Q3 2023 TotalEnergies SE Earnings Call
Ladies and gentlemen, welcome to the total energy third quarter 2023 results conference call.
Speaker 1: transcript
Speaker 1: Ladies and gentlemen, welcome to the Total Energy's third quarter, 2023.
I'll now hand over to Patrick <unk>, Chief Executive Officer, and John Pierce Bad CFO, who will lead you to this call. Please go ahead gentlemen.
Hello, everyone. Good afternoon.
Speaker 2: transcript
Speaker 2: So, our good morning, if you are in the US. So, today we are going to present with Jean Pierre of the Coaches Results, which once again demonstrate the relevance of our strategy. Indeed, our transition strategy is encoded on both pillars as we explain in the last September , on all in gas on one side, integrated power on the other side. And it allows us to fully leverage upside in supportive energy environments like the one we are experiencing today.
So oh, good morning issue all the U S. So today.
We I would present wish uphill third quarter results, which once again, the most wages or whatever and so those strategy.
Indeed, our transition strategy is anchored on booth at all so as we explained you last September.
Oil and gas on the one side integrated oil India, the sauce and it allows us to fully leverage upside and supports even though she ever months like the one we're experiencing today.
Speaker 2: transcript
Speaker 2: As explained, our strategic outlook presentation in September , we have state of course, and this culture illustrates all these strategies in motion in oral business.
Thanks, Dan.
The agenda for outlook presentation end of September we have stayed the course and risk which illustrates what are your strategies in motion in all business segments.
Speaker 2: transcript
Speaker 2: Oil and gas first. As you know, we have developed organically a deep portfolio of projects.
Oil and gas is a as you know we have developed organically deep portfolio of projects.
Speaker 2: transcript
Speaker 2: but are low cost and low emissions, which will offer a growth of production of 2 to 3% per year for the next five years.
That's our low costs and low emissions, which we don't feel a group of production of two 2% per year for the next five years.
Thanks to this strategy. This quarter, we did have a 5% increase of production compared to Q3 'twenty to several of our newer projects.
Speaker 2: transcript
Speaker 2: Thanks to this strategy, this quarter we delivered a 5% increase of production compared to Q3 2022. Several new projects have been put into production, like Meru 1 in Brazil, Absheron in Azerbaijan, Block 10 in Oman, or Ratawi in Iraq.
Put into production like maybe one in Brazil are I'm sure. There's a badge on the block 10 in Oman or whatever.
Iraq.
Speaker 2: transcript
Speaker 2: and they are moving off sitting on that whole decline of 3%
And they are more than offsetting all natural decline of 3% per year.
Speaker 2: transcript
Speaker 2: The downstream is also contributing to this oil and gas business, in particular thanks to our capacity to combine an excellent utilization rate of our refineries with very robust refining maps.
The downstream is also contributing to vs. Orient guests visits in particular, thanks to our capacity to combine an extended utilization rates or where you find though is we have very little business refining margins on.
Speaker 2: transcript
Speaker 2: On the LNG side, the recent rise in volatility in the European gas market.
On the LNG side V I send price volatility in European gas market.
Speaker 2: transcript
Speaker 2: Spax spiking as much as 28% in a single day during the quarter is the most obvious example of real-time markets intention
But he got as much as 28% and a single digits in the quarter is the most obvious example of realtime markets intention.
Speaker 2: transcript
Speaker 2: We capture value along the entire value chain and maximize the margins on both our dominant U.S. and European positions. We are the largest U.S. LNG exporters and we have reinforced
We capture value along the entire value chain and maximize the margins some buffo dominion's U S and European positions. We are the largest U S. LNG export chosen we have reinforced.
Speaker 2: transcript
Speaker 2: this position this quarter with the sanction of Rio Grande LNG in Texas, and the largest, we are also the largest European gas capacity holders, and there again we are enforcing this position this quarter with the commissioning of our second FSIU in France after the one in Germany earlier this year.
This positions this quarter, we just sanctioned Rio Grande LNG and takes US envy largest we are also the largest European gas capacity orders and there again, we are enforcing this position this quarter with the commissioning of our cigar into if you say you in France. After the one in Germany earlier this year.
Speaker 2: transcript
Speaker 2: The same integrated strategy extends, as you understood, to our integrated power business, since the electricity market in Europe follows the gas market, as natural gas plus CO2 sets a marginal power price for many years to come.
The same integrated strategy extend that you understood through our integrated power business since the electricity market in Europe photos the gas market.
Natural gas Brasil, two sets of marginal price for many years to come.
Speaker 2: transcript
Speaker 2: This market is again once characterized by growing demand and constrained supply, which exploits opportunities in the market.
This market is again once characterized by growing demand and constrained supply, which X creates opportunities in the market.
As a software with its brand new integrated polo achieved a new milestone this quarter with both adjusted net income and cash flow exceeding $500 million.
Speaker 2: transcript
Speaker 2: As Jean-Pierre will explain you, Integrated Power achieved a new milestone this quarter with both adjusted net income and cash flow exceeding $500 million. We are well on our way to achieving our $2 billion cash flow target for the year in this business.
We don't know way to achieving our 2 billion cash flow target for the year in this business.
Speaker 2: transcript
Speaker 2: We have announced this morning an interesting acquisition of the German market which illustrates our integrated power strategy. Quadra is the second largest aggregator of renewable energy in Germany with 9 gigawatts of virtual onshore wind farm and offers a very interesting platform from getting value out of a poor market dominated by renewables without capital implied in the asset and so contributes to our profitability in this attractive market.
We have announced this morning and enjoy seeing accretion on the German market, which illustrates our integrated forward strategy. What are the second largest segregate too. When you were born in AG in Germany, we have nine gigawatt of.
Sure onshore wind farm and if it was a very interesting platform from getting value out of a proven market dominated by renewable without capital employed in the asset and so contribute to our profitability in these attractive markets.
Speaker 2: transcript
Speaker 2: I will write up my introduction by just saying again, that the relevance of a balanced transition strategy between Olingas and one side integrated power on the other side has never been clearer.
Right up my introduction by just saying again that is what events are a balanced foundation strategy between oil and gas unwanted side integrated <unk> side has never been clearer more energy less emission more cash flows in this quarter. It is choices relevance with our adjusted net income increased to <unk>.
Speaker 2: transcript
Speaker 2: More energy, less emission, more cash flows, and this culture illustrates these relevance with the adjusted net income increased to $6.5 billion and CFU increased to $9.3 billion.
<unk> 5 billion dollar and CHF will increase to $9 3 billion.
Speaker 2: transcript
Speaker 2: Total generated 4.2 billion dollar free cash through internet investment.
That generated a $4 2 billion of free cash flow after net investments.
Speaker 2: transcript
Speaker 2: Based on the strength of these results and the trust in companies' outlooks, our board approved a third interim dividend of 7.25% year-on-year at $0.70.
Based on the strength of these reserves and its first in companies or groups of our board approved the first interim dividend.
725% year on year at <unk> 70.
Speaker 2: transcript
Speaker 2: for Euro per shares. I think that I turn it to Jean Pierre. We give you more details for the solid full-court of financial reasons.
For Europe per shifts I think you said that I've done it too jumped yeah, we'll give you more details for this solid first quarter financial results. Thank you Patrick So now we're moving on to the detail financial results starting with our first.
Speaker 3: transcript
Speaker 3: Thank you, Patrick. So now we're moving on to the detailed financial results, starting with our first pillar, oil and gas, which is the cash engine of Canada.
Oil and gas, which is the cash engine of today.
Speaker 3: transcript
Speaker 3: Third quarter hydrocarbon production was nearly 2.5 million barrels of oil equivalent per day, which is notably up 5% year-on-year as already mentioned by Patrick, thanks to the startup of several oil and gas
Calvin prediction was nearly $2 5 million barrels of oil equivalent building, which is not that many up 6% year on year as already mentioned the magnetic thanks to the start up of several oil and gas projects.
Speaker 3: transcript
Speaker 3: on oil, production benefited from new production from the first FPSO on Meru in Brazil, EKK in Nigeria, and our entry in the Ratawe oil field in mid-August in Iraq.
On Brazil.
<unk> benefited from new production for the first six Basil Mayo in Brazil, <unk>, Nigeria and <unk>.
<unk> in mid August in Iraq.
Speaker 3: transcript
Speaker 3: Speaking of projects, Meru-Touf should be online by the end of the year. Production also benefits for our entry in January into the Serb and Nulu procedure in Abu Dhabi. From the gas side, production benefits from the startup of Black Thed in the Man and Azerbaijan and Azerbaijan for the upsharing.
Speaking of project <unk> should be online by the end of <unk>.
<unk> also benefits each voluntary in January into the South and <unk> <unk>.
On the guest side prediction and benefited from the startup of <unk> and <unk>.
<unk> of the upscale and sheets.
Speaker 3: transcript
Speaker 3: Although production was flat quarter to quarter, exploration and production posted strong quarterly results with adjusted net income of $3.1 billion and FFO of $5.2 billion.
Although production was flat quarter to quarter exploration and prediction posted strong quarterly results with adjusted net income of $3 1 billion and Thats a full five to be in that.
Speaker 3: transcript
Speaker 3: The 34% increase in adjusted net operating income, quarter to quarter, was primarily re-earned by higher oil price.
The 34% increase in adjusted net income quarter to quarter was predominantly driven by higher oil.
Right.
Speaker 3: transcript
Speaker 3: and a lower effective tax rate, which is a result of two effects. First, it results from the lower taxation rates on new barrels, Brazil, Azerbaijan, Iraq, compared to declining historic levels, barrels, and it results also as a lower weight of North Sea barrels in the segment results for this quarter.
And a lower effective tax rates, which is a result of tools.
First it results from the low worth extension rates, one new barrels.
John Iraq compares to declining historic labels barrels and its results also lower weights of North sea barrels in the segment results for this quarter.
Operating costs decreased to $5 five this quarter.
Speaker 3: transcript
Speaker 3: Operating costs decreased to $5.50 per barrel this quarter.
Yeah.
Speaker 3: transcript
Speaker 3: For the Integrated LNG segments, we continue to demonstrate our leadership as a top global LNG player.
For the integrated LNG segments, we continue to demonstrate our leadership as a top global LNG player.
Speaker 3: transcript
Speaker 3: Integrated LNG production is up 18% year on year and stable quarter to quarter.
Integrated LNG production is at 18% year on year and stable quarter to quarter.
Speaker 3: LNG sales were down by 5% quarter to quarter due to decrease in spot traded volumes in a less volatile environment. And LNG price sales was down 3% quarter to quarter linked to a certain environment.
LNG sales were down by 5% quarter to quarter due to decrease in spot trading volumes and a less volatile environments and LNG price sales was down 3% quarter to quarter linked to assessing all environments.
Unknown Executive: 3rd quarter 2023 results conference call.
Patrick Pouyann: I will now hand over to Patrick Pouyannet, Chief Executive Officer and Jean-Pierre Spar, CFO, who will lead you to this call. Please go ahead gentlemen. Hello everyone, everyone. Good afternoon. So, good morning, if you are in the U.S.
However.
Speaker 3: transcript
Speaker 3: After our results have landed last quarter from the historic high exceptional results experienced in 22, Integrated LNG maintains this quarter robust results with adjusting net operating in complex, quarter to quarter at $1.3 billion, and CFFO at $1.6 billion down 8% compared to previous quarter, in line we sales down by 5% and prices by 3%.
After our reserves have landed last quarter from the story tie exceptional results experienced in 'twenty two.
Integrated LNG maintained this quarter Rubbished results with adjusted net operating income flat with just to put that at one point <unk> and CSA full at one <unk> down 8% compared to the previous quarter.
Patrick Pouyann: So today we are going to present with Jean-Pierre of the Culture Results, which once again, we are going to demonstrate the relevance of our strategy. Indeed, our transition strategy is encoded on both pillars, as we explain in the last September, all together on one side, integrated power on the other side, and it allows us to fully leverage upside and supportive energy environments like the one we are experiencing today. As explained in our strategy, I look to our presentation in September, we have state the course, and this culture illustrates all these strategies in motion in oral business segments.
We sell down by 5% and prices by 3%.
Speaker 3: transcript
Speaker 3: Despite entering the winter period with high natural gas inventories in Europe , in the tens markets, gas prices remain at good levels and very reactive to production disruption. As we have seen over the last several months.
Despite entering the winter with high natural gas inventories in Europe.
It sounds markets gas prices remain at good levels and very reactive to production disruption as we've seen over the last several months.
Speaker 3: transcript
Speaker 3: 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 should be above $10 per mmU in the fourth quarter 2023.
Given the evolution of oil and gas prices in recent months and the lag effect on price formulas, we anticipate that our average LNG setting price should be.
Patrick Pouyann: All in gas first, as you know, we have developed organically a deep portfolio of projects, but our local and low emissions, which will offer a growth of production of 22% per year for the next five years. Thanks to this strategy, this could do with the level of 5% increase of production, compared to 2, 3, 22, several new projects have been put into production, like Mero one in Brazil, Absheron in Azerbaijan, Blocton in Uman, or Rataoui in Iraq, and they are more than offsetting on natural decline of 3%.
And good afternoon to you in the fourth with the 23.
Speaker 3: transcript
Speaker 3: For the combined downstream, address the net-operate income and CEPFFO increased sequentially to 1.8 billion dollars and 2.2 billion dollars with space.
For the combined downstream adjusted net income and <unk>, Inc.
Increased sequentially one eight.
<unk> and $2 2 billion dollar respectively.
Despite lower petrochemical results due to the European environment, our results reflect higher refining margins in Europe, and how you can use different rates during the third quarter.
Speaker 3: transcript
Speaker 3: Despite lower petrochemical results due to the European environments, our results reflect higher refining margin in Europe and higher utilization rates during the third quarter, which was supported by greater probability of our French refining risk to be noticed for one time.
Which was supported by greater visibility of our French refineries to be noticed for once.
The utilization rates on processed could increase quarter to quarter to 84%, despite having an unplanned shutdown at the top two refineries in the U S.
Speaker 3: transcript
Speaker 3: The utilization rate on processed goods increased quarter to quarter to 84% despite having an unplanned shutdown at the power tool refinery in the U.S.
Patrick Pouyann: The downstream is also contributing to these organ gas business, in particular thanks to our capacity to combine an excellent utilization rate of our refineries with very robust refining margin. On the energy side, the recent price volatility in European gas markets, spiking as much as 28% in a single day during the quarter, is the most obvious example of real-time markets in tension. We capture value along the entire value chain and maximize the margins on both for dominant US and European positions.
Speaker 3: transcript
Speaker 3: For the fourth water, the utilization rate should be above 80% and includes the restart of Poitou in mid-November.
For the fourth quarter, the traditional way it should be above 80% and includes restock.
November.
Moving now to the second pillar.
We continue to develop a profitable and differentiated integrated power modules.
Speaker 3: transcript
Speaker 3: We continue to develop a profitable and differentiated integrated power model.
Speaker 3: transcript
Speaker 3: Building a world class cross-competitive portfolio that combines renewable assets, solar offshore, wind, onshore winds and flexible assets, circular TCTs and storage to deliver clean firm power.
Building, a world class cost competitive portfolio that combines renewable assets so at all.
Patrick Pouyann: We have the largest US and NG exporters, and we have reinforced this position, this quarter with the sanction of Rio Grande NG in Texas. And the largest, we are also the largest European gas capacity to all those. And very again, we are reinforcing this position, this quarter, with the commissioning of our second of the FSAU in France after the one in Germany earlier this year. The same integrated strategy extended, as you understood, to our integrated power business, since the electricity market in Europe, follows the gas market as natural gas plus CO2 sets a marginal power price for many years to come.
Offshore wind onshore wind and flexible assets, such as <unk> and CRH to deliver clean firm.
Speaker 3: transcript
Speaker 3: As mentioned by Patrick, this quarter we achieved a milestone in the integrated power business segment, with adjusted net income and cash flow both exceeding $500 million, and we are well on our way to achieving our target of generating $2 billion cash flow in 2023, having already generated close to $1.5 billion through the first three quarters.
As mentioned like that each quarter, we achieved a milestone in integrating our business segments.
Adjusted net income and cash flow, both exceeding 500 million, but up and we are well on our way to achieving our targets of generating to be ended off cash flow in 2000 fleet, having already generated close to one side. We ended up the first three quarters.
Speaker 3: transcript
Speaker 3: All the value chain contributed this quarter to this.
All of the value chain contributed this quarter to this site.
Patrick Pouyann: This market is again once characterized by growing demand and constraints to apply, which creates opportunities in the market. As Sampia will explain to you, integrated power achieved a new milestone this quarter, with both adjusted net income and cash flow exceeding 500 million dollars. We are well aware to achieving our 2 billion cash flow target for the year in business. We have announced this morning an interesting equation on the German market, which illustrates our integrated power strategy.
Speaker 3: transcript
Speaker 3: 500 million dollar results, renewables, flexible assets and trading supply to customers.
And we can be done without results renewables flexible assets NPD supply to <unk> as well.
During the third quarter, we also acquired 100% of total airline which contributes to the Gulf of our electricity production and reserves.
Speaker 3: transcript
Speaker 3: During the third quarter, we also acquired 100% of total R&D, which contributed to the growth of our electricity production and results.
Early October we signed a corporate PPA, we singled out in the U S to supply clean power from our <unk> Solar farm it takes us.
Speaker 3: transcript
Speaker 3: Early October , we signed a corporate PPA with Sango 9 in the US to supply clean power from our Danish field solar firm in Texas.
Speaker 3: transcript
Speaker 3: The agreement is a good illustration of our strategy in Integrative Power, as it includes an upside sharing mechanism under which both companies share potential upsides arising from spot market prices over the contract term.
The agreement is a good illustration of our strategy and integrated power and it includes the net side sharing mechanism under which both companies share potential upside rising from spot market prices, although the contract.
Patrick Pouyann: Quadar is the second largest educator of renewable energy in Germany with 9 gigawatts of virtual control wind farm, and offers a very interesting platform from getting value out of the poor market dominated by renewable, without capital implied in the asset and so contribute to our profitability in this attractive market.
Yes.
We recently achieved another milestone.
Speaker 3: transcript
Speaker 3: We recently achieved another milestone. Earlier this month, our Sea Green offshore wind farm in Scotland became fully operational and is running at the design capacity of more than 1 GW.
This month's a figurine offshore wind farms in Scotland became fully operational in Israel and is running at designed capacity of more than one gigawatt.
Patrick Pouyann: I will write up my introduction by just saying again, there's the relevance of a balanced transition strategy between online gas and one side integrated power on the other side has never been clearer. More energy, less emission, more cash flows, and this culture illustrates these relevance with our justice net income increase to $6.5 billion and see if you will increase to $9.3 billion. Total generated to $4.2 billion.
Speaker 3: transcript
Speaker 3: This project was delivered within budget on a 5% cost of a run and is total energy's biggest offshore winds farm globally. I'll wrap it with CapEx and shallower returns.
These projects will deliver within budget only 5% versus the direct.
And he stood there linearity is biggest offshore wind farm globally.
I'll wrap up with Capex and shallow Debbie Jones.
Yes, yes, yes to date net investments.
Speaker 3: transcript
Speaker 3: As of the end of the first quarter, totaled $16.1 billion.
At the end of the third quarter totaled $16 1 billion.
