Q2 2026 TotalEnergies SE Earnings Call

July 23, 2026

Speaker #1: Ladies and gentlemen, welcome to TotalEnergies' second quarter and first half 2026 results conference call. I now hand over to Patrick Pouyanné, Chairman and CEO, and Jean-Pierre Sbraire, CFO, who will lead you through this call.

Operator 2: Ladies and gentlemen, welcome to TotalEnergies Q2 and H1 2026 results conference call. I now hand over to Patrick Pouyanné, Chairman and CEO, and Jean-Pierre Sbraire, CFO, who will lead you through this call. Sir, please go ahead.

Operator: Ladies and gentlemen, welcome to TotalEnergies Q2 and H1 2026 results conference call. I now hand over to Patrick Pouyanné, Chairman and CEO, and Jean-Pierre Sbraire, CFO, who will lead you through this call. Sir, please go ahead.

Speaker #1: Sir, please go ahead.

Speaker #2: Hello, everybody. Good afternoon, or good morning for those who are in the U.S. Before Jean-Pierre will go through the details of the second quarter financials, I would like first to make a few opening comments, starting, obviously, with the current conflict in the Middle East, which has picked up again in the last few days and is clearly impacting our markets, our operations, and our perspectives.

Patrick Pouyanné: Hello, everybody. Good afternoon or good morning for those who are in the US. Before Jean-Pierre will go through the details of the Q2 financial, I would like first to make some few opening comments. Starting obviously with the current conflict in the Middle East, which has picked up again in the last few days, which is currently impacting our markets and our operations and our perspectives. Although we were all hoping in mid-June that a resolution could be envisaged through the signature of the MoU and ceasefire between the US and Iran, the situation has remained, to say the least, extremely volatile, with the Strait of Hormuz being an intermittent battleground, where the risk premium to navigate in these waters is increasingly high.

Speaker #2: Also, we are aware all opening in mid-June, but the resolution could be envisaged for the signature of the MOU and ceasefire between the U.S.

Speaker #2: and Iran. The situation has remained, to say the least, extremely volatile, with the Strait of Hormuz being an intermittent battleground where the risk premium to navigate in these waters is increasingly high.

Speaker #2: Some are even competing to consider that this could become a new normal, with the strait opening on and off depending on the level of tensions between the parties.

Patrick Pouyanné: Some are even beginning to consider that this could become a new normal, with the strait opening on and off, depending on level of tensions between the parties. This unstable and chaotic environment has been prevailing for the Q2, I would say the last 15 days in June, where we have seen some quite interesting reactions of the market, with crude oil going down very quickly, products going through the roof at the same time. We don't know how long this conflict will continue. We have no specific informations. I don't know if anybody knows, by the way. Of course, for us, safety of our teams will remain our utmost priority.

Speaker #2: This unstable and chaotic environment has been prevailing for the second quarter, but I would say the last 15 days in June, where we have seen some quite interesting reactions of the market, with crude oil going down very quickly, but products going through the roof at the same time. This conflict will continue.

Speaker #2: We have no specific information. I don't know if anybody knows, by the way. But, of course, for us, safety of our teams will remain of utmost priority.

Speaker #2: As Jean-Pierre will show you in a moment, we can say we have managed this quarter to deliver, once again, strong results and cash flows from both our strategic pillars, thanks to the strong performance of the teams who managed to capture very favorable market conditions for many of the energies we are producing and selling.

Patrick Pouyanné: As Jean-Pierre will show you in a moment, we can say we have managed this quarter to deliver once again strong results and cash flows from both our strategic pillars, thanks to the strong performance of the teams who managed to capture very favorable market conditions for many of the energies we are producing and selling. The oil prices rose above $100 per barrel, even if differentials have widened, while refining, petrochemicals, biofuel margins, but also distributions margins were increased, with some even reaching historic levels. Gas, LNG, electricity were also at strong levels. Once again, TotalEnergies is demonstrating its capacity to capture these margins and high prices, leveraging the integrated and diversified business model along the value chains of oil, gas, and electricity. First, for oil, upstream and downstream businesses have been performing very strongly at the same time, which is not so frequent.

Speaker #2: The oil prices rose to about $100 per barrel, even if differentials have widened, while refining, petrochemicals, and biofuel margins, but also distribution margins, were increased, with some even reaching historic levels.

Speaker #2: And gas, LNG, and electricity were also at strong levels. Once again, TotalEnergies has demonstrated its capacity to capture these margins and high prices, leveraging the integrated and diversified business model along the value chains of oil, gas, and electricity.

Speaker #2: First, our oil upstream and downstream businesses have been performing very strongly at the same time, which is not so frequent, in fact, since quite often one benefits from a supportive environment at the expense of the other.

Patrick Pouyanné: In fact, since quite often, one benefits from a supportive environment at the expense of the other. Currently, both are capturing high prices and margins, given the tensions on global demand for products. As we speak, integrated margins this morning are around $130 per barrel. Brent crude oil around $95 and margins at $35. E&P delivered a strong quarter in terms of productions, thanks to a solid 4% organic growth higher than our forecast, coming from a rich and diversified portfolio of projects, which was planned, in particular from Brazil, US, and Libya. Also, and I must say, it was very good from a strong operational performance limiting, I would say, the unexpected stoppage of the production. It was a very good performance from an operational point of view. All that allow us to partly compensate the production losses in the Middle East.

Speaker #2: But currently, both are capturing high prices and margins. Given the tensions on global demand for products, as we speak, integrated margins this morning are around $130 per barrel. Brent crude oil is around $95, and margins are at $35.

Speaker #2: ENP delivered a strong quarter in terms of production, thanks to a solid 4% organic growth—higher than our forecast—coming from our rich and diversified portfolio of projects, which was planned in particular from Brazil, the U.S., and Libya. Also, and I must say, it was very good from a strong operational performance, limiting, I would say, the unexpected stoppages of production.

Speaker #2: So it was a very good performance from an operational point of view, and all that allows us to partly compensate for the production losses in the Middle East.

Speaker #2: ENP has been delivering, once again, this quarter a strong cash flow from operation, despite as well, I would say, and there was a difference in the Middle East between the production reported and the capacity to lift this productions which impacted the because the lifting in the in the Gulf, of course, was very limited by access to the strait of Hormuz.

Patrick Pouyanné: E&P has been delivering, once again, this quarter with strong cash flow from operation. Despite as well, I would say, there was a difference in the Middle East between the production reported and the capacity to lift these productions, which impacted because the lifting in the Gulf, of course, was very limited by access to the Strait of Hormuz. Looking forward on the Middle East situation, beginning of July, end of June, I would say the productions were going up quite quickly, and we had limitations, I would say only 5% of our global production. This weekend, after the conflict came back, we were more back to 8% to 10% of limitations. Difficult, which I think we say 5% to 10% in our perspective. It will obviously depend on the way that the conflict will develop.

Speaker #2: Looking forward on the Middle East situation, beginning of July, end of June, I would say the production was going up quite quickly, and we had limitations—I would say only 5% of our global production. But this weekend, after the conflict came back, we were more back to 8-10% of limitations.

Speaker #2: So, difficult, which I think we said 5 to 10% in our perspectives. It will obviously depend on the way that the conflict will develop.

Speaker #2: And again, it's not only production for us—also lifting, offloading the crude oil, which might be affected. And when we look to what happened in the second quarter, the re-offloading was in fact affected, as per our guidance, at 15% of our production.

Patrick Pouyanné: Again, it's not only production for us, it's also lifting, offloading the crude oil, which might be affected. When we look to what happened in Q2, the real offloading was in fact affected as per our guidance at 15% of our production. We'll see what will happen for this quarter. Refining and chemicals performed in an exceptional way, I must say, leveraging market conditions. Managing well the tensions on supply of refined products to maximize capturing margins. Refiners have adjusted the way they use their plants in Q2 to prioritize, in particular, production of diesel and jet fuel, which were offering higher margins. Also by doing that, contributing to security of supply of France and Europe.

Speaker #2: So it was so we'll see what will happen for for the next for this quarter. Refining and chemicals performed in an exceptional way, I must say, leveraging market conditions.

Speaker #2: Managing well the tensions on supply of refined products to maximize capturing margins, our refiners have adjusted the way they use their plants in the second quarter to prioritize, in particular, production of diesel and jet fuel, which are offering higher margins.

Speaker #2: And also, by doing that, contributing to the security of supply for France and Europe. This performance was achieved even though some of our facilities were impacted by events outside of our control, like the SATORP refinery in Saudi Arabia, which was hit in mid-April, if I remember well, by some drones.

Patrick Pouyanné: This performance was achieved although some of our facilities have been impacted by events outside of our control, like the SATORP refinery in Saudi Arabia, which was hit in mid-April, if I remember well, by some drones. Which is back today at 70% of capacity and full capacity by end of Q3 is expecting. Port Arthur in the US suffered, unfortunately, in June from a lightning strike during a tropical storm and now is progressively coming back to normal production levels. Our crude oil and petroleum products trading activities have been very successful for Q2 in a row with a strong performance and made another EUR 500 million, I would say, over performance on the top of our usual secure performance of EUR 500 million.

Speaker #2: And which has been used at around, which is back today at 70% of capacity, and is expected to reach full capacity by the end of the third quarter.

Speaker #2: But also, Port Harper in the U.S. unfortunately suffered in June from a lightning strike during a tropical storm, and now it's progressively coming back to normal production levels.

Speaker #2: Our crude oil and petroleum products trading activities have been very successful for the second quarter in a row, with a strong performance. And made another $500 million, I would say, overperformance on top of our usual structural performance of $500 million.

Speaker #2: And last but not least, on the Downstream, Marketing and Services, as reported, the best-ever quarter, driven by the positive impact of the seasonality in Europe but also higher, I would say, unit margins, in particular on products like lubricants.

Patrick Pouyanné: Last but not least, on the downstream, marketing and services has reported the best-ever quarter driven by positive impact of the seasonality in Europe, but also higher, I would say, unique margins, in particular on products like lubricants. After a strong outperformance in this quarter, on Q1, sorry, our gas trading activities results in Q2 were not good, to be clear, and impacted by flat to declining European market conditions. Our traders were positioned to seize a more supportive European gas environment in line with supply-demand fundamental expectations. Our traders took a long position on gas, thinking, being bullish on the market. Which seems to be reasonable because many indications were pointing to gas prices increasing as because of lower supply out of the Middle East and from Qatar, because European inventories were low at less than 15%, below the five-year average.

Speaker #2: After a strong outperformance in this quarter—on the first quarter, sorry—our gas trading activities' results in the second quarter were not good, to be clear, and were impacted by flat to declining European market conditions.

Speaker #2: Whereas our traders were positioned to see the more supportive European gas environment in line with supply demand fundamental expectations. Our traders took a long position on gas, thinking being bullish on the market, which seems to be reasonable because many some indication many indications were pointing to gas prices increasing, as because of lower supply out of the Middle East and from Qatar, because European inventories were low at less than 15%.

Speaker #2: Below the five-year average. But these factors did not materialize during the second quarter. In fact, prices have declined throughout the quarter, leading to, I would say, weaker or poorer results from the trading business.

Patrick Pouyanné: These factors did not materialize during Q2. Even in fact, prices have declined through the quarter, leading to, I would say, weaker or poor results from the trading business. The story is everywhere, not over. You have probably seen now, gas prices in Europe have rallied, and as we are lit, their traders are rightly so bold. Since early July, their gas trading results are following, and will be back to some over-performance again. On our second pillar, electricity, there was multiple good news during this quarter. Integrated Power delivered one of its best quarters ever in terms of with a strong cash flow. In fact, the second-best since 2024, even in the absence of farm downs during this quarter.

Speaker #2: The story is overall not over. As you have probably seen now, gas prices in Europe have rallied, and as we are a little bit, traders are rightly stubborn. Since early July, their gas trading results are following and will be back to some overperformance again.

Speaker #2: On our second pillar, Electricity, there was multiple good news during this quarter. Integrated Power delivered one of its best quarters ever in terms of strong, with a strong cash flow.

Speaker #2: In fact, the second best since 2024, even in the absence of farm downs during this quarter. but it was supported by the closing of the transaction with EPH in April, one month earlier or two one to two months earlier than expected.

Patrick Pouyanné: It was supported by the closing of the transaction with EPH in April, one month earlier or one to two months earlier than expected, and the cash flow coming from EPH as per the expectations. The strong deliveries on almost all fronts, but I would say gas trading for once. We have generated at the company level next to EUR 10 billion this quarter, which has been allocated in a very consistent matter as I've announced to you last April, during the call for Q1. First, of course, we are deleveraging down to a gearing ratio of 13%, which show an improvement of 2.4 percentage points quarter to quarter, benefiting from a EUR 3.3 billion reduction in net debt and also a EUR 1.2 billion working capital release.

Speaker #2: And the cash flow coming from EPH was as per the expectations. So, strong deliveries on almost all fronts, but I would say gas trading, for once, we have generated at the company level close to $10 billion this quarter.

Speaker #2: which has been allocated in a very consistent manner, as announced to you— as I announced to you last April during the call for the first quarter.

Speaker #2: First, of course, we have deleveraging down to a gearing ratio of 13%, which shows an improvement of 2.4 percentage points quarter to quarter, benefiting from a $3.3 billion reduction in net debt and also a $1.2 billion working cap release.

Speaker #2: And second, of course, we have confirmed the increase of our interim quarterly dividend by 5.9% to €0.90 per share, which places TotalEnergies once again in the leading pack of the growing dividend companies.

Patrick Pouyanné: Second, of course, we have confirmed the increase of our interim quarterly dividend by 5.9% to EUR 0.9 per share, which places TotalEnergies once again in the leading pack of the growing dividend companies. Along this quarter, our cash generation has also allow us to sustain our production growth targets with disciplined capital investment of EUR 3.4 billion, comforting our annual guidance of EUR 15 billion, also to increase as announced our buybacks to EUR 1.5 billion during Q2. The board has authorized us to maintain this buyback with another EUR 1.5 billion for Q3. With all this good news, I now hand it over to Jean-Pierre, who has an easy work to go through the details of Q2 financial results.

Speaker #2: Along this quarter, our cash generation has also allowed us to sustain our production growth targets with disciplined capital investment of $3.4 billion this quarter.

Speaker #2: Confirming our annual guidance of $15 billion, and also to increase, as announced, our buyback to $1.5 billion during the second quarter. The Board has authorized us to maintain this buyback with another $1.5 billion for the third quarter.

Speaker #2: With all this good news, I know, I'll hand it over to Jean-Pierre, who has an easy work to go through the details of the second quarter financial results.

Speaker #1: Okay, thank you, Patrick. So I will start by commenting on the price environment in the second quarter ’26 versus the first quarter. We captured high commodity prices, although gradually decreasing over the quarter.

Jean-Pierre Sbraire: Okay. Thank you, Patrick. I will start by commenting on the price environment in Q2 2026 versus Q1. We capture high commodity prices, although gradually decreasing over the quarter. Brent average $104 per barrel during Q2 versus $81 per barrel in Q1, meaning +$23 per barrel, more than 25%. While average liquid price was up by $18 per barrel due to widened differential and a lifting schedule weighted towards the end of the quarter in a crude market, which softened in June in the context of the ceasefire in the Middle East. TTF averaged $15.6 per MMBtu versus $13.7, our average LNG price increased by 20% at $10.20 per MMBtu. Oil prices started to impact LNG prices with one to two months of lag effects according to LNG pricing formulas.

