Q3 2024 TotalEnergies SE Earnings Call
Speaker Change: Ladies and gentlemen, welcome to the total energies for 4th 2024 results conference call.
Speaker Change: I now hand over to Patrick Pouyann, Chairman and CEO of Jean Pierre-Streme, CFO, who will lead you through this call. So, let's go ahead.
Patrick Pouyann: Good morning, good afternoon, everyone Patrick Biennet here together with Jean Pierre Nice to be with you again after seeing you many of you in person That's all in the studio in New York, I have his month
Patrick Pouyann: I just spent last few weeks in Rotchuz and I would like just to share with you that we got a constructive feedback from the investors or on balance strategy and the level of understanding of our growth profile on both pillars and in gas.
Patrick Pouyann: with a quality and therefore I'll swim for 4-1-1 side but also on your side, the integrated power is now a bit better in the suit on both sides of the Atlantic.
Patrick Pouyann: As discussed at the University of the Criter, the consistency of the strategy must remain operating.
Patrick Pouyann: This is Pinatel, Goss, keeping a low-break event towards Foulou. And it's from Bernardin, supporting a fact issue with the return of the fundamental principle, which allows the company to be resilient for the cycles.
Patrick Pouyann: Especially when we are entering into an increasingly volatile and certain environment like what we have seen during these first quarter.
Speaker Change: I will not be longer than I will end over to Jean Pierre to discuss details of the figure-to-fine and shows.
Speaker Change: Regarding the upstream environment, Brent decreased by 5% quarter over quarter H H.
Speaker Change: Why is the company average LNG price decreased by 6%.
Speaker Change: In this context the company reported adjusted net income of $4 1 billion below on the quarter and $13 9 billion dollar although the first nine months.
Speaker Change: Profitability remained robust with return on average capital employed for the 12 months ended September at 14, 6%.
Speaker Change: Moving now to the D&S segment, starting with the first.
Speaker Change: Also a balanced strategy.
Speaker Change: Talents.
Speaker Change: First regarding oil and gas production.
Speaker Change: During the third quarter churn was 241 median value look like if we didn't build it within the guidance range of $2 four to 45 million barrel oil equivalent.
Speaker Change: We continue to see good performance from project ramp ups, mainly made with <unk> in Brazil, which partially offsets unplanned shutdowns to meet its energy and security related disruption in Libya.
Speaker Change: In addition, during the third quarter, we achieved first oil at the high margin Encore project, there's Gulf of Mexico into the U S and first gas at the Phoenix field offshore in Argentina.
Speaker Change: We expect production for the fourth quarter of 2004 to be between $2. Four point to point 45 median value of oil equivalent per day benefiting from the and the secret Ricky Ricky disruption.
Speaker Change: And yes. It is softer on the mill feed projects in Brazil that compensates for several plant shutdowns during the fourth quarter 2004.
Speaker Change: Exploration and project has been almost continues to be strong.
Speaker Change: We reported adjusted net operating income of $2 5 billion, but up stable cash flow of $4 <unk> and an attractive retail on capital employed of 15, 6%.
Speaker Change: On the project side.
Speaker Change: Most of the company and its partners sanctioned on mobile.
Speaker Change: Yes.
Speaker Change: Last one 220000 Boes per day.
Speaker Change: S peso located offshore Selina with estimated weekend reliable reserves of more than $750 million.
Speaker Change: These low costs low emission developments west thanks, Sean one year.
Speaker Change: After the end of the playbook and designed to accommodate future opportunities to extend the <unk> finfet.
Speaker Change: <unk> is a company six major oil and gas.
Speaker Change: If I E 24.
Speaker Change: I don't know if which there is a medium term predictions will also be well, 3% bill yet for 2013.
Speaker Change: We came at it translates into growing shareholder distributions.
Speaker Change: Exploration budgets have ASC 932, well fixed although we.
Speaker Change: Remain best in class at $4 nine build up build up February.
Speaker Change: For the first nine loans 24 compared to the objective to be below five.
Speaker Change: Moving to take thank you Dan.
Speaker Change: First on the reserves.
Speaker Change: Hydrocarbon for the transfer of LNG decreased 7% quarter to quarter, primarily linked to Atlanta metals.
Speaker Change: Yeah.
Speaker Change: On the other hand, and then he said increased by 8% quarter to quarter.
Speaker Change: In the context of seasonal inventory replenishment.
Speaker Change: Integrated NGL <unk> <unk> was $1 1 billion down just Phil what's up.
Speaker Change: He's learned primarily reflects lower deposit trends.
Sure Yeah, you know, it's really benefits from markets.
Speaker Change: Low volatility.
Speaker Change: Cash flow was at one point you.
Speaker Change: Two the timing effects in even on peanuts from some equity yes.
Speaker Change: Around 200 million.
Speaker Change: They're looking for what's even evolution of oil and gas prices in the recent months and the lag effect on price formulas. So telling me that he anticipates that its elevated LNG setting price should be your own standard up on Nuomi to you in the fourth quarter up 94 slightly higher than the $9 nine.
Speaker Change: See you in the third quarter.
Speaker Change: During the third quarter up 30, now he strengthens future cash flows by signing several medium term sales contract in India, bringing total AGM LNG contract sign you have to go to $4 million.
Speaker Change: In addition, we that has quite an integration along the gas value chain by took Ryan look us upstream gas supply in the Eagle Ford in Texas.
Speaker Change: Moving now to India.
Speaker Change: Although the company continues to deliver on these targets for the first quarter I just need to identity guard remains close to 0.5 and cash flow the board <unk> Humira.
Speaker Change: Yesterday.
Speaker Change: Adjusted net income totaled one, particularly he ended up.
Speaker Change: <unk>, 1% year on year and cash flow totaled $1 95 billion Buda.
Speaker Change: 75% and in line with annual guidance of more than $2 5 billion dollar coffee beauty who've already you can see of the competition.
Speaker Change: In addition, we have extended our tactical blackouts, we retailed an average capital employed for the 12 months and the endoscope number close to 10%.
Speaker Change: Okay.
Speaker Change: Achieved several milestones during the third quarter.
Speaker Change: So that's why I'm being the startup of two Giants solar farms in the U S with battery storage.
Speaker Change: Yes, good market in Texas, where we already have all the necessary building blocks that define <unk>.
Speaker Change: <unk> integrated model.
Speaker Change: We closed on the strategy the acquisition look at needing to deregulate, the UK markets that complement our existing intermittent renewable assets and lastly, we signed a partnership in booth, Yeah, Lisa at any in Germany, and the deadlines with <unk> in <unk>.
Speaker Change: In the third quarter adjusted net operating income total jopling secret umbrella and cash flow totaled one point to be ended up.
Speaker Change: The marketing and trading activities, partially compensating for the very sharp decrease in global refining margin in Europe down 66% sequences and the like.
Speaker Change: Two of the worlds.
Speaker Change: In refining and chemicals, the company's European refining markets fell to $15 per tonne in Q3 due to normalization of credit flows after the Russian ban.
Speaker Change: Ample supply quality to recent capacity increased.
Speaker Change: Currently close to 25 neuropathy.
Speaker Change: These indicate a 15 year after Israel, whereby now breakeven on that.
Speaker Change: 25.
Speaker Change: And we still felt that's where we saw incidents in some of our refineries.
Speaker Change: For the fourth quarter of 2000 and for the companion anticipates refining utilization rates will remain below 85%, we even saw the wrong plan at learning a refinery in a pivot.
Speaker Change: Marketing and selling as a result remained strong for the silk with or without just integrating the ego or zero points will be India, and guestroom or 0.6 million Boe.
Speaker Change: At the company level and to wrap up.
Speaker Change: What are we looking at one point when we ended up they get EBIT just meant to net income related to impairments.