Speaker 3: transcript
Speaker 3: As a reminder, we expect to receive cash proceeds from the sales of our Canadian assets and from the deal with Alimentation Couchetard in the fourth quarter. Therefore, we reiterate full-year guidance of $16 to $17 billion of CAPEX this year.
As a reminder, we expect to receive cash proceeds from the sales.
Patrick Pouyann: Now free cash flow after net investment, based on the strengths of these results and trust in companies outlooks or boards, approve the third interim dividend in up 7.25% year on year at 0.74 euro per share.
Our Canadian assets and from the deal with <unk> in the fourth quarter.
Therefore, we think units full year guidance of $16 billion to $17 billion of Capex. This year.
Jean-Pierre Spar: As he said that, I turn it to Jean Pierre, we give you more details through the solid full quarter financial results. Yes, thank you, Patrick. So now we're moving on to the details financial results, starting with our first pillar, oil and gas, which is the cash engine of today. Third quarter at the carbon production was nearly 2.5 million barrels of oil equivalent per day, which is notably up 5% year on year as already mentioned by Patrick.
Our balance sheet is strong.
Speaker 3: transcript
Speaker 3: Our gearing slightly increased from 11.1% at the end of the second quarter to 12.3% at the end of the first quarter that is mainly due to the consolidation in our counts of total eranded.
Our gearing slightly increased from 11, 1% at the end of the second quarter to 12, 3% at the end of the first quarter that is mainly due to the consolidation.
Ill answer that.
Iran deaths.
Speaker 3: transcript
Speaker 3: Proceeds from disposals should bring gearing back below 8% by end of the year.
Proceeds from disposal should bring gearing back below 8% by end of the year.
Although the last 12 months <unk> was 21% and return on equity with more than 22%.
Speaker 3: transcript
Speaker 3: Over the last 12 months, ROECI was 20.1% and return on equity was more than 22%.
Jean-Pierre Spar: Thanks to the start-up of several oil and gas projects. On oil, production benefitted from new production, from the first space on Merule in Brazil, EKK in Nigeria, and our entries in the hot oil field in mid August in Iraq. Speaking of projects, Merule 2 should be online by the end of the year. Production also benefitted from our entry in January into the South and Oulu concession in Abu Dhabi. On the gas side, production benefitted from the start-up of black sand in the man, and other than in the other region of the Aksharan fields.
Speaker 3: transcript
Speaker 3: September , we raised our annual payout guidance from 35-40% of cash flow to more than 40%.
In September we raised our annual payout guidance from 35, 40% of cash flow to more than 40%.
Speaker 3: transcript
Speaker 3: We enthrach for 23, having paid out accumulaties for 23% for the third quote.
We're on track for 23.
<unk> paid out a cumulative 43% over the third quarter.
Speaker 3: transcript
Speaker 3: Our payout is a combination of ordinary dividends and buyback.
<unk> is a combination of ordinary dividends and buybacks.
Speaker 3: transcript
Speaker 3: as we believe our stock, despite having reached its historical high this quarter, is still undervalued by the market.
We believe our stock despite having which is historical high this quarter is still undervalued by the markets.
Speaker 3: transcript
Speaker 3: We bought back $6.1 billion of stock through the third quarter, and so we are well underway in executing our $9 billion buy-back program for full year 2023, as the Board decided to allocate $1.5 billion of Canadian sales proceeds to this buy-back program in 2023.
We bought back $6 might be and.
The third quarter and so we are well underway in executing our 9 billion buyback program for full year 2003, as the board decided to allocate $1 5 billion Canadian sale proceeds to devalue light program in 'twenty three.
Jean-Pierre Spar: All food production was flat, quarter to quarter, exploration and production, pasted strong quarterly results, with adjusted net income of 3.1 billion dollars, and 5.4 of 5.2 billion dollars. The 34% increase in adjusted net operating income, quarter to quarter, was primarily given by higher oil price, and a lower effective tax rate, which is a result of two effects. First, it results from the lower taxation rates on new barrels, Brazil, Asia, Beijing, Iraq, compared to declining historic levels, barrels, and its results also as a lower weight of North Sea barrels in the segment results for this quarter.
Speaker 3: transcript
Speaker 3: This concludes my comments and now we can move to the Q&A.
This concludes my comments and now we can move to the Q&A.
Ladies and gentlemen, welcome to total energy third quarter 2020 results conference.
Carl.
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 Touchtone telephone and wait for your name to be announced please mute any audio sources, while asking a question.
If you wish to cancel their request please press star.
Once again, please press star and one for questions one moment for the first question.
Jean-Pierre Spar: Operating cost decreased to 5.5 billion dollars per barrel, this quarter. For the integrated LNG segments, we continue to demonstrate our leadership as a top global LNG player. Integrated LNG production is up 18% year on year, and stable quarter to quarter. LNG sales were down by 5% quarter to quarter due to decrease in spot-traded volumes in a less volatile environment, and LNG price sales was down 3% quarter to quarter linked to a certain environment.
The first question comes from Oswald Clint of Bernstein. Please go ahead Sir.
Speaker 4: transcript
Speaker 4: and thank you very much both of you. Two questions, the first one on the US offshore wind police attentive energy. It was a good press release this week, lots of information that's not normally presented for these types of deals and it helps us kind of get to the returns I think. You know with the 40% tax credit we were getting to something like 13.5% on an equity basis and I just wondered if that was anywhere close to your own expectations for.
Thank you very much both of you.
Two questions. So first one on the U S offshore wind. Please attentive energy. It's a it was a good press release this week lots of information.
Not normally presented data for these types of deals and helps us kind of get to the returns I think.
With the 40% tax credits.
We were getting to something like 13, 5% on an equity basis and I just wondered if that was anywhere close to your own expectations for a project like that and I'm, perhaps at this point you could say how much of your $20 billion of capital employed and integrated power is currently in production.
Jean-Pierre Spar: Oliver, After our results have landed last quarter from the historic high exceptional results experienced in 22, Integrated LNG maintained this quarter robust results with adjusted net operating income flats, quarter to quarter, at 1.3 billion dollars, and CFO at 1.6 billion dollars, down 8% compared to previous quarter, in line we sales down by 5% and prices by 3%. Despite entering the winter period with high natural gas inventories in Europe, in the tens markets gas prices remain at good levels and very reactive to production and disruption as we have seen over the last several months.
Speaker 4: transcript
Speaker 4: a project like that and perhaps at this point you could say you know how much of your 20 billion dollars of capital employed in integrated power is currently in production. That's the first one and secondly I wanted to ask about
That's the first one and then secondly, I wanted to ask about geopolitical risk.
Speaker 4: transcript
Speaker 4: You always have your finger on the pulse and obviously I wanted to get a sense of how you're thinking about the portfolio risk at the moment, especially Middle Eastern exposure and whether any.
You always have your finger on the pulse and obviously I wanted to get a sense of how youre thinking about the portfolio of risk at the moment, especially middle eastern exposure and whether any strategic changes or indeed, M&A moves may be needed or may be considered if things were to worsen. Thank you.
Speaker 4: transcript
Speaker 4: changes or indeed M&A moves may be needed or may be considered if things were to worsen. Thank you.
Jean-Pierre Spar: 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 should be about $10.00 per millimeter in the fourth quarter 23. For the combined downstream, adjusted net operating income and CFO increased sequentially to 1.8 billion dollars and 2.2 billion dollars respectively. Despite lower petrochemical results due to the European environments, our results reflect higher refined margin in Europe and higher utilization rates during the third quarter, which was supported by greater probability of our friends refined risk to be noticed for once.
Speaker 2: transcript
Speaker 2: Thank you, Oswald. Thank you for the comments. Yes, we, as you know, the offshore wind industry sometimes is questioned. So, in fact, these offshore wind, by the way, in our portfolio, we had two good news, in fact, for me, these last weeks. And so, we wanted to share. First, Sea Green in Scotland.
Thank you as well thank you for the comments, yes, we as you know <unk> industry. Sometimes is a question. So in fact this offshore wind by the way.
And I'll pause for you we had two good news in fact for EMEA.
<unk>.
And so we wanted to share first CRE and in Scotland.
Speaker 2: transcript
Speaker 2: We managed to make that project within 5% only of our own cost, $4 billion. So it's quite, it demonstrates that, and we have a good CFD on Sea Greens who will make money now from this project. So it demonstrates that you can execute an offshore wind project.
We managed to make bad projects within 5% of the overrun cost 4 billion. So it's quite it demonstrates that.
And we have a good to cfd on series will make money from this purchase so its dimensions that you can execute a neutral wind projects. When you all good team good.
Speaker 2: transcript
Speaker 2: when you are a good team, a good project team within the budget and I would say not much delay in fact in that case which of course are linked. So first comment. Second comment on in New York.
<unk> team within the budget and I would say.
Not much delay effect in VAT case, which of course selling so first comment second comment on in New York.
Jean-Pierre Spar: The utilitarian rates on processed crude increased quarter to quarter to 84% despite having an unplanned shutdown at the quarter to refine in the US. For the fourth quarter, the utilization rate should be about 80% and includes the restart of the quarter in mid-November.
Speaker 2: transcript
Speaker 2: You know, yes, that's true, and I think the nice thing is that even if we are not allowed to disclose
Yes, that's true, but we are and I think the nice said, even if we are not allowed to disclose what is the level of our price. So you know they mentioned an average price of around the $145 a megawatt.
Speaker 2: transcript
Speaker 2: what is the level of our price. You know they mention an average price of around $145 per megawatt-hour nominal. And so you know you change the range compared to previous ones. And I think it is a lesson I explained to you last time that offshore wind, you need
<unk> and so you know you changed the range compared to previous ones and I think this is a lesson I explain you lost time, but therefore, we need to to have to be pragmatic, but what would be the cost and when you enter into a discussion in the U S. In particular of these type of.
Jean-Pierre Spar: Moving now to the second pillar, we continue to develop a profitable and differentiated integrated power model. Building a world-class cost-competitive portfolio that combines renewable assets, solar offshore, wind, onshore winds and flexible assets, such as CCTGT's and storage to deliver clean firm power. As mentioned by Patrick, this quarter will achieve the milestone in integrated power business segments with adjusted net income and cashflow both exceeding $500 million and we are well on our way to achieve this.
Speaker 2: transcript
Speaker 2: to be pragmatic but what would be the cost and then you enter into a discussion in the US in particular of this type of price plus the 40% IRA are giving us a good support and honestly you are quite good in your mind.
Price plus the 40% IRR are giving us a good support and see you are quite good in your math I would say I would have answered to you 12% to 15. So you are quite good and Youre. My congratulation. So we can in the India develop a profitability showing projects based on equity and one of the.
Speaker 2: transcript
Speaker 2: I would say I would have answered to you 12 to 15, so you are quite good in your math.
Speaker 2: transcript
Speaker 2: Congratulations. So we can indeed develop a profitable, a showing project based on equity. And one of the key, by the way, people might be surprised by the level of price announced by the state of New York, which is much higher than before. I can't tell you, one of the key has been to have a month of partnership, as we announced we have introduced in the partnership.
By the way.
You might be surprised by the level of price announced by the state of New York, which is much higher than before I can tell you one of the key has been to have among our partnership as we announced we are introducing the partnership <unk> and Wichita worldwide partner, but also <unk>, which is a U S company they were establishing New York and again.
Jean-Pierre Spar: Building our targets of generating $2 billion cashflow in 23, having already generated close to $1.5 billion through the first three quarters. All the value chain contributed this quarter to this $500 million results, renewable, flexible assets and trading, supply to customer as well. Doing the third quarter, we also acquired 100% of total income, which contributed to the growth of our electricity production and results. Early October, we signed a corporate PPA with Sangeobain in the US to supply clean power from our Danish field solar firm in Texas. The agreement is a good illustration of our strategy in integrated power as it includes a net-flight sharing mechanism under which both companies share potential upside, rising from spread market places, although the contract is down.
Speaker 2: transcript
Speaker 2: Corio, which is our worldwide partner, but also LS Power, which is a US company, very well established in New York, and again, for me, a very strong lesson. When you have a local partner, well implemented, it helps a lot in these discussions with local authorities. We would have been alone, Total Energies in front of New York State, I'm not sure we would have achieved.
Jim.
You guys have strong listen when you have a local partner well implemented its epsilon in these discussions with local authorities. We would have been the rule and total energies in front of New York State I'm not sure would have achieved the same result, so that concludes my strong belief renewable required to identify local partner and by the way.
Speaker 2: transcript
Speaker 2: the same results. So that comforts my strong belief that renewables are required to identify local partners, and by the way,
Speaker 2: transcript
Speaker 2: And as power is a very interesting partner for us in the future, including to develop maybe more business in the PGM.
And as for where it's a very interesting partner for us in the future including to develop maybe mill business.
PGM area, so that's that.
Speaker 2: transcript
Speaker 2: So that's this one, so for offshore wind.
This one so for offshore wind.
Speaker 2: transcript
Speaker 2: on the geopolitical risk. I'll explore you know when you look to a portfolio with a mint countries, but there are two countries from the maintain, which are contributing to the cash flow. By the way, yes, to come back on the year.
On the geopolitical risk or exposure you know when you look to our portfolio. We have many countries with our two countries fundamentals, which are contributing to the cash flow.
Jean-Pierre Spar: We recently achieved another milestone. Earlier this month, our sea green offshore wind farm in Scotland became fully operational, and is running at the design capacity of more than one gigabyte. This project was delivered with in budget, only 5% cost of a run, and is total energies biggest offshore wind farm globally. As rapid with CapEx and Shareholder returns, year-to-date net investments as of the end of the first quarter totaled $16.1 billion. As a reminder, we expect to receive cash proceeds from the sales of our Canadian assets and from the deal with alimentation costar in the fourth quarter.
By the way, yes to come back on the year.
Yes.
Speaker 2: transcript
Speaker 2: And the second question, capital employed out of $20 billion under production or in offshore wind, I think it's less than $2 billion today, probably 10%, 10% of the capital employed are in offshore wind today out of the $20 billion of the integrated power business. Just to give you an idea. And more or less, you know, in our prospective to 2030, 10% is more or less what we expect from offshore wind.
And the second question on capital employed.
220 billion under production or in the offshore wind I think it's.
There's been two today, probably like $2 billion or 10%, 10% of the capital employed INO four into the out of the $20 billion of the integrated business just to give you an idea and more as you know we know post pictures to prospective 2000, <unk>, 10% is more or less what we expect from offshore.
Yes.
Speaker 2: transcript
Speaker 2: So, geopolitical risk, two countries for us which are key are Abu Dhabi and Qatar, in fact. In reality, where the cash flow is coming from today, you have also Libya, which is out of the area, and to be honest, in Abu Dhabi, I think the geopolitical risk is limited.
So geopolitical risk do country as well as some chunky Abu Dhabi and in fact, when you really see where the cash flow is coming from today. We have over you are also Libya, which is out of it or to a to the area and to be honest in Abu Dhabi.
Jean-Pierre Spar: Therefore, we reiterate full year guidance of 16 to 17 billion dollars of CapEx this year. Our balance sheet is strong, our dealings slightly increased from 11.1% at the end of the second quarter to 12.3% at the end of the first quarter that is mainly due to the consolidation in our accounts of total earned debts. Proceeds from disposals should bring gearing back below 8% by end of the year. Over the last 12 months, Roache was 20.20% and return on equity was more than 22%.
The geopolitical risk is limited.
Speaker 2: transcript
Speaker 2: It's well controlled and Qatar also, I would say, so I'm not so, I really not when I think to what situation, which is a dramatic situation.
We'll control and it's also I would say so I am not so really when I think towards distribution, which is a dramatic situation I don't see too many I would say.
Speaker 2: transcript
I don't see too many, I would say,
Consequence of that.
Speaker 2: transcript
consequence for that. Of course we need to manage the situation to be fair in Iraq, of course, in Lebanon but it was only exploration. And so Egypt, I would say, or exposure is very limited in Egypt so I'm not considering that it's an issue for total energy, maybe for all of us. So that's I would say where I'm there.
Of course, we need to manage the situation to be in Iraq.
<unk>.
Whereas on the exploration.
And so in Egypt, I would say our exposure is very limited in Egypt, So I'm not considering that as an issue for total energy maybe followers. So.
Jean-Pierre Spar: In September, we raised our annual payout guidance from 35-40% of cash flow to more than 40%. We on track for 23, having paid out accumulates 43% for the third quarter. Our payout is a combination of ordinary dividends and buybacks. As we believe our stock, despite having reached historical high, this quarter is still undervalued by the markets. We bought back $6.1 billion stock through the third quarter and so we are well underway in executing our $9 billion buyback program for full year 23 as the board decided to allocate $1.5 billion of Canadian sales proceeds to the buyback program in 23.
I would say.
M&A will be six hour suddenly.
Speaker 2: transcript
M&A move, if things are worsening, the price of oil will go up and then we'll see what we'll do. But there's no M&A move linked to that situation for me in that period.
<unk> the price of oil will go up and then we left we see what we do with this new M&A needs to registration for <unk>.
In that period.
Very clear thank you.
The next question is from monarch Christian of J P. Morgan.
Please go ahead.
Hi, Good afternoon, gentlemen, thank you for having me I'll quick question.
Speaker 5: transcript
Hi, good afternoon gentlemen. Thank you for having me ask a question. The only question I would like to ask is just around your views around consolidation jump in terms of what
The only question I would like to ask is just around you.
Views around consolidation.
So what we're seeing in the U S.
Speaker 5: transcript
how would you read two parts? One, their sort of opportunistic chasing of growth in terms of volumes through their balance sheet as opposed to building organically. And then two, where does that position total energies in the upstream, median term, particularly if based on what they're doing it suggests that they are looking for oil as well as backing the back end of the curve?
How you would you read.
Two parts one.
Are there sort of opportunistic chasing of Greg in terms of volumes through through the balance sheet as opposed to building organically and then two where does that position total energies in the upstream.
Unknown Executive: This concludes my comments and now we can move to the Q&A.
The intent.
<unk> please.
Just on what Theyre doing it suggests that they are looking for oil as well as backing the back end of the curve. So to speak. So do you feel like you have a little bit of promo or you're very comfortable with the upstream growth in I guess the question.
Unknown Executive: Ladies and gentlemen, welcome to Total Energy's third quarter 2023 results conference call. We will now begin the question and answer session. As a reminder, if you wish to ask a question, please press star and one on your touchstone telephone and wait for your name to be announced. Please kindly mute any audio sources while asking a question. If you wish to cancel the request, please press star and two. Once again, please press star and one for questions. One moment for the first question.
Speaker 5: transcript
So do you feel like you have a little bit of phomo or are you very comfortable with your upstream growth and get the question?
I'm asking is why don't you feel the need to deconsolidation, particularly given you're building. These two pillars and building into scale. Thank you.
Speaker 5: transcript
I'm asking is why don't you feel the need to do consolidation, particularly given your buildings teachers and building interest scale? Thank you.
There'll be some as you know we don't have any we are not a position in the U S. So I think I understand that it may be consolidation in the U S. It's quite says put it industry understood industries, who have no comment, but it is not the case historically, you'll make you make consolidations when you have low price of the borrower to get synergies.
Speaker 2: transcript
To be honest, as you know, we are not a position in the U.S. So I think I understand that it might be consolidation in the U.S. with quite a spread in the industry, in the shale industry. So I have no comment, but it's not okay.
Oswald Clint: The first question comes from Oswald Clint of Bernstein. Please go ahead, sir. Thank you very much, both of you.
