Q1 2023 TotalEnergies SE Earnings Call

April 27, 2023

Speaker 1: And.

Speaker 2: Ladies and gentlemen, welcome to Total Energy's first quarter 2023 results conference call.

Speaker 2: I now hand over to Patrick Pouyanné, CEO and Jean-Pierre Freire, CFO who will lead you through this call. Sir, please go ahead.

Patrick Pouyanné: Hello, everyone. Good morning or good afternoon, wherever you are. I'm here today together with Jean-Pierre. We'll give you, I would say, a review of the very good quarter that we had on Q1 2023. I just wanted, as an introduction, to comment on the other news which came this morning regarding the future of our Canadian assets. As you know, we explained that in September at our CMD. We are planning to organize a spin-off of our Canadian assets. We went through the process and, in the meantime, because fundamentally, I think we are very serious about making this spin-off a reality.

Speaker 3: Good morning or good afternoon, wherever you are. I'm here today together with Jean-Pierre. I'm here to give you a...

Speaker 3: I would say that.

Speaker 3: review of the very good course that we had in the first quarter of 2023. I just wanted to add an introduction to comment with other news which came this morning about the future of our Canadian assets. As you know...

Speaker 3: We explained that in September at our CMB. We are planning to organize a spin-off over Canadian assets.

Speaker 3: We went through the process and in the meantime, because fundamentally I think we are very serious about the...

Patrick Pouyanné: We attracted some unsolicited offers in the last months, and one of them has materialized in, I think, at a value which is quite attractive, at CAD 5.5 billion cash plus CAD 600 million of additional payment under certain conditions. The value which is fitting with the expectations of the initial quotation, which were given to us between CAD 5 to 6 billion. Of course, it's coming from Suncor, who knows very well one of our two assets. Suncor will comment a little later in the day his own view of the deal. For us, it's fitting the value. It's a straightforward, I would say, way to divest the assets as we are planning to do it straight away. From...

Speaker 3: making this spin of reality. We attracted some unsolicited offers in the last months and one of them has materialized in I think it's a value which is quite attractive 5.5 billion Canadian dollar cash plus

Speaker 3: from Suncor, who knows very well one of our two assets. And Suncor will comment a little later in the day on his own view of the deal. So it's keeping the value. It's a straightforward, I would say, way to diverse the assets as we are planning to do it.

Patrick Pouyanné: From the company and from the shareholders' point of view, the board considered that it was this alternative worth to be considered and approved yesterday to move forward with this transaction. Of course, the most important part of the discussion beyond these comparing both alternatives was about the distribution to shareholders because, as you know, spin-off was meant, in fact, a distribution in kind of some shares of the newco. We both perfectly have that in mind. The guidance what we have decided to give to our shareholders today is that, last year, you know, we put a higher guidance on the payout to shareholders of 35% to 40% of cash flow from operations, which we did in 2022, 37%.

Speaker 3: straight away. And from the company and from the shareholders point of view, they both consider that it was ill-alternated, was worth to be considered and approved yesterday to move forward with this transaction.

Speaker 3: Of course, the most important part of the discussion beyond comparing both alternatives was that the distribution you should hold it, because the generous spin-off meant, in fact, a distribution in time of some shares of the new coal. So we have both perfectly-

Speaker 3: has that in mind and the guidance that we have decided to give to our shareholders today is that last year we put higher guidance on the payout to shareholders of 35-40% of cash flow from operations.

Patrick Pouyanné: There, because we have, let's say, additional proceeds from this sales, its divestment, the guidance we give you today is at least 40%. I mean, that means that we, I told you before that it was not, there was no ceiling, the 35-40% was a range of targets. Today, we tell you that the board decided that to increase or to enhance, I will say for 2023, with distribution to shareholders with at least 40%, so consider 40% plus, you have to get the plus, for something, at least 40% of the cash flow from operations in 2023. Which I think is good news for all shareholders and which of course maintains the course of the company.

Speaker 3: which we've done in 22, 47%. There, because we have additional proceeds from these sales, these divestments, the guidance we give you today is at least 40%. That means that I told you before that it was not a...

Speaker 3: There was no ceiling, the 35-40% was a range of targets. Today we tell you that the board decided to increase, to enhance, I would say for 23, with distribution to show you with at least 40%.

Speaker 3: So consider 40% plus, you have to get the plus.

Speaker 3: at least 40% of the cash flow from operations in 2023, which I think is a good news.

Patrick Pouyanné: You have noticed that, on Q1, we maintained the buyback of EUR 2 billion, like last year, last quarter. On Q2, we repeated the EUR 2 billion. I think it gives this guidance for the distribution to shareholders for 2023, at least 40% of our cash flow from operations should give you some comfort about the will of the board to have, obviously, and to maintain or to develop even an attractive return for shareholders. I will not be longer. I think I will give the floor to Jean-Pierre, who will be happy for the first time ever, you know, today we disclose the integrated LNG and integrated power statement results for the first time.

Speaker 3: for our shareholders and which of course maintain the course of the company. We have noticed that on the first quarter we maintain the buyback of 2 billion like last year, last quarter. On the second quarter we repeated the 2 billion. So I think it gives a...

Speaker 3: guidance for the distribution to shareholders for 2023, at least 40% of our cash flow from operations, should give you some comfort about the role of the board to have a fair enough to maintain, to develop even an attractive return for shareholders.

Speaker 3: So I will not be longer. I think I will give a floor to Jean-Pierre. We'll be happy for the first time of the day. We will disclose the integrated LNG and integrated power segment results for the first time.

Patrick Pouyanné: I told you during the last investment day that we are targeting 10%. You know, in TotalEnergies, we are not at 10, but at 9.9%. But it's comforting some expectations about the investments we are doing in this integrated power segment. Jean-Pierre Sbraire, the floor is yours.

Speaker 3: I told you during the last

Speaker 3: Investment Day that we are targeting 10%. In the current energies we are not at 10% but at 9.9%. I think we are composing some expectations about the investments we are doing in this integrated power segment.

Jean-Pierre Sbraire: Yes. Thank you, Patrick. 2023 is off to a good start. Once again, I think we demonstrate our ability to generate strong results even.

Speaker 3: Jean-Pierre, the floor is yours. Yes, thank you, Patrick. So 2023 is up to a good start.

Speaker 3: Once again, I think we demonstrate our ability to generate strong results even if we don't.

Operator 2: Ladies and gentlemen, please hold the line. The conference will resume shortly.

Operator: Ladies and gentlemen, please hold the line. The conference will resume shortly.

Speaker 2: Ladies and gentlemen, please hold the line. Our conference will resume shortly.

Jean-Pierre Sbraire: Okay. Quarter to quarter, Brent went down 9% to $81 per barrel, and European gas dropped by 50% to $16 per million BTU. In this context, TotalEnergies reported Q1 2023 adjusted net income of $6.5 billion, a decrease of only 13%, and a strong cash conversion with a debt adjusted cash flow, the FCF, close to $10 billion. With Brent above $18 per barrel and European gas above $15 per million BTU, still high by historical standards, we are continuing to deliver excellent profitability with 25% ROACE in Q1. Commodity prices have been volatile, albeit still at high levels. Oil prices fell briefly below $75 per barrel in March, largely on fears of economic slowdown before rebounding in April on news of OPEC+ quota reductions.

Speaker 1: Yeah, okay

Speaker 4: So quarter to quarter, Brent went down 9% to $81 per barrel and European Gas dropped by 50% to $16 per barrel.

Speaker 4: In this context, Total Energy reported first quarter of the decrease in the net income of 6.5 billion dollars, a decrease of only 13%, and a strong cash conversion with a debt adjusted cash flow, the FAF, close to 10 billion dollars. We burnt about 18 euro per barrel and european gas about 15 euro per million dollar bill.

Speaker 4: 17.5 BOM in March, largely on fields and economic slowdown, before rebounding in April on use of a peckless quota reduction. The spending margins are easing down after several quarters of exceptionally high zero annually, including Maryland's sporting events, racial minority arts and ACTam gotta go to

Jean-Pierre Sbraire: Refining margins are easing down after several quarters of exceptionally high diesel cracks in the same context of fears of economic slowdown, high product inventories, largely fueled by Chinese exports, and the quicker than expected reorganization of Russian flows following the European embargo. Gas prices fell due to mild weather. We expect prices to remain stable and still restocking beginning in H2 of the year. Future markets are anticipating prices next to $20 per million BTU for this winter. For the first time as announced, we are reporting integrated LNG and integrated power as independent segments. These two growing segments are, as you know, at the core of our transition strategy. The respective historical data for 2021 full year and 2022 quarter is available in the results press release. In terms of scale, integration, and performance, we are unmatched among our peers in both of these activities.

Speaker 4: in the same context of fields of economic slowdown, high-product inventories, largely fueled by Chinese exports, and the quicker-than-expected reorganization of Russian flows following the European Obama.

Speaker 4: Gas prices fell due to mild weather, we expect prices to remain stable, and still, this talking begins in the second half of the year.

Speaker 4: future markets are anticipating prices next to $20 per million for this winter.

Speaker 4: For the third time at the moment, we are reporting integrated LNG and integrated power as independent segments.

Speaker 4: These two grain segments are, as you know, at the core of our condition strategy.

Speaker 4: The respective historical data for 21 through year and 22 quarters is available in the results slide for you.

Speaker 4: In terms of scale, integration and performance, we are unmatched among our peers in both of these activities.

Jean-Pierre Sbraire: We are already widely recognized as having a very strong performing globally integrated LNG portfolio and business. Mainly through competitive acquisitions, we have achieved our position as the largest leader of low cost US LNG, more than 10 million tons, and the largest regas provider in premium priced European markets, around 20 million tons after the recent start up of the FSRU in Germany in Lubmin. Our unmatched access to the European markets creates a competitive advantage for our trading operations and makes us more competitive as a partner in securing future resources. For example, our recent contract awards in Qatar. We launched this quarter the feed for Papua LNG, and this will contribute to the future growth of our portfolio with close to 2 million tons equity production. Last year, with LNG sales of 48 million tons, this business generated $10 billion of cash flow.

Speaker 4: We are already widely recognized as having a very strong performing, globally integrated and challenging portfolio in their business.

Speaker 4: mainly through counter-chemical acquisition, where they achieve their position, as the largest lifter of low-cost US LNG, more than 10 billion tons, and the largest V-GAS provider in premium-priced European markets.

Speaker 4: around 20 in the end after the recent start-up of the SSR in Germany in the mid.

Speaker 4: Our unmatched access to the European markets creates a competitive advantage for trading operations and makes us more competitive as a partner in securing future resources, for example our recent contract to boats in Qatar.

Speaker 4: We launched this quarter the feed for pathway LNG and this will contribute to the future growth of our portfolio with close to 2 million tonne equity production.

Speaker 4: Last year, with LED sales of 48 million tons, this business generated 10 billion dollar of cash flow.

Jean-Pierre Sbraire: In Q1, sales were 11 million tons and cash flow was $2.1 billion. In Q1 2023, LNG sales were down 17% quarter to quarter and 13% year on year, reflecting mainly the decrease in spot sales due to lower LNG demand in Europe linked to the mild weather. Integrated LNG generated adjusted net operating income of $2.1 billion, down only 10% compared to the previous quarter excluding Novatek, mainly due to lower prices. Given the evolution of oil and gas prices in recent months and the lag effect on price formulas, we anticipate that our average LNG selling price might decrease by another 10-15% in Q2 because of this timing lag versus $13.3 per million BTU this quarter.

Speaker 4: In the first quarter, sales were 11 million tons and cash flow was 2.1 billion dollars.

Speaker 4: In the first quarter, 23 LNG cells were down 17% quarter to quarter and 13% year on year In the last quarter, we see in Manly the decrease in spot cells due to lower LNG demand in Europe linked to the mild weather

Speaker 4: Integrated LNG generated adjusted net operating income of $2.1 billion, down only by 10% compared to the previous quarter at school in New Atlantic, many youth lower prices.

Speaker 4: Given the evolution of oil and gas prices in recent months and the lag effect on price formulas, we anticipate that our average LNG selling price might decrease by another 10-15% in the second quarter because of this time lag.

Jean-Pierre Sbraire: Operationally, we expect to benefit from the restart of Freeport LNG in our Q2 2023 LNG sales. On the two new segments, integrated power is the newer business activity in the company. Mainly through smart acquisition of early stage development projects, we have grown this business to 18GW of gross installed renewable power generation, our two largest markets being Europe and the US. We are solidly on track to reach 38GW by 2025 and then 100GW by 2030. Our flexible power generation capacity and growing positions in energy storage are fully integrated into the business strategy, allowing our traders to maximize our performance. Developing power projects, generating electricity, as well as integrating the trading and selling of power as we do other energy commodities, is a natural expansion of business. Last year, we net power production of 33TWh.

Speaker 4: 13.3 Eliot Cooking in the Don't ask me to meet you in this quarter.

Speaker 4: Operationally, we expect to benefit from the restart of 3-port energy in our Q2-23 LNG cells. On the two new segments, Integrity-Follower is the new or business activity in the company.

Speaker 4: Many through smart acquisition of early stage development projects, who have grown their business to 18 GW of growth installed renewable power generation, of two largest markets being Europe and the US.