Speaker #1: Brent averaged $104 per barrel during the second quarter versus $81 per barrel in the first quarter, meaning plus $23 per barrel, more than 25%.

Speaker #1: While average liquid price was up by $18 per barrel, due to widened differential and a lifting schedule weighted toward the end of the quarter, in a crude market which softened in June in the context of the ceasefire in the Middle East.

Speaker #1: TTF averaged $15.6 per million BTU versus $13.7, and our average LNG price increased by 20% to $10.2 per million BTU. Oil prices started to impact LNG prices with one to two months of lag effects, according to LNG pricing formulas.

Speaker #1: Finally, the European refining margins increased by $13.5 per barrel, on average, over the quarter. In this price environment, the company reported very strong financial results, increasing by almost 15% compared to the first quarter.

Jean-Pierre Sbraire: Finally, the European refining margins increased by $13.50 per barrel on average over the quarter. In this price environment, the company reported very strong financial results, increasingly by almost 15% compared to Q1. With Q2 to FTS cash flow of EUR 9.8 billion and adjusted net income increasing to EUR 6 billion. These results were possible because of the strong operational performance of all businesses, demonstrating the company's ability to fully capture the environment upsides. Upstream delivered an underlying accretive production growth of over 4% year-on-year, which is above the annual 3% guidance and partially offsetting the production loss in the Middle East. Downstream, a very good operational performance as explained by Patrick from our refineries, which has been deliberately geared towards maximizing distillate production, diesel, jet fuel, to capture higher refining margins.

Speaker #1: We saw second quarter 2026 cash flow of $9.8 billion and adjusted net income increasing to $6 billion. These results were possible because of the strong operational performance of all businesses, demonstrating the company's ability to fully capture the environment upsides.

Speaker #1: Upstream delivered an underlying accretive production growth of over 4% year on year, which is above the annual 3% guidance and partially offsetting the production loss in the Middle East.

Speaker #1: Downstream, a very good operational performance, as explained by Patrick, from our refineries, which have been deliberately geared towards maximizing distillate production—diesel, jet fuel—to capture higher refining margins.

Speaker #1: Integrated Power cash flow generation increased by 25% over the quarter, supported by the contribution of EPH assets, in line with expectations since the closing of the transaction at the end of April.

Jean-Pierre Sbraire: Integrated Power cash flow generation increased by 25% over the quarter, supported by contribution of EPH assets in line with expectation since the closing of the transaction at the end of April. TotalEnergies generated this very strong result, the highest since the end of 2022, despite two challenges. Although production from the Middle East was higher than originally expected, a significant portion of this production could not be lifted during the quarter and in recognizing E&P results based on the crude price from end June, meaning less than $70 per barrel. Our gas trading underperformed after an over-performance in Q1 because of the declining gas price for the quarter, as explained by Patrick. TotalEnergies has delivered strong profitability this quarter with return on equity at 15.9% and a ROACE close to 14%. Now moving to the business segment, starting with hydrocarbons.

Speaker #1: TotalEnergies generated this very strong result, the highest since the end of '22, despite two challenges. Although production from the Middle East was higher than originally expected, a significant portion of this production could not be lifted during the quarter and is recognized in E&P results based on the crude price from end-June.

Speaker #1: Meaning less than $70 per barrel. Our gas trading underperformed after an overperformance in the first quarter, because of the declining gas price through the quarter, as explained by Patrick.

Speaker #1: TotalEnergies has delivered strong profitability this quarter, with return on equity at 15.9% and a ratio close to 14%. Now, moving to the business segment, starting with hydrocarbons.

Speaker #1: On production, on a year-on-year basis, excluding the impact of the Middle East conflict, second quarter hydrocarbons production increased by more than 4%, above the guidance provided of 3% for 2026, benefiting from a ramp-up of the project started since the beginning of 2025, and from an operationally improved facility availability.

Jean-Pierre Sbraire: On production on a year-on-year basis, excluding the impact of the Middle East conflict, Q2 hydrocarbons production increased by more than 4% above the guidance provided of 3% for 2026, benefiting from the ramp-up of the project started since the beginning of 2025, and from an operational improved facility availability. The impact of the conflict in the Middle East is around 210,000 barrels of oil equivalent per day over the quarter, below the guidance communicated last quarter of 360,000, due to the company's production ramp-up in offshore United Arab Emirates and the restart of production in the other countries in the region during June. Physical lifting turned out to be in line with the guidance, with an impact of 350,000 barrels of oil equivalent per day.

Speaker #1: The impact of the conflict in the Middle East is around 210,000 barrels of oil equivalent per day, over the quarter, below the guidance communicated last quarter of 360,000, due to the company's production ramp-up in offshore United Arab Emirates, and the restart of production in other countries in the region during June.

Speaker #1: Although physical lifting turned out to be in line with the guidance, with an impact of 350,000 barrels of oil equivalent per day. Looking forward, we expect to maintain strong momentum, with oil and gas production in the first quarter, excluding the Middle East impact, expected to grow around 3% compared to the third quarter '25, in line with the annual growth guidance.

Jean-Pierre Sbraire: Looking forward, we expect to maintain a strong momentum with oil and gas production in Q1, excluding the Middle East impact, expected to grow around 3% compared to Q1 2025, in line with the annual growth guidance. Turning on the quarterly results and starting with E&P results, the segments generated an adjusted net operating income of EUR 3.2 billion this quarter, up by 25% quarter-to-quarter, capturing the increase in average liquid price of EUR 17.9 per barrel over the quarter, and demonstrating the accretive new project contributing this quarter to the yearly production growth. Similarly, cash flow reached EUR 5.8 billion, up 27% quarter-to-quarter. On the cost side, very important as well, once again, we maintain our leadership with an average OpEx per barrel equivalent below EUR 5 in Q2.

Speaker #1: Turning to the quarterly results and starting with E&P production, E&P results and the segment generated an adjusted net operating income of $3.2 billion this quarter, up by 25% quarter to quarter, capturing the increase in average liquids price of $17.9 per barrel over the quarter, and demonstrating the accretive new project contributing this quarter to the yearly production growth.

Speaker #1: Similarly, cash flow reached $5.8 billion, up 27% quarter to quarter. On the cost side, very important as well, once again, we maintain our leadership with an average OPEX per barrel equivalent below $5 in the second quarter.

Speaker #1: On Integrated LNG, the LNG production decreased by 10% quarter to quarter, mainly due to shutting production in Qatar related to the Middle East conflicts. But in contrast to the outperformance in the first quarter, this quarter, the second quarter, was impacted by the underperformance of gas trading activities in an overall flat or even bearish European market, reflecting the significantly decreased adjusted net operating income and the cash flow of the segment, quarter to quarter, of $0.8 billion.

Jean-Pierre Sbraire: On Integrated LNG, the LNG production decreased by 10% quarter-to-quarter, mainly due to shutting production in Qatar related to the Middle East conflict. In contrast to the outperformance in Q1, this quarter, Q2, was impacted by the underperformance of gas training activities in an overall flat or even bearish European markets, reflecting the significantly decreased adjusted net operating income and the cash flow of the segment quarter-to-quarter of EUR 0.8 billion. Given the evolution of oil and gas prices in recent months and the lag effects on pricing formula, the company anticipates an average LNG selling price of above EUR 11.5 per MMBtu for Q3 2026.

Speaker #1: Given the evolution of oil and gas prices in recent months and the lag effects on price-setting formulas, the company anticipates an average LNG selling price of above $11.5 per million BTU for the third quarter of '26.

Speaker #1: As we execute our consistent strategy in LNG, the main milestone of the quarter was the startup of the Energia Costa Azul LNG plant on the Pacific coast of Mexico, strengthening the diversification of the LNG portfolio of the company towards the Asian markets.

Jean-Pierre Sbraire: As we execute our consistent strategy in LNG, the main milestone of the quarter was the start-up of Energia Costa Azul LNG plant on the Pacific Coast of Mexico, strengthening the diversification of the LNG portfolio of the company towards the Asian markets. TotalEnergies loaded the first cargo at ECA LNG and shipped it to the Asian markets, where the company pursued strategy of signing long-term oil index LNG contracts with new clients in China or in Japan. Turning now to Integrated Power. Net power generation increased to 14.8 TWh, up 28% year-on-year, driven by an increase of nearly 15% in generation from renewable sources, reflecting growth in installed capacity and a 2 TWh increase in production from flexible gas fire capacity, resulting notably from the completion of the transaction with EPH end of April.

Speaker #1: TotalEnergies loaded the first cargo at ECA LNG and shipped it to the Asian markets, where the company pursued a strategy of signing long-term oil-indexed LNG contracts with new clients, in China or in Japan.

Speaker #1: Turning now to Integrated Power, net power generation increased to 14.8 terawatt-hours, up 28% year-on-year, driven by an increase of nearly 15% in generation from renewable sources, reflecting growth in installed capacity, and a 2 terawatt-hour increase in production from flexible gas-fired capacity, resulting notably from the completion of the transaction with EPH at the end of April.

Speaker #1: TotalEnergies is on track to reach its annual objective in integrated power, in particular to generate more than 60 terawatt hours over the year. Cash flow from operations was above $700 million, supported by the contribution again of EPH assets, in line with expectations since the closing of the transaction.

Jean-Pierre Sbraire: TotalEnergies is on track to reach its annual objective in Integrated Power, in particular to generate more than 60 terawatt-hours over the year. Cash flow from operation was above EUR 700 million, supported by the contribution again of EPH assets in line with expectation since the closing of the transaction. This quarter again, we provide more granularity in the Integrated Power financial performance with a split in cash flow between what we call production assets, meaning renewables and gas-fired power plants, and sale activity, B2B, B2C, and trading. The former contributed 60% of the cash flow and the latter contributed 40%. TTEP, the new venture with EPH, will continue providing its growing contribution to the company's results throughout the year in line with expectation.

Speaker #1: And this quarter, again, we provide more granularity in the integrated power financial performance, with a split in cash flow between what we call production assets—meaning renewables and gas-fired power plants—and sell activity, B2B, B2C, and trading.

Speaker #1: The former contributed 60% of the cash flow, and the latter contributed 40%. TTEP, the new venture with EPH, will continue providing its growing contribution to the company's results throughout the year, in line with expectations.

Speaker #1: As TTEP has started contributing in the second quarter, we said in the first quarter that Integrated Power should benefit in 2026 from 10 terawatt-hours of net power production, in line with the 15 terawatt-hour guidance given for a full year, and more than a $500 million contribution to available cash flow.

Jean-Pierre Sbraire: As TTEP has started contributing in Q2, we said in Q1 that Integrated Power should benefit in 2026 from 10 terawatts of net power production in line with the 15 terawatts guidance given for a full year, and more than EUR 500 million contribution to available cash flow. Moving to Downstream. During Q2, Refining and Chemicals was able to fully capture the increase in refining and petrochemical margins, notably adapting the refinery run to produce more distillates. Overall, for Refining and Chemicals, adjusted net operating income was up by EUR 200 million quarter-to-quarter to EUR 1.8 billion, and cash flow reached EUR 2 billion. Marketing and Services delivered outstanding results, the best in at least 10 years, driven by the positive impact of the seasonality in Europe and the higher unit margin, as noted by Patrick, notably on lubricants.

Speaker #1: Moving to Downstream, during the second quarter, Refining and Chemicals was able to fully capture the increase in refining and petrochemical margins, notably adapting the refinery run to produce more distillates.

Speaker #1: Overall, for Refining and Chemicals, adjusted net operating income was up by $200 million quarter to quarter, to $1.8 billion, and cash flow reached $2 billion.

Speaker #1: Marketing and Services delivered outstanding results—the best in at least 10 years—driven by the positive impact of seasonality in Europe and the higher unit margin, as noted by Patrick, notably on lubricants.

Speaker #1: Adjusted net operating income was up 21% year-on-year, at $500 million, and cash flow was close to $850 million, up 19% year-on-year.

Jean-Pierre Sbraire: Adjusted net operating income was up 21% year-on-year at EUR 500 million, and cash flow close to EUR 850, up 19% year-on-year. Moving to the company level and starting with working cap. Working capital decreased by EUR 1.2 billion during Q2, largely driven by the reversal of the Q1 build-up with the lower hydrocarbon prices at the end of Q2 compared to the end of Q1. The company has kept the course for capital expenditure, with net investments amounting to EUR 3.4 billion in Q2, with a contribution of net disposal to EUR 1.2 billion. This, as explained by Patrick, comfort our guidance for full year 2026 net investments level of EUR 15 billion. As a result, the gearing is improved by more than 2 points to reach 13.1% at the end of the quarter, reflecting a reduction in net debt of EUR 3.3 billion.

Speaker #1: Moving to the company level and starting with working cap, the working capital decreased by $1.2 billion during the second quarter, largely driven by the reversal of the first quarter buildup, with lower hydrocarbon prices at the end of the second quarter compared to the end of the first quarter.

Speaker #1: The company has kept the course for capital expenditure, with net investments amounting to $3.4 billion in the second quarter, with a contribution of net disposals of $1.2 billion. This, as explained by Patrick, comforts our guidance for full year 2026 net investments at a level of $15 billion.

Speaker #1: As a result, the gearing improved by more than 2 points to reach 13.1% at the end of the quarter, reflecting a reduction in net debt of $3.3 billion.

Speaker #1: To conclude, once again this quarter, the integrated model of TotalEnergies demonstrated its ability to capture higher prices and higher margins, with a growing cash flow to support the deleveraging of the company, our shareholder distribution—with a clear priority to the dividends—and the capex to deliver our growth.

Jean-Pierre Sbraire: To conclude, once again this quarter, the integrated model of TotalEnergies demonstrated its ability to capture higher prices and higher margins with a growing cash flow to support the deleveraging of the company, our shareholder distribution, with a clear priority to the dividend and the CapEx to deliver our growth. I think now we can open the line for questions.

Speaker #1: I think now we can open the line for questions.

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, and wait for your name to be announced.

Operator 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 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 zero key. Once again, star and two. Once again, please press star and one if you wish to ask a question. The first question is from Martijn Rats, Morgan Stanley.

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 and one on your telephone and wait for your name to be announced. Please kindly mute any audio sources while asking a question. If you wish to cancel your request, please press the star and zero key. Once again, star and two. Once again, please press star and one if you wish to ask a question. The first question is from Martijn Rats, Morgan Stanley.

Speaker #2: Please kindly mute any audio sources by asking a question. If you wish to cancel your request, please press the star and zero keys. Once again, star and two.

Speaker #2: Once again, please press star and one if you wish to ask a question. The first question is from Martin Ratz, Morgan Stanley.

Speaker #3: Hi, hello. Two questions, if I may. I know there's an awful lot of attention, of course, on the Middle East, but I wanted to ask you a quick one about Namibia.

Martijn Rats: Hi. Hello. Two questions, if I may. I know there's an awful lot of attention, of course, on the Middle East, but I wanted to ask you a quick one about Namibia. It's still very important for Total. Where do you stand on the FID of Venus versus the completion of the transaction with Galp on Mopane? I was hoping you could say a few words about that. Secondly, I wanted to ask you about the payout ratio for this year, because the guidance of more than 40%. I think we're sort of tracking below that so far. Of course, you see volatile macro environment. It's perhaps no surprise, but the payout guidance, over which period should we expect that to be realized? Would you still expect to have more than 40% payouts over the year, or should that become a longer-term target?

Speaker #3: It's still very important for Total. Where do you stand on the FID of Phoenix versus the completion of the transaction with GALP on Mopane?