Speaker 2: transcript
Historically, you make consolidations when you have low price of the bowels to gain synergies, but the history of the industry. You are driven by a low price of bowels, price of synergies and scale, obviously generate synergies. And so you are trying to, but the history of the industry. We are not at all in that situation today. Price is brilliant. We are even at most of us at the top of our historical.
The story of our industry I know you are driven by a low price of our devices synergize as scale occupancies generate synergies and so you are trying to but the story of our industry. We are not at all in that situation today prices.
Oswald Clint: Two questions. The first one on the US offshore wind police attentive energy. It was a good press release this week. I just wondered if that was anywhere close to your own expectations for a project like that. I'm perhaps at this point you could say how much of your 20 billion dollars of capital employed in integrated power is currently in production. That's the first one.
The Oems we are even more.
Most of us at the top of our historical value. So I would say that.
Speaker 2: transcript
So I would say that's not what I would look for, honestly, and for total energy, we would not have diverse synergies in terms of...
That's what I would look for <unk> and for total synergies, we would not have neither synergies in terms of.
Speaker 2: transcript
So I think that's not for us the type of things we are looking. By the way, we have quite a strong and deep...
Operations, So all nor in terms of costs. So I think that's not for us the type of things. We are looking but we have a quite a strong and deep.
Speaker 2: transcript
We have a deep portfolio of projects in Olingas. I think it was what we presented to you, end of September . So I don't feel the necessity to add more on this one.
We have a deep portfolio of projects in oil and gas I think it was what we presented to you end of September So I don't see it as a necessity to add more on this one again, we mentioned that we might have to look to more shale gas in the U S for feeding and duration to be LNG, which we mentioned in September but sort of what I mentioned.
Unknown Executive: Secondly, I wanted to ask about geopolitical risks. , you always have your finger on the pulse and obviously I wanted to get a sense of how you're thinking about the portfolio risk at the moment, especially Middle Eastern exposure and whether any strategic changes or indeed M&A moves may be needed or may be considered if things were to worsen. Thank you. Thank you for the comments. Yes, we, as you know of your flow in the industry sometimes it's a question.
Speaker 2: transcript
Again, we mentioned that we might have to look to more shale gas in the US for feeding integration to the LNG, which we mentioned in September , but so what I mentioned. So I observe this move. It means that my colleagues are thinking that the price of oil will go, will remain high for a moment, so I'm happy.
So I observe this move it will but my colleagues are thinking about the price of oil will go will remain for a moment so I'm happy.
Speaker 2: transcript
what I can comment to you, but for us, I think we have a clear strategy, we execute the strategy, and let's be consistent.
What I can comment to you, but for US I think we have.
Clear strategy, we executed our strategy and.
Unknown Executive: So in fact, these are flowing, by the way, you know, in our portfolio, we had two good news in fact for me, these last weeks and so we wanted to share first, it's a green in Scotland, we managed to make that projects within 5% only of a run cost for billions. So it's quite a, it demonstrates that and we have a good CFD on secrets, we'll make money now from this point.
Let's let's be consistent.
Thank you.
The next question is from Lydia rainforest of Barclays.
Thank you and good afternoon.
Speaker 6: transcript
Thank you and good afternoon. Two questions if I could. One just following up on the virtual power plant acquisition from this morning.
If I could one just following up on the virtual power plant acquisition. This morning can you just walk us through.
Speaker 6: transcript
why that idea works in terms of potential power plants and just any indication on price on that. And then secondly, I think just in the, this was clearly seeing a lot of volatility on the gas market. Could you just walk us through what you think might happen over the winter?
Scott.
Yes.
Unknown Executive: So it's a monster that you can execute a no-flow in projects when you are good team. We have a good project team within the budget and I would say not much delayed, but in that case which of course are linked. So first comment, second comment on in New York, you know, yes, that's true, but we are and I think the nice said, even if we're not allowed to disclose what is the level of our price, you know, they mentioned an average price of around $145 megawatt or nominal and so you know you change your range compared to previous ones.
Special pipelines I, just any indication on price on that and then secondly, just.
Ladies and gentlemen volatility on the gas market.
From Deutsche Bank might have neither winter David Flores. Thank you.
Yes.
Okay.
Speaker 2: transcript
Okay. No, a virtual power plant, what is it? It's just integrated, you know, you can build assets, you can also aggregate some assets. And I think it's the idea that these quadruple are established, very strong. They are number two in the German market. They have been able to connect rich 4000, wind renewable developer in Germany, quite a large base, aggregating nine gigahertz, which is a big volume. Of course, with that, you can
Okay.
No virtual what is it just integrated.
You can build assets you can also aggregates of assets and I think it's the idea that this quarter. Our company has established a very strong we're number two in the German market.
Unknown Executive: And I think it is a lesson, I explain you last time, but of showing you need to have to be pragmatic, but what would be the cost and then you enter into a discussion in the US in particular of this type of price plus the 40% IRA are giving us good support and honestly you are quite good in your math. I would say I would have answered to you 12 to 15 so you are quite good in your math.
<unk> been able to connect and risk profile.
When the renewable developer in Germany, with a large base.
<unk> nine Gigawatts, which is a big volume of course with that you can trade it or you can even if you are pricing is and youll make through Europe and figure out what the margin out of it. It gives you access to some finger.
Speaker 2: transcript
trade it, or you can even if you are pricing it and you make
Speaker 2: transcript
through Europe , Megawater of margin, out of it, it gave you access to something.
You don't have any capital employed or more staffing in order to support an acquisition I would say of people or even the low end of knowledge. There is no asset so.
Speaker 2: transcript
You don't have any capital employed, almost nothing, you know, it's quite an acquisition, I would say, of people with know-how and knowledge, there is no asset. So I can mention to you that the price that we acquire is around $200,000 to $200,000.
Unknown Executive: Congratulations, so we can indeed develop a profitable showing projects based on equity and one of the key by the way people might be surprised by the level of price announced by the state of New York, which is much higher than before. So I can tell you one of the key has been to have among our partnership as we announced, we have introduced in the partnership, Croyo, which is all worldwide partner, but also LS power, which is a US company very well established in New York and again for me, very strong lesson when you have a local partner well implemented.
I can mention to you about the price that we acquired is around 200 to two <unk>.
Speaker 2: transcript
250 million euro. So it's not your expenses, but you have a lot of skills. You have access. It's a complement to our model. You know, we have some assets.
250 million Euro so it's not very.
Expenses, but do you have a lot of skills you are.
Have access as a complement to our model as you know we have some assets and we try to to complement it with again.
Speaker 2: transcript
And we try to complement it. We've again...
Speaker 2: transcript
a low capital employed base in order to develop the business and it gave us, again we explain you, in the integration it's important.
Luke Luke.
Low capital employed the base in order to develop the business and gave US again, explaining the integration it's important to have as sources of supply and when you have customers who may be intermediation. It gives you more flexibility for trading platform in Germany, Germany again as far as a it's an interesting market I repeat it.
Speaker 2: transcript
to have sources of supply and when you have customers you may be Intermediation it gives you a more Flexibility for trading platform in Germany. Germany again is for us of a it's an interesting market I repeat it this is for us one of the key target because It really is the mix will be renewable and gas plus. Yes, so that means quite a good price
Unknown Executive: It's absolutely in these discussions with local authorities, we would have been alone, total energies in front of New York state, I'm not sure would have achieved the same result. So that comfort my strong belief, renewable required to identify local partner and by the way, LS power is a very interesting partner for us in the future, including to develop maybe more business in the PGM area. So that's that's this one.
This is far as one of the key target because it really is the mix will be renewable and gas plus etfs. So that means quite a good price a lot of potential. So we are building step by step is our position in Germany and this one is interesting because we enter in a big way again, it's a number two.
Speaker 2: transcript
a lot of potentials. So we are building step by step our position in Germany and this one is interesting because we enter in a big way again.
Patrick Pouyann: So for of Schroen on the geopolitical risk or exposure, you know, when you look to a portfolio with a mint countries, but there are two countries fundamentally, which are contributing to the cash flow. By the way, yes, to come back on the, I don't know, and the second question, capital employed out of two 20 billion dollar under production or in of Schroen, I think it's less than two to the probably like two billion for ten percent.
Speaker 2: transcript
It's the number two of this market, and with a large base, 9 gigawatts, some PPA, some more short term. So I think it's an interesting way to progress in the integrated power strategy on this important market.
Is the market that we have a large base of nine gigawatts. Some PPA some more short term. So I think it is.
It's an interesting way to progress in the integrated product strategy on this important market.
Speaker 2: transcript
On the second one, volatility gas market for the winter, I don't know if it will be cold. Today, it's a little cold in Paris, to be honest, since the beginning of the week, even if I hope it will not be too cold for the final of the Rugby World Cup tomorrow, but of the day after tomorrow. No, but more seriously, you know, it's very volatile, you know, it's clear the market is in tension. I know, I'll be clear. There is no margin in this market. So each time you have a hiccup.
On the second one we're looking to get to market for the winter I don't know if it will be core to date surgical curtain varies to be honest since the beginning of the week.
Patrick Pouyann: Ten percent of the capital employed are enough for when today out of the 20 billion dollar of the integrated power business, just to give you an idea. And more or less, you know, in our prospections to prospective to 2030, ten percent is more or less what we expect from. Jean-Politik always do countries for us in Turkey, Abu Dhabi, in Qatar. In fact, when you are reality, we have a cash flow is coming from today.
And if I hope.
Two quarters, it's final.
The World Cup Tomorrow.
The rest of the day after tomorrow no more seriously.
Clearly volatile it's clear the market is intention.
There's no margin in this market. So each time you have a hiccup.
Speaker 2: transcript
You know, the strike in Australia, then you had the stoppage of the Tamar field in Israel, which was going to Egypt and back to LNG to Europe . Then you had, of course, this Baltic pipeline, and so each time you have a hiccup, poof, the market is taking almost 30-40% in a day. So that's super tension.
The strikes in Australia, when you add the <unk>.
To stop the stoppage of the tomo filled in Israel, which was going to Egypt and back to LNG to Europe. When you add of course is burdick, Despite <unk> pipeline and so each time you have a gap.
Patrick Pouyann: We have over, you have also Libya, which is out of the area. And to be honest, in Abu Dhabi, because I think the geopolitical risk is limited, but it's well controlled. And Qatar also, I would say, so I'm not so, I really, not when I think to what situation, which is a dramatic situation, I don't see, I'm not so, I really, when I think to what situation, which is a dramatic situation, I don't see, I'm not so, I'm not so, I really, when I think to what situation, which is a dramatic situation, I don't see, too many, I would say, consequence for that.
The market is taking almost 30% 40% in the data so that full because if you pay attention. So.
Speaker 2: transcript
So we always said that for this winter, by the way, the full world are more around $16.00 per million, but you still remain high. If, yes, the storage are full, but we don't have enough storage in Europe to go through the winter is a window.
We always said that.
Well this winter, but it's always a ford up more around $16 per million Btu, we still remain.
Yes, just a range of food, but we don't have enough storage in Europe to go through the winter is the window is it's not only me. It is by the IEA recently so in any event in this condition is pushing there is putting the price up knowing that you noticed as well.
Patrick Pouyann: Of course, we need to manage the situation to be fair in Iraq, of course, in Lebanon, but it was only exploration. And so an Egypt, I would say, or exposure is very limited in Egypt. So I'm not considering that it's an issue for TotalEnergies, maybe for always. So, that's, I would say where I'm there.
Speaker 2: transcript
that only me is repeated by the idea recently. So any event in this condition is pushing, is putting the price up, knowing that you notice as well, that the Asian buyers are back in the energy business. They are back today, the GKM is TTS first to $2.3, which means that in fact, they are ready to buy. And today most of the cargo are going to Asia because the spot market is in favor of Asia. So you might have in this type of market more.
Asian buyers are back in the LNG business.
Patrick Pouyann: MNA move, he thinks our son, you know, he thinks our sonning, the price of all will go up and then we'll have to see what we'll do, but there's no MNA move into that situation for me in that period. Tipper, very clear. Thank you.
Today, the <unk> Cta for two to $3, which means that in fact, we are ready to buy and today. Most of the cargoes are going to Asia, because the spot market in favor of Asia.
In this type of market.
More coolers for LNG coming from Asia. So we've put them in an additional attention on this.
Speaker 2: transcript
called for energy coming from Asia, so it put an additional tension on this energy market. So let's see, okay, the weather will be important again. And again, if there is any, it's clear that if you have like one year ago, one or two years ago, an event like in Freeport on one plant, this will be obviously immediately reflected in the gas market.
Alec Christian: The next question is from Alec Christian of JPMorgan. Please go ahead. Hi, good afternoon, thank you for having me ask this question. The only question I need to ask is just around your views around consolidation jump air in terms of what we're seeing in the US. How would you read two parts? One, they're sort of opportunistic chasing of growth in terms of volumes through through their balance sheet as opposed to building organically and then two.
Energy markets, so let's see.
Alec Christian: Where does that position total energies in the upstream medium term, particularly if based on what they're doing, it suggests that they are looking for as well as backing the back end of the curve. So, do you feel like you have a little bit of phomo or are you very comfortable with the upstream growth and I get the question. I'm asking is why don't you feel the need to do consolidation, particularly given your buildings, Tipper, and building interest scale. Thank you.
Okay as a waiver will be important again and again if there is any year, it's clear that the issue of like one year ago, when that three years ago and even like in report on one brand. This will be obviously immediately reflected.
In the gas market. So that's why again generally we are wrong on the future, but this attention I'm sure. There is the market guest marketing the attention today.
Speaker 2: transcript
So that's why again, generally we are wrong on the future, but the tension I'm sure there is a guess sanitation.
Okay.
The next question is from Mccann.
Goldman Sachs.
Speaker 7: transcript
Thank you very much. I wanted to ask two questions if possible. The first one is back to M&A but thinking of it more counter-cyclically. Energy prices are quite high, a lot of companies are consolidating. I was wondering if this could actually be a good time to dispose of some of the E&P assets that may be more marginal to your portfolio and maybe again going counter-cyclical in some of the energy transition assets that have substantially derated over the last year. And then remaining on the theme of clean tech and renewables, congratulations on the very consistent delivery of earnings out of cash flow. I was wondering if you could perhaps unpick a little bit for us the half a billion dollars you make in integrated power per quarter between renewable CCGTs and trading, definitely highlighting the integrated nature of the business but also perhaps helping us to understand a bit more the scale of those different moving parts. Thank you.
Thank you very much.
Two questions if possible.
First one is back to M&A, but thinking of it more counter cyclically.
Energy prices are quite high a lot of companies are consolidating I was wondering if this could actually be a good time to dispose of some multi E&P assets that may be more margin or to your portfolio and maybe again going counter cyclical in some of the energy transition assets that have substantial deteriorated over the last year.
Patrick Pouyann: To be honest, as you know, we don't have any, we are not a position in the US, so I think I understand that it might be consolidation in the US with quite such pretty industry in the shared industry, so I have no comment, but it's not okay. Historically, you make you make consolidations when you have low price of the bowel to gain synergies, but the history of our industry, you know, you are driven by a low price of bowel, price of synergized and scale, obviously generate synergies and so you are trying to, but the story of our industry, we are not at all in that situation today.
Then remaining on the theme of clean Tech and renewable is congratulation on the very consistent delivery of earnings of cash flow I was wondering if you could perhaps peak a little bit for us.
As a billion dollar you make.
Integrated power per quarter between renewable <unk> and trading definitely highlighted the integrated nature of that business, but also perhaps helping us to understand a bit more of the scale of those different moving parts. Thank you.
Patrick Pouyann: Price is brilliant, we are even at most of us at the top of our historical value, so I would say that's not what I would look for. Honestly, I don't have, and for total energy, we will not have nervous synergies in terms of operations or nor in terms of course, so I think that's not for us the type of things we are looking.
Yeah on the second question original care I mentioned.
Speaker 8: transcript
On the second question, I think Jean-Pierre mentioned that it was coming from three segments, renewables, flexible asset strategies and trading, and also a marketing business, by the way. So the supply business to customers is also positive. So consider that it's coming from all of them. So everything is contributed to this integrated power and in a positive way.
That's coming from various segments.
The new way boards.
64 assets as it is in trading and also marketing business by the way.
Patrick Pouyann: By the way, we have quite a strong and deep, we have a deep portfolio of projects in only gas, I think it was what we presented to you end of September, so I don't feel the necessity to add more on this one. Again, we mentioned that we might have to look to more share gas in the US for feeding integration to the energy, which we mentioned in September, but so what I mentioned, so I observe this move.
So the supply business to customers is also positive so consider that is coming from all of them.
So everything has contributed to these integrated power.
In a positive way.
Speaker 2: transcript
That's what I can just explain to you. On the... On the...
That's what I can explain to you.
Yeah.
Yes.
On the.
The first question.
Patrick Pouyann: It means that my colleagues are thinking that the price of all will go will remain high for improvement, so I'm happy that what I can come into you, but for us, I think we have a clear strategy, we execute the strategy and let's be consistent. Thank you.
Speaker 2: transcript
It's clear, as you know, that I'm a strong believer that in M&A it's better to be counter-psychical than to be pro-psychical. That's very clear. That's for me, in this business, the commodity business, where you have cycles, I mean, you take a risk when you make an acquisition at the top. So yes, you are right on E&P, but by the way, we've just done it.
It is clear as you know with the strong deliver between M&A is better to become a second cohort to be pro cyclical that's very clear.
That's for me.
This is a business the commodity business, where you have cycles.
You take the risk when you make a.
Sure.
Bob.
So yeah.
Yes, you are right on E&P, but we've just done it I'll remind you that we just divested or Canada.
Lydia Rainforth: The next question is from Lydia Rainforth of Berkeley.
Speaker 2: transcript
I remind you, Michele, that we just divested our Canadian Sands assets at the top of the market and we received $4.4 billion plus an extra amount next year of $400 billion, so I'm happy. It's a good value for these assets and so we've done it, we've just done it.
<unk> is a top of the market.
Lydia Rainforth: Thank you, and good afternoon, two questions, if I could. We're just filling up on the virtual power plant acquisition from this morning. Can you just walk us through why that have idea of works in terms of facial power plants and just any indication on price on that? And then secondly, I mean, just in the, this is clearly thing a lot of volatility on the gas market. I'm just walking through what you think might happen over the winter period for us.
We received four point.
Unknown Executive: Thank you.
$4 billion represent next now next year $400 million elsewhere might be I'd say, it's a good value of these assets and so we've done it we've just done it we.
Speaker 2: transcript
We have cleaned a lot the portfolio since 2015, we rotated a lot, we have cleaned a lot, but that doesn't mean that I don't think we have a lot of wants. We might have, as I said, some quite, you know, but...
Clean a lot of the portfolio.
Since 2015, we've rotated a lot we are clean a lot of it does not mean that I don't think we have a lot of what we might offer as I searched for quite.
Some exposure, which are high on some countries like for example, Nigeria yard, where we want to continue to invest where we might be willing to use that enrollment to reshape the Nigeria portfolio are not today.
Speaker 2: transcript
So exposure which are eye on some countries, like for example Nigeria, and where we want to continue to invest, we might be willing to use that environment to preserve the Nigeria both for you. I'm not very, the old entrepreneur in Nigeria for me is...