Speaker 4: And we are slowly on track to reach 1.8 gigawatt by 2025 and then 100 gigawatt by 2040.

Speaker 4: Our flexible power generation capacity and growing positions in energy storage are fully integrated into the business strategy, allowing our traders to maximize our performance.

Speaker 4: Developing power projects, generating electricity, as well as integrating the trading and selling of power, as we do over energy communities, is a natural extension of this.

Jean-Pierre Sbraire: This business generated about $1 billion cash flow. For the 12 months ending March 2023, integrated power generated a ROACE of 9.9% next to 10%, consistent with our stated objective to achieve double-digit profitability for this activity. Going into the details of the results of the same segments now. Renewable power generation capacity was 18 GW at the end of this quarter, an increase of more than 1 GW quarter to quarter, thanks to 0.6 GW from the acquisition of Casa dos Ventos in Brazil and 0.3 GW from the connection of the Seagreen offshore wind farm in the UK. For the integrated power results, the best reference for comparison is Q1 2022, since like for the marketing and services business, the gas and power marketing business is seasonal.

Speaker 4: Last year, with net power production of 33kW, this business generated about 1 billion LArts off textbooks in the last 4 years.

Speaker 4: For the 12th month ended, March 23, Integraty Power generated a ROHE of 9.9%, next to 10%, consistent with our stated objective to achieve double digit profitability for this activity.

Speaker 4: Going into the details of the results of the theme segment now.

Speaker 4: The renewable power generation capacity was 18 GW at the end of this water, an increase of more than 1 GW closer to quarter, thanks to 0.6 GW from the acquisition of Casa dos Arduentos in Brazil and 0.3 GW from the connection of the sibling offshore wind farm in the UK.

Speaker 4: For the integrated power results, the best reference for comparison is Q1-72, since, like for the marketing and service business, the gas and power marketing business is CRMO. Next electricity generation was 8.4kWh, the first scooter.

Jean-Pierre Sbraire: Net electricity generation was 8.4 TWh in Q1, up 10% year on year, due to growing electricity generation from renewables offsetting the lower generation from flexible capacity in a context of lower demand. Integrated Power posted adjusted net operating income of $170 million. This figure is significantly higher compared to the Q1 2022 adjusted net operating income, which was -$82 million. Last year was heavily impacted by a huge increase in supply costs. This year, all segments have done better: gas-fired power plants, renewables, supply and trading, despite the negative impact of winter seasonality of supply in the power marketing business. Higher cost of supply in winter versus equal invoicing along the year for many customers. Now moving to the oil part of our business.

Speaker 4: have 10% year on year due to growing electricity generation from renewable, or taking the lower generation from flexible capacity in a context of lower demand.

Speaker 4: Integrity power hosted adjusted net operating income of 170 million dollars.

Speaker 4: This figure is significantly higher compared to the first quarter of 2022, adjusted net operating costs, which was negative at minus 82 million dollars. Last year was heavily impacted by a huge increase of supply costs.

Speaker 4: This year, all segments have done better. Gas power plants, renewable, supply and trading, despite the negative impact of winter's sustainability of supply in the power marketing business, higher cost of supply in winter, versus eco-elimosing along the year for many customers.

Jean-Pierre Sbraire: Operationally, our oil and gas production was 2.52 million barrels of oil equivalent per day, up 2% quarter to quarter excluding Novatek. This includes the acquisition of a 20% interest in the SARB/Umm Lulu already producing oil field in the Emirates starting from mid-March. The production also benefits from new project contribution, notably the start of gas production of Block 10 in Oman and the ramp up of Johan Sverdrup Phase 2 in Norway. Production for Q2 2023 is expected at around 2.5 million oil equivalent per day. Exploration & Production reported adjusted net operating income of $2.7 billion, down 22% quarter to quarter excluding Novatek due to lower oil and gas prices.

Speaker 4: Now moving to the oil part of our business.

Speaker 4: Properationally, our oil and gas production was 2.52 million DAL per day, at 2% quarter to quarter, excluding no-adaptive.

This includes the acquisition of a 20% interest in the Sarbonne-Rouneau already producing a full fee in the Emirates starting from mid-March.

The production also benefits from new project contributions, notably the start-up of gas production in 100 vessels.

Production for Q2-23 is expected at around 2.5 million for all equivalent for this.

Expiration and production reported a destiny net operating income of 2.7 billion dollar, down 22%, quarter to quarter, including in metals, due to lower oil and gas prices.

Jean-Pierre Sbraire: In downstream now, refining and chemicals contributed $1.6 billion of adjusted net operating income, up 9% quarter to quarter and 44% year on year, despite the pension protests that were ongoing in France at the end of the quarter, thanks to the strong refining margins. Refinery utilization rate was at 78%. For Q2 2023, we expect the refinery utilization rate to increase above 80% given the end of strikes in France. Marketing and services results are stabilizing at a level around $300 million of adjusted net operating income, $280 million for Q1 2023, up 3% year on year despite sales being 6% lower. This demonstrates that our strategy of value over volumes is working.

In the last three months, refining and chemicals contributed $1.6 billion of adjusted net operating income, up 9% quarter to quarter, and 44 year on year despite the pensioner protests that were under in France at the end of the quarter.

Thanks to the strong refining knowledge.

The fine-rich digestion rate was at 78%.

For Q2-23, we expect the refined utilization rate to increase over 80%.

We learned the end of strikes in France.

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280 million dollar for the first rotary of 53, up 3% year on year, despite sales being 6% lower.

Jean-Pierre Sbraire: Overall, at company level, CFFO trading working cap was $9.6 billion in Q1, +5% quarter-on-quarter, despite the lower price environment I already commented. As Q4 2022 was impacted by exceptional taxes, notably the $1.1 billion European solidarity contribution, mainly impacting R&C and E&P to a lesser extent. There was a $4.5 billion working cap built in this Q1 2023. This is an exceptionally high build for a Q1, mainly related to higher crude and petroleum products inventories on water, notably due to the impacts of the pension law protests in France. This is an exceptional element which explains $1.4 billion working capital and will disappear next quarter. Second factor is the seasonality of the gas and power marketing businesses.

This demonstrates that our strategy of value over volumes is working.

Overall, at Compagnie-Mévot, 6.4% was $9.6 billion in the first quarter, plus 5% quarter-on-quarter, despite the lower price environment I already commented, as the fourth quarter of 22 was impacted by exceptional taxes.

Notably, the $1.1 billion European Solidarity contribution mainly impacting Earth, EarthNC and EMPs to a lesser extent.

It was a $4.5 billion working cap built in this first quarter of 23.

This is an exceptionally high build for a first quarter, mainly related to higher food and petroleum products in the area of water, not only due to the impacts of the pensions and profits in poles.

This is an exceptional element which explains $1.4 billion for inter-builds and will disappear next quarter.

Jean-Pierre Sbraire: The gap between the seasonal cost of supply and the fixed monthly B2C clients' payments. Of course, you have more traditional effects of lower prices on tax and trade payables that explain this working cap built in Q1 2023. Note that parts of this working cap build will reverse in the next quarter, notably the higher inventories related to protests in France and the impact of seasonality for the gas and power marketing business. Also, there was higher net investment in Q1 2023 at $6.4 billion, including $3.3 billion for acquisition, mainly the acquisition of the 20% interest in SARB and Umm Lulu concession, the payments relating to the acquisition of a stake in North Field East project in Qatar, and the stake in the joint venture with Casa dos Ventos in Brazil.

Second factor is the stalematic or the gas and power marketing businesses, the gap between the seasonal cost of supply and the fixed monthly B2C clients payments.

And of course you have more traditional effects of lower crises on tax and trade. But there are many variables that explain this working cap built in the first quarter of the decrease.

Not the start of its working capital will reverse in the next quarter. Notably, the higher inventory is related to protests in France and the impact of seasonality for the gas and power marketing business.

Also, there was higher net investment in the first quarter at $6.4 billion, including $3.3 billion for acquisition, mainly the acquisition of the 20% interest in carbon minimum consumption, payments relating to the acquisition of the Spirit in working East project.

Jean-Pierre Sbraire: Our guidance for 2023 net investments remains unchanged at $16 to 18 billion. Net investments include acquisitions and divestments, so the sales of Argentine assets that Patrick commented on for $4.1 billion with the closing expected in Q3 to be complete within the envelope. The recently announced sale to Alimentation Couche-Tard for $3.1 billion is also expected to be closed by year end. Encouraged by the strong first quarter results, the board confirmed the 7.25% increase for the first interim dividend 2023 to €0.74 per share, as well as a repurchase of $2 billion shares in the second quarter 2023. I think now we can go to the Q&A with Patrick.

in Qatar and the States in the adventure of Qatar's adventure in Brazil.

Our guidance for Frenchy 3-net investment remains in change at 16 to 18 billion dollars.

Next, investments include acquisitions and divestments. So the sales of our Canadian assets that we commented for $4.1 billion, with a closing expected in Q3, should be complete in the envelope.

We recently announced that the Alimentation of the Cushar for 3.1 Bm is also expected to be closed. Thank you for your attention.

Encouraged by the strong first quarter results, the board confirmed the 7.25% in 3 for the first Interim Dividend 23 to 0.74 euro per share as well as the risk of shares of 2 billion dollar shares in the second quarter 23.

Rachel Smith: Myself.

Jean-Pierre Sbraire: Myself.

And I think now we can go to the Q&A.

Operator 2: Thank you, ladies and gentlemen. We'll now begin the question and answer session. As a reminder, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Please kindly mute any audio sources while asking a question. If you wish to cancel your request, please press the star and two. Once again, please press star one if you wish to ask a question.

Operator: Thank you, ladies and gentlemen. We'll now begin the question and answer session. As a reminder, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Please kindly mute any audio sources while asking a question. If you wish to cancel your request, please press the star and two. Once again, ple ase press star one if you wish to ask a question.

Thank you.

Ladies and gentlemen, this concludes the... Sorry. Thank you, ladies and gentlemen. We'll now begin the question and answer session. As a reminder, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Please continue any audio sources while asking a question. If you wish to cancel your request, please press...

the star and two.

Rachel Smith: Please go ahead.

Operator: Please go ahead.

Operator 2: The first question is from Oswald Clint of Bernstein. Please go ahead.

Operator: The first question is from Oswald Clint of Bernstein. Please go ahead.

Once again, please press star one if you wish to ask a question. The first question is from Oswald Plink of Bernstein. Go ahead.

Oswald Clint: Good afternoon, and thank you very much for the time. I'm happy to guess the plus on the 40%. If I was to go up, you know, into the mid-40s, I guess the

Good afternoon and thank you very much for the time. I'm happy to guess the plus on the 40% and if I was to go up into the mid 40s I guess the... No, no. No, but the range... At least 40, at least 40. Go get good luck.

Jean-Pierre Sbraire: No, no.

Oswald Clint: No. You know, the range becomes-

Jean-Pierre Sbraire: No. At least 40.

Oswald Clint: At least 40.

Jean-Pierre Sbraire: Forget your plus. At least 40. I think some of your colleagues have found what it means, so you can guess.

Oswald Clint: I guess the question is, you know, is the 40% a number we could think about when you have good divestments topping it up? If not, we should think more around the 35%. The other, just, you know, related to that, is there any Novatek dividends included here? I know Novatek declared a dividend last week. It's up quite materially. Does Total expect to get anything in 2023 in terms of their cash flow? The second one is just Mozambique LNG. Lots of momentum, lots of discussion from the president recently. I think you're still hoping to secure some of the favorable cost terms, construction terms. Any update you could provide us on that side of it, please? Thank you.

I think some of your colleagues have found what it means. But I guess the question is, is a 40% a number we could think about when you have good divestments topping it up? And if not, we should think more around the 35%.

Related to that, is there any Novatech dividends included here? I know Novatech declared a dividend last week. It's up quite materially. Do Total expect to get anything in 2023 in terms of their cash flow? The second one is Mozambique LNG.

Jean-Pierre Sbraire: Okay. No, Oswald, we gave you a guidance 35, 40, telling you that it's neither or you're 35 or 40, but there is no sync. Last year we've done 37. That means that in fact it's not monitored by specific figures. It's not 35 at certain times and 40 at other times. The only point today which makes a difference is that the Board announced a spin-off, so it was a dividend in kind. We have a sort of form of commitment from the Board to our shareholders. The discussion, as soon as we decided to take the route of a direct sales, we are committed somehow to have a reward to our shareholders. The decision yesterday was, at this stage, we don't know if it will go through buybacks or special dividends.

being new but it's neither or you're 35 or 40 but there is no sync and that's when you've done specific so that means that in fact it's not monitored by it.

So it's not 35 certain time and 40 other time. The only point today which makes a difference is that we have

The board announced this female, which was a dividend in kind, so we have a sort of formal commitment from the board to our shareholders. And so the discussion that we, as soon as we decided to take the route of the direct sales, we were committed somewhere to have a reward to our shareholders.

Jean-Pierre Sbraire: Let's look at what will be. We're at the beginning of the year, and the proceeds of the sales are not yet, let's say, in the treasury of Jean-Pierre. Let's close, and let's take time to see where we go in the year. The decision was, it's an opportunity, and the commitment linked, I would say, to the decision of the spin-off. The sort of dividend in kind, we translate that as we go beyond what was announced. At least 40%. At least 40% means 40% plus, and then as it will be then discussed either buyback or dividends. You have noticed that for the time being, we have maintained.

