Q1 2026 TotalEnergies SE Earnings Call

April 29, 2026

Speaker #2: Sir, please go ahead. So, good afternoon or good morning, everyone. Happy to be with you again today. So, before Jean-Pierre will go through the details of these first quarter financials—

Patrick Pouyanné: Good afternoon or good morning, everyone. Happy to be with you again today. Before Jean-Pierre will go through the details of this Q1 financials, I would like first to make some few opening remarks, in particular on the conflict in the Middle East and its consequences. As you know, this region, Middle East, holds of course a very special place for TotalEnergies. It's deeply rooted in our DNA, in our history, in our identity, because it is where the company was born in 1924 in Iraq. More importantly, this is a region where we have established along the years a prime position which differentiates ourselves. Since the very first day of the conflict on 28 February, our priority has been first the security of our teams and their families.

Speaker #2: I would like first to make a few opening remarks, in particular on the conflict in the Middle East and its consequences. As you know, this region, the Middle East, holds, of course, a very special place for TotalEnergies.

Speaker #2: It's deeply rooted in our DNA, in our history, in our identity, because it is where the company was born in 1924. In Iraq, and more importantly, this is a region where we have established along the years a prime position which differentiates ourselves.

Speaker #2: Since the very first day of the conflict on February 28, our priority has been first the security of our teams and their families. And we have decided just through today's afternoon to organize the evacuation of employee families and as well as some non-essential employees.

Patrick Pouyanné: We have decided, just through the two days after, to organize the evacuation of employee families and as well as some non-essential employees out of UAE, Qatar, Iraq, Saudi Arabia, Jordan, and Lebanon. Thanks to the strong mobilization in all our affiliates in the regions, but also around the globe and also at the headquarters, more than 1,300 people have returned safely from the countries concerned by the conflict. I want to thank all the teams who participated to that strong effort. Safety of our staff will remain our foremost priority, but I want also to reiterate here our full solidarity and support for the population of these countries which suffers the consequence of the conflicts. I want to reaffirm TotalEnergies' commitment to all our local partners, contractors, and customers.

Speaker #2: Out of the UAE, Qatar, Iraq, Saudi Arabia, Jordan, and Lebanon. Thanks to the strong mobilization in all our affiliates in the regions, but also around the globe, and also at the headquarters, more than 1,300 people have returned safely from the countries concerned by the conflict.

Speaker #2: And I want to thank all the teams who participated in that strong effort. Safety of our staff will remain our utmost priority, but I also want to reiterate here our full solidarity and support for the population of these countries, which suffers the consequences of the conflict.

Speaker #2: And we, I want to reaffirm TotalEnergies' commitment to all our local partners, contractors, and customers. From this point of view, I want to underline that we kept present in all the countries, aside our partners. For example, in Abu Dhabi, all our secondaries working for the ADNOC JVs are maintained on the ground.

Patrick Pouyanné: From this point of view, I want to underline that we kept a presence in all the countries aside our partners. For example, in Abu Dhabi, all our secondees is working for the ADNOC JVs are maintained on the ground. It's the same situation in Qatar. We have also, by the way, sent some experts to assist QatarEnergy in evaluating the damage and repair necessary to the two trains which were damaged during the conflict. We have maintained a team in Iraq, in Basra, of 20 TotalEnergies staff, who are supervising the progress of the GGIP key projects on the ground with around 5,000 workers there. Also in Saudi Arabia, we have of course maintained on most of our secondees in order to supervise the Amiral projects which mobilize today 22,000 workers.

Speaker #2: It's the same situation in Qatar. We have also, by the way, sent some experts to assist QatarEnergy in evaluating the damage and repair necessary to the two trains which were damaged during the conflict.

Speaker #2: We have maintained a team in Iraq, in Basra, of 20 TotalEnergies staff, which were supervising the progress of the DGFE projects on the ground, with around 5,000 workers there.

Speaker #2: And also, in Saudi Arabia, we have, of course, maintained or most of our secondaries in order to supervise the Amiral projects which mobilize today 22,000 workers.

Speaker #2: So, my message on this first is to thank all our teams, which are again working hard in the region, facing the situation. I went myself last week to visit them, and I can tell you that I had a strong feeling of high mobilization of everybody facing these adverse events. Also, I met, of course, our partners and authorities to reaffirm our commitment to the region.

Patrick Pouyanné: My message to on this first is to thank all our teams which are again working hard in the region facing the situation. I went myself last week to visit them, and I can tell you I feel I had a strong feeling of a high mobilization of everybody facing these adverse events. Also I met, of course, our partners and authorities to reaffirm our commitment to the region. Of course, we will have to draw some lessons from what happened, in particular to envisage some alternative evacuation routes for the production of oil in the region, but that will come after the conflict. This conflict immediately has some impact on TotalEnergies' operations. We have been, by the way, very transparent, I would say, since day one, to disclose all the impacts on our activities.

Speaker #2: Of course, we will have to draw some lessons from what happened, in particular to envisage some alternative evacuation routes for the production of oil in the region, but will come after the conflict.

Speaker #2: This conflict immediately has some impact on TotalEnergies' operations. And we have been, by the way, very transparent, I would say, since day one. That will disclose all the impacts on our activities.

Speaker #2: So at this stage, the production is shut down in Qatar, Iraq, and UAE offshore, which represents approximately 15% of the total oil and gas production of the company.

Patrick Pouyanné: At this stage, production is shut down in Qatar, Iraq, and UAE offshore, which represents approximately 15% of the total oil and gas production of the company. More precisely, 360,000 barrels per day. Because we continue to produce onshore UAE production, oil productions, 210,000 barrels per day TotalEnergies sales.

Speaker #2: More precisely, 360,000 barrels per day. Because we continue to produce onshore UAE production oil productions, 210,000 barrels per day, TotalEnergies says, which is evacuated through the Fujairah terminal out of the Strait of Hormuz.

Jean-Pierre Sbraire: Fujairah

Patrick Pouyanné: Fujairah terminal out of the Strait of Hormuz. We also continue to produce the Dolphin Gas between Qatar and UAE because it's a, I would say, a domestic Gulf production. While this is a significant portion of our production upstream, these Middle Eastern assets contributes less to our cash flow per barrel than the rest of our portfolio due to higher taxation in the regions. This 15% of volumes, a little less, 360,000 barrels per day, impact account, are for only account for roughly 10% of our upstream cash flow at EUR 60 per barrel. The company's cash accretive growth expected for 2026 is largely outside the Middle East, and you've seen that through the results of the first quarter.

Speaker #2: And we also continue to produce the Dolphin gas between Qatar and UAE because it's, I would say, a domestic Gulf production. While this is a significant portion of our production upstream, this Middle Eastern asset contributes less to our cash flow per barrel than the rest of our portfolio due to higher taxation in the region.

Speaker #2: And this 15% of volumes—a little less, 360,000 barrels per day—in impact account for only, account for roughly 10% of our upstream cash flow at $60 per barrel.

Speaker #2: The company's accredited cash, accredited growth expected for 2026, is largely outside the Middle East. And you've seen that through the results of the first quarter.

Speaker #2: Meaning that the higher oil price observed since the start of the crisis more than offsets, of course, the loss of production in the Middle East, and the equivalent of an $8 per barrel increase in the Brent is enough to offset the expected 2026 CSS flow from the shut-in production.

Patrick Pouyanné: Meaning that the high, higher oil price observed since the start of the crisis, more than offsets, of course, the loss of production in the Middle East. An equivalent of EUR 8 per barrel increase in the Brent is enough to offset the expected 2026 cash flow from the shut-in production. We are, of course, today of more of EUR 100 per barrel, I think even EUR 115 per barrel this morning, which in terms of our sensitivities to price, represent substantial additional cash flows. The impact on of the LNG production shutdowns in Qatar or in Abu Dhabi on our energy trading activities are, in fact, very limited as our exposure to our marketing portfolio is limited to 1.5 million tons for the remainder of 2026.

Speaker #2: And we are, of course, today at more than $100 per barrel. I think even $115 per barrel this morning, which, in terms of our sensitivities to price, represents substantial additional cash flows.

Speaker #2: The impact of the LNG production shutdowns in Qatar or in Abu Dhabi on our energy trading activities are, in fact, very limited. As our exposure to our marketing portfolio is limited to 1.5 million tons, further reminder of 2026.

Speaker #2: I remind you that most of the LNG produced by our GVs in Qatar are, in fact, marketed by Qatar Energy itself and not by TotalEnergies.

Patrick Pouyanné: I remind you that most of the energy produced by our JVs in Qatar are in fact marketed by QatarEnergy itself and not by TotalEnergies. Finally, on our refining activities in the region, the SATORP site, which is owned jointly by Aramco and TotalEnergies, was impacted by strikes that occurred during the night of 7 April to 8 April, causing damage to 3 units. No casualties were reported. As a safety precaution, the units were immediately shut down. A partial restart occurred on 14 April, allowing to resume production to a 50% capacity, 230,000 barrels per day.

Speaker #2: Finally, on our refining activities in the region, the setup site, which is owned jointly by Aramco and TotalEnergies, was impacted by strikes that occurred during the night of April 7 to April 8, causing damage to three units.

Speaker #2: No casualties were reported. As a safety precaution, the units were immediately shut down. A partial restart occurred on April 14, allowing production to resume at 50% capacity, or 130,000 barrels per day.

Speaker #2: And the repair work on the first one of the unit, a VDU unit, are well underway. And we expect to restart and to increase the production to more than 300,000 barrels per day from beginning early days of May—May 5th or around.

Patrick Pouyanné: The repair work on the first one of the unit, VDU unit, are well underway, and we expect to restart and to increase the production to more than 300,000 barrels per day from beginning of early days of May, 5 May, or of around. The situation for assets. This conflict, of course, has consequences beyond or only, the only perimeter of TotalEnergies, and now will impact the course of 2026 very significantly in terms of markets. Although the damage to upstream assets has been limited so far, the closure of the Strait of Hormuz constitute a major disruption to the world energy system as it affects around 20% of worldwide oil, crude oil, refined products, and of course, LNG exports.

Speaker #2: So that's the situation for assets. But this conflict, of course, has consequences beyond—or only the only perimeter of—TotalEnergies. And now will impact the course of 2026 very significantly in terms of markets.

Speaker #2: Although the damage to upstream assets has been limited so far, the closure of the Strait of Hormuz constitutes a major disruption to the world energy system.

Speaker #2: As it affects around 20% of worldwide oil crude oil refined products and, of course, LNG exports. And there is very limited spare capacity of production.

Patrick Pouyanné: There is very limited spare capacity of production outside the Gulf, in reality. The immediate consequence was a surge in oil prices, which are now around $100, $115 per barrel, which have been extremely volatile with major swings in the past weeks. Some days have been the highest days. I think we experienced eight of the 10 highest volatile days in the last 25 years during the month of March and April. Given the time required to restart facilities, but also, and more importantly, to reach the markets, you know, because the oil tanker which will be loaded in Abu Dhabi or in Saudi Arabia will take 25 days of shipping to reach its customers in Asia, Korea, or Japan. There is a time lag.

Speaker #2: Outside the Gulf, in reality. So, the immediate consequence was a surge in oil prices, which are now around $100 to $115 per barrel. They have been extremely volatile, with major swings in the past weeks—some days have seen the highest volatility. I think we experienced eight of the ten most volatile days in the last 25 years during the months of March and April.

Speaker #2: So given the time required to restart facilities, but also, and more importantly, to reach the markets—you know, because the oil tanker, which will be loaded in Abu Dhabi or in Saudi Arabia, will take 25 days of shipping to reach its customers in Asia, Korea, Japan, and so there is a time lag.

Speaker #2: Even if the war was to end quickly, prices are expected to remote at high levels and in all the scenarios I can read and I agree with the scenarios I'm reading, either for me IMF or from some banks, at least $80 per barrel is expected for 2026.

Patrick Pouyanné: Even if the war was to end quickly, prices are expected to remain at high levels. In all the scenarios I can read, and I agree with the scenarios I'm reading, either from the IMF or from some banks, at least EUR 80 per barrel is expected for 2026. In fact, the reality is that the 2026 surplus scenario that was anticipated by the markets and by ourselves, by the way, at the beginning of the year, is behind us. With global hydrocarbon inventories being materially drawn to balance the market already at a pace of 10 to 13 million barrel oil per day. We have already consumed, I would say, 500 million barrel out of inventories.

Speaker #2: In fact, the reality is that the 2026 surplus scenario that was anticipated by the markets and by ourselves, by the way, at the beginning of the year, is no other is behind us.

Speaker #2: We have global hydrocarbon inventories being materially drawn to balance the market, already at a pace of 10 to 13 million barrels of oil per day.

Speaker #2: We have already consumed, I would say, 500 million barrels out of the inventories. And with the phenomenon I described to restart and to reach the market, it's probably more like 1 billion barrels which will at least be consumed from the inventories.

Patrick Pouyanné: With the phenomenon I described to restart and to rig the market, it's probably more 1 billion barrel, which will at least be consumed from the inventories. We would exit even if the conflicts, and I hope so, will end in the month of May. We would exit the conflict with clearly some very low inventories. This conflict also has some impacts on the LNG markets and prices. We have seen that the European gas price have established today at around USD 15 per million BTU. Again, we are facing now, by this summertime, the peak season for LNG because it's only the warm summer season in Asia, which will draw and which will call for more LNG demand.

Speaker #2: And we would exit, even if the conflicts— and I hope so— will end in the month of May. We would exit the conflict with, clearly, some very low inventories.

Speaker #2: So, this conflict also has some impacts on the LNG markets and prices. We have seen that the European gas prices have established today at around $15 per million BTU.

Speaker #2: But again, we are facing now, by this summertime, the peak season for LNG because it's the warm summer season in Asia. Which will draw—and which will call for—more LNG demand.

Speaker #2: But also it will be a season where Europe will have to replenish its storage and, as you know, at the end of the winter season, we were at the lowest point of the last five years in terms of European gas storage around 25%.

Patrick Pouyanné: Also it will be a season where Europe will have to replenish its storage, as you know, at the end of the winter season, we were at the lowest point of the last 5 years in terms of European gas storage, around 25%. We anticipate as well, and I was in Qatar, but QatarEnergy, we wait for a real stabilization of the Strait of Hormuz before to restart the liquefaction plants. We cannot turn on and turn off these plants easily, so it will also impact, I will say, the time it will take to reach the market. That's on LNG, and I would not be surprised to see some support from higher prices by summer season considering this timeline or time lag that Qatar could.

Speaker #2: And we anticipate as well and I was in Qatar that Qatar Energy will wait for real stabilization of the Strait of Hormuz before to restart circular production plants.

Speaker #2: We cannot turn off these plants easily. So it will also impact, I would say, the time it will take to reach the market. So that's on LNG.

Speaker #2: And I would not be surprised to see some support from higher prices by summer season, considering this timeline or time lag that Qatar could—LNG could go back to the market, and Qatar Energy represents almost 20% of the world market.

Patrick Pouyanné: LNG could go back to the market. QatarEnergy represent almost 20% of the world market. In this context, strategy of TotalEnergies demonstrates once again the ability of the company to capture price upsides, thanks to major strategic strengths from the company. Also, I must say, and I compliment the team because of a strong operational performance, which of course is of essence in such markets during Q1. First, of course, we are integrated along the value chains of oil, gas, LNG, electricity, and allows us to capture margins and prices all along the value chains and provide us with a unique combination of activities in oil, gas, electricity, being a low-cost producer, transforming them into added value products, which can then be traded on the market and sold to our B2B, B2C customers. Secondly, we are, you know, growing.

Speaker #2: So, in this context, the strategy of TotalEnergies demonstrates once again the ability of the company to capture price upsides, thanks to major strategic strengths from the company.

Speaker #2: And also, I must say, and I compliment the team because of a strong operational performance which, of course, is of essence in such markets during the first quarter.

Speaker #2: First, of course, we are integrated along the value chains of oil, gas, LNG, electricity. And allows us to capture margins and prices all along the value chains.

Speaker #2: And provide us with a unique combination of activities in oil, gas, electricity, being a low-cost producer, transforming them into added-value products which can then be traded on the market and sold to our B2B, B2C customers.

Speaker #2: Secondly, we are in a growing we are a growing company. And a strong organic growth. And even we are demonstrating quarter after quarter, our ability to strongly grow our production.

Patrick Pouyanné: We are a growing company and a strong organic growth. When we are demonstrating quarter after quarter our ability to strongly grow our production with a, as you've seen, a 4% year-on-year organic production growth for the oil and gas business and also, of course, our electricity business. 4% for oil and gas was above our annual guidance of 3%. Which, of course, helps to offset, if not completely during the Q1 it was completely during the Q1, will be partially during the Q2, the impact of Middle East conflict.

Speaker #2: As you've seen, we had a 4% year-on-year organic production growth for the oil and gas business, and also of course for the electricity business. 4% for oil and gas was above our annual guidance of 3%.

Speaker #2: And which, of course, helps to offset, if not completely during the first quarter, it was completely during the first quarter, will be partially during the second quarter, the impact of Middle East conflict.

Speaker #2: But more importantly, it allows us to capture the upside of the high prices. Because the incremental productions that the new production that we put on stream is more is accreted, is more accretive and generates more cash flows per barrel that the average of the portfolio.

Patrick Pouyanné: More importantly, it allows us to capture the upside of the high prices because the incremental productions, that's the new production that we put on stream is more accretive and generates more cash flows per barrel than the average of the portfolio. Third, we are diversified, and I think this is again a strong lesson of this crisis. Strong diversification or rich and diversified portfolio allow us to compensate against the impact of the crisis in the Middle East for our geographically diversified portfolio of oil and LNG outside of the region. It notably allow us to activate the flexibility of our LNG portfolio to ensure the security of supply of all our customers.

Speaker #2: Third, we are diversified. And I think this is again a strong lesson of this crisis. Strong diversification or rich and diversified portfolio allows us to compensate again the impact of the crisis in the Middle East for our geographically diversified portfolio of oil and LNG outside of the region.

Speaker #2: It notably allows us to activate the flexibility of our LNG portfolio to ensure the security of supply for all our customers. And the diversity of the LNG portfolio—we are producing in 11 different countries—allows us to serve our customers in Asia.

Patrick Pouyanné: The diversity of the LNG portfolio, we are producing in 11 different countries, allow us to serve our customers in Asia, rerouting some non-contractive volumes that we have in our portfolio to them, and not to declare any force majeure in our contracts. I can ensure you, because I visited some customers in Asia, that they appreciate very much the value of the contract commitment at TotalEnergies. We have also, I would say, and it's another example of the optionality and of our diversified portfolio, I would say that more than ever, the decision to restart the Mozambique LNG construction in January could be fully appreciated because it's a way, a diversification which will be good for our portfolio by 2029.

Speaker #2: Rerouting some non-contractive volumes that we have in our portfolio to them, and not to declare any force majeure in our contracts. I can ensure you, because I visited some customers in Asia, that they appreciate very much the value of the contract commitment at TotalEnergies.

Speaker #2: We have also, I would say—and it's another example of the optionality and of our diversified portfolio—I would say that more than ever, the decision to restart the Mozambique LNG construction in January could be fully appreciated, because it's a way of diversification which will be good for our portfolio by 2029.

Speaker #2: There was an article recently in a journal, but Mozambique will be the Qatar of Africa. And we are proud to be the ones to build this project in Mozambique.

Patrick Pouyanné: It was an article recently in a journal that Mozambique will be the Qatar of Africa. We are proud to build these projects in Mozambique. It will help us to diversify. I would say as well as we are working hard, these events are giving a good momentum to sanction Papua LNG before year-end. In this context, of course, compared to the beginning of the year where we were all cautious, there are no reason not to fulfill all our commitments for strong returns to shareholders. I think the board has taken decisions yesterday that I'm happy to report to you.

Speaker #2: And it will help us to diversify as and I would say as well as we are working on this events are giving a good momentum to sanction Papua LNG before year-end.

Speaker #2: So, in this context, of course, and compared to the beginning of the year when we were all cautious, there is no reason not to fulfill all our commitments for strong returns to shareholders.

Speaker #2: And I think the Board has taken decisions yesterday that I'm happy to report to you. And considering, of course, the strength of the balance sheet, but also the environment and taking into account the ability to demonstrate our growth, priority was again given to what I call the sacrosanct dividend.

