022 and 2023 in relation with the Russian crisis. And we suffered as well from operational issues on some of our refineries, especially in France and in The U. S. However, you can see that the downstream cash flow remained above $6,000,000 at $6,100,000 demonstrating the resilience of the company integrated downstream model. Let's move to the results themselves.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

So you see that we posted a net income, adjusted net income at $18,300,000,000 and an EFRS results at $15,800,000,000 taken into account mostly the impairments we recorded in the course of the year on SunPower and the exit on some African exploration leases in South Africa, the relation with RHC to from this box, there are adjustments and inventory valuation effects. In terms of profitability, we had a ROE return on equity at 15.8% and ROACE return on capital employed at 14.8% in 2024, which make TotalEnergies once again the number one in terms of royalty among our peers. In terms of investment, you see the figure. So you invested $15,800,000,000 So in the range we gave to you between $17,000,000,000 and $18,000,000,000 On the shareholder return side, we continue to increase the dividends with a distribution of $7,400,000,000 in 2024. And we executed the $2,000,000,000 buyback program per quarter, so leading to $8,000,000,000 buyback on if you consider all the quarters 2024.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

Globally, that means that the payouts for 2024 reached 50%. Very important to note is that this attractive shareholder distribution was achieved while keeping very strong balance sheet. You see here the gearing we have end of the year at 8.3% or around 9.5% when normalized. Why? Because this figure of 3.8% benefited indeed from positive impacts in working capital for 1,500,000,000 So in summary, we maintain Fortress balance sheet, while increasing the shareholder return in 2024.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

On the investment side, we remain disciplined in 2024, as evidenced by this figure, net investments being within the guidance $17,000,000,000 to $18,000,000,000 18 point 8 billion dollars for 2024. We continue to be highly selective in the project we sanctioned, or we invest in selecting low cost, high return, low emission projects and projects resilient through cycles. Patrick will come back on that later for 2025. As you can see with the pie, Total Energy has a balanced growth strategy with one third of the 2024 CapEx allocated to new oil and gas projects and $4,800,000,000 to low carbon energy, mainly renewables, integrated power projects for $4,000,000,000 We continue to be active with portfolio management using selective M and A to enhance to aggregate, in fact, our portfolio. 2024 net CapEx consisted of $16,400,000,000 of organic CapEx, but also $4,600,000,000 in acquisition and $3,200,000,000 in divestments.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

So once again, that means that we continue to be very active on that side, M and A side. Previously, I described our focus acquisition on the upstream side. And on Integrated Power, our acquisition are focused on key deregulated markets, such as The U. S, The UK or Germany. I will come back later on that as well.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

2024 divestments included in the upstream, our exits from Brunei, the sale of our E and P subsidiaries in Brunei. In downstream, the closing of the second part of the deal with Couche Tard with the sale of retail station in Belgium, in The Netherlands and in Luxembourg. And within Integrated Power, several divestments in line with our strategy to found out our projects at Cielo Day when the production is ready to start. Just to give you two examples, so solar and battery project in The U. S.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

That we closed last December and 50% our interest in Seagreen projects offshore wind in The UK. Let's discuss now of each of the business segments in more details. 2024, I think, showcase the depth of our portfolio, upstream portfolio, full of attractive growth opportunities that are translating into project sanction, delivering high return and robust reserve replacements. You have here the list of the main projects sanctioned in 2024, '4 main projects on the Och side and two projects on the gas and LNG sites. This project anchor 3% per year accretive production growth through 02/1930.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

And very important to notice that we have already derisked project costs by signing largely lump sum EPC contracts on that project. The chart on the right hand side of the slide highlights Total Energy compelling investment case. We already had the resources to grow underlying production and cash we ultimately support that will ultimately support dividend growth and attractive shareholder returns. Saying that differently, no need for us to make large acquisition, large M and A to fill any potential gap. Given our consistent strategies, we continue to explore and develop the upstream business.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

We have maintained a strong and consistent proved reserve life index of around twelve years since 2018. You see here the index for 2024, '12 point '4 years, it was 11.7 the year before in 2020 three percent. I think it's clearly in contrast with some of our peers that posted a decline. That means that Exxon and Total Energy are leading the peer group by wide margin in terms of portfolio longevity with a key advantage in the Deviation business and support cash flow into the next decade. Also you have the figure for proved and probable reserves, which are now at eight point five years.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

Saying that differently, we are not a shrinking company. We have been replacing reserves at much faster well, replacing reserves at much faster rates than we are depleting them and at a faster pace compared to some of peers. In 2024, our reserve placement was a robust 157% of production, up from an already strong figure. It was 141% in 2023. Pest majority was done through organic growth, which translates into a strong organic reserve replacement ratio of 150%.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

These reserve replacements figures demonstrate clearly the depth once again of our portfolio and that we are successful to replenish it year after year. Let's move to integrated LNG business. As shown in the chart on the lower left, the results end of the year, so for the first quarter, were at the highest of the year and benefited from improved market conditions, so meaning more volatility, higher price. Adjusted net operating income increased 35% sequentially. And the result, we are back to the first quarter twenty twenty three level at over $1,400,000,000 is the two blue bars you see on the chart on the lower left.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

This performance was driven by 6% higher hydrocarbon production for LNG, an average LNG price above $10 per annum BTU and ultimately LNG trading results that were able to capture higher market volatility. Although this rebound during the fourth quarter, overall, full year 2024 results were negatively impacted by low gas price volatility due to the May 2023, '20 '20 '4 winter, high stock level, particularly when at the start of the year, low demand and limited trading opportunities due to globally a balanced global LNG market. So what are our expectation or anticipation for 2025? As you can see in the top left chart, a colder '24, '20 '5 winter and low end of season storage is expected. The end as well of the Russian Ukraine transit agreement to use the pipeline to import Russian gas is also a factor that will contribute to tighten the market.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

Tightness in Europe should lead to more competition between Europe and Asia to attract or to capture additional LNG vessels, and it will result in increased arbitrage opportunities for flexible cargos between The U. S. And Europe and Asia. This should benefit Total Energy given our dominant real gas position in U. S.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

And our large position as an LNG exporter in The U. S. We are number one, as you know, in that matter. Moving now to Integrated Power business. 2024 was a continuation of our multiyear track record of performance in that business.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

So definitely a growing business. You see here the progress that we made between 2021 and 2024. We have grown Integrated Power into a business that is yielding some results. We are able to increase by nearly four times the cash flow over the period 2021, '20 '20 '4, reaching once again our objective to have cash flow in 2024 above 2,500,000,000 And ROICI increased from 7% to 10%. That was the target we set for the year.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

In 2024, the company further enhanced integration in the regulated markets for flexible asset acquisitions. So we acquired CCGT in The U. S. And in The UK throughout the year for three gigawatts. And in addition, we increased storage capacity through the acquisition of a major player in German battery markets called Kion, the middle of the year.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

We also have been active in consolidating our renewable portfolio As part of our farm down strategy in integrated power I mentioned in the Manufacturing, we successfully farm down the equivalent of 1.2 gigawatts of renewable and battery projects, resulting in $1,000,000,000 of CapEx being recycled with more than 10% return. On top of that, the company acquired VSB, it's a German based renewable project developer with a sizable 18 gigawatts pipeline, mainly in Germany, France, Poland with a closing expected this year. In addition, in 2024, the company strengthens its differentiated market offering of clean film power. For example, you have a few examples. We capture premium pricing through co pricing three terawatt of clean firm power to large industrial and big tech companies.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

And through the acquisition of Cara, you see here the table. Operated Scope one and two emissions are down 36% compared to 2015. And an absolute level, you see the figure. Scope one and two on our operation, our operating facilities in 2020 or 2024 were at 34,000,000 tonne compared to our target of being less, of having less than 38,800,000 tonne of CO2. In fact reflecting year on year two opposite movements, two opposite trends.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

So on one side, a further decline in our operating oil and gas facilities, reflecting emission reduction initiative undertaken over the last couple of years. And in the other hand, the impact of the interrogation of the new CCGT, I mentioned to you, the acquisition we made in 2024 particularly in The U. S. And in The UK. On the maintain side, the 15 reduction targets we have to reduce the methane in operation by 50% between versus the level we have in 2020.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

This reduction target was achieved per year early with 2024 operating methane emission now minus 55% compared to 2020 levels. We achieved this thanks to continuous decrease in Freire and Fugitive emission in particular in E and P. And you have here the example of Gabon with the elimination of routine flaring two years early than anticipated. And we will continue to reduce operating methane emissions, and we set a new objective for 2025 with a target of minus 60% compared to a reference 2020. To achieve that, you have different action that will be taken.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

First, the decision we made last year to deploy continuous detection system across all the operated assets in the company. That means that in 2025, you see here the figure, more than 13,000 equipments for continuous methane tracking will be developed and deployed. Additional technologies improvement will be implemented to further reduce methane emission. You have here some example to switch gas instrumentation to wear or to replace car ticks. And last but not least, we reduced our life cycle carbon intensity by 17% compared to 2015, which is better than our initial target of 14%.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

This indicator reflects, as you know, the amount of CO2 emitted per unit of energy sold, and which is in fact, which matter in our industry. This indicator translate perfectly the evolution of our energy mix and the implementation of our strategy, more energy with less emission. And the final slide for this section is the benchmark. So the positioning, the relative performance of Total Energy compared with our peers on four important metrics. So the proved reserve life index, the upstream production costs, the ROICI, return on capital employed and the dividend per share growth.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

As already mentioned, our strategy has remained consistent and it's allowed us to deliver some results and to remain in the competition very well positioned. Starting with the upstream, our reserve life index increased, I mentioned to you already, from eleven point seven years in 2023 to a very robust twenty point four years in 2024. Were on par with ExxonMobil and red of the remaining peers, reflecting once again the depth of our portfolio. We have the resources in hand to continue to grow production and to grow the cash flow, the underlying cash flow for years to come. And once again, we do not require big M and A to do that.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

Moving to the cost. We have stream production costs. Total Energy has consistently reported the lowest upstream production, so PEX per barrel, with $20.24 figure below $5 per barrel equivalent, of oil equivalent. This is, of course, a competitive advantage that we want to keep, allowing the company to be resilient even in low price environment. In terms of profitability, we are pleased to report that in 2024, again, TotalEnergies ranked number one.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

In our history among our peers, this is the third consecutive year that we achieved this performance, demonstrating once again that it's possible to be the most profitable major and to be a leader in the energy transition. On the dividend side, so it's the last graph, the dividend growth the dividend per share growth, we are positioned number two at 25 growth over the last five years, which reflects our strong commitment vis a vis our shareholder. Potel Energy maintained, as you know, the dividends between the COVID crisis. It was not the case of all our peers. Some of our peers decided to cut the dividend at that time.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

And our dividend growth is underpinned by the company deep upstream portfolio, strong free cash flow outlook and balance sheet with gearing once again at 8.3% and of 24% or 9.5% after normalization. And with that, with that benchmark, I leave a floor to Patrick for 2025 outlook.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

Thank you, Jean Pierre, for this '24, which people say it's less than before, but the two years before are exceptional for us. So first largest results in the history of the company. So it's still a good year. And in fact, again, I said that in 'twenty three and 'twenty two after the exceptional year, we were entering into a new era because the balance sheet was completely deleveraged. And the succession in fact of last three years, it's easier for us to implement the strategy we have decided because we went in a world where we have more, I would say, capacity to deploy it.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