Patrick Pouyanné: Let's look at what will be. We're at the beginning of the year, and the proceeds of the sales are not yet, let's say, in the treasury of Jean-Pierre. Let's close, and let's take time to see where we go in the year. The decision was, it's an opportunity, and the commitment linked, I would say, to the decision of the spin-off. The sort of dividend in kind, we translate that as we go beyond what was announced. At least 40%. At least 40% means 40% plus, and then as it will be then discussed either buyback or dividends. You have noticed that for the time being, we have maintained.

The decision yesterday was at this stage we don't know if it will go to buybacks or special dividends. Let's look to what will be at the beginning of the year. The proceeds of the sales are not yet in the treasury of Jean-Pierre. So let's close and let's take time to see where we go in the year.

40% means 40% plus and then as I said, it will be discussed, I will buy back or the evidence we have noticed that for the time being we have maintained the buyback at 2 per quarter despite the fact that the

Patrick Pouyanné: The buyback at $2 billion per quarter for Q1, despite the fact that the environment has softened, we did not decrease it. There might be a chance that we could maintain the $2 billion dollars around, along the year. Then I think if you make some math in your model, you will find something above 40%. Novatek, I don't know. Again, you know, my question is, the question is, and you know, you have news, permanent news coming from Russia. Yesterday, I think that the Russian authorities wanted to sanction some more European Western companies. I don't know. It's difficult to answer to you. Yes, there was a. Again, we are no more in the governance of Novatek, as you know. We are just, we are out of that.

the environment has softened, we did not decrease it, so there might be a chance that we could maintain the $2 billion along the year. And then I think if you make some math in your model, you will find something about 40%.

will it not decrease it? So there might be a chance that we could maintain the $2 billion along the year. And then I think if you make some math in your model, you will find something about 40%.

Another thing, I don't know again, you know my question, the question is, and you know you have news, permanent news coming from Russia, yesterday I think that the Russian authorities wanted to sanction small European-Russian companies, so you know, so it's difficult to answer to you or yes, that was your...

Patrick Pouyanné: It's no more consolidated in our accounts. Yes, we have seen that there was a decision of a dividend. Can it go through up to the accounts of TotalEnergies? We'll see along the year. I cannot just tell you today. You know, we have decided that Russia is, we do not plan the future. We just monitor day after day, week after week, month after month, and, if it comes, it comes, if it does not come, it's not in the plan, I would say. Mozambique LNG, that's a good question. Update on the cost terms. You know, you have understood that it's the last step before to restart. I commented recently that we need the contractors to be reasonable.

Again, we are no more in the government of LAPAC, as you know, we are just a half-hour out of that, it's no more consolidated in our accounts, so yet we have seen that there was a decision of a deal end. Let's vocalise, for example, appear a drain right, and if the price isposts, then they

I cannot just tell you today. As you know, we have decided that Russia is a... We do not plan the future. We just monitor day after day, week after week, once it comes to terms. If it comes to terms, it doesn't come. It's not in the plan, I would say. protection of energy

That's a good question based on the questions. You know you have understood that it's the last step before you restart. I commented recently that we need the contractors to be reasonable. Some of them are not so we will repeat some of the questions.

know you have understood that it's the last step before you restart. So some I commented recently that we need the contractors to be reasonable. Some of them are not so we will give it some of the packages.

Patrick Pouyanné: Some of them are not, so we will rebid some of the packages because there is no way for us to accept some undue costs. We have paid what we had to pay because we stopped the project and we have to restart the project. That had an impact, obviously, the stop and restart. We don't see why we should pay more than that. That's where we progress. I think when we'll be ready, we'll come back to you. But I think today it's premature again because our teams, the project teams, we are speaking with the contractors with the view to be able to relaunch the project, but under the conditions that the costs are controlled. That's fundamental to us.

because there is no way for us to accept some undue costs. We have paid what we had to pay because we stopped the project and we have to restart the project, that happened in fact previously, we stopped and restart. We don't see why we should pay more than that.

And so that's where we progress. So I think when we're ready, we'll come back to you. But I think today is premature again because our project teams will be the contractors. We need to be able to launch a project that's under the conditions that the costs are controlled.

Christopher Kuplent: Excellent. Thank you.

that's fundamental to us. Excellent, thank you. The next question is from Christopher Kaplan of Bank of America. Please go ahead.

Operator 2: The next question is from Christopher Kuplent of Bank of America. Please go ahead.

Operator: The next question is from Christopher Kuplent of Bank of America. Please go ahead.

Christopher Kuplent: Thank you very much. Patrick, I'm gonna ask you, probably the same question again, if you don't mind. As to what I've heard, a need for clarification, is the decision before the disposal to Suncor was to basically give proceeds to shareholders directly. Is that a principle we should continue to talk about and to consider the $4 billion as effectively an add-on, and then we can run our CFFO payout numbers as long as we like? So that's my question, just looking for confirmation. And lastly, second question, slightly connected to that. You've done, as you've highlighted, more than EUR 3 billion of acquisitions in the first quarter.

Thank you very much. Patrick, I'm going to ask you probably the same question again, if you don't mind. What I've heard, looking for clarification, is the decision before the disposal to Semcor was to basically give proceeds to shells directly. Is that true?

the principle we should continue to talk about and to consider the $4 billion as effectively an add-on and then we can run our CFFO payout numbers as long as we like. So that's my question, just looking for confirmation. And lastly, a second question, slightly connected to that.

Christopher Kuplent: You've announced disposals that go well beyond this, but if we accept that the EUR 4 billion disposals ought to be distributed to shareholders, you're kind of running on an even number for the full year. I appreciate you're not likely to give us a number, but I wonder how big the Total Eren completion looms, and whether you can confirm that that is baked into your EUR 16 to 18 billion guidance. That would be it. Thank you.

You've done as you've highlighted more than 3 billion of acquisitions in the first quarter. You've announced disposals that go well beyond this, but if we accept that the 4 billion disposals ought to be distributed to shareholders, you're kind of running on an even number for the full year.

Patrick Pouyanné: Okay. No, Chris, I need to clarify. We never said that the $4 billion will go back to shareholders. By the way, it was not the case in the spin of Steam, if you remember correctly. There is, let's say, an enterprise value of which was around CAD 5 to 6 billion, let's say $4 to 5 billion. Where this company would have a debt which would have been left, proceeds for the company. Then we were ready to spin off to keep 30% on our side. If you do your math, you are far from the $4 billion. Again, it's not the way we expressed it. We expressed it, and I can only repeat what we said, is that the decision of the board is that.

We never said that the 4 billion will go back to shareholders. By the way, it was not the case in the spin of steam. If you remember correctly, there is an enterprise value of, which was around 5 to 6 billion Canadian dollars, where these companies have a debt which would have been left.

and proceed for the company, then we were ready to announce to keep 30% on our side. So if you make your math, you are far from it for a billion. And again, it's not the way we expressed it. We expressed it and I can only repeat what we said. It's that the decision of the board is that... And so, by the way, thank you very much.

Patrick Pouyanné: By the way, second remark, proceeds of sales does not impact the cash flow from operations. The cash flow from operations, as it is stated in all, the way we communicate and in our results and accounts, do not integrate the cash from divestments. We have an amount of cash flow from operations, and you know perfectly last year we had $46 billion at $100 per barrel. At eighty, I think we'll be between $35 and $40 billion. In this environment of the first quarter, this quarter, the cash flow from operation, I think, is something like $9.5 billion, no? If we have four quarters of $9.5 billion, it will make $58 billion.

The proceeds ourselves do not impact the cash flow from operations. The cash flow from operations, as it is stated in all the ways we communicate and in our results and accounts, do not integrate the cash from advertisements. So we have an amount of cash flow from operations.

And you know, the 13th last year, we had $46 billion at $100 per barrel. At 80, I think we'll be at $45 and $40 billion. So then, we need more. If you remember the first quarter, this quarter, the cash flow from operation, I think, is something like $9.5 billion. So if you have four quarters at $9.5 billion.

Patrick Pouyanné: If you make 40%+, you can find what will be the guidance of payout to shareholders. You deduct the dividend, which is more or less between, according to the. You have all the figures of the dividend. We have, you can even take credit for all the quarters. We have the last payment of 0.74 EUR. The only unknown is the exchange rate, euro/dollar. So that's. Then you will find what could be the amount. The question for the board was, is it for through buyback shares or is it through, share buyback or through special dividend? That will be discussed, and we'll see along the year.

It will make 58 billion. If you make 40% plus, you can find what will be the guidance of payouts to shareholders. You give us the dividend, which is more or less according to the figures of the dividend. We have the Canadian credit for all the cultures. We have the last payment of £4 for euro.

The only amount is the exchange rate of $0.00. And then you will find what will be the amount. The question for the board, what is it for food, by bag shares, or is it through share by bag or through special dividends? That will be discussed and we will see along the year. The feeling on the side is that as you consider what you share.

Patrick Pouyanné: The feeling on our side is that, as you consider that the share of the company is low compared to some US peers, and there is room for improvement, increasing and maintaining, not increasing, but maintaining the share buyback is probably a good investment in demonstrating the trust to our shareholders and to investors in the future of the company. Your other question, yes, there was some acquisition this year, but no, you cannot because when you look quarter by quarter, there were also two big announcements of sales, the divestment of the European network, plus the Canadian divestment, so we have to proceed. Totally agree, there is no secret. I think it was mentioned.

of the company is low compared to some USPAs and there is room for improvement. Maintaining the share buyback is probably a good investment in demonstrating the trust to our shareholders and investors in the future of the company.

Yes, I was on my position this year, but no, we cannot because when it comes to the R-Quarter, there were also two big announcements of Fed announcement, the divestment of the European Network plus the Canadian divestment, so we have to proceed. To Palirano, there is no secret, I think it was mentioned, of course to Palirano, but...

Patrick Pouyanné: Of course, totally agree, and all that is integrated in $16-18 billion guidance, and we don't change the guidance, you know, neither one way or the other way, because I'm not fully sure that all the proceeds. I think Canada should come this year because it's quite an easy process impact. But on the other side, the European network, there is more to do, in fact, on carve-out, et cetera. So everybody's working to close the deal before year-end, and both parties want to do it, but you know, sometimes you have sensitivity. So to tell you, it is integrated, and totally right, I think in cash it's something around $1.5 to 2 billion, you know, with Renaud, I think we already mentioned that.

On the other side, the European network has more to do in fact on Callao TV Cetera. Everybody is working to flow the gear before your hand and both parties want to do it. Sometimes they are sensitive. I think the cash is something around 1.5 to 2 billion in the world.

Rachel Smith: That's great. Thank you very much, Patrick, for the clarification. May I add one quick follow-up? Could you give us the details around the carrying value of your Canadian assets that are to be sold?

Patrick Pouyanné: That's great. Thank you very much, Patrick, for the clarification. May I add one quick follow-up? Could you give us the details around the carrying value of your Canadian assets that are to be sold?

There's no doubt that I think we already mentioned that. That's great. Thank you very much, Patrick, for the clarification. May I add one quick follow-up? Could you give us the details around the carrying value of your Canadian assets that are to be sold? Yes.

Patrick Pouyanné: What is the carrying value? You mean the capital employed in our balance sheet?

Rachel Smith: Yeah. Yeah.

Patrick Pouyanné: Yeah. Yeah.

Patrick Pouyanné: It's around EUR 5 billion.

Rachel Smith: Perfect. Thank you.

Patrick Pouyanné: Perfect. Thank you.

Patrick Pouyanné: There will be a capital gain, I mean, there will be a positive result in our account, but you know, I would say it's an exceptional result.

Rachel Smith: Yes.

Patrick Pouyanné: Yes.

Patrick Pouyanné: I mean, I'm under the control of my CFO.

Rachel Smith: Yes. It will be treated as a, an adjustment.

Patrick Pouyanné: Yes. It will be treated as a, an adjustment.

Exceptional with that. Yes. And then I can control my seat. Yes, it will be treated as an adjustment. Now I can. Okay. Okay.

Patrick Pouyanné: An adjustment.

Rachel Smith: In our accounts.

Patrick Pouyanné: In our accounts.

Patrick Pouyanné: Okay.

Rachel Smith: When it comes. Thanks.

Patrick Pouyanné: When it comes. Thanks.

Operator 2: The next question is from Irene Himona of Société Générale. Please go ahead.

Operator: The next question is from Irene Himona of Société Générale. Please go ahead.

The next question is from Irene of Societe General. Please go ahead. Thank you very much. Good afternoon. Two questions. First of all, on your EMP tax rate, please, thank you for your attention.