Patrick Pouyanné: Considering, of course, the strength of the balance sheet, but also the environment and taking into account the ability to demonstrate our growth, priority was again given to what I call the sacrosanct dividend by continuing to its strong track record of dividend growth. We have decided to increase the first interim dividend by 5.9%, above probably market's expectation, to EUR 0.9 per share, compared to last year interim dividend, which was EUR 0.85. We confirm once again the leadership of TotalEnergies, not only in terms of dividend resiliency, but also more important dividend growth among the oil and gas majors.

Speaker #2: I continuing to it's our strong track record of dividend growth. And we have decided to increase the first interim dividend by 5.9% above probably markets expectation to 0.9 euro per share.

Speaker #2: Compared to last year, the interim dividend was €0.85. So we confirm once again the leadership of TotalEnergies not only in terms of dividend resiliency, but also, more importantly, dividend growth among the oil and gas majors.

Speaker #2: Secondly, in view and we are I would say very pragmatic and consistent once again in view of the current projections of the evolution of the prices.

Patrick Pouyanné: Secondly, in view, and we are, I would say, very pragmatic and consistent once again, in view of the current projections of the evolution of the prices, not only the Q2, but as I said, along the year 2026, the board of directors gave us the authorization to continue, of course, the share buyback program up to the high end of the range that we gave last February, which was $750 million to $1.5 billion per quarter. We'll target the high end of this range up to $1.5 billion per quarter.

Speaker #2: Not only the second quarter, but as I said, along the year 2026, the board of directors gave us the authorization to continue, of course, the share buyback program up to the high end of the range that we gave last February, which was $750 million to $1.5 billion per quarter.

Speaker #2: So we'll target the high end of this range up to 1.5 billion dollars per quarter. The board also reiterates the objective to achieve the cash payout ratio above 40% for the full year 2026.

Patrick Pouyanné: The board also reiterates they had the objective to achieve a cash payout ratio above 40% for the full year 2026, and we will monitor buybacks accordingly along the year. Keep as well in mind that in terms of capital allocation, board attach great importance to deliberate the balance sheet, and we would be happy to see a gearing in the low 10s by the end of 2026 if the barrel price or if the crude oil price was remaining above EUR 100 per barrel. On that note, I will now turn now to call to Jean-Pierre Sbraire, who will go through the details of the first quarter financials.

Speaker #2: And we will monitor buybacks accordingly along the year. Keep as well in mind that in terms of capital allocation, board attached great importance to deliberate the balance sheets and we would be happy to see a gearing in the low terms by the end of '26 if the bar oil price is a crude oil price was remaining above 100 dollars per barrel.

Speaker #2: On that note, and I will not turn now to call to Jean-Pierre, we'll go through the details of the first quarter financials.

Speaker #3: Thank you, Patrick. So I will start by commenting on the price environment in the first quarter. Versus the first quarter '25. So Brent, average 81 dollars per barrel during the first quarter versus nearly 64 dollars per barrel in the first quarter.

Jean-Pierre Sbraire: Thank you, Patrick. I will start by commenting on the price environment in Q1 versus Q1 2025. Brent averaged EUR 81 per barrel during Q1 versus nearly EUR 64 per barrel in Q1, up more than 25%. Average liquid price was up by EUR 12.4 per barrel due to the timeline effect, in particular in VGO. TTF averaged EUR 13.7 per million BTU versus EUR 10.3 per million BTU during Q1 2025. Our average LNG price stayed at EUR 8.5 per million BTU. Oil price increase impacting LNG prices with 1 or 2 months of lag time according to LNG pricing formulas.

Speaker #3: Up more than 25%. And average liquid price was up by 12.4 dollars per barrel. Due to the time lag effect in particular in the Emirates.

Speaker #3: TTF average 13.7 dollars per million BTU versus 10.3 dollars per million BTU during the first during the fourth quarter '25. And our average LNG price stayed at 8.5 dollars per million BTU.

Speaker #3: All price increase impacting LNG prices with one or two months of lag time according to LNG pricing formulas. Finally, the European refining margins remain at 11.4 dollars per barrel.

Jean-Pierre Sbraire: Finally, the European refining margins remain at EUR 11.4 per barrel on average over the quarter, with exceptional margin in March and poor margins in January and February. In this price environment, the company reported very strong financial results with Q1 2026 cash flow of EUR 8.6 billion, increasing by 20% compared to Q1, and adjusted net income increasing by more than 40% to EUR 5.4 billion. These results, as already highlighted by Patrick, were possible because of a strong operational performance of all businesses, which demonstrated the company's ability to fully capture the environment upsides. Upstream delivered a 4% upstream underlying accretive production growth, offsetting the production loss due to the crisis in the Middle East.

Speaker #3: On average over the quarter, with exceptional margin in March and poor margins in January and February. In this price environment, the company reported very strong financial results, with first quarter '26 cash flow of $8.6 billion, increasing by 20% compared to the first quarter.

Speaker #3: And adjusted net income increasing by more than 40% to $5.4 billion. These results, as already highlighted by Patrick, were possible because of a strong operational performance of all businesses, which demonstrated the company's ability to fully capture the environment upsides.

Speaker #3: Upstream delivered a 4% upstream underlying accretive production growth offsetting the production loss due to the crisis in the Middle East. Downstream a very good operational performance of our refinery with an utilization rate on average over the quarter above 90%.

Jean-Pierre Sbraire: Downstream, a very good operational performance of our refinery with a utilization rate on average over the quarter above 90% that allow us to capture high refining margins in March. Trading was also able to take benefits from the high market volatility in March and deliver the high performance on crude petroleum products, but also LNG. TotalEnergies has delivered a strong profitability this quarter with return on equity at 14.4% and ROCE at 12.7%. Now moving to the business segment and starting with hydrocarbons. On a year-on-year basis, excluding the impact of the Middle East conflict, Q1 oil and gas production exceeded expectation and increased by more than 4% above the guidance provided of 3% for 2026.

Speaker #3: That allow us to capture high refining margins in March. And trading was also able to take benefits from the high market volatility in March.

Speaker #3: And deliver the high performance on crude petroleum products but also LNG. TotalEnergies has delivered a strong profitability this quarter with return on equity at 14.4% and a raw HA at 12.7%.

Speaker #3: Now moving to the business segment and starting with hydrocarbons. On the earlier basis, excluding the impact of the Middle East conflict, first quarter oil and gas production exceeded expectation and increased by more than 4% above the guidance provided of 3% for '26.

Speaker #3: As communicated by the company from the very beginning, the production was impacted by the conflict in the Middle East with an impact of around 100,000 barrels per day on average for the quarter which correspond on average to around 25 days of disruption during the months of March.

Jean-Pierre Sbraire: As communicated by the company from the very beginning, the production was impacted by the conflict in the Middle East with an impact of around 100,000 barrels per day on average for the quarter, which correspond on average to around 25 days of disruption during the month of March. E&P, exploration and production. Turning to quarterly results and starting with E&P division. The segment generated an adjusted net operating income of $2.6 billion this quarter, up by more than 40% quarter-to-quarter, fully capturing the increase in average liquid price of $12.4 per barrel over the quarter and demonstrating the accretiveness of the new projects. This quarter, Lapa Southwest in Brazil, Mabruk in Libya started up and will each, once ramped up, bring an additional production capacity of 25,000 oil equivalent per day.

Speaker #3: ENP. Exploration and production. So turning to quarterly results and starting so with ENP division, the segment generated an adjusted net operating income of 2.6 billion dollars this quarter.

Speaker #3: Up by more than 40% quarter to quarter, fully capturing the increase in average liquid price of $12.4 per barrel over the quarter, and demonstrating the accretiveness of the new projects this quarter.

Speaker #3: Lapas Southwest in Brazil, Mabuk in Libya, started up. And will eat once ramped up. Bring an additional production capacity of 25,000 barrels per oil equivalent per day.

Speaker #3: Similarly, cash flow reached for ENP 4.6 billion dollars up 26% quarter to quarter. On the cost side, once again we maintain our leadership with an average OPEX per barrel of oil equivalent below 5 dollars in the first quarter '26.

Jean-Pierre Sbraire: Similarly, cash flow reached for E&P EUR 4.6 billion, up 26% quarter-to-quarter. On the cost side, once again, we maintain our leadership with an average OpEx per barrel of oil equivalents below EUR 5 in Q1 2026. On integrated LNG. On the production side, LNG production, it has grown significantly by 12% quarter-to-quarter, mainly supported by growth in Australia with it is back to full capacity during the quarter, the United States and Malaysia. First quarter LNG sales reached 12.4 million tons, supported by strong spot activity, giving us a strong start compared to our yearly guidance of more than 44 million tons.

Speaker #3: On integrated LNG. So on the production side, LNG production it has grown significantly by 12% quarter to quarter mainly supported by growth in Australia with it is back to full capacity during the quarter.

Speaker #3: The United States and Malaysia. First quarter LNG sales reached 12.4 million tonnes supported by strong spot activity giving us a strong start compared to our yearly guidance of more than 44 million tonn.

Speaker #3: Supported by this growth and strong trading activity capturing market volatility, the adjusted net operating income of Integrated LNG was increased significantly quarter to quarter to $1.3 billion, and cash flow to $1.8 billion.

Jean-Pierre Sbraire: Supported by this growth and strong trading activity capturing market volatility, the adjusted net operating income of Integrated LNG was increased significantly quarter to quarter to $1.3 billion and cash flow to $1.8 billion. Given the evolution of the oil and gas prices in recent months and the lag effect on pricing formulas I already mentioned, the company anticipates an average LNG selling price of around $10 per million BTU for Q2 2026. As we execute our consistent strategy in LNG, the main milestone of the quarter were the full restart of construction activity at our Mozambique LNG project, with more than 6,000 people already on site as we speak. This project was broadened the diversification of our LNG supply, a strength that the current crisis has put an additional emphasis on. Turning to Integrated Power now.

Speaker #3: Given the evolution of oil and gas prices in recent months, and the lag effect on pricing formulas I already mentioned, the company anticipates an average LNG selling price of around $10 per million BTU for the second quarter of '26.

Speaker #3: As we execute our consistent strategy in LNG, the main milestone of the quarter was the full restart of construction activity at our Mozambique LNG project, with more than 6,000 people already on site as we speak.

Speaker #3: This project has broadened the diversification of our LNG supply, a strength that the current crisis has put additional emphasis on. Turning to integrated power now.

Speaker #3: So net production—net power production—increased year on year to 11.7 terawatt-hours, with a 20% growth of power generation from renewables. This offset the lower utilization of gas flexible capacities in the context of lower winter demand in Europe and in the United States.

Jean-Pierre Sbraire: Net production, net power production increased year-on-year to 11.7 TWh, with a 20% growth of power generation from renewables, offsetting the lower utilization of gas flexible capacities in the context of lower winter demand in Europe and in the United States. TotalEnergies has increased its renewable capacity by nearly 8 GW over a 12-month period, on track to reach its objective of 42 GW gross installed capacity at the end of the year. Cash flow from operation was EUR 0.6 billion, as no farm downs were registered during Q1 2026, unlike in Q1 2025. This quarter again, we provide more granularity in integrated power financial performance with a split in cash flow between production asset on one side, renewable and gas-fired power plants, and sales activity on the other side, B2B, B2C, and trading.

Speaker #3: TotalEnergies has increased its renewable capacity by nearly 8 gigawatts over a 12-month period. On track to reach its objective of 42 gigawatts growth in stall capacity at the end of the year.

Speaker #3: Cash flow from operations was $0.6 billion, as no farm-downs were registered during the first quarter '26, unlike in the first quarter '25.

Speaker #3: This quarter again we provide more granularity in integrated power financial performance with a split in cash flow between production asset on the one side renewable and gas fire plants and sales activity on the other side B2B, B2C, and trading.

Speaker #3: The former contributed 35% of the cash flow and the latter 65%, in line with the first quarter '25, due to the seasonal nature of the marketing business, with more consumption obviously during the winter.

Jean-Pierre Sbraire: The former contributed 35% of the cash flow and the latter for 65%, in line with Q1 2025, due to the seasonal nature of the marketing business, with more consumption, obviously, during the winter. Given the closing of EPH deals that we announced this morning, TotalEnergies has now a 50% interest in a portfolio of flexible power generation assets in Europe, and integrated power should then benefit in 2026 from 10 TWh of net production, net power production, in line with the 15 TWh guidance given for the full year and more than EUR 500 million contribution to available cash flow in relation with this EPH deal.

Speaker #3: And, given the closing of the EPH deal that we announced this morning, TotalEnergies now has a 50% interest in a portfolio of flexible power generation assets in Europe.

Speaker #3: And Integrated Power should then benefit in '26 from 10 terawatt-hours of net power production, in line with the 15 terawatt-hours guidance given for the full year.

Speaker #3: And more than $500 million contribution to available cash flow in relation with this EPH deal. Moving to downstream and during the first quarter, refining and chemicals was able to capture the exceptional margins in March thanks again to the high availability of the refineries, which recovered their full operational performance. It was particularly the case in Port Arthur in the US and Donges in France.

Jean-Pierre Sbraire: Moving to downstream, during Q1, Refining & Chemicals was able to capture the exceptional margins in March, thanks again to the high availability of the refineries, which recovered their full operational performance. It was particularly the case in Port Arthur in the US and Donges in France. Utilization rate reached 92% in the absence of plant turnarounds, trading activities was also very strong for crude and product, taking benefits of the market volatility. Overall, for R&C, adjusted net operating income was up by nearly $600 million quarter-to-quarter to $1.6 billion, cash flow reached $1.7 billion. In marketing and services, results remain consistently strong and reflects the seasonality of the business, with higher margin activities offsetting lower volumes linked to the disposal of some assets in Brazil and in Sahel, in Africa.

Speaker #3: Utilization rate reached 92% in the absence of plant turnarounds, and trading activities were also very strong for crude and product, taking benefit of the market volatility.

Speaker #3: Overall for ARC, adjusted net operating income was up by nearly $600 million quarter to quarter to $1.6 billion, and cash flow reached $1.7 billion.

Speaker #3: And Marketing & Services results remained consistently strong and reflect the seasonality of the business, with higher-margin activities offsetting lower volumes linked to the disposal of some assets in Brazil and in Africa.

Speaker #3: Moving to corporate to company level and starting with working cap. So working cap increased by 5.1 billion dollars during the first quarter out of which 2.5 billion dollars is related to guide business seasonality and 2.6 billion dollars that reflects the impact of higher hydrocarbon prices at the end of the quarter notably on inventories.

Jean-Pierre Sbraire: Moving to corporate company level and starting with working cap. Working cap increased by EUR 5.1 billion during Q1, out of which EUR 2.5 billion is related to guide business seasonality and EUR 2.6 billion that reflects the impact of higher hydrocarbon prices at the end of Q1, notably on inventories. While the context remain quite volatile, we deploy our investment program with discipline, with net investment that amounted to EUR 4.5 billion in Q1, with a neutral balance between acquisition and disposal in line with our quarterly budgets. We therefore reiterate full year 2026 net investment guidance of EUR 15 billion.

Speaker #3: While the context remained quite volatile, we deploy our investment program with discipline, with net investment that amounted to $4.5 billion in the first quarter, with a neutral balance between acquisition and disposal, in line with our quarterly budgets, and we therefore reiterate full-year '26 net investment guidance of $15 billion.

Speaker #3: As a result, the gearing lands at 15.5% at the end of the quarter, with cash flow growth driven by higher energy prices partially offsetting, in particular, the impact of high prices on the working cap bills.

Jean-Pierre Sbraire: As a result, the gearing lands at 15.5% at the end of the quarter, with cash flow growth driven by higher energy prices, partially offsetting, in particular, the impact of high prices on the working cap bills. Looking forward now, we expect to maintain strong momentum with hydrocarbon production, excluding Middle East impact, in Q2, expected to grow around 4% compared to Q2 2025, in line with first growth we registered during Q1. As we speak, as mentioned by Patrick, production shutdown in the Middle East still represents around 15% of the company's total production, and we anticipate refining utilization in the range 80% to 85% in Q2, which accounts for a 2-month scheduled maintenance at Donges and the impact of the capacity reduction of SATORP commented by Patrick.

Speaker #3: Looking forward now, we expect to maintain strong momentum, with hydrocarbon production excluding Middle East impacts in the second quarter expected to grow around 4% compared to the second quarter '25, in line with the first growth registered during the first quarter.

Speaker #3: As we speak, as mentioned by Patrick, production shutdown in the Middle East still represents around 15% of the company's total production. And we anticipate refining utilization in the range of 80 to 85 percent in the second quarter, which accounts for a two-month scheduled maintenance at Donche and the impact of the capacity reduction of support commented by Patrick.

Speaker #3: As I mentioned, the company confirmed it expects its yearly net investment to be at $15 million for the full year, in line with annual guidance.

Jean-Pierre Sbraire: As I mentioned, the company confirmed it expects its yearly net investment to be at $15 million for the full year, in line with annual guidance. Therefore, this investment should trend downwards in Q2. Meanwhile, the company is evaluating options to accelerate short-cycle investment to capture current hydrocarbon price environments. To conclude, the set of growing earnings clearly demonstrate, in our view, the strength of our integrated model in oil, gas, and power, which enable us to seize price updates upside in Q1 and put us in a strong position for Q2 and the rest of the year. With that, I think with Patrick, we are now available to answer your question, so you can open up the line for questions, please.

Speaker #3: Therefore, that investment should trend downward in the second quarter. Meanwhile, the company is evaluating options to accelerate short-cycle investment to capture current hydrocarbon price environments.

Speaker #3: To conclude, the set of growing earnings clearly demonstrated, in our view, the strength of our integrated model in oil, gas, and power, which enabled us to seize price upside in the first quarter and put us in a strong position for the second quarter and the rest of the year.

Speaker #3: And with that, I think with Patrick, we are now available to answer your question. So you can open up the line for questions, please.

Speaker #2: Thank you, ladies and gentlemen. 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 telephone.

Operator: Thank you, ladies and gentlemen. We will now begin the question-and-answer session. As a reminder, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Please kindly mute any audio sources while asking a question. If you wish to cancel your request, please press the star two key. Once again, please press star one if you wish to ask a question. The first question is from Michele Della Vigna, Goldman Sachs.

Speaker #2: And wait for your name to be announced. Please kindly mute any audio sources while asking a question. If you wish to cancel your request, please press the star and two key.

Speaker #2: Once again, please press star and one if you wish to ask a question. The first question is from Michele Della Vigna Goldman Sachs.

Speaker #3: Thank you very much, and congratulations on the strong result. I wanted to ask two questions on LNG. The first one is about whether, with all of this crisis, you're starting to demand oil-linked long-term contracts and if that can unlock more LNG projects for you, like for instance, PNG.

Michele Della Vigna: Thank you very much, and congratulations on the strong results. I wanted to ask 2 questions on LNG. The first one is about whether with all of this crisis, you're starting to see a resurgence of demand for oil-linked long-term contracts, and if that can unlock more LNG projects for you, like for instance, PNG. Longer term, I was also wondering if this crisis may actually be a bit more concerning and reduce some of the dependence on hydrocarbons from Asia, for instance, turn some of those countries more towards coal, solar, and energy storage as an alternative. If that could actually make perhaps what already looks like probably an oversupplied LNG market from 2028 last well into the next decade. Thank you.

Speaker #3: But longer term, I was also wondering if this crisis may actually be a bit more concerning, and reduce some of the dependence on hydrocarbons from Asia—for instance, turn some of those countries more towards coal, solar, and energy storage as an alternative.

Speaker #3: And if that could actually make perhaps what already looks like probably an oversupplied LNG market from 2028 last well into the next decade. Thank you.

Speaker #4: Okay. It takes a second one first Michele it's quite clear you know for customers in Asia a crisis in '22 another one in '26 the reliability I would say from an affordability point of view of the LNG will be questioned.

Patrick Pouyanné: Okay. We take the second one first, Michele. It's quite clear, you know, for our customers in Asia, a crisis in 2022, another one in 2026. Reliability, I would say from an affordability point of view of the LNG will be questioned. That's why, by the way, we think we will, we have to promote to them the idea of long-term contracts, not only related to spot price, you know. That's very clear. That's what the Europeans, because their whole are not benefiting from. I think it should influence and put them more on this type of long-term contract. You are right. That way, the whole planet and only in Asia, I think the government will look again to, like we were in the 1970s, you know, domestic production first, I would say.

Speaker #4: And that's why, by the way, we think we will have to promote to them the idea of long-term contracts, not only related to spot price, you know.

Speaker #4: That's very clear that's what the Europeans because there were rules are not benefiting from but I think it's should influence in it put them more on this type of long-term contract.