Patrick Pouyann: Okay, no, virtual power plant, what is it? It's just integrated, you know, you can build assets, you can also aggregate some assets. And I think it's the idea that these quadruple as established is very strong. We are number two in the German market. They have been able to connect rich 4,000 wind renewable developer in Germany, quite a large base, aggregating nine gigahertz, which is a big volume. Of course, with that, you can trade it or you can even if you are pricing it and you make through Europe a megawatt out of margin out of it. It gave you access to something. You don't have any capital employed or most of it, you know, it's a quiet acquisition. I would say of people with no knowledge, there is no assets.
The overall onshore Nigeria for me.
Speaker 2: transcript
many issues about the type of assets and it's a good environment to monetize them if we find some buyers, of course, but that's part of things we could do. But we have clean, I would say, the portfolio in terms of most of the portfolio today are in the definition of low cost, low emissions, the work has been done. So it's more optimizing things in some countries where we could do.
<unk> has been an issue. So that's the type of assets that it's a good environment to monetize them. If we find some buyers of course.
Thats part of things, we could do better.
We have cleaned out the portfolio in terms of most of the portfolio today in the definition of low cost low emissions has been a really.
The work has been done so it's more optimizing things in some countries, where we could do and I would prefer for them for example to be a higher stake would be our operator, Emily to overstate, where we are not operating so we've got a non operated position to diversify to hint to reinforce I would say when we are operator in control of our future.
Speaker 2: transcript
And I would prefer from, for example, to be a higher stake when we are operator and many lower stake when we are manipulating. So if we are not operated position to diversify them, to reinforce them.
Patrick Pouyann: So I can mention to you by the price that we acquired around 200 to 250 million euro. So it's not your expenses, but you have a lot of skills. You have access. It's a compliment to our model. You know, we have some assets and we try to compliment it. We have, again, low capital employed the base in order to develop the business and gave us again, we explain to you in the integration.
Speaker 2: transcript
when we are operator in control of our future, I like to be more in control of our destiny, rather than just being an unoperated company, even if it's operated by a large peer. And then the other question, of course,
I would like to be more in control of our destiny, rather than just being a non operated the company.
Even if it's operated by your large peer.
And then.
The other question of course that you mentioned is about.
Speaker 2: transcript
the transition assets. You know, today, or priority, and I think what we've done this morning with quite a interesting is more as I explained to you in September to compliment.
Transition assets today.
Patrick Pouyann: It's important to have sources of supply and when you have customers, you may be intermediation. It gave you a more flexibility for a trading platform in Germany. Germany, again, it's for us. It's an interesting market. I repeat it. This is for us one of the key target because it's really as a mix will be renewable and gas plus ETS. So that means a quite a good price. A lot of potentials. So we are building step by step opposition in Germany.
Today, our priority and I think what we've done this morning's quarter agonist rates is more as I explained to you in September to complement.
Speaker 2: transcript
Infant key markings.. You son.. Positive acquisition
In some key markets through some targeted acquisitions I mentioned, either takes us flexible assets in Texas gas fired power plants will come one of these days.
Speaker 2: transcript
I mentioned the Iowa Texas flexible assets in Texas gas fire plants will come on of this day Or what we've done in in in Germany with this Quarroir we might look to rather than making a bigger position because if you even if it's derated It's still I
What we've done in Spain, and Germany, with this quarter or we might look to rather than making a big acquisition because if you even if its the ratio is still high.
Patrick Pouyann: And this one is interesting because we enter in a big way again. It's a number two of these markets and with a large base, nine gigawatts from PPA, some more for term. So I think it's it's an interesting way to progress in the integrated power strategy on this important market.
Speaker 2: transcript
So I think it could go even lower and lower. So, and honestly, when you think, for example, to offshore wind.
So I think it could go even lower and lower so.
When do you think for example to offshore wind.
Speaker 2: transcript
I mean, I'm very happy to build ourselves a portfolio.
I'm very happy to build offset for portfolio we have.
Speaker 2: transcript
Exactly is the one in New York where we control what we do. We are part of the, we'll be covered by CFD, part of it will be merchant. So that's better for us because again, our strategy is not to acquire portfolio of fully secured renewable assets with no upside. It's not what we describe to you. So I think it's better to continue and to deliver our strategy with the way we explain to you at the end of September . Thank you.
Exactly as the one in New York, where we control what we do.
Part of the <unk> will be covered by Cfd part of it will be merchants or better for it because again our strategy is not to acquire portfolio of fully secure the renewable assets with no upside is not what we described to you. So I think it's better to continue and to deliver our strategy where we are.
Patrick Pouyann: On the second one, electricity gas market for the winter, I don't know if it will be cold today. It's a little cold in Paris to be honest since the beginning of the week. Even if I hope it will not be too cold for the final of the will be well kept tomorrow, best of the day after tomorrow. Now, but most seriously, you know, it's very volatile. You know, it's clear with the market is intention.
Turning to you end of September.
Thank you.
The next question is from adding Humana.
Patrick Pouyann: You know, it be clear. There is no margin in this market. So each time you have a pickup, you know, the strike in Australia, then you add the top stoppage of the Tamil field in Israel, which was going to Egypt and back to an engine to Europe, then you add, of course, this Baltic this Baltic pipeline. And so each time you have a pickup proof, the market is taking almost 30, 40% in the day.
Jay.
Speaker 9: transcript
Thank you very much. Good afternoon. The two questions please. You formed a new joint venture with Adani Green in India during the quarter. Earlier this year when there was the financial crisis with the Adani Group.
Thank you very much good afternoon.
Two questions. Please.
For the new joint venture with Adani Green in India during the quarter.
Early this year when there was the financial crisis with the Adani Group I think you had said that you would likely slow down that Indian expansion and wait for the outcome can we presume that you are satisfied with that groups.
Speaker 9: transcript
I think you had said that you would likely slow down that Indian expansion and wait for the outcome. Can we presume that you're satisfied with that group's financial situation and therefore back to normal in terms of total continuing to invest?
Patrick Pouyann: So that's full, but it's super dangerous. So we always said that for this winter, by the way, the forward or more around $16 per minute, you still remain high. If yes, the storage are full, but we don't have enough storage in Europe to go through the winter is a winter school. It's not only me, it's repeated by the idea recently. So any event in this condition is pushing is putting the price up, knowing that you notice as well that the Asian buyers are back in the energy business.
Financial situation and therefore back to normal.
Normal in terms of.
Continuing to invest.
Speaker 9: transcript
in Indian renewables. And then the second question on chemicals where this is the week in the sea, your nine month volumes are down, when you look at the balance.
In India in renewables and then.
The second question on chemicals, obviously weak industry, you're nine months volumes are down when you look at the balance of.
Patrick Pouyann: They are back today, the GKM is TTS first to $2,000, which means that in fact, they are ready to buy and today most of the car goes are going to Asia because the spot market is in favor of Asia. So you might have in this type of market more cool for energy coming from Asia, so it put them in an additional tension on these energy markets.
Speaker 9: transcript
capacity versus this weak demand picture, what is your expectation for that business over the next year?
New capacity.
Weak demand picture what is your expectation for that business.
Over the next year.
Okay.
Speaker 2: transcript
OK, on India, I think, again, what we said in the beginning of the year is that we wanted to have clarity on the situation. We have engaged with Adani Group. You have noticed that what we've done, in fact, for me, you should make a difference between we are a shareholder of Adani Green, not of Adani Group. Adani Green is a strong company with a large base of assets. The question for us is how do we continue to contribute to the development of Adani Green?
Okay, and yes, I think again, what we said in the beginning of the year is that we wanted to have a clarity on the situation we are engaged with.
And then a group.
Is that what we've done in fact from Tony you should make a difference between shareholder of either the Green Nova Adani group at an Iraqi other diseases.
Patrick Pouyann: So let's see, okay, the weather will be important again. And again, if there is any year, it's clear that if you have like one year ago, one and three years ago, an event like in report on one plant, this will be obviously immediately reflected in the gas market. So that's why again, generally we are wrong on the future, but the tension I'm sure there is a gas market in the attention.
Unknown Executive: Thank you very much.
Wrong company with a large base of assets. So a question for US is do we continue to contribute to the development of the new Green.
Speaker 2: transcript
We could do what we have elected is to do it for GV between other things in ourselves. So let's be clear, this is a venture where we have direct access to the asset.
We could do it.
We have elected is to do it for GB between additives in an offset so let's be clear this is adventure.
We have direct access to the assets, which is fundamental so is not putting we didnt put more money in a dining room as a shorter but we made it in Irvine, we contribute to the development that has been making access direct to the asset so for me.
Speaker 2: transcript
So it's not putting, we didn't put more money in a dining room as a shoulder, but we made it and we opened, we contribute to the development of the green making access direct to the asset. So for me, but I don't even as a portfolio, we share part of this portfolio, the equivalent of 1.4 gigawatts together, but 50% of it being owned by total energy.
Unknown Executive: I wanted to ask two questions if possible. The first one is back to MNA, but thinking of it more down to secretly, energy prices are quite high. A lot of companies are consolidating.
And then the other portfolio we share part of this full portfolio the equivalent of one four.
Gigawatts together, but 50% of it being owned by total energy. So total energy is protected and I think it's also good to consolidated has agreed to continue its growth, which is as a shareholder whether we win or interest.
Unknown Executive: I was wondering if this could actually be a good time to dispose of some of the EMPI. I was wondering if you could perhaps unpick a little bit for us. The half a billion dollar you make in Integrity Power per quota between renewables and renewables. This is a global CCGT's and trading.
Speaker 8: transcript
is protected and I think it's also good to consolidate at a degree to continue with growth which is as a shareholder of a degree or interest. That's the first point and we are I would say
That's the first point and.
We are I would say.
Speaker 8: transcript
The conditions in which we have discussed that deal are attractive in terms of metrics for total energies as a company. On the chemicals in Europe , you know that we know that chemicals in Europe are clearly
The conditions in which we have discussed that deal attractive in terms of metrics for total energies.
As a company on the chemicals in Europe.
But we know that chemicals in Europe are clearly.
Speaker 8: transcript
quite linked to GDP. You know the GDP in Europe is softening, more than that, so you have less demand in Europe .
Quite linked to <unk>, and you know where the GDP Europe is softening more than that so you have less demand in Europe. So like it but it was very good two years ago today.
Patrick Pouyann: Definitely highlighting the integrated nature of that business, but also perhaps helping us understand a bit more of the scale of those before moving parts. Thank you. All of them, so everything is contributed to this integrated power and in a positive way.
Speaker 8: transcript
So it was very good two years ago, today it's the reverse of it.
The reverse of it.
Speaker 8: transcript
So that part of the value chain or exposure to Europe in chemical course is not so strong I mean the DKF also polymer sparta Compared to the other part because in fact what we we make more money on refining and on NAFTA we make less money on the picture chemicals in Europe
So that's part of the value chain.
Our exposure to Europe chemicals is not so strong I mean, <unk> is a 40 minute sparta compared to vehicle because in fact, what we we make more money on refining and NAFTA, we make less money on the petrochemical orders in Europe.
Speaker 8: transcript
The strategy, by the way, is not to develop any new capacity in Europe , to be clear. We did not announce...
The strategy by the way is not to develop any new capacity in Europe to be clear, we did not announce things since I am.
Speaker 2: transcript
I think since I have been in charge of refining and chemical.
I've been in charge of refining and chemicals.
Speaker 8: transcript
Twelve years ago, I don't think you announced a single weak-fuck-a-pacity in chemicals of the technology in Europe .
12 years ago, I don't think you announce a singularly truck capacity in chemicals or fertilizers in Europe.
Patrick Pouyann: That's what I can just explain to you on the first question. It's clear that you know that a strong believer that in MNA, it's better to become a secure one to be prosecuted. That's clear. That's for me.
Speaker 8: transcript
you have even more listen to either closing or selling some of them. So I don't think it's the best place to invest to be clear. All the strategy in chemical total energies has been more either based on chip-fit stock, either in the US or in Saudi Arabia with Amir, but Amir is targeting markets in China, India, on the east. So that's where I was a demand is. So I would say for total energies, in fact it's more managing the...
<unk> has even more reason to either closing or selling some of them. So I don't think it's the best place to invest to be clear all of the strategy in chemical <unk> energy has been more based.
Based on cheap feedstock either in the U S or in Saudi Arabia, we've got in yard, but I'm yard is targeting markets in China, India on the east, So thats, where our where the demand is so I would say further that energy is in fact, it's more managing the.
Patrick Pouyann: In this business, the commodity business where you have cycles, I mean, you take your risk when you make acquisition at the top. So, yes, you are right on EMP, but by the way, we've just done it. In mind, you may get it, but we've just divested our Canadian cents assets at the top of the market and we receive 4.4 billion dollar plus an extra amount next year or 400 million dollars. We also are mapping. It's a good value for these assets and so we've done it. We've just done it.
Speaker 10: transcript
the history, the historical portfolio, in the best possible way. Again, when I'm looking today to our position refining petrochemicals and polymers in Europe , that is quite positive today. By the way, it contributes to a good return on capital employed. So that's what I could comment. For next year, I don't expect much more. Okay. The next question.
The story the story for portfolio in the best possible way.
Again, when I am looking to the two miles to our position in refining petrochemicals and fully moves in Europe, but is quite positive today versus what it contributes to a good return on capital employed so that's what I could comment.
Patrick Pouyann: We have cleaned a lot the post for you. In the last since 2015, we've rotated a lot. We have cleaned a lot, but that's not mean that I don't think we have a lot of wants. We might have, as I said, some quite, you know, but some exposure, which are eye on some countries, like, for example, Nigeria. And where we want to continue to invest, we might be willing to use that environment to push up the Nigeria port for you. So, I'm not very, the old onshore in Nigeria for me is many raised many issues, but the type of assets and it's a good environment to monetize them if you find some buyers, of course.
For next year I don't expect much more okay.
The next question is from Bill.
Yes.
Hi, Thanks for taking my questions two quick ones. Please the first one is on.
Your your debt profile could you just confirm what proportion of your gross debt is on long term fixed interest rates.
And then the second question is on the recent U S.
Speaker 11: transcript
US wind bed. There's a provision in the PTA that just goes up with
When bid.
Patrick Pouyann: That's part of things we could do, but we have cleaned, I would say, the portfolio in terms of most of the portfolio today are in the definition of low cost, lower emissions have been really, the work has been done. So, it's more optimizing things in some countries where we could do and I would prefer from, for example, to be a higher stake when we are operator and many lower stake where we are manipulating.
<unk> in the PPA that suggest the.
It goes up with it.
Industry specific inflation.
I was wondering what you are seeing.
Creation wise for that kind of project from here. Thank.
Thank you.
Yes, perhaps I'll take the first question more than 80% of our debts has been fixed.
Speaker 3: transcript
Yes, perhaps I will take the first question. More than 80% of our debt has been fixed.
Speaker 3: transcript
Couple of years ago, so that means that we benefited on that portion from very low coupon around 3%. And so the remaining is expected.
The goal so that mean that we benefited on that portion from very low coupons around 3% and so the remaining is is flexible.
Patrick Pouyann: So, if we are non-operated position to diversify them, to reinforce, I would say, when we are operator in control of our future, I like to be more in control of our destiny rather than just being a non-operated company, even if it's operated by a large peer.
Speaker 8: transcript
Clear answers is quite clear, but you know we have within today and the FID we have more probably three years to work. So you will have inflation of the next three years so it might be I think.
Clear answer second answer is quite clear, but no we have within to the NDA Friday, we have more poorly three years to work. So you will have inflation over the next three years, so it might be I think.
Patrick Pouyann: And then the other question, of course, that you mentioned is about the transition assets. You know, today, our priority, and I think what we've done this morning is quite our industry, is more as I explain to you in September to complement. , Instanti Market, some targeted acquisitions, I mentioned, I will text us, flexible assets in Texas, gas fire, poor plants will come on of this day, or what we've done in Germany, with Viscuaroa, we might look to rather than making a big acquisition, because even if it's derated, it's still I, so I think it could go even lower and lower, so, and honestly, when you think, for example, to offrow in, I mean, I'm very happy to build all sets for portfolio, with exactly the one in New York, where we control what we do, we are part of the, we'll be covered by CFD, part of it will be merchant, so that's better for it, because again, our strategy is not to acquire a portfolio of fully secured renewable assets with no upside, it's not what we describe to you, so I think it's better to continue and to deliver our strategy, the way we explain to you at the end of the tender.
Speaker 8: transcript
Let's say 5% to 10% probably in the three years. We'll see. But again, there is a provision which, I would say, protects us until the FID. Then, of course, we take the risk of execution. But I think it's a fair protection, which is offered by the New York state to the investors. So it's one of the elements of the bid and of the discussion negotiation we managed to obtain. So we are satisfied. Again, we'll see if it's higher than that. We don't expect much more than that.
Let's say, 5% to 10% probably in the.
For years, we see but again, there is a provision which prove up which I would say.
Irene Himona: Thank you. The next question is from Irene Hemona of Societies General.
Protect us and <unk> and of course, we've taken the risk of execution, but I think it's a fair theft protection.
Is offered by the New York State to be investors. So we will it's one of the.
Elements of the of the bid of the discussion negotiation, we managed to obtain so we are we are satisfied again, we see if its higher than that but we don't expect much more than that.
Okay very clear thank you guys.
The next question comes from Martin Rats of Morgan Stanley.
Speaker 1: transcript
The question comes from Martin Rack as Morgan.
Yes, Hello, I just want to follow up on the question that <unk> asked about the debt.
Speaker 12: transcript
Yeah, hello. I just want to follow up on the question that the branch actually just asked about the debt.
Interest rates continue to rise and ryzen to Tal bonds are not escaping that some of the longer term debt that youll, just now sort of yielding 6% International wondering in addition to the mechanical impact that this might have on the interest expense every quarter how this effect.
Speaker 12: transcript
Interest rates continue to rise and rise and total bonds are not escaping that. Some of the longer term debt that you hold is now yielding 6%. And I was wondering.
Speaker 12: transcript
In addition to the mechanical impact that this may have on the interest expense every quarter, how does effect possibly any investment decision making, particularly in the new energy areas? I mean, the question has been put to me, can we have an energy transition when US Treasury yields? The 10-year US Treasury yields are 5 percent, and it's kind of a sort of an intriguing one. Therefore, I can ask you how are these rising interest rates impacting your investment decision making?
Possibly person any investment decision, making particularly in the new energy areas.
I mean, the question has been put to me can we have an energy transition when U S. Treasury yields to the 10 year U S. Treasury yields are 5% and it's kind of a sort of an intriguing one.
Therefore can I ask you how how are these rising interest rates impacting your investment decision, making and also what are you seeing.
Irene Himona: Thank you very much, good afternoon. The two questions, please, you formed a new joint venture with Adani Green in India during the quarter. Earlier this year, when there was the financial crisis with the Adani group, I think you had said that you would likely slow down that Indian expansion and wait for the outcome. Can we presume that you're satisfied with that group's financial situation and therefore back to normal in terms of total continuing to invest in Indian renewables?
Speaker 12: transcript
What are you seeing in others, particularly in sort of CapEx-intensive areas like renewables? What's the impact that you're seeing?
Others, particularly in sort of capex intensive areas like like renewables.
What's the impact that Youre seeing.
Speaker 8: transcript
And so it's quite clear, you transfer the interface to the customer.
So it's quite clear are you transfer the until its way to the customer.