Speaker Change: These garments being linked to two elements. The first one the chapter 11 bankruptcy filing of <unk> in the U S and the exits on blocks element, meaning 12, B and 567 in South Africa.
Speaker Change: After the beats, we bought in the first quarter. The first working capital when it was reported during the second quarter and the new release of the $4 4 billion, but that was reported this quarter and we anticipate that working capital will continue to reduce the first quarter and you'll either be ended up is anticipated for the second problem.
Speaker Change: First quarter 2004.
Speaker Change: As I was saying in goods would you care profitability remained robust with retail elaborates capital deployed at 14, 6%.
Jeff you said that keeping a strong because her 24 net investment guidance of $16 million to $18 million.
Speaker Change: Lastly, we continue our track record of strong shareholder distribution.
Speaker Change: You back out consistent with the company set to execute yet another 2 billion going out in the soft quarter in light of your objective of AP and go out for the full year flexible.
D var is healthy with a third of them carry maybe nuts.
Speaker Change: Nearly seven 7% compared to 2000 and.
Speaker Change: 20% compare to quickly levels.
Speaker Change: We stop here and we've.
Speaker Change: With that Patrick and I are available to answer your questions.
Speaker Change: Okay.
Speaker Change: Thank you ladies and gentlemen, we will now begin the question and answer session.
Speaker Change: As a reminder, if you wish to ask a question. Please press star one on your telephone and wait for your need to be announced please contact me with any other sources like asking a question.
Speaker Change: If you wish to cancel your request please press star.
Speaker Change: Once again, please press star one if you wish to ask a question.
Speaker Change: The first question is from Lydia <unk> from Barclays. Please go ahead.
Lydia: Thank you and good afternoon, and thank you for the presentation two questions if I could answer.
The first one on cash flow if I look at the cash flow in the quarter at just under $7 billion ex working capital and I don't know if I said, what was effectively I think tell us that no actually that's kind of a capex dividends and buybacks.
Lydia: Is that just a specific closely feature always cash flow actually starting to like behind your expectations.
Speaker Change: And then secondly, very different topic that we have started to see some transactions in the back much of in Argentina can you talk to what your plans are for Argentina, and what do you hate me opportunity that might be.
Speaker Change: From the cash flow I think.
Speaker Change: We hope you have mentioned in his pitch, but there was.
Speaker Change: We have to.
Thank you fix a lag effect from some of the Smes and the.
Speaker Change: So reserves under the cash dividends.
Speaker Change: So we sell LNG, assuming so it's why it's affecting the integrated energy cash flow, Nigeria, I didn't catch all of it because I think this is not.
Speaker Change: Something we should be reversed in flux. There is no fundamental reason throughout it.
Speaker Change: Detroit suggest.
Speaker Change: Quarterly effect, so I would say no more no specific point behind this one I would say.
Speaker Change: On the second question, Yes, I learned that some and we have quite a lot as you know for acreage in Argentina.
Speaker Change: We know that we managed that quite cautiously here, we're just recirculated capex cash flow mainly produce gas we have some.
Speaker Change: Some acreage exactly like Exxon and Vod window, which Simpson, though we did book the block in fact, it's a question of.
Speaker Change: Okay. Thanks, I mean always puts it really is a question followed by the way.
Speaker Change: Our company is we know if we move from undertaking capex more or will do unless on the guests but would require some investment. So we are evaluating.
Speaker Change: Okay.
Speaker Change: Having said that we do not intend the as long as our I would say there's no.
Speaker Change: Specific country, where you kind of see Petrie a dividend really so as long as it's commenced the same.
Speaker Change: <unk> as a generic residents when I met him or last months.
Speaker Change: We won't sell them when they book you know so we were.
Lets invest more as long as we don't see.
Speaker Change: The freedom to repatriate dividends so.
Speaker Change: Again, I've, a we have a we have a large portfolio, where we are evaluating all options.
Our country, but.
Speaker Change: Let's close I can tell you.
Speaker Change: Hum.
Speaker Change: We will of course in the lives of the short answer.
Speaker Change: Options be asking about.
Speaker Change: Okay.
Speaker Change: The next question is from Makena the Levy now from Goldman Sachs. Please go ahead.
Speaker Change: Thank you very much I had two quick questions. The first one I was wondering if you could update us with progress with your Uganda project one of the giant startups that we've got to in the relatively near term and also in Mozambique, and we've had the elections.
Speaker Change: This effectively bring you one step forward to restarting that project and then secondly, I was wondering with cop 29 coming up in Baku next month, if you had any expectation of what you think could be some loyalty.
Speaker Change: Low hanging fruit of some of the wins in terms of.
Speaker Change: Changes too.
Speaker Change: To the global policy there. Thank you.
Okay. Thank you Emmy Kids.
Speaker Change: Uganda is progressing as per plan, we intend to start of production by mid 2006.
Speaker Change: So drilling is is positive I would say are in the news from those of our point of view.
Speaker Change: Globally <unk> positivity.
Speaker Change: I would say is progressing.
Speaker Change: The pipeline itself is being started to be built in late so I would say we are on their way to deliver this important project as we said not only in terms of the jumbo loan or swing in terms of cash flow for the company is quite sizable investments.
Speaker Change: So that's where we are on Uganda on me.
Speaker Change: <unk> I would say we need to.
Speaker Change: Again.
Speaker Change: No. We are there are different aspects in Mozambique sufficiently strong.
Speaker Change: Okay.
Speaker Change: Yeah.
One of them was a security.
Speaker Change:
Speaker Change: Okay.
Speaker Change: On the security side I would say are we are we are.
Speaker Change: Well it is progress of course, the fact that there will be a stable.
Speaker Change: Political or poorly Mozambique is important for us. So we are following the news from there and we intend to visit the country.
Speaker Change: When it will be we'd be ready.
Speaker Change: But I think it's of course, a positive for us.
Speaker Change: Module stability in the country when it comes with its own. It is for all of US I think I said that we are more focused on North Island, Cabo Delgado I don't care, whether they are those are good news plugged the election process, but this was quiet there was no events during that period, so I would say.
Speaker Change: From this perspective for me, it's positive, but the assessment on the security side for the maturities that we could we start those projects with the contracts as we worked to all everybody is there.
Speaker Change: So would you I think last time or last point on which we are working and I Hope we'll have good news is that we're.
Speaker Change: Wherever it came with additional rent on the financing of the projects as you know there was a big project financing package, which was the.
Signing in fact executed in 2000, 22021, we began but as a way to execute it in 'twenty one before the full measure.
Speaker Change: All the credit export agencies that have done the due diligence from the on.
While the projects and that technically it's okay. No. We are waiting for the different green lights, and particular form there I would say some discipline our credit certainties and we are working program. So from my perspective, I would say we are on the right track but of course this is a.
Speaker Change: Fundamental to have or the financing in place before we restart the projects. So that's the last points on which we work.
Speaker Change: On cookbook Jeannine honestly, I don't see a lot of them and I will myself veeva because as you know I am one is a free with free champions of the oil and gas Decarbonization charter together, we've done a jabil and I'm in NASA.
Speaker Change: So we have a an event, though I would say by the way to neutral arresting collective move for the industry, where they engage with 52 company a lot of national oil companies and it's an interesting.
Speaker Change: I would say moving forward so to put in place.
Speaker Change: With these initial companies the same type of reporting framework with the one we oven, so which programs to shell. So a lot of experience in short of our experience in terms of our.
Speaker Change: Beijing methane emissions, which is one of your objectives. So I think Betsy is positive.
Speaker Change: The cop 29, I'm not partly I mean, MISO, we are not I would say a part.
Speaker Change: Part of the discussions.
Speaker Change: According to the news that <unk>, we don't expect much of new fees and no one knows a key.