And that's what we've done in 'twenty four. Jean Pierre said it all time, we have a deep portfolio of plenty of good opportunities. What I will show you is that in 'twenty five, what we want to do is not only to grow, but also to have to deliver additional free cash flows, which are the most important. That's why we have this we selected this title, delivering an active growth. And resilient shareholder returns, that's a program for '25.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

Few words about the market. In fact, the old market, people told me it's volatile. I think when you look at

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

the field, it's a little stable.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

In fact, this line is quite flat, in fact. Okay, it was flat in IOL last year than this year. But in fact, we can say that with two different in fact environment in 'twenty three still a very high increase of the demand because the end of the COVID recovery in China. In 'twenty four, the full year markets were more bearish about the demand. At the end, it's only 800,000 barrels per day.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

But all the expectations on the supply side did not materialize, in fact, as it was anticipated. And finally, at the end, the OPEC plus has done a good job to maintain this price, I would say above $70 70 5 dollars per barrel. And I think for 2020, we look to $20.25 dollars I expect IEA, not us, we have no expert said plus 1,100,000,000 barrel of oil per day in oil demand, which will be higher than 24,000,000 barrels. By the way, it's more or less the average, a little less than 1% that we observed on twenty years. Re news from '24, by the way, is that the increase of oil demand in India was as big as the one in China.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

So we have a new engine of oil demand growth in the world. India is moving to more infrastructure, more manufacturing business model than the one we had in mind. On the supply side, of course, 25 strong supply from non OPEC and The U. S. Policy U.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

S. Administration is willing to push this production up. So U. S, by the way, liquid production in 2024 increased by 700,000 barrels per day. And when we spiked by the way about liquids, it's in fact more NGLs than oil, because in fact most of the liquids production in The U.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

S, it's coming from the increase of the gas and all the associated NGLs. The oil is increased by 0.3. We plan for it 0.2, zero point three for '25. So that's to keep that in mind. Of course, Brazil and we'll come back, we will benefit from the growth in Brazil, ourselves, Vienna as well, we are not there.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

We do not intend to be. We are next to Suriname. We'll see. The market, of course, will be a debate, I think, in 'twenty five between the U. S.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

Administration and OPEC plus So it will be an interesting debate to observe. We have been a little cautious in the way we approach the year. We put all the results I will show you on the forecast based on $70 We are more $80 but if I can do it at $70 I could do it even easier at $80 So you will have some sensitivity in the presentation. On the gas, it's quite different. I think last year, the year '24, and we had very good, I would say, weather during last winter or mild weather.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

And in fact, we ended we exited the winter twenty four, twenty twenty four with high inventories. And in fact, the full first half of the year, so first, I would say some quite low volatile, low volatility in the gas markets, around $8.09 dollars per million BTU for TTF during six months because there was no really need to replenish full storages. The storages were high. And that, of course, did not help, by the way, the capacity, not only the price, absolute price was lower, but also a lower volatility, which did not help our gas trading to perform. 4.25 in fact, as you can see, weather is Europe, this is much colder and you have another element of the it's not only weather, but you have also the fact that now the transit for Ukraine from ocean gas has been stopped.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

So it creates another tension in terms of supplying gas to Europe. And what we observe is that today we are already at this stage two months only still two months before the end of the winter, at the lower begin to have depleted quite well the storage. And it's reflected in the forward curve, second quarter '20 '5 dollars the forward gas is at $16 per million BTU, so it's about $15 per million BTU. So we anticipate clearly, I would say, more volatility, $25,000,000 higher prices. People could say there will be an additional LNG capacity.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

It's quite limited. In fact, when we make the map for $25,000,000 we evaluate that around 20,000,000 tons of new capacity coming on stream, which means 5%. So it does not change the fundamental trend. And you will see probably again more competition between European buyers, which need to replenish their inventories and Asian buyers. So of course, you know for us, there are two spreads which are fundamental, TTF minus NREIB.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

And then you have the GKM minus TTF, because it's the arbitration. And with the volumes we have in The U. S. Or regas capacity in Europe, of course, we can benefit from more arbitration when these spreads are going higher. But what we expect, we anticipate, again, we'll see for 2025.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

So two different environment clearly for gas, LNG and oil. Our KPIs for 2025, our objectives, I always think about growth, but then of course growth is not enough. We need to deliver more free cash flow and it's more volume, more energy, less emissions and growing free cash. So globally, our energy production, when I compare the oil and gas and the electrons, will grow by 5%. So we contribute to, I would say, a global supply of the people of this planet, 5%.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

More than 3% growth on the oil and gas and more than 20% growth on the electricity side. And we will reach more than 50 terawatt hour. 50 terawatt hour is halfway of the objective by 02/1930. And in fact, the electricity production from TotalEnergies will represent 10% of our oil and gas production in 2025. So it's for the ones who want to see of the transition is in March, it is, it is.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

It's reality. It's rebooking for me a sizable business. And I would say the achievements in the last five years has been quite we are on the roadmap and I would say quite a success. So that's the key. Refining Vincent will do its most with his teams to have a better utilization rate.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

I will come back. LNG sales about 40,000,000 tons. We don't have new, I would say, LNG plants coming on stream. So we should be in the range of what we achieved 40,000,000 tons, 45,000,000 tons. And renewable gross installed capacity, we set this target of 35 gigawatts by end of twenty twenty five in 2020.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

I will come back on it. We will be there at 35. We are 26 by end of twenty twenty four and we have exactly nine gigawatts, which are being built today, 8.9, so maybe 0.1 we'll miss, but which are being built. So it's reality, it's not just an objective. It's a matter to deliver, of course, this capacity.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

But again, more and more myself and the board, we are attached more and more importance to the production of electricity because at the end of results more linked to the production, but the growth capacity of renewables. Less emissions, yes, we continue to make part of the, I would say, our global agenda. We need to produce hydrocarbons, but with less emissions. So our scope one and two, we set an objective less than 37,000,000 tons. Of course, we can say it's not ambitious enough, but we have one difficulty we face that we have more gas fired power plant in our portfolio, which we acquired in 2024 in The UK, in The U.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

S. We will run and if it's colder in France, we'll have a higher utilization rate, so more CO2. What is important for us is also to see the decrease on the oil and gas operations was 35,000,000 tons in 2023, '30 '4 million tons in 2024 and should be to 33,000,000 tons in 2025. The methane, we are clearly a leader on that part. I think it's a very it's an easy way for me for the oil and gas industry to have a real contribution to diminishing this greenhouse gas.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

It is in our hand, it's stopped wearing, it's stopped venting, things which are not high-tech, I would say, clothes flare. So we have really embarked the whole company and Nicolas is really very strong about it. He's a master of clothes flare all over the place, all over installations, setting all discontinuous equipments for detection of methane like for oil. And I think it's really, we want to be visitors and the teams are motivated. And last but not least, because it's the marker of our strategy of transition, which is the carbon intensity of the sales of energy, the word sales is missing there.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

We have reduced it by 17%. We want to continue to we are in fact quicker and on the roadmap because we deliver the, of course, the electrons, which are, I would say, decarbonizing part of ourselves. But last but not least, all that, because we want to grow the free cash flow. So we selected three indicators. I will give you some others in the presentation.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

Production costs less than $5 could be $5 but not so we don't need to have a big, I would say, cost saving plan, but we are permanently maintaining. And honestly, the fact that we have been able for the last three years, despite the inflation that we face to maintain this less than $5 is maybe not spectacular, but it is, isn't it? So other companies, some of my peers have engaged in large cost saving plans. I think we've done it between 2015, '20 '20. We have the benefit.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

And today, we are strong with the team, are very efficient to manage this $5 per barrel. So CapEx, I will come back on it. I'm sure we have question $17,000,000,000 17 point 5 billion dollars as a range. And cash flow from operations more than $29 at $70 We've done $29.8 So it's quite an improvement. There is some free cash, some additional cash flow and the objective of my presentation will tell you where it will come from, in fact, so that you can certify that all these balance of all the business model and the strong returns we intend to deliver to shareholders are in safe hands, which is true.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

So by the way, the CapEx first. So it was true, but we gave you a guidance of $18,000,000,000 I think in New York on organic CapEx. Today, we came with organic CapEx of $17,000,000,000 reduction and a global CapEx, including M and A of seventeen, seventeen point five. Why? In fact, it's because we've done some few we've done what we worked in fact.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

We have to be clear, all the growth accretive projects will be developed as planned. There is no reduction on any of the nice opportunities we have in our portfolio. So I'm completely underline of Darren Woods from that perspective, no change. But at the same time, we have many projects. And so with Nicolas and we reviewed all that with the teams, not to over threat the team by continuing to invest in small projects, but focusing the world company to deliver these large, active projects by the program.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

So it led us, I would say, in the extreme to find $500,000,000 of small projects, which at the end is 50 plus 50 plus 50 plus 80. But it's a sort of dispersion, so refocusing because we know also that we have a workforce and we cannot have to do everything at the same time. So it does not impair the global production profile that we have to deliver to you. But it's a question of streamlining, focusing the teams, being efficient in the way we spend our cash. The other decision we took to be it's more in the low carbon molecules, it's a little lighter.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

It was $800,000,000 or $900,000,000 in 2024. It's only $500,000,000 in the '24. It's only $500,000,000 the budget. We drew some lessons and we consider today that it's better in some businesses like EV charging or biogas to have a leverage for equity. We don't see enough returns in all that, to be honest, in terms allocation of equity of the company is full equity is not our priority.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

And we do some lessons. That doesn't mean that we don't continue to do it, but we move to some business models with less capital intensity. It's not major. On the SAF molecules, we continue. In fact, the budget, we have this big project in Grand Prix with the Vincent team, which will end before year end.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

So it's the end of the project. So we have done the top. So that's why also. But $500,000,000 of low carbon molecules is reduced because we drew some lessons. It doesn't mean we will not continue the SAF strategy.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

It means that we are allocating our capital and our equity in the best way. So that's the reason why we came down to $17,000,000,000 17 point 5 billion dollars We still have in case of challenging market conditions, we have identified another $1,000,000,000 which we could decide to arbitrate during the year. At this stage, it's not necessary. Power is at $80 70 5 point 8 0 dollars So it's not that situation. So that's why I would like to it's also true that compared to September, we continue to execute the lump sum, the EPC contracts and a lot of them are largely lump sum.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

So we have security, I would say, we have a good vision for 2025 of what we will spend. If there were overrun, it's not in 2025, it's more in 2028. So I hope there will no be. So that's also why we can, we are confident. And of course, it's a good work, it's an effort, but continuing to streamline even more when you have a large portfolio of opportunities, I think it's a good discipline.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

So I announced to you a growth of more than 3% for the upstream growth, Oil and Gas. In fact, you have here the list of the new projects, the new productions, which represent 150,000 barrel per day. What is remarkable on this chart is that six of the eight projects are already started. So it's more mainly a matter of ramp ups. We have two projects which have to come on stream, Balmor in the Gulf Of Mexico and Meruford in Brazil, where by the way the operator is a little more optimistic than on sale.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

So it's good. By the way, there are over Carac sixty six on this slide. You have three gas projects, Phoenix, Terra and Yerun in Malaysia. You have five oil projects. It's important for the next slide.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

And by the way, Autotal is operating four, Petrobras three and Chevron two. So we rely on two of our big operators, but nice operators. So I'm quite comfortable with this figure of 3% because it's mainly ramp ups and we are on the way to deliver it. Of course, it's more important, it's not only growing production, it's additional cash flow. And that's the good news and important news when we look to this file is that the growth of 3% of our upstream production, more than 3%, will be translated in terms of cash flow from operations by an increase of more than 8%.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