Speaker 8: transcript
I will tell you at the end, so the question is, does it affect the space of the transition? It might, but it's clear that it's against the idea that it can contribute maybe by the way to have a segment which will stop going, price going down and down, but it has already an impact. In fact, I can tell you, in fact, in the US, you know, I take the US as a good example, you have the IRA on one side, which has, but we also have the obligation to make projects which we've.
Yes.
So the question is does it affect the space of the transition it might with its three of it.
It's against the idea that any concrete contribute maybe by as a way to have a segment, which will stop growing prices moving down into what it is.
Already an impact in fact I can tell you in.
Patrick Pouyann: And then the second question on chemicals where this is a week in the see your nine month volumes are down, when you look at the balance of new capacity versus this week demand picture, what is your expectation for that business over the next year? Thank you. Okay, I think again what we said in the beginning of the year is that we wanted to have a clarity on the situation. We are engaged with the Adani group.
In fact in the U S.
<unk> is a good example, <unk> on one side, which is what we also have the obligation to make projects with.
Speaker 8: transcript
but solar modules being manufactured in the US it has an impact on the cost of the project
Solar modules being manufactured in the U S. It doesn't impact on the cost of the project. So this cost of the project today, where we discuss in renegotiation basically renegotiate ppas with all customers. It has an impact on the high side and also today you signed the last PPA. We signed this recently with <unk> in the U S is reflecting.
Speaker 8: transcript
So this cost of the project today, when we discuss and renegotiate PPAs with our customers, it has an impact on the high side, you know. So today you signed the last PPA, we signed this recently with Saint-Gobain in the US, is reflecting, let's be clear, a higher cost of manufacturing in the US and a higher interest rate. We don't use the 3% of total energy for when we...
To be clear.
Patrick Pouyann: You have noticed that what we've done, in fact from Pomi, you should make a difference. But we are sure of Adani Green, Adani Group. Adani Green is a strong company with a large base of assets. The question for us is how do we continue to contribute to the development of Adani Green? We were what we have enacted is to do it for GV between Adani Green and all of that. So let's be clear, this is a venture where we have direct access to the assets, which is fundamental.
Cost of manufacturing in the U S interest rate because when we did we don't use a 3% of total energy for when we price a project in the <unk> as you know we are pricing a INR, one which makes it makes us more profitable we compete with people. We've got we have competitors, which in fact.
Speaker 2: transcript
price project in the renewables. You know, we are pricing a higher one, which makes us more profitable. We compete with people, we have competitors, which have, in fact, a higher cost of that.
Our cost of debt. So we use their cost of debt that we were maybe we benefit from that to win the deals, but we keep the difference for us in fact as a company. So I would say, yes, youre right it might FX as a base, but you know I think.
Speaker 2: transcript
So we use their cost of debt and we may be benefit from that to win the deals, but we keep the difference for us in fact as a company. So I would say yes, you're right, it might affect the pace.
Patrick Pouyann: So it's not putting, we didn't put more money in Adani Green as a shoulder, but we made it and we opened, we contribute to the development of the green making access direct to the asset. So for me, but Adani Green as a put for you, we share part of this for for you, the equivalent of 1.4 gigawatts together, but 50% of it being owned by total energy. So total energy is protected, and I think it else will go to consolidate Adani Green to continue with growth, which is as a shoulder of Adani Green or interest. That's the first point, and we are, I would say, in the conditions in which we have discussed that they are attractive in terms of metrics for total energies as a company.
Speaker 2: transcript
But, you know, I think we are we are back in a normal world. It's much better for the world.
We are we are back in a normal world.
It's much better for the world economy to have a <unk>.
Speaker 2: transcript
5% interest rates were rather than 0% I think in particular for all companies owning gas companies with a strong balance sheet and cash delivery I think it's we have it was for me the anomaly were during five ten years having the 0% world after the 2008 crisis was which we the committee but for me it was more the anomaly than the contrary so I think for me it's a new normal we have to integrate it
5% interest rates will rather than zero percent I think in particular for companies owning gas companies with a strong balance sheet and cash delivery year.
Thank you.
It was for me the anomaly you were doing 510 years with zero percent.
After the 2000, each project was a which will absorb it had been the Covid before me, but more of the anomaly vendor control is I think for me, it's a new normal we have to integrate it.
Speaker 2: transcript
It will have an impact probably of course on the competitor which have a very
It will have an impact poorly.
Of course on the competitor, which have a very.
Jean-Pierre Spar: On the chemicals in Europe, we know that chemicals in Europe are clearly The GDP in Europe is happening more than that, so you have a less demand in Europe, it was very good two years ago today, it's a reverse of it, so that's part of the value chain, or exposure to Europe in the chemical, it's not so strong, I mean the D.K.F.O, it's a polymer sparta compared to the other part, because in fact what we make more money on refining and on NAFTA, we make less money on the petrochemicals in Europe, all of strategy by the way is not to develop any new capacity in Europe to be clear, we did not announce, I think since I have been in charge of refining in chemicals 12 years ago, I don't think you announced a single capacity in chemicals of the technology in Europe, I think you have even more listen to either closing or selling some of them, so I don't think it's a best place to invest, to be clear, all the strategy in chemical total energies has been more either based on chip-fits stock, either in the US, or in Saudi Arabia with Amir, but Amir is targeting markets in China, India, on the east, so that's where I was a demand is, so I would say for total energies, in fact it's more managing the history, the historical portfolio in the best possible way, and again when I'm looking today to my to our position refining petrochemicals and polymers in Europe, all that is quite positive today, as it contributes to a good return on capital employed, so that's what I could comment. For next year, I don't expect much more, okay.
Speaker 8: transcript
We have more leverage than us, and from this perspective, the strength of the balance sheet of total energies is an effect.
We have put more leverage on us and from this perspective, the strength of the balance sheet. The total energy is an asset and I think that's why we continue to.
Speaker 8: transcript
And I think that's why we continue to, part of the cash flow, we continue to strengthen the balance sheet.
Part of the cash flow, we continue to strengthen the balance sheet.
Very clear thank you.
The next question is from Lucas Herrmann of BNP Paribas.
Speaker 5: transcript
Yeah, thanks very much, gentlemen. A couple of straightforward ones, I think. Firstly, just on your reporting for the last five, as long as I can remember actually, Patrick, 20 odd years, divisions may have changed, but your reporting methods has always been consistent on a quarterly basis. And yet, today, you've elected to alter it. I'm just wondering whether there was any particular reason that you're just closing more around cash or other items with the things that you were trying to amplify to us.
Yes, thanks, very much gentlemen, a cup.
Straightforward ones I think firstly just on your reporting.
As far as I was hoping if I can remember actually Patrick 20 odd years divisions may have changed but you're reporting method has always been consistent on a quarterly basis.
Today, you've elected to alter it I was just wondering whether there was any particular reason that your.
Disclosing more around cash or other items with the things that you were trying to emphasize to us.
Speaker 13: transcript
The second question, just staying with that, some of the adjustment items. In integrated power, I noticed that there's a 400, 420 odd million asset impairment provision charge taken this quarter. If you could provide some further detail on what that impairment concerns. That's it. Thank you.
Second question, just staying with that.
Some of the adjustment items and an integrated power analysis.
400, 420 odd million asset impairment.
Provision charge taken this quarter, just if you could provide some further detail on what that impairment concerns. That's it. Thank you.
On the second one is Richard.
Speaker 8: transcript
I think this presents that we have impaired some of the goodwill when we made some acquisitions linked to customers, in fact.
I think this business that we have impaired some of the goodwill when we made some acquisition linked to our customers in fact, because in fact, when we made the acquisition of some of these smaller square mall companies are worst, but both are of goodwill was allocated to the.
Speaker 2: transcript
Because, in fact, when we made the acquisition of some of these small companies, part of the goodwill was allocated to the customer portfolio, but the customer portfolio as a child, which is quite high, so it's a certain point.
Customer portfolio, but the rest of our portfolio is insured which is quite high. So it's a certain point, we when we reviewed the situation, which we do regularly with our auditors, we decided with this goodwill, but it would be.
Speaker 8: transcript
We, when we reviewed the situation, which we do regularly with our auditors, we decided that this goodwill...
Speaker 3: transcript
might be it would be it's better to employ it I mean I don't think that's right I'm okay so that's what we're done it's a normal review that we that we have to do until we
It's better to impair it.
Exactly that's why as I indicate yes. So that's what we've done it's a normal review that we that we have to do answer will be.
Speaker 8: transcript
Okay. Then, oh, it's again for the CFO , but I think I'll be clear and transparent with you. We had some exchange, like
Okay.
Henri Patricot: The next question is from the Raj for Khartaria of RBC. Hi, thanks for taking my questions, two quick ones please, the first one is on your debt profile, could you just confirm what proportion of your gross debt is on sort of long term fixed interest rates? And then the second question is on the recent US win bid, there's a provision in the PPA that just goes up with industry specific inflation.
<unk> them, all it's against the CFO, but I think it would be clear and transparent with you.
We had some exchange like.
Like all companies with the FCC, but we as you know we are using non-GAAP.
Speaker 8: transcript
Like other companies with VSCC about the, you know, we are using non-gap
API I would say early indicators.
Speaker 8: transcript
KPI, I would say, indicators, we have to reconcile the gap at the non-gap. So it was quite a formal exchange during the last month and
We have to re coincides with GAAP to non-GAAP. So it was quite a full <unk> in the last months in the <unk>.
Speaker 8: transcript
Jean-Pierre has spent some time, but honestly, nothing fundamental. At the end of the day, we concluded with them.
<unk> spent some time, but honestly.
Nothing fundamental at the end of the day, we concluded but with them, but they wanted to have a clear reconciliation between the GAAP and non-GAAP and so some of the tables has to be just complemented I mean some of them.
Speaker 2: transcript
But they wanted to have a clear reconciliation between the gap and the non-gap. And so some of the tables has to be just complemented. Some have to be removed, and some have to be complemented. So that's why you have that moving, that change. So honestly, we reviewed it with the audit committee and the board, and there was nothing major. It's more formal. But I think they were right. We have a gap, and we need to give clarity between the IFRS.
Jean-Pierre Spar: I was wondering what you assume inflation wise for that kind of project from here to FID, thank you. Yes, perhaps I would take the first question, more than 80% of our debt has been fixed couple of years ago, so that's mean that we benefited on that portion from very low coupon around 3%. And so the remaining is flexible.
We removed and some activity.
So thats why you have it but moving but such change that changes. So honestly, we review that with the audit Committee and the board and there was nothing.
No nothing major it's more for more but I think they are all right. We have a gap and we need to get clarity between the isos.
Jean-Pierre Spar: Clear answer is quite clear, but you know we have within today and the FID we have more probably three years to work, so you will have inflation of the next three years, so it might be, I think, say 5 to 10% probably in the three years we see, but again, there is a provision which provide which I would say protect us until the FID, then of course we take the risk of execution, but I think it's a fair protection, which is offered by the New York state to be investors or we were one of the elements of the of the bid and of the discussion negotiation we managed to obtain. So we are we are satisfied again, we see if it's higher than that, but we don't expect much more than that.
Speaker 2: transcript
I would say I refer as referential and what we use so but but the reason why you have seen some moves
I would say I refer a surfer insured and what we use so that's the reason why you have seen some moves but it's thank you Luca because it demonstrates that we are very precise and reading oral reports, including all the pages and all of the table. So I recognize your longstanding position following certain synergies, but you know.
Speaker 2: transcript
Speaker 2: transcript
including all the pages and all the tables. So I recognize you are long standing position following the tad energies, but you know I know you for almost 20 years. So that's why you are right to support. But again, it's modernization in line with good practice and we support it.
I know you for almost 20 years. So that's why you are you.
Alright to Cisco, but again its modernization in line with good practice and we support it.
Speaker 13: transcript
Yeah, it's a sad vehicle for modernization of the mold model as well, Patrick. So, thank you. That's a lot of work, but there we go. Thank you very much. Thank you. Thank you, Lukas.
Sadly, it's also a modernization of our multimodal as well Patrick so thank you that's a lot of work.
Thank you very much thank you Luca.
The next question from Kim <unk> of HSBC.
Jean-Pierre Spar: The next question comes from Martin Ratz of Morgan Stanley. Yeah, hello. I just want to follow up on the question that the branch actually just asked about the debt. We just, interest rates continue to rise and rise into talbons are not escaping that some of the longer term debt that you hold is now revealing 6% and I was wondering in addition to the mechanical impact that this may have on the interest expense every quarter, how this affects possibly any investment decision-making, particularly in the new energy areas.
Speaker 14: transcript
Hi good afternoon and thank you for taking my question. Firstly I wondered if you could talk about the three and a half million ton SPA with Qatar Energy on LNG volume.
Hi, good afternoon, and thank you for taking my question.
Firstly I wondered if you could talk about the $3 5 million ton S. P, a with Qatar energy and LNG volumes.
Speaker 14: transcript
Some people have noticed that 27-year duration, and it seems like other off-takers have might shorter term contracts, and it also takes you well beyond 2050. So I just wondered whether this was a requirement from Qatar Energy, and also the orangey will be delivered in France, I believe. Can you say whether there was a destination cause or whether you can redirect the ball?
Some people have noticed the 27 year duration and it seems like other uptake or shorter term contracts and it also takes us well beyond 2015.
Wondering whether this was a requirement from Qatar energy and also the LNG will be delivered in France. I believe can you say, whether there was a destination calls or whether you can redirect the volumes.
Jean-Pierre Spar: I mean, the question has been put to me, can we have an energy transition when US Treasury yields, the 10-year US Treasury yields are 5% and it's kind of a sort of an intriguing one. Therefore, can I ask you how are these rising interest rates impacting your investment decision-making and also what are you seeing in others, particularly in sort of the Capac's intensive areas like renewables, what's the impact that you're seeing?
Speaker 14: transcript
Secondly, I wanted to ask a broader question on climate. I wondered if you could share your expectations of what total and the border oil industry could potentially announce that COP28 next month. You've already got a target of reducing methane emissions by 80% by the end of this decade, and that's Paris Immigration. So could the ambition be to share your best practices on methane, monitoring, and emission reductions and encourage other oil companies to do the same? Thank you.
Secondly, I wanted to ask a broader question on climate I Wonder if you could share your expectations of what total antibody oil industry could potentially announced that cop 28 next month.
You've already got a target of reducing methane emissions by 80%.
By the end of this decade, and the Paris aligned so could the ambition data sharing best practices on methane monitoring and emission reductions and encourage other oil companies to do the same thank you.
Jean-Pierre Spar: I'm sorry, it's quite clear. You transfer the interest rate to the customer. So the question is does it affect the space of the transition? It might, but it's clear that it's against the idea that it can't be contribute maybe by the way to have a segment which will stop going, price going down and down, but it has already an impact, in fact, I can tell you, you know, in fact, in the US, you know, I'm taking the US as a good example.
Speaker 8: transcript
Good question. Thank you, Kim. The first one, we are alone. The 27-year-old graduation, in fact, is for all the energy of take as all the partners of Northfield East and Northfield South, which were the last new ventures, were asked to take their share of offtake on the 27-year. So we are not the only one, all my colleagues.
Good question. Thank you Kim.
First of all I know we are below the 27 year duration. In fact is for all the LNG offtake as all of the partners of <unk> and northeast South which was a loss of new ventures, we're asked to take their share of offtake on the 27 year. So we are not the only one all my colleagues and you will see by the way I think they issued over.
Speaker 8: transcript
And you will see, by the way, I think they issued over press release with.
Jean-Pierre Spar: You have the IRA on one side, which is that we also have the obligation to make projects with solar modules being manufactured in the US. It has an impact on the cost of the project. So this cut of the project today, when we discussed a renegotiable, renegotiable PPH with our customers, it has an impact on the high side, you know. So today, you signed the last PPH we signed recently with Sangoba in the US is reflecting, let's be clear, higher cost of manufacturing in the US and higher interest rate because when we did, we don't use a 3% of total energy for when we price a project in the renewables, you know, we are pricing a higher one which makes us more profitable.
Press release we've.
Speaker 2: transcript
or two other European companies, it's only the German companies which are not part.
Or to your European companies, it's only.
Jim and companies, which are not part of the.
Speaker 2: transcript
of the adventures of the developments which have decided to elect 450 or 20 years. So that's clear. By the way, honestly, 2026 plus 27 make 2050 free. It's not so far beyond 2050. And by the way, it'll all be in your portfolio.
Adventures of development, which are managed which decided to elect for 15 or 20 years. So that's up here by the way honestly 'twenty 'twenty six 'twenty seven to make 2050 fleets not so far beyond 2050 and by the way in our portfolio and in the net zero company. What we described in our last sustainable.
Speaker 8: transcript
And in the net zero company that we described in our last sustainable and climate report about total energy in 2050, you still see in the mix of our portfolio.
We're in climate report that total AIG in 2015, you still see in the mix of our portfolio. We can be some LNG being valued when there are quite a large share of LNG gas is there in the transition. So we have no further we need to go again to France. After Europe I think yes.
Speaker 8: transcript
We can be some energy being there, even quite a large share of energy. It's a gas is there in the transition.
Jean-Pierre Spar: We compete with people, we have competitors which have, in fact, a higher cost of debt. So we use their cost of debt and maybe we benefit from that to win the deals, but we keep the difference for us, in fact, as a company.
Speaker 8: transcript
So we have the parade. Will it go at the end to France or to Europe ? I think yes.
Speaker 8: transcript
I think I don't see if you could manage again complex.
I think I don't see of you could manage.
Again.
Complex.
Speaker 2: transcript
power electricity markets in Europe with a lot of renewable energy without an inflexible asset. So I'm not, I'm quite clear. So it's not France by the way we committed a total energy.
Power electricity markets in Europe, we have a lot of renewables without having flexible assets. So on.
Patrick Pouyann: So I would say, yes, you're right, it might affect the pace, but you know, I think we are back in a normal world now. It's much better for the world, the economy to have a 5% interest rate world rather than 0%, I think in particular for all companies, only in gas companies with a strong balance sheet and cash delivery, I think it's, we have, it was for me, the anomaly were during 5, 10 years, I think the 0% world after the 2008 crisis was which we absorb it and then the COVID, but for me, that's more the anomaly than the contrary.
But I'm quite clear so is that France by the way we committed a certain energy. So we are comfortable and if we need to re direct part of these.
Speaker 8: transcript
We are comfortable and if we need to redirect part of this LNG to our country, I think Qatari and ourselves, if it's our interest, we'll do it, you know, so no, in fact, these 27 years is a line on the duration of the concession in which we enter on NFE and NFS. It's just a pure alignment between reinvest.
LNG to avail, our country I think that <unk> saw in to US we'll do it.
No in fact with <unk> several years is aligned on the duration of the concession.
Which we enter on NFS and NFS is just.
Pure alignment between we invest we take three years to invest and when we asked 27 years remaining covers in fact, the full concession which is a figure 30 years transition and I can tell you. We are very happy of the conditions in which we are.
Speaker 8: transcript
We take three years to invest and then we have 27 years remaining, covers in fact the full concession which is I think a 30 years concession.
Patrick Pouyann: So I think for me, it's a new normal, we have to integrate it, it will have an impact probably, of course, on the competitor which have a very, we have more leverage than us and from this perspective, the strengths of the balance sheet of total energies is an effect and I think that's why we continue to part of the casual, we continue to strengthen the balance sheet.
Speaker 8: transcript
And I can tell you we are very happy of the conditions in which we have...