Speaker #3: I was hoping you could say a few words about that. And then, secondly, I wanted to ask you about the payout ratio for this year, because the guidance is sort of "more than 40%."

Speaker #3: I think we're sort of tracking below that so far, of course. Usually, in a volatile macro environment, it's perhaps no surprise. But regarding the payout guidance, over which period should we expect that to be realized?

Speaker #3: Would you still expect to have more than 40% payouts over the year, or should that become a longer-term target?

Speaker #4: Okay. Thank you, Martin, for the first question. So, to be more precise on the GALP transaction related to Mopane versus Venice, we received, at the end of last week, the official approval from the Ministry of Energy of Namibia.

Jean-Pierre Sbraire: Okay. Thank you, Martijn, for the first question. I will be more precise. On the Galp transaction related to Mopane versus Venus, we have received, at the end of last week, the official approval of the Ministry of Energy of Namibia. We are just, in fact, finalizing the last paper to close the deal, potentially tonight or tomorrow. Your question came at the right time. That's very important, of course, because this fact that we will be on both developments as operator has a strong value for us in order to engage with the first FID. On the FID of Venus, I would say there are intense discussions as well. We have a joint target between the government of Namibia and the consortium to sanction it by end of July. There are discussions progressing.

Patrick Pouyanné: Okay. Thank you, Martijn, for the first question. I will be more precise. On the Galp transaction related to Mopane versus Venus, we have received, at the end of last week, the official approval of the Ministry of Energy of Namibia. We are just, in fact, finalizing the last paper to close the deal, potentially tonight or tomorrow. Your question came at the right time. That's very important, of course, because this fact that we will be on both developments as operator has a strong value for us in order to engage with the first FID. On the FID of Venus, I would say there are intense discussions as well. We have a joint target between the government of Namibia and the consortium to sanction it by end of July. There are discussions progressing.

Speaker #4: And so we are just, in fact, finalizing the last paper to close the deal, potentially tonight or tomorrow. So, your question came at the right time.

Speaker #4: So that's important, of course, because it is this fact that we will be on both developments as operator that is a strong value for us, in order to engage with the first FID.

Speaker #4: On the FID of Venus, I would say there are intense discussions as well. We have a joint target between the government of Namibia and the consortium to sanction it by the end of July.

Speaker #4: There are discussions progressing. We'll see if we can conclude in July, or if we need to have a little more time. Technically, I think we have selected all contractors.

Jean-Pierre Sbraire: We'll see if we can conclude in July or if we need to have a little more time. Technically, I think we have selected all contractors. We are ready to take the FID subject to finalizing discussions with the government of Namibia. There have been some progress, but there's still some progress to be done. Again, generally, it's when the last minute you can conclude, but we'll see if we can do it. Otherwise, we'll wait. I would say reasonably optimistic that all the parties, there is a joint interest, clearly. In particular, the Namibian authorities are fundamentally supportive to have a strong operator being able to capitalize on synergies between the projects. I remind you that now that the Mopane has been approved and will be closed, the next step is to engage in the signal arc to appraise Mopane.

Patrick Pouyanné: We'll see if we can conclude in July or if we need to have a little more time. Technically, I think we have selected all contractors. We are ready to take the FID subject to finalizing discussions with the government of Namibia. There have been some progress, but there's still some progress to be done. Again, generally, it's when the last minute you can conclude, but we'll see if we can do it. Otherwise, we'll wait. I would say reasonably optimistic that all the parties, there is a joint interest, clearly. In particular, the Namibian authorities are fundamentally supportive to have a strong operator being able to capitalize on synergies between the projects. I remind you that now that the Mopane has been approved and will be closed, the next step is to engage in the signal arc to appraise Mopane.

Speaker #4: So we are ready to take the FID, subject to finalizing discussions with the government of Namibia. There has been some progress, but there is still some progress to be made.

Speaker #4: So, again, generally, it's when at the last minute you can conclude, but we'll see if we can do it. Otherwise, we'll wait. But I would say I am reasonably optimistic that all the parties have a joint interest, clearly, and in particular the Namibian authorities are fundamentally supportive to have a strong operator being able to capitalize on synergies between the projects.

Speaker #4: I remind you that now that Mopane has been approved and will be closed, the next step is to engage in the second half to appraise Mopane.

Speaker #4: We have three worlds in 27, and the FID will be taken in 28. So all that as we engage in a strong momentum and clearly for us, Namibia will become will begin its beginning, is becoming a very important hub for future growth, not only to 20 for the beyond 2030, but will then on the other topics, no, we know we I'm yes, we are clear.

Jean-Pierre Sbraire: We have 3 wells in 2027, and the FID will be taken in 2028. All that as we engage in a strong momentum, and clearly for us, Namibia is becoming a very important hub for future growth, not only to 2030, beyond 2030. On the other topics. Yes, we are clear. We are targeting 40% of payout. We have increased the buyback level and the dividend level between Q1 and Q2. I don't know where we'll go. To be honest, you could say there was a little cautiousness. In fact, we have raised from $750 million to $1.5 billion. We maintain the $1.5 billion for the next quarter. Because I can tell that we were quite impressed also when the MoU was signed in June by the quick drop of the crude oil price down to $70. It's difficult, honestly, to anticipate

Patrick Pouyanné: We have 3 wells in 2027, and the FID will be taken in 2028. All that as we engage in a strong momentum, and clearly for us, Namibia is becoming a very important hub for future growth, not only to 2030, beyond 2030. On the other topics. Yes, we are clear. We are targeting 40% of payout. We have increased the buyback level and the dividend level between Q1 and Q2. I don't know where we'll go. To be honest, you could say there was a little cautiousness. In fact, we have raised from $750 million to $1.5 billion. We maintain the $1.5 billion for the next quarter. Because I can tell that we were quite impressed also when the MoU was signed in June by the quick drop of the crude oil price down to $70. It's difficult, honestly, to anticipate

Speaker #4: We are targeting a 40% payout. We have increased the buyback level and the dividend level between the first quarter and the second quarter. I don't know where we'll go, to be honest. You could say there was a little cautiousness in the fact we have raised from $750 million to $1.5 billion.

Speaker #4: We maintained the 1.5 for the next quarter. Because I can tell that we were quite impressed also when the MOU was signed in June by the quick drop of the crude oil price down to $70.

Speaker #4: So it's difficult, honestly, to anticipate what will be the cash flow for the second half of the year. Of course, we will be globally above the guidance we gave I gave even to you end of April, I think I mentioned a cash flow guidance at 80 dollars, 7 dollar 80 dollar per barrel, 7 dollar of refining margin of 32 billion.

Patrick Pouyanné: What will be the cash flow for H2? Of course, we will be globally above the guidance I gave, even to you, end of April. I think I mentioned a cash flow guidance of $80 per barrel, $7 per refining margin of $32 billion, obviously will be higher than that. Where will it land between $35 billion to $40 billion? I don't know. It's difficult to guess. We can make the math like you. If we were at $35 billion, there is a miss. I mean, not a miss. There is a question of $1 billion. Around $1 billion to increase in the return to shareholders, $1 billion in the last quarter. We'll see, and there will be a debate at the board at the different ways we could imagine to execute it.

Speaker #4: Obviously, we'll be higher than that. Where will it land—between 35, 40? I mean, I don't know. It's difficult to guess. So, we can make the math, like you.

Speaker #4: If we were at 35 billion dollar, there is a miss I mean, a miss, not a miss. There is a question of 1 billion, 1, 1 a little more, 1 around 1 billion dollar to increase in the return to shareholders.

Speaker #4: $1 billion in the last quarter is there. We'll see, and there will be a debate at the Board on the different ways we could imagine to execute it.

Speaker #4: But I think, again, my message to you is, first, it's a good topic, because that means that we are generating more cash flows compared to the guidance we gave you in February.

Patrick Pouyanné: I think, again, my message to you is, first, it's a good topic because that means that we are generating more cash flow than compared to the guidance we gave you in February. It's a matter of, I would say, a rich company. It's a good topic. The idea that we will get to 40% is really on the yearly basis. I remind you, by the way, that we have quite an advance if you want to make it in a multiyear case, as you suggested in your question. I think the last year we were at 55%, the previous year around 50% or 53%. If I make it on many multiyear, which is not the case because we are simple guys. We are quite in advance compared to 40%. Again, consider that 40% guidance is guiding the board.

Speaker #4: So it's a matter of, I would say, a rich company. It's a good topic. But the idea that we will target the 40% is really on a yearly basis.

Speaker #4: I remind you, by the way, that we have quite an advance. If you want to make it in a multi-year case, as you suggested in your question, I think the last year we were at 55%.

Speaker #4: The previous year, around 50 or 53%. So if I make it on many multi-year, which is not the case, because we are simple guys, but we are quite in advance compared to 40.

Speaker #4: So again, consider that 40% guidance is guiding the Board. And again, the Board is also, as I was explaining to you last quarter, looking, thanks to your support—with your support and your strong guidance last year at the same period of the year—at the giving ratio.

Patrick Pouyanné: Again, the board is also, as I was explaining you last quarter, looking, thanks with your support and your strong guidance last year or the same period of the year to the gearing ratio. Going down to 10% is quite also an objective for the company, and we might achieve it this year. That's the equation of the capital distribution, I would say, for the board. I think we will manage that as we've done that regularly in respecting our different, I would say, stakeholders.

Speaker #4: And going down to 10% is also quite an objective for the company, and we might achieve it this year. So that's the equation of the capital distribution, I would say, for the Board.

Speaker #4: And I think we will manage that as we've done previously, regularly respecting our different, I would say, stakeholders.

Speaker #1: Great. Thank you.

Martijn Rats: Great. Thank you.

Speaker #2: The next question is from Michele Della Vigna, Goldman Sachs.

Operator 2: The next question is from Michele Della Vigna, Goldman Sachs.

Operator: The next question is from Michele Della Vigna, Goldman Sachs.

Speaker #3: Thank you very much. I wanted to ask two questions. The first one is if you have an update on the two giant oil developments you're operating in Uganda and Suriname. The second one is more of a macro question.

Michele Della Vigna: Thank you very much. I wanted to ask two questions. The first one is, if you have an update on the two giant oil developments you're operating in Uganda and Suriname. The second one is more of a macro question. I was wondering if you have a view on China demand. We've seen a drop of about 5 million barrels per day in imports since the beginning of the conflict. It's very difficult to unpick what is the stocking demand, substitution demand, distraction. I was just wondering if you had any view of how to think about it. Thank you.

Speaker #3: I was wondering if you have a view on China demand. We've seen a drop of about 5 million barrels per day in imports since the beginning of the conflict.

Speaker #3: It's very difficult to unpick what is destocking, demand substitution, demand destruction. I was just wondering if you had any view on how to think about it.

Speaker #3: Thank you.

Speaker #4: Okay. First question, on Uganda. Okay. We are, I would say, in the last six months of development, I would say we we expect the crude oil production to start by before the end of the year.

Patrick Pouyanné: Okay. First question, on Uganda. Okay. We are, I would say, in the last 6 months of development. I would say, we expect the crude oil production to start before the end of the year. I would say 2027 will be the year where we reach the plateau. We have two developments. We have Tilenga on one side and the other one, the offshore, what is the name? Kingfisher, I think is even ready to start up by September. If my informations are good, the pipeline is also ready by, I would say, September. We might start, in fact, in the next quarter, the production, at a rate which is, I think Kingfisher was around 60,000 barrel per day. Then Tilenga will come ramping up, I would say, on the H1 of 2027. So full plateau for me is by mid 2027.

Speaker #4: I would say '27 will be the year where we'll reach the plateau. We have two developments: we have Kilang on one side and the other one, the offshore, which is the main one.

Speaker #4: Kingfisher, I think, is ready to start up by September. If my information is good, the pipeline is also ready by, I would say, September.

Speaker #4: So we might start, in fact, in the next quarter. The production at a rate which is, I think, Kingfisher was around 60,000 barrels per day.

Speaker #4: And then Kilanga will come ramping up, I would say, in the first half of '27. So the full plateau for me is by mid-'27.

Speaker #4: So this is where we are. And, by the way, it's an opportunity for me. We will follow that carefully. Of course, Uganda is affected today by a disease, Ebola.

Patrick Pouyanné: This is where we are. By the way, it's an opportunity for me, and we will follow that carefully. Of course, Uganda is affected today by a disease, Ebola. If it was not the case, we think that we might organize. If it stop, we might organize a field trip with some of you, the ones who are brave, to go to Uganda in 1 year in September 2027. Uganda, for me, now it's a matter of finalizing and turning the wells on. On Suriname, things are moving very well, I would say. We confirm that the production will start up by H1 2028. That's where we are according to planning I have. It was our Q1, maybe Q2, but we are in H1 2028 and the news of the construction. It has already progressed by 40%.

Speaker #4: But if it was not the case, we think that we might organize. If it stops, we might organize a field trip with some of you—the ones who are brave.

Speaker #4: The good Uganda in one year, in September 2027. So Uganda, for me, now, it's a matter of finalizing and turning the wells on. On Suriname, things are moving very well, I would say.

Speaker #4: We confirmed that the production will start up by first half '28. That's where we are, according to the planning I have. It was our first quarter, maybe second quarter, but we are in first half '28.

Speaker #4: And the news of the construction, it has already progressed by 40%. We are at 40% advancement. But the SPSO, in a yard— in this yard, it's building correctly, and we saw no— I would say, this is more classical.

Patrick Pouyanné: We are at 40% advancement, but the FPSO in the yard is building correctly. Now, I would say, this is more classical. It's more complex to execute an onshore project than an offshore one. In Suriname, we are in a project which TotalEnergies, a deep water project. We know how to execute them. China is very interesting demand. Of course, we have all been surprised when we discovered the statistics of May and June, I would say. Where in fact, you are right. The refinery runs went down from 15.5 million barrel of oil per day in February to 12.5 in June. Clearly, with the policy, which was firstly, first, I remind you that the Chinese authorities have decided very quickly to stop exporting products out of China.

Speaker #4: It's more complex to execute an onshore project than an offshore one. So, we are in Suriname, we are in a project which, for TotalEnergies, is a deepwater project. We know how to execute them.

Speaker #4: China is, of course, a very interesting source of demand. I would say we were all surprised when we discovered the statistics for May and June.

Speaker #4: We are—in fact, you are right—the refinery rates went down from 15.5 million barrels of oil per day in February to 12.5 in June.

Speaker #4: So clearly, with the policy which was first in place, I remind you that the Chinese authorities decided very quickly to stop exporting products out of China.

Speaker #4: And they reduced the run rate of the refineries in China by 10%, down to 90%, I would say. Voluntary reduction of Chinese, so it was more affecting the export.

Patrick Pouyanné: They reduced the run rate of the refineries in China by 10%, down to 90%, I would say. Voluntary reduction of Chinese. It was more affecting the export. The domestic demand is difficult to say, but it's a domestic demand disruption, so I will not say that. It's also true probably, what we're sure is that we observe it. It seems that there is some, I would say, turnaround on Chinese refinery in July, August and summertime. We don't expect, in fact, much increase of this demand from China. It's true that when you look at that, you can consider that China has a system in China, has quite an impact on the oil market, and probably, you know, we are commenting in April the fact that the Strait of Hormuz blockade was representing 10 to 12 million barrel oil per day of the market.

Speaker #4: The domestic demand is difficult to say, but it's the domestic demand destruction, so I will not say that. It's also true, probably, that—so that's what we—so what we're sure is that we've observed it.