Speaker #4: You are right. But there is a whole planet, not only in Asia. I think the governments will look again—to, like we were in the '70s, you know—domestic production first, I would say.

Speaker #4: Domestic energy first—whatever it is, coming from coal when you have coal, or coming from biofuels. By the way, Malaysia and Indonesia are beginning to raise their biodiesel content, you know, very logically.

Patrick Pouyanné: Domestic energy first, whatever it is, coming from coal, when you have coal, or coming from biofuels. By the way, Malaysia, Indonesia are beginning to raise their biodiesel content, you know, very logically. Coming to renewables, of course, as well, and from this position of company, TotalEnergies could benefit from it because we are also investing in electricity, I would say. I would say electrification will be also a global answer because it will give, you can produce electricity from biomass and not only from hydrocarbon. That will be the other big trend, I think we will see, because security of supply, because again, affordability of energy is of essence. It's not a very good news, I agree, for the LNG markets.

Speaker #4: But coming to renewables, of course, as well, and from this position, our company, TotalEnergies, could benefit from it because we are also investing in electricity, I would say.

Speaker #4: So that will be, and I would say, electrification will be also a global answer because it will give—you can produce electricity from various means and not only from hydrocarbons.

Speaker #4: So that will be the other big trend I think we will see because security of supply because again affordability of energy is of essence.

Speaker #4: So it's not very good news, I agree, for the LNG markets. As you said, probably the result of this crisis as well is that we push back some of the, I would say, famous wave, I think, because there will be some delays in some projects. Because we are—by the way, we don't know today how long the war will last.

Patrick Pouyanné: As you said, probably the results of this crisis as well is that we push back some of the, I would say the famous wave, I think, because there will be some delays in some projects, because we don't know today how long will war will last. We have no idea. I always say that 2026 will remain a good price. I think 2027 will, can be very optimistic then. What you said, the oversupply LNG market will come from 2028. I would say, by the way, that it's not bad for customers to have an oversupplied market. You know, one of the observation I've done when I observe what happened today with the crisis, and it's quite remarkable.

Speaker #4: We have no idea. But I see I I was always I always said that '26 will remain a good price. I think '27 will can be optimistic then what you said the oversupply LNG market will come from 2028.

Speaker #4: But I would say, by the way, that it's not bad for customers to have an oversupplied market, you know. One of the observations I've made when I observe what happened today with the crisis, and it's quite remarkable.

Speaker #4: I know only two markets today where there will be no impact on the crisis on the energy price one was the US domestic gas price we only have still remain even lower at three dollar instead of four dollar before or three point five.

Patrick Pouyanné: I know only 2 markets today where there will be no impact on the crisis, on the energy price. One was the US domestic gas price, we have still remained at even lower at EUR 3 instead of EUR 4 before, or EUR 3.5. Why? Because there was, there is an oversupply, there is overcapacity. The Permian gas now is connected through pipelines. The other market I observe is French electricity market. No impact at all because also overcapacities of nuclear and renewables, by the way, both. We produce too much. That means that it is a way to secure the affordability.

Speaker #4: Why? Because there wasn't—there is an oversupply, there is overcapacity. The Permian gas now is connected through pipelines, and the other market I observe is the French electricity market—no impact at all, because also overcapacities of nuclear and renewables, by the way, both.

Speaker #4: So we produce too much. Too much. And so that means that it is a way to secure the affordability. So from this perspective, because of what you said and the fear which could be generated to our customers, energy customers, the fact that we'll enter at a certain point—when probably more summer '28 than before, or winter '28—will, I would say, a lower cycle would be good to convince them to come to us.

Patrick Pouyanné: From this perspective, because of what you said and the fear which could be generated to our customer, energy customers, the fact that we'll enter at a certain point when probably more summer 2028 than before or winter 2028, will to I would say a lower cycle, will be good to convince them to come to us. I make a link with your first question. Honestly, today, I think we were happy and lucky to have signed a lot of oil link contracts, because in this context, where there is sort of a bullish price of oil, we have always quite been bullish, but I think this context, the crisis, will also impact, I would say this oil market.

Speaker #4: It's a I make a link with your first question honestly today I think we were happy and lucky to have signed a lot of oil-linked contracts because in this context where there is sort of bullish price of oil we have always quite be bullish but I think this context the crisis will also impact I would because there will be now something which was completely even hypothetical which in fact was only putting in the risk cartography which was a closing of the Strait of Hormuz became a possible a real possibility.

Patrick Pouyanné: Because there will be now something which was completely even hypothetical, which, in fact was only putting in the risk cartography, which was a closing of the Strait of Hormuz became a real possibility. It's a materialized, this threat. This threat is materialized. You have in the Gulf, more than 20% of the 25% to 30% of the oil reserves or gas reserves. Clearly, I think this will have an impact on the way that the markets will, I would say, take this threat in, into even if we go onto a stabilized situation for Strait of Hormuz, will have an impact on the markets, on the Middle East markets, I would say. Today, I think we are happy to see that.

Speaker #4: It's a materialized this threat and and this threat is a is materialized. And you have in the Gulf more than twenty percent of the twenty-five thirty percent of the oil reserves oil and gas reserves.

Speaker #4: So clearly, I think this will have an impact on the way that the markets will, I would say, take this threat in. Even if we go down to a stabilized situation for the Strait of Hormuz, it will have an impact on the markets—on the Middle East markets, I would say.

Speaker #4: So so today I think we are happy to see that. We see appetite from Asian buyers for Papua LNG not only because of the contract but because of the geographical position I would say.

Patrick Pouyanné: We see appetite from Asian buyers for Papua LNG, not only because of the contract, but because of the geographical position, I would say. Of course, Papua LNG is perfectly located, not far from them outside, so any diversity is good. But on our side as well, we think that we are, by the way, because of this geography, we will see if we sign long-term contracts for Papua LNG or if we keep some LNG for our own portfolio, because we like this LNG as well for our own portfolio. We'll be. But again, no problem from this perspective to sign. We might be, I would say in this context, a little tougher in the negotiation. What I've observed the last week, some Asian buyers come back to NREAP plus, because suddenly, they just observe what happens.

Speaker #4: Of course Papua LNG is perfectly located not far from them outside. So any diversity is good. And but on our side as well we think that we are by the way because of its geography we will see if we sign long-term contracts for Papua LNG or if we keep some LNG for our own portfolio because we like this LNG as well for our own portfolio.

Speaker #4: So we'll be, but again, no problem from this perspective to sign, and we might be, I would say, in this context, a little tougher in the negotiation.

Speaker #4: What I've observed last week, some Asian buyers came back to Henrietta+ suddenly because they just observed what happens, and the stable, I would say, and affordable gas marker is the Henrietta+.

Patrick Pouyanné: The stable, I would say, and affordable gas marker is the NREAP. I think so there will be quite a lot of new popularity for the NREAP plus if some LNG offtakers want to sell their LNG there. Definitely, this crisis has an impact on all this global energy market. Having said that, you've seen our results during the first quarter. While you have a strong, diversified portfolio, you can do good results when you have volatility. I think we demonstrated that with our teams during the first quarter. I think we'll continue for the next quarter as well.

Speaker #4: I think there will be quite a lot of new popularity for the Henrietta+, if some LNG offtakers want to sell their LNG there.

Speaker #4: But definitely, this crisis has an impact on all these global energy markets. Having said that, you've seen our results during the first quarter—when you have a strong, diversified portfolio, you can deliver good results when you have volatility.

Speaker #4: And I think we demonstrated that with our teams during the first quarter. I think we'll continue for the next quarter as well.

Speaker #1: Thank you Patrick.

Renaud Lions: Thank you, Patrick.

Michele Della Vigna: Thank you, Patrick.

Speaker #3: The next question is from Biraj Borkatarya, RBC.

Operator: The next question is from, Biraj Borkhataria, RBC.

Speaker #4: Hi. Thanks for taking my question and thank you for the comprehensive overview of your your operations. The first one's just on the comment in the release around accelerating short-cycle investments.

Renaud Lions: Hi. Thanks for taking my question. Thank you for the comprehensive overview of your operations. The first one is just on the comment in the release around accelerating short cycle investments. Could you just unpack that a little bit more? You know, what opportunities are you looking at? Secondly, kind of what are you looking to see macro-wise or otherwise to put that capital to work? Secondly, just a follow-up on Papua New Guinea. Could you just talk about the steps from here to FID? Are the fiscal terms all now agreed, tendered, and so on? Just any uncertainties there ahead of FID. Thank you.

Biraj Borkhataria: Hi. Thanks for taking my question. Thank you for the comprehensive overview of your operations. The first one is just on the comment in the release around accelerating short cycle investments. Could you just unpack that a little bit more? You know, what opportunities are you looking at? Secondly, kind of what are you looking to see macro-wise or otherwise to put that capital to work? Secondly, just a follow-up on Papua New Guinea. Could you just talk about the steps from here to FID? Are the fiscal terms all now agreed, tendered, and so on? Just any uncertainties there ahead of FID. Thank you.

Speaker #4: Could you just unpack that a little bit more? You know, what opportunities are you looking at? And secondly, what are you looking to see, macro-wise or otherwise, to put that capital to work?

Speaker #4: And then secondly, just a follow-up on Papua New Guinea. Could you just talk about the steps from here to FID? Are the fiscal terms all now agreed, and tenders and so on?

Speaker #4: Just any uncertainties there ahead of FID. Thank you. Okay, first question. I mean, you would have been surprised that we didn't mention that. I'm sure I would have a question.

Patrick Pouyanné: Okay. First question. I mean, you would have been surprised that we did not mention that, or I'm sure I would have a question. It's quite natural from the CEO of the company. I've asked to my E&P teams, okay, is there anything to accelerate on the short cycle to benefit from the higher price deck? Again, on 2026, I'm quite. I mean, be confident is difficult in this world, but to see at least EUR 80 per barrel, I don't think it's, I would put quite a lot of my own money on it for the rest of the year. By the way, it's just, it's an exercise which is moving on. I know there are a few countries like Angola, for example, where they have some ideas.

Speaker #4: So it's quite natural from the CEO of the company that I've asked to my E&P teams, okay, is there anything to accelerate on the short cycle to benefit from the higher price deck?

Speaker #4: Because again on '26 I have I'm quite I mean be confident it's difficult in this world but to see at least eighty dollar per barrel.

Speaker #4: I don't think it's I would put quite a lot of my own money on it. For the rest of the year. So by the way there are it's just it's an exercise which is moving on.

Speaker #4: I know there are a few countries, like Angola for example, where they have some ideas. So if we need to dedicate a few hundred million dollars to that, I would do it.

Patrick Pouyanné: If we need to dedicate a few hundred million USD to that, I would do it. It will be, maybe I will tell you at the end of the day, but it's not EUR 15 billion, but EUR 15 to 15.5 billion. You will accept it if it's profitable on the short term. I think, honestly, I'm not sure it's so big because in fact, when we built the budget, we did not arbitrate a lot of short-term cycles, in fact. We had a list of what we could cancel in case the price would, the price of oil was going down to USD 50 per barrel. We prepared in case of, let's say, adverse market.

Speaker #4: It will be, maybe I will tell you at the end of the day, but it's not fifteen billion, but fifteen to fifteen point five billion.

Speaker #4: But it will you will accept it if it's profitable on the short term. I think the honestly I'm not sure it's so big because in fact when we built the budget we did not arbitrate a lot of short-term cycles.

Speaker #4: In fact, we were—we had a list of what we could cancel in case the price would, the price of oil was going down to fifty dollars per barrel.

Speaker #4: So we prepared in case of I would say adverse market. But we have asked the questions and I know that because I visited some countries that they have some few ideas.

Patrick Pouyanné: We have asked the questions, and I know that, because I visited some countries, but they have some few ideas, so I'm quite, I can be flexible on keeping the discipline. Again, if we can generate some good free cash flow on the short term, everybody will appreciate it. It's, it's not probably as big as I just mentioned. It's probably some hundred, a few hundred million USD that we could mobilize, subject to capacity to have the rigs, et cetera. We are, we are working on it with some countries. On PNG LNG, I think, you know, it's a big project. Good many partners. Many we have in parallel, some, I would say at least four workflows.

Speaker #4: So I'm quite— I can be flexible on keeping the discipline, but again, if we can generate some good free cash flow in the short term, everybody will appreciate it.

Speaker #4: So it's not probably as big as I just mentioned. It's probably some hundred, a few hundred million dollars that we could mobilize, subject to capacity to have the rigs, et cetera.

Speaker #4: So we are we are working on it with with some with some countries. On PNG LNG I think you know it's a long big project.

Speaker #4: Good, many partners. Many we have in parallel, some—I would say at least four workflows. So the CapEx side, I would say, and the EPC are progressing very well.

Patrick Pouyanné: The CapEx side, I would say, and the EPC are progressing very well. We have made some recommendations to our partners. We are waiting for the approval from one of them, so I hope we will get it soon so that we can move forward with these tenders. In parallel to that, we have, I would say, the financing of the project because it's, there is a project financing. Both are in, by the way, because as you know, selection of the nationality of some contractors have an impact of the involvement of export credit agencies. We need to do. It's, it's not, there is a little sequence there.

Speaker #4: We have made some recommendations to our partners. We are waiting for the approval from one of them, so I hope we will get it soon.

Speaker #4: So that we can move forward. With the with the with the standards. In parallel to that we have I would say the financing of the project because it's there is a project financing.

Speaker #4: Both are linked, by the way, because, as you know, selection of the nationality of some contractors has an impact on the involvement of export credit agencies.

Speaker #4: So we need to do it's it's not there is a little sequence there. So we need to have decided the contractors so that we can definitely confirm to the different credit export agencies.

Patrick Pouyanné: We need to have decided the contractors so that we can definitely confirm to the different credit export agencies. That's also. I think there is some appetite clearly from Asian credit export agencies, but also we discussed with the US ones about it. We are moving on the financing of it as well. The second workflow. The third workflow, as you said, is a discussion with the government. They are progressed, I would say. I could almost say finalized, but I didn't see the ink on the paper. Between the government and also there is a good understanding on the agreement. I consider, of course, it will have to be again approved by our partners.

Speaker #4: So that's also, I think, there is some appetite clearly from Asian credit export agencies. But also, we discuss with the US ones about it.

Speaker #4: And so we are moving on the financing of it as well. So it's a second workflow. The third workflow, as you said, is a discussion with the government.

Speaker #4: There are there are progress I would say. I could almost say finalized. But I I didn't see the the ink on the paper. But between the government and ourselves there is a good an understanding on the agreement.

Speaker #4: So I consider, of course, it will have to be, again, approved by our partners. So we are in the, I would say, now in the process to finalize, to set, to close the loop, I would say, between the partners and government on these final end terms.

Patrick Pouyanné: We are in the, I would say, now in the process to close the loop, I would say, between the partners, governments on these finance and terms. Fiscal terms, the idea there is some way to protect the projects. The CapEx will be around EUR 14.5 billion, so it's quite, it's not too cheap. It's much better than the EUR 18 billion, but it's still cheap. The idea is to protect the projects when the price of oil are low and to give back some when the price are high, above $90, I would say. There is a sort of trade-off, which is good for the, which would be good. The fourth one is a marketing, on the marketing.

Speaker #4: Fiscal terms the idea there is somewhere to protect the projects as the CapEx will be around fourteen point five billion. So it's quite a it's not for it's not too cheap.

Speaker #4: It's much better than the eighteen billion. But it's still cheap. So the idea is to protect the projects when the price of oil is low, and to give back some when the price is high—above ninety dollars, I would say.

Speaker #4: So there is a sort of trade-off, which is good for the—for the—for the—which would be good. And the fourth one is on the marketing, on the marketing.

Speaker #4: So on the marketing, there is some progress—quite a lot of progress. But again, on our side, the more we look to Papua LNG, the more we have appetite for the LNG located in that region and diversifying our portfolio.

Patrick Pouyanné: On the marketing, there is some progress, quite a lot of progress. Again, on our side, the more we look to Papua LNG, the more we have appetite for the LNG located in that region and diversifying our portfolio. It's possible, but we could market because we market not only all LNG, but the one of Kumul as well. We could market maybe, 1 million tons on the long term and keep the other 1.5 to 2 for our own portfolio. We are looking to different options. All that is progressing. I would say, the target is to sanction the project, for sure before the end of the validity of the offers, which is I think around November. Because in this market, I don't want to have to.

Speaker #4: So it's possible. But we could market out of it because we market not only our LNG but the one of Kumul as well. We could market maybe one million tons on the long term and keep the other 1.5 to 2 to 4 on portfolio.

Speaker #4: So we are looking at different options. So all that is progressing. I would say the target is to sanction the project for sure before the end of the validity of the offers, which is, I think, around November.

Speaker #4: So, because in this market I don't want to—we don't want to reopen and negotiate to extend offers. You know, we could face some inflation there.

Patrick Pouyanné: We don't want to reopen and to negotiate, to extend offers. You know, we could face some inflation there. That's, I think, and we are aligned, I think, with the partners on moving to the FID, H2 of the year. The possibility with the government, for sure. There is a last point to clarify, if I want to be exhaustive. We need to be sure of the way that the Kumul financing, you know, there is a Kumul back-in, and we need to know exactly what is a back-in and which will be exercised. There, all these workflow, we are working on them in parallel to converge through the FID.

Speaker #4: So that's the I think and we are aligned. I think with the partners on moving to the FID second half of the year. The with the governments for sure.

Speaker #4: There is a last point to clarify if I want to be exhaustive. We need to be sure of the way that the Kumul financing you know there is a Kumul backing and we need to know exactly what is the backing on which we should be exercising.

Speaker #4: So there but all these workflow we try to we we are working on them in parallel to converse to the FID.

Speaker #1: Thank you very much.

Renaud Lions: Thank you very much.

Biraj Borkhataria: Thank you very much.

Speaker #3: The next question is from Lydia Rainforce, Barclays. Please go ahead.

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

Speaker #4: Thank you. And good afternoon to you both. Two questions please. Could you just touch on the early closing of the EPH transaction and what options that now gives you?

Lydia Rainforth: Thank you and good afternoon to you both. 2 questions, please. Could you just touch on the early closing of the EPH transaction and what options that now gives you? Secondly, could I come back to the cash return side? I just want to be clear about what sort of the message is around where we see cash returns going through here. Obviously you're at the top end of the guidance that you'd given, but that was at EUR 60 to 70. I'm just trying to work out whether you would go beyond that or whether the priority then is the debt side coming down. I just want to be clear on the messaging around cash returns for the rest of the year. Thanks.

Speaker #4: And then secondly, could I come back to the cash return side? I just want to be clear about what—so the message is around where we see cash returns going through here.

Speaker #4: ‘Cause obviously you're at the top end of the guidance that you'd given. But that was at $60 to $70. And I'm just trying to work out whether you're prepared to go beyond that, or whether the priority then is the debt side coming down.

Speaker #4: So, I just want to be clear on the messaging around cash returns for the rest of the year. Thanks.

Patrick Pouyanné: Okay. First point, EPH. First, I mean, we have been, and teams have been very efficient. By the way, the antitrust supervisors also have been super efficient because even in Europe, we did 3 calls to get the approval on these transactions, which allow us to close early end of April instead of end of June. That means that we are now entering into this new company, CTEP, at a time which, by the way, is not too bad because as gas prices are higher in Europe and, you know, the electricity price in a country like Italy, we have a big exposure now to Italy. Italy is facing some increase of electricity price. This gas-fired power plants will have a little higher margin factor.

Speaker #5: So first point EPH first. I mean we have been in teams. I've been very efficient. By the way the antitrust supervisory is also I've been super efficient because even in Europe we've been three calls to get the approval on these transactions.

Speaker #5: Which allows us to close at an early end of April instead of end of June. So that means that we are now entering into this new company, TTEP, at a time which, by the way, is not too bad because gas prices are higher in Europe, and you know the electricity price in a country like Italy. We have a big exposure now to Italy.

Speaker #5: Italy is facing some increase in electricity prices. And so these gas pipeline fleet will have a little higher margin. In fact, some few European megawatts are beyond, I would say, the normal average margin.

Patrick Pouyanné: Some few Europe MWh beyond, I would say, the normal, average margin. It's positive. The second good news, recently the EPH team managed to get very attractive new capacity contracts for some plants in Ireland, around 200,000 GBP per kWh. We come with a third time where it's good news. First, I'm happy to join to make it earlier. It gave us, of course, options, as you know. Now we will have access to 50% of the electrons of all these CCGT fleets.