In fact, this portfolio of projects, of course, the portfolio in Brazil and in the Gulf Of Mexico are accretive compared to and that means that for the same amount of CapEx, in fact, more or less the same between the two years, organic CapEx, you will have an increase of $1,300,000,000 of free cash, 8% is $1,500,000,000 sorry, $1,500,000,000 of free cash, which will come from this growth. And I think that's a good news, of course, for that's why we are at the Board. We are confident in the return to shareholders and we have decided again to increase the dividend by another 7.7% and the final dividend by 7.6%. So that's I think important within TotalEnergies. It's value of our volume.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

It's not just growing. It's also delivering more free cash flows. One of the country in which is successful from its perspective, which will contribute to this additional free cash is Brazil. Brazil, in fact, is becoming in 2025 the number one country in our portfolio in terms of cash flow from operations. It's new, you maybe did not notice, but in fact, since 2015, we have built the portfolio.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

Today, we have we will have eight fields producing 180,000 barrel per day. So it's a successful story. It's quite interesting, by the way, to build such a position. The average margin at $70 per barrel is about $35 per barrel. And so in Brazil, we'll continue to invest because we have two other projects that we sanctioned in 2024, Sepia two and Ataputu, which will contribute to additional free cash in 02/1930.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

But the free cash formula in 'twenty five at $70 per barrel will be $1,400,000,000 and $10 per barrel would add another $400,000,000 So it's a strong position that we have built since 2015. Again, we operate La Pa. Petrobras is our operator on most of that. And we had access to when you look to the history of the cost of access to all these resource, it was in fact quite a good quite a low countercyclical cost of access. We did not discover them, but between the deals we've done with Petrobras in twenty fifteen, twenty sixteen, then the ToR rounds where we participated with low competition, we managed to be it's a good demonstration on how to build a strong position in a new country.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

We have also some exploration potential. We continue to look to that. The other country in which I want to touch a point because I'm sure we have plenty of questions is Namibia. So I prefer to preempt the questions. Our friends have made some decisions.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

And in fact, we know, to be clear, we share the same partner and we have the data. We have some data sharing agreements between our friends and ourselves. So we can compare. It's true that we were probably, I would say, more lucky or slower or better. But they selected a block where clearly the Venus discovery has better characteristics, petrophysical characteristics.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

The oil in place density, 10,000,000 to 20,000,000 per barrel of oil compared to the adjacent discovery, which was less than 5,000,000. It's a fixed reservoir of 8,120 meter. The permeability is not very high, I will come back on it, but it's 2,000,000 to $4,000,000 compared to I would say less than $1,000,000 So all that makes in fact the commerciality of this discovery is achievable. It's in our hand. We are working on it.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

We have that's why we don't make any write off because in the country, we want to transform this discovery into production. So probably we have there at the heart of the system on this eastern on the western part of Namibia Orange Basin. So there are some challenges, I still don't mean it's not challenging. Yes, the permeability is not high, there is high VU R. VU R in our license is lower than the neighboring one, five hundred against 700.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

So still again. That means that the challenge is in fact that you have as we don't flare, I remind you, we don't flare, no flaring policy. We have to reinject the gas in the low permeability matrix. So that means that we have, we cannot, the plateau on which that we'll reach will be lower considering, but it will be a very longer plateau and a slow decline along the years. So we are designing today a project of 150,000 barrel of oil per day production.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

It's a very light haul 45 API, which is good for its value, with a long shallow decline after the plateau. The other challenge is 3,000 meter water depth and 300 kilometers from the coast, but I would say that's not but I mentioned them because but it's not really impacting. So objective and we are is to be able I will not tell you less than $20 per barrel, but today we are confident we can reach $20 per barrel of development costs. And also, of course, to continue to minimize our greenhouse gas emissions, we target 15 kilogram of CO2 per barrel on this development. So on this one, the plan is to move forward.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

We apply the same ideas while on Suriname, taking FPSO with contracting contractor standards, which have been quite efficient in terms of managing the cost. There are some ideas to optimize, by the way, even the design of the SPSO, the contractors. I don't promise you, we'll sanction it before year end. I know it's an internal Jockey, I'm more about beginning the first half of 'twenty six, but it's an important it's a good project and on which we are working. So it's good news for Namibia.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

And for total energies, our neighbors in the North, we are not surprised by their results because the last well we drilled, Tamboti, was not good. So we are not surprised that the neighbor in the North did not make any discovery. It's quite consistent. We are in the center of this ecosystem. I would like to add that we have in fact some potential, continue to explore and we so it's not end the end.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

Venus is a focus of, I would say, the engineering and project teams. But we have to we will drill, I think, during the second quarter, the rig is under its way, Marula, which is a big prospect you can see South Of Venice. We have another one on this block in Namibia, which is called Olamb on the block, next block. It's a different thematic, but it might be, it's an interesting exploration to drill. We plan to do it either in end of 'twenty five, again in 'twenty six, because we would like to have a full campaign between Olam and then continuing in South Africa.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

We took some positions on the Orange Basin on the South Africa side, where we have two prospects to be drilled. One is called Vultures and the other one NELA. So the permitting process in South Africa is a little longer than in some other countries. The idea is that in 2020 and 2025, '20 '20 '6 to have a ring coming and drilling these three exploration wells. So an important year for Namibia for progressing on the project.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

On integrated LNG, I will not come back on all the comments of Jean Pierre who explained you that I mentioned it about the environment for gas price. Yes, we think we have a, we might have a better environment, not only absolute term, but also in terms of volatility, If we maintain the performance of the fourth quarter, but again, we should and we have a target is to come back to after a year where we are I think at $4,800,000,000 of cash flow to come back to target $6,000,000,000 not more, but let's target $6,000,000,000 and Stefan and his teams are taking actions. $25,000,000,000 is also a year for us where we have to progress a number of projects, LNG projects, because which will come on stream in 2026. It is a case of energy costar zones in Mexico and Northfield East in Qatar mainly. Nigeria LNG '27 will be end of 'twenty six or little impact on the 'twenty six performance, but more for 'twenty seven.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

So that's also, as you can see, we have six LNG projects, which today are being on the way to be are being built. And so this is, of course, another part of the execution efforts of all the teams of TotalEnergies. Last but not least, but I would say a lot has been done in 2024 by with, I would say, this strategy of securing some rent related contracts with Asian buyers successfully. It has been on 6,000,000 tons, a very good achievement. We will continue to work on it because if we have opportunities, as we think that the market might be, I would say, softened by the end of the decade.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

It's a good way to take benefit of it if we have some good contracts, which are oil related. So that's for this one. Well, about integrated power. On this slide, I have only some few figures. I would say, again, this year 2025, we will reach vis electronics production will represent 10% of the oil and gas production.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

So it's I think it's a good block on our roadmap, hopefully our 30 objectives. In terms of cash flow from operations, we say $2,500,000,000 to $3,000,000,000 we made $2,600,000,000. We have benefited in the last in 2024 of and 2023 by the way of some hedges which we have done because of the high electricity price of 2022. We don't have them in 2025, but we have additional productions. We have new gas fired power plant.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

So we are confident we could meet again these objectives in terms of cash generation. It's not written, but maintaining the 10% clear turn on capital employed, even increasing it is, of course, on the roadmap of Stefan and his teams. We are working, but I will answer questions. On the downstream, so it's clear that the landscape has changed. You have on the left the refining margin, the European refining margins, which for us is quite an important, I would say, API.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

The environment has changed in the middle of the year. You can see you have in gray, the min and the max 2018, '20 '20 '1 before the which is a war. You have where we were in the last you can see we were in 2022, '20 '20 '3, largely above, but it was, I would say, a hysteric market. We benefited from it. In 'twenty four, we are back to a sort of normalization, a little low because $25 per ton is breakeven.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

So I prefer $35 per ton. As we are optimistic, we have made the budget $35 per ton. But maybe if there are tariffs on Canadian crude oil, we could reach it. Yesterday, it was at $40 so it's not impossible. Sometimes you have some events in this planet, which can help you.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

You don't control everything. But what we should do, that's why we have a target of $7,000,000,000 downstream compared to the $6,100,000,000 this year, because there was also some needs to be clear on the operational side, which we estimate a little less than $1,000,000,000 and say, But we opened, and some things we seem are really motivated to eliminate this miss. A very poor performance on Dunges, which was not in fact running well. We are hoping that you will run again from March. We had some issues on the cracker in Normandy because not because of a cracker, but because there was a storage, there was an accident, technological accident independent on the wheel, but which affected us.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

This is all, so we are back to normality. Port Arthur as well is quite a challenge for years. We have a chance of management with OPE will deliver better returns. So it's a matter of coming back, I would say, on fundamentals, of course, dissipate on cost, but also delivering the Energy Efficiency program should deliver $100,000,000 and of course, plant availability. So by the refining, this downstream segment is helped, I can tell you, by performance of the marketing and the trading.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

The marketing is quite remarkable because we sold quite a large portion of German, Dutch, Belgium networks. In fact, the cash flow from the marketing in 'twenty four is a $2,300,000,000 It was exactly the same, but $2,300,000,000 with these networks. So we gained we sold them for $3,200,000,000 And in the meantime, I see no impact on the cash flow generated by the division. So it's quite remarkable and I can congratulate the team so Bernard. So at the end, you could tell me we would have done 100,000,000 more, but I like the idea that we cash in these networks in an environment where we are not strategic assets.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

And at the end, we continue the performance. Trading is doing well as well. And that's why we target $7,000,000,000 an improvement, but we have some good reasons. It's not just a margin assumption, it's fundamentally solving the operational issues we had and continuing to deliver on marketing and trading as per which are resilient. So all that gave us and I will give you the math, but before so the Board of Directors look at it, we have a growth in front of us, a growth of free cash flow.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

And I mentioned $1,500,000,000 additional free cash coming at $70 from the upstream growth in 2025. We plan $10,000,000,000 So it's a step between '24 and 02/1930. So it's a good step. So this we are confident. We have a strong balance sheet.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

Board of Directors for the third year in a row decided to increase the dividend by 7%. Here it's not in, it's not for the full exercise, it's paid dividend per year. So that's why you see 7.2. But it's paid in a year. It's a combination of two exercise and some interim dividends.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

So in fact, since for the last three years, we have increased the dividend by more than 20%. So it's quite a good, I think, good returns to our shareholders. We have translated the euro per share because our dividend is denominated in euro, in dollar per share on this chart because we have served some dollar investors. That's true that they benefit from higher growth, by the way, at 1.1 in the last two years, one point zero four zero five, it's a little lower. But the average for U.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

S. Investors on 2225 compared to 7.1 for a European investor would be between six point five and seven point eight. So I would say, it's not, we are, depends on the exchange rate, but it should, it's a strong also nice upgrade. On the buyback, it's a strange chart. So I don't know if it's a Mondrian chart, but you know we have bars of $2,000,000,000 2 billion dollars 2 billion dollars I told you in New York that we want to maintain the $2,000,000,000 assuming reasonable market conditions.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

The market conditions are very reasonable. So we maintained the $2,000,000,000 I know there were some questions marks among you after the third quarter results, but generally when we announce something, we are consistent, we know what we do. And of course, it has been reinforced by the two, the strong, the low gearing at the end of the year. By the end of the year, we knew that there will be a way to return this draw on the working capital. It's not, we will try to find a way to normalize it around quarter, but it would have some fiscal effects.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

8.3% of gearing is low, but I remind you, we are at 7% in end of 'twenty two at 5% end of twenty twenty three, eight point five % end of twenty twenty four. So the track record under 10 is quite well established in this company. So we have some room, let's be clear, and that's why I can confirm that the intent is to maintain this $2,000,000,000 of buy buyback per quarter. We make some math. You have them on this chart on the left.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