Speaker #4: It seems that there is some, I would say, turnaround in refined Chinese refinery in July and August, in summertime. So we don't expect, in fact, much increase in this demand from China.

Speaker #4: It's true that when you look at that, you can consider that China has—the system in China had quite an impact on the oil market. And, probably, we were commenting in April on the fact that the Strait of Hormuz blockade was representing 10 to 12 million barrels of oil per day in the market.

Speaker #4: The Chinese, by themselves, with their policy, have, I would say, absorbed 4 million barrels of oil per day. If you add on top of that that the US has released almost 2 million barrels per day from the SPR that they have sold, the two countries, I would say, have solved almost 60% of the problem for—.

Patrick Pouyanné: The Chinese, by themselves, with their policy, I would say, absorbed 4 million barrel oil per day. If you add on that the US have released almost 2 million barrels per day of SPR. They have solved, the two countries, I would say, have solved almost 60% of the problem. That's probably why, by the way, the price of oil went up to 120, but not so high. For the coming months, to be Michele, you can observe like me, that we are back to the blockade today. No vessels, no tankers are crossing Strait of Hormuz, so we are back to the situation. I know that the Chinese have announced that they will allow, again, some few refineries to export some few products. It was during, I would say, the quiet period at Hormuz.

Speaker #4: That's probably why, by the way, the price of oil went up to $120, but not so high. So for the coming months, Michele, you can observe that, like me, that we are back to the blockade today.

Speaker #4: No vessels, no tankers are crossing the Strait of Hormuz. So we are back to the situation. I know that the Chinese have announced that they will allow again a few refineries to export a few products. It was during, I would say, the quiet period at Hormuz.

Speaker #4: Today, we can imagine that again—it might not be the case again with these events. So that's what I can comment. So, for sure: less exports, domestic demand destruction. Difficult to have data on this one.

Patrick Pouyanné: Today, we can imagine that again, it might not be the case again with these events. That's what I can comment. For sure, less exports. Domestic demand destruction, difficult to have data on this one.

Speaker #3: Thank you.

Michele Della Vigna: Thank you.

Speaker #2: The next question is from Biraj Borkataria, RBC.

Operator 2: The next question is from Biraj Borkhataria, RBC.

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

Speaker #5: Hi there. Thanks for taking my question. Just two on your LNG business. In June, there were reports around a Russian decree to authorize a sale of 10% of Arctic LNG-2, I think related to the European sanctions.

Biraj Borkhataria: Hi there. Thanks for taking my question. Just two on your LNG business. In June, there were reports around a Russian decree to authorize a sale of 10% of Arctic LNG 2, I think, related to the European sanctions. I don't believe you have commented, but are you aware and are you planning to exit there? Related to that, are you any clearer on the sort of legal language around EU sanctions and what it means for Yamal at this point? I know I asked with full year results, and it wasn't quite clear exactly what it would mean, and there's been some conflicting reports. Any color there would be helpful. Thank you.

Speaker #5: So, I don't believe you have commented, but are you aware and are you planning to exit there? And related to that, are you any clearer on the sort of legal language around EU sanctions, and what it means for your mouth at this point?

Speaker #5: I know I asked about the full year results, and it wasn't quite clear exactly what that would mean. And there have been some conflicting reports, so any clarity there would be helpful.

Speaker #5: Thank you.

Speaker #4: Thank you, Biraj, for your questions. I know that you have a specific interest in Russian matters—for good reasons, by the way. So Arctic LNG 2, as you know... I remind you that we decided in 2022—it was very early, in March, the accounts as of March 31st, 2022, shortly after the war.

Patrick Pouyanné: Thank you, Biraj, for your questions. I know that you have a specific interest for Russian matters, for good reasons, by the way. Arctic LNG 2. As you know, I remind you that we decided in 2022, it was very early in March, the council, 31 March 2022, shortly after the war. We recorded an impairment of EUR 4.1 billion, which was, in fact, concerning notably Arctic LNG 2, full write-off. Secondly, that Arctic LNG 2 has been placed under sanctions by US authority on 2 November 2023. As a result, immediately, we suspended procedures in accordance with existing contracts. In consequence, in fact, all rights, obligations under these contracts related to Arctic LNG 2 have been suspended since November 2023.

Speaker #4: We recorded an impairment of $4.1 billion, which was, in fact, concerning notably Arctic LNG-2. Secondly, that Arctic LNG-2 has been placed under sanctions by US authorities on the 2nd of November, '23.

Speaker #4: And as a result, immediately we suspended procedures in accordance with existing contracts. And in consequence, in fact, all rights and obligations under these contracts related to Arctic LNG 2 have been suspended since November 23.

Speaker #4: In such a context, Novatek approached us indeed and initiated discussions for the transfer of our 10% in Arctic LNG 2 to one of their own subsidiaries, Nordline.

Patrick Pouyanné: In such a context, Novatek approached us indeed, initiated discussions for the transfer of our 10% in Arctic LNG 2 to one of their own subsidiaries, NordLine. This has been publicly authorized, as you noticed, by a special decision of the Russian presidency in June. In fact, given this context of Arctic LNG 2, we on our side, consider that it's a joint interest of TotalEnergies and Novatek to dispose of our Arctic LNG 2 shares, which again, were fully impaired in 2022. We have notified our partners and lenders, we expect the transfer process initiated by Novatek to be completed in the near term. The Arctic LNG 2 chapter will be over for TotalEnergies in such a context. The second question, I would love to be able to answer to you, we are waiting to see what is the legal language precisely.

Speaker #4: And this has been publicly authorized, as you noticed, by a special decision of the Russian presidency in June. In fact, given this context of Arctic LNG 2, we on our side consider that it's in the joint interest of TotalEnergies and Novatek to dispose of our Arctic LNG 2 shares.

Speaker #4: Which, again, we are fully impaired in 2022. We have notified our partners and lenders, and we expect the transfer process initiated by Novatek to be completed in the near term.

Speaker #4: So, the Arctic LNG-2 chapter will be over for TotalEnergies in such a context. The second question I would love to be able to answer for you, but we are waiting to see what the legal language is precisely.

Speaker #4: So, as you have it, there was some press news this morning that there was intense discussion about a new sanctions package in Brussels.

Patrick Pouyanné: As you have, there was some press news this morning that there was intense discussion about the new sanctions package at Brussels. Among these different topics, we are not part of everything, even if we try to understand, we are not in the room. There was a debate which came from, I would say, the Greek authorities, which were claiming that the Greek energy tankers should be allowed to transport some LNG from Russia if it was to be offloaded outside of the EU. That was basically the case. It seems that there is a legal language, again which could, in fact, have an impact on the Yamal LNG, accordingly what you have said, which could, in fact, allow, I would say, some transfer and purchase of Yamal LNG, if we were using EU LNG tankers outside of EU again. A specific case.

Speaker #4: And among these different topics, and we are not part of everything—even if we try to understand, we are not in the room—there was a debate which came from, I would say, the Greek authorities, who were claiming that the Greek LNG tankers should be allowed to transport some LNG from Russia if it was to be offloaded outside of the EU.

Speaker #4: So that was basically the case. And it seems that there is a legal language, but again, which could, in fact, have an impact on Yamal LNG, according to what you have said, and which could, in fact, allow, I would say, some transfer and purchase of Yamal LNG if we were using EU LNG tankers outside of the EU again.

Speaker #4: So, a specific case—so, it's a little complex story. But that might have, yes, an impact on the fact that we, in fact, if it is a case, that means that TotalEnergies could not use a force majeure to say—like it was until now. Because until now they could, in fact, with the regulations which were in place, which were banning the LNG export to the EU. But there was a question mark.

Patrick Pouyanné: It's a little complex story. That might have, yes, an impact on the fact that we, in fact, if it is the case, that means that TotalEnergies could not use a force majeure to say to like it was until now, because until now they could, we in fact with the regulations which were in place, which were banning the LNG exports to EU. There was a question mark. I made that comment, I think in April to all of you, or in February, I remember. That we are questioning if there was a different interpretation of the European sanctions, that even a EU company could not purchase any of Russian energy, either for EU or outside of EU.

Speaker #4: I made that comment, I think, in April to all of you, or in February. I remember that we were questioning—there was a different interpretation of the European sanctions—that even an EU company could not purchase any Russian energy, either for the EU or outside of the EU.

Speaker #4: So it seems that the new language could, in fact, clarify it in a way that it could be done outside of EU if we use some EU LNG tankers, in fact, which, in fact, would be that the interest of EU companies would say some be preserved independently and independently of the if it's outside of EU.

Patrick Pouyanné: It seems that the new language could in fact clarify it in a way that it could be done outside of EU if we use some EU LNG tankers, in fact. Which in fact would be that the interest of EU companies would say some be preserved independently, and independently of if it's outside of EU. Again, I'm just commenting some verbal informations. We have been in contact with different, and I think the final resolution will be delivered probably tonight or tomorrow morning. They are drafting the last ones, and we will see what will be the outcome. Of course, we need to analyze it because we have a policy where we don't want to take any risk with sanctions.

Speaker #4: So again, I'm just commenting. Some verbal information: we have been in contact with different parties, and we are, I think, a resolution will be delivered probably tonight or tomorrow morning.

Speaker #4: They are drafting the last ones, and we'll see what will be the outcome. Of course, we need to analyze it because we have a policy where we don't want to take any risk with sanctions, but my comment is that if it is the case again, I think the interest of EU companies would be preserved because, honestly, to let the Russian LNG be sold outside of the EU, not by EU companies but only by your competitors, was a little odd to all the EU companies involved.

Patrick Pouyanné: My comment, if it is the case, again, I think the interest of EU companies will be preserved because honestly, to let Russian LNG being sold outside of the EU, not by EU companies but only by our competitors, was a little odd to all the EU companies involved. Let's see. That's what I can tell you, and we will keep you aware, obviously, because it has some impact on our own business. We will keep you aware of the situation.

Speaker #4: So let's see. That's what I can tell you, and we will keep you informed, obviously, because it has some impact on our own business.

Speaker #4: And we'll keep you aware of the situation.

Speaker #5: Thank you very much.

Biraj Borkhataria: Thank you very much.

Speaker #2: The next question is from Doug LaGate, Wolfe Research.

Operator 2: The next question is from Doug Leggate of Wolfe Research.

Operator: The next question is from Doug Leggate of Wolfe Research.

Speaker #6: Thank you, and good afternoon, everybody. Patrick, I wonder if I could pick up on Martin's prior question about cash returns and the 40%, and so on.

Doug Leggate: Thank you. Good afternoon, everybody. Patrick, I wonder if I could pick up on Martijn's prior question about cash returns and the 40% and so on. I think we would all agree probably this is a bit of a windfall environment, and maybe formulaic returns of capital. One could be forgiven if there was some flexibility there. My question is specifically around the hybrid bonds as opposed to the net debt target, and whether you would consider these windfalls as an opportunity to perhaps address some of that longer-term financing as part of your capital structure. That is my first question. I have got a follow-up on exploration, please.

Speaker #6: I think we would all agree, probably, this is a bit of a windfall environment. And maybe, for the formulaic returns of capital, one could be forgiven if there was some flexibility there.

Speaker #6: My question is specifically around the hybrid bonds, as opposed to the net debt target, and whether you would consider these windfalls as an opportunity to perhaps address some of that longer-term financing as part of your capital structure.

Speaker #6: That's my first question. I've got a follow-up and exploration, please.

Speaker #4: I should give that to Jean-Pierre, but I know that I'm still—to be honest—the hybrid bond, for me, it's a debt. It's a debt, but it's not a debt; it's a quasi-debt with a low interest rate compared to what we can do with the issue bonds.

Patrick Pouyanné: To be honest, the hybrid bonds, for me, it is a debt. It is a debt, but it is not a debt. It is a quasi-debt with a low interest rate compared to what we can typically issue bonds. I do not make a lot of difference between the different bonds that we have issued. I would say it is around EUR 11 billion of 3% coupons. It is quite a cheap debt. Is it a priority to unwind all that? My answer will be clear, it is no. It is no, and we have made some partial reimbursement, but it is not a priority. Again, we are more looking at, I would say, as a CEO, I am more looking to the global cost of our different bonds rather than this specific one, yeah. Maybe Jean-Pierre will say otherwise.

Speaker #4: So, I don't make a lot of difference between the different bonds that we have issued. So, I would say it's around €11 billion of 3% coupon.

Speaker #4: So, it's quite a cheap debt. So, is it a priority to unwind all that? My answer will be clear: it's no. And it's no.

Speaker #4: And, well, we have made some partial reimbursement, but it's not a priority. And again, we are more looking at, I would say, the CEO is more looking at the global cost of all different bonds rather than the specific one.

Speaker #4: Maybe Jean-Pierre will elaborate.

Speaker #3: Is it independent of the market? So, if you could consider it cheap debt, there is no reason not to keep high risk in our portfolio.

Jean-Pierre Sbraire: It highly depends on the market. If you could consider it is a cheap debt, there is no reason not to keep the hybrid in our portfolio. Of course, it highly depends on the conditions, as Patrick explained. What is important for us is globally the cost of global debt, senior bond plus hybrids.

Speaker #3: But of course, we say it depends on the conditions, as Patrick explained. So what is important for us is, globally, the cost of global debt.

Speaker #3: So senior bond plus hybrids.

Speaker #6: That's very clear, guys. Thank you. Yeah, my follow-up, Patrick, is very specific on exploration. So you hired Nicola out of Eni, and you have more paying Venus in Namibia.

Doug Leggate: That is very clear, guys. Thank you.

Patrick Pouyanné: After that, Doug is D15.

Doug Leggate: Yeah. My follow-up, Patrick, is very specific on exploration. You hired Nicola out of Eni, and you have Mopane and Venus in Namibia. Back in 2016, Total drilled the only deep water well in Uruguay. Eni, late last year, farmed into Uruguay. It seems that activity there is picking up a bit. My question is, when you roll all that together, does Total have any ambitions to move into Uruguay?

Speaker #6: Back in 2016, Total drilled the only deepwater well in Uruguay. And ENI, late last year, farmed into Uruguay. It seems that activity there is picking up a bit.

Speaker #6: So, my question is, when you roll all that together, does Total have any ambitions to move into Uruguay?

Speaker #4: Okay. I mean, Doug, you will need to ask a question to Nicola, to be honest. Nicola did not come to my office to tell me we absolutely need to come back to Uruguay.

Patrick Pouyanné: Okay. Doug, you will need to ask the question to Nicola. To be honest, Nicola did not come to my office to tell me, we need absolutely to come back to Uruguay. To be clear, our own experience in Uruguay has been quite average, to be honest. In fact, it's a whole basin because this basin, which was the Pelotas basin, if I remember well. In fact, we drilled in Uruguay. We also drilled in the other side in Brazil, which was not as well, quite a success. We made two drillings in this deep water basin there, which was honestly not very encouraging. I have noticed that there were some companies last year which went back. Nicola is quite excited by Namibia, by coming back on Suriname with Obiang. He has some other ideas or other African countries.

Speaker #4: So, to be clear, our own experience in Uruguay has been quite average, to be honest. And in fact, it's a wul basin, because this basin, which was the Pilota's basin, if I remember well—in fact, we drilled in Uruguay, we also drilled on the other side in Brazil.

Speaker #4: Which was, as well, not quite a success. So we made two drillings in this deepwater basin there, which was, honestly, not very encouraging.