Speaker 8: transcript
joined this NFS venture in Qatar. So there, that's where. So can we redirect, yeah, for cities of, if it is the interest of both parties, we would have in the agreement, we can redirect with Qatar agreement and my vision.
Joined these NFC NFS NFS debenture in Kita so there.
So can we direct the efficacy that is of.
Interest of both parties, we will have in the agreement we can redirect.
We've kept our agreement and it might be the case.
Unknown Executive: Thank you.
Speaker 8: transcript
Climate, climate methane, yes, we have strong targets. We are leading it with the... I can just confirm to you that we have entered into a mega job. But, you know, what's the time in Jebeur would like to do in CUP 28? It would have more national companies, in fact joining the IOCs, because the tide energies and the others, all of the OGCI companies we had to, to forefront of this fight. We have already set the target, you know, on methane.
Climate me, saying, yes, we have swung targets, we are leading it.
Lucas Herrmann: The next question is for Lucas Herrmann of BNP Paribas. Yeah, thanks very much, gentlemen. A couple of straight-forward ones, I think.
Recently I can just confirm to you with.
We have entered into a mega job.
Lucas Herrmann: Firstly, just on your reporting for the last five, as long as I can remember, actually, Patrick, 20-odd years, divisions may have changed, but your reporting methods has always been consistent on a quarterly basis, and yet the day you've elected to alter it, and I'm just wondering whether there was any particular reason that you're disclosing more around cash or other items with the virtual things that you were trying to amplify to ask. And the second question is just staying with that.
What systems you there we'd like to do in 2012, most multinational companies in fact, joining via <unk>, because the <unk> and the others order with CVR GCI companies, we added to the forefront of this fine we have already set the target to Noah on methane. My motto is near zero emission by end of 2000.
Speaker 8: transcript
My motto is Year 0 Mishrain by end of 20, by 2040. In fact, it's been stopped clearing, stopped bending, and in particular, using technologies to detect fugitive emissions with drones, which we do in all our assets.
By 2030 in fact, which means stop flaring stop venting and in particular.
Lucas Herrmann: Some of the adjustment items in integrated power, and notice that there's a 400, 420-odd million asset impairment provision charge taken this quarter, just to be able to provide some further detail on what that impairment confirms. That's it. Thank you. I'll just be going on, it's written. I think it's written that we have impaired some of the goodwill when we made some acquisition linked to customers, in fact, because in fact, when we made the acquisition of some of these small, small companies, who has bought, part of the goodwill was allocated to the customer portfolio, but the customer portfolio was assured which is quite high.
Using technologies to detect fugitive emissions withdraws, which we do in all our assets and we are just in the way to share. These technologies, we saw national companies and we are signing some agreements.
Speaker 8: transcript
And we are just in the way to share these technologies with some national companies. And we are finding the
Speaker 8: transcript
which will be this close before COP so we have signed one or two already but it's we have to respect you know the will of the country is to announce them so what have we done so we are on our total energy is committed
Which would be disclosed before crop. So we are we have signed one or two already.
But it's we have to respect that.
Of new countries to announcements so it will be done. So we are on the total <unk> committed in order to propose this technologies measuring with again the not only <unk>.
Speaker 8: transcript
in order to propose these technologies, measuring with, again, not only Excel 5, but with...
Excess fiber.
Speaker 2: transcript
Directly emissions to cover assets and not only from total but larger assets from national companies. So we promote this technology
Direct emissions to cover assets not only from total but larger assets from National company. So we promote this technology, we do our job and Willa.
Lucas Herrmann: So at a certain point, when we reviewed the situation, what we do regularly with auditors, we decided that this goodwill might be, it would be better to import it. That's right, and that's what we've done. It's a normal review that we have to do, and so we need that stuff.
Speaker 8: transcript
We do our job and we will be able to announce some of these in some countries where we are also, and obviously we are operating and we have good relationship with national companies.
We will be able I think to announce I'm sure to announce some of these.
In some countries, where we are or shortly where obviously we are operating in we have good relationship with National company, we will offer them and deploy this strategy. So we are doing our job on this perspective that I think it's very important for the world and gas industry to engage more national companies.
Speaker 8: transcript
we will offer them and deploy this strategy. So we are doing our job on this perspective, and I think it's very.
Patrick Pouyann: Okay. Then, or it's again for the CFO, but I think it's transparent with you. We had some exchange, like over companies with the SEC about the, you know, we are using non-GAP KPI, I would say, indicators. We have to reconcile the gap at the non-GAP, so it was quite a formal exchange during the last month, and Jean-Pierre has spent some time, but honestly, nothing fundamental. At the end of the day, we concluded that with them, that they wanted to have a clear reconciliation between the gap and the non-GAP, and so some of the tables has to be just complemented.
Speaker 8: transcript
for the world leaders in the switch to engage more national companies in these efforts.
In these efforts.
Efforts.
The next question comes from Alastair Syme of Citi.
Speaker 15: transcript
Thanks, Patrick. Any updates on Namibia you want to share? I know you updated at the recent capital markets day, but you're right in the middle of your assessment, and I guess how's the production test?
Thanks, Patrick and any updates on never be able to share with you. After the recent capital markets day, but you're right in the middle of your assessment.
So I guess how is the production test to be in this what are you looking at.
Speaker 15: transcript
And then secondly, can you just, you know, all the question of, of back, can you just remind us on the hybrid? So I mean, they are the pets.
And then secondly can you just.
Patrick Pouyann: I mean, to be removed and some has to be quite. So that's why you have that moving, that's that change, that changes. So honestly, we reviewed it with a committee on the board, and there was nothing major. It's more formal, but I think we're all right. We have a gap, and we need to give clarity between the IFRS or IFRS, and what we use. So that's the reason why you have seen some moves, but it's a thank you look at, because it demonstrates that you are very excited in reading all of reports, including all the pages and all the tables.
A question of can you just remind us on the hybrids I mean, the appetite Joe.
Speaker 15: transcript
but I think as they start to be callable the the coupons change. So can you just talk a little bit about that mechanic?
But I think as they start to be callable.
The coupons change so can you just talk a little bit about that mechanic. Please.
Okay, Yeah, we'll come back on this hybrid to explain who will give you all the detail what they know is that.
Okay, Jean-Pierre, we'll come back on this hybrid to explain you, give you all the details. What I know is that the...
Speaker 8: transcript
The cost of the heroin is quite interesting, but Jean-Pierre will give you some details in this world of, I would say, higher interest rates.
So cost of DIY is quite interesting so that software we gave you some details.
In this world of <unk>.
The higher interest rate.
On the other side in the media, no, we don't have any updates. I can tell you that we started the Mangetti where, which is a discovery in the exploration website, not a discovery exploration. So, well, drilling has started seven of October , I think, beginning of the month, so it's on this way. So, nothing to report today. It takes two prima...
On the other side in the media I know, we don't have any data, but I can tell you that we started the mangus anywhere which is a discovery.
Patrick Pouyann: So I recognize you are a long standing position following certain energies, but you know, I know you for almost 20 years. So that's why you are right to support. But again, it's modernization in line with good practice and we support it. Yeah, it's a fact that it's all the modernization of the mold model as well, Patrick. So thank you, that's a lot of work, but there we go. Thank you very much.
The exploration work so as not to discover its exploration drilling has started the <unk> of October I think beginning of the month. So it's on this way so nothing to report today. It takes two to three months to drill and test on the second.
Speaker 8: transcript
and the test on the second, the second well on Venus, I just started the test, we'll start this day, so this week, so sorry, but it did not...
The second well on Venus just started.
The test will start these days so this week, so sorry, but it's not.
Speaker 8: transcript
or drilling operations did not follow our quarterly calls, so you will have to wait for more news. But again, as I said recently, let's be clear, we will develop the Venus Discovery. There is a development, so it's a matter for us now to try to assess the full size of it and then to find the right scheme of development.
Our drilling operations did not for all quarterly calls so you will have to wait for more news but.
Kim Fustier: Kim Fustier of A-T-S-B-C Hi, good afternoon and thank you for taking my questions. Firstly, I wondered if you could talk about the three and a half million ton S-P-A with Qatar energy on energy values. Some people have noticed that 27-year duration, and it seems like other us takers as like shorter-term contracts, and it also takes you well beyond 2050. So, I just wondered whether this was a requirement from Qatar energy. And also, the energy will be delivered in France, I believe. Can you say whether there was a destination clause or whether you can redirect the volume?
But again as I said recently be clear, we will develop the Venus discovery development. So it's a matter for us to try to.
Assess the full size of it and then to find the right scheme of development.
Speaker 8: transcript
considering that there is quite a good ICGR but again it's optimizing the development that we are looking for the oil development again on the
<unk> there is quite a good ICL, but again, it's optimizing the development that we are looking for the oral development again on business. So we'll come back with you I think.
Speaker 8: transcript
So we'll come back with you, I think, probably in February , when we'll have the annual results, we'll be able to disclose more information about it. And I think we'll have the results on both these wells and to have more clarity on Venus.
But we were in February when we will have the annual results will be able to to disclose more information about it.
Patrick Pouyann: Secondly, I wanted to ask us a broader question on climate. I wondered if you could share your expectations of what total and the border oil industry could potentially announce at COP 28 next month. You've only got a target of reducing methane emissions by 80 percent by the end of this decade, and that's parasolizing. So, could the ambition be to share your best practices on methane, monitoring, and emission reductions, and encourage other all companies to do the same?
We will have the results of both these wells.
More clarity on venues expansion, we plan to do a third well after in the north, but we love a.
Speaker 8: transcript
We plan to do a third well in the north, but we have a lot of that.
A lot of data.
Speaker 3: transcript
Okay, hybrid, hybrid, yes. That's true, we benefit from very competitive hybrid models for you, because on average, the coupon is 2.3%. So very, very low, very cheap equity. So the problem now is that as a man, as a venture in my Patrick, the refining thing has become more expensive.
Okay hybrid hybrid, yes, that's who we benefit from.
Very competitive hybrid loan portfolio, one because on average the coupon is two points, 3%, so very very low <unk>.
Patrick Pouyann: Thank you. Good question. Thank you again. The first one. No, we are to learn. The 27-year duration, in fact, is for all the energy of takers, all the partners of no fill list and no fill south, which were the last new ventures, were asked to take their share of off-take on the 27-year. So, we are not the only one, all my colleagues. And you will see, by the way, I think they issued over press release with two European companies.
<unk> equity the problem now is that estimate.
As mentioned by Patrick the refinancing has become more expensive.
Speaker 3: transcript
course that more or less for a maturity of seven years. So we used the flexibility of the ESN.
6% minus a maturity of seven years.
So we use the flexibility of the S&P.
Speaker 3: transcript
to be able to reduce by 10% global portfolio without losing the equity treatment. We use V6.
Are you able to reduce by 10%.
Global portfolio without losing equity treatments, we used six ability because in the second quarter, we have one tranche metering and so we decided not to refinance before so now we have to say with <unk> in the future. How we can continue to lower.
Speaker 3: transcript
because in the second quarter we have one tranche maturing and so we decided not to refinance this tranche. So now we have to see in the future how we can continue to lower this hybrid portfolio without losing the equity.
Patrick Pouyann: It's only the German companies, which are not part of the ventures of the development, which are managed, which decided to elect for 50 or 20 years. So, that's up here. But the way, honestly, 26 plus, 27 makes 20-50, which is not so far beyond 2050, and by the way, in our portfolio. And in the net zero company that we described in our last sustainable and climate report, but total energy in 2050, you still see in the mix of our portfolio.
<unk> you.
EBIT portfolio without using the equity treatment Sweetser Brooks.
Speaker 8: transcript
I have my advance birth for the coming months. Fundamentally we will use a 10% flexibility after quarter or year after year in order to advance, I would say to rule. Illuminate, to respect of course, the rules. But I will do it year after year.
Again, the convenient months fundamentally we reuse of 10% flexibility.
After quarter or year after year.
At the end I would say two eliminated eliminate drilling we expect of course the rules, but we will do it.
Patrick Pouyann: We can be some energy being there, even a quite a large share of energy. It's a gas is there in the transition. So, we have no problem. We need to go again to France or to Europe, I think yes. I think I don't see of you could manage again complex. In power electricity markets in Europe, we have a lot of renewable, we have an inflexible asset, so I'm not quite clear. So, it's not France, by the way, we will commit it, it's total energy.
Year after year.
Speaker 15: transcript
considering the law. Is it clear? Sorry, Jean-Pierre, just to be clear, the bit that's callable, does the coupon change on that element or does it stay the same? No, it's stable.
Considering.
Yeah. This is bill.
Yeah, just to be clear.
Callable coupon change on that element tours, so stay the same.
Now it is stable.
Okay. Thank you.
Okay.
The next question is from.
Patsy call of UBS.
Is that a potential here data two questions from my side. The first one on the outlook for oil demand and refining margins. Because this is quite a sharp drop in refining margins past month optical not very high.
Speaker 16: transcript
Interpreterator from here. Thank you for the update. Two questions from my side. The first one on the old look for old demand and we found in margins because this is quite a sharp drop in refining margins. But at the past month of the season, a very high level. Just wondering if you're getting a bit more concern about the deal for old demand and refining margins at the moment.
Patrick Pouyann: So, we are comfortable, and if we need to redirect part of this energy to our country, I think the category and also 50, so into us, we'll do it. So, no, in fact, 20-70 years is a line on the duration of the transition, which we enter on NFI and NFI. It's just a pure alignment between we invest, we take failures with vests, and then we have 30-70 years remaining, covers in fact the full transition, which is a figure 40 years transition.
Level I was just wondering if youre getting a bit more concerned about detailed core oil demand and refining margins at the moment.
Speaker 16: transcript
And secondly, I wanted to ask you about the wind and the summer on the European wind industry we've seen the commission this week setting out more actions to support the European industry. I wanted to have your initial assessments of these actions and what we potentially better done on the soil for European wind and acceleration in wind over here. Thank you.
And secondly, I wanted to ask you about.
Wind in some more on the European wind industry, we've seen the commission this week setting up more actions to support the European industry.
I wanted to reschedule any skill assessments of some.
These actions and what where you see potentially.
Patrick Pouyann: And I can tell you, we are very happy of the conditions in which we have joined the NFI NFI venture in Qatar. So, that's where. So, can we redirect, yes, if it is the interest of both parties, we will have in the agreement, we can redirect with Qatar agreement and might be the case.
Better dynamics for European win an acceleration.
Thank you.
Two general question complex Palm oil demand and overall demand in 2000 for a strong an increase of almost 2 million barrels per day, mainly coming from China by the way.
Speaker 8: transcript
Well, two general questions, complex one. All demands, you know, we all demand in 33, strong, an increase of almost two million Baubel per day, mainly coming from China, by the way, I said, it's more than two-thirds, 70% more, compared to chemicals on one side, and from as well, kerosene, jet fuel, you know, the spread in the air.
70, more vulnerable to food, 70% more on petrochemicals on one side and from.
Patrick Pouyann: Climate in NFI, yes, we have strong targets, we are leading it, we say, I can just confirm to you that we have entered into a make or job, you know, what system I would like to do in COP28, it's to have more international companies, in fact joining the IOCs, because the target energy and the others, all of you, the OGCI companies, we have to forefront of this fight. We have already said the target, you know, on this thing, my motto is near zero, on this thing, by end of 2050, in fact, which means stopparing, stoppanting, and in particular, using technologies to detect fugitive emissions with roads, which we do in all of our assets.
As well Ken Rosen.
Jet fuel.
The statement.
Online activities back or most of them are not fully so you still have in fact in 2470.
Speaker 8: transcript
and line activity back almost to the normal load full it. So you still have in fact in 24, some demand from the
Some demand from the airlines.
Speaker 8: transcript
Airlines in the world to come back so we are not yet fully to be a level pre-covid on the jet fuel Demand so I don't see what it would stop to be honest because it's a very so cool for move in this planet
Airlines in the world to come back. So we are not yet fully to where LIBOR Pico beat of the jet fuel demand. So I don't see what you would stop to be honest because it's.
There is a call for moving this planet and secondly, I think the IEA has announced an additional 1 million borrower volcker.
Speaker 8: transcript
And secondly, I think the IA has announced an additional 1 million dollar world-poded increase for next year. So I take this...
Kris for next year, so I take this.
Speaker 8: transcript
point I think all traders agree with it so it's not too much is one so continuing to see a demanding phase
I think our traders agree with it so it's not too much in Swan so continuing to see.
Patrick Pouyann: And we are just in the way to share these technologies with some national companies, and we are finding the some agreements, which will be this close before COP, so we are, we have signed one or two already, but it's we have to respect, you know, there will be, of the countries to announce them. So what do we be done? So we are on a total energy committee, in order to propose this technology, measuring with, again, not only, excess five, but with directly emissions to cover assets and not only from total, but larger assets from national companies, so we promote this technology, we do our job and we will be able to think to announce, I'm sure, to announce some of these, in some countries where we are also, we obviously we are operating and we have good relationship.
The remaining increase and again by the way what struck me is despite the doubts that some of the Chinese economy. Since this year, we have a plus two and so but again, 70% of its coming from China. So when China will come back I read yesterday that the Chinese government is thinking too.
Speaker 8: transcript
And again, by the way, what struck me is despite the doubt that some...
Speaker 8: transcript
our Chinese economy is the year we have plus two and again 70% of it coming from China. So when China will come back, I read yesterday that the Chinese government is thinking to
Speaker 2: transcript
make an incentive package, an economic economic incentive package raising more depth in order to give in first to the economy, as we complain about the growth in China, but it's 5%, and it's not 1 or 2%. So I think I'm still believer that the Chinese growth will drive again growth. And in fact, you know, when you look to, by the way, on all demand, I will give you a clue, it's not very complex. You take the last one,
Make an incentive package and it kind of macroeconomic incentive package raising more depth to it.
Patrick Pouyann: With national companies, we will offer them and deploy these strategies, so we are doing our job on this perspective, and I think it's very important for the world, in the streets, to engage more national companies in these efforts.
Given <unk>, two very economy, and where we complain about the growth in China, which is 5%, it's not a one or 2%. So I think I'm still a believer but.
Chinese growth will drive again.
Growth and in fact, you know when you look too by the way.
Oil demand I will give you a true it's not very complex you take the last 20 years.
Speaker 2: transcript
you look to the increase of the population of the world, plus 1.2%. You look to the increase of the oil demand, and in 2019, because you have a gap, it was exactly plus 1.2%.
Two the increase of the population of the World plus one 2% as you look to the increase of the oil demand and in 2019, because we have again it was exactly plus one 2% in fact, all demand is not correlated to GDP is related to the growing population because it is a fundamental factor why by the way the transition will be.
Speaker 2: transcript
In fact, the old demand is not related to GDP, it's related to the growing population.
Speaker 8: transcript
because it is a fundamental factor. It's why by the way transition will be complex. A growing population, because this 1.2%, or 1% is still announced for the next 20 years. So 1% on the planet, it requires more energy, a better way of increasing their life standards, and that's more energy.
Complex a growing population because this one 2% or 1% is still and now for the next 20 years, so 1% on the planet It requires more energy.
Alistair Simon: The next question comes from Alistair Simon, of the City. Thanks, Patrick. Any updates on Namibia, you want to share? I know you updated it. The recent capital market stayed, but you know, you're right in the middle of your assessment, and I guess how the production test of Venus 1A looking. And then secondly, can you just, you know, of a question of deck? Can you just remind us on the hybrids? I mean, they are perpetual, but I think as they start to be callable, the coupons change. So can you just talk a little about that mechanic, please?