At $70 we will generate, I will tell you, more than $29,000,000,000 So we have, yes, a deficit and CapEx, of course, lower CapEx is helping the, I would say, the balance. You have something like, I would say, dollars 33,000,000,000, so you have a GAAP of 4%. It represents 2% to 3% of gearing increase, less than 2.5% of gearing increase at $70 At $80 it's almost nothing. So in fact, considering the sensitivity, you have 1,000,000 So it's an equation, which I think is fully is quite completely affordable with a strong balance sheet. And that's why we, I confirm to you our intent to maintain this $2,000,000,000 per quarter.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

As I told you, in New York, you have the sensitivity, which interchange fundamentally on this chart. So to finalize to end my presentation. Precision chart, we show you in New York, I think more energy, less emission, growing free cash. We just introduced the year 2025 to remind you the framework in which we are to grow the energy production by 4% per year over the six years through 02/1930. We'll do it 5% in 2025.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

Electricity, electronics will represent 20%, will be at 10% halfway in twenty twenty five percent less emissions and growing cash flow, which I think is very important. What is remarkable is that as you can see at $70 12 dollars per million btu ETF and $35 per tonne, which is more or less $10 per barrel only different from $24. We could deliver a free cash, which is the same at $70 but at $80. And so at $80 an additional $3,000,000,000 compare. And again, it's coming and that's a strong message I want you to keep in mind.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

But we grow, but we grow for value and we grow for active growth and additional free cash flows to feed the returns to our shareholders. And the last slide did not change. It's very consistent in total energies. We are I strongly believe in energy world, but consistency in this sense in terms of strategy. So to be resilient is important.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

We have and it's a result of a very deep stream portfolio. And you've seen it through this 157 renewal reserve after 01/1941 last year, which will grow again, which will anchor the growth of our production for 02/1930. On LNG, we are in good position, very well positioned with The U. S, with European position to benefit from arbitrage. And this is what the teams of Stephane are doing.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

Integrated power is underway on the roadmap that we set. And I gave you all the elements of the financial framework to support this strategy. Thank you for your attention, and I will be happy to answer with Jean Pierre and with all the executive committee members in the room to your questions.

[Operator]

Okay. Let's move on to the Q and A. So maybe, Henri, yes? Yes?

[Henry Tarr, Director - Co-Head of Energy & Environment Research at Barenberg]

It's Henri Tarr at Berenberg. Just a couple. In Namibia, I think you mentioned sort of Tambotti perhaps not living up to expectations. If you could give a little bit more color on that, that would be great. And then just on the LNG business, What flexibility do you have this year in terms of sort of cargoes that are available to drive that incremental cash flow in integrated LNG?

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

Okay, Tambuti, Nicolas, you want to answer? You need to take a microphone or otherwise nobody will listen to you.

[Nicolas Terraz, President of Exploration & Production at TotalEnergies]

So Tambuti, there was oil pool. We performed a test of the well. Permeability was low, lower than Venus, so what Patrick explained moving to the north. So the well did flow, but limited flow. So, less goods than Venu specifically.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

No, there is no commerciality to be clear. So, it's not we cannot think to connect Tambotti to Venice. Game is over on Tambotti. And in fact, it was a risk we knew because when we drill one of the Venice well appraisal, we saw in the north some degradation. So, I mean, so but we wanted to drill it because it was a sizable prospect.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

And in case it could have been an additional, but petrophysics ARPU, I would say, are more in the same type of range, but what has been written off by some of our colleagues. So we know the limit in the north, we know the limit on the north and west. So we continue to look to the rest of the block. The one of Stephane, you want to answer to the flexibility you have in your portfolio. Stephane is there, you will have a microphone.

[Stéphane Michel, President of Gas, Renewables & Power at TotalEnergies]

Yes. So, the flexibility that we have in the portfolio is, as you know, we have a supply that is largely coming from The U. S. And those U. S.

[Stéphane Michel, President of Gas, Renewables & Power at TotalEnergies]

Volume can either go to Europe or Asia. And as Patrick mentioned, the spread between GKM and TTF should be quite volatile because of low stock in Europe. So we expect people to fight for that LNG. So we will be able to divert the cargo depending on the best market from that U. S.

[Stéphane Michel, President of Gas, Renewables & Power at TotalEnergies]

Position.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

When we have a long term contract, generally, we are close to rediver the cargos with such profit sharing, so it's quite flexible. In fact, it's the advantage to be a company portfolio. And we have very gas capacity in Europe, I remind you, 20,000,000 tons to welcome to take all this LNG. So this is the infrastructure is helping us from this point of view.

[Operator]

Michele?

[Michele Della Vigna, Managing Director at Goldman Sachs]

Michele della Vigna from Goldman Sachs. Two questions, if I may. The first one is on tariffs, clearly a very hot topic at the moment. You've got exposure to various parts of The U. S.

[Michele Della Vigna, Managing Director at Goldman Sachs]

Energy value chain, renewables, LNG plants. Is there any area where you would see potential tariffs as being inflationary from your CapEx perspective? I'm thinking especially the value chain of the LNG plants, but also perhaps some parts of your downstream business there as well. And then secondly, on gas, there's a big debate about summer in Europe with potentially Germany forcing 90% inventories by the end of the summer. Do you see the market being able to do that or a potential repeat of 2022 with a hard competition on price with Asia?

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

On the second one, I think it's clear, but for me, we have that's why my message, I think with the situation of European storage, if we are too aggressive to replenish our storage and we don't give them a little more time, Illustration is not exactly the same for Germany because we have more free gas terminal today. In 'twenty two, we are all afraid not to have we are trying to put maximum storage because we had a lack of infrastructure. In the meantime, we have built some we have bought some floating units. In Germany. You have 5,000,000 tons of capacity, but also in France, we have one.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

So we have more infrastructure. So I think the situation should be a little more. But if we go to rush, the only way to rush is to take the LNG from Asia and to pay more. And again, it could be inflationary. So I think today, yes, we have a risk of that.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

I'm not sure it's not good for European customers or European LNG player like TotalEnergies, not necessary, but up to us to also me, the situation is not again because we have built some infrastructure. So the Europeans should take that into consideration. And not just because in 'twenty two, we are super afraid. We had a lack of free gas capacities on the continent. Today, we had some of them.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

Not everything, but we have more. And so it's still there. So that's the point. But yes, I think that's my message. I think there will be some, we could have higher price, gas prices and tensions.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

And again, the spread between that's why the arbitrage from The U. S, which even by because of the Panamax channel is even more. I mean, that could be another element of the puzzle. On the tariff, we are entering in the new world. I said that to the board yesterday, none of us have never worked in a world of tariff or tariff wars.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

It was the old world. We have been we have built a global world with almost no tariffs. So we thought everything was easy to move. I mean, I think we have pragmatic guys, by the way, they are able to take decision and to change their mind, which is good leadership when you are able to see that you could have some points. We could have some difficulties.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

It's true that you have some spare, some value chains, but it's true for not only for refining or downstream, it's true for car manufacturing. A lot of spare parts are moving across the border between Mexico and The U. S. So you could have this type, which is a strength, which is not a good news. You could have also some good effects for European refiners.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

If you have a tariff on heavy crude oil in Canada, you will benefit of it. So yes, you might have your effect. At the end of the day, I think my view is that U. S. Administration will be pragmatic in the interest of the business people.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

It's fundamentally, it's a country where business is first more than in Europe. In Europe, we can shout, but don't listen too much to us unless we take strong decision. In The U. S, it's more open to that, including the President. So I say, let's say, today you have a sort of I think '25 will be a little shaky, so let's be ready.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

But maybe the best for us is to sort of not to take too quick decision in the wrong way, to observe what will remain really policies in place. It's the same by the way for the fiscal policy in The U. S. For renewable, but let's see what will happen in the Congress. Again, I was looking, I asked this morning to Stephan give me the map of the federal lands, which are forbidden for onshore wind.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

Texas, there is no federal land at all, just to be clear. It's the Rockies, it's the part of the federal lands and when we cross in the history of The U. S, we went beyond the Rockies. So I mean, let's observe what will happen. I think the best my view is that we need to observe not to overreact and to let this coming six months will give us more answers to many questions to the enthusiasm at the beginning of the administration.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

But it's true that we might have to adapt and we are not all what we have designed. The supply chain have been designed not only in our industry, but in our industries as a world with no tariff or very limited ones. So suddenly, if you disrupt it, you might have bad effects, but also maybe some good effects on the other side. So I'm let's observe and not but I take your point and yesterday said to the board, we have there we have to be able to be very adaptable and to react, to look at it.

[Operator]

Okay.

[Operator]

Martin?

[Martijn Rats, Analyst at Morgan Stanley]

It's Marc Maritz from Morgan Stanley. I have two questions, if I may. I wanted to ask you about Suriname. So Staatsoli in Suriname in a recent bond offering suggested a level of CapEx for the project that was perhaps a little slightly higher than what we sort of generally understood. And I was wondering if you had a comment on that whether you're comfortable with the CapEx in Suriname.

[Martijn Rats, Analyst at Morgan Stanley]

And the other thing I wanted to ask you is about trading. It's a bit of an open ended question, but of course trading was very, very profitable generally in the industry 2022, '20 '20 '3, came down a lot in 2024. But it's hard to know exactly how much. Can you perhaps say a bit about how the earnings evolution of trading has been and more broadly what your ambitions are in that business going forward? How you see that business changing?

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

Stazzoli, I don't know where the budget is $10,500,000,000 as we mentioned that in September, there is no change at all. So I don't know, Stazzoli maybe is using it, they have a small production or to leverage some money, of cash. We don't know. So you have to ask them a question, but there is no change at all. There is no impact.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

No, no, we are very close to them and we are monitoring them. So no, there is no impact, no new elements compared to the budget we gave you. Okay. So from this perspective, obviously. On the trading, in fact, honestly, there are different things.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

We have been quite open to you about the gas trading. On the oil trading, in fact, that's true that it was an incredible year in 'twenty two, But the year 'twenty four was a strong year, was a good year on our side. We don't see lower but strong. In fact, nothing even higher than it was before 'twenty two than 'twenty one when I compare the results. So I think the teams have adapted.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

Well, it's really linked to the volatility of the market. Traders, they complain where things are flat. They don't know what to do. It's flat. So we don't like that.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

When it's a little more rocky mountains, they're happy. So for me, on my side, I'm not sure I'm competing with them. But no, but it's I mean, it's as we said, it's we are strong contributor. We don't ask them to take more risk. It's up to them to manage their business.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

And if they do better results, they have the better pay. That's quite easy. So they have a strong motivation. Dheeraj, there, please. But on the oil side, there was no miss, to be clear.