Speaker #5: So it's positive. And the second good news the recently the EPH team managed to get very attractive new capacity contracts for some plants in Ireland around two hundred thousand two hundred pounds per kilowatt hour.

Speaker #5: So we come with the time where it's good news. So first, I'm happy to join to make it earlier. And it gave us, of course, options as you know.

Speaker #5: Now we will have access to fifty percent of the electrons of all these strategic fleet. And so this will allow our teams to increase our trading business, but also to go to customers to sell them clean form power by combining gas and electrons—coming from the gas pipelines, flexible electrons with the renewable electrons.

Patrick Pouyanné: This will allow our teams to increase our trading business, but also to go to customers to sell them clean firm power with combining gas and electrons coming from the gas pipelines, flexible electrons with the renewable electrons. That's exactly the page. We are, we will move forward. We gave you some indications, I think, in the press release about the impact from 1 May. I think we evaluate the impact on the production around 10 TWh. We told you that the cash flow should be at least two-third of an annual cash flow, which means at least EUR 500 million of impact, maybe a little more. We see less certainty in the ventures.

Speaker #5: So that's exactly the case. So we will move forward. We gave you some indications, I think, in the press release that the impact, because it's from the first of May...

Speaker #5: So I think we evaluate the the impact on the production around ten terawatt hour. And we told you that the cash flow should be at least two thirds of an annual cash flow which means at least five hundred million dollars of impact maybe a little more we see.

Speaker #5: Let's enter into the venture. So, it gives— I would say it gives a push to the integrated power business. And you should see, next quarter, and third and fourth quarter, I would say, in the results.

Patrick Pouyanné: It give a push to the integrated power business. You should see next quarter and Q3 and Q4 in the results and the cash stay priced compared to the level where we are today. Cash return. I'll be clear. We are going step by step. We gave you. Yes, you're perfectly right on the buyback. We gave you at the beginning of the year, $750 million to $1.5 billion between $60 and $70. We told you immediately on Q2, we'll monitor that quarter after quarter to be clear. We go to the high end of the range to $1.5 billion for this quarter.

Speaker #5: And the cash stay priced compared to where the level where we are today. Cash return I mean I'll be clear. I you know we are we are we are going step by step.

Speaker #5: We gave you a yes you're perfectly right on the buyback. We gave you at the beginning of the year seven fifty to one point five billion between sixty and seventy dollars.

Speaker #5: So we told you immediately on the second quarter we'll monitor that quarter after quarter to be clear. We go to the to high end of the range to one point five billion dollars for this quarter.

Speaker #5: And then I have added in my comments that we are guided by another objective which is forty percent of payout. So if you make the math you will see that if we are at ninety dollars per barrel for example as an average it's an example I will need we'll need to go beyond one point five for the second and third quarter.

Patrick Pouyanné: I have added in my comments that we are guided by another objective, which is 40% of payout. If you make the math, you will see that if we are at 90 dollar per barrel, for example, as an average, it's an example, we will need to go beyond 1.5 for Q2 and Q3. I think the idea is to monitor it progressively, because again, there is, I don't know if we will be at 80, 90, 100, but we reiterate this commitment and the board reiterate the commitment in the press release to give you the guidance at least more than 40%. I have added to you that because more than 40 could be 40, 45.

Speaker #5: But I think the idea is to monitor it progressively, because again, I don't know if we'll be at eighty, ninety, one hundred.

Speaker #5: But we reiterate this commitment, and the Board reiterates the commitment in the press release to give you the guidance—at least more than 40%.

Speaker #5: I have added to you that because more than forty could be forty, forty-five. I just added to you another guidance to tell you that if we were in a scenario of ninety or a hundred dollars per barrel, then there is some cash priority; we will also deliberate the company.

Patrick Pouyanné: I just added to you another guidance to tell you that, if we were in a scenario of EUR 90 or EUR 100 per barrel, if there is some cash, priority will be also to de-leverage the company and that, if we are able to combine low tens of gearing and higher buybacks, we will do it. That's the idea. I hope I'm being clear. I will not give you a precise scale what happened at 75, 80, 85, 90, 95. It's mathematical formula and, you know, I'm not a perfect engineer, so I prefer you to guess now.

Speaker #5: And that, if we are able to combine low tens of gearing and higher buybacks, we will do it. But the idea—so I hope I'm being clear.

Speaker #5: I cannot do I will not give you a precise scale what happened at seventy-five eighty eighty-five ninety ninety-five. It's mathematical formula. You know I'm not a perfect engineer.

Speaker #5: So I prefer you to guess now.

Speaker #4: That's perfect. Thank you Patrick.

Anish Kapadia: That's perfect. Thank you, Patrick.

Lydia Rainforth: That's perfect. Thank you, Patrick.

Speaker #3: The next question is from Martin Ratz at Morgan Stanley.

Operator: Next question is from Martijn Rats at Morgan Stanley.

Speaker #6: Yeah, thanks for taking my question. I've got two, if I may. I wanted to ask you about the two to three months sort of restart time that you mentioned in the release.

Martijn Rats: Yeah. Thanks for taking my question. I've got 2, if I may. I wanted to ask you about the 2 to 3 months sort of restart time that you mentioned in the release. I was hoping you could elaborate a bit on what really happens in that period. What are the steps that are on the critical path that make this longer or shorter? Is it getting tankers back into the Persian Gulf? Is it well intervention? Are there critical components in some of the LNG facilities? Can you please make that sort of operational, logistical, sort of what, you know, what really drives that?

Speaker #6: and I was hoping you could elaborate a bit on what really happens in that period. What are the steps that are on the critical path that make this longer or shorter?

Speaker #6: Is it getting tankers back into the Persian Gulf? Is it well intervention? Are there critical components in some of the energy facilities?

Speaker #6: I mean, can you—can you please make that sort of operational, logistical—sort of, what, what, what, you know, what really drives that?

Speaker #6: And secondly I wanted to ask you about Mozambique where we are now with the total budget for the project and the start the the the the the timeline.

Martijn Rats: Secondly, I wanted to ask you about Mozambique, where we are now with the total budget for the project and the start, the timeline. I remember a EUR 15 billion, but I also heard a EUR 20 billion. Can you just give an update on where we are now?

Speaker #6: I remember a fifteen billion dollars, but I also heard a twenty billion dollars. Can you just give an update on where we are now?

Speaker #7: On the second, consistent for the last two years. Fifteen, it was a long time ago. We have told you that there was some interim cost because, of course, measure.

Patrick Pouyanné: On the second question, it is EUR 20 billion. I've been consistent for the last 2 years. EUR 15 billion, it was long time ago. We have told you that there were some interim costs because of force majeure. We have updated. We have been obliged to renegotiate some of the EPC, I would say, contracts because, 4 years after, of course, there is inflation. I repeated EUR 20 billion in all my speech for the last 2 years, so I repeat EUR 20 billion today, and this is the budget on which we are and which we put the financing, by the way, on the basis of EUR 20 billion. The rest is rumors, but this is the point. This one is easy. The timeline, we have restarted in January, so we have 6,000 or more people on the ground today.

Speaker #7: We have updated—we have been obliged to renegotiate some of the EPC, I would say, contracts because four years after, of course, there is inflation.

Speaker #7: So I've repeated twenty billion in all my speeches for the last two years. So I repeat twenty billion today. And this is the budget on which we are.

Speaker #7: And which will put the financing, by the way, on the basis of $20 billion. So the rest is rumors. But this is the point.

Speaker #7: So this one is, this is the timeline. We have restarted in January. So we have 6,000 or more people on the ground today.

Speaker #7: So they are—I mean, I've been there with the President of Mozambique, and construction has already begun on the train, on the first train.

Patrick Pouyanné: I mean, I've been there with the president of Mozambique, and they are already, construction has began on the train, on the first train and jetty and all. The timeline is that the objective and the timing is to produce first energy by 2029, the first train. That's where we'll, we are sticking to that timeline and as a mobilization and all is on its way to reach this target today. You know, on these projects, we have, in fact, we spent some money not only to safeguard equipment, et cetera, during 4 years, but also to progress all the engineering and the procurement. All that has been done is very advanced compared to, I would say, traditional projects.

Speaker #7: And JT, and so the timeline is that the objective and the timing is to produce first LNG by 2029, the first train. So that's where we are—we are sticking to that timeline.

Speaker #7: And the mobilization and all this is on its way to reach this target today. And you know, on this project we have, in fact, spent some money not only to safeguard equipment, etc., during four years but also to progress all the engineering.

Speaker #7: And to procurement. So all that has been done—that is very advanced compared to, I would say, traditional projects. We have progressed at the end of March of the project.

Patrick Pouyanné: We have a progress at the end of March of the project. If I see the global progress of the project at the end of March is 42%, in fact. It's not, we are not starting from scratch. We are, we have progressed on this project, it's a matter to be able to construct. By the way, since January, the security situation in Cabo Delgado is quiet, I would say, and well under control, thanks to the support of both Mozambique and forces, but also Rwanda forces, which are committed to remain in the area. On the first time. I mean, probably the way I was reading the questions same time because in fact, no, to restart facilities, it does not take 2 to 3 months.

Speaker #7: If I see the global progress of the projects at the end of March, it is forty-two percent, in fact. So it's not—we are not starting from scratch.

Speaker #7: We are— we have progressed on this project. And so it's a matter to be able to construct. By the way, since January, the security situation in Cabo Delgado is quiet, I would say, and well under control.

Speaker #7: Thanks to the support of both Mozambican forces, but also Rwandan forces, which are committed to remain in the area. Then on the first time.

Speaker #7: So, I mean, probably there is. I was reading the press release at the same time because, in fact, no—to restart facilities, it does not take two to three months.

Speaker #7: The two to three months is covering first today; there is no—it's covering the whole cycle. But I described in my introduction speech. It's also the fact, between the way you will restart all production, you will bring tankers.

Patrick Pouyanné: The 2 to 3 months is covering first today, there is no, it's covering the whole cycle that I described in my introduction speech. It's also the fact between the way you will restart oil production, you will bring tankers. You need to because the tankers which are today in the Gulf are all full. You have, I think something like several hundreds of tankers that you need to exit. You need to bring some empty tanker back. You need to ship the new oil to, I would say, some destination in Asia. Like I said, it's 25 style day shipping. It's longer if you know to go to Europe. It's a matter of the delay. It's not only, because restarting the wells, it's not very complex.

Speaker #7: You need to, because the tankers which are today in the Gulf are all full. So you have, I think, something like several hundreds of tankers.

Speaker #7: So you need to exit. You need to bring some empty tanker back. Then you need to ship the new oil to, I would say, some destination in Asia. Twenty-five, like I said, it's twenty-five days shipping.

Speaker #7: It's longer if you know to go to Europe. So it's more a matter of the delay is not only because restarting the wells—it's not very complex, you know.

Patrick Pouyanné: You know, in the Middle East, production is generally quite easy production. We don't expect difficulties from restarting the wells. It's more restarting the well system to restabilize it, to come back to the flow where before the war, you had every day, 50 oil tankers moving in, moving out to Gulf, et cetera, and charging, loading oil or loading products. That's this cycle where we estimate 2 to 3 months to have. It's not exactly what the word is. Restarting is not restarting production facility. It's restarting or coming back to, I would say, a normal mode, which would have been more correct in our statement.

Speaker #7: In the Middle East, production is generally quite easy production. So we don't expect difficulties from restarting the wells. It's more restarting the world system to restabilize it—to come back to the flow where before the war you had, every day, fifty oil tankers moving in, moving out of the Gulf, etcetera.

Speaker #7: And charging and loading, loading oil or loading products. So that's this cycle, where we estimate two to three months to have it. So it's not exactly—it's not exactly what the world is restarting.

Speaker #7: It's not restarting the production facility. It's restarting, or coming back to, I would say, a normal mode, which would have been more correct in our statement.

Speaker #7: What I said on the LNG side— I spent some time in Qatar. On the Qatari side, it's clearly, of course, we cannot afford to, I mean, start again liquefaction plants, then start off again if the crisis comes back.

Patrick Pouyanné: What I said on the LNG side, I spent some time in Qatar, is that on Qatari side, it's clearly, of course, we cannot afford to, I mean, start again liquefaction plants, then start off again if the prices come back. I think Qatar very wisely wants to observe, I would say, some certain stability in the situation before to be able to restart. That might take a little more time knowing that LNG tankers, the fleet is not as strong, as big as oil tankers. We need to move the LNG tankers. Then, you know, we don't use the Red Sea, for example, with LNG tankers. The voyage to come from Middle East, from Qatar to Europe is longer.

Speaker #7: So I think Qatar is very wisely wanting to observe, I would say, some certain stability in the situation before being able to restart.

Speaker #7: So that might take a little more time. Knowing that LNG tankers—the fleet is not as strong, I mean, as big as oil tankers.

Speaker #7: So we need to move the LNG tankers. And then, you know, we don't use the Red Sea. We don't use the Red Sea, for example, with LNG tankers.

Speaker #7: So, the tour—the voyage to come from the Middle East, from Qatar to Europe—is longer, around Africa. So this is again an estimation, more.

Patrick Pouyanné: You go around Africa. This is again, an estimation more about the time that it will take to come back to, let's say, a normal situation. Just to come back.

Speaker #7: But the time that it will take to come back to, I would say, a normal situation—just to come back.

Speaker #4: Thank you.

Martijn Rats: Thank you.

Speaker #8: The next question is from Doug Leggett, Wolf Research.

Operator: The next question is from Doug Legate, Wolfe Research.

Speaker #9: Good morning, everyone. I wonder if I could also squeeze in to Patrick and Jean-Pierre—maybe first for Jean-Pierre, or whoever wants to answer this.

Doug Leggate: Good morning, everyone. I wonder if I could also squeeze into Patrick and Jean-Pierre. Maybe first for maybe for Jean-Pierre or for whoever, whichever wants to answer this. You're getting an opportunity with these windfall oil prices, obviously, to address your capital structure, perhaps. Obviously, working capital bumped up your net debt, but you also, I guess, added another hybrid bond pending the redemption later this year. I'm just wondering, where would you like to see the capital structure? In this environment, why hold any hybrid bonds given those were something of an emergency issue during COVID? That's my first question. My follow-up is, just very quickly, Patrick, I wonder if this environment, as it relates to refining margins specifically, has changed your view on Port Arthur as a core asset.

Speaker #9: You're getting an opportunity with these windfall oil prices, obviously, to address your capital structure, perhaps. Obviously, working capital bumped up your net debt.

Speaker #9: But you also, I guess, added another hybrid bond pending the redemption later this year. I’m just wondering, where would you like to see the capital structure?

Speaker #9: And in this environment, why hold any hybrid bonds, given those were something of an emergency issue during COVID? That's my first question. My follow-up is just very quickly, Patrick.

Speaker #9: I wonder if this environment, as it relates to the finding margins specifically, has changed your view on Port Arthur as a core asset?

Speaker #10: So Pat and I agree. So, you know, we do not increase—we, in fact, it was not to increase the hybrid bond portfolio.

Jean-Pierre Sbraire: Perhaps on hybrid. You know, we do not increase, we intend to do is not to increase the hybrid bond portfolio. We are opportunistic at TotalEnergies. The hybrid market was very good in January and February. By the way, it was before the crisis, before the USD 100 per barrel price. We decided to do liability management. Just to anticipate, in fact, the bonds that will mature end of this year by replacing it at good condition. It was EUR 1.5 billion. That's all. It's not, our intention is not to increase this portfolio. Just benefiting from good markets beginning of the year to in fact, to anticipate the redemption of the bonds.

Speaker #10: We are opportunistic at TotalEnergies. The hybrid market was very good in January and February. By the way, it was before the crisis. So, before the one hundred dollar per barrel price.

Speaker #10: So we decided to do liability management, so just to anticipate, in fact, the bonds that will mature end of this year by replacing it at good condition.

Speaker #10: So it was one point five billion euro. So that's all. So it's not our intention is not to increase this this portfolio. So just benefiting from good markets beginning of the year to to in fact to anticipate the the redemption of the bonds.

Speaker #9: Okay, but so, the hybrid, yeah.

Patrick Pouyanné: Okay. On the hybrid-

Speaker #2: Yeah, what about the capital structure generally, Jean-Pierre? I mean, why not take the opportunity to lower the net debt?

Doug Leggate: Yeah. What about the capital structure generally, Jean-Pierre? I mean, why not take the opportunity to lower the net debt?

Speaker #10: That's what I said—that's what I said. I think I told you. But I just told you that the objective, if I want to reach a gearing of low terms, it means lowering the net debt fundamentally.

Patrick Pouyanné: That's why I said that. I think I told you that, I just told you that, the objective, if I want to reach a gearing of low 10s, that means lowering the net debt.

Doug Leggate: Yeah

Patrick Pouyanné: fundamentally. That's the way to go to.

Speaker #10: So but the way to low to to to reach low terms. So I told you that one of the objectives primary objective and that will be if we are at ninety dollar one hundred dollar per barrel environment as a boat or and I conveyed to you the message of the boat.

Doug Leggate: Okay. Fair enough.

Patrick Pouyanné: To reach low tens. I told you that primary objective, and that will be if we are at $90, $100 per barrel environment, the board told, and I convey to you the message of the board. In the arbitration, we have on one side the 40% of payout to shareholder, that will stick on. If some of you ask me to go to 50%, I might answer to you, No, 40%, 40, more than 40 is our commitment. The other, the extra cash, we prefer to deleverage and to lower the net debt going down to gearings of 10%, 10 and maybe lower, in fact. For me, that's clearly the trend that we.

Speaker #10: In the arbitration, we have on one side the forty percent of payout to shareholders, that will stick on. But if some of you ask me to go to fifty percent, I might answer to you, no, forty percent—forty, more than forty is our commitment.

Speaker #10: And the other, the extra cash, we prefer to deliberate and to lower the net debt, going down to gearings of 10 percent, 10 times, and maybe lower, in fact.

Speaker #10: So for me, that's part of the—that's clearly the trend. But we, of the—of—but I would say the direction we want to give you today.

Patrick Pouyanné: that, let's say the direction we want to give you today. We share your view. On Port Arthur, yes, you have a buyer for Port Arthur, Doug, or what? You have an idea in the head, or? I mean, obviously, Port Arthur is a very good asset, you know. It's, it's by the way today, making good results, I can tell you. It's a very positive asset in this environment. It has a value for trading teams, because it's the only asset. You know, trading is not only, is not, in our companies. It's in fact optimizing, I would say, our assets, molecules, and, there are flows around of assets. They optimize molecules around of assets. It's the anchor point for.

Speaker #10: So we share your view. On Port Arthur—yeah, do you have a buyer for Port Arthur, Doug, or what? Do you have an idea in mind, or...?

Speaker #10: No I mean honestly Port Arthur is a is a very good asset. You know it's a it's a it's by the way today making good results I can tell you.

Speaker #10: It's a very positive asset in this environment. It has a value for trading teams, because it's the only asset you know trading is, not only is not in our companies.

Speaker #10: Well, it's in fact optimizing, I would say, our asset molecules, and there are flows around our assets. They optimize molecules around our assets. So it's the anchor point for us, and we have a strong trading arm in the US.

Patrick Pouyanné: We have a strong trading arm in the US, and Port Arthur is, I would say, an anchor point, is a tool for them. It's on one side for refiners, a profitable asset, where we have also, I remind you, integrated a lot of petrochemical assets with BASF and Baystar crackers. It's an integrated platform. Today we benefit from good margins. You know, for example, today we have engaged and we are on the verge to sign some trading contracts with Venezuela, with PDVSA. Part of the destination of PDVSA heavy crude oil will be Port Arthur. Our traders are developing a trading scheme around the flows from Venezuela to the US Gulf Coast. I think that's the idea on Port Arthur.

Speaker #10: And Port Arthur is, I would say, the anchor point—it is a tool for them. So it's, on one side, for the refiners, a profitable asset, where we have also, I remind you, integrated a lot of petrochemical assets with BTP and Baystar crackers.

Speaker #10: So it's an integrated platform. And today we benefit from good margins. But you know, for example, today we have Engage, and we are on the verge of signing some trading contracts with Venezuela, with PDPSR.

Speaker #10: And part of the destination of PDPSR heavy crude oil will be Port Arthur, and our traders are developing a trading scheme around the flows from Venezuela to the US Gulf Coast.

Speaker #10: So I think that's the idea on Port Arthur. So yes, it's a good asset, delivering and contributing to the strong downstream results that we have experienced.

Patrick Pouyanné: Yes, it's a good, it's a good asset delivering and contributing to the strong downstream results that we have experienced.

Speaker #9: Very clear. Thank you guys.