Irene Himona: Thank you very much. Good afternoon. Two questions. First of all, on your E&P tax rate, please, which increased in the quarter. Can you remind us what is included in the Q1 in terms of upstream windfall taxes? And then at current price levels, what should we anticipate for that average E&P tax for the full year? And then secondly, you referred to the significant inflation in renewables. Could you possibly talk around inflationary pressures you're seeing in your upstream operations, please? Thank you.

increased in the quarter. Can you remind us what is included in the first quarter in terms of upstream windfall taxes and then at current price levels what should we anticipate for that average E&P tax for the full year. And then secondly, can you remind us what is included in the first quarter in terms

you referred to the significant inflation in renewables. Could you possibly talk around inflationary pressures you're seeing in your upstream operations, please? Thank you. We have to take the first question regarding the tax rate. So of course, the Q1 has been prepared the same way as the 2022 accounts. At the time, I explained to you that the Q1

Patrick Pouyanné: First let me take the first question regarding the tax rate. Of course, the Q1 has been prepared the same way as the 2022 accounts. At the time, I explained to you that EPL, so windfall tax profit in the UK is treated in the adjusted net income. It has an impact in the 2022 tax rate. Of course it has impact in the Q1 2023 tax rates. The amounts representing in relation with this with tax is $0.4 billion, just to give you one figure. On the opposite, all the exceptional contribution in relation with European decision to put in place an exceptional contribution in 2022 was treated in 2022 as an exceptional element because it's an exceptional element.

that the EPL, so repo tax processing in the UK, is treated in adjusting the income. So it impacts, it has an impact in the 22 tax rates, and of course it has an impact in the Q1 2023 tax rates. So the amount we're presenting in relation with this tax is 0.4 billion dollar.

just to give you one video. And we have reviewed all the exceptional contribution in relation with the European decision to put in place an exceptional contribution in 2022. What's written in 2022 as an exceptional element, because it's an exceptional element. So of course, we continue with this sort of treatment. So not impacting the tax rate in the first quarter of 2013. I would say I focusnothing. You know?

Patrick Pouyanné: Of course we continue with this treatment, so not impacting the tax rates in Q1 2023.

Rachel Smith: Price inflation?

Patrick Pouyanné: Price inflation?

Patrick Pouyanné: Price inflation in H2. I mean, again, it's I think the timing of the extra dollar is at $5.5 dollars per barrel. In our operations, I do not see impact, which is, by the way, very good performance from the team. On the rigs, yes, you know that the rig rates are more expensive, but we are benefiting from the fact that we have quite a number of long- and medium-term contracts, so we have seen some impact that's limited. Then you have the cases where we had some inflation; it was more on the services last year. We resisted, by the way; we are right because the services went down again. We have we can.

Question and answer in the next room. And then again, I think the timing of the effects of the bowel is 5.5 to a lakh of bowel. So in our predictions, I do not see impacts, which is by the way a very good performance for the team.

On the risk, yes, we know that there are risks, so people to risk are more expensive, but we are benefiting of the fact that we have quite a number of long-term surgeries, and hopefully given some possible mobility too.

Patrick Pouyanné: Again, the question is more, I think that we are facing the will of some contractors to get some money back from, we say, bad years. They look to our reserves, and so they want a sort of share of the cake, but again, it's a question of supply and demand from here at the end. There's no reason to accept to pay more if the supply and demand is not stretched, and I think it's not stretched on many elements. Which is why I was mentioning Mozambique. We will go to rebid, and we have the feeling that the contractor which were awarded the contract try to benefit from the situation. We are not in a hurry and to go, as you know, as a market, the best is to go to tender.

We resisted, by the way we arrived because the speed went down again. So again the question is more, I think that we are facing the will of some contractors to get some money back from I would say bad years. They look to our reserves and so they want to sort of fill the gate but again take a shot of supply and demand.

the contractor which were awarded the contract, tried to benefit from the situation. We are not in a hurry and to go where there is a market, the best is to go to tender. So this is what we will do on this project. But for me and honestly, the truth of inflation last year was more of a speed and all that.

Patrick Pouyanné: This is what we will do on this project. For me, and honestly, the source of inflation last year which were more the steel and all that came down. We have observed it in our, by the way, Uganda projects. We were very, very right last year not to place the order for steel. I think we have saved a lot of money just to resist the temptation. Again, it's an arbitration for me between the value and speed, and it's a question of managing that factor. I don't see much inflation today, even if the actual

We have observed this in a very low-end project. We have very arrived last year, not to play the older for field. I think we have saved a lot of money just to the list, to the plantation. And we can get an application for me between value and...

and speed and all. It's a question of managing that fact. So I don't see much inflation today, even if we are too busy.

Martijn Rats: Thank you.

Patrick Pouyanné: Thank you.

Which by the way, it's another good message to O.K. if you see fine the project and that's good for everybody.

Operator 2: The next question is from Martijn Rats of Morgan Stanley. Please go ahead.

Operator: The next question is from Martijn Rats of Morgan Stanley. Please go ahead.

Okay. Thank you. The next question is from Martin Vax.

Martijn Rats: Hi. Hello. I wanted to ask if you could chat a little bit about the sort of triggers or the drivers that would lead to the full payment in the disposal to Suncor. I noticed that the press release wasn't really sort of all that clear about, but if you could say a few words about that would be helpful. Secondly, I wanted to ask if you could perhaps share some of your thoughts on the global LNG market. I noticed that on Thursday and Friday last week, Europe enjoyed all-time high LNG imports, which is of course a little bit surprising given that the price has been going lower, and yet the LNG keeps coming.

Hi, hello. I wanted to ask if you could check out a little bit the triggers or the drivers that would lead to the full payment in the disposal to Suncor. I noticed that the press release wasn't really all that clear, but if you could say a few words about the payment

Martijn Rats: It sort of doesn't look like Asian demand is sort of all, you know, picking up all that much, at least, you know, looking at the data that we have access to. Perhaps in your business, you have earlier insights. I was wondering if you're seeing anything in terms of an Asian demand pickup, for example. Thank you.

So the price has been going lower and yet the LNG keeps coming and it doesn't look like Asian demand is picking up all that much, at least looking at the data that we have access to. But that's your business that you have earlier inside. So I was wondering if you're seeing anything in terms of an Asian demand pickup, for example. Thank you. Any issues? Okay. Ready for workings. Here to be

Patrick Pouyanné: Okay. The additional payment, yeah. To be honest, it's quite nothing very classic, I would say. It's there is a price threshold above which, if it's a monthly payment, a monthly calculation. If the price of WCS is reaching a certain level, then there is a multiplier effect by the dollar per barrel and depending also on the production, I would say, of the field. It's a classical CDR. What is good, I mean, from my point of view is that we have 5 years, so it's 60 months. Also I would say, as you know, there is a good chance to get some of it.

and depending also on the prediction I would say, of the field. So it's quite a successful CDR. Like the good, and then what is good from my point of view is that we have five years. So it's 60 months.

I would say, as you know, there is a good chance to get...

Patrick Pouyanné: Just to let you know, a calculation, if we would have one year like 2022, we would have got the full $600 million. That's the point.

Some of it. Just to make you know, a great relation. If we would have a one here on line 2022.

We would have dropped a full six dollars million dollar. Okay, interesting. Interesting. Yeah. Global engine market. To be honest, today is the next year. We've seen at the beginning of the poll through some demand. We've seen at the beginning of the poll through some demand.

Martijn Rats: Okay.

Patrick Pouyanné: Okay?

Martijn Rats: Interesting.

Patrick Pouyanné: Interesting. As I said. Global LNG market, to be honest, there is mix. We've seen at the beginning of the full year some demand, even short-term demand picking up. On the price, it's clear that today the market is better. There is, it's a good time to sign, to try to sign some long-term contracts, and we are back to a better percentage of Brent than in the last year. By the way, this is what we want to do on PNG and LNG. You know, today we are benefiting. Marketing of PNG and LNG in this type of environment is good timing for us, in fact.

On the price is clear that today's market is better, other is better. It's a good time to try to find some non-stop contracts when we are back to the first-hand stage of rent that I'm in the last year. There's a way to think what we want to do on PNG and NG. Today, we are benefiting the marketing of PNG and NG.

Patrick Pouyanné: We have delayed a bit the benefit from that, and I think we are targeting to finalize some long-term sales contracts to cover our share of PNG LNG. Then, on the other side, on the global market, Europe was suffering more than last year because, you know, the weather was mild in winter. The storage is limited in capacity, so when the storage are full, it's difficult to put more. If you have limited storage, then it's a problem, and by the way, for Europe, it is that we don't have a very large capacity of underground storage, in fact, in Europe. When it's full. That's why, by the way, we see that in the figures of TotalEnergies, there were less spot deals being done.

In this type of environment, is a good timing for us in fact, so we have delayed the benefit from that and I think we are starting to find the lives from the long-term space contract over the share of TNG and GNG. Then on the other side, on the global market, Europe was the most of the last year because the weather was mild and winter. The storage is limited in capacity, so when the storage of food is difficult to put more.

So if you have limited internet performance, or as a way for me, for Europe , because we don't have a very large capacity of underground storage in fact in Europe . So that's why, by the way, we see that in the figure of certain energy, there were less ports, built, and there wasn't a reason, by the way, that the spot is because there's some strikes in France, there's a terminal energy, there are just terminals in France, where in fact, there's shutdown, there are not accessible from two...

Patrick Pouyanné: There was another reason, by the way, that I just told you, because some strikes in France, the regas terminals in France were in fact shut down. Not shut down, but they were not accessible for a few, almost a month. Otherwise, I would say, do we see today, if your question is more Chinese demand? It's not too clear to me, to be honest. There is more than last year, but are we back to the 2021 level of Chinese LNG demand? It's not, it's a little premature to answer you positively. We are in between, I would say, at this stage, 2022 and 2021 for the Asia demand. There's more appetite from many players, and including, by the way, the Chinese players. You have seen that they have signed some long-term contracts with Qatar.

or most of the months. But otherwise, I would say, do we see today, if your question is more Chinese demand, it's not too clear to be honest. There is more than not here, but I will back to the 2021 level of Chinese energy demand, it's a little premature to answer you for the 5th day. So we are finished!

at this page 22 and 21. So, we are in the area. There's more appetites for many players, and if you're in by the way, the Chinese players, you have seen that they have signs or non-conquered with Qatar, which clearly because they are really willing to, I think to ensure security of the flight.

Patrick Pouyanné: It's clearly because they are really willing to, I think, to ensure the security of supply. China is importing 40% of natural gas. So it's a good opportunity, and Qatar is benefiting of it, and we are working with them in order to try to secure on the long term the supply for natural gas. So it's good for LNG.

China is voting 40% of natural gas. So it's a beautiful city and it's a significant of it and we are working with them. In other words, we will try to secure on the long term that we have supply for natural gas. So it's good for energy.

Martijn Rats: Wonderful. Thank you.

Operator 2: The next question is from Biraj Borkhataria from RBC. Please go ahead.

Operator: The next question is from Biraj Borkhataria from RBC. Please go ahead.

Wonderful, thank you. The next question is from Biraj, Borg Tarar, Tariya, sorry, from RBC. Let's go ahead.

Martijn Rats: Hi. Thanks for taking my questions. Two questions on the upstream, please. The first one just on Mozambique. Appreciate your restarting there. On the other side, it seems like the operator was considering a second floating facility. I was just wondering from the Total point of view, is that something you've looked at, or something you're considering? The second question is just, could you just walk me through the kind of plans for 2023 for both Namibia and Suriname, and what are the next steps for heading towards development? Thank you.

Hi, thanks for taking my questions. So two questions on the upstream, please. The first one just on Mozambique, I appreciate your restarting there. On the other side, it seems like the operator was considering a second floating facility. I was just wondering from the total point of view, is that something you've looked at or something you're considering?

And then the second question is, could you just walk me through if I plan for 2023 for both Namibia and Suriname and what are the next steps for heading towards development? Thank you. No, I mean, honestly, when you have a Mozambique LNG, huge visitors, and you have a lot of people

Patrick Pouyanné: No, I mean, honestly, when you have Mozambique LNG, huge reserves, the question for us is to develop a scheme where we can really have the potential to take the most of these reserves. The floating LNG concept, which is honestly not fully adapted, I think it was quite adapted to first development because it was a part of the reservoir which was not related to the big reservoir which we want to develop. For us, honestly, in terms of allocation of capital, if I want to do LNG, I prefer to allocate capital for LNG to projects with the potential of that size, because you make much more value with additional trains on a brownfields way than on a greenfield project.

The question for us is to develop a scheme where we can really add the potential to take the most of the results. And so the first thing an engine comes up, which is honestly not fully adapted, I think it was quite that it was the first result, because it was a part of the result.

The reservoir which was not related to the big, big reservoir that went to the block of the Earth, so that's, and it's been done the very patient of capital, I want to do energy. I prefer to rotate capital for energy projects with potential of websites.

Patrick Pouyanné: The limitation for me on the floating energy scheme is that in fact, you have the CapEx and then you cannot expand it. You cannot benefit from the additional reserves. We have enough projects in our portfolio, LNG projects portfolio, not to allocate capital to floating LNG because we don't see the upside. Again, for me, LNG is a good, a very good cash machine when you can add additional trains. Namibia and Suriname. Namibia, we are drilling just now. You know we have, in fact in 2023, we spent $300 million. We have 3 wells to drill. We have 2 rigs. 3 wells, 3 tests. In fact it's a critical year. We are just making a second exploration well.

So we make much more value, additional trains on the green, on the brown, the green, on the green, on the green, on the green, on the green, and the limitation for me on the first thing energy shield is that in fact, we have the catacet and then we cannot expand it, we cannot benefit from the additional results. So we have enough projects in our portfolio.

LNG project portfolio not to allocate capital to floating LNG. Because we don't see the upside and again for me LNG is a very good cash machine when you can add additional funds.