[Analyst]

It's actually maybe for Stefan on integrated power, but there's a lot of excitement around data centers and power demand associated with that. I was wondering if you could just give some of your perspectives on what you're hearing from the customers, what are they looking for? And in particular, could you just do a little compare and contrast across the regions you're in, U. S, Northwest Europe and maybe Asia? Thanks.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

Stephane might complement me. I think several comments. First, on our side, our business model integrated power is linked to the combination of renewable and flexible assets. And we strongly believe that this market, what we call the clean firm power, we managed to sell. We have been effective and we sold 3.3 terawatt hour per year at this stage to different customers, 25% to Gafam, by the way.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

So we begin to enter into mass market. There is more to be done. The figure I gave you, it's when we sell as total energies. If I add, I'm adding the Clearway sales because we are also non operated assets with Clearway. It's seven terawatt per year.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

So we benefit somewhere from this market. But what we are looking us, we are not in the infrastructure business. So investing in gas fired power plant in a power plants, which is a sort of infrastructure, I would say, return, which is an infrastructure return, a sort of regulated business. It's not what we are targeting. What we want is to offer and we have some still some dialogue.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

We have dialogue with some hyperscalers about of do you combine renewables, gas fiber plant, pickers and batteries. The renewables, in fact, are lowering the cost because when we use renewable, it helps to lower the price at the end for the PPA. So it's a source of cheaper electricity. But of course, they want a 20 fourseven reliability. We need to combine it with CCGT because batteries.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

And this is a combination where we think we can not only have a reliable electricity, but also a cheaper one, which is honestly what they target. Of course, today, they want a lot of volume. They are all shouting, but they don't have enough. But if it's expensive, I'm not sure they want to get it. The other points where we have, I mean, I'm listening to this concept, which is coming in The U.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

S. About big data park, I would say, or huge park combining several gigawatts plus in our dialogue, we were discussing with Stefan again yesterday or in our dialogue about with hyperscalers, they attach a lot of value to the reliability. And the reliability is not coming only if you have an independent, I would say, park, independent from the grid, but does not mean a reliable system. So some hyperscalers that we discussed at home are willing to have the connection to the grid as well. And the grid not only, so it's a grid where you would be able in case of unreliable supply from your own sources to bring, to withdraw, I would say, electricity from the grid.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

So it is more this business in which we are, this integrated business, taking benefits of the assets, but just building capacities as an infrastructure. But maybe Stefan wants to add on my comments to give some complement to what I just explained. So yes, we look at it, but more in the dynamic of what we could integrate it and clean from power.

[Stéphane Michel, President of Gas, Renewables & Power at TotalEnergies]

Yes. Just to add on what Patrick has said, just on the geography of it. There is a clear focus on The U. S. First and not up in Texas, where we have a large presence and as Patrick mentioned, where we can offer a blend of renewable pickers, CCGT and batteries, that's one.

[Stéphane Michel, President of Gas, Renewables & Power at TotalEnergies]

And we start to see an interest as well on some European countries, notably Germany, where we have tried to develop our presence. The good thing as well is that in The U. S, there is a clear focus on time to market and one way to be able to deliver on the '28 target '29 target is clearly to use existing pipe and the construction asset, otherwise that's going to be quite challenging to deliver on time.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

Your idea is that in the sale, when today when you build some new farms, you try to have connection in both ways?

[Stéphane Michel, President of Gas, Renewables & Power at TotalEnergies]

I know. That's not tomorrow, but the day after tomorrow is that any project we do now, we try to preserve some land to be able to welcome that as under. And at the same time, we ask for the grid connection to supply the grid, we ask to be able to withdraw the power. Because as Patrick mentioned, they need to be connected to the grid for a reality reason. And the idea is that you can only build that on beyond the meter is probably not going to work.

[Christopher Kuplent, Analyst at Bank of America Merrill Lynch]

Chris Kuplen from Bank of America. Two questions, if I may, Patrick. I think you've been powerfully presenting how busy you are growing organically. But nevertheless, I wanted to ask you, where do you think today is it most attractive to buy rather than to build? Where do you see the biggest opportunities in the M and A market considering your ambitions all the way into 02/1930?

[Christopher Kuplent, Analyst at Bank of America Merrill Lynch]

And my second question, I'm afraid someone's got to ask you about Mozambique. Your 02/1930 numbers you presented in October were including Mozambique. What can you give us as an update? Thank you.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

Okay. We don't need M and A. We have an organic growth. So today, again, it's not the right time. I think we can sell.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

We have a divestment program at $70 80 dollars per barrel is the right time to buy. I mean, we'll look again, as you know, if we have continued to have opportunities in the for TotalEnergies in The U. S. Shale gas to continue to replenish. We have done two deals, but we need to have more.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

So that's remained clearly for me a priority. So there are good opportunities and I have teams today, we are looking around and trying to be imaginative and creative. You have some shale oil producer. We have a lot of associated gas with mostly negative value. So they might have a way to make a deal, and we are working with some of them.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

So we see this remain. And we have to date is quite low. So in fact, it's quite accessible, I would say, these type of things. Otherwise, honestly, I don't I'm not we don't have a big need working on other ideas.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

On the integrated power, yes, we continue to we will continue to acquire, but it's more recycling capital, because this year, we Jean Pierre I said it's a good achievement.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

We sold 1.2 gigawatts farming down, so recycling $1,000,000,000 The target was more around $2,000,000,000 than $1,200,000,000 to be honest. So we are still so I'm just I remember the internal mark targets, okay. Jean Pierre is nice, but it's fine with all his colleagues. But in fact, we are more targeting two. We know what we missed.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

It was two countries on which we are almost closed and finally we had an issue with the buyer, so we decided not to close it. But so it's two gigawatts per year, it's recycling $2,000,000,000 and this $2,000,000,000 should always that's why we are already at the plateau in terms of CapEx in integrated power, even if we want to continue to grow. So this one for me is a matter now. The model must continue to recycle this capital to be able to grow the assets. That's fundamental.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

And on this one, I would say it's quite obvious where do we target. We need to in Germany, we have a we need to target some one or two gas fired power plants to maintain, then we'll have the full value chain, so that's clear. So U. S, PGM, things like that. But again, today in The U.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

S, the gas fired power plants, because of these hyperscalers, they are so expensive. We are lucky to go beyond. So let's wait. Let's wait and see. Today, it's very fashionable.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

It could come back. And so that's, I would say, this type of example. But it's not big, big deals, which and by the way, Jean Stephane has already consumed quite a lot of his M and A acquisition budget with the VSB deal. So you know, it's but it's a business where we can tell you we have a lot of ideas. We have a lot of ideas.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

But it's good for me because we can be selective and fundamentally on this M and A, kind of integrated power. More and more together, we know exactly what we want to achieve. And so we have the teams are very enthusiastic. But solar in Ireland, I'm not sure it was the most best idea of the team. So sorry for the Irish in the room, but I don't think you can see Irish, but some French ideas sometime.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

That point. The question too, with Mozambique. Yes, Mozambique is more important. On Mozambique, again, I met President of Mozambique, it was not in the press last the beginning of last this week, last Monday. I've been there to discuss about what Eves used.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

The good news, in fact, there is a huge continuity in terms of the security setup. He kept the energy minister is coming, was already there before. He was not Minister, but it was the Head of the Agency, Defense Minister, all that are the same people. So I would say continuity regarding these Mozambique LNG projects and the surroundings, there is a will of continuity that's important. The cybersecurity, the agreements they have with other countries will remain in place, and they are dedicated, I would say, to bring the best they can to the project.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

We have, as you know, it's public. We had a debate with some credit export agencies. I think the one which will be sold quickly is the one on the other side of the Atlantic. I think I will be surprised, but President Trump administration will be against an LNG project they have approved, by the way, four years ago. So I think it's a question of weeks.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

So this is important because it was a big part of the credit export. But President Adarco, we said all that, but it was almost $5,000,000,000 So once we have this piece, this financing is done, I would say. I would remind to some of the other credit exporters, in fact, all of them, but two have approved. The other one that they have signed a contract, but we gave them a lot of money, so I'm ready to exercise all my contractual rights, not me, Mozambique LNG shareholders, because we are only 26% of it. Okay.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

And then on the project side, the question is to be able not only to appraise the security on FOG, which is fine. On the Peninsula, we're going to build, we have no doubt, to be clear. It's even better than it was before because everything has been reinforced, so I have no problem. It's more the security of the regions, again, which is more for me a question. So I would like to we are looking to the reality and to see some improvements on this part.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

On the contractor side, we are all ready to start up again. The project is, we told you, around $20,000,000,000 it's around $20,000,000,000 so there is no change. So yes, it's true that each month, which is going through, and we were not anticipated to be honest in summer last year, these difficulties with credit export agencies in particular there, because there are no signal when it enters into a politics, the politics mix. So we are victims. But it's back on track from my point of view, and it's a matter of weeks.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

So that's where we are. Today, I think we told you 2029, if we lose six months, we'll be 2029, '2 thousand and '30. But the idea is to be able to do the project, to launch the project and that's point. Lydia? In 02/1930, to answer precisely to your question, in our roadmap, it's 3,000,000 tons of LNG.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

So precisely, so it's not a valid, it's important, but we have other options to activate in our portfolio. So we don't have in our plans '24 Rio Grande or '25. So we might have I mean, we have enough the depth of the portfolio, the optionality is we have on the LNG side. Okay, it's maybe Mozambique in the base case, but not Mozambique, it might be something else. So from this perspective, I think we have some different cards to play to meet the and again, it's more the value that I want to have and not just the volume.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

And I will not sanction, we are working hard on Papua. I'm sure I will have a question on Papua. And we are very in very good, I mean, I would say strongly unify or force it with ExxonMobil together to find new ideas to relaunch the tender. And again, we are not desperate to make the project, but we are working out to make it back on track, acceptable CapEx to deliver some value. We'll see by I think we'll have the, we have all the offers will come by September 2025, so we should be able to take decisions.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

But the good news, but again, there on this one, the forces of the two companies are aligned and working together, which is good for us.

[Lydia Rainforth, MD & Energy and Energy Transition Equity Research at Barclays Corporate & Investment Bank]

Thank you. It's Lydia from Barclays. Two questions, if I could. The first one, just on CapEx, because if I think about the change from September, the CapEx side was probably the big change. So just going back to that, well, at what point did you go actually we need to take it down from 'eighteen to that 17.5%?

[Lydia Rainforth, MD & Energy and Energy Transition Equity Research at Barclays Corporate & Investment Bank]

And just that point on the contractors and it being lump sum, are the contractors still happy to do that going forward and you're working with them differently, I think? And then the second one was just coming back to the downstream side and the operational issues that we've seen there. That obviously is unexpected, these things happen. But is there anything you're looking at that may be more systemic that you need to go back and look at some of the processes that you have in place?

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

I will let Vincent explaining what he wants to put in place about his availability of the plants. It's also thought to be clear that we have old refineries, I will tell you. And you know I'm not a big fan to invest in plenty of new refineries, in particular in Europe. So we have also a question of reliability. It does not mean that we don't have a systematic plan, but Vincent will share with you his action plan that he's putting in place with his colleagues and his teams.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

On the first one, okay, it's not a big change. 0.75 out of 17, I know it's a big change. Yes, maybe you were surprised because you were all thinking that we'll go above. So you don't believe us, you should believe us. I've been CEO in front of you for ten years.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

I don't think I didn't miss a lot of things on this perspective. So should believe us first and not planning that we'll go beyond. We are, in fact, we've done our job. And again, I told you the truth is that there was something which was voluntary on these some low molecules where we begin to have our EV charging. We want to have to be more frugal in the way we allocate capital, I would say.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

Not the program could be developed, but the matter is the way we finance all that. The other part is again to be pragmatic. We have a number of people. We cannot over stretch them because that is a question of safety, it's a question of execution. And we had some subsidiaries, where clearly like Angola, we have a lot of things to be done.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

And so we look at the plate and we said they are maybe a little too much. So let's arbitrate, let's focus on delivering Camino and the key matters and not because the guys are or people, you have a bottom up approach and then you try to be reasonable. So it came to that conclusion, but I don't see that as a I think it's a good discipline. By the way, it's true. But again, we all the opportunities bringing additional cash are being preserved.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

So it's more looking I know, when you spend $18,000,000,000 to $500,000,000 it's not a huge management of exercise. It's a question to maintain the idea and it's important because we have a three year in a row at $80 increasing some CapEx. You begin to discipline might be somewhere more difficult obtain. The fact that we are having this debate important, it's also true, be clear, but the commitment to what we told to you in September to the buyback is taken into account by everybody. And that's part also of the margins we want to have.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

So you have an impact on us when you make some comments. We listen to our shareholders and to our investors, which is good.