Speaker Change: Chapter on which we'd like to see pulls Ics on these.
Speaker Change: The cushion of the carbon credits the Fei more optical <unk>.
Speaker Change: Because it's important in order to invest in these type of credits to have a sort of strong framework, which would be.
Speaker Change: Validated by the U N and the global community protection for Ritchie would be good I think in order to make these investments in the in those formula in investments and benefits. So, let's I would say the main expectations on those sites.
Speaker Change: Okay.
Speaker Change: Thank you.
Speaker Change: Okay.
Speaker Change: The next question is from Matt Lofting from Jpmorgan. Please go ahead.
Hi, James Thanks for taking the questions two if I could please first just coming back to your early comments on cash flow generation in the quarter Arena, obviously shape.
Speaker Change: Fluctuate and that can be phasing effects quarter on quarter. So wonder if you looked at yes.
Speaker Change: To date, the nine months performance can you talk about underlying cash generation.
Speaker Change: For the course of 'twenty.
Getting <unk> expectations on a underlying basis and then.
Speaker Change: Currently the capital frame was made very clear.
Speaker Change: Yes.
Speaker Change: The beginning of October we will invest today Kevin.
Kevin: Sure Matt.
Kevin: Volatility to the downside as well as the upside could you talk about where the threshold in terms of win.
Speaker Change: Hey, Tyler energies, where do we look to activate some or all of the 2 billion Capex flex that you talked about thank you.
Speaker Change: Okay first.
Speaker Change: On the cash generation I would say on the cash flow after.
Speaker Change: Nine months, we are about $23 billion next two French freeze, which means are we at today are the food last fourth quarter was one 7 billion. So it's between 30 around 30 billion. There are we could land at the end of the year, which is in fact, we are more in line and we were at 41 42 are your expectations on the one side with the re.
Speaker Change: Finding margin. So for me we are in the Boardwalk and I would say from this global perspective does the chance or the guidance we gave you.
Speaker Change: The last.
Speaker Change: <unk>, New York, including on the share buybacks I would say I am consulting we are comfortable with we are on the track that we've been anticipating so I see no impact.
Speaker Change: We are on from this perspective, so let's consider we are there.
Speaker Change: At around <unk> 2 billion.
Speaker Change: Can you talk a capex what was the Capex for me to be here and it's a it's not that $70 or it will change our strategy you know, Steve probably supposed Vicki said Ventura when we speak about short of short term.
Speaker Change: Fix or short.
Speaker Change: Short cycle Capex, you saw Capex, which had 70, though that would give us a payback wishes quite quickly. So it for me is a challenge. It's only if we are going to 15 16 startup of borrower, but we could consider activating part of this flexibility and arbitrating. Some of these short cycle capex because the payback for these additional awards.
Speaker Change: We'll be longer so I see no difference from between 70 and 90.
Speaker Change: The market seems to be done to 70, but again for <unk> guidance, we gave you.
Speaker Change: Last T M D. But you can consider them good by the way I remind you just to correct a slightly shorter 17, $18 16 18 for the year.
Speaker Change: 70, the ATM.
Speaker Change: For the year 2004 and for next year, we told you it will be in the range of.
Speaker Change: 16, 18, and you have the 18 billion wrote off.
Speaker Change: Organic capex so.
Speaker Change: Thank you Patrick.
Speaker Change: The next question is from Irina <unk> from Bernstein. Please go ahead.
Speaker Change: Thank you very much good morning.
Irina <unk>: My first question on refining, obviously, a very weak quarter.
Speaker Change: Patrick you you have said before that I see you are not positive on the business.
Irina <unk>: Do you see grounds for optimism that as OPEC, plus tops, returning $2 2 million barrels a day to the market margins could strengthen meaningfully from the current $25, which I believe is your breakeven level and then my second question on LNG.
Speaker Change: Recently to Tyler Lewis.
Speaker Change: Quoted in the press as expecting the next wave of capacity could be delayed by two years, which is obviously very material you are a key participant to that novel increase through your strategic focus on LNG and can you share with us.
Speaker Change: Where you see the delays, which big projects are driving this view and in that delay scenario, where would you expect ETF.
Speaker Change: Yeah. Please thank you.
Speaker Change: Okay.
Speaker Change: I don't know what is in the first refining.
Speaker Change: Refining of your average margin.
Speaker Change: You can take different matrix is around $35 per ton on the <unk>.
Speaker Change: 2013, 2000 free and by the way receives a planning assumption we use internally of the long term is $35 per ton, which is under 25 today and Thats why we are working at two of these are breakeven going down to $25 per tonne.
Speaker Change: You know about a moderately optimistic optimistic about this.
Speaker Change: This events I think we benefited from two years well. So he can cover the 2021, there was a huge acceleration on some shutdowns of refinery in Vietnam tick basins, you know on both sides by the way in particular on the.
Speaker Change: America side in the Caribbean Islands, and the U S. A lot of conversion to buy a refinery when you add the dislocation of the market because of a push and froze, which I did so I would say some.
Location and some pushing the margin up I think since of course like always on price margin saw good people stop continuing to west structuring in parts from Euro in Europe, we've even seen some few small refineries, which was supposed to be a shutdown which was maintained.
Speaker Change:
Speaker Change: So and.
Speaker Change: And then on the top of it you add some new refineries, which have started in particular in China, which have added an additional capacity. The Chinese were suppose in their policy to shut down some what they call the depots the or small refineries, but it's at the ports are still cooking I would say and Thats mid threat you have quite a lot of <unk>.
Speaker Change: Supply.
Speaker Change: At the same time, so and today in fact, we are also facing in Europe is the fact that some flows are coming some products are coming from the U S, which can because the Russian products go to South America U S coming to us and Europe last point that was not list.
Speaker Change: No.
Speaker Change: Feed demand demand in Europe is not very strong today. So that means that we are back to I would say it was a traditional cycle whereby.
We stopped I mean, we the diagnosis with the industry's top I would say.
Speaker Change: Thanks for joining to capture good margins and I think our time. So I'll just were to come back fundamentally year, which was true before we still true today.
Speaker Change: You have too many small refineries in Europe, and everybody else will do his job I would say one way as you know is to transform these biorefineries refinery in bio refineries because at the same time in Europe, we benefit from a bit of a regulations, which push by.
Speaker Change: Biofuels.
Speaker Change: For I think a better demand for Biofuels for regulation, So I would say that so the optimism moderately opdivo optimist I would.
Speaker Change: Be more optimistic I see more I would say announcements about shutting down and we find out if it takes time. It takes time, so let's see the $35 per ton a for me a good long term plan and then it's volatile so I hope we will capture more in the future.
Speaker Change: But like forward price you know it's difficult to.
Speaker Change: Ooh Beazer.
Speaker Change: Yes about LNG I don't know lets say two years ago, we were very clear with.
Speaker Change: Very clearly New York C. M. D. I told you what we were thinking by the way, we'll begin not 'twenty six 'twenty seven I think <unk> never spoke about 25 of them being we don't see a big additional supply in 'twenty five towards ever mentioned it was a debate between 26 and 27.
Speaker Change: We are just reading the new you know.
Speaker Change: We've got some projects in the U S, which have been delayed for different reasons.
Speaker Change: So I would say on my view, we seek to raise new additional commenced as the one we are doesn't.
Speaker Change: The wave of additional capacity, 10% per year doing for years.
Speaker Change: So let's begin baby singled out of 26, 27, and 28 2009. So for 2025 I would say we are expecting GTS is seasonal so its the average on the on the year. The average today on Tcf is around I think central Golar now today, we are more than 12 foot in dollar.
Speaker Change: I have the MVP of $12 four.