In fact, in 23 weeks, we spent 300 million dollars. We have three wells to the grid. We have two-way. Three-way-three tests. So in fact, it's a typical year. We are just thinking of single-exercirational well.

Patrick Pouyanné: We make an appraisal well of the first discovery and potentially another appraisal well, which is the on the second appraisal well, either on the third discovery or on the second discovery, if it's a discovery. Every test, because it's fundamental, we have some good static, I would say, data last year, so very encouraging. It's why we have decided to commit almost half of our exploration budget in 2023. We need the dynamic test results, because, you know, when you are at 3,000 meters of water depth, either it's 15,000 barrels per day per well or 5,000, you don't have the same economics. Different economics.

Then we'll make an aqueduct of the third discovery and potentially another aqueduct

So, I'm thinking of ways to work either on the first discovery or on the second discovery or if it's a discovery. So every test because it's fundamental, we have some good statistics that can also be very encouraging. So why we have decided to permit the almost alpha-val exploration budget in 2023.

Patrick Pouyanné: The plan is, my view is that, with all this data, we'll be in a position to have, by the end of 2023, maybe earlier, but ideally by 2023, to have a good idea of what we have in hand and can we accelerate the time to market to develop the first, a discovery. On Suriname, I think the last appraisal well is just being drilled. The good news is that we are trying to, you know, to develop an oil pool. The difficulty in Suriname is that the oil to gas ratio is quite high, but what we want is to identify oil pool with a lower CGR in order to be able to have an efficient development. It's a development which we combine two discovery.

that with all this data we'll be in a position by the end of 2023, maybe earlier, but I think 2023 will have a good idea of what we have in hand and can we accelerate the time to the market we did not prefer the day I discovered.

Suriname, I think the last appraisal was just being drilled. So the good news is that we are trying to develop an oil pool. The difficulty in Suriname is that the oil to gas ratio is quite high, so what we want is to identify oil pool with a lower CGR.

in order to be able to have an efficient development. It's a development which we don't buy through discovery. So first, we are pretty well aware that these two discoveries are a bit positive. So today, it's a pool of around 500 plus the entire void.

Patrick Pouyanné: The first two appraisal wells of these two discoveries are both positive. Today, it's a pool of around 500+ million barrels of oil. We are waiting for the last oil well in order to reach 650. It will be time to go to development, I would say, after these appraisal wells. We have, again, there, a good position and, in order to move forward to the next step. This year, 2023, for both Namibia and Suriname is very important because for us it could be, it will be the next wave of FID, going to FID for growing our oil business in the coming, in the future years.

We are waiting for the last oil by the well in order to reach 660 feet. And then it will be time to go to the government. So, after the oil is all wet, we have again a good vision in order to move forward to the next step.

So this year, 23 for both Madi Gyae and Sri Ngaam is very important because for us it could be a next wave of A5 to going to A5D for going to all business.

Rachel Smith: Thank you for the details.

Patrick Pouyanné: Thank you for the details.

in the future years. Thank you for the details.

Operator 2: The next question is from Michele Della Vigna of Goldman Sachs. Please go ahead.

Operator: The next question is from Michele Della Vigna of Goldman Sachs. Please go ahead.

Next question is from Michaela Delavi now of Goldman Sachs. Please go ahead. Patrick and Jean-Pierre, congratulations on the strong results despite the deteriorating macro. I really had one question. We've seen a major shift in the renewable power strategies, both of the oil companies, some of whom are de-emphasizing that investment, but also from the UCDTs who are...

Michele Della Vigna: Patrick and Jean-Pierre, congratulations on the strong results despite the deteriorating macro. I really had one question. We've seen a major shift in the renewable power strategies, both of the oil companies, some of whom are de-emphasizing that investment, but also from the utilities who are more focused on financial delevering. I'm wondering whether you're seeing signs that this shift is starting to restore better profitability, especially in wind, but also in solar, and perhaps opening up better opportunities for you as well.

Patrick Pouyanné: It's a little premature. What we drive, it's clear that today you have the adverse effects here from higher costs from the supply chain, then of course you have the interest rates which are going up. You know, it's a highly leveraged industry. So of course, if you want at the end of the day to restore profitability, you have to put the price up, which is good, I think. For me, it's nice for players like us, it will create opportunity for sure. We've seen as well on some tenders, to be honest, prices which were very aggressive in offshore wind, which we do not understand, which were a bit too low. I don't know what is behind.

I think it's a little premature. What we drive, it's clear that today with the add-ons here from IEO, costs from the supply chain, then of course you have the inter-trades which are going up, and you know it's highly leveraged industry. So of course if you want at the end of the day to restore profitability you have to put the price up which is good I think.

Patrick Pouyanné: It's difficult to tell you, I would say, to have a clear and precise answer. I think this will come. We see higher prices in the negotiation of corporate PPAs in the US clearly. People are more reasonable, and I think on both sides, by the way, the customers and the sellers, because everybody, when you have, you know, a direct discussions with some industries or some customers, it's a way to restore profitability. There is good signal from this point of view. Sometimes in tenders it's different.

clear and objective answer. I think this will come with key higher prices in the negotiation of cocoa and TPA in the U.S. clearly. People are more in the legal and I think on both sides earlier. So customers tend to sell it because everybody, when you have to know, evaluate discussions with some industry or some customers, it's a way to work.

to restore profitability. So there is good signal from this point of view, sometimes in tenders it's difficult. What we try to do by the way on the corporate PPA in order to restore part of the profitability is as well to introduce not only a fixed price PPA for 15 years or 10 years which honestly is not the best but we introduce so many amounts of some merchant elements.

Patrick Pouyanné: What we try to do, by the way, on the corporate PPA in order to restore part of the profitability, as well to introduce not only a fixed price PPA for 15 years or 10 years, which honestly is not the best, but we introduce some elements of some merchant elements in order to share some upside, downside with the customer, which we like to know in our model of TotalEnergies. This environment gave us more, like, capacity to propose this type of contract. I think what is true, to come back to you, is that I think there is a feeling that the race is more today, not to volume, but to value. It's a little like, I think the shale oil industry in the past, you know. There are more players looking to profitability.

in order to share from the upside, downside with the customer, which we like, knowing our model, of course, our energy. And this environment gave us more capacity to propose this type of contract. So I think what is true, to come back to you, is that I think there is a feeling that the race is more to do not to volume, but to value. So it's like a...

Patrick Pouyanné: It's why we. You know, when we announced that we are targeting more than 10% for integrated power, I know that people are stunned us, but. Again, it's integrated because the full value chain, but I'm fully convinced that this will come. It's capital intensive industry, and there is no way to just to think. You know, when the money, cost of the money was almost zero, you could find plenty of people ready to accept the low profitability. When the price of the money is at 4, 5%, you have to add some 4, 5% if you want to reach the same profitability. I think all that will probably help us to restore the profitability and to move from, I would say, an infant industry to a little more mature industry.

I think the shadow industry in the past, you know, so there are more players looking to profit. I think it's why we, you know, when we announced that we have targeted more than 10% for integrity for, I know that people have some doubts, but, and again, it's integrated because of the full value chain, I'm fully convinced that the

This will come, it's capital intensive industry and there is no way to just think. You know when the money, the cost of the money was almost zero, you could find plenty of people ready to accept the low profitability. When the price of the money is 4-5%, you have to add some 4-5% if you want to reach the center of the capability.

Lydia Rainforth: Thank you.

Operator 2: The next question is from Lydia Rainforth of Barclays. Please go ahead.

Operator: The next question is from Lydia Rainforth of Barclays. Please go ahead.

Lydia Rainforth: Thank you, and good afternoon. Two questions, if I could. I did want to come back to the Suncor divestment proceeds. Given that you've kept the net investment number the same, is this effectively giving you more acquisition capacity? I just wanna double check where we are on that. The second one, which is coming back to the integrated power business. I see you've given us lots of helpful data, and I guess pushing that out. It has been very volatile. When we're looking at that business, kind of what are the key things that you actually want us to think about from that side? Thanks.

Here is our amelioroid tree's Please go ahead.

Thank you and good afternoon. Two questions if I could and I did want to come back to the Suncor digested process. Given that you've kept the net investment number the same, is this effectively giving you more acquisition capacity? I just want to double check where we are on that. And then the second one which is coming back to the integrated power...

Patrick Pouyanné: On the first one, I would say yes and no, because again, in our view, when we put our budget for 2023, we planned the spin-off. We planned the spin-off, and the company, TotalEnergies, was planning to allocate part of a certain amount of debt, let's say $2 billion more or less, to the spin-off. This $2 billion was proceeds which was integrated in our budget. I would say, it does not change from the company, the view we have of our guidance for CapEx of $16 to 18 billion. Yes, of course, we have room for both, again, divestment and acquisitions. We knew that this year we will have some, I would say, higher proceeds of divestment, but we have also.

On the first one, I would say yes and no because again in our view, when we put our budget for 2023, we planned the spin-off. We planned the spin-off and the company Total Energies was planning to allocate a certain amount of debt to the company.

So yes, of course we have room for both, again, divestment and acquisitions. We knew by this year that we will have some, I would say, higher proceeds of divestment, but we have also a...

Patrick Pouyanné: Look, we have already spent some money for acquisition. We've done the Abu Dhabi deal. We have Total Eren. We have the Qatar. We have some renewable deal which are introduced. The Qatar, we might have this year. By the way, it's not a question of acquisitions, it's more a question of capex. In 2023, we'll have NFE, which was delayed to January, and we might have NFS as well. All that is integrated. Again, do not consider that the $4.5 billion of proceeds from Canada are extra. By the way, we also announced today that the payout will be increased. That part of this proceed will go to shareholders, like it was.

Look, we have already spent some money for acquisition. We've done the Abu Dhabi deal. We've done the Nui Lac Hotel UN. We have some renewable deal which were introduced. And the Qatar, we might have this year, by the way, it's not the question of the situation. It's not the question of the past course.

But in 2023, we'll have NFT was delayed to January and we may have Agile NFS. So all that is integrated and again, do not consider that the 4.5 billion dollar of proceeds from Canada are extra but we will also be permitted today.

for announcements that the payouts will be increased. But part of this procedure will go to shareholders, like it was. So that's, I think, the point on the first one. On the second one...

Patrick Pouyanné: That, I think, responds on the first one. On the second one. Yeah, it's volatile. Okay. It's volatile, but going up. It's volatile going up.

Yes, it's for a time. It's for a time, but it's a good enough.

Lydia Rainforth: And then-

Patrick Pouyanné: I think honestly, the year 2022, on the supply side, to be honest, like Jean-Pierre told you, was complex because, you know, these European governments wanting to put some ceiling. So introducing, in our account, the ceiling effects and, when you have some supply which are done on the spot, created the quarter by quarter results were not, I would say, a smooth exercise last year. This year, I have the impression that we are more, I would say, in a stable environment, even if you still have some governments which are putting some different schemes, but it's more stable. And so I'm expecting more stability from this, from last year, from this supply business. The renewable part is growing, so I'm expecting more in 2023 than in 2022.

So, the year 2022 on the supply side, to be honest, like Jean-Pierre told you, was complex because you know the European governments wanted to put some ceiling, so introducing in a way the ceiling effects and when you have some supplies which are done on the sports screen.

last year from this supply and supply business during the way both parts in growing so I'm expecting more in 23 by 22 and then part of what could be volatile is linked to the gas fight with plants which for last year learned to be very irate.

Patrick Pouyanné: Part of what could be volatile is linked to the gas-fired power plants, which for last year ran at a very high rate. This Q1 was good, but not as high as last year because of mild weather. This is part of, you would say, a volatile result. We'll see. I mean, we are, you know, it's the beginning of the story. We'll see quarter after quarter, and to give you some more elements. What Jean-Pierre and his teams have done and delivered to you, I think it's at the end of the press release. We restated the year 2021 and all the quarters of 2022 in this segment. I think it's good that you can engage with my IR team.

So we'll see, I mean we are, it's the beginning of the story and we'll see quarter after quarter and to give you some more elements what Jean-Pierre and his teams have done and delivered to you. I think it's at the end of the question. We've stated the year 21 and all the quarters of 22.

in this segment and I think it's good that you can engage with my IRR team. We'll be happy to give you more indications or maybe not by the way, just to help you to see what they can explain to you. But I think by the way, the answer will be more from growing and developing the business. That's the question of size of this business.

Patrick Pouyanné: They will be happy to give you more indication or maybe not, by the way, you know, just to help you to see what they can explain you. I think, by the way, the relativity, the answer will be more from growing and developing the business. You know, it's a question of size of this business. You have noticed that almost $400 million, I think, $370 million is quite sizable. It's, the results is even larger than the one of Marketing and Services. After 5 years of development, I think it's a good achievement, we look to that positively and it will be a source of growth in the future. Cash flow.

But you have noticed that almost $400 million, I think, is quite sizable. The reverse is even larger than the one of marketing and services. After five years of development, I think it's a good achievement. So we look to that positively and there is real source of growth in the future. Thank you very much.

Rachel Smith: That's great. Thank you very much.

Patrick Pouyanné: That's great. Thank you very much.

Operator 2: The next question is from Lucas Herrmann of Exane. Please go ahead.

Operator: The next question is from Lucas Herrmann of Exane. Please go ahead.