Speaker #4: So, I have noticed that there were some companies last year which went back. Nicolas is quite excited by Namibia, and by coming back on Suriname with OBL.

Speaker #4: So he has some other ideas or other African countries. But again, I discussed with him through your intermediary, Doug. If he wants to come back to Uruguay as the CEO, policy is quite clear.

Patrick Pouyanné: Again, I discussed with him through your intermediary, Doug, if he wants to come back to Uruguay. As the CEO, the policy is quite clear. We allocate EUR 1 billion per year to exploration and appraisal, which is my commitment to Nicolas when we are in. I told him, it's up to you to decide where we will put the money. You have to share with you your convictions, but if it's your ideas, we know, we follow that. By the way, when I was looking to potentially not tie it down, but the Venus case, looking the department. A Venus development might generate quite a nice cash flow, paying many years of, or like Suriname. The Gran Morgu development will pay many years of exploration.

Speaker #4: We allocate $1 billion per year to exploration and appraisal. This is my commitment to Nicola when we are in. And I told him, it's up to you to decide where we'll put the money.

Speaker #4: You have to share with us your convictions. But if it's your ideas, we know we follow that. By the way, when I was looking to potentially—it's not planned on—but the Venus case, looking to the department, you know, a Venus development might generate quite a nice cash flow, paying many years of—or like Suriname, you know, the Grand Mongo development will pay many years of exploration.

Speaker #4: So, we need to keep in mind that it's in terms of cash generation. Added value exploration, for me, is a nice engine. But again, I trust Nicola that he'll bring us ideas. I don't know if it's Uruguay or not, but until now, it's not Uruguay.

Patrick Pouyanné: That we need to keep in mind, that in terms of cash generation of added value, exploration for me is a nice engine. Again, I trust Nicolas that he will bring to us ideas. I don't know if it's Uruguay or not. Until now, it's not Uruguay.

Speaker #6: Great. Thanks so much, Patrick.

Doug Leggate: Great. Thanks so much, Patrick.

Speaker #2: The next question is from Christopher Copland, Bank of America.

Operator 2: The next question is from Christopher Kuplent, Bank of America.

Operator: The next question is from Christopher Kuplent, Bank of America.

Speaker #6: Thank you very much. Just two quick questions from me, Patrick. The information that you've given us on the positioning of your gas traders is very helpful.

Christopher Kuplent: Thanks very much. Just two quick questions from me, Patrick. The info that you've given us on the positioning of your gas traders is very helpful. Can you maybe comment on whether their bullishness has extended into power and your merchant and spark spread position there? What you expect on that side, now that you've got access to the EPH portfolio. The second question, as ever, I keep trying to get comments out of you on the state of the M&A market. Maybe now we have a specific example that you know more about than we do, which is the Danish deal which I believe is entirely operated by yourself. What do you think about this environment? You've made use of inorganic before. Is this an environment to sell or to buy? Any comment once again would be appreciated. Thank you.

Speaker #6: Can you maybe comment on whether their bullishness has extended into power and your merchant and spark spread position there? And what you expect on that side now that you've got access to the EPH portfolio?

Speaker #6: And the second question, as ever, I keep trying to get comments out of you on the state of the M&A market. But maybe now we have a specific example that you know more about than we do, which is the Danish deal, which I believe is entirely operated by yourself.

Speaker #6: What do you think about this environment? You’ve made use of inorganic before. Is this an environment to sell or to buy? Any comment, once again, would be appreciated.

Speaker #6: Thank you.

Patrick Pouyanné: I commented the gas trading, whether over a lower performance than trading. Just to tell you that now the position is, I would say, the winning one. On electricity, honestly, I don't have the visibility on that. Your question, of course, we have, as you know, the EPH deal is a deal where we are buying the assets, but we transform all assets in a tolling mode in order to have access to the electrons, and in order to trade ourself around with electricity. In fact, today at this stage, all the tolling agreements have not yet been signed. We are working on it. I think the full potential of trading around the EPH deal is more for Q4 than immediately, to be honest.

Speaker #4: I commented on the gas trading. The gas trading has again shown lower performance than trading. So, just to tell you, now the position is, I would say, the winning one.

Speaker #4: On electricity, honestly, I don't have the visibility on that. Your question, of course, we have, as you know, the EPH deal is a deal where we are buying the assets, but we transform all assets in a tolling mode in order to have access to the electrons and in order to trade ourselves around this electricity.

Speaker #4: In fact, today, at this stage, all the assets have not yet been—and the tooling agreements have not yet been—signed. So we are working on it.

Speaker #4: So I think the full potential of trading around the EPH deal is more for fourth quarter than immediately, to be honest. But of course, we are expecting from that some additional value, in fact.

Patrick Pouyanné: Of course, we are expecting from that some additional value. In fact, we have some objective, and we were discussing that, by the way, with our trading electricity team last week during our five-year business plan. We have some objective, and we expect them to deliver. We are trading on two markets. There is a European market. There's one with which we are also trading in the US, which is a little more complex market, to be honest, because our position there is probably today still limited. We will need to find ways to increase the position in the US if we want to be, I would say, profitable trading electricity in the US. In Europe, we have quite a large portfolio today, in different countries. We have some project expectations.

Speaker #4: We have some objectives, and we were discussing that, by the way, with our Trading Electricity team last week during our five-year business plan. So we have some objectives, and we expect them to deliver.

Speaker #4: We are trading in two markets. There is the European market, and the one in which we are also trading in the US, which is a little more complex market, to be honest, because our position there is probably, today, still limited.

Speaker #4: So we will need to find ways to increase our position in the US if we want to be, I would say, profitable trading electricity in the US.

Speaker #4: In Europe, we have quite a large portfolio today in different countries, so we have some expectations. The US, I would say, is still a work in progress on this one.

Patrick Pouyanné: The US, I would say it's still a work being in progress, I would say, on this one. M&A market. Yeah. I didn't have the time to analyze the price which was paid by Vår to acquire the BlueNord. Maybe I will receive a memo, but I was occupied by other matters these last days. It seems for me the market today is more a seller market than a buyer market. With the crude oil price which we experience today, to make a deal, unless you have a big earn-outs or schemes in which you will try to capture part of the potential upside, it's not a stable market. Before this crisis, I think you could imagine that the deals were done to buy you around $70 per barrel.

Speaker #4: M&A market, yeah, I mean, I didn't have the time to analyze the price which was paid by VOR to acquire Blue Nord Energy.

Speaker #4: So I didn't—maybe I will receive, probably I will receive a memo, but I was occupied by other matters these last few days. It seems to me the market today is more a sellers' market than a buyers' market, you know, with the crude oil price which we have experienced today to make a deal.

Speaker #4: Unless you have a bigger note or schemes in which you will try to capture part of the potential upside, it's not a stable market.

Speaker #4: So before these crises, I think you could imagine that the deals were done around to buy you around $70 per barrel. Today, to sell at $70, on my side, to be honest, I would not be—I'm not a seller today on these assets, on the oil assets, because we would not like to lose some upside.

Patrick Pouyanné: Today, to sell at $70, on my side, to be honest, I'm not a seller today on these assets, on your assets, because we would not like to lose some upsides. Selling is probably better today than buying. Yeah, it's fine, to come back to your deal. Again, I cannot comment the specific situation you mentioned. Maybe we have some pre-emption right. I don't know. I don't know the situation obviously. We'll look at it. As it is our assets and we operate with. By the way, I'm not surprised because BlueNord was bought and it was quite clear to me that I met, by the way, the owner of BlueNord when I was in Denmark a few months ago, and it was quite clear to me that we were willing to sell.

Speaker #4: So selling is probably better today than buying. Yeah, that's right. To come back to your deal—again, I cannot comment on the specific situation you mentioned.

Speaker #4: And maybe we have some preemption right. I don't know. I don't know. I don't know the situation of this deal, so we'll look at it.

Speaker #4: But as it is our assets and we operate, by the way, I'm not surprised because Bruno was a fund, and by a fund, and it was quite clear to me. I met, by the way, the owner of Bruno when I was in Denmark a few months ago.

Speaker #4: And it was quite clear to me that we were willing to sell. For us at TotalEnergies, we already have quite a big share, I would say, in these Danish underground assets.

Patrick Pouyanné: For us as TotalEnergies, we have already quite a big share, I would say, in these Danish underground assets. It's quite mature assets, to be honest. I think we are fine with what we have. Again, we'll look to this situation.

Speaker #4: So it's quite mature assets, to be honest. So I think we are fine with what we have. But again, we'll look at the situation.

Speaker #6: Great. Much appreciated. Thank you.

Christopher Kuplent: Great. Much appreciated. Thank you.

Speaker #2: The next question is from Mark Wilson at Jefferies.

Operator 2: The next question is from Mark Wilson, Jefferies.

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

Mark Wilson: Thank you. Regarding European projects, could I ask about the Cyprus project, Cronos Block 6, and what the expectations to move that one forward are, please? Secondly, on gas trading, yes, agree with others' helpful comments, you spoke to the European expectations for price moves there that didn't occur. Should we consider your gas trading business to be more of a regional-focused business rather than global? Obviously, oil material moves up and down and probably that enables that business. Should we think of your gas trading business as being a more European regional-focused one? Thank you.

Speaker #6: Thank you. Regarding European projects, could I ask about the Cyprus project, Kronos Block 6, and what the expectations to move that one forward are?

Speaker #6: Please. And then secondly, on gas trading—yes, I agree with others, those were helpful comments. But you spoke to the European expectations for price moves there that didn't occur.

Speaker #6: Should we consider your gas trading business to be more of a regional-focused business rather than global? Obviously, oil made material moves up and down, and probably that enables that business.

Speaker #6: But should we think of your gas trading business as being a more European, regionally focused one? Thank you.

Speaker #4: No, yeah, no, we have a global gas trading. We are a big LNG, I would say, player. I just mentioned that there are different markets—in the US, in Asia, of course.

Patrick Pouyanné: No, still not clear. No, we have a global gas rating. We are a big LNG, I would say-

Mark Wilson: Player

Patrick Pouyanné: player. I just mentioned that there are different markets from the US and Asia, of course. I just tried to, in my comment, to tell you where we make the miss, and the miss was more on the European anticipation on the TTF, where I think we were around EUR 15, EUR 16. End of March, we're around EUR 17, or since we are thinking it would go up to EUR 19, EUR 20, like it is going, by the way, today and in July, because we were anticipating the impacts on the market, both of the distraction from the Qatari production from the market and, I would say as well, the fact that the inventory in Europe has to be rebuilt.

Speaker #4: I just try to, in my comment, to tell you where we made the miss. And the miss was more on the European anticipation, on the TTF, where I think we were around $15, $16 at the end of March. We were around $17.

Speaker #4: Our teams were thinking it could go up to $19, $20, like it is going, by the way, today and in July. Because we were anticipating the impacts on the market, both of the destruction from the Qatari production from the market, and, I would say as well, the fact that the inventories in Europe have to be rebuilt.

Speaker #4: And in fact, what happened is that the market probably considered that it was too anticipative to grow, to have a higher price, because it was expecting maybe the Qatari disruption to stop, which happened in June, but came back in July.

Patrick Pouyanné: In fact, what happened is that the market probably considered that it was to anticipate to grow to have a higher price because expecting maybe the Qatari disruption to stop, which happened in June, but came back in July, and that there were time to have higher to grow the inventories. It's also true that the weather in Europe was quite in fact good in Q2. It's just to try to give you the main, I would say the main, the major, the one on which they took a position, which appeared, which were in fact reversed, which were not the right ones. It does not mean at all that we are not a global one. I would say on the other markets, we didn't see any, I would say, underperformance, I would say.

Speaker #4: And that there was time to have higher growth in the inventories. It's also true that the weather in Europe was quite, in fact, good in the second quarter.

Speaker #4: So it's just to try to give you the main, I would say, the main majors— the ones on which they took a position, which appeared, which were, in fact, reversed, which were not the right ones.

Speaker #4: But it does not mean at all that we are not a global one. I would say, on the other markets, I didn't see any specific—we didn't see any, I would say, underperformance, I would say.

Speaker #4: We only see it on this European position. That's why I mentioned it. But don't draw any conclusions. Kronos, thank you for this question on Kronos.

Patrick Pouyanné: We only see it on the European position. That's why I mentioned it. Don't draw the conclusion. Mark, thank you for this question on Cronos. We are working on many FIDs. In fact, the end of July, and the good news, and I think I must pay tribute to Eni, the operator, because we are 50, we have a big share, 50% like the operator, Eni. We work jointly, by the way, in the last six months to go to the FID. The good news is that we have, I think we are working hard to, again, like on Venus, to finalize the FID by the end of July. It's a matter of, again, there is a lot Cronos for everybody is an interesting development where we produce gas in Cyprus, and then we maximize existing infrastructures in terms of CapEx, because it's a sub-sea development.

Speaker #4: We are working on many FIDs. In fact, at the end of July, you know, it's—and the good news, and I think I must pay tribute to ENI, the operator, because we are a 50.

Speaker #4: We have a big share, 50% like the operator ENI. We worked jointly, by the way, in the last six months to go to the FID and the good news is that we have I think we are working hard to, again, like on Venus, to finalize the FID by the end of July.

Speaker #4: It's a matter of, again, there is a lot. Kronos for everybody is an interesting development where we produce gas in Cyprus, and then we maximize existing infrastructures in terms of capex because it's a subsea development.

Speaker #4: It will go to ZOR installations in Egypt to make the gas treatment, and then to the Damietta LNG plant in Egypt. So, as you can imagine, there were a number of intergovernmental agreements and agreements with third parties to use all these existing installations, but it's being done, honestly.

Patrick Pouyanné: It will go to Zohr installations in Egypt to make the gas treatment, then to Damietta LNG plant in Egypt. There, you can imagine there was a number of inter-governmental agreements and agreements with third parties to use all these existing installations. It's being done, honestly, and I think as I discuss, we'll be able, probably the end of next week to announce that. It's good. It's an interesting project because at the end, for TotalEnergies, we have access to 1.4 million tons of LNG in Egypt, just in front of the European market. You can imagine that it's an interesting project from gas to LNG. For Cyprus as well, it's the first gas development in Cyprus, and maybe our scheme will open the door, will open the way to other valorization.

Speaker #4: And I think Claudio discussed that we'll be able, probably next week, end of next week, to announce that. So, and it's good. It's an interesting project because, at the end, for TotalEnergies, we have access to 1.4 million tons of LNG in Egypt, just in front of the European market.

Speaker #4: So you can imagine that it's an interesting project, from gas to LNG. And for Cyprus as well, it's the first gas development in Cyprus.

Speaker #4: And maybe your scheme will open the door. We open the way to over-valorization. So it has been a long journey, but I think we are there.

Patrick Pouyanné: It has been a long journey, but I think we are there, and we'll be happy to invest capital in the Cronos project.

Speaker #4: And we'll be happy to invest capital into Kronos projects.

Speaker #2: The next question is from Matt Lofting, JP Morgan.

Operator 2: The next question is from Matt Lofting, J.P. Morgan.

Operator: The next question is from Matt Lofting, J.P. Morgan.

Speaker #6: Thank you for taking the questions. Two, if I could, please. I wanted to first ask you about full-year operating cash flows. I think, Patrick, you said earlier—understandably—that you'd expect to be probably above the $32 billion for the full year that you mentioned.