Speaker Change: It would be more or less at the same level by the MVP. So we anticipate for 'twenty five something of the same range I think I would say around an average of around $12 per million Btu, because again, we don't see in 'twenty five or any additional.
Speaker Change: Additional capacity, which would suddenly changed the fundamentals of what I would say a market, which still is still.
Speaker Change: And the pension and then we'll see by 'twenty six and of course, we will forego carefully all the news of startup of delays so long as a year, 2025%. So again I'm not sure one year 27, yes, two years, no and 25 should remain in our view so the same type of environment.
Speaker Change: We have benefited in 'twenty four so positive.
Speaker Change: For the 10 energies as a big area.
Speaker Change: And as you play you.
Speaker Change: Okay.
Speaker Change: The next question is wrong.
Please proceed a coupla from Bank of America. Please go ahead.
Speaker Change: Thank you very much good afternoon.
Speaker Change: Just two questions on renewables. Please for me I wanted to double check Patrick if you could.
Give us a little more detail on how you feel the current market sits I think since we saw you in New York you fast farmed into.
Speaker Change: <unk> project is.
Speaker Change: Is it easier to farm in these days.
Speaker Change: Much more difficult is it to find partners for farm Downs that you are looking for in parallel on other projects and maybe related to that.
Speaker Change: Please let us know what you think of them, making a corporate acquisition as equity or debt.
Speaker Change: A 10% shareholder rights, all set and whether you would contemplate anything similar so total thank you.
Speaker Change: The first one is quite Dizzy you know, we had an option which was negotiated better Burger we because as you've noticed we've made a farm in in the Dutch offshore wind in connections with all will to Decarbonize or.
Speaker Change: We learned refinery food green nitrogen so that was bought we negotiated an option.
Speaker Change: Burglary was efficient so we'd said successful to get access to offshore wind.
Speaker Change: Our licensees with very low cost of entry so I would be it would be strange from us not with a sizeable.
Speaker Change: Option.
Speaker Change: Because obviously solvay with well we benefited from it and it's good for us.
Speaker Change: That could lead us of close to as you know we are training more to be willing to scale. These offshore wind licenses by the way of working closely with <unk>, who is also a good upfront for us and for them to grow globally. Because we leased two two main players. So that I think are driving down the cost will be by I would say a skidding up these developments together.
Speaker Change: But something we contemplate.
And for US I would say we have more options.
Speaker Change: Our wind, Germany, and so we would see in which we'll do with most.
Speaker Change: Developers have different package for its again it. So it was a good report from <unk>. So from this perspective was obvious to us.
Speaker Change: On.
Speaker Change: To be I don't like to commences.
Speaker Change: The move my competitors, a respect everybody has its own strategy.
Although vision for its all very focused on offshore wind. So they are probably a good answers what is clear is that in my view just to a comment I know we have been consistent will become a minority shareholder of a competitor we vote on all sides of an industrial strategy.
Speaker Change: Ever done it and so when we went through Veeva. Danny you know, yes, we are minority shareholder Benetti Green, but we developed at the same size, some <unk>, who have access to some industry or the.
Speaker Change: Assets, so thats the way I see this type of leverage is probably I don't know I did not study carefully is a case of offset.
And we know, but I think our respect their decision and again.
Speaker Change: Again on all sides, we think.
Speaker Change: So we can develop organically some efficient.
Speaker Change: For wind assets.
Speaker Change: The.
Speaker Change: That's why we have done it whereby we.
Speaker Change: I would not have considered such acquisition, but again I respect their decision.
Speaker Change: Understood. Thank you.
Speaker Change: The next question is from Matthew <unk> from Morgan Stanley. Please go ahead.
Speaker Change: Okay, and I wanted to get back to the question that original songs have asked about which is refining margins specifically in Europe.
Sir.
There are.
Speaker Change: It's quite a sort of indication that there are some economic run cuts in the European refining system.
Speaker Change: Looking at the data that you reported today and also the guidance for utilization in the fourth quarter.
Speaker Change: Seemingly not in the total portfolio so.
Speaker Change: Just wanted to confirm margins have declined quite a bit.
Speaker Change: But they are they're not low enough for you to consider any economic run cuts right.
Speaker Change: That was the first I wanted to ask the second one is about the balance sheet.
Speaker Change: Last quarter gearing, 10% during the earnings call you talked about the sort of underlying level of about 7% to 8%. If you cleaned up for a few items, where now with 12.
Speaker Change: What explains the difference between the sort of 7% to eight and that was mentioned last quarter. It is also where and how often and how do you expect that.
Speaker Change: To develop over the next one or two quarters. Please.
Speaker Change: Thank you.
Speaker Change: Okay on the ordinary funding budget honestly I'm not sure we are big enough to consider all self funding cutting runs just to please our competitors in all of its type of strategy, which is are we sure there's lots of notebook of European refiners. So.
Speaker Change: I mean, we are today, the breakeven and I think as it is.
Speaker Change: It's something which because when you have quite to <unk> fixed costs and so I compare that more on the value Board. It's more a question of valuable Oh do we cover all Bobby valuable cost you know where I was breakeven is calculated in terms of fixed plus variable cost as long as we are the margins better.
Speaker Change: About the valuable cost is better to run our refineries in order to cover a part of your fixed costs are we are largely covering our variable costs.
Speaker Change: So simple economic theory that so no we are not there.
The question will be more for us more structurally and as you know we have.
Speaker Change: Already Tom swaps on refineries and buy a refinery is in <unk> and 'twenty as we have been always clear, but we are working on is a photo of this one's just on one site to capture of your opportunity.
Speaker Change: In Biofuels market.
Speaker Change: On the other side because.
Speaker Change: Except the last two years Genuity, it's economically marginal so we wish more important question for me or instructions to our teams is.
Speaker Change: Maybe the best use of your assets and as long as you cover your valuable cost obviously you have to right.
In order to capture Scott cover part of our fixed costs.
Speaker Change: Again questions no.
Speaker Change: Let's be clear, we all don't know its a seven 8% was last year. We have more you know that we have explained to you varies in the gearing just different aspects.
Speaker Change: It's a little I today, I think we should be back.
Speaker Change: And the range that you mentioned, 10% to 12% by the end of the year for different reason.
Speaker Change: For this quarter as you've seen values, we stood up and I think I don't there was clear in his pitch.
We anticipate a working capital release of $2 billion for the next quarter, So which is in line with what we the guidance. We gave since the beginning of the year, we had the big cash our working cap.
Speaker Change: Okay.
Speaker Change:
So it's at the beginning of the year.
Speaker Change: More than 4 billion, if I remember 2 billion well perfectly linked to exceptional events of last year of tax issuance events of 2023.
Speaker Change: Over 2 billion should be coming back in the balance sheet before year end. So I know about all of the businesses is working on it. So I would say this is part of it when do you have a bulk of it is better to some some of you have noticed but really the capex, where I because this quarter, we have more acquisition when the sales of the year.
<unk> was <unk>, but it would be with your bed adds two question of again, a phasing the divestments and.
Speaker Change: As you know we are expecting some renewable divestments, because it's part of the model, which should be concluded in the in this type of visits of M&A. There is a lot of things Flushing Lastminute Dot com you know as of last quarter.
Speaker Change: And I don't we don't push vendors suite just two <unk>.
Speaker Change: Finalized or visa grows the deals before <unk> as of September 30 was first of December.
Speaker Change: But that's only Saturday, there's usually so equivalent practice. So I would say my view is that we should get to come back to something like around delivered 12% by the end of the year.
Speaker Change: What we can anticipate on the.
Speaker Change: If of course, we have remaining.
Speaker Change: These type of Undrawn mill price price environment of today.
Speaker Change: That's what I can tell you, but again.
Speaker Change: I know Youre March in this of this type of hearing was anticipated.
Speaker Change: At the board level, when we discussed about shareholder returns and we gave you the guidance for next year.