Thanks very much. The next question is from Lucas Herman of Exams. Please go ahead. Thanks very much and thanks for the opportunity. Patrick, I wanted to ask you two questions on the LNG business. The first one is clearly being...

Lucas Herrmann: Yeah, thanks very much, and thanks for the opportunity. Patrick, I wanted to ask you two questions on the LNG business. The first, there's clearly been increasing talk in Europe of, you know, banning or doing something to stop Russian LNG imports into Europe. I just wonder whether you could make some observations around what's your understanding, interpretation, and whether. Well, just your position on that. I'm a little confused actually as to whether you were obliged to take volumes into Europe to regasify through the original contract, but anyway. The second, staying with LNG, is it goes back to Mozambique, and you have come to the agreement, or you've had contracts signed for pretty much all of the offtake from Mozambique.

increasing talk in Europe of banning or doing something to stop Russian LNG imports into Europe . I just wonder whether you could make some observations around what's your understanding interpretation and whether, well, just your position on that. I'm a little confused actually as to whether you were obliged to take volumes into Europe to regasify through the original contract. But anyway, and the second thing with LNG is it goes back to Mozambique.

Lucas Herrmann: How have those agreements impacted, if at all, as a consequence of, you know, push out, redoing FEED, retendering, et cetera, and the delays that, you know, are clearly apparent for the offtakers? That was it. Thank you.

and you have headed agreement or you had contract signed for pretty much all of the offtake from Mozambique. How is that impacted if at all or how those agreements impacted if at all as a consequence of push out, redoing feed, retendering, etc., etc., and the delays that are clearly apparent for the offtakers? That was it. Thank you. The Mozambique energy contract...

Patrick Pouyanné: The Mozambique energy, I would say energy contracts have not been affected until now by all that. The buyers are still maintaining all the, I think this did not reach any, let's say a date where we would have to commit on something. I think my view is, you know, that the buyers, when you look to different contracts, there are good contracts, but they are in the market. We are not, I would say, there is no impact at this stage of this delay on the LNG contracts, set contracts. By the way, TotalEnergies, we have only today we, one of the contract was discussed or negotiated, but TotalEnergies took some volumes, and we are ready to take more volumes of Mozambique LNG on our side.

stage of this delay on the LNG contracts. By the way, total energy, we have only today, one of the contracts was discussed or negotiated, but total energy took some volumes and we are ready to take more volumes of Mozambique LNG on our side.

Patrick Pouyanné: On the Russian imports, you know, we are, I would say, like you know, we have some long-term contracts. The part of these long-term have a destination clause which is Europe, to be clear, most of them, by the way, out of the 5 million tons of long-term contracts that we are committed to, I think at least three or four have a destination clause to Europe. There is also a force majeure clause, which means that, if Europe decides to ban LNG, Russian LNG imports, then we would exercise the force majeure clause, and we stop importing the LNG from Russia to Europe. I have the impression when I'm reading what is at.

On the Russian people, we have some long-term contracts. Part of these long-term are the destination close to Europe , to BJJ, most of them by the way, out of the 5 million long-term contracts that we have committed to, I think at least three or four, for other destination close to Europe .

There is also a force measure clause which means that if you are asked to ban NMG or to change NMG in both of them, we will exercise the force measure clause and we stop.

importing the energy from Russia to Europe . I have the impression when I'm reading what is it, of course there is a debate, the debate has rebounded, of course first because there is not much improvement on the situation of the war, and second because we are European leaders think that today...

Patrick Pouyanné: Of course, there is a debate that rebounded, of course, first because there is not much improvement on the situation of the war, I would say. And second, because the European leaders think that today they have taken actions and that maybe banning Russian LNG import is possible. It's not a unanimous position. Some countries are more concerned than others. What is being discussed today, if I understand correctly, the regulation which is put on the table, which will go to the European Parliament, so it could take time, in fact. Because sanctions require unanimity, and we not go full sanction. There is no unanimity in Brussels on that. But if it goes to the

the African actions and that maybe banning Russian and Asian forces is possible. Some countries are more concerned than others.

What is being discussed today, if I understand correctly, the regulation which is put on the table, which will go to the European Parliament, which will take time in fact, because sanctions require unanimity and will not go to sanctions. There is no unanimity in Brussels on that. If I understand the position, it's more of that.

Patrick Pouyanné: If I understand, the position is more about trying to regulate the capacity of Russian players to, I would say, wanting to book some regas capacities in Western Europe, future regas capacity. So if it is the case, it's not a ban. By the way, it does not really affect, it will not affect our position to be clear. Then, you know, our position on that, we respect all the sanctions and. At this stage, as you know, we have a long-term contract. It's a commitment. It's a huge contract, and we have no other way than respecting these long terms. It's a take or pay contract, so if we don't take, we pay. And again, in the balance of Europe, it was not neutral.

and by the way it does not really affect, it will not affect our position to be clear. Then you know our position on that, we respect all the sanctions and...

At this stage, as you know, we have a long-term contract, it's a commitment to use contract, and we have no way by expecting these long-term to take off a contract, so if we don't take, we pay. And again, in the current of your office, what's left to you, and last year, it worked on something around 15 million times, a few months to track.

Patrick Pouyanné: Last year it was something around 15 million tons, I think, more or less, which were imported from Russia to Europe. Again, we are monitoring that week after week. We will execute. I remind you that we don't hedge all these LNG contracts because we perfectly know that maybe it could happen to us that we'd have to stop. There is no market position being taken on the LNG from Russia.

important from our sharp hero. So again we are monitoring that we have to wait and we will exit it. I remember you that we don't touch all these engines from past because we just have to know that maybe we have to stop.

So there is more market position being taken on the energy from Russia. I'm sorry, just to go back to the Volumes that you've now taken into court earlier, can you quantify the number?

So there is no market position being taken on the energy from Russia. I'm sorry, just to go back to Mozambique and the volumes that you've now taken into portfolio, can you quantify the number? 25 what?

Lucas Herrmann: I'm sorry, just to go back to Mozambique and the volumes that you've now taken into portfolio. Can you quantify the number?

Patrick Pouyanné: Quantify what?

Lucas Herrmann: Could you quantify the amount of LNG that you effectively will take into your marketing?

Patrick Pouyanné: At this stage, I think it's something like 0.7 million tons of TotalEnergies. But again, if some buyers want to tell us that they prefer to go, we are ready to take more. So we are open to that. But some Japanese buyers are also ready to take more. Our Japanese friends of Mitsui are also keen. So there is some appetite. You know, Mozambique LNG is not only a reserve, it's well located, you know, it's directly on the Indian Ocean, to go to some Asian countries, it's quite Indian players, by the way. So I think it's a good geographical position. So I'm not afraid about start selling this Mozambique LNG.

What quantum by the amount of LNG that you effectively will take into your marketing? At this stage, I think it's something like points to the Van millionth on the planet. And at this, but again, if some buyers won't all just with a preferred role, we are ready to take more. So we are open to that. But some Japanese buyers are also going to take more of Japanese friends of me three, also kids. There are some very some happy times.

In other words, Mozambique RNG is not only in your preserve, it's well-located. It's directly on the Indian Ocean to go to some Asian countries. It's quite Indian-led by the way. So I think it's a good geographical position. So I'm not afraid about selling this Mozambique RNG. Again, the buyers did not exercise any clothes with the RNG project.

Patrick Pouyanné: Again, the buyers did not exercise any clause vis-à-vis the project.

Matt Lofting: Okay, Patrick, thank you.

Operator 2: The next question is from Matt Lofting of J.P. Morgan. Please go ahead.

Operator: The next question is from Matt Lofting of J.P. Morgan. Please go ahead.

Patrick, thank you. The next question is from Matt Lofting of JP Morgan. Please go ahead. Hi, thanks for taking the questions, too, if I could please. First on demand, Patrick, I think you talked LNG specifically earlier, but to the extent financial markets are putting something of a burden of proof on the resilience of global oil and energy demand more broadly here, are there any areas or subsectors through the timespaces where oil or oil or oil is being distributedIGED? Do people fall in China? What do you see happening around China, oceans, and the Laird Simpleter- Care TOP Is is sights the rise fromaddy EPS Ling

Matt Lofting: Hi. Thanks for taking the questions. Two, if I could, please. First, on demand, Patrick, I think you talked LNG specifically earlier, but to the extent financial markets are putting something of a burden of proof on the resilience of global oil and energy demand more broadly here, are there any areas or subsectors through TotalEnergies' extensive global downstream business where you're seeing any early warning signs on the rate of change in demand manifesting? And then secondly, could you share any sense of the strength of contribution from the oil and products trading business within the Q1 refining and chemicals result, and perhaps how you see that trending going forward as the industry moves through the immediate effects of the embargo on Russian oil products? Thank you.

industry moves through the immediate effects of embargo on Russian oil products. Thank you. I don't see very, no, I mean what we observed in Europe was of course some I would say energy saving, energy efficiency effect last year price went very high.

Patrick Pouyanné: Honestly, I mean, what we observed in Europe was of course some, I would say, energy saving, energy efficiency effect. Last year, prices were very high, so I would say Europe has saved 15% of energy demand because prices were so high that a lot of industries, but also by the way, B2C customers, you know, have saved some energy. We have allocated to our customers in France a bonus if they were saving more than 5% of their electricity during wintertime, we are ready to share with them part of the profit that we are gaining from the forward supply. Out of our customers, more than 1 million customers, 1.2, 1.3 million customers, have saved an average of 15%.

So I would say Europe has saved 15% of energy demand because of why it's so high. There's a lot of industries, but also by the way, B2C customers have saved some energy. We have allocated to our customers in France a bonus.

If they were saving more than 5% of their electricity during winter time, we are ready to share with them half of the profit that we are gaining from the default supply. And our total customers, more than 1 million customers, 1.2, 1.3 million customers, I'd say an average of 15%

Patrick Pouyanné: By the way, it's more or less the same figure that you observe from the manufacturing side, I mean, the industry side. There were some impact on energy saving. Will it last? You know, I think this is really. I think it was really a reaction to the very high price. The gas price was almost $200 per barrel last year in Europe. Today it has softened, and we begin to see some demand coming back, I would say. I'm, I think there was a. Is it shorter? Is it fundamental? I'm not clear. Otherwise, no, I would say, we don't see some softening of energy demand, right, so the expectations from the oil market are still high. On the second question about Russian ban, what you say has been a surprise.

was almost 100% of the last year in Europe . So today it has suffered, and we begin to see some demand coming back. So I think there was a, is it good? It's fundamentally clear. Otherwise, no one would say we don't see some suffering in our energy demand, and the expectations from the market of the high. On the single question, the best question done, what is the state where there's been a supply, the supply that's been with?]

Patrick Pouyanné: The surprise has been that really, there are many effects on the ban. The big surprise is that in fact, the diesel from Russia was rerouted much quicker than expected. You know, I think the markets were anticipating some impact on the diesel trucks, which are integrated probably. We've seen a lot of players making inventories of diesel before the ban. In fact, the surprise of the coming months is that the diesel of Russia was quickly rerouted to Africa and South America. That was obvious because they were the two importing markets. But also to the Middle East, where some producing countries prefer to buy some diesel with a good discount and to sell their crude with no discount, which is by the way a good transfer of value from Russia to some Middle East countries.

but also to the Middle East where some producing countries prefer to buy some diesel with a good discount and to sell their food with no discount which is by the way a good transfer of value from Russia to some Middle East countries. That is a surprise. This means that by the way the diesel crack is happening, clearly.

Patrick Pouyanné: That is a surprise, which means that by the way, the diesel track is softening clearly because there were high inventories. Now, Russian diesel is there, and the Chinese refineries are back full speed because also they benefit, by the way, from Russian crude with a discount. This ban, I would say, this cap on the Russian crude and diesel has so many effects on different parts of the world and some impacts on the global markets. This is what we observe. Our trading, you know, traders, they love volatility. There is a lot of volatility. I would say they have good results, but in fact, they have very good results almost every quarter. I hope that they will continue. That's my comment.

because there are high inventories, now Russian diesel is there and the Chinese refineries are back full speed because also they benefit by the way from Russian ports with a discount. So this does be the state in the cap on the Russian port in the end.

they are more reserved but in fact they are very good to be left almost to be courts else I hope that they will continue that's my comment.

Matt Lofting: Very good. Thank you, Patrick.

Operator 2: The next question is from Kim Fustier of HSBC. Please go ahead.

Operator: The next question is from Kim Fustier of HSBC. Please go ahead.

Very good. Thank you, Patrick. The next question is from Kim Sistia of HSBC. Please go ahead. Hi, good afternoon and thank you for taking my question.

Thank you Patrick. Next question is from Kim Suistier of HSBC please the head. Good afternoon and thank you for taking my question. I've got two for me.

Patrick Pouyanné: Hi. Good afternoon, and thank you for taking my questions. I've got two, if I may. The first one is, I appreciate that you don't comment on rumors, but I'm just curious to hear any thoughts that you can share on the attractiveness of corporate upstream M&A, and particularly for producing assets, given that Total has recently been linked to a certain private E&P company. I guess another way of asking that question is hypothetically, what would you need to see in order to pull the trigger on, let's say, a $5 billion deal in the upstream? My second question is on Iraq. I just wondered if you could walk us through the updated Iraq integrated energy deal that was announced earlier this month.