Better way of increasing.
Lifestyle, that's more energy. So that's so it's very aligned you can see that we will make a presentation on our total energy outlook.
Speaker 8: transcript
So it's very line, you can see that we will make a presentation soon from our total energies outlook on November 13th and we will explain that again.
November 14, and we will explain that again, so that's the demand refining margin environment as different as it depends on the market supply and demand we have seen them.
Speaker 2: transcript
That's the demand. Refining margins. Refining margins is different. It depends on the market, supply, and demand. We've seen them going to the roof, going more.
Moving to the roof doing one or two months.
Speaker 2: transcript
during summertime, everything was under constraint. I think you still have, honestly, in this downstream business, an impact on the ban of Russian products because all that has put the Russian puddle on one side. So the quality of the puddle is different in the refining system and also on the products. You have disorganized, I would say, as a transportation, transgressions are more expensive. And so today what we face is that you see the gasoline demand, and are collections of large premiums.
During summer time, everything wasn't constrained I think you still have in the.
Jean-Pierre Spar: Okay, Jean-Pierre, we come back on this hybrids to explain you all the details. What I know is that the cost of the hybrids is quite interesting, but Jean-Pierre, we give you some details in this world of hybrids to us, right?
In this.
Downstream business and impact of the burden of Russian products, because all of that is put our onshore crude oil on one side. So the quality of recruit already it's different lines in the refining system and also on the protection you have this overnight I would say as a transportation conquest from cost are more expensive and so today, what we face is that youll see it.
Patrick Pouyann: On the other side in Namibia, no, we don't have any updates. I can tell you that we started the Mangeti world, which is a discovery in the exploration world, so it's not a discovery. It's exploration. The world drilling has started seven of October, I think, beginning of the months, so it's on this way, so nothing to report today. It takes two pre-months as well. And the test on the second, the second world of Venus has just started.
Gasoline demand I guess.
The spread is down quite low because again as the gasoline demand in Europe is I think impacted by July price. You know you have an elasticity of the demand to supply so when in the third quarter you've seen.
Speaker 2: transcript
quite low because against the gasoline demand in Europe is I think impacted by your iPhone. You know you have a nelacticity of the demand to the price. So when in the third quarter you've seen 90 dollars about 95 dollars, plus a strong margin of refining. So the customers, you know, when prices are high they say it.
$90 up about $95 per hour plus.
<unk> margin of refining so customers you know when prices are they save energy and reduce their consumption. So which is what we have observed and so today's the gasoline demand is softening sources, but the practice is softening, but the diesel crack is still a high priority.
Patrick Pouyann: The test will start this week. Sorry, but it's not that our drilling operation did not follow our quarterly course, so you will have to wait for more news. But again, as I said recently, we will develop with Venus' discovery. There is a development. It's a matter for us to try to assess the full size of it and then to find the right scheme of development considering that there is quite a good ICGR, but again, it's optimizing the development that we are looking for, the oil development, again, on Venus.
Speaker 8: transcript
energy. They reduce their consumption. So it is what we have observed. And so today the gasoline demand is softening. So the spread, the crack is softening. But the diesel crack is still high, very high, $30.
Hey, Dara.
Speaker 8: transcript
Because there, on this side, you have an impact of the fact that we have less aviocrude. So it's more expensive to produce diesel. And so you had some warning, which I think I exaggerated from the IAEA, that we might have a lack of diesel. We will not have a lack of diesel, for sure. You know why? Just because the refiners are smart people. When you have a strong crack on diesel and a low crack on gasoline, you...
Because they're on this side.
And in part of the fact that we have less if you accrued saw its more expensive to produce <unk> and so you had some warning, which I think accelerating from the idea that we might have a lack of diesel will not have a lack of diesel for sure no.
Why just because the refinance our smart deepwater when you have a strong current year's or in a row clock on gasoline.
Patrick Pouyann: So we'll come back with you, I think, probably in February, when we have the annual results, we'll be able to disclose more information about it, and I think we'll have the results on both this world and to have more clarity on Venus' expansion. We plan to do a third world after in the North, but we'll have a lot of data.
To adapt to a refinery and youll make more diesel and less and less gasoline. So it's quite easy business, you know and we have a flexibility. So today, our machines are running to make user and so no fear, but a good benefit. So yes. It has suffered but I would say.
Speaker 8: transcript
You adapt your refinery and you make more diesel and less gasoline. So it's quite easy business, you know, and we have flexibility. So today our machines are running to make diesel and so no fear, but a good benefit. So yes, it has suffered, but I would say I would expect a margin around 7080. We need to adapt the term for the next.
I would expect.
Margin around the 70 $80 per tonne for the next months.
Jean-Pierre Spar: Okay, hybrid. Yes, that's true. We benefit from very competitive hybrid monoports for you, because on average, the coupon is 2.3%. So very, very low. I will say cheap equity. So the problem now is that, as a measure of my Patrick, the refinancing has become more expensive, six percent, more or less, for a maturity of seven years. So we used the flexibility of third by S&P to be able to reduce by 10 percent the global portfolio without losing the equity treatments.
Speaker 8: transcript
good good good bet I would be surprised to see them coming back very low because again you have some inefficiencies in the system because of a Russian ban not only on oil but also on products
But I would be surprised to see them coming back.
Because again you have some.
Inefficiencies in the system because of the erosion done not only on oil, but also on products and that creates some I would say.
Increased costs on the wind.
Speaker 8: transcript
On the wind, yes, wind, European, the Commission. And it's more the European wind manufacturing industry, which is completing, if I'm reading carefully, rather than the European wind development industry. The developers are still willing to develop with lowest cost because that's a good question to the Commission.
When the European Commission and it's most of the European wind manufacturing industry, which is complaining if I'm reading.
Rather than European wind developments industries developers are still willing to.
Jean-Pierre Spar: We use this flexibility, because in the second quarter, we have one-trunch material, and so we decided not to refinance this one. So now, we have to say, we have to see in the future how we can continue to lower the portfolio, hybrid portfolio without losing the equity treatments. So it's right I have on my agenda for the coming months. Fundamentally, we will use a 10 percent flexibility. Quarter after quarter or year after year, in order to advance, I would say, to eliminate the risk to respect, of course, the rules, but we will do it year after year.
To develop with lowest cost because that's a good question to the commission I think.
Speaker 8: transcript
You know, like on solar, do they want to protect the consumers by continuing to have access to the lowest possible cost of renewables? And do they want to protect the manufacturing industries? That's a question. Until now, in the last 10 years, it was always a... Europe , you are favored.
I would like on Sola do they want to to protect the consumers by continuing to have access to zero as possible cost of renewables or do we want to protect the manufacturing industries. That's a question until now in the last 10 years it was always.
Europe.
U as favorable.
Consumers interact.
Speaker 2: transcript
I've seen a call from the solar developers calling for not protecting them. So I will see again for us, or at the end of the day, in the US when we are asked by the AIRA to
And I've seen a core from the solar developers, calling for not protecting them. So we'll see again for us obviously at the end of the day.
In the U S. When we are asked.
To use.
Speaker 8: transcript
US goods, we are using US goods, you know, in the off-shore wind project in New York, we have made a deal with G, we secured the price and the cost, by the way, of the...
U S goods, we are using U S goods you know in the offshore wind project in New York, We have made a deal with GE.
Andrew Patricot: The next question is from Andrew Patricot of UBS. Thank you for the update, two questions from my side. On the old look for old demand and we found margins, because this seems quite a sharp drop in refining margins, but at the past month of the week from a very high level, just wondering if you're getting a bit more concerned about the old demand and we found margins at the moment. And secondly, I wanted to ask you about wind, and if I'm more on the European wind industry, we've seen the commission this week, setting up more actions to support the European industry. I wanted to have your initial assessments of these actions and what we see potentially better than an example for European wind and acceleration in any wind over here. Thank you.
We secure the price and the cost by the way of the.
Speaker 2: transcript
of the turbines with GE, which will build a new manufacturing plant in New York, creating local jobs.
Of the two bonds with GE, which will build a new manufacturing plant in New York, creating local jobs or because of cost, but it has been integrated in the <unk>.
All that has a cost, but it has been integrated in the CFD, which has been accepted, you know, and agreed, negotiated. So I think...
In the.
Cfd, which has been accepted.
Negotiating so I think so.
So up to, we will adapt ourself, we are flexible, you know. That's why, by the way, we should not.
Two we will adapt our search we are flexible.
That's why by the way, we should not anticipate too early this type of CSD as insurance is because if you take the insurance is too early.
Anticipate to early this type of CFDs in the shortcies because if you take the insurance it's to early, when as the environment is moving you could be...
As the enforcement is moving you could be.
trapped in something which becomes less profitable, because offshore wind is taking more time.
Trucking, something which become less profitable so it's because wind offshore wind is taking more time.
Speaker 2: transcript
Having said that, at the end of the day, I can confirm to you that I see more and more gold-willed...
We've said that at the end of the day I can confirm to you, but I see more and more a good win.
The Chinese wind farms being built in Europe and in the World.
Speaker 17: transcript
Chinese wind farms being built in Europe and in the world. Thank you.
Patrick Pouyann: Well, two general question, complex one. Old demand, you know, we have demand in 33 strong and increase of almost two million Baal over the day, mainly coming from China, by the way, I said, it's more than two thirds, 70% more from petrochemicals on one side and from as well. So, you know, we have a couple of key roles in jet fuel, you know, the statement, the airline activity back almost to normal, but fully so you still have in fact in 24 some demand from the airlines in the world to come back.
Thank you.
The next question is from Bernstein.
Okay.
Okay.
Speaker 18: transcript
Yes, hello, thank you for taking my question to very quick one. If I made the first one on Namibia, you disclose that he has the first.
Yes, Hello, Thank you for.
Taking my question two very quick ones, if I may the first one on the Namibia.
Can you disclose that.
Yes.
Speaker 18: transcript
DST tests on Venus were in line with expectation.
Julie DST tests, so on venues were in line with expectation.
Speaker 18: transcript
Can you share a bit more color that you hinted at?
Could you shed a bit more color on that you hinted that.
Patrick Pouyann: So we are not yet fully to be a level pre-COVID on the jet fuel demand. So I don't see what you would stop to be honest, because it's a very cool for move in this planet. And secondly, I think the IA as announced an additional one million Baal over the day, increased for next year. So I take this point, I think our traders agree with it. So it's not two, but it's one.
Speaker 18: transcript
If it was $5,000 per equivalent per day, it was not good. If it was $15,000, it was OK. So can you give us a bit of a color and whether it was above $15,000 or below $15,000?
If it was.
5000 barrel equivalent per day net beauty Swiss 15th Okay.
So can you give us a bit of a color.
And whereas when it's above 15 are below $50.
Speaker 18: transcript
essentially my question. And then on US offshore wind in New York, can you disclose in dollar per megawatts what is your current capex estimate before any inflation provision?
Essentially my question and then on U S offshore wind in New York can you disclose internal per megawatt.
Patrick Pouyann: So continuing to see a demand increase. And again, by the way, what struck me is despite the doubts that some are on the Chinese economy. This is the year we have a plus two. And again, 70% of it coming from China. So when China will come back, I read yesterday that the Chinese government is thinking to make an incentive package, an economic economic incentive package raising more depth in order to give in person to the economy.
Is your current Capex estimate.
Amy.
Inflation provision.
Speaker 2: transcript
No, I cannot feel your full excess file. Right, the other one, sorry to tell you that. I didn't know that 15 was a threshold, it depends from, no, honestly, I think we told you the truth. It's in line with our expectation, but means that it's in line. We have the assumptions, we have taken to plan the development.
No I cannot fulfill your excess funds.
So I can tell you that I didn't know about 15 with a fresh or defense.
No.
We told you the truth is in line with our expectation that means that it's in line yes.
The assumptions, we have taken two plant developments.
Patrick Pouyann: But where we complain about growth in China, but it's five percent, and it's not one or two percent. So I think I'm still believer that the Chinese growth will drive again growth. And in fact, you know, when you look to, by the way, on all demand, I will give you a clue. It's not very complex. You take the last 20 years, you lead to the increase of the population of the world plus 1.2%.
Speaker 8: transcript
So if it's in line, that means that we are happy, we introduce we get the data, they confirm the productivity as a production per well. And we know that with this level of production per well, we can make a profitable development. So I don't want to comment more on one test because we have plenty of tests coming. And so let's continue the job. And you will have to rely on what we say, but as we are listed company, generally we say the truth.
So if it is <unk> nine which means that we are happy we introduced we get the data confirms the productivity at the production per well and we know that this reduced level of protection for where we can make a profitable development. So I.
Patrick Pouyann: You look to the increase of the old demand. And since 2019, because you have a gap, it was exactly plus 1.2%. In fact, the old demand is not related to GDP is related to the growing population. Because it is a fundamental factor. It's why the transition will be complex. A growing population because this 1.2% or 1% is still announced for the next 20 years. So 1% on the planet, it requires more energy, a better way of increasing their life standards, and that's more energy. So it's very line.
I don't want to comment more one thats because we are a plethora of tests coming and so let's continue the job and.
You will have to rely on.
What we said because we are listed companies annuity, we say that's true.
Speaker 19: transcript
and then on the second one
And then on the second one.
I think.
Speaker 8: transcript
It's something that I don't remember, to be honest.
It's.
Assumption.
But I don't remember to be honest, so the lack of megawatt hour.
Speaker 2: transcript
$1 or megawatt or before any CAPEX provision. We don't work like that. So we have a CAPEX including contingency. This is the way we work. We work in no showroom, the same way, but in all areas on our side. We're an experience of projects, of short projects. And we know that when you make a no show project, you don't think we're only the EPC contract, but you are taking some...
Before any capex provision, though we don't work like that so we have a capex, including contingencies in the way we work we work in offshore wind in the same way, but you know what India is on our side, we have an experience of OXXO.
Projects offshore projects and you know that when you make a nuclear project you don't stick with only the EPC contract, but you are taking some.
Patrick Pouyann: You can see that we will make a presentation soon from our total energies outlook on November 13, and we will explain that again. So that's the demand.
Speaker 2: transcript
contingencies. And when we communicate in Olingas on the CAPEX, we communicate always including contingencies, because we perfectly know that in Olingas, when you make a project, things will not be exactly the sigma would be EPC contracts. And this is one of the mistakes which is done in this industry by some of the...
Contingencies, and when we communicate in oil and gas on the Capex with Capex, we call communicate always interesting contingency because we perfectly know, but in oil and gas when you make a project thinks will not exactly the Sigma EPC contracts and this is one of the mistake, which is done in this industry, but some of them.
Patrick Pouyann: Refining margin. Refining margin is different. It depends on the market, supply and demand. We've seen them going to the roof during 1 or 2 months, during summertime. Everything was under constraint. I think you still have, honestly, in this downstream business, an impact on the ban of Russian products because all that has put a Russian puddle on one side. So the quality of the puddle is different in the refining system, and also on the protection.
Speaker 2: transcript
competitors which believe that you make the EPC and you will execute rightly the EPC.
Competitors, which believes that you make the EPC, we'd execute prices EPC and <unk>.
Speaker 2: transcript
And it's why today you have some EPC contractors which are facing difficulties because then they have huge pressure on them and they are obliged to announce losses. Now it's not the way, you know, if the sustainability of this model, business model like we've done in New Orleans, it's to understand, but to make a project because your EPC contractors are also...
Why today, you have some EPC contractors, which are facing difficulties because they have huge pressure on them and they are.
Patrick Pouyann: You have disorganized, I would say, as a transportation, transportation costs are more expensive. And so today, what we face is that you see the gasoline demand. The gasoline spread is down quite low because, again, the gasoline demand in Europe is, I think, impacted by your iPhone. You know, you have a elasticity of the demand to the price. So when in the third quarter, you've seen $90.00, $95.00, plus a strong margin of refining.
Obliged to announce losses no it's not the way you know.
Patrick Pouyann: The customers, you know, when prices are high, they save energy. They reduce their consumption. So which is what we have observed. And so today, the gasoline demand is suffering. So the spread, the crack is suffering. But the diesel crack is still high. Because there, on this side, you have an impact of the fact that we have less, if you're crude, so it's more expensive to produce diesel. And so you had some warning, which I think I exaggerated from the idea that we might have a lack of diesel.
So the sustainability of this model business model like we've done in the oil and gas industry is to understand where to make a project because youre EPC contractors I'll also surviving and surviving making profit and thats why when we execute a project in oil and gas we know that we have contingencies I remember the first time.
Speaker 2: transcript
surviving, you know, and not just surviving, making profits. And that's why when we execute a project in oil and gas, we know that we have contingencies. I remember the first time our offshore wind developers came to the executive committee where I was mentioning to us 2% of provision. We were laughing. We thought, no, no, offshore, it's at least 10%, you know? And we know that by experience.
Offshore wind developers came to the Executive Committee, where I had mentioned it was 2% of provision we were laughing with offshore.
This 10% you know and we know by experience and I will tell you is that the.
Speaker 17: transcript
And I will tell you that the oil experience in Segrin instead of installing 100 wind turbines offshore, it's much more complex, but installing one big offshore oil platform. So it's including provision and we make all of projections and negotiation with the right provision within our capitals. Thank you. Thank you.
Our experience in <unk> and <unk>.
Steady installing 100.
When the.
<unk> offshore is much more complex, but installing one big offshore oil platforms. So.
So, it's including provision and we make all of our projections and negotiation with the right provision within our Capex.
You.
Thank you.
Patrick Pouyann: We'll not have a lack of diesel for sure. So, you know why? Just because the refiners are smart people. When you have a strong crack on diesel and a low crack on gasoline, you adapt your refinery and you make more diesel and less gasoline. So it's quite easy business, you know, and we have flexibility. So today, our machines are running to make diesel. And so no fear, but a good benefit. So yes, it has suffered, but I would say I would expect a margin around 70, 80 dollar per ton for the next month.
The next question is from Paul Cheng of Scotia Bank.
Speaker 20: transcript
Thank you. Good morning. Good afternoon. Two questions. Once it's really short, maybe it's for John Paul. Third quarter, EMP effective tax rate, they call it rank number 45%.
Thank you and good morning.
Good afternoon.
Two questions. One is really sure maybe it's small John Paul.
Third quarter again.
The effective tax rate.
Long number 45%.
Speaker 20: transcript
seems a bit low even taking into consideration of the lower contribution from North Sea. If there is anyone off
Seems a bit low even taking into consideration of the lower contribution from Las <unk> is there any one off.
Speaker 20: transcript
benefit in tax in the quarter and also more importantly that based on the current market condition what is your expectation for the division affected tax rate in the quarter?
And that's again tax in the quarter and also more importantly based on the current.
Patrick Pouyann: And it is a good, good, good bet. I would be surprised to see them coming back very low because again, you have some inefficiencies in the system because of a Russian ban, not only on oil, but also on products. And that creates some, I would say, increased costs.
Market conditions, what is your expectation for the division.
In the fourth quarter.
Speaker 20: transcript
Um, second question, I think this for, um, Patrick, um,
Second question I think this oil patch.
Patrick.
Okay.
Speaker 20: transcript
We have seen a pre-substance reduction in the renewable diesel margin over the past several weeks.
We have seen a pretty substantial.