Speaker Change: <unk> 2 billion per quarter for share buyback and the.
Speaker Change: Dividends, increasing at least by the buyback of 23, which we said leads by 5%. It was anticipated this type of a gearing level.
Speaker Change: Wonderful thank you.
Speaker Change: The next question is from Doug Leggate from Wolfe Research. Please go ahead.
Speaker Change: Yeah.
Speaker Change: Good morning, everyone.
Speaker Change: Patrick.
Speaker Change: No you've been asked extensively about refining.
Doug Leggate: This morning, but I'm going to ask the same question a little differently.
Doug Leggate: Yes.
Doug Leggate: Some of your some of your peers have started to consider shutting refineries when they have a major capital event like a turnaround.
Doug Leggate: And as we as appears to be coming into an extended downturn like tissue and poor refining for the time being how do you see the portfolio today understand the breakeven is $25, but.
Speaker Change: Are there any assets you would consider rationalizing at this point if there's weakness continues.
Speaker Change: Again, we've done it and we've done it we've made in 2015 and we've done is we've roughly in 2020 and its quite clear that and what do we do it we try to look to the agenda of the shutdowns to avoid to spend a lot of money on the refinery and to shut down one year. After so that's part.
Speaker Change: But you know shifting.
Speaker Change: Turning around our refinery is it offensive or a full five years some of them by the way in our case are making turnarounds every two years some of the off more longer cycle for five years. So that is taken into consideration, but is that because of the turnaround, which again, we really avoid we will make a decision before to spend it for sure but.
Speaker Change: I would say again more went the way we love we have selected <unk> roughly is more influx of structural I would say a week.
Speaker Change: Weakness of interest to us pumps for them because of allocation of because of their markets et cetera. So when we think to this type of <unk>. We have 67 refineries I think today still remaining in the in the 1234566 defined areas in Europe, we know each of these.
Speaker Change: As such we know where our strengths, which yoga weakness and we will if we have and as you know we have been consistently.
Speaker Change: My view is that we need to transform them one after one and as each of these events is quite a big event in terms of that.
Speaker Change: Reinvestment on the platform to transform but also in terms of social impact is better to phase them rather than to wait 2035, and the decrease of the gasoline and diesel market in Europe, which will happen because of the decisions of the EU about the evs and all that so yes, we will continue to plan it.
Speaker Change: And if of course, we will avoid to wait to have spent the money on the platform to just dovetail announce that.
Speaker Change: We will shut down so but again.
Speaker Change: For me, it's not because of this.
Speaker Change: Strategic thinking is not linked to the low cycle of today.
Speaker Change: Prefab it since we have announced it won't be I would say we are preparing the next one so question is them to with all the different opportunities and to be sure that we are and as the markets are moving from.
Speaker Change: From this perspective, you know, including visa biofuel markets in Europe.
Speaker Change: Moving.
Speaker Change: Today's facing some oversupply choice or this type of thinking.
Speaker Change: It could affect us in Canada, but so.
Speaker Change: So we will we are working on it and.
Speaker Change: But again this is obviously important in my view.
Speaker Change: Normally in a market economy.
Speaker Change: What I would say the cost base curve of different assets and when's a margin <unk>. The first once we shut down although once we.
Speaker Change: Breakeven I would say so as we have good assets with low breakeven I'm expecting others to move to shutdown before US number is the way. It works otherwise so we'll see and I think I said that again, you know our ambition I would say more on the opportunistic on the opportunity side the positive side.
Speaker Change: But we can see that with these bayou should market is soft markets in Europe with the mandate of 6% is giving good opportunities for brownfield projects, rather for Greenfield ones. So we exclude wind field. So we will and we have the ambition to continue to benefit from this market.
Speaker Change: Thank you for the full answer my follow up is a quick one on Suriname, obviously sadly I was was unable to be in person York. When you presented the strategy update but you did talk about Suriname sanctioned on a full year plateau, but with tie back opportunities. Since then your partner.
Speaker Change: Has been suggesting the plateau could be extended as much as to eight years and I Wonder if I could ask you to offer your perspective on that.
Speaker Change: We are the operator of the project.
Speaker Change: Okay.
Speaker Change: So what's your view on the long term platform.
Speaker Change: I stick to what we told you even though we are the operator of the project. We we said versus plateau is designed for four years. We also explained that we have selected <unk> to a higher plateau level, because we consider that.
Speaker Change: On mobile could be the hub of our.
Speaker Change: <unk>.
Speaker Change: More tie backs I'm unable to quantify it because most of these.
Speaker Change: <unk> that had been drilled so less relevant before to speak about the duration.
Speaker Change: Terrific. Thanks, so much.
Speaker Change: Okay.
Speaker Change: The next question is from Eni for go ahead Donna from Bank of America. Please go ahead.
Speaker Change: Hi, Thanks for taking my question I, just had one related to going back to the CFO.
Speaker Change: At the start of this year you gave some.
Speaker Change: Guidance, which looks like it's something closer to 34.
Speaker Change: And the macro environment that you show that versus.
Speaker Change: What we've seen is not that different obviously refining has been weak.
Speaker Change: Is it possible to help me bridge the gap between the 34 ish billion that you maybe originally envisaged and besides you bid MSA that you mentioned any moving parts that would be helpful. Thank you.
Speaker Change: I don't remember 34, 32 in mind, but I would say clearly along the yeah. The guess.
Speaker Change: Price was lower than expected during the first half of the year I think we have been clear.
Speaker Change: We went down under $10 per million Btu during the first half so European inventories go away completely replenished. It is a seasonal effect. We are back since this summer to 12 $13 per million Btu more in line with our assumptions. So I would say there is 1 billion somewhere for me, which is which.
Speaker Change: Linked to these guests.
Speaker Change: Gas market has been less volatile and it's true that in a less volatile markets or trading business has been.
Speaker Change: Performance, which was very good more than with <unk> with excellent in 'twenty, two 'twenty free benefiting from big volatility when the market is quite stable. It is more difficult. So I would say a raise 1 billion mobile out of these these one $1 5 billion out of your guests are trading.
Speaker Change: Luke gas pricing.
Speaker Change: <unk> view of the thoughts we have gone for these refining business well I think we're losing.
Speaker Change: I would say I would say I don't know I don't have the figures in my 500, the five of them beyond our borders where I think the best of all we will recall side over that by the end of the year because it is.
Speaker Change: Is not yet finished in any in any case, so I would say that's in the main I would say Oh.
But the main elements I have in mind.
Speaker Change: What they've suggested theorizes that.
Speaker Change: Again, I'm trying my teams to try to catch <unk> quicker than me so.
Speaker Change: But they are a little slow so the best is that I think you can they will give you a core.
Speaker Change: To tell you, but again don't have awards of mass yeah.
Speaker Change: The <unk> 34 in the <unk>.
Speaker Change: Okay.
Speaker Change: All right that's fine. Thank you so gas and refining okay.
Speaker Change: The next question is from Luca.
Speaker Change: Luca Panama BNP. Please go ahead.
Luca Panama: Yes, thanks very much.
Talk to you in a couple as well if I might.
Luca Panama: I want to focus on Nigeria for a moment if I might.
Luca Panama: Firstly, Patrick can you just remind me where we are around the sale of the onshore assets to <unk>.
Luca Panama: Is that expected to complete where things went the authority.
Speaker Change: Well Dana.
Speaker Change: And also thank you.
Could you make any comment on Nigeria, seven on progress in terms of developments and timing and just generally on gas flows into Nigeria, LNG and how those have been progressing through this year in my own opinion in place here Okay.
Speaker Change: And then secondly, just at J P. Perhaps the comment its toll on the write offs that you've taken this tool, which is a $1 billion.