Matt Lofting: Thank you for taking the questions. Two, if I could, please. I wanted to first ask you about full year operating cash flows. I think, Patrick, you said earlier, understandably, that you'd expect to be probably above the EUR 32 billion for the full year that you mentioned in April. Obviously, the macro scenario is uncertain. If we were to stick to the sort of the USD 80, USD 15 gas, and USD 7 refining that you used in April, where do you think full year cash flows at that price deck would outturn on an underlying basis versus the EUR 32 billion that you saw 3 months ago? Secondly, I wanted to ask you about refining and security of supply of feedstock. Is the company able to access the appropriate feedstocks for the system as you look into the coming months?

Speaker #6: In April, obviously, the macro scenario is uncertain. So, if we were to stick to the sort of the $80 oil, $15 gas, and $7 refining that you used in April, where do you think full-year cash flows at that price deck would outturn on an underlying basis versus the $32 billion that you saw three months ago?

Speaker #6: And then, secondly, I wanted to ask you about refining and security of supply of feedstock. Is the company able to access the appropriate feedstocks for the system as you look into the coming months?

Speaker #6: And is there a scenario where additional measures could be required from that perspective, particularly if conflict in the Middle East persists? Thank you.

Matt Lofting: Is there a scenario where additional measures could be required from that perspective, particularly if conflict in the Middle East persists? Thank you.

Speaker #4: Okay. On the first question, it's quite easy to answer. The 32, because we know what has been the improvement of the second quarter, would be raised to 34.5.

Patrick Pouyanné: Okay. On the first question, it is quite easy to answer the 32 because we know what has been the improvement in the Q2 would be raised to 34.5. That is why I mentioned EUR 35 billion, I think, in my answer to your colleague, the first question that I got. So 34, 35, EUR 35 billion would be in such an environment. I would say you can get it as a guidance again. We see if we are at EUR 80. Since the beginning of the year, we were a little higher. We are more on an average, I think, around EUR 90.7 since the beginning. The last 30 days, we are at 76. That is quite a spread. So between 75 and 90, we will see where we land. It is interesting. So in this assumption, 40, 44.5. The current forward curve is a moving target.

Speaker #4: That's why I mentioned $35 billion, I think, in my answer to your colleague— the first question that I got. So $34, $45, $35 billion would be, in such an environment, I would say you can use it as a guidance.

Speaker #4: Again, we'll see if we are at $80. Since the beginning of the year, we were a little higher. We are more of an average, I think, around $90.7.

Speaker #4: So, since the beginning—and in the last 30 days—we're at 76. So that's quite a spread, you know? So, between 75 and 90, we'll see where we'll land.

Speaker #4: It's interesting. It's an interesting—so, 13 in this assumption, 40, 34.5. And the current forward curve is a moving target. You know, it follows the spot one.

Patrick Pouyanné: It follows the spot one, so I do not have the figure. I mentioned to you a range of EUR 35 to 38, 39 billion. If we were having a H2 as the H1, you double it, you find 38. It is a higher environment. It is not EUR 80, it is EUR 90. It is EUR 90. It is a refining margin of 15. So it is EUR 90, 15, and TTF at 15 as well, which was the average of the H1. If you replicate such an environment, you could imagine we should deliver around EUR 38 billion instead of 35. You have a range to where we could land, but I do not know. Maybe it will be lower at the end. That is what I can tell you today. The second question, no, we have no problem of supplying feedstock to our refining system, not at all.

Speaker #4: So I don't have the figure, but I mentioned to you a range of $35 to $38, $39 billion if we’re remaining, I think, if we were having a second half as the first half—you double it, you find $38—you know?

Speaker #4: So that it's more it's a higher environment. It's not 80. It's 90 dollars. It's 90 dollars. It's a refining margin of 15. So it's 90 dollars, 15, and TTF at 15 as well, which was the average of the first half.

Speaker #4: If you replicate such an environment, you could imagine we should deliver around $38 billion instead of $35 billion. So, you have a range of where we could land.

Speaker #4: But I don't know. Maybe it will be lower at the end. That's what I can tell you today. The second question—no, we have no problem supplying feedstock to our refining system.

Patrick Pouyanné: The second question, no, we have no problem of supplying feedstock to our refining system, not at all.

Speaker #4: Not at all. You know, we are producing a lot of oil in Brazil—a lot of oil in Africa. And so, in fact, our refinery, by the way, independently of Ormuz, in terms of crude supply, you know, the Atlantic basin, or European refineries which are on the Atlantic basin, are generally supplied by crude oil coming from the Atlantic basin.

Patrick Pouyanné: We are producing a lot of oil in Brazil, a lot of oil in Africa. In fact, our refinery, by the way, independently of Hormuz, in fact, in terms of crude supply, the Atlantic Basin or European refineries, which are on the Atlantic Basin, are generally supplied by crude oil coming from the Atlantic Basin. It is true that we like to have some sour crude coming from the Middle East to make more diesel, because it is the best crude to produce diesel. Generally, the sour crude from the Middle East is more going to Asian refineries, in fact, than to European ones. No, we have no concern on our side to feed our refining system.

Speaker #4: It's true that we like to have some sour crude coming from the Middle East to make more diesel, because it's the best crude to produce diesel.

Speaker #4: There is a limited but generally these Ormuz sorry, the sour crude from the Middle East is more going to Asian refineries, in fact, than to European ones.

Speaker #4: So no, we have no concern on our side to fill our refining system. The only concern I could have is more around SATORP in Saudi Arabia because, first, it has been hit.

Patrick Pouyanné: The only concern I could have is more around SATORP in Saudi Arabia, because first it has been hit, I hope it will not be hit again, and we don't have the full capacity. Secondly, SATORP production is, of course, stranded in the Gulf. It has been quite well used by the Saudi system during Q2 for domestic use because they had other refineries which were hit. From this perspective, we are running it for the domestic market, but we see what could happen if it's strong. That's the situation. No security of supply for feedstock for our system.

Speaker #4: So I hope to not be hit again. And so we don't have the full capacity. Secondly, SATOP production is, of course, stranded in the Gulf; it has been quite well used for domestic use because they had other refineries which were hit.

Speaker #4: So from this perspective, we are running it for the domestic market, but we'll see what could happen—what could happen if it's strong. So that's the situation.

Speaker #4: But there is no security of supply for feedstock for the system.

Speaker #6: Super. Thank you on both.

Matt Lofting: Super. Thank you on both.

Speaker #2: The next question is from Lucas Herman, BNP Paribas.

Operator 2: The next question is from Lucas Herrmann, BNP Paribas.

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

Speaker #7: Yeah, thanks.

Patrick Pouyanné: Yeah, thanks.

Speaker #3: Yeah, thanks very much. Patrick, it's a little conceptual perhaps, but one of the things that I think most of us or many of us are struggling with is struggling with medium term at the moment is, you know, the fragmentation or fracturing within OPEC.

Lucas Herrmann: Yeah. Thanks very much, Patrick. This is all conceptual perhaps, but one of the things that I think most of us or many of us are struggling with medium term at the moment is the fragmentation or fracturing within OPEC. The UAE having departed, Iraq talking about an incremental quota or changing its quota. As you think forwards about your own position, the potential for Iranian barrels to come back, more UAE to be available, Iraqi flows perhaps be larger, where does discipline sit with what remains of the rest of OPEC? How does that impact the way you think about allocation of capital to project? Does it change anything in terms of how you feel about the robustness of oil markets, particularly at the bottom of the cycle?

Speaker #3: The UAE, with the UAE having to part. Iraq is talking about, you know, an incremental quota or changing its quota. As you think forward about your own position—the potential for Iranian barrels to come back, more UAE to be available, Iraqi flows to perhaps be larger—where does discipline sit with what remains of the rest of OPEC?

Speaker #3: How does that impact the way you think about allocation of capital to projects? Does it change anything? In terms of how you feel about the robustness of oil markets, particularly at the bottom of the cycle?

Speaker #3: And secondly, if I might, and maybe this is just one that I should leave or we should leave for the strategy days, but simply to ask whether in light of, you know, the actions you've taken on OPEC or around OPEC, the addition of EPH and the environment we're seeing in refining in particular at the moment, but maybe sustained.

Lucas Herrmann: Secondly, if I might, and maybe this is just one that I should leave or we should leave for the strategy days, was simply to ask whether in light of the actions you've taken on Mopane or around Mopane, the addition of EPH, and the environment we're seeing in refining in particular at the moment, but may be sustained, whether that's changed and altered your target of 20 billion or so of free cash by 2030 in a $70 world.

Speaker #3: Whether that's changed and altered your target of, you know, 20 billion or so of free cash by 2030 in the 70 dollar world.

Speaker #7: Hi, everyone.

Patrick Pouyanné: Hi, everyone.

Speaker #3: Thank you.

Lucas Herrmann: Thank you.

Speaker #7: Hi. Hi, James.

Patrick Pouyanné: Okay. The first question. It's a good question for the investor presentation outlook in September, Lucas, where we speak more about strategy. The first one, what I see in terms of capital discipline, because of all what you described, very rightly, it's very good to stick of the discipline to test all our projects at $50 per barrel. Because the answer, yes, you can infer that today we are in a world of high prices, but we could go in a way where everybody would like to produce more. Maybe, by the way, Saudi Arabia, like they've done in 2020, could do, why not myself? I mean, if everybody wants to produce, we could do it again. If you remember what happened in 2020 when Saudi Arabia decided to close the market, I think some few peeps around them were quick to come back to more discipline.

Speaker #4: Okay. The first question, it's a good question for the investor presentation outlook in September, Lucas. Where we speak more about strategy. But the first one, honestly, in terms of capital discipline, because of all what you described very rightly, it's very good to stick of the discipline to test all our projects at 50 dollars per barrel, you know?

Speaker #4: Because the answer is yes, you can infer that today we are in a world of high prices, but we could go in a way where everybody would like to produce more. And maybe, by the way, Saudi Arabia, like they've done in 2020, could do—why not myself?

Speaker #4: I mean, if everybody wants to produce, we could do it again. If you remember what happened in 2020, when Saudi Arabia decided to close the market, I think a few people around them were quick to come back to more discipline.

Speaker #4: So it's a matter of discipline. For us, honestly, I continue to believe, and we are, but in the company, you know, we are continuing to test the 50 dollars.

Patrick Pouyanné: It's a matter of discipline. For us, honestly, I continue to believe, and we are. Within the company, we are continuing to test the $50. We planned the five-year business plan. We plan it at $60. Yes, we test what happened at $80 or $70, like you mentioned. Keeping the discipline and knowing that we are in a cyclical industry, I think is just fundamental. All these events that you mentioned, I think are just confirming to me that we need to keep a discipline. That's what I would answer to you.

Speaker #4: We planned the five-year business plan. We plan it at $60. Yes, we test what happened at $80 or $70, like you mentioned.

Speaker #4: And that's, but keeping the discipline and knowing that we are in a cyclical industry, I think it's just fundamental also. I don't all these events that you mentioned, I think are just confirming to me that we need to keep at discipline.

Speaker #4: That's what I would like to answer to you. And that means as well, that you should not be surprised that when we will speak in end of September about, I would say, capital net investments, capital investments, you'll hear figures which are more or less in line, which will be not more or less, which will be in line with what we told you last year, you know?

Patrick Pouyanné: That means as well that you should not be surprised that when we speak in end of September about, I would say, capital net investment, capital investments, you'll hear figures which are more or less in line, which will be not more or less, which will be in line with what we told you last year. We do not suddenly increase our CapEx because we have, on the short term, a higher environment. Does it change 2030? Not really what you said, because Mopane, first the production of Mopane beyond 2030. Venus should start by end 2030. I would say, Venus Mopane for me, it is 2030, 2035. We are working on it, there's no impact. EPH somewhere was part of already our plan, our five-year business plan.

Speaker #4: There is no, we do not suddenly increase our capex because we have, on the short term, a higher environment. Does it change 2030? Not really, as you said, because Mopane—first, the production of Mopane is beyond 2030.

Speaker #4: Venus should start in by end 2030. So I would say, for Venus-Mopane, for me, it is 2030, 2035; we are working on it.

Speaker #4: So, there is no impact. EPH, somewhere, was already part of our long-term, five-year business plan. We told you that we have just anticipated with EPH some of the capex we were willing to allocate to M&A in integrated power.

Patrick Pouyanné: We told you, we have just anticipated with EPH, some of the CapEx we were willing to allocate to M&A in Integrated Power. It has been done, but in fact, it was modeled, even if EPH was not, I would say, the deal, which in fact, was modeled in our future cash flow by 2030. Balance and refining, frankly, I will not take it as granted. I'm still, maybe because I managed that business during three years, I'm a little more cautious on it. Today, we have an incredible situation where both markets are positive in the same direction. That's true that on the products market, you have no products coming out of the Strait of Hormuz. The Russian situations with, I would say, themselves, they stop exporting diesel, you have a Russian disruption.

Speaker #4: So, it has been done, but it was, in fact, modeled even if EPH was not, I would say, the deal. It was, in fact, modeled in our future cash flow by 2030.

Speaker #4: And Barnes & Refining, frankly, I will not take it as granted. So I'm still maybe because I manage that business during three years, I'm a little more cautious of it.

Speaker #4: Today, we have an incredible situation where both markets are positive in the same direction. It's true that, on the products market, you have no products coming out of the Strait of Hormuz.

Speaker #4: So the Russian situations with, I would say, themselves, they stop exporting diesel. And so you have Russian disruption. So you have a lot of impacts, I would say, which have pushing up the product price.

Patrick Pouyanné: You have a lot of impacts, I would say, which are pushing up the product price. I don't think it will. Because if Strait of Hormuz remains on and off, as I read that some authority said maybe it's a new normal. If it is the case, then we'll not be in the $50 per barrel environment. We'll be elsewhere because to reinstall, there is no load cycle with an on and off Strait of Hormuz production. Of course, we are building and we are discussing today to invest in some of the pipeline projects which will allow to circumvent the Strait of Hormuz, which will take a few years. The balance of refining, I don't take it for granted for our planning by 2030. We'll come back to your first question more precisely.

Speaker #4: I don't think it will, because if Strait of Hormuz remains on and off, as I read that some authorities said maybe it's a new normal, if it is the case, then we'll not be in the 50 dollar per barrel environment, you know?

Speaker #4: We'll be elsewhere. Because we to reinstall, there is no low cycle with an on and off Strait of Hormuz production. Of course, we will need to, we are building and we are willing to, we are discussing today.

Speaker #4: To invest in some of the pipelines projects which are, which will allow to certain be in the Strait of Hormuz, but it will take a few years.

Speaker #4: So the Barnès Refining, I don't take it for granted for our planning by 2030. So we'll come back to your first question more precisely, but for me, in fact, what we have worked since we met last year on September 25, we have confirmed, in fact, and it's more—and we will come back to tell you fundamentally—all our targets, we are confirming even strongly.

Patrick Pouyanné: For me, in fact, what we have worked since we met last year in September 2025, we have confirmed, in fact, and it's more, and we will come back to tell you fundamentally all our targets are we can confirming even strongly. Yes, the increase of free cash generation that we announced, which was more than $10 billion, an increase of $10 billion, will be confirmed. Far, this is one of the first messages in September will be the confirmation of that. The second one will give you more color on beyond 2030, because, in fact, we are working now beyond 2030.

Speaker #4: And so yes, the increase of free cash generation that we announced which was more than 10 billion dollars, an increase of 10 billion, more than 10, will be confirmed.

Speaker #4: And I'm very so far, this is one of the first matches in September will be the confirmation of that. The second one will be to be more color on beyond 2030, because in fact, we are working now beyond 2030.