Kim Frustlier: Hi. Good afternoon, and thank you for taking my questions. I've got two, if I may. The first one is, I appreciate that you don't comment on rumors, but I'm just curious to hear any thoughts that you can share on the attractiveness of corporate upstream M&A, and particularly for producing assets, given that Total has recently been linked to a certain private E&P company. I guess another way of asking that question is hypothetically, what would you need to see in order to pull the trigger on, let's say, a $5 billion deal in the upstream? My second question is on Iraq. I just wondered if you could walk us through the updated Iraq integrated energy deal that was announced earlier this month.

First one is, I appreciate that you don't comment on rumors, but I'm just curious to hear any thoughts that you can share on the attractiveness of corporate upstream M&A and particularly for producing assets given that TOTAL has recently been linked to a certain 5-odd empty company. I guess another way of asking that question is hypothetically, what would you need to see in order to pull the trigger on, let's say, a $5 billion deal in the upstream? And my second question is on Iraq. I just wondered if you could walk us through the updated.

Patrick Pouyanné: It seems to be a $10 billion headline investment, but just how is that CapEx going to be phased over the years? Thank you. Okay. Iraq, yes, that was good news after my comments in London. I don't know if some people listened to my comments. Clearly, the government of Iraq confirmed the whole contract with no modification at all. I would say sanctity of contract went through change of government. It was for me, fundamental. That was, for me, more than a good news. Secondly, we reached an agreement on the way that participating interest would be allocated to an Iraqi party. We have seen, but we will invite also for partners from TotalEnergies to join us. I think that is a good setup.

Kim Frustlier: It seems to be a $10 billion headline investment, but just how is that CapEx going to be phased over the years? Thank you.

Iraq integrated energy deal that was announced earlier this month. It seems to be a $10 billion headline investment, but just how is that cap going to be phased over the years? Thank you. Okay. Iraq, yes, that was good news after my comments in London. I don't know if some people listened to my comments, but clearly the government of Iraq confirmed the whole contract with no modification at all.

Patrick Pouyanné: Okay. Iraq, yes, that was good news after my comments in London. I don't know if some people listened to my comments. Clearly, the government of Iraq confirmed the whole contract with no modification at all. I would say sanctity of contract went through change of government. It was for me, fundamental. That was, for me, more than a good news. Secondly, we reached an agreement on the way that participating interest would be allocated to an Iraqi party. We have seen, but we will invite also for partners from TotalEnergies to join us. I think that is a good setup.

I would say, sanctity of contract went through a chamber of government. It was for me fundamental. So that was for me more than a good news. And secondly, we reached an agreement on the way that participating interests would be allocated to an Iraqi party. We have seen but we will invite also farmers from such an energy to join us. So that I think is a good step up. We are finalizing all the paperwork that's been passed.

Patrick Pouyanné: We are finalizing all the paperwork that has been launched. You know, it will be spent over the period, but over four years, we need to because it's by phase, but the way it's phased is the way that the gas flaring, you know, we have to build some trains to flare the gas. That will take two phases. Also on the oil plant, by the way, increasing the production will be done in two phases. Let's consider four years. We will ramp up over the years. That's the point. You know, use my name. Don't believe all rumors, you know, people love to use our name.

Patrick Pouyanné: We have demonstrated, I think, in the past, that we are able to make good deals when the price is good. I think it's price of acquisition. Second, I think it's a matter for me as well of synergies. Can you find some synergies in the acquisition, which will deliver additional value? The other point, which of course is important for us, is does this deal I mean, how does it make for the company, can it fit with our portfolio, you know, according to our different position? We are not trying to fill the gaps, you know, generally, we are not trying to be consistent with the strategy. We'll see. Don't believe all rumors.

So that's the point. Not a few minutes, unbelievable rumors, you know. People love to use our name. We have demonstrated, I think, in the past that we are able to make good news when the price is good. So I think it's a price for acquisition. And again, I think it's a matter for me as well of synergy.

Can you find some synergy in the acquisition which will deliver additional value? One of the other points which is important for us is that does this build...

How does it make? Can it fit with our portfolio according to our different positions? So we are not trying to fill the gaps, you know, we are not trying to be consistent with the strategy. So we will see. So don't believe all windows.

Operator 2: The next question is from Amy Wong of Credit Suisse. Please go ahead.

Operator: The next question is from Amy Wong of Credit Suisse. Please go ahead.

The next question is from Amy Wong of Credit Suisse. Please go ahead.

Speaker 14: Hi, good afternoon, and thanks for taking my questions. I have two of them, please. One of them is just continuing along the lines of M&A strategy. You've made, you know, quite a few chunky pretty large acquisitions this quarter, an interesting mix across E&P, Power, Integrated Gas. Can we take that as an indication of kind of how you're thinking along the lines of the near future? Then as a follow-up to that is just tying that with your Scope 1, 2, 3 emissions targets that you've talked about. And how are those targets in to any degree, if any, at all, restricting the way you're looking at acquisitions at the moment? You know, the need to comply with some of those 2025, 2030 targets that you've put out. Thank you.

Amy Wong: Hi, good afternoon, and thanks for taking my questions. I have two of them, please. One of them is just continuing along the lines of M&A strategy. You've made, you know, quite a few chunky pretty large acquisitions this quarter, an interesting mix across E&P, Power, Integrated Gas. Can we take that as an indication of kind of how you're thinking along the lines of the near future? Then as a follow-up to that is just tying that with your Scope 1, 2, 3 emissions targets that you've talked about. And how are those targets in to any degree, if any, at all, restricting the way you're looking at acquisitions at the moment? You know, the need to comply with some of those 2025, 2030 targets that you've put out. Thank you.

my questions. I have two of them, please. So one of them is just continuing along the lines of M&A strategy. You've made quite a few chunky, pretty large acquisitions this quarter, an interesting mix across E&P, power, integrated gas. So can we take that as an indication of kind of how you're thinking along the lines of the near future?

And then, and as a follow-up to that, and just think tying that with your scope 1, 2, 3, admissions targets that you've talked about. And how are those targets into any degree, if any at all, restricting the way you're looking at acquisitions at the moment? You need to comply with some of those 25, 20, 30 targets that you've put out. Thank you. Thank you.

Patrick Pouyanné: The second question is easy. You know, there is no constraint of absolute value. We have a commitment, in particular, when we look to hydrocarbons, that any project, either by the organic one or acquisition, must have an intensity, Scope 1 and 2 intensity of CO2 lower than the average of the company. The average of the company of 19. Any project, any M&A should be, should enhance the position and intensity. That's my question now. Then we manage, and if it's good for the shareholder, it delivers value, we'll manage the absolute objective. It's up to us to make the effort on other, on other projects. I think we have demonstrated our capacity to have, not only to acquire, but to divest, you know, some assets like we are doing today.

The second question is easy. There is no constraint of absolute value. We have a commitment, in particular when we look to hydrocarbons, that any project, either by organic one or acquisition, must have an intensity, a scope one and two intensity of CO2, lower than the average of a company of 19. Any project, any M&A should be...

through an end to position, and that's my question now. And then we manage, and if it's good for the show, if there is a review, we manage the absolute objective that's up to us to make the effort on the other project. And I think we have demonstrated to have the capacity to have the company to work with, to balance, to know some methods like we are doing today, because we have the exit of the Canadian oil sense from the perspective, and by that we can claim it.

Patrick Pouyanné: By the way, the exit of the Canadian oil sands from that perspective, pure CO2 budget, I would say, are giving us some space in terms of CO2. It's again, don't consider that there is a drive, there is more for me when we are developing our strategy, our integrated power strategy. It's very clear that this is clear, that we want to be able to offer to a customer a more decarbonized, I mean, lower range of products, oil, gas, and some electricity. That's clear that this is a strategy. By the way, the first question, you know, we have demonstrated, I think this quarter is a perfect demonstration of the balance of our strategy.

in terms of fuel. But again, don't consider that there is a need more for me when we are developing our integrated power strategy. This is clear.

that we want to be able to offer to our customers a more decarbonized and lower range of products or gas and some electricity that's clear that we can do the strategy.

But that was the first question, you know, we are very much ready. I think each footer is a perfect demonstration of the balance of a strategy. We can use MNA or organic disordant either to grow oil or dacinabrudadi because we are the opportunity.

Patrick Pouyanné: We can use M&A or organic development either to grow oil, like in Abu Dhabi, because we have the opportunity to put in our portfolio a very low cost, low CO2, by the way, asset. I think the cost per barrel production is around 7, 8 dollar per barrel. We pay the cost more or less of $4 per barrel. It's fitting very well at a price of $40 per barrel. It's fitting perfectly well with the strategy. Oil is good when it's fitting with strategy. We have the LNG in Papua, which was, I mean, of course the investment which was the result of last year positioning. Again, it's LNG is clear and we have some renewables.

To put it on post for you, a very low cost, low CO2 by the way asset. I think the cost of the bow is the price of the bow production in around $7.8 a dollar per dollar. We pay the cost more as a full dollar per dollar, so it's fitting very well. That's why I call it a price of 4.0 a dollar per dollar. So it's fitting perfectly with the strategy. So all it is good when it's fitting with strategy.

We have the LNG in Tiktok which was the investment, which was the result of last year's positioning, and again, it's LNG that we have, and we have some renewables. We continue to receive feedback with organic oil and an air, all these segments of the company.

Patrick Pouyanné: We'll continue to, I would say, feed with organic or M&A all the segments of the company if there are good opportunities. For me, the question when we look to M&A, and again, it's not today, we are more frequently looking to divestment than a merger or than acquisition, I would say. It is, we are looking to that. What is the value creation that we can get? Not only by day, but beyond, I would say, the initial acquisition payment. That's what we look at it.

If there are good opportunities for me to question when we look to M&A, and again, this must be today we are more looking at the summary to the investment and the other of the acquisition of the place, that is we are looking to work what is the new creation that we can get, not only by the way, but the young.

I will show you the initial acquisition, and that's what we look at.

Operator 2: Thank you. The next question is from Paul Cheng of Scotiabank. Please go ahead.

Operator: Thank you. The next question is from Paul Cheng of Scotiabank. Please go ahead.

The next question is from Paul Chang of Scotiabank. Please go ahead.

Speaker 15: Hi. Thank you. Actually, just if you don't mind, I want to go back into the origin of the sales. Is it a competitive or did you get some unsolicited offer, but did you go out and put it as a result or put it as a competitive bid, or that is purely coming in from other people? Have you looked at to break up the asset and sell it individually?

Paul Cheng: Hi. Thank you. Actually, just if you don't mind, I want to go back into the origin of the sales. Is it a competitive or did you get some unsolicited offer, but did you go out and put it as a result or put it as a competitive bid, or that is purely coming in from other people? Have you looked at to break up the asset and sell it individually?

All right, thank you. Patrick, just if you don't mind, I want to go back into the origin of Excel. Is that a competitive or that you get some unsolicited offer but then you go out and put it as a result of a competitive bid?

or that is period that is coming in from other people and have you looked at to break up the asset and sell it individually.

Patrick Pouyanné: No, it's clear. No, no, I mean, there were, I think everything is a statement. In the presentation, you just have to read my thoughts. I think we said in the statement, we announced the spin-off. There was no bid organized at all, and we received several unsolicited offers. Several players, not only one. We did not look at them. We look at them only in the last month when they begin, and the one of Saint-Gobain begin to reach a level that we felt comfortable enough to go to the board and to say to the board, "Look, we have this offer," which again, CAD 5.5 to 6 billion. At the same time as we working on, and we already...

I think everything is in the statement. You just have to read my thoughts. I think we said in the statement, we now just spin off. There was no need of a knife at all. And we received unsolicited, several unsolicited offers. So we are all here at this minute.

So several players, not only one, we did not look at them, we looked at them only in the last month when they began as one of the centers, we reached a level where we felt comfortable enough to go to the ball and to face the ball. Look, we have this offer, which again, the...

Patrick Pouyanné: I spent a week last two weeks ago. I went to Toronto in order to meet from Stock Exchange management team. We are working on. We had a good view of what could be expected from one side-

5.5 to 6 billion Canadian dollar and with the same time as working hard and we're already I spent a week Last two weeks ago. I went to Toronto in order to meet some certain exchange Management team so we are working on so we have to do what could be expected from one side of the market. Yeah, even when we

Speaker 15: You have an alternative.

Paul Cheng: You have an alternative.

Patrick Pouyanné: Clear alternative, and then we had alternative trade. Of course, we were to put, it's our job, you know, to push the price up. I think at the end of the day, again, I prefer Saint-Gobain's management to comment on their motivation to make the acquisition on their side. On our side, again, we think through this process without organizing a bid process, but just being very, I would say, determined to make the spin off, which we see an alternative opportunity. By the way, I met several shareholders last event in London, and some of them were expecting a possible outcome of this nature. I mean, it's what I can say. That's what we've done.

It's our job to push the prices, but I think at the end of the day, again, I prefer central to management to prevent their motivation to make the acquisition on their side. On the North side, again, we think through this process, we go into organizing this process and just being very determined to make the spinoff which we see an alternative opportunity.