Doug Leggate: Very clear. Thank you, guys.

Speaker #8: The next question is from Lucas Hermann, BNP Paribas Seine.

Operator: The next question is from Lucas Herrmann, BNP Paribas.

Speaker #9: Oh, thanks very much, Patrick. I wondered if I could ask you about the UAE news overnight and the decision to, you know, exit OPEC.

Lucas Herrmann: Oh, thanks very much. Patrick, I wondered if I could ask you about the UAE news overnight and the decision to, you know, exit OPEC. What your personal thoughts are, how it leaves you thinking perhaps about the future and the robustness or otherwise of oil prices. Just general, you know, comments. And secondly, if I can be greedy, any observations on Namibia over the last three months or how your sentiment towards that opportunity may or may not have changed as you've continued to look at, you know, the data? Thanks very much.

Speaker #9: What are your personal thoughts, or how does it leave you thinking, perhaps, about the future and the robustness or otherwise of oil prices? Just general, you know, comments.

Speaker #9: And secondly, if I can be greedy, any observations on Namibia over the last three months, or how your sentiment towards that opportunity may or may not have changed as you've continued to look at the data?

Speaker #9: Thanks very much.

Jean-Pierre Sbraire: On UAE decision, you know, I mean, not difficult for to answer. It's a sovereign decision by a state, I, which we are heavily involved. We knew from, not today, but for some years, that the UAE were not specifically happy with the quota which was allocated to them. I think it's quite public by the OPEC. UAE have made, and we are contributing to it. We are one of the most exposed company to the UAE, you know, onshore and offshore. They have involved. They have the program to raise their capacity from

Speaker #10: Yeah, on the UAE decision, you know, I will not—it’s not difficult for me to—I mean, it’s a sovereign decision by a state, in which we are heavily involved.

Patrick Pouyanné: On UAE decision, you know, I mean, not difficult for to answer. It's a sovereign decision by a state, I, which we are heavily involved. We knew from, not today, but for some years, that the UAE were not specifically happy with the quota which was allocated to them. I think it's quite public by the OPEC. UAE have made, and we are contributing to it. We are one of the most exposed company to the UAE, you know, onshore and offshore. They have involved. They have the program to raise their capacity from

Speaker #10: We knew for some—not today, but for some years—that the UAE, we are not specifically happy with the quota which was allocated to them.

Speaker #10: I think it's quite public by the OPEC, because the UAE have made, and we are contributed to it, contributing to it. We are one of the most exposed company to the UAE, you know, onshore and offshore.

Speaker #10: We are — they have involved, they have the program to raise their capacity from first to four and then to five million barrels of oil per day, where we have — by the way, there was a test in January, an official test for the OPEC, by the way, where we reached during a week five million barrels of oil per day.

Patrick Pouyanné: First to 4 and then to 5 million barrel per day, where we have, by the way, there was a test in January, an official test for the OPEC, by the way, where we reached during a week, 5 million barrel per day. It's, by the way, it's contributed before the war to the good production that, which was, I mean, delivered by TotalEnergies in Q1. This is our decision. On our side, you know, as the CEO of an oil and gas company, we supported the OPEC role in the market. I've seen that OPEC or OPEC+, I've seen that Russia will continue with OPEC, with Saudi Arabia in OPEC+.

Speaker #10: So it's, by the way, it's contributed before the war to the good production that, which was—I mean, delivered by TotalEnergies in the first quarter.

Speaker #10: So, this is that decision. On our side, you know, as the CEO of an oil and gas company, we supported the OPEC role in the market.

Speaker #10: But I've seen that OPEC, or OPEC+—I've seen that Russia will continue with OPEC, with Saudi Arabia in OPEC+. And I think the UAE has also said that they will coordinate with OPEC on the market.

Patrick Pouyanné: I think the UAE has also said that they will coordinate with the OPEC on the market. I think, clearly, the statement, when you read the statement of the UAE, they are investing for growth and they want to benefit for the growth, I would say. That's the way I'm reading their statement. Future for oil prices, honestly, Lucas, what happens today, you can see that the oil prices are not only relying on oil on supply and demand, you know, and pure logic. I think, it's, we have, after 11 years of CEO, I've seen more periods of, I would say, external events to the market than really the market itself.

Speaker #10: So, I think clearly the statement—when you read the statement of the UAE—they are investing for growth, and they want to benefit from the growth, I would say.

Speaker #10: That's the way I'm reading their statement. Shoot you for oil prices. Honestly Lucas what happens today you can see that the oil prices are not only re relying on oil on on supply and demand you know and the pure logic.

Speaker #10: So I think it's we have I'm after eleven years of CEO I've seen more period of I would say external events to the market than really the market itself.

Patrick Pouyanné: We'll see what will the way that the different countries and the role that each country will want to play in that in that in that context. On Namibia, I would say, good news for me in Namibia. You know, we have engaged in January with the authorities at the highest level. I went myself, the chairwoman of Galp together. For sure this, I would say this combination of TotalEnergies and Galp in Namibia has been very welcome locally. Very welcome. It will help everything. First, the sanction of Venus or then on Venus, we have an agenda with the government, which is to make our best on both sides to sanction the project by, I would say, end of July.

Speaker #10: So we'll see. what will the way that the different countries and and the role that each country will want to play in that in that in that context.

Speaker #10: On Namibia, I would say good news for me in Namibia. You know we have engaged in January with the authorities at the Islands level.

Speaker #10: I went myself a chairwoman of CAR together for sure this I would say this combination of TotalEnergies and GALP in Namibia has been very welcome.

Speaker #10: Locally, very welcome. Because—and it will help everything. First, the sanction of Venice, or Ven on Venice. We have an agenda with the government, which is to make our best on both sides to sanction the project by, I would say, end of July.

Speaker #10: Because we have there again some offers by end of July. Tenders. So why is it positive? Because they see our company as being the operator of choice.

Patrick Pouyanné: Because we have there, again, some offers by end of July, tenders. Why is it positive? Because they see our company as being the operator of choice, and we can discuss with them not only on one project, but they see not only our commitment to one, but to at least two projects, if not more, with Mopane behind Venus. The plan is clear. We want to sanction Venus this year. There is a discussion with the government to amend, which is a very old oil and gas law, in fact, from the beginning of the 2000s, which has never been really used in Namibia. In fact, we are the first, to be, I would say, to develop a large, a very large project and an ultra-deep water project.

Speaker #10: And we can discuss with them not only on one project, but they see not only our commitment to one, but to at least two projects, if not more, with more pain.

Speaker #10: Behind Mopane, behind Venice. So the plan is clear. We want to sanction Venice this year. There is a discussion with the government to amend—this is a very old oil and gas rule, in fact from the beginning of the 2000s, which had never been really used in Namibia.

Speaker #10: In fact we are the first in fact to be I would say to to develop a part a very large project. And a ultra deep water project and that's the point on which I think the authorities understand that this ultra deep water project requires some I would say some amendments to the standard terms.

Patrick Pouyanné: That's the point on which I think the authorities understand that these ultra-deep water projects require some, I would say, some amendments to the standard terms. This is on what we work today with them. Again, there is a very, very good dynamic because we are both sides in a win-win situation. Both, we see the perspective of the second project. On the second project, Mopane, our plan, and again, it will be approved soon. The plan is to, in fact, you know, to make sort of an appraisal program with 3 wells. We want to drill the first one. It's an appraisal program, and be clear, not to check if there is a development. There is a development.

Speaker #10: So this is on what we work. Today with them and again there is a very there is a good dynamic. Because we are both sides in a win-win situation.

Speaker #10: And both we see the perspective of the second project. So on the second project Mopane our plan and again it says we will be it will be approved soon.

Speaker #10: The plan is to, in fact, you know, to make, to have an appraisal program with Free Wells. We want to drill the first one.

Speaker #10: But it's an appraisal program let's be clear. Not to check if there is a development. There is a development. The question for us do we have eight hundred million barrel to develop or do we have one point two?

Patrick Pouyanné: The question for us, do we have 800 million barrel to develop or do we have 1.2? You know, it's a question of which. We need to appraise, not to miss some resources by rushing to a first development, which will be not optimal for getting, if there is more than 1 billion barrels. We might adapt geographically when you look to the map. It's linked to the last well, which was drilled by Galp, by the way, which opened some doors. We want also to drill some seismic, OBN seismic to be sure that there is some resources. The rock on Mopane is better. I would say the permeability is much better.

Speaker #10: You know it's a it's a question of reach. And the the we need to appraise not to not to miss some resources by rushing to a first development which will be not optimal for getting if there is more than one billion barrels we we might adapt in geographically when you look to the map.

Speaker #10: it's linked to the last well which was drilled by GALP by the way which opened some win some doors. But we want also to drill some seismic OPN seismic to be sure that there is some resource.

Speaker #10: Resources a rock on Mopane is better I would say. The permeability is much better. So if we are more on a standard development which will not require some fiscal discussions I would say.

Patrick Pouyanné: If we are more on a standard development, which will not require some fiscal discussions, I would say. We could do that with the terms because it's more classic. This one, I would say the idea and the plan, which is approved with GALP, is to drill 2026, 2027, finish the appraisal, and then to move to sanction by 2028. One sanction in mid-2026, one in 2028, and maybe more because on these licenses are also still to explore. There is for me, Namibia will become for us a new anchor country, I would say. By the way, I know that I will have some questions about the Middle East, but it's a good diversification again, you know.

Speaker #10: We could do that with the terms because it's more classic. So this one, I would say, the idea and the plan—which is approved with GALP—is to drill in '26, '27, finish the appraisal, and then to move to sanction by '28.

Speaker #10: So one sanction in mid-twenty-six one in twenty-eight and maybe more because on this licenses there are also still to explore. So there is a for me Namibia will become for us a a new anchor country I would say.

Speaker #10: and by the way it's a good I know that I will have some question about the Middle East but it's a good diversification again.

Speaker #10: You know so to have options and to de develop the options is a good big lesson of what is happening. And will on Namibia we are in a good momentum.

Patrick Pouyanné: To have options and to de-develop the options is a big lesson of what is happening. We'll on Namibia, we are on a good momentum. I hope I will be able to report to you by the end of July that we have really materialized the first project.

Speaker #10: I hope I will be able to report to you by the end of July that we have really materialized the first project.

Speaker #2: Is that still the completion date Patrick for the transaction?

Lucas Herrmann: Is that still the completion date, Patrick, for the transaction?

Patrick Pouyanné: The transaction should be completed the same time or a little before, in fact. A little before.

Speaker #3: I think transaction should be completed at the same time or a little before in fact. A little before.

Patrick Pouyanné: The transaction should be completed the same time or a little before, in fact. A little before.

Speaker #2: Thank you.

Patrick Pouyanné: Thank you.

Lucas Herrmann: Thank you.

Speaker #3: It's more on the transaction. It's more paperwork to be honest. Because the the partners have lifted their preemption rights. So we are more on the paperwork with the Namibia government in order to move forward.

Patrick Pouyanné: It's more on the transaction, it's more paperwork, to be honest. The partners have listed their preemption rights. We are more on the paperwork with the Namibia government in order to move forward and that's it.

Speaker #3: And and that's it.

Speaker #2: Thanks very much.

Operator: Thanks very much. Question is from Alastair Syme, Citi.

Lucas Herrmann: Thanks very much.

Operator: Question is from Alastair Syme, Citi.

Speaker #4: The next question is from Alistair Syme City.

Alastair Syme: Hi. Afternoon, everyone. Can I get you to talk to the profitability of chemicals in the current environment? I mean, oil and gas looks pretty clear, but I am not sure how to think exactly about your chemicals business. My other question, and this might be a very, very short answer. What is your trading business doing with tankers and the Straits of Hormuz? I mean, do you have any traffic moving or do you see any arrangements where traffic can move? Thank you.

Speaker #5: hi afternoon everyone. Can I get you to talk to the profitability of chemicals in the current environment? I mean in oil and gas looks pretty clear but I'm not sure how to think exactly about your chemicals business.

Speaker #5: And then my other question and and this might be a very very short answer. but what is your trading business doing with with tankers in the Straits of Ormuz?

Speaker #5: I mean, do you have any traffic moving, or do you see any arrangements where traffic can move? Thank you.

Speaker #3: Hi good news on the second one. We have ten tankers before the last weekend stuck in the Gulf. No we have nine. Because one of the tanker has moved out of the Gulf during the weekend.

Patrick Pouyanné: I have good news on the second one. We had 10 tankers before the last weekend stuck in the Gulf. Now we have 9. One of the tanker has moved out of the Gulf during the weekend. You know, when Friday evening, I think both parties announced that the strait will be reopened. We gave instruction immediately to our traders to try to get out. There were 2 tankers which were in the queue. The first one exited. The second one, unfortunately, was just after the Indian tankers which was attacked. You know, in fact, all that was governed, by the way, by the insurance companies. In fact, we get on the Friday evening the insurance, we are insured to go through the strait on a Friday evening.

Speaker #3: You know when Friday evening I think they everybody both parties announced that the Straits will be reopened. We gave instruction immediately to our traders to try to get out.

Speaker #3: There were two tankers which were in the queue. The first one exited. The second one unfortunately was just after the Indian tankers which was attacked.

Speaker #3: So you know in fact all that was governed by the way by the insurance company. Because in fact we get on the Friday evening the insurance we are insured to go through the Straits on the Friday evening.

Speaker #3: And when there was an attack in the Sunday afternoon on the Indian tankers then the insurance company told us you guys no more insurance.

Patrick Pouyanné: When there was an attack in the Sunday afternoon on the Indian tanker, the insurance company told us there is no more insurance. We went back to the Gulf. This is the situation. Honestly, we are following on this one. Of course, if we can exit, the best. We are following the news and we depend completely on the discussions between the different parties to the conflict, you know. That's the situation for us. This is where we are. We have done a small business within the Gulf.

Speaker #3: So we we we meant we went back to to the Gulf. So this is the situation. Honestly we are following on this one. Of course if we can exit it's the best.

Speaker #3: but we are following the news and we depend completely on the discussions between the different parties to the conflict you know. And that's that's the situation for us.

Speaker #3: So this is where we are. We have done what we try to do—we have done a small business within the Gulf. You know, we managed to offload one of the, because we had some, a refined products tanker which was stalled.

Patrick Pouyanné: You know, we managed to offload one of the because we had some a refined products tanker which was stored, so we managed to offload it in one country and then to load it with some other crude oil. We try to do what we can inside the Gulf, as trading inside the Gulf with these two tankers, which is limited. On chemicals. Obviously, in fact, there are two different impacts there. First one, naphtha is more expensive because it's it's rare. Because it's scarce, we've seen that the cracker margin went down much. The good news is that at the same time, there is a scarcity globally of naphtha on Asia.

Speaker #3: So we managed to offload it in one country and then to load it with some other pro+ crude oil. So we try to to do what we can inside the Gulf.

Speaker #3: Trading inside the Gulf with these two tankers, but it's limited. On chemicals, obviously, in fact, there are two different impacts there. First one, naphtha is more expensive because it's rare.

Speaker #3: So and so it's because it's scarce. So we've seen that the cracker margin went down in March. But the good news is that at the same time there is a scarcity globally of NAFTA on Asia.

Speaker #3: And as you have a scarcity in Asia, you know you have some people in Asia with crackers looking for naphtha. Then the price of the polymers has increased.

Patrick Pouyanné: As you have a scarcity of Asia, you know you have some people in Asia with crackers looking for naphtha. The price of the polymers have increased. In April, for the first time for long, I've seen a positive results coming from my polymer business. I would say, by the way, I've observed in April that on all our business, including biofuels everywhere, in fact, the beginning of the scarcity implied by the crisis is pushing all our products in the green, I would say. We are benefiting from that, and that's the beauty of the integration we know we have. I see that on the end product. There are, on the chemicals, there's some downside with the cracker, but the polymers are much better.

Speaker #3: And in April, for the first time in a long while, I've seen positive results coming from my polymer business. So I would say, by the way, I've observed in April—but on all our business, including biofuels, everywhere in fact—the beginning of the scarcity implied by the crisis is pushing all our products in the green, I would say.

Speaker #3: We are benefiting from that. And that's the beauty of the integration. You know we have the tasty vet on the end product. So there are on the on the chemicals some downside but the cracker but the polymers are much better.

Speaker #3: So let's and in particular and in the US as well by the way. Because when you are and that's the advantage to be on the petrochemicals not only on NAFTA but you know part of our chemicals in the US and in in is on on gas.

Patrick Pouyanné: Let's, and in particular, and in the US as well, by the way, because when you are. That's the advantage to be on the petrochemical, not only on naphtha, but, you know, part of our chemicals in the US and in, is on gas. Then, when you have polymer price going up and you are way up or ethane in the US is stable, the margin is much better. I see some, we say some good signals on the chemical business which are completely consequence of this crisis.

Speaker #3: And then when you have polymer price going up and you unreop or Ethane in the US is stable the margin is much better. So I see some some I would say some good good signals on the chemical business which are completely which concludes consequence of this of this crisis.

Speaker #2: So so so net net positive earnings in chemicals?

Alastair Syme: Net positive earnings in chemicals?

Speaker #3: Yeah exactly.

Patrick Pouyanné: Yeah. Exactly.

Speaker #2: Patrick? Thank you.

Alastair Syme: Thank you.

Speaker #4: The next question is from Mark Wilson. Jeffreys?

Operator: The next question is from Mark Wilson, Jefferies.

Speaker #5: Thank you very much. I think one area we haven't covered yet is refining. you're probably only company that breaks out your refining very clearly in your annual report.

Mark Wilson: Thank you very much. I think one area we haven't covered yet is refining. You are the only company that breaks out your refining very clearly in your annual report. In total, it's grown to just under 1.5 million barrels a day. Jet fuel, aviation fuel is about 10% of that, just over. Could you give us the dynamics between the different main products? Do you have the ability or desire to move the amount, for instance, of aviation fuel that is produced versus diesel and others? Do you see cost headwinds as well as margin as we move through the year and into Q2, has been mentioned by other companies? Thank you.

Speaker #5: In total, it's grown to just under 1.5 million barrels a day. And jet fuel, aviation fuel, is about ten percent of that, just over.

Speaker #5: Could you give us a dynamics between the different main products? do you have the ability or desire to move the amount for instance of of aviation fuel that is produced versus diesel and others?

Speaker #5: And do you see cost headwinds as well as margin as we move through the year and into Q2? This has been mentioned by other companies.

Speaker #5: Thank you.

Speaker #3: there is clearly I mean the clear all our refinery today have been there was an instruction with a limit of a refinery. A refinery unfortunately you know you distillate and you distillate you have a slate of products but there is ways to optimize.

Patrick Pouyanné: Very clearly, I mean, to be clear, all our refineries today have been, there was an instruction with the limit of a refinery. A refinery, unfortunately, you know, you distillate and you have a slate of products, but there are ways to optimize. All of them in Europe, the instruction is max jet first, and then max diesel, and then result in gasoline. We try to maximize the two cracks, and in particular these days, which are the better. Jet fuel, even is better than the paper jet fuel, is really high. Maximizing jet and then maximizing diesel in particular, because in France, we are a big consumer of diesel, and diesel crack was quite high. Gasoline, we know that we have enough European refineries are producing a lot of gasoline, so there is less incentive to do it.

Speaker #3: So all of them in Europe the instruction is max jet first and then max diesel and then res+result in gasoline. So we try to maximize the two cracks and in particular these days which are the better jet fuel even is better than the paper jet fuel.

Speaker #3: It's really high. So, maximizing jet, and then maximizing diesel in particular, because in France we are a big consumer of diesel, and diesel crack was quite high.

Speaker #3: And then gasoline we know that we have enough in European European refineries are producing a lot of gasoline. So there is less incentive to do it.

Speaker #3: So what we do at the max is—it's not, we don't go from ten percent to twenty percent. It's a matter of adding two to three percent.

Patrick Pouyanné: That we do at the max. It's, it's not, we don't go from 10% to 20%. It's a matter of adding 2% to 3%, but each percent, of course, is good. For the global refining margin. That is clear, and we do it. We have done it immediately and systematically because these are the critical, I would say, products, jet fuel and diesel, which we are more relying on imports for the European continent, so of course the margin is better. It's very logical we've done that. I'm not sure to have understood the question of the cost headwinds, what it is related to.

Speaker #3: But each percent of course is is good for the m global refining margin. So that is clear. And we do it we have done it immediately and systematically in order to be able because these are the critical I would say products.

Speaker #3: Jet fuel and diesel where which we are more relying on imports for the European continent. So of course the margin is better. So it's very logic.