Speaker #4: So, the company has two objectives: to deliver all the 2030 additional free cash, and we will do it. I can't tell you because—and we'll demonstrate why—we are super confident, and you have some of the projects you mentioned.

Patrick Pouyanné: The company has two objectives, to deliver all the 2030 additional free cash, and we will do it, I can tell you, and we'll demonstrate why we are super confident, and you have some of the projects you mentioned. Working as well to continue the story because the story of TotalEnergies group does not stop in 2030.

Speaker #4: And then working as well to continue the story, because the story of TotalEnergies Group does not stop in 2030.

Speaker #1: The next question is from Neshkui at Barclays.

Operator 2: The next question is from Nash Kui, Barclays.

Operator: The next question is from Nash Kui, Barclays.

Speaker #5: Hey, good afternoon. Thanks for taking my questions. Two please. The first one is on the Middle East. Patrick, we watched some of your recent interviews with French media.

Nash Kui: Hey, good afternoon. Thanks for taking my questions. Two, please. The first one is on the Middle East. Patrick, we watched some of your recent interviews with French media. I think you talk a lot about the importance of building more export pipelines in the UAE as well as other countries. I wonder if you could elaborate your thinking around the Middle East situation and Total's longer term strategy in the area, please. The second question is on power segment. You have built a successful power business, and you achieved one of the best quarters, as you mentioned earlier. Strategically, I wonder what's your next ambition for this business? Thank you.

Naish Cui: Hey, good afternoon. Thanks for taking my questions. Two, please. The first one is on the Middle East. Patrick, we watched some of your recent interviews with French media. I think you talk a lot about the importance of building more export pipelines in the UAE as well as other countries. I wonder if you could elaborate your thinking around the Middle East situation and Total's longer term strategy in the area, please. The second question is on power segment. You have built a successful power business, and you achieved one of the best quarters, as you mentioned earlier. Strategically, I wonder what's your next ambition for this business? Thank you.

Speaker #5: I think you talk a lot about the importance of building more export pipelines in the UAE as well as other countries. I wonder if you could elaborate your thinking around the Middle East situation, and tell us about your longer-term strategy in the area, please.

Speaker #5: And then the second question is on the Power segment. You have built a successful Power business, and you achieved one of the best quarters, as you mentioned earlier.

Speaker #5: Strategically, I wonder, what's your next ambition for this business? Thank you.

Speaker #4: Okay. On the Middle East, it's quite obvious to me. You know, we are very well positioned in Abu Dhabi, for example, and we just announced two very big projects, by the way.

Patrick Pouyanné: Okay. On the Middle East, it's quite obvious to me. We are very well positioned in Abu Dhabi, for example, and we just announced two very big projects, by the way. Maybe despite this war, we have been quite active in Abu Dhabi to reinforce the whole partnership and position of TotalEnergies together with ADNOC or XRG or Masdar. We have announced a joint with Masdar and all these renewable business in Asia. We have announced the Bab Gas Cap concession, which was an old dream for many people in the company to have access to the Bab Gas Cap. It's done. We go further. By the way, it's interesting to know that when in 2015 we signed the Bab concession onshore, some people were skeptical.

Speaker #4: Despite maybe this war, we have been quite active in Abu Dhabi to reinforce the world partnership and position of TotalEnergies together with ADNOC or XRG or Mazda, you know, we have announced a G with Mazda in all these renewable business in Asia.

Speaker #4: We have announced the Babgas Cap concession, which was an old dream for many people in the company—to have access to the Babgas Cap.

Speaker #4: So it's done. We've all partnered. By the way, it's interesting to know that when in 2015 we signed the Bab concession onshore, some people were skeptical.

Speaker #4: 10 years after, we delivered the additional value. And it's because we were in the place together with our partners that we managed to go along with ADNOC.

Patrick Pouyanné: 10 years after, we deliver the additional value, and it's because we were in the place together with our partners that we managed to go along with ADNOC. Thank you, by the way, to the trust that the Emirati authorities have given into the existing consortium. We have also announced the Umm Shaif Gas Cap. We have FID, I would say yesterday, this week in fact. We have FID together with ADNOC, and we have a 20% share. The Umm Shaif Gas Cap, which is also, by the way, not only gas, it's also liquids. All these Gas Cap, by the way, are gas projects, of course, but there are also quite good condensate projects. It's a liquid. When you need liquids, you need to have an outlet.

Speaker #4: And thank you, by the way, to the trust that the Emirati authorities have given into the existing consortium. And we have also announced the Umsha, if you guys have cap, we have FID, I would say, yesterday, this week, in fact, we have FID together with ADNOC and we have a 20% share, the Umsha gas cap, which is also, by the way, not only gas, it's also liquids.

Speaker #4: All these gas caps, by the way, are gas projects, of course, but there are also quite good condensate projects. So it's liquids. Then in liquids, you need to have an outlet, you know?

Speaker #4: And so it's clear to me and Abu Dhabi has been very active and ADNOC has been very active and very reacting on we need to double the pipeline to Fujairah.

Patrick Pouyanné: It's clear to me, and Abu Dhabi has been very active, ADNOC has been very active, very reacting on we need to double the pipeline to Fujairah in order not only to accommodate future growth, but also to connect the offshore production. I think ADNOC is offering to partners to look at the projects, and we definitely are looking to that very seriously. That's one part. The other part of interest for us is Iraq, because we have some production in Iraq. Iraq today, we have only one way to export. Almost not one way, I'm exaggerating, but fundamentally it's Basra, so it's in the Gulf. Being able to contribute and to see. There are some projects which are being announced and being studied from Iraq to Syria, and TotalEnergies is keen to join the projects if possible, or to develop some.

Speaker #4: In not only to accommodate future growth, but also to connect the offshore production. I think the ADNOC is offering to partners to look at the projects and we definitely will, we are looking to that very seriously.

Speaker #4: So that's one part. The other part of interest for us is Iraq, because we have some production in Iraq. Iraq today, we have only one way to export, almost not on one way.

Speaker #4: I'm exaggerating, but fundamentally the Gulf. So being able to contribute and to see there are some projects which are being announced and being studied, from Iraq to Syria, and TotalEnergies is keen to join the projects if possible or to develop some.

Speaker #4: So I think it's obvious to me that we cannot, if we want tomorrow to come back to you and to say we want to continue to invest because it's cheap oil, which is true, and there is a lot of oil, we need to diversify.

Patrick Pouyanné: I think it's obvious to me that we cannot, if we want tomorrow to come back to you and to say we want to continue to invest because it's cheap oil, which is true, and there is a lot of oil, we need to diversify our exit route. Otherwise, we would not do a proper business case. That's why I'm clear, and I think, by the way, all the public countries themselves. Even, I think, if the conflicts were coming to an end quickly, we must absolutely keep that in mind and pursue the effort to have alternative routes for this oil. Integrated Power, the next ambition is to reach the 2030 target. It's not yet done. This year, we'll reach 60 TWh. We will reach more than 100 TWh.

Speaker #4: Or exit route. Otherwise, we will not do a proper business case. So that's why we are, I'm clear. And I think, by the way, all the—for the countries themselves.

Speaker #4: So I think it's, and even—I think if the conflicts were coming to an end quickly, we must absolutely keep that in mind and pursue the effort to have alternative routes for this oil.

Speaker #4: Integrated Power, but the next ambition is to reach the 2030 targets. You know, it's not yet done. Today, this year, we will reach 60 terawatt-hours.

Speaker #4: We will reach 100, more than 100 terawatt-hours. I think 100 terawatt-hours is probably the low assumption for production by 2030. More importantly, we want to generate net cash flow from this business.

Patrick Pouyanné: I think the 100 TWh is probably the low assumption for production by 2030. More importantly, we want to generate a net cash flow from this business. We said next year it will be net cash flow positive. This year, it might be, but I would like to do it in a normal CapEx environment. We want to join not only more than zero, but I would say in our famous free cash flow, more than EUR 10 billion free cash flow target by 2030. There was EUR 2 billion coming from Integrated Power. The target is to deliver these EUR 2 billion, and then beyond 2030, there are different options. Of course, we might continue to grow the business. The question is at which pace, in fact, and that will depend as well to opportunities.

Speaker #4: We said next year it will be net cash flow positive. This year it might be, but I will do, I would like to do it in a normal capex environment.

Speaker #4: And we want to join not only more than zero, but I would say in our famous free cash flow 10, more than 10 billion dollar free cash flow target by 2030.

Speaker #4: There was $2 billion coming from Integrated Power. So the target is to deliver these $2 billion, and then beyond 2030, there are different options. But of course, you know, we might see continued growth of the business.

Speaker #4: The question is at which pace, in fact, and that will depend as well on opportunities. But I think, on this topic, the Board is very keen to really see the capacity of the company to deliver.

Patrick Pouyanné: I think on this topic, the board is very keen to really see the capacity of the company to deliver on our targets rather than planning big ambitions. Then it's not a matter, I would say, of growth, it's a matter of value as well for the board. I think for all our investors, and you have been supportive, not always, but today more supportive than before, by the way, to us to invest. I think we are right, because one of the lessons of the crisis, as you can observe in many countries, the new world is electrification. It's not green, by the way, it's electricity, electrification, domestic resource. It's also supported, of course, by all the data centers and AI growth.

Speaker #4: All the targets rather than planning big ambitions and then it's not a matter, I would say, of growth. It's a matter of value as well for the board.

Speaker #4: And I think for all our investors, you have been supportive not always, but today more supportive than before, by the way, to us to invest.

Speaker #4: I think we are right, because one of the lessons of the crisis, as you can observe in many countries, is that the new world is electrification.

Speaker #4: It's not green, by the way. It's electricity—electrification, domestic resource. So we are, and it's also supported, of course, by all the data centers and AI growth.

Speaker #4: And we are right to be and to continue to invest into this energy which is a good complement to what we do in particular on oil and gas.

Patrick Pouyanné: We are right to be and to continue to invest into this energy, which is a good complement to what we do, in particular on oil and gas, electricity, and the gas to power connection is obvious. The ambition to continue to develop it. In some geographies, just to, again, to frame completely, where we can develop the integrated model, where gas, renewables, customers, trading is possible. That means some few major European countries, the US, that will be the core, I would say, of our investments. If you add Brazil and India, I think you have the description. We are, in fact, today, the next ambition to be stronger in some markets where we can deliver the integration and the profitability.

Speaker #4: Electricity and the gas-to-power connection is obvious, so that's the ambition—to continue to develop it. In some geographies, just again to frame it completely, we can develop the integrated model where gas, renewables, customers, and trading is possible.

Speaker #4: That means some few major European countries, the US—that will be the core, I would say, of our investments. If you add Brazil and India, I think you have the description.

Speaker #4: So we are, in fact, today the next ambition to be stronger in some markets where we can deliver the integration and the profitability.

Speaker #1: Very helpful. Thanks, Patrick.

Nash Kui: Very helpful. Thanks, Patrick.

Naish Cui: Very helpful. Thanks, Patrick.

Speaker #2: The next question is from Kim Fustia, HSBC.

Operator 2: The next question is from Kim Fustier, HSBC.

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

Speaker #5: Hi, good afternoon. Thanks for taking my questions. I wanted to go back to the Middle East. The production impact came in below your original guidance, thanks to the surprisingly fast ramp-ups in the UAE in June, and maybe in Iraq as well.

Kim Fustier: Hi. Good afternoon. Thanks for taking my questions. I want to go back to the Middle East. The production impact came in below your original guidance, thanks to the surprisingly fast ramp-ups in the UAE in June, and maybe in Iraq as well. Now, with tensions rising again in the past couple of weeks, could that progress reverse? In other words, if the situation doesn't change from here, how soon could we see production shut-ins once again across the UAE and Iraq? Then just staying with Iraq for a bit, just on the GGIP project. I think that's what Ratawi Phase I was supposed to be starting up sometime this year. Could you give us an update on this project?

Speaker #5: Now, with tensions rising again in the past couple of weeks, could that progress reverse? So, in other words, if the situation doesn't change from here, how soon could we see production shut-ins once again across the UAE and Iraq?

Speaker #5: And then just staying with Iraq for a bit, just on the GGIP project. I think that Motawi Phase One was supposed to be starting up sometime this year.

Speaker #5: Could you give us an update on this project? And obviously, does the renewed regional escalation pose any risks to the timing of the oil ramp-up, but also the other parts of that project, including the associated gas and the seawater project?

Kim Fustier: Obviously, does the renewed regional escalation pose any risk to the timing of the oil ramp-up, but also the other parts of that project, including the associated gas and the seawater project? Thank you.

Speaker #5: Thank you.

Speaker #4: Okay. Thank you. So I mentioned that I gave you some information in my opening comments to tell you that I would say beginning of July, the production, I would say, was in July, I would say, until July 8th, in fact, until the blockade came back.

Patrick Pouyanné: Okay. Thank you. I mentioned that I gave you some information in my opening comments to tell you. I would say beginning of July, the production was in July. Until July 8, in fact, until the blockade came back, the production was going up, and the impact on our production was even around 5% only. The global production from the Middle East, if you consider that our base was around 650,000 barrels per day, was by that time 550,000 barrels per day because there was an increase in many assets, in particular, of course, in the Abu Dhabi assets were almost back to normal production, which demonstrate, by the way, that I remember the questions that I had during the month before the MoU. It is quick to go back to the normal level. Yes, it is very quick.

Speaker #4: The production was going up, and the impact on our production was even around 5% only. That means that the global production from the Middle East, if you consider that our base was around 650,000 barrels per day, was by that time 550.

Speaker #4: And 550,000 barrels per day, because there was an increase in many assets. In particular, of course, the Abu Dhabi assets were all almost back to normal production, which demonstrates, by the way, that I remember the questions that I had during the months before the MOU: is it quick to go back to the normal level?

Speaker #4: Yes, it's very quick. Wells in the Middle East are very easy to reopen and to produce. So Abu Dhabi was back. I would say even Qatar was not fully back, in fact, on the LNG side because there was a sort of ramping-up cautiousness on this one.

Patrick Pouyanné: The wells in the Middle East are very easy to reopen and to produce. Abu Dhabi was back. I would say, even Qatar was not fully back, in fact, on the LNG side because there was a sort of ramping up cautiousness on this one. Iraq, even Ratawi, was back to half of the production. Iraqi part was a little more, I would say. We are minimizing, and we are ramping up quickly to come back to a normal level. Since July 8, in fact, because of the situation, when I was looking to the situation beginning of this week, again, the impact is more around 8% to 9% I mentioned during my opening speech because, of course, we cannot maintain such production if we cannot off take. It is not a matter of wells, it is a matter of off take.

Speaker #4: And Iraq, even Motawi, was back to, I would say, half of the production. So the Iraqi part was a little more, I would say, but we were minimizing, and we are ramping up quickly to come back to a normal level.

Speaker #4: Since July 8th, in fact, because of the situation, when I was looking at the situation at the beginning of this week, again, the impact is more around the 8 to 9% I mentioned during my opening speech because, of course, we cannot maintain such production if we cannot off-take.

Speaker #4: It's not a matter of wells; it's a matter of off-take. And because, again, when you produce at maximum, your tanks are full, and then your system—it's also logistics which are constraining the production.