Speaker Change: Yes.
Speaker Change: I'll pass it right down.
It looks very much like dealing with sunpower, but just explain to me. That's it. Thank you very much okay.
Speaker Change: Sure.
Speaker Change: Thank.
Speaker Change: So valves are and have been received some approval Oh man in D. C. I think recently the regulators said, but.
Speaker Change: We should have a green light so we are working on it.
Speaker Change: No just we are not in the same position that some of our peers. Because we are not operating and we are not operating position. So I think it's easier for the authorities to evaluate the quality of the buyer because we are non operator.
Speaker Change: We transfer and we have a limited share we have 10%. So the 10% is limited share.
Speaker Change: Non operated positions. So of course in terms of evaluation by the regulators is easier probably to that to improve and we have the <unk> advisor we have been already approved.
Speaker Change: Approved recently either deal on an offshore assets are non operated offshore asset. So each center is.
Speaker Change: It's a buyer with well known by few for it so I did not anticipate.
Speaker Change: The difficulties of Nathan we are so we can see the visa process to follow and we are following very carefully so let's point on 2007 as you know we have been.
Speaker Change: Working all.
Speaker Change: For the last year.
Speaker Change: There are two of to obtain a good too right terms to be able to develop some new gas projects in order to field. These train seven because it's you know as you know we have already some difficulty to supply orders the guests through the first six rates, so I've been quite clear MISO.
Speaker Change: But I think my colleague zarzuela fuels as well with the Nigerian of fluids is that it's time to accelerate.
Speaker Change: The sanctioning of a gas projects in order to fill this strange.
Speaker Change: We have got some improvements in particular on the Townsville gas price <unk> Freeman the downstream ourselves we have sanctioned the first projects better.
Speaker Change: Which has been sanctioned this year and which is dedicated to fill these twin.
Speaker Change: <unk> so it's depending as these will be in.
Speaker Change: In line with its commitments in terms of supplying the first series of seven trains. We are working on another one which is called <unk>, which is a.
It's more of a very.
Speaker Change: Quite a low cost to gas feel very next to <unk>.
Speaker Change: But in the islands. So we are working on it trying to sanction VAT in 'twenty five.
Speaker Change: It's a good opportunity to monetize gas reserves.
Speaker Change: <unk> of an ounce I would say is a global package to <unk> Cisco leave us against reserves, so things should be in line again.
Speaker Change: Yeah, it's not an easy one and as you can see but at the end, we managed to make good projects and profitable projects.
Speaker Change: Positive on that the write offs I think <unk>. There are two parts was one was linked to.
Speaker Change: Sudbury.
Speaker Change: Company went through chapter 11, so we had to write off what was remaining because that is the capital employed and then other part was linked to the decision about South African assets well, we've made some discoveries, but the monetization of the gas discoveries was too difficult. In fact, there is no gas markets being gas in phosphates.
Speaker Change: So we are very limited.
Speaker Change: The possibility to go from gas to power is also very complex because you can read in newspapers as situations come in South Africa. So at the end, we decided that it was.
Speaker Change: And we had some contractual commitments. So we are moving on the development or we will stop in the assets. So I would say, but it was also.
Speaker Change: <unk> of timeline.
Speaker Change: It does to take better decisions.
Speaker Change: It's true, but oh by the way just to remind you our long story on the South Africa. When we took these licenses was not to disclose their gas liquids. Because we are looking for oil like today. We are looking for in the in the licensees. We have in South Africa next to that media. So it's clear that the or to monetize.
Speaker Change: And these are in South Africa or in gas.
Speaker Change: So in particular when gas is not located next to customers and most of the industries in the.
Speaker Change: In South Africa are not on the on the cost lines soft for the country, but they are more in the north west of the country or a little far away. So.
Speaker Change: So it has never been easy or is the gas market there.
Speaker Change: The contribution so that's a two week visit two reasons why we make these to write off this quarter.
Can I just push you a bit more on Nigeria, I think about startup of train seven what's your latest commentary on when you might expect that to happen and secondly, I mean gas prices used to be nominal so.
Speaker Change: Or nominal very low incentives.
Speaker Change: Just some sense of what you're actually able to or what price. It. So I'd say what price you need in order to justify an adequate return on the investment you're making.
Speaker Change: I think when the traffic momentum.
Speaker Change: So train seven is expected to start up by 26 by the end of 2006.
Speaker Change: That's part of the ones, which are not to come back to a question that they had before but it's one of those 20, which probably will not be in advance to be clear. Okay. Okay. So you can push it more through 'twenty six server that run 20 <unk>.
Speaker Change: And by the way as we are also developing the gas we don't need to have to train ready.
Speaker Change: And so we try to spend the capex according to <unk> figures.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Yep.
Speaker Change: And on price on gas that you're buying.
Speaker Change: <unk> to get from Nigeria to agree or.
Speaker Change: Or.
Speaker Change: And LNG to agree.
Speaker Change: No. It's done we have an agreement with them, we have increased and all of that bundle of energy.
But.
Speaker Change: Uh huh.
Speaker Change: Transfer price from the approved through the plant will be IL, which is no more no because initially and historically when you started in 1990 700 1998.
Speaker Change: There wasn't a big alignment between the supplier and a shareholder before insured though.
Speaker Change: And the shoulder in fact, you had 60% at MPC and venue at the three major.
Speaker Change: Major players shell total synergies.
Speaker Change: Eni, which we're on both sides. So in fact that transfer price was an issue for the <unk>, which was not speaking to wind energy, which was affected by that time, the conoco JV, but along the years as you noticed.
Speaker Change: It was why it was so critical to solve it we had different views of different partners when LNG have different views on their commitments to develop upstream gas. So there is a point where.
Speaker Change: As soon as you don't have an alignment we don't see you wanted to sell energy should protrudes develop more guests that he chair for the benefit of our partners and in LNG.
Speaker Change: That's very fair so that was the discussions and we solve it.
Speaker Change: Collectively.
Speaker Change: We enter two.
Speaker Change: The drop more gas a trend and of course that means that part of the margin is transferred from the downstream to upstream.
Speaker Change: In order to finance the developments, but it's quite clear.
As we are on both sides.
Speaker Change: We are somewhat neutral, but it's not the case for everybody.
Speaker Change: Okay. That's great. Thank you. Thank you.
Speaker Change: The next question is from Keith <unk> from HSBC. Please go ahead.
Speaker Change: Hi, Thank you for taking my questions I've got two please firstly on the outage at excess LNG, you've talked for some time about preventive maintenance to try and minimize any unplanned downtime.
Keith: Is there a way that this issue on the heat exchanger could've been avoided in any way.
Keith: I also understand that exit is expected to restart fully by mid November so should we expect a similar financial impact in Q4 than Q3, so around $100 million.
Keith: And then secondly on net financial expenses I've seen them tick up over the past few quarters could you talk about how your cost of debt is evolving as you refinance that at presumably higher interest rates. Thank you.
Okay, I'm, sorry, but I'm not in charge of <unk> six engines of the company.
Keith: And the advisory we are not operating expenses.
Keith: Salt something happened that it has been sold.
Keith: The point and I think my view be putting charter of operations are driving the lessons but to.
Keith: To avoid these type of issues.
Keith: Machines it can't happen.
Keith: And I am sure vessel, operator, and my team's willingness failure are working the best doing their best to avoid this type of unplanned events.
Keith: The slides I would say financial impact in Q4, I think it has been.
Keith: Been sold the thing.
Keith: It is as we started is cycled into my informations, so it should be.
Keith: The impacts would be it's not only $200 million isn't the way you mentioned 200 of scanned with I'm not sure. It was so big as an individual because they will have different impacts on the cash settled equity. This is part of it I don't know if you have an English OPM.
Speaker Change: No I don't have the I D.