Speaker #3: We've done that. I'm not sure to have understood the question of the cost headwinds. What it is related to?

Speaker #5: Well there's obviously been a lot of talk about the availability of feedstock and competition for for crudes and certain grades of crudes. So is that any any impact?

Mark Wilson: Well, there's obviously been a lot of talk about the availability of feedstock and competition for crudes and certain grades of crudes. Is that any impact?

Speaker #3: Yeah it I mean okay. in fact today you yeah I understand. some some feedstock are I would say yes are they are scarcer. Are scarce and so they are more expensive.

Patrick Pouyanné: Yeah. I mean, okay. In fact, today, I understand. Some feedstock are, I would say, yes, they are scarcer, are scarce, and they are more expensive. Again, yes, it's an impact. We see some, but the refining margin were exceptionally high in March, around EUR 25 per barrel. I would say, I think Jean-Pierre told you that it was very poor in January, February, and the 11.4 margin was a result of very non-nonlinear, I would say, margin. In April, there was some volatility in the margins linked partly to more volatile, linked partially to the feedstock which were coming in the refinery. That's true. That's true.

Speaker #3: But again yes it's an impact. We see some by the way there is the the refining margin where exceptionally high in March around twenty-five dollar per barrel.

Speaker #3: So I would say the I think Jean-Pierre told you that. But it was very poor in January February. And the eleven point four margin was the result of a very not non-linear I would say margin.

Speaker #3: but in April there was some volatility in the margins linked partly to more volatile linked partially to the feedstock which were coming in the refinery.

Speaker #3: So that's true, that's true. But again, on this one, clearly I will tell you there is a very strong connection between refining in the company and trading.

Patrick Pouyanné: Again, on this one, clearly, I will tell you, there is a very strong connection between refining in the company and trading. All that is optimized between both of them. They are competing. They are, by the way. The suppliers of refinery are exactly on the same desk, next to the traders. We interface between both of them in order to optimize the slate which will go to refineries and what we should sell among all our crude oil that the traders have access to on the market. We make it as an optimization for the company. It may be not optimal for the trading itself, but if it's optimized, if it's an optimum on the refining and trading as a combination, then we will take the feedstock to the refinery.

Speaker #3: And all that is optimized between both of them. And in fact they are completely they are by the way the the suppliers of refinery are exactly on the same next desk next to the traders.

Speaker #3: And we interface between both of them in order to have to optimize the slate which will go to a refineries and what we should sell among all our crude oil that our traders have access to on the market.

Speaker #3: And we make it as an optimization for the company. So it may be not optimal for the trading itself. But if it's optimized if it's an optimum on the refining and trading as a combination then we will take the feedstock to to the refinery.

Speaker #3: So this is one of the advantage I would say to have these strong integration. And to think in particular in this type of period I know some people were thinking that what we might have a lack of crude or we will never have a lack of crude.

Patrick Pouyanné: This is one of the advantage, I would say, to have this strong integration and to think in particular in this type of period. I know some people were thinking that we might have a lack of crude. No, we will never have a lack of crude. We optimize the type of feedstock we need to our refineries according to the access to many, I mean, flows that our trading can generate.

Speaker #3: And so we optimize the type of feedstock we need for our refineries according to the access to many, I mean, flows that our trading can generate.

Speaker #5: Thank you very much Alejandro.

Mark Wilson: Thank you very much. I'll hand it over.

Speaker #4: The next the next question is from Kim Fustier HSBC.

Operator: The next question is from Kim Fustier, HSBC.

Speaker #6: Hi good afternoon. Thanks for taking my questions. firstly on on Qatar how are you managing the force majeure situation in Qatar as it relates to your LNG portfolio and your commitments to customers?

Kim Fustier: Hi. Good afternoon. Thanks for taking my questions. Firstly on Qatar, how are you managing the force majeure situation in Qatar as it relates to your LNG portfolio and your commitments to customers? Just noting that one of your IOC peers is also a partner in Qatar LNG, had to declare force majeure. Related to that, what is your view on the timeline of the Qatar LNG expansion project? I also wanted to ask about SATORP. What is the repair timeline for the damaged units? Linked to that, what is the potential impact on the timeline of the Amiral project? Thank you.

Speaker #6: Just noting that one of your IOC peers is also a partner in Qatar LNG. You had to declare force majeure. And related to that what is your view on the timeline of the Qatar LNG expansion project?

Speaker #6: I also wanted to ask about SATORP. What's the repair timeline for the damaged units? And, again, linked to that, what is the potential impact on the timeline of the Amaryl project?

Speaker #6: Thank you.

Speaker #3: Okay. Qatar—I mean, again, I repeat, I don't know why people do not believe us. Qatar LNG has declared force majeure to its customers.

Patrick Pouyanné: Okay. Qatar, I mean, again, it's, I repeat, I don't know why people do not believe us. QatarEnergy has declared force majeure to its customers. That means that, you know, in Qatar, we have some JVs with QatarEnergy, and the marketing of its JV is done by QatarEnergy. Our JV, which are reported in the upstream part, which are, I would say, like the rest, are not producing today. There is no production, no revenue, and very logically and very professionally, I would say, QatarEnergy has immediately declared force majeure to its customers. That's one point. From this perspective, TotalEnergies is a customer for QatarEnergy only for our own offtake.

Speaker #3: That means that you know in Qatar that we have some GVs with Qatar LNGs. And the marketing of these GVs is done by Qatar Energy.

Speaker #3: So all GV which are reported in the upstream part which are I would say like the rest but it's are not producing today. So there is no production.

Speaker #3: No revenue. And very logically and very professionally I would say Qatar Energy has immediately declared force majeure to its customers. That's one point. From this perspective TotalEnergies is a customer for Canal Energy.

Speaker #3: Only for our own offtake. The difference between our competitor and ourselves is that because we were we are very exposed and we know that to Qatar through the GVs we have some limited contracts with Qatar as our for our own offtake.

Patrick Pouyanné: The difference between our competitor and ourselves is that because we are very exposed and we know where to Qatar through the JVs, we have some limited contracts with Qatar as, or for our own offtake, for our own portfolio. The amount is around 1.5 million tons per year. We have this 1.5 million tons per year. We received the force majeure from Qatar because we are a customer for them. We decided that we will not transfer it because, by the way, we don't. In the way we work with our LNG portfolio, when we sign a contract with a Korean or Japanese buyer or Thai, we don't assign, we don't tell them it is coming from Qatar because we are a portfolio company. We took on ourselves.

Speaker #3: For our own portfolio. And so the amount is around one point five million ton per year. So we have this one point five million ton per year.

Speaker #3: We receive the force majeure from Qatar because we are a customer for them. But then we decided that we will not transfer it because by the way we don't we they're in in the way we work we bought LNG portfolio.

Speaker #3: When we sign a contract with a Korean or a Japanese buyer or a Thai we don't assign we don't tell them it is coming from Qatar.

Speaker #3: Because we are a portfolio company. So we took it on ourselves. And, by the way, we told them we are a portfolio company. We produce in eleven countries.

Patrick Pouyanné: By the way, we told them we are a portfolio company. We produce in 11 countries. We secure user supply. We decided, yes, we receive the force majeure, but we will take it for us. We could have done it, probably, but we decided that it was in terms of commercial, in terms of what we advocate every day, for their customers, the best position. Probably 1.5 million tons is absorbable in a portfolio of 40 million tons, you know. We will deliver, we will not transfer the force majeure to any of our customer. That's what we've done. I know that our competitor is more exposed because, if I read correctly in the press, it's more 6 or 7 million tons than 1 million tons, 1.2 or 1 to 2.

Speaker #3: So we secure use the supply. So we decided yes we receive the force majeure but we will take it for us. And we will not we could have done it probably.

Speaker #3: But we decide that it was in terms of commercial in terms of what we advocate every day for their customers. The best position because probably one point five million ton is absorbable in a portfolio of forty million ton you know.

Speaker #3: That we will deliver. We will not transfer the force majeure to any of our customers. That's what we've done. I know that our competitor is more exposed because they are, if I read correctly in the press, it's more six or seven million tons than one million tons.

Speaker #3: One point two or one to two. So probably with seven million tons it was for them more logic. T+to be honest my energy traders were ready to exercise the force majeure.

Patrick Pouyanné: Probably with 7 million tons, it was for them, more logic. To be honest, my energy traders were ready to exercise the force majeure, but the management said that, no, be careful what we do. We've done it like that, so no problem. Timeline on schedule expansion, I think, I think the themselves, they have said that today the impact is evaluated to 2 months or something like that on the expansion on NFE first train. Because NFE underground technique and the teams are continuing to work in fact, onshore. The offshore works have been stopped. They are, you know, I think it was planned for Q3 2026. Probably today we are more on Q4 2026.

Speaker #3: But the management said that no, be careful what we do. And so we've done it like that. So no problem. Timeline on Qatar expansion, I think I can—I think the Qataris themselves, they have said that today the impact is evaluated to two months or something like that on the, I would say, on the expansion, on NFE first train.

Speaker #3: Because NFE on the ground technique and the teams are continuing to work. In fact, offshore and onshore, the offshore works have been stopped.

Speaker #3: So they are you know I think it was planned for Q3 twenty twenty-six. So probably today we are more on Q4 twenty twenty-six. And again there is a difference in all this wording between when you put the gas in and when you offtake the first LNG.

Patrick Pouyanné: Again, there is a difference in all this wording between when you put the gas in and when you off take the first LNG. If you want my bet in my plans, I would say first LNG offloaded from North Field East is probably right on the end 2026, beginning 2027. That's if I'm taking a bet on that. You know, that's where we are. Again, this is completely linked to how long this war will last. As long as we don't, cannot restart works offshore, of course, this might impact the timeline. There are three units. One, I told you the first unit will be repaired very quickly, the VDU. That means that Setup is able to produce some VDU from in 10 days.

Speaker #3: So if you want my bet in my plans, I would say first LNG offloaded from NFE is probably right on the big end, twenty-six, beginning twenty-seven.

Speaker #3: That's if I'm taking a bet on that. But you know that's that's where we are. And again this is completely linked to the of l of long we'll this law we this war will last.

Speaker #3: Because as long as we cannot restart works offshore, of course, this might impact the timeline. SATORP—so there are three units. One, as I told you, the first unit will be repaired very quickly.

Speaker #3: The VDU. So that means that SATORP is able to produce some VGO from, in ten days. We could produce, in fact, full capacity VGOs.

Patrick Pouyanné: We could produce full capacity VGUs. You need to find a market, somebody who buys VGU. As we cannot export VGU because the Gulf state of Hormuz is closed, we will be limited to something like 330 thousand barrel per day. We need to recover the two other units. The two other units are the conversion units, which allow us to transform the VGU, I would say, diesel and noble products. This one, honestly today, it's we don't know. We have sent some experts, and we are working together with Aramco. There have been some damage to this unit. It's a matter of at least 6 months, maybe more. We don't know. It's we are working on it.

Speaker #3: But then you need to find a market somebody who buys VGO. And as we cannot export VGO because the Gulf Strait of almost is closed we will be limited to something like three hundred three hundred thirty cavic thousand barrel per day during the.

Speaker #3: and then we need to recover the two other units. The two other units are the conversion units. Which allow us to transform with VGO in I would say diesel and noble products.

Speaker #3: This one, honestly, today it's—we don't know. We have sent some experts, and we are working together with Aramco. There has been some damage to these units.

Speaker #3: So it's a matter of at least six months maybe more. We don't know. It's we are working on it. And when we will have as we have been very transparent since the beginning of the of the conflict.

Patrick Pouyanné: As we have been very transparent since the beginning of the conflict, when we'll have better new news on it, but I would say, not café du commerce news, we will report to you. At this stage, the teams of Aramco and TotalEnergies are working to evaluate the, really the damage and more to evaluate the repair that we need to do. By the way, TotalEnergies, we have an insurance on this type of war events, which we might activate if the damage are higher than EUR 150 million. This is our own limit, I would say, our threshold for ourselves. Impact of Amiral? No. Amiral, there are 22,000 people working in Amiral today on the ground. That's why we have, also again, is Aramco.

Speaker #3: When we will have better new news on it. But I would say not the Café du Commerce news. We will report to you. At this stage the teams of Aramco and TotalEnergies are working to evaluate the really the damage.

Speaker #3: And more to evaluate the repair, but we'll need to do that. By the way, TotalEnergies, we have insurance on this type of war event.

Speaker #3: which will we'll we might activate if the damage are higher than one hundred fifty million dollar. So this is our own limit I would say.

Speaker #3: Our threshold for ourselves. impact of AMIRAL? No. AMIRAL there are twenty-two thousand people working in AMIRAL today on the ground. That's why we have also again is Aramco.

Speaker #3: I was I went in Riyadh. We discussed a lot about AMIRAL. We have the full support of the authorities for AMIRAL. So AMIRAL again is progressing.

Patrick Pouyanné: I went in Riyadh. We discussed a lot about Amiral. We have the full support of the authorities for Amiral. Amiral, again, is progressing. The progress of Amiral is today at 70%, this project. The startup is planned by end of 2027, I would say, beginning 2028. Again, it's, of course, what I just tell you today is the conflict was worsening, which I don't think could change. This is just another day today with validity, but this is the situation for Amiral.

Speaker #3: And the progress of AMIRAL is today at seventy percent. This project, the startup is planned by end of '27, I would say beginning '28.

Speaker #3: But again it's of course the context might what I just tell you today is a conflict was worsening. Which I don't talk could change.

Speaker #3: So this is just an update today with validity. But this is a situation for AMIRAL.

Speaker #4: Thank you very much.

Operator: Thank you very much. The next question is from Matthew Lofting at J.P. Morgan.

Kim Fustier: Thank you very much.

Speaker #5: The next question is from Matt Lofting at JP Morgan.

Operator: The next question is from Matthew Lofting at J.P. Morgan.

Speaker #6: Hi thanks for taking the questions and congratulations on the performance of the integrated model in i+in what's clearly been i+exceptional times. I wanted to ask you th y+y+you guys engage extensively with host governments globally.

Matthew Lofting: Hi. Thanks for taking the questions, and congratulations on the performance of the integrated model in what's clearly been exceptional times. I wanted to ask you guys engage extensively with host governments globally. It's early days, but are you seeing any change in the tone of conversations as a result of recent events towards greater urgency, let's say, from some countries to develop domestic production and better secure energy supply? Second, sort of more specific to the financials, price and timing lags are an inherent part of several parts of TotalEnergies business. Wondered if you could just talk a bit about how that impacted Q1, given the sort of surge in commodity prices more kicked in in March, and how that then sort of plays out as we look forward to the coming quarters. Thank you.

Matt Lofting: Hi. Thanks for taking the questions, and congratulations on the performance of the integrated model in what's clearly been exceptional times. I wanted to ask you guys engage extensively with host governments globally. It's early days, but are you seeing any change in the tone of conversations as a result of recent events towards greater urgency, let's say, from some countries to develop domestic production and better secure energy supply? Second, sort of more specific to the financials, price and timing lags are an inherent part of several parts of TotalEnergies business. Wondered if you could just talk a bit about how that impacted Q1, given the sort of surge in commodity prices more kicked in in March, and how that then sort of plays out as we look forward to the coming quarters. Thank you.

Speaker #6: I—it's early days, but are you seeing any change in the tone of conversations as a result of recent events, towards greater urgency, let's say, from some countries to develop domestic production and better secure energy supply?

Speaker #6: and then second at a more specific to the financials. Price and timing lags are an inherent part of several parts of TotalEnergies business. Wondered if you could just talk a bit about how that impacted Q1 given the sort of surge in commodity prices more kicked in i+in March.

Speaker #6: A+and how that then sort of plays out as as we look forward to the coming quarters. Thank you. Okay. We are on the second question.

Patrick Pouyanné: Okay. On the second question, the obvious case is the LNG, because most of the contracts on LNG are based on, have a time lag of 1, even 2 months. Obviously we don't see, by the way, we end the average price of the quarter was EUR 8.5 per million BTU, exactly what we planned in February, in the trading statement. Yeah, on the guidance that we gave in February. That means that there was no impact on the March oil prices or gas prices. We expect to see the impact of the March high price clearly will be in the Q2.

Speaker #6: We have use cases. The LNG. Because most of the contracts on LNG are based on a have a time lag of one even two months.

Speaker #6: So obviously we don't see by the way we end the average price of the quarter was eight point five dollar per million. But you exactly what we planned.

Speaker #6: In in in February in the trading statement. And then that turned yeah on the guidance that we gave in February. So that means that there was no impact on the March oil prices or gas prices.

Speaker #6: So we expect to see the impact of the March high price clearly will be in the second quarter. That's why we gave you a guidance by the way.

Patrick Pouyanné: That's why we gave you a guidance, by the way, of EUR 10 per million BTU, which again, is reflecting price of March, an assumption for sort of over months of EUR 80 per barrel and a TTF around EUR 40, 15 per million BTU. Again, if the crude oil was higher and remain higher, that could impact positively the EUR 10 per million BTU. This is the obvious case. On the crude oil, we have some few things.

Speaker #6: Of ten dollar dollar per million BTU. Which again is reflecting price of March. An assumption for so other months of eighty dollar per barrel.

Speaker #6: And the TTF around forty fifteen dollar per million BTU. So again if it was if the crude oil was higher and remained higher that could impact positively the the the ten dollar per million too.

Speaker #6: So this is the obvious case. On the crude oil we have some few things. We have one country. We have by the way it's which where we have the a formula which is with one or two months delay.

Patrick Pouyanné: We have one country. We have, by the way, it's which where we have a formula which is with one or two months delay, is the UAE, which creates, by the way, some difficulties when we, and we are trying to solve them because when we have a two months delay, that means that, we could face a day that it will reopen and the price could go down. We would have to pay with two months delay, but not a good situation. We are discussing on that. Honestly, these are the main two. There are also some impacts on polymers and things like that. You know, in plastic world generally, it's also you have also some delays in all the formulas.

Speaker #6: It's the UAE. Which creates by the way some difficulties when we and we are trying to solve them. Because when you have a two months delay that means that we could face a day that it will reopen and the price could go down.

Speaker #6: You could have to pay with two months delay but not a good situation. We are discussing on that. But honestly these are the main two.

Speaker #6: there are also some impacts on polymers and things like that. You know in plastic world generally it's also you have also some delays in all the formulas.

Speaker #6: So for example answering I should have commented that in March we suffered an after that we bought was on the spot market. But the polymers and all the pricing do not reflect immediately the increase of the nafta you know.

Patrick Pouyanné: For example, answering, I should have commented that in March, we suffered the naphtha that we bought was on the spot market, but the polymers and all the pricing, do not reflect immediately the increase of the naphtha, you know? That's negative from the naphtha, and this will be recouped in Q2. The time beyond 1 to 2 months, we don't have many timelines longer than that. Maybe exceptional situation with the 6 months or so. It's very rare, in fact, in the portfolio. Okay? Post-government, I think I answered in my first answer to Michele. That was more or less the same question.

Speaker #6: So that's negative for the nafta, and this will be recouped in the second quarter. That's the type. Beyond one to two months, we don't have many time lags, no longer than that.

Speaker #6: M+might be exceptional situation with a six months or so. But it's very rare in fact in the portfolio. Okay? most governments I think I answered in my first answer to to the government to Michele.

Speaker #6: That was more or less the same question. Yes I said to Michele look it's quite clear that today you begin to see for sure again the governments are looking to what could we could we develop our domestic production.

Patrick Pouyanné: Yes, I said to Michele, Look, it's quite clear, but today you begin to see for sure. Again, the governments are looking to, what could we develop our domestic production? Could we, that's obvious, securing say, energy supply. I said electrification. I said more coal for countries who have coal, you know, will develop their coal. That's sure India is more coal. Renewables as well. That's positive for renewables, I think in many countries, including in Europe. Nuclear will be again, I would not be surprised to see there was already a good momentum, but to see a country like India again or China, it's already done, but with nuclear programs, so like some European countries. We have the new France, you know, after 73, we are French.

Speaker #6: Could we that's obvious securing the energy supply. I said electrification. I said more more coal for countries who have coal you know. they will develop their coal.

Speaker #6: that's sure. India is more coal. renewables as well. So that's positive for renewables I think in many countries including in Europe. Nuclear will be again I I will not be surprised to see there was already a good momentum.

Speaker #6: But to see a country like India again or like China it's already done. But with nuclear programs. So like some European countries so there'll be new France you know after seventy-three we are French.