[Analyst]

So we have a clear plan on availability. Just to make it short, first, we have very good refineries as well. And we have realized that sharing of experiences is not fully implemented. To take a very concrete example, the refinery in The U. S.

[Analyst]

For our tour is alone in The U. S. And we want to take the best of the best players in Europe and to have, for instance, and to be sure that it's implemented in Port Arthur. So we have changed the management. We We have people coming from Europe and we see already the plan delivering the first results.

[Analyst]

Second axis, in terms of organization in what I would call the bad players, we see that very often in the maintenance for instance, the people working on the more long term improvements, they are cannibalized by the short term when you have issues. So we need to ensure that these two teams, they are clearly separated and that these particular plans like for instance in launch, they are not always fixing issues rather than working on the long term. We have also realized in some plans that people could focus on these particular equipments of the refineries, which are bringing the best margin, instead of looking at everything to focus on the high value margin units. And then last but not least, and it's very concrete and pragmatic, I think that digital today is ready to bring value. We have solutions and we can improve valorization, for instance, for the product in the refineries, thanks to these tools.

[Analyst]

It's to make it short, but

[Analyst]

you have plenty of color.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

I think, and I see, even Lydia, I'll look to the chart that I put it again. When you have two years of easy profits, I would say, which came from the sky, our refiners, when I was running this business, I would have never thought I would have $100 ton of margins. I think it has also an impact somewhere. But it's why in fact at the end it's back to fundamentals, back to the things which we are claiming.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

So it's no critics, it's just a matter of again, it was very strong very high results. You lose parts of these plants are and you have a succession of events. But again, it's not a matter to sleep, not to react and that's the business. It's not systemic. For me, it's a question of again putting back things in normal and I hope we'll get the results.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

Reasonably optimistic on this one.

[Operator]

Lucas, here, please.

[Lucas Herrmann, Analyst at BNP Paribas]

Thanks very much. It's Lucas Herman at BNP XM. Two if I might, Patrick. Liquidity, U. S.

[Lucas Herrmann, Analyst at BNP Paribas]

Share, how have things moved? Where have you got to in terms of the intent to improve it? And second, I guess, is just a reminder, I have this horrible feeling I'll wake up one day, we'll probably know about it beforehand that Russia Ukraine has been resolved. So it's just a reminder of what's the position in terms of legacy dividends, legacy flows that you could potentially recoup over and above obviously regaining control is the wrong word, but regaining access to the cash flows from existing assets? Thanks very much.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

First one, first is I will not introduce the debate. It's not a question of double leasing. I remind you, what we want to do is to have one class of shares, only one, which will be introductory market is Paris. And these shares might be traded on both markets from 09:30AM to 6PM, I think, in Paris and from 5PM to 10PM in New York. So it's a continuous listing of the same class of shares, that's why.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

And at the beginning, it's transforming the ADRs into shares. So I don't want to people are using double listing, not a double listing, it's not two class of shares. And in fact, fundamentally, the stock value and when the two markets are open at the same time, it's just linked by the exchange rate in fact. So it works. It's not a tool double leasing, it's one leasing, it's more continuous listing.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

Operating, yes, access on The U. S. Side to shares and not to ADRs, which are of course, etcetera. Where are we? We have we've working hard to lots of technicalities with Euroclear and DTCC, which are the two I would say transfer agents in the system.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

We have also some banks working with us. So the technical solutions have been found for all the issues. So we know if we could vote, we know if we could proceed taxation, so all that is done. Now we need to go to the legal part. So there is a we have entered into a new phase to translate to buy into legal documents.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

So that means that we are working on it. We see there is a I don't anticipate a blocking point, but you know all that has to be done. So the good news is we know how to make this continuous trading on both markets, interaction, but we have to translate that into contracts. Of course, our counterparts will not have only our topics to solve. So there is a lot of things.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

But our view is that our objective is to do it in 'twenty five, maybe end of 'twenty five. But if we don't do it in 'twenty five, we'd be worried, but we cannot do that. But so it's clear. So let's see, we'll have some more visibility in the next six months. But it's technically, we know and we have find all the solutions to the technical questions we have, including the one which is for example, in France, when you buy a new sell a share, you have to pay 0.3% tax.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

That should be applied to the purchase and sales on The U. S. Market. It's a small detail, it's not a small detail. So it was, how do we implement that?

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

That has required some, I would say some developments with different intermediaries, etcetera. But we have the solution, so we know how to secure that. So that's the type of things where we are. It's not big deal, but it's a sum of technicality. So we progress.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

And again, the board supports unanimously all these move. But it's again, it's a continuous leasing of the shares, which are primarily introduced in Paris between the two markets. And then that's the point. Russia, I don't remind you figure anymore. I know we have around $1,000,000,000 somewhere in the system.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

To be honest, in my head, they have disappeared somewhere. I don't count I mean, I don't know why, but I see your application. You are optimistic that but we don't have any dividend from Novatech for almost a year. They are somewhere there. And there is a funny law in Russia, which is floating, but if you don't take your dividend after three years, you could lose them.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

So there are funny things, they could make one year. So it's not very friendly for foreign investors. But honestly, today, the point is that today, we, as you know, the situation, everything is frozen from our point of view. Yamal continue to work and we continue to exercise the contract of Yamal works for the rest. We'll see.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

The assets, we have the shares, the shares are somewhere, but I'm not for 2025, we did not integrate anything in our even more on the point, but my question to me is when in Europe, when at which point there will be enough LNG capacity in The U. S, Twenty Seven, where Europeans might decide that we'll get rid of the LNG in Russia. That's more the question. Again, in the meantime, the one hundred days of President Trump would be if I easily manage,

[Christopher Kuplent, Analyst at Bank of America Merrill Lynch]

I will

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

applaud, which solve not only total energies but for everybody, I would say, more important than for us. So as well, yes. So again, nothing is in all the figures you've seen is there is no Russia story, except the Yamal flows. But Yamal, as you know, as we don't hedge too much, we don't hedge Yamal, we have an issue when price are going, when we are very low in 'twenty four. So performance of Yamal, which was not hedged, was not as good as it was a year before, it's part also of what has impacted the I'm not claiming that, but that's the reality, what has been the performance of the contract 'twenty four, we are not as good as 'twenty three just because we are more in the spot.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

If the price is going back, could be that's what we that's the point.

[Irene Himona, Managing Director - Oil & Gas at Bernstein]

Thank you. Irene Himon at Bernstein. My first question on biofuels, if I may. An industry that had its economics deteriorate substantially last year, A lot of your peers are canceling, withdrawing, impairing. There is some valid concern that we won't have the SAF capacity needed by airlines in 02/1930.

[Irene Himona, Managing Director - Oil & Gas at Bernstein]

So I wanted to ask because you've obviously converted a number of your units. What do you think needs to happen for that business to economically scale itself up over the next two or four years? My second question, specific to the quarter, working capital, we've seen a systematic release of material amounts of cash in Q3, 'twenty '3, in Q4, 'twenty four. So can we anticipate that happening in future? What is driving it?

[Irene Himona, Managing Director - Oil & Gas at Bernstein]

What is happening there? Thank you.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

Jean Pierre is the expert of working capital. Try to help him.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

On the I mean, first, I think on the SAF, let's come back to there are different ways to produce SAF. There is the easy way, the cheapest way, which is to go from lipids, I would say. Loose cocoa, animal fats, different waste, palm oil, things like that.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

These ones are profitable. And we need to continue to invest because we have this mandate, so you could have a short. Then you have other projects, which are honestly for me more critical, where we didn't invest today, which are methanol to jet or going to ESAF, green hydrogen, all that are complex,

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

they are expensive. And in

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

fact, they are not meeting the demand from customers, because the airlines are complaining, but they want the cheapest one. And my view is that we can meet the mandates by 02/1930, '2 thousand and '30 '5 just by remaining on the cheapest technology. So just so I understand why some people are canceling some projects, which seems to be on the high side of the capital intensity, but I understand. On the other side, I think the difficulty is that it's coming for it's a regulated market. So sometimes you have high, sometimes you have down.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

So in 2024, the HBO were quite low priced. So then you see a depression because there were too many because of the Scandinavian countries, which have changed their rule of games. Wizzir in '24 Germany is helping everybody because they have decided, but all the inventories, which we had in our bio quotas have disappeared. So suddenly you have a lack and so the price is going up. So that's the difficulty of this market.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

And you have to navigate it. You have a nice way to make SAF and that's the reason as to why you have some cancellation with co processing. Because the airline industries have discovered have allowed us in fact, because it was in fact just a normative debate. Can we make some co processing when you inject used coco in a refinery? You produce Kerosene, can you make a mass balance in order to consider that what you have produced is a SAF.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

So it's not a real SAF, but it's a SAF by aggregation. And we have this year during in July, but it's acceptable. Why? Because first, it's much cheaper. But by doing that, of course, they have pushed back the other big projects where which are really delivering SAF, the old SAF, I would say SAF, like the ones we will produce are more expensive.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

So but just because we were somewhere afraid that we could not have enough stuff and they are cheaper. So I think the co processing has taken quite a good space in the market. And so that's also why I think some of my colleagues have said, why should I continue to invest in greenfield projects, because if I can produce these products just by combining in my own refinery? That's part. So the game has changed.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

And that's the difficulty with these molecules, which are honestly very regulated. They change the way you accept the things and so you have these markets. So that's why investing in CapEx, you need to be clear, push, I mean, you can do it, but in on the most efficient projects. And so I'm continuing to be convinced that for us, it's not great for sure. It's just transforming old refineries, which become old and even not profitable in declining European markets into biofuels.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

So for me, that's a good thing to do. And again, the condition to do that, and that's one difficulty is to find a way to integrate the upstream. Because then there, there is a value in all these used cocoa, animal fats, or do you manage? We build a partnership with Saia, this German company on Grand Prix. We are exploring with them to extend large this partnership to more and more projects because the integration is a way to secure the valuation, not just to be the transformer of a feedstock, which could go high.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

And by the way, an outlet which could go down, it could be completely squeezed. That's the economic difficulty. But again, I'm not so afraid. In fact, I think you have a game there. The airline companies, they are shouting, they have a lack of stuff because they want the price to go down to produce, to provoke the overcapacity.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

It's a commodity business. So in fact, in our math, when you make the markets, I'm more afraid to have an overcapacity than an undercapacity by 02/1930. I mean, and for them, the game is to say, Oh, look, we have a luck. And then the but the conclusion is that in Europe, we have faced a number of difficulty. We clear in Europe, I explained I discussed it with a commissioner in Brussels, is that today, we are accepting SAF, importing SAF from China, from China because the airline companies are selling the high black.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

But when you import from China on which to be sure that they have all the I mean, they are meeting all the criteria that we do in Europe, investing in Europe in the new units when you have the stuff coming from China and sellout somewhere it makes a little sense. So that's all this, it's big difficulty for me on these molecules. It's plenty of regulated elements, which makes a decision of investment not easy. But at the same time, let's move. So it's clear, it's a complex market, but it is a market and which I think we have some good cards to play in this one.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

If we put together the integration, low CapEx and being sales, It will not be for us a major, it will be a source of revenue. I don't expect that to be of free cash, I would be clear. But if you can help me to transform some post losses into, like we have done in Lamed, we went from minus 100 per year to plus 30 per year, it's fine. At the end, it's worth to make the investments just to and because we have jobs, etcetera, etcetera. So that's fine.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

That's the objective. Working capital. So how do you avoid to make it? It's good to make it by the end of the year, but I know that we have some systematic issue about fiscal, for example, in Norway, we pay in March, so we have a big draw, big chunk of taxes have to be paid 1 the first end of first quarter for the rest.