Patrick Pouyann: On the wind, yes, wind, European, the Commission. And it's more the European wind manufacturing industry, which is complaining if I'm reading carefully rather than the European wind development industry. The developers are still willing to develop with lowest cost because that's a good question to the Commission. I think, you know, I like on solar, do they want to protect the consumers by continuing to have access to the lowest possible cost of renewables or do we want to protect the manufacturing industries?
We touched in renewable diesel margin over the past several weeks.
Speaker 20: transcript
and that the wind price in the U.S. has been dropping, and we have also seen the LCFS price remain relatively low. Does this market condition in any shape or form impact your thinking of the investment in the alternative fuel like renewable diesel and SAF?
And that when clients in the U S have been dropping.
And we have also seen the FCS Pi remain relatively low.
So that's the market condition in any shape or form impact your thinking of the investment in the automotive field by.
Total DSO and AR.
No.
Okay.
Alright, thank you.
Patrick Pouyann: That's a question. Until now, in the last 10 years, it was always a, European, European, EU has favored the consumers in fact. And I've seen a call from the solar developers calling for not protecting them. So, I will say, again, I've for us, honestly, at the end of the day, in the US, when we are asked by the area to use US goods, we are using US goods, you know, in the off-shore wind project in New York, we have made a deal with GE, we secured the price and the cost, by the way, of the turbines with GE, which will build a new manufacturing plant in New York, creating local jobs.
Speaker 8: transcript
In fact, as Jean-Pierre told you the first question, it's not only the mix, the lower nosy, it's the fact, and it's more important, and we'll come back to you, I think, in February , that the new barrels that we are producing...
In fact as <unk> told you. The first question is that there is a mix lower lower <unk> is the fact that it's more important and will come back to you I think.
February that the new volumes, but we are producing.
Speaker 2: transcript
Like in Brazil, like in Iraq, like I think there was another example. In your... In Azerbaijan? In Azerbaijan? Yes, in Azerbaijan.
Like in Brazil like in a in Iraq like I think there was another example in Europe.
I mean, there is a bunch of Sean here.
Speaker 2: transcript
In fact, other lower fish called burden than the declining barrels from the North Sea. So it's interesting for you because that means that there is a trend in our portfolio with new barrels and higher margins will lower time.
In fact at a lower fee.
Fiscal burden than the declining bondholders for the North sea. So it's interesting for you because that means that there is a trend in our portfolio <unk> and <unk>.
Higher margins were lower tax.
Patrick Pouyann: All but as a cost, but it has been integrated in the, in the CFD, which has been accepted, you know, and agreed in negotiating. So, I think, so up to, we will adapt, also, if we are flexible, you know. That's why, by the way, we should not anticipate to early this type of CFD in the shortly because if you take the insurance is to early, then as the environment is moving, you could be trapped in something which becomes less profitable.
Speaker 3: transcript
To give you the real figure for Q4, I mean, it's premature, I cannot guess on that. As you know, we are making quarterly results, and generally the last quarter you have some alignments. But to come back, is there any one of that? Jean-Pierre, confirm. I give you the two main factors in my speech. So once again, the weighted average.
Give you, though youll figure for Q4, I mean, it's there's <unk>.
Actually I cannot guess on that as you know we are making quarter results in January as of last quarter, you have some alignments, but to come back is there anything you want to relax.
We are confident with them two main sectors in my speech, so once again.
Weighted average high.
Speaker 8: transcript
high-tax barrels versus low-cost barrels, and the fact that we are now more accretive barrels in our portfolio. So there was no one-off. On the second one...
Hi, Darryl.
Hi tax barrel Lucas nerves and the fact that we are now marketing balancing our portfolio. So there was no oil.
Patrick Pouyann: So, it's because a wind off-shore wind is taking more time. I've said that at the end of the day, I can confirm to you, but I see more and more gold-willed Chinese wind farms being built in Europe and in the world. Thank you.
The second one.
Speaker 2: transcript
The US refining market and LTFS. And honestly, as you will notice, if you probably notice, Port Arthur was not really running in the Q3. We had an issue.
Z U S refining market in TFS.
Lastly, as you will notice as you probably noticed both offer was not really running into Q3, we had an issue so.
Speaker 2: transcript
So we have more work here on restarting your thought after with this long haul and it will restart by being November by taking care of the margins in the US because unfortunately when the refinery is not working there is no margin to capture.
So.
Bertrand Haudi: Next question is from Bertrand Haudi. Yes, hello. Thank you for taking my question.
We have more work here on restarting your thought offer with long or and it will be start by mid November by taking care of the margins in the U S. Because unfortunately when the refinery is not working there is no margin to capture so I think for me from my mind.
Bertrand Haudi: Too very quick one if I may. The first one on Namibia, you disclose that the, the first dual DST test so on Venus was in line with expectation, but could you share a bit more color on that? You hinted that if it was, you know, $5,000 for the equivalent that it was not good, it was 15, it was okay. So, can you give us a bit of a color and whether it was above 15 or below 15? That is essentially my question.
Speaker 2: transcript
So I think for me, for my, I mean, I will dig, thank you for the question, but I still see.
<unk>. Thank you for the question.
Still see.
Speaker 8: transcript
every day, quite a high margin in the U.S., even if it's lower, again, like in Europe . We went to the roof. It was around almost not far from $200 per ton, I think, which we never seen since I am in this company during one quarter. It's softening today, but it's softening remaining around $120, $150, so it's still very high.
Every day quite a high margin in the U S. Even if it's lower again like in Europe, we went through the roof, which was around the almost not far from $200 per ton I think which we never seen since I am in this company.
One quarter is suffering today, but some softening remaining around 120 150, so it's still very high.
Speaker 8: transcript
Does it affect renewable resources and staff? No, because in fact all these businesses today are regulated, in fact, now they are from where regulated. Somewhere in Europe in particular, at the end, the staff price is more guided by the penalty that somebody will pay if it does not fill the mandate rather than the demand and supply, because today, in fact, on the staff.
Does it affect.
We are always has been soft nor because in fact all of these businesses today.
We're regulated in fact that we are somewhat regulated and so on where you are in Europe. In particular, you know at the end of this tough price is more guided by the penalty that somebody will pay if it does not feel the mandate rather than the <unk>.
Patrick Pouyann: And then on US offshore wind in New York, can you disclose in dollar per megawatt, what is your current cap estimate before any inflation provision? No, I cannot fill your full XS file by dear Bertrand, sorry to tell you about. I didn't know that 15 was a threshold, it depends from, you know, honestly, I think we told you the truth, it's in line with our expectation, that means that if in line we have the assumptions, we are taken to plan the development.
The demand and supply because today in fact on the staff so supply in short of the demand somewhere else. So you will see running behind so it's more of the.
Speaker 8: transcript
The supply is short of the demand somewhere. So you're still running behind. So it's a regulated business somewhere. And as the penalties are quite high, it does not impact this directly as a business. In the US, we don't make SAF today. So I'm not able to come back to you on this one. We plan to produce SAF in the future in Port Harbour, but we don't do it today. So I cannot help you to understand the market in the US today specifically.
Our regulated business somewhere as a penalty are quite high.
It does not impact us directly as a business in the U S. We don't make soft today so.
Not able to come back to you on this one we plan to produce stuff in the future.
Patrick Pouyann: So, if it's in line, that means that we are happy, we introduce, we get the data, they confirm the productivity as a production per well and we know that this, with this level of production per well, we can make a profitable development. So, I mean, I don't want to comment more one test because we have plenty of tests coming. And so, let's continue the job and you will have to rely on what we say, but as we are listed company, generally we say the truth.
But we don't do it today, so I cannot help you to understand.
These markets in the U S to the specifically.
Alright, thank you.
The next question is from Gianluca Romano of CIC market solutions.
Speaker 1: transcript
Question, sir, is from Jean-Luc Romain of CIC Market Solutions.
Hi, Good afternoon. Thank you for taking my question.
Speaker 21: transcript
to your acquisition in Germany. I was wondering with the electricity that you will purchase and on medium-term contracts will be accounted for in your power capacity or in your...
It relates to your acquisition in Germany.
Patrick Pouyann: And then, on the second one, I think. , I think it's something that I don't remember to be honest, the lack of mega-wet Aure, before any Capex provision, we don't work like that, so we have a Capex including contingency, this is the way we work, you know, we work in North Shore Wind, the same way that you know in the Arizona side, we're an experience of projects, of short projects, and we know that when you make a North Shore project, you don't think we're only the EPC contract, but you are taking some contingencies, and when we communicate in Aurelien gas on the Capex, we communicate always including contingencies, because we perfectly know, but in Aurelien gas when you make a project, things will not be exactly the sigma or the EPC contract, and this is one of the mistakes which is done in the industry by some of the competitors, which believe that you make the EPC and you will execute right with the EPC, and it's why today you have some EPC contractors which are facing difficulties, because then they have huge pressure on them, and they are obliged to announce losses, now it's not the way, you know, if the sustainability of this model, business model, like we've done in Aurelien gas industry, is to understand, but you make a project because your EPC contractors are also surviving, you know, and judges are surviving, making profits, and that's why when we execute a project in Aurelien gas, we know that we have contingencies, I remember the first time or offshore wind developers came to the executive committee, we were as mentioning to us two percent of provisions, we were laughing, we thought, no, no, offshore, it's at least 10 percent, you know, and we know by by experience, and I will tell you is that our experience in sea green, instead installing 100 wind turbines offshore, it's much more complex, but installing one big offshore oil platform, so it's including provision, and we make all of projections and negotiation with the right provision within our CAPEX.
I was wondering with.
I think <unk>.
Gotcha.
Correct.
Will it be accounted for.
Fuel and power capacity.
Bosses.
I wanted to ask smoke.
In terms of generating margin.
It would be a sale, but not a capacity we don't own the capacity, we manage the capacity as you know we.
Speaker 2: transcript
It will be a cell but not a capacity, we don't own the capacity, we manage the capacity.
Speaker 8: transcript
You know, we are honest people, so we don't invest in the capacity, but we have access to some capacities, which is a good thing. And then we need the sales because we are selling it for sure. We are selling it to customers and we might have even, I think in the portfolio, we have two gigawatts out of the nine which are under medium, long-term PPA, so that's sales, which will be reported as sales.
On this before so we don't invest in the capacity, but we have access to some capacity, which is a good thing and then we'll if we need the sales because we are selling it for sure we are selling it to customers and we might have even.
I think in the portfolio, we have two gigawatts out of the nine which are the medium long term PPA, so, but sales, which will be reported as sales, but not as capacities, because we don't own the capacities, which we will.
Speaker 8: transcript
but not as capacities because we don't own the capacities. But the way it will work, you know, like in LG, you know, you have some reporting in the service and we don't report when we have...
And or light.
In LNG.
714, and yourselves and we don't report when we have it is like if you're a long term PPA SBA that we have with the U S. LNG cheniere.
Speaker 8: transcript
It's like a long term PPA SPA that we have with the USLNG in Cheignier. You know, we don't account for the capacity in our production because we don't produce it, but we account in the same.
We don't account for the capacity.
Production, because we don't produce it but we count we accounting into sales.
Speaker 2: transcript
Same mechanics. Same mechanics. There is parallel is the right one, by the way. Thanks very much.
Same same mechanic same mechanics, there is apparel is <unk> by the way.
Thank you very much.
The next question is from Jason gave woman of T D Cohen.
Speaker 4: transcript
uh... hey good afternoon uh... just one follow-up uh... on capEx i think you mentioned both the oil sand divestment and the sale to kushar to close in for q which implies about six billion dollars of divestment proceeds coming in and it in light of that it seems like
Hey, good afternoon, just one follow up.
On Capex I think you mentioned, both the oil sands divestment and the cell to Koos charter were closed on <unk>, which implies about $6 billion of divestment proceeds coming in.
And.
In light of that it seems like.
Speaker 4: transcript
reiterating the $16 billion to $17 billion CapEx range for 2023 would be a bit high. So I was hoping you just could square those two. Thanks.
Reiterating the $16 billion 17 billion.
Capex range for 2023 would be a bit high.
So I was hoping you could square those two thanks.
Okay.
Well no it's not.
Speaker 2: transcript
Well, no, it's not I. No, because it's not so high because you we spend the organically five to five billion, six billion per quarter. You we have today at the end of the quarter 16. We spend five to six billion per quarter. We'll divers, but we have one or two acquisition that I mentioned, which are coming in the quarter as well. So 16, 17 seems to be a, it's not 16, 18. By the way, we specify 16, 17 is morning.
Paul Tang: Thank you. The next question is from Paul Tang of Gosebank. Thank you, good morning, or good afternoon.
No because it's not so high because we spend organically $5 5 billion 6 billion per quarter.
Paul Tang: Two questions, once it's really short, maybe it's for John Paul. The third quarter, E&P, effective tax rate, they call it rank number 45 to 10, seems a bit low, even taking into consideration of the lower contribution from North Sea. If there is only one off benefit in tax in the quarter, and also more importantly that based on the current market condition, what is your expectation for the division effective tax rate in the North quarter?
Today at the end of the <unk> 16.
We spent $5 6 billion per quarter will.
We will divest, but we have one or two acquisitions that I mentioned, which are coming in the quarter as we also see.
<unk> seems to be a 16 18 by the way we specify $60 70. This morning.
Speaker 8: transcript
So we I think as a 1617 seems to be to us the right range, but we will will explain you that in the annual water. So take it as it. I think we have a good view on where we should land. All right, thanks.
So we I think goes a 16 17 seems to be to us.
So the right range.
We will you will explain you that in the annual water. So take it as it is I think we have a good view on where we should land.
Patrick Pouyann: Second question, I think this or Patrick, we have seen a pretty substantial reduction in the renewable diesel margin over the past several weeks, and that the wind price in the U.S, has been dropping, and we have also seen the LCFS price within relatively low. That's the next market condition you may should have formed in thinking of the investment in the alternative field like renewable diesel and SIS.
Alright. Thanks.
Your next question comes from Alessandro Pozzi of Mediobanca.
Speaker 22: transcript
I would have sooner and just one question on the microside and I guess in a way linked to the recent offtake agreement in Qatar. This week the IEA published the World Energy Outlook and they don't get it again the gas demand for 2050. I think if you look at the APS is down 40% gas demand. I was wondering is this versus 20% gas demand?
Hi, Good afternoon, just one question.
On the macro side and I guess in new ways, and then to the recent offtake agreement in Cotai.
This week the IEA is published.
World Energy outlook and downgrade it again the gas demand for 2015.
If you look at the Rps is down 40% gas demand.
I was wondering is this versus 2022.
Speaker 22: transcript
This is a concern for you. I'm linking a blocking such long term contracts or do you think?
Our concern for you.
Local such long term contracts or do you see.
Patrick Pouyann: Thank you. In fact, as Jean-Pierre told you the first question, it's not only the mix, the lower nocy, it's the fact that it's more important, and we'll come back to you, I think, every, that the new balance that we are producing, like in Brazil, like in Iraq, like I think there was another example in Europe, in Azerbaijan, in Azerbaijan. In fact, other lower fish called burden than the declining barrels from the nocy, so it's interesting for you because that means that there is a trend in our portfolio with a few barrels and higher margins for lower tax.
Patrick Pouyann: To give you the real figure for Q4, I mean it's premature, I cannot guess on that, as you know we are making quite a result and generally it's a lot shorter, you have some alignments, but to come back, is there any one of the racks? No, Jean-Pierre confirmed that. I guess you have the two main factors in my speech, so once again the weighted average high barrels versus high tax barrels versus low-cos barrels, and the fact that we have no more active barrels in our portfolio.
Patrick Pouyann: So there was no one. On the thing and one, the US refining market and LTFS, honestly, as you noticed, as you probably noticed, Port Arthur was not really running in the Q3, we had the issues, so I mean we have more work here on restarting your Port Arthur with long ore, and it will restart by being November by taking care of the margins in the US, because unfortunately when the refinery is not working, there is no margin to capture.
Patrick Pouyann: So I think for me, from my, I mean I will dig if thank you for the question, but I still see every day quite a high margin in the US, even if it's lower, again, like in Europe, we went to the roof, it was run almost not far from $200 per ton, I think, which we never seen since I am in this company during one quarter, it's suffering today, but it's suffering remaining around $120, $150, so it's still very high. Does it affect the renewable diseases and stuff?
Patrick Pouyann: No, because you know, in fact, all these businesses today they are regulated, in fact, they are from where regulated and somewhere you are in Europe in particular, you know, at the end, the stuff price is more guided by the penalty that somebody will pay if it does not fill the mandate rather than the demand and supply, because today, in fact, on the staff, the supply is short of the demand somewhere, so you are still running behind, so it's more the, it's a regulated business somewhere, and as the penalty are quite high, it does not impact historically the business. In the US, we don't make stuff today, so I'm not able to come back to you on this one, we plan to produce stuff in the future in Port offer, but we don't do it today, so I cannot help you to understand the needs market in the US today specifically.
Jean-Luc Romain: All right, we do, thank you. The next question is from Jean-Luc Romain of CIC Market Solutions. Good afternoon, thank you for taking my question.
Patrick Pouyann: I think it relates to your acquisition in Germany. I was wondering with the electricity that you will purchase on medium-term contracts will be accounted for in your power capacity or in your power sales, or will that work? Will it be only an intermediary margin? It will be a sale, but not a capacity. We don't own the capacity. We manage the capacity. You know, we are honest people, so we don't invest in the capacity, but we have access to some capacities, which is a good thing.
Patrick Pouyann: And then we'll bring in the sales because we are selling it, for sure. We are selling it to customers, and we might have even, I think in the portfolio, we have two gigawatts out of the nine which are under medium-long-term PPA, so that's sales, which will be reported as sales. But not as capacities because we don't own the capacities, but the way it will work. You know, like in LNG, you know, you have some reporting in the service, and we don't report when we have, it's like a long-term PPA SPA that we have with the USLNG, Cheney, you know, we don't account for the capacity in our production because we don't produce it, but we account in the service. Same mechanics. Same mechanics, but it's parallel to the right one, by the way.
Unknown Executive: Thanks very much.
Jason Gabelman: The next question is from Jason Gabelman of TD Cohen.
Jean-Pierre Spar: Hey, good afternoon. Just one follow-up on CAPEX. I think you mentioned both the oil-sand divestment and the sale to coup start were closed in 4Q, which implies about $6 billion of divestment proceeds coming in. And in light of that, it seems like reiterating the $16 billion to $17 billion CAPEX range for 2023 would be a bit high. So I was hoping you just could square those two.
Jean-Pierre Spar: Thanks. Well, no, it's not high. No, because it's not so high because we spend organically $5 billion to $5 billion per quarter. We are today, at the end of the quarter, 16. We spend $5 billion to $6 billion per quarter. We'll divest, but we have one or two acquisition that I mentioned which are coming in the quarter as well. And also $16.17 seems to be, it's not $16.18, by the way, we specify $16.17 is morning. So I think $16.17 seems to be to us the right range, but we will explain you that in the new water. So take it. I think we have a good view on where we should land.
Unknown Executive: All right.
Alessandro Pozzi: Thanks.
Next question comes from Alessandro Pozzi of MedioBanca.
Good afternoon. Just one question on the microside and I guess in a way, it's linked to the recent offtake agreement in Qatar. This week, the IEA published the World Energy Outlook and they don't give you the gas demand for 2050. I think if you look at the APS is down 40% gas demand. I was wondering, is this versus 20? Edith Wendry II, this is a concern for you, a link in blocking such long-term contracts or do you think...