Speaker #6: And Japan now we'll see no new country you know coming to that. So that's obvious that's obvious to me. Which is as I said to s for sure a challenge for the gas you know.

Patrick Pouyanné: Japan, we will see no new country, you know, coming to it. That's obvious to me, which is, as I said to, for sure a challenge for the gas, you know, because it's a competition of you produce electricity. Gas to electricity. Gas is not only used for electricity, also used for heating, by the way. You know, it's it will be some for sure a challenge. The other governments where I see a change of tone, it's as I told you that I visited of course our friends in the Middle East. It's clear that on the agenda today, you have the question of can we get around the Strait of Hormuz, you know?

Speaker #6: Because it's a competition of you produce electricity. So gas to electricity. Gas is not only used for electricity. It also used for heating by the way.

Speaker #6: But you know it's it's it will be some for sure a challenge. the other governments where I see a change of tone it's I s I told you that I visited of course our friends in the Middle East.

Speaker #6: It's clear that on the agenda today you have the question of of can we get around the Strait of Ormuz you know. So all we are discussing again on projects to build some pipelines to double the pipeline to Fujairah to double pipelines through Saudi Arabia.

Patrick Pouyanné: We are discussing again on projects to build some pipelines, to double the pipeline to Fujairah, to double pipelines through Saudi Arabia. Iraq obviously is in a situation where we need to revive some old pipelines which are stuck today. You know, where the pipeline crossing Syria. You have the pipeline through Turkey. It's for me, these countries for sure today, the question of their own, not security of supply, but security of delivering and of evacuating and commercializing will become high on the agenda of all these countries. Yes, this crisis, and again, because it's not only an isolated one, we had 22, now we have 26. You have this question of security of supply and affordability, which is linked to that.

Speaker #6: Iraq obviously is in a situation where we need to revive some old pipelines which are stuck today. You know there is a pipe was was a pipeline crossing Syria.

Speaker #6: You have the pipeline through Turkey. So it's, for me, these countries, for sure, today the question is not security of supply, but security of delivering.

Speaker #6: And of evacuating and commercializing will become high on the agenda of all these these countries. So yes, this crisis—and again, because it's not only an isolated one.

Speaker #6: We had twenty-two. Now we have twenty-six. So you have these questions of security of supply and affordability which are linked to that. And again, for me, it means how do we remunerate more capacities.

Patrick Pouyanné: For me it means how do we remunerate more capacities? We need to invest more in all these energy capacities will be high on the agenda and in many countries around the world.

Speaker #6: We need to invest more in all these energy capacities. will be high on the agenda. And on in in many countries around the world.

Speaker #6: Super. Thanks Patrick.

Jean-Pierre Sbraire: Super. Thanks, Patrick.

Matt Lofting: Super. Thanks, Patrick.

Speaker #3: Our next question is from Jason Gableman. TD Cowen. Mr. Gableman your line is open. Maybe you're in mute. Mr. Gableman line got disconnected. So the next question is from Christopher Copeland Bank of America.

Operator: The next question is from Jason Gabelman, TD Cowen. Mr. Gabelman, your line is open. Maybe you're on mute. Mr. Gabelman line got disconnected. The next question is from Christopher Kuplent, Bank of America.

Speaker #7: Yeah thank you very much. Good afternoon everyone. just two more questions remaining. y+you know when we think back to February and you gave us your outlook for cash flow during the year you were referencing a sixty to seventy Brent range refining margins at five et cetera.

Christopher Kuplent: Yeah, thank you very much. Good afternoon, everyone. Just 2 more questions remaining. You know, when we think back to February and you gave us your outlook for cash flow during the year, you were referencing a 60 to 70 Brent range, refining margins at 5, et cetera. We're now in a different world. You've talked yourself about 80 as a, you know, good starting point for the year. What can you tell us, how should we adapt your sensitivities that you've published, which I believe were meant for a 60 to 70 world rather than for an 80 to 100 world?

Speaker #7: we're now in a different world. You've talked yourself about eighty as a as a you know good starting point for the year. what what can you tell us how should we adapt your sensitivities that you've published which I believe were meant for a sixty to seventy world rather than for an eighty to a hundred world?

Christopher Kuplent: Where would you like to make some adjustments or give us some warnings other than the volumes of course, that you're not able to sell right now in terms of the validity of these sensitivities? Maybe as a quick second question, considering you haven't been active in the farm-out market, maybe I can ask you my favorite question, Patrick: What do you think is the current state of M&A? I know it's not one market. Power is very different from oil, from gas. Where would you rather be right now, a buyer or seller? Thank you.

Speaker #7: so where would you like to make some adjustments or or give us some warnings other than the volumes of course that you're not able to to sell right now in terms of the validity of these sensitivities?

Speaker #7: and then maybe as a quick ques second question considering you haven't been active in the farm bill market maybe I can ask you my favorite question Patrick.

Speaker #7: What do you think is the current state of M&A? I know it's not one market. Power is very different from oil from gas. but where would you rather be right now a a buyer or seller?

Speaker #7: Thank you.

Speaker #6: So, first question, Chris. I invite you to read page thirteen of the press release, I think. And you have the stable, the sensitivity, and fundamentally they are between sixty and eighty. You can extend sixty-seventy to sixty-eighty.

Patrick Pouyanné: First question, Chris, I invite you to read page 13 of the press release, I think, and you have the stable, the sensitivity. Fundamentally they are between 60 and 80. You can extend 60, 70 to 60, 80. I have no doubt about it. The only point is that as we have lost, if we remain in the situation of today, which we, without the Middle East production, of course we must correct it. That's why we gave you a sensitivity of 10% on the Middle East production.

Speaker #6: So I I have no no doubt about it. The only point is that as we have lost if as we can if we were if we remain in a situation of today which will without the Middle East production then of course we must correct it.

Speaker #6: That's why we gave you a a sensitivity of ten percent on the Middle East production. But I've made the math. If we were just for you just to give you if we were in an environment around eighty dollar per barrel fifteen dollar per million BTU seven dollar per month per refining margin.

Patrick Pouyanné: I made the math, if we were just for you, just to give you, if we were in an environment around EUR 80 per barrel, EUR 15 per million BTU, EUR 7 per refining margin. Without the Middle East, would be around EUR 32 billion of cash flow. EUR 32 billion. It's again, if the situation remains the same, and my scenario is not good, to be honest, because if it remains the same, we'll not be at EUR 80 during the whole year. If we lose really the production of the Middle East during the next nine months, I think you can correct my EUR 80 to EUR 100 or EUR 110. Again, you can take around EUR 3 billion for...

Speaker #6: without the Middle East we'd be around thirty-two billion dollar of cash flow. thirty-two billion dollar. But it's again if the situation remains the same and if and my scenario is not good to be honest because if it remains the same we'll not be at eighty dollar during the whole year.

Speaker #6: So if we lose really the production of of of the Middle East during the next nine months I think you can correct my my my f my eighty to to one hundred or one hundred ten.

Speaker #6: So again you can take around three billion dollar for two point eight officially but three billion dollar for and it's a little more you're right.

Patrick Pouyanné: it's 2.8 officially, but EUR 3 billion for. It's a little more, you're right, because in fact, when we go high at EUR 100, the Middle East impact of the production, the loss of the 15% is no more 10%. It will go down to 6%, 7%, which means that the higher we go, the more the sensitivity will rely on the barrels outside of the Middle East. Your question is good, but we need to make the math correctly at 100. We will do it, and I think Renaud and his team will give you the. We might publish it if you want because this information is important. We might publish it on our internet site.

Speaker #6: Because in fact when we go high at one hundred dollar the Middle East impact of the production the loss of the fifteen percent is no more ten percent but will go down to six seven percent.

Speaker #6: Which means that the higher we'll go the more the sensitivity will will rely on the barrels outside of the Middle East. So your question is good but we need to make the math correctly at one hundred.

Speaker #6: We will do it and I think Renault and his team will give you the will for might publish it if you want because you this information is important we we might publish it on our internet site.

Speaker #6: So there is less impact from the production of the Middle East at one hundred but we have on the at sixty dollar that's true as well.

Patrick Pouyanné: There is less impact from the production of the Middle East at 100 that we have at EUR 60. That's true as well. That's what I can comment. All that is, to be honest, any high scenario is a good news for integrated companies like TotalEnergies.

Speaker #6: So that's what I can comment. So all that is to be honest any high scenario is is a good news for integrated companies like TotalEnergies.

Speaker #7: Great. Thank you. Looking forward to that Renault. Your great work.

Christopher Kuplent: Great. Thank you. Looking forward to that, Renaud, your great work.

Speaker #6: Renault it's okay. I mean it's not so complex. Renault is not able to make the math but the budget guy is able. So don't worry.

Patrick Pouyanné: No, no, it's okay. I mean, it's not so complex. Renaud is not able to make the math, but the budget guy is able. Don't worry, we just need to correct it. No, with what I said, he should be able to do it. Just a joke between us. Okay. You know, M&A. M&A of M&A, you know. M&A on oil, honestly, today is difficult, because where is the right price tag for the oil assets in the next three years, you know? You know, there was a sort of consensus until the crisis. I think oil was more or less, assets were more or less exchanged around EUR 70 per barrel, I would say, in the market. It was more or less the market, and it was some few could debate, but it's more or less the average assumption.

Speaker #6: we just need to correct it. Never know. We what I said it should be able to do it. Just a joke between us. Okay.

Speaker #6: I no M&A. M&A of M&A you know M&A on oil honestly today is difficult. because where is the right price tag for the oil asset?

Speaker #6: In the next three years you know. And you know there was a sort of consensus until the crisis I think oil was more or less assets were more or less exchanged around seventy dollar per barrel I would say in the market.

Speaker #6: It was more or less the market and was some few who could debate but it's more or less the average assumption. today and of course you to put seventy dollar for the next for twenty-six twenty-seven twenty-eight I would not agree if my teams are proposing me to sell at seventy dollar you know.

Patrick Pouyanné: Today, of course, to put EUR 70 for the next, for 2026, 2027, 2028, I would not agree if my teams are proposing me to sell at EUR 70. You know, I would say, No, no. It's very difficult because there is no certainty at all about where we'll establish the market. You could say EUR 80, EUR 75. You could say also maybe it's EUR 100. I think M&A on oil today is not an easy game to play. Of course, the buyer would love to buy at EUR 70, but I'm sure the seller will be a little more difficult to convince. That's where I see that. On the gas, different. You know, we are looking on our side to the gas, US gas business on the other side.

Speaker #6: I would say no no. And it's very difficult because there is no certainty at all about where we'll establish the market. So you could say it's eighty it's seventy-five.

Speaker #6: You could say also maybe it's one hundred. So I think M&A on oil today is not an easy game to play, and I'm sure neither—of course the buyer would love to buy at seventy dollars, but I'm seeing the seller will be a little more difficult to convince.

Speaker #6: So that's where I see that. On the gas, different—you know, we are looking on our side to the US gas business. On the other side, the US gas market has been stable.

Patrick Pouyanné: The US gas market has been stable, so I think that means that we, by the way, when you look to the assets on their side, it didn't move a lot, valuation, so that's more easier for on this side. Power, you know, is they are all crazy in the US with gas-fired power plant. It's not a good market to buy gas-fired power plant. They are more reasonable in Europe, because, you know, we don't, we are not in love with gas in Europe. It's good to continue to buy M&A, to make M&A on gas plants in Europe. We are looking to some opportunities in to complement the portfolio. An obvious country for us to look at is Germany, in Europe from a power point of view.

Speaker #6: So I think that means that we by the way the when you look to the assets on the best side it has not it did not move a lot.

Speaker #6: valuation so that's more easier for on this side. Power but power you know is there are all crazy in the US with gas five for a plant.

Speaker #6: So it's not a good market to buy gas five for a plant. There are more reasonable in Europe because you know we we don't we are not in love with gas with gas in Europe.

Speaker #6: So it's good to continue to buy M&A to make M&A on gas plants in Europe. And we are looking to some opportunities in to complement the portfolio where I can an obvious country for us to look at is Germany in Europe for from a power point of view.

Speaker #6: So that is the situation. And then if I continue M&A on renewables by the way I have a good news for all of you.

Patrick Pouyanné: That is the situation. If I continue, M&A on renewables, by the way, I have good news for all of you. You didn't ask me the question, we got the money from the US government on our account yesterday. We have the famous $928 million. By the way, the share for TotalEnergies out of the $928 million, because we had some partners on one of the concession, is $550 million. We'll have this cash incoming. It already came. It already came. On renewables, the market is influenced by higher interest rates. It's much, you know, the multiples in that field are quite high compared to oil and gas.

Speaker #6: It didn't ask me the question but we got the money from the US government on our account yesterday. So we have the the the famous number twenty-eight million dollar.

Speaker #6: By the way the share for TotalEnergies out of the nine twenty-eight because we had some partners on one of the of the concession is five hundred fifty.

Speaker #6: So we'll have this cash in coming is already came. It's already came. So on renewables the market is influenced by higher interest rates. So it's it's not so but it's most you know as a multiple in that field are quite high compared to oil and gas.

Speaker #6: But I see a sort of impact on raise raising interest rates on the valuation of these assets.

Patrick Pouyanné: I see a sort of impact on raising interest rates on the valuation of these assets.

Speaker #7: Okay. Thank you very much.

Christopher Kuplent: Okay. Thank you very much.

Speaker #3: The next question is from Ari Patrickou UBS.

Operator: The next question is from Henri Patricot, UBS.

Speaker #8: Yes hello everyone. Thank you for the update. Just one quick question left for for me. going back to the the trading great performance in the in the first quarter in both oil and and gas.

Henri Patricot: Yes, everyone. Thank you for the update. Just one quick question left for me. Going back to the trading great performance in the first quarter in both oil and gas. I was wondering if you have any comments on the second quarter. Should we be expecting a continuation of a strong performance given we've seen already one month with significant volatility and maybe a full quarter of significant volatility in both markets? Thank you.

Speaker #8: Ronik if you have any comments on on the second quarter should be be expecting potential of a strong performance given we've seen already one month with significant volatility and maybe a full quarter of significant volatility in in both markets.

Speaker #8: Thank you.

Speaker #6: Hi Kenneth. Answer that question. You know we we just you know what we we have no idea you know trading is not a matter of earning a plant and taking the production multiplying by a price an assumption on the price minus the cost.

Patrick Pouyanné: I cannot answer that question. No, we just, you know, we have no idea. You know, trading is not a matter of running a plant and taking the production, multiplying by a price, an assumption on the price minus the cost. It doesn't work like that. I can only comment that there is a very volatile market, but the traders generally are quite happy when they see volatile product market up to a point when it's too volatile, there are some danger. When the volatility is not related to supply and demand, but to the tweets of some authorities in the world, it's even more dangerous because you could go, you could face suddenly a reverse situation. We are not betting on price.

Speaker #6: It doesn't work like that. So obviously, I can only comment that there is a very volatile market, but the traders generally are quite, yeah, happy when they see volatility for our market.

Speaker #6: Up to a point when we when it's too volatile there are some danger and it's and when the volatility is not related to supply and demand but to the tweaks of some authorities in the world it's even more dangerous because you could go or you could face suddenly a reverse situation.

Speaker #6: So we are not betting on price. There is no the trading of TotalEnergies is is an asset-backed trading and is is fundamentally not we are not betting on the oil price you know.

Patrick Pouyanné: The trading of TotalEnergies is an asset-backed trading. It's fundamentally not, we are not betting on the oil price, you know. We are not exposed with flat price in the trading with. No, it's impossible. I wish they will reiterate a strong performance. You know, what we've done in some, when we say in a press release that there is an exceptional performance or strong performance to qualify it compared to the normal run rate. The normal run rate of our trading is quite good, by the way. Again, we'll, I have no information. Their book, by the way, there was a lot of comments in newspaper on one specific position, which was taken by all crude oil traders.

Speaker #6: we don't make we are not exposed to the flat price in the trading. We so no it's impossible. I wish there will reiterate a strong performance.

Speaker #6: You know what we've done in it's been some when we say in a press release that there is an exceptional performance a strong performance to qualify it compared to the normal run rate the normal run rate of our trading is quite good by the way.

Speaker #6: again we'll I I have no no information may maybe a book by the way there was a lot of comments in newspaper on one specific position which was taken by oil crude oil traders.

Speaker #6: But you know when they take a position on one side they have some other position on the other side. You know they are so it's not one-sided.

Patrick Pouyanné: You know, when they take a position on one side, they have some other position on the other side. You know, it's not one-sided. Yes, they made a position which was long in the Gulf at the beginning of the war. That's true, but there were other positions which were not as positive. By the way, our products, our product team, our product trading team made was quite good to benefit from the fact that in Asia there was a scarcity of products. To be able to supply Asia with products, there were a strong performance there. It's a, it's a different, I would say different markets, different flows. We'll see. We'll see.

Speaker #6: yes they made a position which was long in the gulf at the beginning of the war that's true. But there were other positions which were not as positive.

Speaker #6: And by the way our products our product team our product trading team made was quite good to benefit from the fact that in Asia there was a scarcity of products.

Speaker #6: And so and to be able to supply Asia with products there were a strong performance there. so it's a it's a different I would say different markets different flows.

Speaker #6: we'll see. And we'll see. By the way when I just to confirm to you I don't know when I mentioned a figure to Chris I think.

Patrick Pouyanné: Just to confirm to you, I don't know when I mentioned a figure to Chris, I think I said EUR 32 billion of cash flows. I have normalized the trading to a normal run rate or run delivery and not an exceptional one. If there was repeating quarter after quarter same performance, then my 32 is a little short of the reality. Okay. I cannot answer to you more than that, Henry. A book of trading is plenty of trades, and we'll see the results at the end. What I can confirm is that the trading division of TotalEnergies is quite successful, and I never see them underperforming the market. Either they are the average or they make strong performance. That's it.

Speaker #6: I said thirty-two dollar thirty-two billion dollar cash flows. I have normalized the trading to a normal run rate. Our run run delivery. I'm not an exceptional one.

Speaker #6: So if there was repeating quarter after quarter the same performance then my thirty-two is a little short of the reality. Okay? So I cannot answer to you more than that anyway.

Speaker #6: And a book of trading is plenty of of trades and we'll see the results at the end. But what I can confirm is that the trading division of TotalEnergies is quite successful.

Speaker #6: And I never saw I never see them underperforming the market either. They are I would say on the average or they make strong performance.

Speaker #6: Let's see.

Speaker #7: Great. Thank you.

Henri Patricot: Okay, thank you.

Speaker #3: The next question is from Fergus Neven Rothschild & Co Redburn.

Operator: The next question is from Fergus Neve, Rothschild & Co Redburn.

Speaker #7: Yeah. Hi there. Thank you very much for taking my question. just one from me. I just hoped you might be able to provide us with a bit of an update on some of the key projects which are due to come online this year.

Fergus Neve: Yeah. Hi there. Thank you very much for taking my question. Just one from me. I just hoped you might be able to provide us with a bit of an update on some of the key projects which are due to come online this year. Perhaps if you could comment on Ratawi phase one, which I imagine is affected by the current situation in the Middle East. Then maybe also Tilenga, due to come on late, online later this year. That'd be really helpful. Thanks.

Speaker #7: Perhaps, if you could comment on Retawi Phase One, which I imagine is affected by the current situation in the Middle East. And then maybe also Telenga, due to come online later this year.

Speaker #7: that'd be really helpful. Thanks.

Speaker #6: All right Ari. You know actually we have I said that we have five thousand people working on the ground. But there is no way to export the crude oil.

Patrick Pouyanné: On Ratawi, you know, Ratawi we have, I said, that we have 5,000 people working on the ground, but there is no way to export the crude oil. We were planning to start it by Q2. I would say logically, what I can answer to you today is that Q2 more to Q3 than Q2. The question will be not only to build the plant, and the plant is almost done. In fact, it was a question of one month and a half on Ratawi. It's more a question to be able to produce the oil and to export it, which is today, I would say the limit to allow to start up Ratawi.

Speaker #6: So it was we were sup planning to start up right Q2. I would say logically what I can answer to you today it's not Q2 it's more to Q3 than Q2.

Speaker #6: the question will be not only to to build the plant and the plant is almost done in fact. It was a it was a question of one month and a half.

Speaker #6: on Retawi. but it's more a question to be able to produce. We are all into export it which is today I would say the the limit to a line to start up Retawi.

Speaker #6: So ask as quick as we can obviously. And no problems the walls are drilled. Easy oil to produce. So restarting Retawi it's a matter of few days.