[Stéphane Michel, President of Gas, Renewables & Power at TotalEnergies]

There is no cash belonging to the company outside the company, in terms of your way for your hands. But I mentioned to you during my speech that we benefited end of this year of exceptional elements, mainly tax elements. I will just give you one example. We are supposed to receive the bill from the German authorities in relation with capital gain tax we generated when we closed the deal in Germany End Of 'twenty Three. We supposed to receive the bill during the course of the first quarter.

[Stéphane Michel, President of Gas, Renewables & Power at TotalEnergies]

We haven't received the bill. There is no permanent pay recall, so we received the bill that we will pay in the first quarter of 'twenty five.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

Having said that, it's clear that the objective is to try to normalize this flows, to be clear. I'm on your page, because I would prefer to see that as a normalization. But I think there were some lessons that we have been drawn by the different my colleagues in order to normalize it. Okay. That's part.

[Operator]

Duke, on that side?

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

But you can consider that you can trust by the end of each year that you will have more or less a stable situation. In your models, in your math, consider that we are able to do it. We've done it several, three years in a row. We know to do the recipe and we can repeat it.

[Doug Leggett, Analyst at Wolfe Research, LLC]

Okay. Thank you, Renaud. Doug Leggett from Wolfe Research. Patrick, you talked earlier about $70 80 dollars oil is not a good time to buy things, but it might be a good time to sell things. In your 3% growth target through 02/1930, what have you assumed?

[Doug Leggett, Analyst at Wolfe Research, LLC]

What are the criteria? And I think of a couple of examples as you're expanding your margin, you still have The UK, The UK has a windfall tax, you have Libya and it's growing and it has a 93% tax. So what do you think about the things that are offsetting your margin expansion and how does what's your criteria for disposals? And my follow-up very quickly is on Suriname. You talked about exploration in Namibia.

[Doug Leggett, Analyst at Wolfe Research, LLC]

You didn't talk about the exploration plans in Suriname. I wonder if you can elaborate.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

That's true. Good question. Second one, both questions are good. No, we have we continue to divest some assets. But here, we are we in '25, we have planned to sell in Nigerian assets onshore.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

So it's on this way to be closed, so it will be down. It's represent $800,000,000 to $900,000,000 of cash in. So it's a big deal. UK, we have worked on it in different ways. We try to find a way to combine fiscal losses with our tax bill.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

We were not successful. We had some few issues with some partners. I will not but we are continuing to work on this one. And I'm very open to be clear. It's not a question of barrels.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

If there are opportunities to save $1,000,000,000 of taxation, we'll do it. Value is more important. Libya, no, Libya, I disagree. Libya depends on the tap. In Libya, more, I think it's a long term position.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

And there is a lot of oil to be developed, not with the presenters, but there are negotiations today. So we are working on it and I think we can improve the taxation rate in Libya heavily, because we are it's a country where it's very easy to develop. Cost per barrel is nothing, it's onshore, huge amount of oil. So I will not forget, forgive this position because contract today are high tax, but they can be they will have to be improved if Libya wants one day to develop its reserves. That's a debate we have with them today with the authorities.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

So it's a matter of continuing. So I'm UK, I see little future, to be honest. And by the way, it's a country where sorry, I'm in London, but we'll not explore in UK because what happens to our friends where they have explored, made discoveries and today we have a debate, we have the right to develop. It's just for me, it's not possible to put some exploration money in a country, I'm not sure to get the development license. I have to go to courts.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

Just observing it, it's for me, I prefer to explore in countries where I'm convinced I will get the development if I'm making a discovery, which is no more rule of the game. Suginam, no, we have some exploration, but we are completely focused on yes, completely focused. By the way, I think we plan to drill a well, one well in the Block 64, which is another block. We have two things. In the way, we discussed with the authorities what we call the development area of Crac Vadou.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

In fact, the development area is covering all our discoveries, all the trends and it's within PSE. So if we want to explore, to appraise, we'll offset the cost on the production. So this part, so we have secured and we have some because I'm sure we'll have to come back on some of the discoveries we've done to better appraise, to reconnect, etcetera. So there is some potential. And then we have another block where we are interested to explore and drill this year.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

So we didn't mention that. But we have taken also, by the way, it's not a public, but two blocks in two licenses in Nigeria, the Niger Delta recently in Iran. So it's a very Niger Delta. In Nigeria, there was no exploration during ten years. We managed to reopen the books and it's one of the most prolific delta in the world.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

So there are still things to be explored. So Suriname is more the Box 64 is not the same trend. So it's, I would say, more frontier exploration. But then we have to come back on what we have already discovered and appraised.

[Operator]

Matt Lufthinc?

[Matt Lofting, Energy Equity Research Analyst & Executive Director at JP Morgan]

Matt Lofting at JP. Just two quick ones. First, Patrick, I wanted to follow-up on the comments you made earlier on trading and just ask specifically on integrated LNG or gas trading, if you can share a sense of the contribution that you've embedded into 2025 cash flow and financial targets given the comments you made earlier on the gas market perhaps, for example, relative to '24? And then second, thirty five gigawatts of renewable capacity in integrated power for this year strikes me that that's incredibly impressive delivery on a target that was set five years ago given the global backdrop over the course of the last five years. When you think forward though for the second half of the decade, has the company's view on the pace and best sources of growth changed at all given the inflation and supply chain challenges that the industry continues to see in some segments at least of Renewable Generation?

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

Okay. In fact, the improvement you have going from $4,900,000,000 to a target of six in integrated LNG cash flow. I would say part of it will come from absolute prices, which are higher, but I would say consider that there is an improvement on the trading gas of $500,000,000 Coming back to levels which were more in line, so that's the and again, I say that under the eyes of Stephane, who is approving, so it's fine, as to deliver. But it's fine, that's the idea. Again, so that's an improvement that we expect.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

So part will come from, I would say, the volumes, which are we're doing a lot. We have a little more volume, but also part of the this trading back to more volatility. And again, what we observe on the market beginning of 'twenty five is giving us stress that this should be achievable by our teams. Maybe we'll do more, we'll encourage them. On the 30 giga, five gigaatt, okay.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

We have a large pipeline of 70 gigawatts. It's The U. S, Brazil, India, Europe, I would say, but the key markets where we think we can deploy. My question for me is what are more important is, again, a sizable business going to this 50 terawatt 100 terawatt by February fifty more than 100. I think it's very important that we have a sizable business and we are on track because we are investing $4,000,000,000 per year to develop it.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

But again, it's not renewable is big part of it. We have this major figure of 100 gigawatts. We have the pipeline. Do we want to develop all that? It will depend, of course, of the value of all what is coming.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

There are permanently opportunities and in fact, we can find a partner. By the way, honestly, the growth capacity for me, if I'm investing in this capacity in Ireland, I will have a big number, but not a lot of results, I can tell you, because it's running only 10%, eleven % of the time. So solar in Ireland make volumes. It's not very expensive, but the result is not there. So be careful about the volume ID, in particular, in the different markets.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

Well, I think we have I'm convinced there will be a continued growth will be The U. S. For sure. And some big countries in Europe like Germany and others will be will be will appear Renewable capacity of growth one, let's see of it is growing, knowing that we have also some partners, we are growing it. India will represent, I think, 15 gigawatts, 15 to 20 gigawatts, but all of them are not equal, I would say.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

And it's that type of things. So between the again, we will continue to invest in integrated power. We have this $4,000,000,000 per year as a metrics, which we will maintain. So we will split it between the I think the batteries, for example, will be more important in our mix that we were when we said the one of The UK wide. We need more batteries.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

It's quite clear to us. But battery is also a way to make to enhance the profitability and the returns on renewables and gas plants. So that mix is moving and we are adapting ourselves to these conditions. Jim?

[Analyst]

Firstly, I wanted to ask a quick follow-up on Yamal. In the past couple of months, the U. S. And the EU have sanctioned a carrier shipping LNG from Yamal. Is this affecting your ability to offtake cargos from Yamal at all?

[Analyst]

Secondly, on U. S. Offshore wind, I think you said back in November that you're pausing your U. S. Offshore project called Attentive Energy.

[Analyst]

You said that's a four year pause. So I'm just curious whether that's reflected in your low carbon CapEx figure. And then just curious to hear your thoughts on your involvement in projects that are exposed to at the mercy of political wins that can shift every four years.

[Analyst]

Thank you.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

Okay. That's life. The concession is for fifty years. To be clear, that means that yes, we don't spend. By the way, the teams, we had 50 development team of 50 or 60 people in New York.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

They all will be down to five. So it's very active. And there is a time not so, I think it might, it will come one day. It's a matter of let's be patient again on this one. So there

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

is,

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

again, a year of development in offshore wind around $30,000,000 per year. So if it does not fundamentally change. In the meantime, we have taken more license in Germany. I don't expect this type of change of policy to be I think it will go through even if there is a change of there will be a change of Chancellor, but the change of the government majority, I don't see a change on this strategy or this policy. Yamal, I'm not sure, I don't remember, was Oenia is the expert or Nicolas and there was a for me, there is not I didn't see any impact on Yamal on any sanction.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

I've seen some impact on Arctic two for sure. But by the way, with Arctic two, we don't invest and we are not there. On Yamal, I don't see Stefan. No, I don't know which cargo you are thinking to, but we have no impact on Yamal from our side. We didn't see it.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

But, Aurelien, you want to take maybe you can answer, but I don't have that in mind. I can tell you, we monitor the Russian sanction every two weeks, so we have a permanent session.

[Analyst]

I was going to say for the last three years now we've been monitoring

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

Every two weeks. We spend thirty minutes on this topic.

[Analyst]

So there's no sanctions there are sanctions affecting the Arctic Energy two and the value chain of Arctic Energy two, the supply chain of Arctic Energy two. That is correct. And actually, we declared for some measure and taken the consequence of that, but not on Yamal, not at all actually. And the ships are not in the sanctions for Yamal.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

You have another question maybe? No, it's okay. So maybe

[Operator]

we can take a question online. We have

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

one person and we'll go on the phone.

[Anish Kapadia, Director & Head of Energy at Palissy Advisors]

It's Anish Kapadia from Policy Advisors. I had a question around your net debt and interest costs. So when I look at the reported net debt versus when you add back some of the other items like the hybrids, the leases, the factoring of receivables, your net debt is then a lot higher, potentially $30,000,000,000 plus higher. So just wondering if you're still when you think about all the other claims on the assets, you're still comfortable with that debt level increasing. And from an interest and financing cost perspective, can you give a sense of what the increase in financing costs is in 2025 in terms of the combination of traditional debt, hybrids and the factoring of receivables, just given you've been re terming your debt at a higher level?

[Stéphane Michel, President of Gas, Renewables & Power at TotalEnergies]

Does it work? Yes. We benefited from very low cost debts because most of the debt was fixed between the interest rate increased. To give you one figure, it's largely below 4%, the cost of the debt we had at present time. And hybrid is something completely different.