Depth and interest rates are I would let the original 36 best of all of this.
Speaker Change: So at this time I have a very.
Speaker Change: We've got <unk>.
Speaker Change: Costs view.
Speaker Change: <unk> <unk> will be used.
Speaker Change: The reason why it should reach.
Speaker Change: Finance, what we need.
Speaker Change: We made two insurance Exiguous markets Wednesday period, and when you September very successful because it was obviously the supply and we very long maturities.
Speaker Change: <unk> strategy, we continue to implement is to try to have.
Speaker Change: Maturity of 34 years at the sacrifice that once again at <unk>.
Speaker Change: Thank you.
Speaker Change: <unk> portfolio.
Speaker Change: Uh huh.
Speaker Change: Right.
Speaker Change: Okay.
Speaker Change: Okay just just.
Speaker Change: Just before we take this next question.
Speaker Change: To answer to be Roger little clear up because in the meantime, the teams have worked so you'd be Rajiv did online you will be IP.
Speaker Change: You are right. The 34 was expecting we are most of their 30 $51 billion of expecting by the end of the year. So.
Speaker Change: My daughter.
Speaker Change: On the gas the fact that the gas price.
Speaker Change: Let's go over its $1 billion Zurn, Louisville gas trading gas and LNG gas is $1 billion, so compared to the year before so it's 2 billion on the on the gas and LNG as a grower and it's $1 billion on the refining margins. So lost $500 million Im not sure we have the figures, but just to a correcting guy I can easily.
Speaker Change: So from 34 to 31, let's say and then.
Speaker Change: Something which are different elements, but we'll come back to you next February rewards the detail just to be sure, but the elements are shared with everybody.
Speaker Change: And then.
Speaker Change: The next question is from heavy particular from UBS. Please go ahead.
Speaker Change: Yes that I want to thank you for the update two questions. Please the first one could you just a quick follow up on the comments around Eddy CFO generation in the year I was wondering if I think of the chemicals segment is also an area where.
Speaker Change: We've seen lower cash with an expected versus.
Speaker Change: What's your thought at the start of the Trop combination of the macro and maybe still ramp up off of based on underlying performance elsewhere in the business.
Speaker Change: And then secondly on the integrated Polar Road Chi.
Speaker Change: Dip below 10% this quarter, how quickly should we expect that to go back above the 10% level.
Speaker Change: Okay I'll stick on one is quite easy.
Speaker Change: It's linked to the calendar all of us of the farm Downs in fact as I told you before we are we have.
Speaker Change: The farm Downs when you make it up the renewables are quite to back because of course not only.
Speaker Change: You are in terms of capital employed.
Speaker Change: It does you will.
Speaker Change: Not only eliminates a share of equity, but also the shelves at depth. So it has a double effect and so as a farm downs our plan by via <unk> business units in the fourth quarter.
Speaker Change: You can see some I would say.
Speaker Change: Linear impact on the non linear and box along the year, but we should reach the expectation certainly again 90 596.
Speaker Change: That's a big difference.
Speaker Change: That's for me. The main explanation is more on the capital employed linked to the.
Speaker Change: The agenda of the farm downs on the chemicals I would say you know what.
Speaker Change: The chemicals.
Speaker Change: Following recent chemical companies, we are near the petrochemicals and polymers.
Speaker Change: Margins in Europe are low for quite a number of quarter the.
<unk> margins are not very big because again, we faced exactly like in your refining more Chinese capacity I would say on one side and as we had quite a number of key petrochemical projects and or in the U S. In particular, there was a wave of the Saint <unk>, which was the outcome.
2022, 2023, and we are part of it so quite a more supply.
Speaker Change: A link to a chip you said.
Speaker Change: Cost, which is there but most of these capacities in the U S and.
Speaker Change: In fact invested to export.
Speaker Change: At the same time, we've seen that the Chinese have been very active in fact to again be more self sufficient and so of course to a visit to a point or so for me margins off correct.
Speaker Change: I believe that the very high end I saw it. So we are not in the cycle I would say the middle or low cycle for chemicals products today.
Speaker Change: It's less cyclical than the refining.
Speaker Change: Making some positive results, but it's not.
Speaker Change: It's not a beautiful market, but it's more I would say no chemicals is more it's more downstream and you have more of a global economic macro will affect them. So you can see the IMF for expectations for the year or decrease quarter after quarter vessel that impacts this type of business.
Speaker Change: I would say in terms of demand and so if demand is lower of gross margins.
Speaker Change: Following.
Speaker Change: Thank you.
Speaker Change: The next question is from Paul Cheng from Scotia Bank. Please go ahead.
Paul Cheng: Thank you.
Paul Cheng: Good morning.
Paul Cheng: Patrick just curious that for the integrated power can you give us some maybe better understanding the contribution you're earning.
Speaker Change #100: Our CFO.
Speaker Change #100: Between the gas by power portfolio.
We knew what bow power portfolio. Thank you.
Speaker Change #101: Yeah, and you forget and the customer portfolio, because the office segments of revenues or contribution.
Speaker Change #102: One is the renewable biogas plants and the customer brands, knowing with US again I'm repeating it's an integrated business. So I would not make some money on the customer says I don't have the assets that are making also additional revenue on the customer because because I'm able to make this commercial business I would say, it's roughly FIFA between a free fall.
Speaker Change #102: So one field around renewables one further about the cash class and one further by the customers just to give you.
Speaker Change #102: You are aware of in the way, we see if if we stick to that.
Speaker Change #103: Great and Patrick can you give us an update where we are on the Papua New Guinea LNG.
Speaker Change #103: Key projects.
Speaker Change #103: When N G.
Speaker Change #103: We have been very transparent in the mall.
Patrick Pouyann: The markets, we said that we interrupted award tender process, because the Capex was up too hard we stopped and we have together with our partners. We have taken some view we have reviewed some I would say of the basis of design in order to streamline the projects and we have also.
Patrick Pouyann: <unk> been to a larger pool of contractors in particular automation contractors and.
Patrick Pouyann: According to my information we have.
Patrick Pouyann: Re tendering as began but since we have announced now the process to all these different contractors on the new.
Patrick Pouyann: On the new scheme, which again most of the scheme has been maintained but we will have some optimizations to give out as a partner in <unk>.
Patrick Pouyann: It's a simplified into a chip to make.
Patrick Pouyann: That's a cheaper source of clipper concepts.
Patrick Pouyann: And we expect or what would be a process, which is a little long so I'm expecting <unk> by next.
Patrick Pouyann: Next summer 2025, I think it is.
Patrick Pouyann: Because it's a big process and again, we have re engaged but the good news I can tell you is that it was quite enough lots of appetite.
Patrick Pouyann: Contractors from the Asian World, So maybe the western contractors, where I'm not so keen but on that side of the continent, and you know I wrote an NGO and find out we can find some contracts as we exit the appetite and which we are quite good too.
Patrick Pouyann: Quite happy to be invited to contribute and we have of course made towards the qualification processes.
Patrick Pouyann: And the teams are working very closely with them in other words, we have some good.
Patrick Pouyann: Within the competitive losses.
Patrick Pouyann: So if somebody's weight.
Speaker Change #104: And Patrick Yep Yep go according to plan Wednesday, first gas and that's going to be.
Speaker Change #105: I think it was returned in our CMT vocab, so I don't have that.
Speaker Change #105: Okay.
Speaker Change #105: Okay.
Speaker Change #105: It's 2028, no I'm not sure it was reset in this slide on the book, So I don't know everything off.
Speaker Change #105: Maybe my team and kind of help me on this one.
Speaker Change #105: Yes.
Speaker Change #106: It's not.
Speaker Change #106: Of course, we try to find it fun minutes, let's.
Speaker Change #106: That's right.