Patrick Pouyanné: As quick as we can, obviously, and no problem, the wells are drilled, easy oil to produce. Restarting Ratawi, it's a matter of few days, and we have teams on the ground, so it's easy. By the way, we have started up just before the conflict. We started up the solar plant in Ratawi. The first project which came on stream was the solar plant and the 300 MW phase. The authorities were quite happy because facing a lack of gas for making electricity, we are supplying some solar e-electronics to the Basra area now, since end of February. Tilenga is moving on. I mean, we told you that the startup of production for Tilenga will be end of Q4, end of Q4, I would say. We were explicit in February, I think.

Speaker #6: and we have teams on the ground so it's easy. By the way we have started up just before the conflict. We started up the solar plant in Retawi.

Speaker #6: The first project which came on stream was the solar plant. And the three hundred megawatt phase. And therefore these were quite happy because facing a lack of gas for making electricity we are supplying some solar el+electrons to the Basra area now.

Speaker #6: since end of February. Telenga Telenga is moving on. I mean we told you that the startup of production for Telenga will be end of Q4 and Q4 end of Q4 I would say.

Speaker #6: We were explicit in February, I think. So there is no change on this part. What is progressing well is EACOP. We think that EACOP might be completed in September or October.

Patrick Pouyanné: There is no change on this part. What is progressing well is EACOP. We think that EACOP might be completed, September, October. By the way, as Kingfisher, the other project in Uganda where we are partner, is also, it will be probably ready by summertime. It's possible that we'll begin to flow the oil from Kingfisher first through EACOP. It's a long pipeline to fill. Operations and crude oil productions from Uganda might start up just after, so now I say September, end of Q3, and then Tilenga is Q4.

Speaker #6: And by the way as Kingfisher the other projects in Uganda where we are partner is also it will be probably ready by summertime. It's possible but we'll begin to flow the oil from Kingfisher first through EACOP.

Speaker #6: It's a long pipeline to fill. But so operations and crude oil production from Uganda might start up just after summer I would say September end of Q3 and then Telenga it's Q4.

Speaker #7: Brilliant. Thank you.

Fergus Neve: Brilliant. Thank you.

Speaker #3: The next question is from Jean-Luc Romain CICCIB.

Operator: The next question is from Jean-Luc Romain at CIC CIB.

Jean-Luc Romain: Thank you for taking my question. It relates actually to the offshore US, where you just announced you had the cashback. Do you consider offshore wind US as a dead zone for the foreseeable future or do you still see it as a future development zone in case an administration would become more receptive to this kind of development?

Speaker #8: thank you for taking my question. It's relates actually to the offshore US where you just announced you had the the cash back. Do you consider offshore wind US as a dead zone for the foreseeable future?

Speaker #8: Or or do you still see a see it as a future development zone in case the an administration would become more receptive to this kind of development?

Speaker #6: No. I I was clear. I commented that in a US newspaper I think. I could use a word of Darren Woods. It's uninvest it's non-investible.

Patrick Pouyanné: No, I was clear, I commented that in a US newspaper, I think. I could use the word of Darren Woods. It's non-investable. It's non-investable because the cycle of an offshore wind project is much longer than the duration of a US administration. You know, offshore wind requires a long cycle of permitting, developing, negotiating. If every 4 year you are stuck, you know, because you have a challenge, that is not possible. But more fundamentally than that. You know the story that we, I mean, when we studied all these projects in front of New York to Jersey, frankly, it was very difficult.

Speaker #6: It's non-investible because the cycle of an offshore wind project is much longer than the duration of a US administration. And you know it's offshore wind requires a long cycle of permitting developing negotiating.

Speaker #6: So if every four year you are stuck you know because you have a change now it's not possible. And but but more fundamentally even then.

Speaker #6: and you know the story is that we I mean when we studied all these projects in front of New York to Jersey and frankly it was very difficult.

Speaker #6: The the offshore part was quite in line with what we expected. Even if there was some cost increase from the I would say the turbine point of view.

Patrick Pouyanné: The offshore part was quite in line with what we expected, even if there was some cost increase from the turbine point of view. What was very expensive was the subsidy cable and landing a cable, subsidy cable to serve New York, very urban city, New York to Jersey, was much more expensive than planned. At the end of the day, we would be able to deliver electricity of around EUR 150 per megawatt hour. It's much more expensive than what you can do in the US, you know.

Speaker #6: But what was very expensive was the subsea cable, and landing a subsea cable to serve New York—a very urban city, New York to Jersey—was much more expensive than planned.

Speaker #6: So at the end of the day, you—you were, we were able, we would be able to deliver electricity of around $150 per megawatt hour.

Speaker #6: it's much more expensive than what you can do in the US you know. So in terms of allocation of capital and considering the various ways to produce electricity in the US with plenty of gas with solar onshore solar onshore wind it's better for us to to develop our position in the US but with the most efficient allocation of our own capital.

Patrick Pouyanné: In terms of allocation of capital and considering the various ways to produce electricity in the US, with plenty of gas, with onshore solar, onshore wind, it's better for us to develop our position in the US, but with the most efficient allocation of our own capital, and for consumers as well. No, the answer is definitely, it's not a matter. We at TotalEnergies consider that it's not a good market for developing offshore wind. In fact, what I also say, I think developing offshore wind requires some specific market. It's a question of cost merit curve to produce electricity, and it's linked as well.

Speaker #6: So and for consumers as well. So that's so no the answer is definitely it's not a com it's not a matter to the US.

Speaker #6: But as TotalEnergies we consider that it's not a good market for developing offshore wind. And in fact what I also say I think developing offshore wind requires some specific market.

Speaker #6: It's a question of cost merit curve to produce electricity. And it's linked as well. So UK Germany France might be as are are some interesting countries.

Patrick Pouyanné: UK, Germany, France are some interesting countries because they have less capacity to develop onshore renewables because limited space, in fact. There is a market there. We will concentrate on these projects. The other lesson we draw is that on offshore wind it needs to be big to be profitable. We are cleaning our portfolio. We had a small project in Denmark. We are just exiting it 'cause it does not fly. Markets and honestly, Brazil, Philippines, India, forget all that. There's no interest. There are plenty in Brazil. You can produce plenty on onshore wind in northeast with gas or the vendors, which costs much less to than offshore wind.

Speaker #6: because they have less capacity to develop onshore renewables because limited space in fact. So there is a market there. So we will concentrate on these projects.

Speaker #6: And the other lesson we draw is that on offshore wind is that it needs to be big to be profitable. So we are cleaning our portfolio we had a small project in Denmark we are just exiting it 'cause it does not fly.

Speaker #6: markets and honestly Brazil Philippines India forget all that. It has no interest. There are plenty in Brazil you can't produce plenty on onshore wind in Nordeste with cases of ventures which cost much less to than than offshore wind.

Speaker #6: So offshore wind is more expensive so it should be dedicated to markets which could afford it and which need it. And that's the conclusion which we draw for ourselves.

Patrick Pouyanné: Offshore wind is more expensive, so it should be dedicated to markets which could afford it and which need it. That's the conclusion which we draw for ourselves. We'll concentrate on some projects which are large, by the way, which are on which we believe that the fundamentals are good. That's the reality. You will not see newspapers and press release that Total is back in US offshore wind.

Speaker #6: So we'll concentrate on some projects which are large by the way which are on on which we believe that the fundamentals are good. And so that's that's the reality.

Speaker #6: So you will not see newspapers and press releases, but Total is back in U.S. offshore wind. At least as I am long, and as long as I am CEO and Chairman of the company.

Renaud Lions: Thank you very much.

Jean-Luc Romain: Thank you very much.

Patrick Pouyanné: At least as I am long and, as long as I am CEO and Chairman of the company.

Speaker #7: Thank you.

Renaud Lions: Thank you.

Jean-Luc Romain: Thank you.

Speaker #3: The next question is from Anish Kapadia Palisi.

Operator: The next question is from Anish Kapadia, Palissy Advisors.

Speaker #4: Thanks, good afternoon. I wanted to ask about battery storage, and especially in the context of seeing Europe having its earliest curtailments of renewables this year.

Anish Kapadia: Thanks. Good afternoon. I wanted to ask about battery storage, and especially in the context of seeing Europe having its earliest curtailments of renewables this year, the record level that's expected this year and the extreme negative pricing. I just wanted to get what's your view, what's your view on battery storage growth in Europe, how you see the Iran conflicts accelerating this, and then, you know, what's the role of TotalEnergies and Saft within this context?

Speaker #4: This the the record level that's expected this year in the extreme negative pricing. So I just wanted to get what's your view what's your view on the battery storage growth in Europe?

Speaker #4: how you see the Iran conflict accelerating this? And then you know what's the role of Total and SAFT with within this context?

Speaker #6: I would say fundamentally it's not linked to the conflict. When you develop renewables, you should put batteries. The good news is for the last two years, in fact, the cost of batteries has dramatically lowered.

Patrick Pouyanné: I would say fundamentally, it's not linked to the conflict. When you develop renewables, you should put batteries. Good news for the last on the last 2 years, in fact, the cost of batteries are dramatically lower. They have been divided almost by 2, battery cells. Thanks again, by the way, to Chinese suppliers, but it's a reality. You have a strong decrease of batteries. I think it is absolutely necessary in order to not only in order to avoid curtailment, but also it's a matter of grid management that when you develop a renewable farm, you should have some battery. Again, the CFD scheme in Europe, because in the CFD scheme, the developer, solar or wind developer, has zero obligation to build a battery, you know.

Speaker #6: They have been divided all almost by two. battery cells. Thanks again by the way to Chinese suppliers but it's a reality. So you have a strong decrease of of batteries and I think it it's absolutely necessary in a world to not only in a world to avoid curtailment but also it's a matter of grid management that when you develop a renewable farm you should have some battery.

Speaker #6: I'm against the CFD scheme in Europe because in the CFD scheme the the developer solar or wind developer has zero obligation to build the battery you know.

Speaker #6: It's securing it's securing a price from the state and it can it can so sometimes the states are smarter they say we don't pay you if it's negative but in fact it's just a strange scheme.

Patrick Pouyanné: He's securing a price from the state, and he can. Sometimes the states are smarter. They say we don't pay you if it's negative. In fact, it's just a strange scheme. In fact, the CFD. The scheme which is working in the US where you have some fiscal support on your CapEx, ITC, or PTC, is much better because in fact, if you are facing the market and you develop your solar plant, and for sure you always build the battery storage with the solar plant. Otherwise, you are dead, and your profitability will be low.

Speaker #6: In fact the CFD the scheme which is in in in working in the US where you have some fiscal support on your CapEx x ITC or PTC is much better because in fact if you are facing the market when you develop your solar plant and for sure you always build a battery storage with the solar plant.

Speaker #6: Otherwise you are dead and your profitability will be low. So I think it's obvious that and the more we see by the way as you said investments and development of new solar farm of like in Spain for example but even in Germany we begin to see the limits and the curtailment is a curtailment is higher and higher because there are no batteries.

Patrick Pouyanné: I think it's obvious that, and the more we see, by the way, as you said, investments and development of new solar farm, like in Spain, for example, but even Germany, we begin to see the limits and the curtailment is higher and higher because there are no batteries. Yes, I think it's time to really incentivize in battery storage. On our side, we are investing in batteries. We have, in particular in Germany, where it's a good market because there is a lot of renewables. We have a company which we acquired 2 years ago, and we have just developing. We are developing 2 to 3 GW of batteries. We just found out part of some of them at 50% to alliance with a good profitability.

Speaker #6: So yes I think it's time to really incentivize and to in battery storage. So on our side we are investing in batteries. We have a in particular in Germany where it's a good market because there is a lot of renewables.

Speaker #6: We have a company which we acquired two years ago and we have just developing we are developing two to three gigawatts of batteries. We just farmed down part of some of them at fifty percent to Allianz with a good good profitability.

Speaker #6: So we lie yes we think there there is a real market in particular in Europe and it's not only only because we run conflict.

Patrick Pouyanné: We like. Yes, we think there is a real market, in particular in Europe, and not only because of the Iran conflict. It should be accelerated. If Europeans are serious about, I would say, developing the penetration of renewables in Europe, it's absolutely fundamental to do it together with batteries to even to stabilize the grid and to be able to absorb the most of this renewable production. Saft, to come back, Saft is good, is strong. It's developing very well on the energy storage system business. I think they are number four or five in the world, and they are making quite a lot, taking quite a lot of markets. It's, it was one of the reasons why we acquired Saft.

Speaker #6: It should be accelerated. If Europeans are serious about I would say developing the penetration of renewables in Europe it's absolutely fundamental to do it together with batteries to even for to stabilize the grid and to to be able to absorb the most of this renewable production.

Speaker #6: And SAFT to come back. SAFT is good is strong. It's the developing very well on these energy storage system business. I think we are they are number four five in the world and they are making quite a lot taking quite a lot of markets so it's it was one of the reasons why we acquired share SAFT.

Speaker #6: It was a little long this market to I would say to take off but no it's really a full speed on it. And there are also some technology improvements which allow to think that the cost could also when we were discussing with the SAFT CEO he thinks that we battery storage could has already diminished by fifty percent but another thirty percent decrease is possible on the cost.

Patrick Pouyanné: It was a little long this market to, I would say, to take off, but now it's really, full speed on it. There are also some technology improvements which allow to think that the cost could also, when we were discussing with the Saft CEO, he thinks that the battery storage has already diminished by 50%, but another 30% decrease is possible on the cost, thanks to higher density of energy storage, et cetera, et cetera. Thank you.

Speaker #6: Thanks to higher density of energy storage etcetera etcetera.

Speaker #4: Thank you.

Speaker #3: The next question is from Bertrand Audet Kepler Chevreux.

Operator: The next question is from Bertrand Hodée, Kepler Cheuvreux.

Speaker #4: Yes. Yes hello. sorry. my mic was off. it it's a follow-up on on Mark's question on refining. one of your competitor explained yesterday that because of various factors like major dislocation and crude differential product yields or freight cost it's realized refining margin in April was about five dollars less than its headline margin indicator.

Bertrand Hodée: Yes. Yes. Hello. Sorry, my mic was off. It is a follow-up on my question on refining. One of your competitor explained yesterday that, because of various factors like major dislocation on crude differential, product yields or freight costs, its realized refining margin in April was about EUR 5 less than its headline margin indicator. Do you see that? Can you also tell us what is the average of TotalEnergies refining margin indicator so far in April? Thank you. I didn't see such a dislocation, to be honest. I know that the ERM. Normally, we have an indicator internally, but my team does not have it. Okay.

Speaker #4: So do you see that? And can you also tell us what is the average of Total refining margin indicator so far in April? Thank you.

Speaker #6: I'm I didn't see such a dislocation to be honest. I know that the I was looking what is normally we have an indicator internally but to my team does not have it.

Speaker #6: Okay so there was the in fact the realized refining margin the first quarter was around ten point five. While the indicator we gave you was around eleven point four.

Patrick Pouyanné: In fact, the realized refining margin in the first quarter was around 10.5, while the indicator we gave you was around 11.4. There was a little lower, but not EUR 5. That's true, but honestly, today, one of the issue, to be honest, and including today in April, we have some. Yes, and it's true. I will tell you, I'll give you another figure just because I want to be solidarity with my colleague. In April, the ERM was, the indicator was around 25, and the MCV of refining, the realized margin on variable cost was around 21.5. You had not 5, but EUR 3.5 different. Why? Because honestly, these paper markets today, these indicators are difficult to follow, are difficult. That is going that way.

Speaker #6: So there was a a little lower but not five dollars. So we suffered less from that's true but honestly today one of the issue to be honest and including today in April we have some yes and it's true.

Speaker #6: I will tell you, I'll give you another figure, just because I want to be in solidarity with my colleague. In April, the indicator was around twenty-five, and the MCV of the refining, the realized margin on variable cost, was around twenty-one point five.

Speaker #6: So you had not five but three point five dollars of difference. Why? Because honestly this paper markets today this indicators are difficult to follow.

Speaker #6: Things are difficult to predict, but that is going that way. The other months it could be the other way, you know. So we are trying to—each of us are trying to trace an indicator to give a sense of what is happening on the market.

Patrick Pouyanné: The other month, it would be the other way, you know. We are trying to trace an indicator to give a sense of what is happening on the market. There is a dislocations, and it's perfectly true today, between the products. By the way, it was an extraordinary situation, by the way, March, where you've seen high oil price and high refining margins. Normally, you have a rebalancing, you know. It's countercyclical, but not the case. Again, at the end, what I know is that I've never seen in my life such high margins on the paper, so it's good.

Speaker #6: But this there is a dislocation and it's perfectly true today where between the the products and by the way it was an extraordinary situation.

Speaker #6: By the way the March where you seen high oil price and high refining margins normally you have you have a it's rebalancing you know.

Speaker #6: It's it's countercyclical. It was not the case. So again at the end I what I know is that I've never seen in my life such high margins on the paper.

Speaker #6: So it's good. And so that we can be even if there is a little difference between the paper indicator and the realization. It's still delivering very good and strong results.

Patrick Pouyanné: Even if there is a little difference between the paper indication and the realization, it's still delivering very good and strong results. That's the situation. Again, I know we have a debate internally, because the daily, our teams are calculating this famous refining indicator based on the market, and we have some big doubts because on the other side, when we see that we can sell jet fuel at more than EUR 200 per barrel, we are not sure that all that is completely consistent, you know. In fact, as you have a dislocation between the physical market and the paper market, which is quite astonishing, at certain point it should come back to converge. These type of indicators are not so.

Speaker #6: That's the situation. And again I know we have a debate internally but because we daily our teams are calculating these famous refining indicator based on the market.

Speaker #6: And we have some big dots because on the other side, when we saw that, we see that we can sell that fuel at more than $200 per barrel. We are not sure that all that is completely consistent, you know.

Speaker #6: So it's—it's today that you have, in fact, as you have, a dislocation between the physical market and the paper market, which is quite astonishing. At a certain point, it should converge.

Speaker #6: this type of indicators are are not so I mean are they have a a a a mar they are not so reflecting the reality of what is happening on a day-to-day marketing of the products.

Patrick Pouyanné: I mean, they are not so reflecting the reality of what is happening on a day-to-day marketing of the products. Thank you very much. Very helpful answer. Thank you. Thank you, Bertrand.

Patrick Pouyanné: I mean, they are not so reflecting the reality of what is happening on a day-to-day marketing of the products.

Speaker #4: Thank you very much. Very helpful answer. Thank you.

Bertrand Hodée: Thank you very much. Very helpful answer. Thank you.

Speaker #6: Thank you Bertrand.

Patrick Pouyanné: Thank you, Bertrand.

Speaker #3: As a reminder if you wish to register for a question please press star and one on your telephone. There are no more questions registered at this time.

Operator: As a reminder, if you wish to register for a question, please press star and one on your telephone.

Patrick Pouyanné: Thanks.

Operator: There are no more questions registered at this time. I turn the conference back to you for any closing remarks.

Speaker #3: I turn the conference back to you for any closing remarks.

Speaker #6: Okay. So thank you for your assistance. Thank you for your comments. I think it was a quarter where once again we demonstrated the strength of our model.

Patrick Pouyanné: Okay. Thank you for your assistance. Thank you for your comments. I think, it was a quarter where once again, we demonstrated the strength of our model. I think, we will not disappoint you in terms of return to shareholders. The share of TotalEnergies since we have been listed in the New York Stock Exchange on December eighth, I'm looking to that as a starting point of the renaissance of the company, has over performed all our peers by quite a margin. I hope that this set of results will help to maintain it. Again, if we can attract more shareholders to this, to TotalEnergies and to globally the sector, it's good. Thank you for your attendance, and I think we'll have opportunity to meet in the coming months.

Speaker #6: we I think we will not disappoint you in terms of return to shareholders. The share of TotalEnergies since we have been listed in the New York Stock Exchange on December eight I'm looking to that as a starting point of the renaissance of the company as over performed all our peers by quite a margin.

Speaker #6: So I hope that this set of results will help to maintain it. And again if we can attract more shareholders to this to TotalEnergies and to globally the sector it's it's good.

Speaker #6: So, thank you for your attendance, and I think we'll have opportunity to meet in the coming months. And all shareholders, for sure, will make that on the eighth Annual General Meeting on May 29, I think.

Patrick Pouyanné: Our shareholders for sure will meet that on the eighth annual general meeting on 29 May, I think, in Paris. Thank you again.

Speaker #6: in Paris. So thank you again.

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

Q1 2026 TotalEnergies SE Earnings Call

Request DemoDemo

TotalEnergies

Earnings