Speaker 15: Okay. That in the past, a lot of time you guys comment on what is the trading result or the trading environment in the quarter, and you haven't mentioned anything in Q1. Should we just assume trading result is more or less average and nothing spectacular in the upside or downside in Q1?

Paul Cheng: Okay. That in the past, a lot of time you guys comment on what is the trading result or the trading environment in the quarter, and you haven't mentioned anything in Q1. Should we just assume trading result is more or less average and nothing spectacular in the upside or downside in Q1?

A lot of times you guys come in on that what's the trading, the sell of the trading environment in the quarter and you haven't mentioned anything in the first quarter. So we should we just assume trading results more and less happens and nothing spectacular. You understand what is the one that is spectacular when you will use because in the trading system.

Patrick Pouyanné: You understand. When it is spectacular, we warn you. It was in the trading statement. If we say nothing, as I said before, that means that it's very good, but nothing spectacular.

Speaker 15: Okay. Very good. Thank you.

Paul Cheng: Okay. Very good. Thank you.

Operator 2: The next question is from Henri Patricot of UBS. Please go ahead.

Operator: The next question is from Henri Patricot of UBS. Please go ahead.

Speaker 16: Yes. Hi, everyone. Thank you for taking the question. Just one last from me on biofuels. We've seen some high targets from the EU in recent weeks and including this week on SAF. I was wondering when I look at your 2030 targets, you mentioned the 10% market share with 1.5 million tons. Could these numbers go up, both for the global market size and for your own capacity, or do you see too much of a constraint when it comes to feedstocks?

Henry Patricot: Yes. Hi, everyone. Thank you for taking the question. Just one last from me on biofuels. We've seen some high targets from the EU in recent weeks and including this week on SAF. I was wondering when I look at your 2030 targets, you mentioned the 10% market share with 1.5 million tons. Could these numbers go up, both for the global market size and for your own capacity, or do you see too much of a constraint when it comes to feedstocks?

on both fuels. We've seen some high targets from the EU in recent weeks and including this week on SAF. I was wondering when I look at your 2030 targets, you mentioned 10% market share with 1.5 million tons of these numbers.

Could you please go up the bill for the overall market size and for your own capacity or do you see too much of a constraint when it comes to feedstocks? No, I think that you're right with 10% that the volume was 2 million tons which is the target, 2 million tons of stock. There is Europe on one side, there is the US on the other side. Now I think we have a plan, we are working in order to develop different units either in the US or the higher.

Patrick Pouyanné: No, I think it's the right 6% because the volume was 2 million tons, which was actually the target, 2 million tons of stock. There is Europe on one side. There is the US on the other side. No, I think we have a plan. We are working in order to develop different units. By going to the US, we have the IRA, by the way, giving an interesting framework. There is a plan to develop a project around both parts. We have other plans in Europe, like Grandpuits, like La Mède, but we are looking to other opportunities to develop it. It's an attractive market. Having said that, as you know, the constraint is more on the feedstock because you need to find, I would say, the circular economy.

Patrick Pouyanné: You need to use either waste or second generation. Today the constraint is more on the feedstock, but I'm thinking of colleagues, people at reaching this target of 2 million tons per year by 2030, which will be positive. No? Is that it? Huh? Or maybe 1.5 is from. One sec, I don't. Okay. We'll see. Don't worry. We are working on it.

the constraint is more on the feedback because you need to find a circular economy, so you need to use other ways for second generation. So today the constraint is more on the feedback, but we are I think of apocalypse of people have reached this target of 2 million tons per year.

Or maybe 1.5 is fine now. Okay, we'll see. But don't worry. We are working on it. The next question is from Giacomo Romeo of Giapolese. Please go ahead. Yes, thank you. First question, I'm just trying to understand.

Speaker 16: Yes, thank you.

Henry Patricot: Yes, thank you.

Operator 2: The next question is from Giacomo Romeo of Jefferies. Please go ahead.

Operator: The next question is from Giacomo Romeo of Jefferies. Please go ahead.

Speaker 17: Yes, thank you. First question is just trying to understand a little bit the rationale that led you to increase the overall payout as a result of the Canadian divestment rather than committing to a fixed payout. The other question I have it's more general. It's around in the emerging legislation in France, and I'd like to hear your thoughts about the tightening the investment criteria for Article 9 funds and explicitly to exclude investments in fossil fuels. Just trying to understand whether you are any sort of involved in discussion with the government in trying to make any changes here. It's obviously, and Total in our screen is the most popular name on for Article 9 funds investments in oil and gas.

Giacomo Romeo: Yes, thank you. First question is just trying to understand a little bit the rationale that led you to increase the overall payout as a result of the Canadian divestment rather than committing to a fixed payout. The other question I have it's more general. It's around in the emerging legislation in France, and I'd like to hear your thoughts about the tightening the investment criteria for Article 9 funds and explicitly to exclude investments in fossil fuels. Just trying to understand whether you are any sort of involved in discussion with the government in trying to make any changes here. It's obviously, and Total in our screen is the most popular name on for Article 9 funds investments in oil and gas.

The other question I have is more general, it's around the

And the emerging legislation in France, and I'd like to hear your thoughts about the tightening the investment criteria for Article 9 funds and to explicitly invest in fossil fuels. And just trying to understand whether you are any sort of involved in discussion with the government in trying to make any changes here. It's obviously, and to tell you now, it's pretty much the most popular.

Speaker 17: Just trying to understand a little bit, your thoughts here and whether you are engaged in discussion with the governments?

Giacomo Romeo: Just trying to understand a little bit, your thoughts here and whether you are engaged in discussion with the governments?

name for Article 9 Fund investment in oil and gas. So just trying to understand a little bit your thoughts here and whether you are engaging discussion with them. Okay, the first question, again I explained why the board, we planned the spin-off for the non- we had the interest to take over and so it would be done to either, I mean, it's commission commission from the cash payouts to.

Patrick Pouyanné: Okay. On the first question, no, I think it's again I explained why the board. We planned the spin-off for the amount to shareholders. That means that there was a sort of, there was a distribution of the dividend in kind, potentially to our shareholders. It was a form of commitment, so we don't do the pre-distribution in kind. Strongly we had feeling to respect our word, and it will be done through either, I mean, a distribution through the payout, the cash payout to through either buybacks or official dividend. That's the point. I think it's quite logical. We translated it at this stage because we prefer to observe what will happen during the year by giving you a guidance on the payout, a positive one.

whoever buybacks or social development. That's not the point. So I think it's quite logic. And so we translated it at this stage because we prefer to observe what we like doing during the year by giving you a guidance on the player. Oh, a positive one. I think it's more than 40%, at least 40%. So I think it's positive. I think that demonstrates that the goal is clearly committed to the return of the shoulder like we said last year. The second question, Article 9, you know, back to debate. I'm not sure that exclusion will make the progress of the transition in particular because I'm convinced that players like to put in their shoes off.

Patrick Pouyanné: I think it's more than 40%, at least 40%. I think it's positive. I think that we demonstrate that the board is clearly committed to the return of shares to shareholders, like we said last year. The second question, Article 9. No, that's a debate. I'm not sure that exclusion will make the progress of the transition, in particular, because I'm convinced players like TotalEnergies are very well positioned to reallocate part of our cash flows to accelerate this transition. If people want to exclude, they exclude. The only argument I have for them is that we are different for size ships company. We are the one who are in transition, which we can demonstrate. You know, I'm not a big fan of taxonomy, to be honest, because all that is just specification.

very well positioned to be allocated part of the deaf rules to accelerate this transition.

If people want to exclude, they exclude. The only argument I have for men is that you are different from the side-fuels company. You are the one who are in transition, which we can demonstrate. You know, I'm not a big fan of taxonomy, to be honest, because of my history and specification. I've also had in some countries, like Belgium, a lot of people who have been in the market for taxonomy.

Patrick Pouyanné: I've observed that in some countries, like Belgium, they make some caveats on the rules, saying, hey, but if some companies are really serious about the transition, then it's they have to be considered. I'm more in favor, I would say, an investing class philosophy than a banning philosophy, this is what should it be. I think it should be more encouraging. If it's not Article 9, it will be Article 8. I think that there are also, I would say, investors who may be willing to have a pure category of, I would say, very clean assets. Okay, that's it's a question for me, more of organizing the marketing to investors than really a question of regulation.

They make some caveats on the rules, but if some companies are very serious about the transition, then they have to be considered. I'm more in favor of investing trust philosophy than the banking philosophy. I think it should be more encouraging. Then if it's not article 9, it will be article 8.

Patrick Pouyanné: I think there is a confusion to try to regulate the transition and to organize the transition through financial regulations. I'm not sure it's the best way to do it. Again, we are on our side. This does not affect our strategy, which is very clear and we maintain the course.

really a concern of regulation. I think there is a confusion to try to regulate the transition and to organize the transition for financial regulation. I'm not sure it's the best way to do it. Again, we are on our side. This does not affect our strategy, which is very clear.

We maintain the course.

Operator 2: The next question is from Jason Gabelman of TD Cowen. Please go ahead.

Operator: The next question is from Jason Gabelman of TD Cowen. Please go ahead.

Speaker 18: Yeah. Hey, thanks for taking my questions. I wanted to go back to M&A for a minute. Last year at your Analyst Day, you talked about an interest in growing your US LNG integrated gas footprint. I'm wondering, as we try to figure out the use of proceeds from the oil sands asset sale, if that's an area that looks attractive to you, either moving into the upstream gas, further into upstream gas in the US and/or partnering on an LNG project or two there. Then my second question is on Kazakhstan. Some news out of there regarding a potential lawsuit related to recouping costs from the Kashagan project, which you have an interest in. I was wondering if you could provide some comments around that, where that lawsuit sits, potential liabilities arising from that lawsuit. Thanks.

Jason Gabelman: Yeah. Hey, thanks for taking my questions. I wanted to go back to M&A for a minute. Last year at your Analyst Day, you talked about an interest in growing your US LNG integrated gas footprint. I'm wondering, as we try to figure out the use of proceeds from the oil sands asset sale, if that's an area that looks attractive to you, either moving into the upstream gas, further into upstream gas in the US and/or partnering on an LNG project or two there. Then my second question is on Kazakhstan. Some news out of there regarding a potential lawsuit related to recouping costs from the Kashagan project, which you have an interest in. I was wondering if you could provide some comments around that, where that lawsuit sits, potential liabilities arising from that lawsuit. Thanks.

Yeah, hey, thanks for taking my questions. I wanted to go back to M&A for a minute. Last year at your analyst day you talked about an interest in growing your US LNG integrated gas footprint. And I'm wondering as we try to figure out the use of proceeds from the oil sands asset sale, if that's an area that looks attractive to you.

either moving into the upstream gas, further into upstream gas in the US, and or partnering on an LNG project or two there. And then my second question is on Kazakhstan. Some news out of there regarding a potential lawsuit related to recouping costs from the Kashagan project.

which you have an interest in. I was wondering if you could provide some comments around that, where that lawsuit sits, potential liabilities arising from that lawsuit. Thanks.

Patrick Pouyanné: On the second question, I have no news more than what you learn. I mean, it seems that the government of Kazakhstan wants to reopen old discussions. You know, it's not the first time about the cost recovery from Kazakhstan. I think my feeling is that the five IOCs are really united, and we have a contract there again, and we will of course fight, you know, that the contract be respected by all the parties. So that's my only comment. I know of a few of it. On the first one, I mean, again, don't consider because we divest, we have no choice to spend the money tomorrow. I mean, we have, we are, we can be, we can also.

My second question, I have no news more than what you have learned. I think that the government of Kazakhstan wants to reopen all these stations, you know, it's not the first time that the cost recovery from Kazakhstan. I think my opinion is that the five IOCs are really united.

So we will face and we will have a contract again and we will of course find the contract to be respected by all the parties. So that's my comments and I know you will meet. On the first one, again don't consider because we are diverse, we are not sure if we are going to spend a moment tomorrow.

Patrick Pouyanné: Well, I mean, I commented already, I think, during the last investor meeting, that it's true that we are looking to see if we can more integrate the various positions, the US position. The price of the NRE is quite low, but people are still dreaming of the price of last year, you know, so expectation. Things are possible. You know our area of interest, some of it. But I repeat it just before, it's good oil, it's LNG, it's also renewable gas. We are looking to different opportunities in order to create value from the broad portfolio.

is quite low but people are still bringing up the price of last year. Things are possible. You know our area of interest, some of the things I repeated just before. It's good oil, it's energy, it's also...

that we know about that and so we are looking to give you a lot of opportunities in order to get value from the board portfolio.

So we are looking to different opportunities in order to face value from the board portfolio.

Speaker 18: Thanks.

Jason Gabelman: Thanks.

Operator 2: Gentlemen, there are no more questions registered at this time.

Operator: Gentlemen, there are no more questions registered at this time.

Thank you very much. Thank you to all the teams and thank you for your questions. See you soon. See you soon. Thank you. Ladies and gentlemen, please welcome to the stage, the World Tour results.

Patrick Pouyanné: Okay. Thank you very much. Jean-Pierre, I given you all the figures. The results were good. Thank you to all the teams, and thank you for your questions. See you soon to all of you.

Operator 2: Ladies and gentlemen, this concludes the conference call. Thank you all for your participation. You may now disconnect.

Operator: Ladies and gentlemen, this concludes the conference call. Thank you all for your participation. You may now disconnect.

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