[Stéphane Michel, President of Gas, Renewables & Power at TotalEnergies]

We decided to make some liability management regarding hybrids. But at present time, we consider that as the long term component in our balance sheet. So that's why we decided to renew the to make some liability management and to renew the tranche that is supposed to mature next in February in fact. It's what we did during the first quarter. But honestly, most of the debt is fixed.

[Stéphane Michel, President of Gas, Renewables & Power at TotalEnergies]

So, we do not see any strong increase this year compared to the previous year.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

No, there is no increase in our planning for 25% of the top of debt. And I don't see an increase of the debt, and again, except what we said about the potential impact of the $3,000,000,000 that we mentioned. Okay. We have to go to maybe the phone, Paul Cheng. Paul,

[Operator]

go ahead, please.

[Analyst]

Hello. Hi. Can you

[Stéphane Michel, President of Gas, Renewables & Power at TotalEnergies]

hear me?

[Operator]

Yes, loud and clear.

[Analyst]

Hi. Thank you. Patrick, I think you haven't talked about on the AI adoption. Do you believe that AI adoption will be an important factor for you in terms of driving down the course and improving efficiency over the next, say, two or three years? And where you see is the biggest opportunity if that is the case and how much of your investment going to be?

[Analyst]

The second question is sorry, just one second. The second question is that is the U. S. Administration, I know you're saying that we should watch and see, but clearly that they become lesser friendly to some of the renewable, I think, ideologically that they are lesser friendly to the renewable energy and that they want to promote more drilling in the onshore and also offshore Gulf Of Mexico, supposedly that will make more leases available. Has it changed in the way that how you may want to allocate your capital, especially on the Gulf Of Mexico?

[Analyst]

And also that for The U. S. Renewable power business? Thank you.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

Okay. On AI, Vincent gave some hints. I don't know if Namita is there. She wants to have some compliment on it. What I can tell you is that we are it's important.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

We will establish in the organization of Namita, which is called OneTech. We will have a specialized line reporting to her her about all these digital and AI, I would say, tool. We strongly believe it's a way to not only always occurs to be more efficient. Does it deliver in the next two, three years? I'm not fully sure.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

It's programs. We will develop what we call a digital plant program in order to digitally look more systematically. We are thinking to make some strong investments with some we are discussing today with some companies in order to be able to connect all the real time data, which are in our different plants, either all the refineries or the FPSOs to in order to connect them and to develop some reverse modeling for advanced processing control. We believe strongly believe that there is a lot of things to win with advanced process control, the APC. In our industry, we try to mimic the physical equation, but it's difficult and it's difficult to adapt.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

There is obviously a very strong improvement potential very high, if you can make based on data reverse modeling, very accelerated and changing conditions, that's it's an obvious way. So these ones we have decided at the end of the year at the executive committee level to invest in this segment, to make these connections across the company and to invest including in terms of developing these, I would say, AI models. So that's clear. Does it deliver quickly? I hope so.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

But we will it's clearly on the top of the agenda. And in the OneTech organization, we'll be directly reporting to Namita as an individual, I would say, line. And not to date was in different segments, different divisions, we want to regroup and to have a clear leader and to drive this move to AI and digital. On The U. S, Gulf Of Mexico has always been part of our agenda.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

You mentioned this year, I mentioned that there is two projects, Balimo and Encore, which are where we are contributing. That's true that we decided to give up on in the five years ago on one project, because we didn't see the way to develop it in a profitable way. And we are not operator, we became non operator. But we can be I'm completely on the way to I think that there is still some good exploration potential in The U. S.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

And we have some discussions with some potential partners to invest in Gulf Of Mexico exploration. It's something on which we are ready, but more as non operator than operator, because I need a lot of money to establish position. It's not really the best way to optimize our cost. On the renewable, okay, I know and I listen like you to the images or to the slogans. Having said that, if I'm just to remind you that during the first presidency of President Trump, the solar, for example, was still supported in terms of fiscal support, not at 30% or 40%, but 20%, twenty four %, which honestly for me is an acceptable level.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

So I mean, it's and I will be, I think the debate at the Congress and the Senate between these Congressmen and the administration will be interested because again, in many of these states, which are also a public and states, basis of interest to develop these renewables. Remind you that the grid infrastructure in The U. S. Is not so strong. So they need to it's a way also to complement it.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

So I mean, I'm optimistic about the fact that it should not impair dramatically the way we envisage the future in The U. S, not only renewables, but gas powered plants, which of course I encourage on batteries. I remind you that we made the investment in Clearway before the IRA, when the IRA came, so it was a sort of additional profit to our investments. And the investments we've done in Clearway is in line with our expectations. So we are fine.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

It was even better, thanks to the IRA. If we are back to previous terms, it has not fundamentally changed. So we will see the development of this power. But again, the world is not only renewable, it's integrated power. And the last investment we've done in these gas plants are really quite profitable.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

So there are ways to electricity demand fundamentally will grow. So, the question is how do you meet this electricity demand in the future years? And all of these data centers are better, they won't back to back tomorrow, it will take a little more time. So it's a good business. When you have a strong demand, it's worth to continue to find ways to invest in it.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

That's fundamentally.

[Operator]

We have Henri.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

Henri and then we have Bertrand, the phone.

[Analyst]

Yes. Hi, Federico from EBS. Thank you for the update. Just one question coming back to the organic CapEx guidance and the move from 'eighteen, 'seventeen. Because if we go back to the October presentation, you're also expecting $18,000,000,000 next year in 2026.

[Analyst]

So just wondering to what extent the changes

[Analyst]

that you've put through for

[Analyst]

this year are kind of structural and can see again similar organic CapEx in 'twenty six? Or whether the lower spending on some of the smaller project, you talk about sort of an impact maybe on some of the

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

You have to wait for September. Year by year, it's a good question. Again, you can take 'seventeen, 'eighteen if you want for 'twenty six instead of 'eighteen. That not really changed fundamentally the attractiveness of the share of TotalEnergies, but we'll help you.

[Operator]

Okay. So we can take the Bertrand question online.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

Yes, of course. Bertrand, go ahead.

[Analyst]

Yes. Hello. Two questions left on the LNG side. The first one on your LNG strategy, the idea as you highlighted it in October is to convert Henrias into Brent when it comes to your LNG offtake. Dollars 300 and Reinas and Brent eighty dollars about it works perfectly, but it works less so at $4 and we have been Brent $70 and it does not work at all at $60 My concern is not obviously for 2025, given current LNG dynamics and high spot LNG prices, but it's more beyond.

[Analyst]

How do you intend to mitigate an outcome where you will have much higher Henry than you had anticipated? And the second question is more very short term on the LNG. Last year at $7.08 dollars per MBTU, we saw a surge in India LNG spot demand, Chinese LNG spot demand. Now that we are at $14.15 dollars per MBTU, do you see reverse impact and LNG demand destruction in Asia?

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

No, but again, we have a view on this market by 02/1970, '2 thousand and '30. The reality of this LNG market is that there will be some increase of capacity of 100,000,000 tons, so 30%. It's a reality and maybe it could drive the NREA high, but it will drive the NNG price low. So the best protection is to move to Brent because again on the oil, I would be surprised to see oil establishing at $50 60 dollars for long by the end of this decade. At $50 per barrel, you don't have a lot of shale oil producer investing.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

They are already disciplined at 70%, so at 80%, and the decline is 20% per year. So I think the fundamental of all these old market is stronger than what could happen on the LNG one. EV and REAP is much higher, what we answer that we need to bring on total energy side is to produce more in The U. S, to have more U. S.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

Gas production as the best protection for me. That's why we have made two deals and we continue and answer to our friends that it's part of, for me, fundamental, we need to fill this gap in our portfolio to have more exposure to domestic, to shell gas or to gas, because to face a situation where you have exactly what described higher NREL price and lower LNG, that's clear. So this one, I agree, and we intend by continuing to do what we've done in 'twenty five, continuing to stack some different opportunities in order to reach more or less 1.5 BCFD. Demand restriction at higher prices in China and India, I would say, I would say, I would be the country would surprise me in 2024 is India. In fact, India has increased its demand.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

I saw the figure this morning, 28,000,000 tons in 2023. We're probably, which was not too low. In fact, they are buying, five years ago, I think same answer would say $5.06 dollars Today, they bought a $10 more or less during the year and an increase of demand. So India is investing in some gas infrastructure. What will be the reaction of 'fifteen, 'sixteen, but again 'fifteen, 'sixteen maybe is for a year.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

But demand destruction, no. Cautiousness, yes. And probably it will be a good incentive for these buyers to go again to Brent, which I think is they are more confident and less volatile in fact from do you want to add something Stefan on this one?

[Stéphane Michel, President of Gas, Renewables & Power at TotalEnergies]

No. As you said, Vedic, India was very strong last year. And so far, based on what I see from January, we don't see sharp decline of India consumption. So, we have to wait for a few months to see if that '16 does start or not, but yes, that's not the case.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

Where will be reactive? Is the price remain in '25? Is this structural? My answer is no.

[Operator]

Any last question?

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

Okay. Yes, you have raised your hand. You had a question. I stopped you because Bertrand was coming. So Lucas, if you want to Lucas, again.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

You want to ask your last question, it will be the last part.

[Lucas Herrmann, Analyst at BNP Paribas]

I've got to stand up. It was just a follow-up question. It was simply, why do you factor out of interest? Why do you use factoring as a process? What's the logic in terms of debt factoring?

[Lucas Herrmann, Analyst at BNP Paribas]

It was going back to Anish's question earlier. Was there a particular logic to

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

It's not a decision made by the holding level, corporate level. Okay. Business by business, we are a centralized organization, operational. We just control, but this remains cheap. If it's not cheap, we don't say, we say no.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

We control the costs. Okay.

[Operator]

Any last words maybe, Patrick?

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

No. Thank you. I think, thank you for all your attendance. First, I know Renault loves to go higher and higher in London. I don't know if there is a message for the stock price, maybe.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

Yes. We should go higher and higher. So I don't know if there is another one to visit next year. Personally, I was one of last year for me was a little better, because I had a view, this year I had a view on tubes, on industries. So, but maybe there is a third one.

[Patrick Pouyanné, Chairman & CEO at TotalEnergies]

So again, thank you for having it hand. I think, honestly, our case is quite simple. We have and the year '24, this last quarter, have reinforced all the fundamentals. And I don't think you would have a lot of surprise or negative ones in 'twenty five for our company. Thank you.

[Jean-Pierre Sbraire, Chief Financial Officer at TotalEnergies]

Presentation by Aurelien on March 27. It will be a one man show by Aurelien and a Q and A. So for us, we want to attend on the Sustainability and Climate report. Aurelia will be on twenty seven afternoon, I think. Thank you.

Participants

Executives

• Stéphane Michel, President of Gas, Renewables & Power
• Jean-Pierre Sbraire, Chief Financial Officer
• Patrick Pouyanné, Chairman & CEO
• Nicolas Terraz, President of Exploration & Production

Analysts

• Executive
• Henry Tarr, Director - Co-Head of Energy & Environment Research at Barenberg
• Michele Della Vigna, Managing Director at Goldman Sachs
• Martijn Rats, Analyst at Morgan Stanley
• Analyst
• Christopher Kuplent, Analyst at Bank of America Merrill Lynch
• Lydia Rainforth, MD & Energy and Energy Transition Equity Research at Barclays Corporate & Investment Bank
• Lucas Herrmann, Analyst at BNP Paribas
• Irene Himona, Managing Director - Oil & Gas at Bernstein
• Doug Leggett, Analyst at Wolfe Research, LLC
• Matt Lofting, Energy Equity Research Analyst & Executive Director at JP Morgan
• Anish Kapadia, Director & Head of Energy at Palissy Advisors