Speaker Change #106: Thanks.
Speaker Change #106: Okay.
Speaker Change #106: Okay.
Speaker Change #106: Okay.
Speaker Change #106: Hello.
Speaker Change #106: Yes.
Speaker Change #106: 2028.
Okay. Thank you.
Speaker Change #106: <unk>.
Speaker Change #106: Okay.
Speaker Change #107: The next question is from Harry <unk> from Baird. Please go ahead.
Speaker Change #108: Hi, there and thanks for taking my question I just have one left really.
Speaker Change #109: And that's just on the on the Bayou business, which I think you've referred to a couple of times.
Speaker Change #110: Europe is clearly incentivizing biofuel use.
Speaker Change #110: But there has been a lot of capacity that's been added.
Speaker Change #110: And if we see a lot more sort of brownfield conversions as well.
Speaker Change #110: Are you confident that theres going to be sufficient demand.
In Europe, and the U S to sort of soak up the.
Speaker Change #110:
Speaker Change #110: The available supply.
Speaker Change #110: Over the next two to three years clearly we're in a little bit of a period of weak margins currently thank you.
Speaker Change #110: I mean.
Speaker Change #110: Yeah.
Speaker Change #110: This is exactly why I was answering to one of geopolitical previously, but when we speak about this type of transformation and we appreciate.
Speaker Change #110: I appreciate all the demand and supply in this market in Europe is strong comfort deregulated and it's coming from regulation. So why do we after their newer margins is because two countries in the north of Europe, Sweden, and Finland, which we are planning to have a mandate for biodiesel, which was above the minimum of Europe. So it wasn't.
Speaker Change #110: <unk> was.
Speaker Change #110: As planned.
Speaker Change #110: Quite of a ballpark figure of 50% instead of 50.
Speaker Change #110: So some competitors are built some plans for making producing HBO when you weigh more diesel.
Speaker Change #110: Unfortunately, our new government came in and basically moved what he finds a monday to come back to be a standout.
Speaker Change #110: By European mandate around 10% so that creates it.
Speaker Change #110: The oversupply and when the HVO margins a decrease so that's the difficulty in pet film, but it's why when I while I'm.
Speaker Change #110: Im showing of course, we are following that carefully because.
Got it.
Speaker Change #110: It's not it's a niche but the initial before quickly and you know.
I know, it's a game of the airline companies, who are pushing us up to produce more in fact, they want us to have a diverse supply levels of price will go down and I know, it's quite easy to wear complaining there is not enough staff.
Speaker Change #110: Today, maybe we our intention, but we might be on the other side. So we are evaluating all of that because of course, it makes little sense to invest in Venezuela.
Speaker Change #110: Going to an oversupplied market. So we are evaluating that and the real rationale on things listen we draw is let's be cautious or if these guys are announcing a year Mondays Lorenzo and mandates.
Speaker Change #110: Only.
Speaker Change #110: Hosting the.
Speaker Change #110: Minimum legal standards Monday this one at home because I don't think that we modify them, but all of them voluntarily mandates on more question the board because against that mission of competitiveness for customers. So this is exactly is a process, where we ought to work properly.
It's a supply and demand in Europe.
Speaker Change #110: Like do you have to do it in the U S and the U S. That's exactly same markets or the buyers from the U S cannot move to Europe because.
Speaker Change #110: I would say.
Speaker Change #110:
Speaker Change #110: The content and then those regulations.
Speaker Change #110: Regulation, so what would be called the Biofuels there was soft in New York.
Speaker Change #110: And the rest is nothing that consistent that's more protection point specific so it's better.
Speaker Change #110: A lot of work on this we need to be as you know us.
Speaker Change #110: Before too.
Speaker Change #110: So as we told you in New York and other things to take into consideration.
Speaker Change #110: So there is some new.
Speaker Change #110: Aviation regulation, which are known to you would make some co processing and some existing refinery. So obviously, we have to evaluate it as an opportunity for us first for refiners to a better outcome.
Speaker Change #110: Drive better value for mortgage asset, but we need to evaluate properly of much of its co processing could be of use by newborn screening Europe, because it will be a competitor to any greenfield or brownfield projects. So we need to but it's also part of the equation, but we have to take into account.
Speaker Change #111: That's great. Thanks for your answer.
Speaker Change #112: The last question will be from market from Gumbert among from Cowen. Please go ahead.
Speaker Change #112: Yeah, Hey, it's Jason Gammel men from TD Cowen.
Jason Gammel: Two questions the first on.
Jason Gammel: On.
Jason Gammel: On Russia, and if we're in a situation, where the Russia, Ukraine conflict and I'm wondering how much cash.
Jason Gammel: Cash is out there that you haven't been able to recover between your mall in Nova <unk>.
Jason Gammel: Dividends that you'll be able.
Jason Gammel: To recoup.
Jason Gammel: Hmm.
Speaker Change #114: No I mean first I hope you are right in your assumption.
Speaker Change #114: And not only prototyping hedges with more for the PC DAU continent and by the way. It is I think it would be important for the global.
Speaker Change #114: Economic mood in the contingency for Airbus. These Nols as well was ending so no color on it.
Speaker Change #114: It's quite dizzy dividends of Nebraska, representing around $600 million per year. So they are stuck with most of them are second nobody think accounts not on the key accounts because of that.
Speaker Change #115: Yeah, So if I take us hips as dividend.
Speaker Change #115: For us in fact.
Speaker Change #115: This represents around 1 billion more or less I would say.
Speaker Change #115: And when you are part of the Yamagata dividends as well, which was at the beginning.
Speaker Change #115: We managed to get them and we were transparent and whereby the without publishing it David I know fabrication because literally nothing no dividends and also that means that you have probably end of the 500. So I don't know when it will end so probably by the end of the year would be one $5 2 billion.
Speaker Change #115: All of our cash dividends, which are.
Speaker Change #115: Somewhere on the overall accounts does.
Speaker Change #115: So as to give you a magnitude of it and of course it is not as important.
Speaker Change #116: Yes, that's that's helpful. Thanks, and then.
Speaker Change #117: Just going back or are turning to Capex and.
Speaker Change #117: It looks like if you continue with the pace of organic spending from <unk> that youll breached the high end of guidance.
Speaker Change #117: For the full year and I know, there's some inorganic acquisitions out there.
Speaker Change #117: All N V that hasnt closed yet so.
Speaker Change #117: 16 around 16.
Speaker Change #117: Okay.
Speaker Change #117: Great. Thanks.
Speaker Change #117: Okay.
Speaker Change #117: Goodness.
Speaker Change #117: Hum.
Speaker Change #117: Just the month do you have any closing comments.
Speaker Change #117: Yeah, we'd have some commensurate. Thank you first to your attendance.
Speaker Change #118: Okay again, I think that can be a quarter of course is lower than the previous once it's clear because we have been a I would say it vis vis vis refining margin that's part of the integrated value chain at the end we are comfortable with the fact that we are on the right track to deliver as a global year, we'd be in line with what.
Speaker Change #118: Dictations, we have confirmed with the board the return to shareholders as a strong return to shareholders guidance keep in mind that a was it a year 25, we'd also be positive. We told you in New York that we enter into a growth cycle, including on the hydrocarbon projections more than 3%.
Speaker Change #118: I can confirm here, we had the very good news yesterday instead the afternoon middle free started.
Speaker Change #118: Started up so as Rhonda will begin we had mero, two which is going to its maximum and so I can confirm to you, but the 25, we'd have a prediction.
Speaker Change #118: More volume and golf valuable like 3%. So on so that also will help of course, the resilience of the model.
Speaker Change #118: The and so thank you again for your support and for having listened to us and I.
Speaker Change #118: I hope we would have to meet you again in coming weeks.
Speaker Change #118: Okay.