Patrick Pouyanné: Because, again, when you produce at maximum, your tanks are full. It is all the logistics which are constraining the production. I would say that, of course. Again, by the way, of course, the LNG plant, Qatargas 2 in Qatar, which was ramping up, has been shut down again. You have some impacts. Today, as I told you, that is why to guess today, I would say, to be clear, the guidance I will give you, if we were like in Q2, we could imagine the production could be with an impact of 10%, but the off take could be unfortunately higher. Back to our initial guidance, when we gave you 15%, it was, in fact, in terms of physical off take, it was then 15%, again, during Q2. Q1 could be the same.

Speaker #4: So I would say that's, of course, and again, by the way, of course, the LNG plant of Qatargas 2 in Qatar, which was ramping up, has been shut down again.

Speaker #4: So you have some impacts and today, as I told you, that's why to guess today, I would say to be clear, the guidance I will give you, if we were like in, we were in the second quarter, we could imagine the production could be with an impact of 10%, but the off-take could be unfortunately higher and back to our initial guidance when we gave you 15%, it was in fact in terms of physical off-take, it was been 15% during the second quarter, third quarter could be the same.

Speaker #4: But again, the lesson is, the good news is that if the Strait of Hormuz is open again, then we'll be able to ramp up quickly. And then, of course, it is a condition to bring in tankers and to off-take the production.

Patrick Pouyanné: Again, the lesson is, the good news is that if the Strait of Hormuz is open back again, we will be able to ramp up quickly. Of course, it is a condition to bring tankers and to off take the production. All that is going together. That is what we face today. During the few weeks of opening, we managed to get all our tankers out. We managed to have some tankers in and out, by the way, in order to load. I think we managed to load three tankers during that period. Again, now we are back to nil because it is not possible. Let's observe. The second question, Ratawi. Ratawi, I think they are a different story. The first phase that we are planning to start up, we were expecting H1. Of course, we are delaying because there have been some impact.

Speaker #4: So all that is going together, that's what we face today. And we had some, during the few weeks of opening, we managed to get all our tankers out.

Speaker #4: We managed to have some tankers in and out, by the way, in order to load. I think we managed to load three tankers during that period.

Speaker #4: But again, now we are back to nil, because it's not possible. So, let's observe. The second question, Motawi, Motawi, I think there are different stories.

Speaker #4: There are the first phase that we are planning to start up. We were expecting the first half, of course, we are delaying because there have been some impacts as well.

Patrick Pouyanné: Ratawi cannot produce fully today, and it has been some impact because some equipment, et cetera, to quote. Today we are, I would say, targeting end of Q3. September will be possible. Honestly, we don't have some events under control. The other projects are progressing. All the projects have been launched, and all the contracts have been awarded. We have people on the ground for the seawater project, for the associated gas project, for the second phase of Ratawi. We are working as well, and we have good news in terms of productivity of the wells, which seems pretty good that we have even the first phase one day.

Speaker #4: Motawi cannot produce fully today, and there has been some impact because some equipment, etc., had to close. So today, we are, I would say, targeting the end of the third quarter.

Speaker #4: So September will be possible, honestly, we don't have some events under control. And then the other projects are progressing. Yeah. All the projects have been launched and all the contracts have been awarded.

Speaker #4: We have people on the ground for the seawater project, for the associated gas project, for the second phase of Motawi. By the way, we are working as well, and we have good news in terms of the productivity of the wells, which I think quickly could mean we have even the third phase one day.

Speaker #4: But all that is just being impacted, I would say, in terms of execution, because a lot of equipment—in fact, one of the reasons—because the Strait of Hormuz level is both about crude oil transit and products, refined product transit, but there were also impacts on equipment, either one way or the other.

Patrick Pouyanné: All that is just being impacted, I would say, in terms of execution, because a lot of equipments. In fact, because Strait of Hormuz, everybody spoke about crude oil transit and products refined, product transit, but there was also an impact on equipments, either one way or the other way. We have transported a lot of equipments by road, but for the larger ones, it's not easy to do, and so even it's not possible. That's the situation. We are dedicating the projects with some impacts. Today, it's difficult to give you in terms of. Of course, I could just tell you it's postponed by 3 months, which I just said. Maybe we need to reassess the situation where we'll be back to a normal situation in the Gulf region.

Speaker #4: And we have transported a lot of equipment by road for the larger ones. It's not easy to do as well, even if they're not possible.

Speaker #4: So that's the situation. So we are dedicated to the projects with some impacts and today it's difficult to give you in terms of if, of course, I could just tell you it's postponed by three months, which I just said, maybe we need to reassess the situation where we'll be back to a normal situation in the Gulf region.

Speaker #5: Thank you. The next question is from Henri Patricko, UBS. Mr. Patricko, we cannot hear you. Maybe your line is on mute. The next question is from Jason Gableman, TD Cowen.

Kim Fustier: Thank you.

Patrick Pouyanné: The next question is from Henri Patricot, UBS. Mr. Patricot, we cannot hear you. Maybe line is on mute. The next question is from Jason Gabelman, TD Cowen.

Operator: The next question is from Henri Patricot, UBS. Mr. Patricot, we cannot hear you. Maybe line is on mute. The next question is from Jason Gabelman, TD Cowen.

Speaker #4: Hey, good afternoon. Thanks for taking my questions. I want to ask the first one. On the potential for windfall taxes and given the recent backup in commodity prices, I'm wondering, Patrick, if your conversations with governments indicate any appetite to reinstitute windfall taxes?

Jason Gabelman: Good afternoon. Thanks for taking my questions. I wanted to ask the first one on the potential for windfall taxes. Given the recent backup in commodity prices, I'm wondering, Patrick, if your conversations with governments indicate any appetite to reinstitute windfall taxes.

Speaker #2: Honestly, until now, in fact, you know, in fact, most of the governments have taken some measures in between 2010 and 2015, which are still there in many of our countries.

Patrick Pouyanné: Honestly, until now. In fact, most of the governments have taken some measures between 2010 and 2015, which are still there in many of our countries. We had one impact limited, an impact now in Brazil, where we have instated an export tax for 4 months, and there are today rumors that they could extend it, which has been declared as not constitutional, but there is a legal fight around this export tax in Brazil. The UK scheme has been increased recent years, they cannot take more. Norwegian is okay. Honestly, in most of our PSCs, the reality is that there are some mechanisms which you can observe when you look to the average tax rate of TotalEnergies between an environment at $60 or $50, where we are more or less an average of 40%, and an environment at $90 or $80, we are more around 45%, 50%.

Speaker #2: We had one impact limited an impact, no, on in Brazil, where they have been stated an export tax. For four months, and they are today rumors that they could extend it, which has been declared as not constitutional, but it seems to be there is a legal fight around this export tax in Brazil.

Speaker #2: The UK scheme, you know, has been increased in recent years, so they cannot take more. Norway is okay. And honestly, in most of our PSCs, the reality is that there are some mechanisms which you can observe when you look at the average tax rate of TotalEnergies between an environment at $60 or $50 where we are more or less at an average of 40%, and an environment at $90 or $80, we are more around 45% to 50%.

Speaker #2: There are some mechanisms within the PSC. In fact, when the price is going up, the governments are taking a bigger stake, and in fact, it's normal. Because, in fact, the way we negotiate ourselves, we try to protect the low cycle by giving up a little more on the high cycle.

Patrick Pouyanné: There are some mechanisms within the PSC. In fact, when the price is going up, the governments are taking a bigger stake. In fact, it's normal because, in fact, the way we negotiate ourselves, we try to protect the low cycle by giving up a little more on the high cycle. That's a balance that we try to institute, to propose to the government. This mechanism exists, we didn't face this type of conversation, to be honest, since the beginning of the crisis. We are not there, and that's what I can tell you. Except Brazil, I don't have today in my head any other situation where we have some discussion. But again, because the mechanism exists already in many of our PSC.

Speaker #2: That's a balance that we try to institute, to propose to the government. So these mechanisms exist, and so we didn't face this type of conversation.

Speaker #2: To be honest, since the beginning of the crisis, we are not there. And that's what I can tell you. So, except Brazil, I don't have today in my head any other situation where we have something in discussion.

Speaker #2: But again, because the mechanism already exists in many of our PSCs.

Speaker #4: Great, thanks for that. My follow-up is, I wanted to go back to the Yamal project for a minute and just understand—because you have the interest in the liquefaction facility, and then you're separately lifting volumes as well.

Jason Gabelman: Great. Thanks for that. My follow-up is, I wanted to go back to the Yamal project for a minute and just understand, because you have kind of the interest in the liquefaction facility, then you're separately lifting volumes as well. I'm trying to understand kind of what the cash flow split is between those two parts of the business, also if you've been able to actually get cash distributions out of the Yamal facility itself over the past few years.

Speaker #4: And I'm trying to understand kind of what the cash flow split is between those two parts of the business. And also, if you've been able to actually get cash distributions out of the Yamal facility itself over the past few years.

Speaker #2: In fact, you have perfectly true. There are two different activities. One is the Russian activity, Russian in Russia, which is the Yamal liquefaction plant where we are a shareholder for 20%.

Patrick Pouyanné: In fact, you are perfectly true. There are two different activities. One is a Russian activity, Russian in Russia, which is a Yamal liquefaction plant, where we are a shareholder for 20%. Some cash flows has been distributed. It's not an easy way to, because then we respect sanctions. The question is it distributed in Russia, and when does it flow to Europe? Again, the sanctions in Europe have limited the number of capacity to transfer from Russia to Europe. Some cash has come back to TotalEnergies, not the full of that. This part is not, I can tell you. In fact, in the way we plan, we don't consider that. We just are cautious. It's not coming on a regular basis. In fact, it's some time to time, we have some opening, but that's not a regular basis.

Speaker #2: The cash flows—some cash flows have been distributed. It's not an easy way to do it because then we must respect sanctions. So the question is, is it distributed in Russia?

Speaker #2: When does it flow to Europe? Because again, the sanctions in Europe have limited the number of capacity to transfer from Russia to Europe. Some cash has been has come back to total energies.

Speaker #2: Not the full of that. So this part is not I can tell you it's not in fact, in the way we plan, we don't consider that.

Speaker #2: We just are cautious. It's not coming on a regular basis. So in fact, it's some time to time we have some opening, but that's not a regular basis.

Speaker #2: And it's not so some cash is somewhere I would say in Russia expect waiting for this. Then we have the other part, which is the lifting European lifting.

Patrick Pouyanné: Some cash is somewhere, I would say, in Russia, expect waiting for us. We have the other part, which is the European lifting. Yes, this one is out of Russia. It's a business where it's a UK and Swiss entity, or UK entity, I think, which is dealing with Russia, with Russian contracts, on which the cash is out. This one, of course, we have a direct access to the cash. The magnitude of this business is around, I would say, an average of EUR 400 million. Again, it's going up and down according to, depending on the different, because the contracts are linked to the Brent, so it depends on the assumptions that you will take on the credit Brent. Let's say EUR 300, EUR 400 million a year. That's the potential. It's a contract as part of the portfolio.

Speaker #2: Yes, there's this one. It's out of Russia. It's a business where it's a UK and Swiss entity—or UK entity, I think—which is dealing with Russia, with Russian contracts.

Speaker #2: On which, so the cash is out, in fact. So this one, of course, we have direct access to the cash. The magnitude of this business is around, I would say, an average of $400 million.

Speaker #2: But again, it's going up and down according to depending on the different because it's the contracts are linked to the brand. So it depends on the assumption that you will take on the current brand.

Speaker #2: But they say $300, $400 million a year. That's the potential. So it's a contract, it's part of the portfolio. It's not a major—it's not a major situation for TotalEnergies.

Patrick Pouyanné: It's not a major situation for TotalEnergies.

Speaker #4: Great. Thanks for the answers.

Jason Gabelman: Great. Thanks for the answers.

Speaker #5: The next question is from Harry Patricko, UBS.

Operator 2: The next question is from Henri Patricot, UBS.

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

Speaker #4: Yes. Hello. Thank you for the update to the institute. One question, coming back to capital location. Last quarter, you mentioned that you were evaluating options to accelerate short cycle investments in upstream.

Henri Patricot: Yes. Hello, thank you for the update. Just one question, coming back to capital allocation. Last quarter, you mentioned that you were evaluating options to accelerate short cycle investments in upstream. Where are you on these options? It sounded like earlier that you might typically CapEx and change. Are they just not being considered anymore? Thank you.

Speaker #4: Where are you on these options? I mean, it sounded like you might typically capex and change. So, are they just not being considered anymore?

Speaker #4: Thank you.

Speaker #2: No, no. We have, of course, different views that worked on it. There have been some proposals. We have approved a few, I think, $200–300 million this year.

Patrick Pouyanné: No, we have, of course, the different subsidiaries have worked on it. There have been some proposal. We have approved some few, I think EUR 300 million this year. The guidance of 15, maybe it could be at the end 15.2, which I consider is part of the global guidance. That's not a real impact. Yes, this might have for next year, there is a little more because, of course, these type of actions are not only for immediate actions, so I would say you have probably EUR 500 million of capital allocation acceleration, which would come next year. Again, it will not be the global guidance we gave you last year, which was, I think, around EUR 15 to 17 billion per year of CapEx. We said, 14, 16. We'll stay around in the EUR 15 to 16 billion, I would say, range.

Speaker #2: So, the guidance of 15—maybe it could be, at the end, 15.2—but I consider it's part of the global guidance. You know, it's not a... that's not a real impact.

Speaker #2: And yes, this might have for next year, there is a little more because, of course, this type of actions are not only for immediate actions, more I would say you have probably 500 million dollars of capital allocation acceleration, which could come next year.

Speaker #2: But again, it does not fit it will not be the global guidance we gave you last year, which was, I think, around 15 to 17 billion dollars per year of capex.

Speaker #2: Then we said $14, $16 will stay around in the $15–16 billion, I would say, range. So yes, we have taken some actions.

Patrick Pouyanné: Yes, we have taken some actions, that will impact a little more 2027 than 2026.

Speaker #2: And but we'll impact a little more 20s, 27 by 26.

Speaker #4: Thank you.

Henri Patricot: Thank you.

Speaker #5: The next question is from Bertrand Hode. Kepler Chevreux.

Operator 2: The next question is from Bertrand Hodee, Kepler Cheuvreux.

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

Speaker #4: Yes, thank you for taking my question. I wanted to come back and try to quantify the underperformance of the LNG trading in Q2.

Bertrand Hodee: Yes. Thank you for taking my question. Wanted to come back and to try to quantify the underperformance of the LNG trading in Q2. Integrated LNG net income was down EUR 500 million Q2, while at the same time, contribution from equity affiliate, which is my understanding, mainly liquefaction, was up EUR 300 million. That puts a Q and Q discrepancy at group level for Integrated LNG, excluding affiliate, at around EUR 800 million. This is what we should understand as a swing in the trading performance?

Speaker #4: Integrating LNG net income was down 500 million dollars Q2, while at the same time, contribution from equity affiliate, which is, my understanding, mainly liquefaction, was up 300 million dollars.

Speaker #4: That puts the Q-on-Q discrepancy at group level for Integrated LNG, excluding affiliates, at around $800 million. This is what we should understand as a swing in the trading performance.

Speaker #2: You are very good, Bertrand. We can hide nothing to you. You know, we are very transparent. In fact, we mentioned to you that there was an overperformance last quarter of around 500 million dollars, and your 800 million dollars is right.

Patrick Pouyanné: You are very good, Bertrand. We can add nothing to you. We are very transparent. In fact, we mentioned to you that there was an underperformance last quarter of around EUR 500 million, and your EUR 800 million is that. You have an underperformance reversed not only from EUR 500 but to less than EUR 300 compared to a normal situation. You merit a certain distinction.

Speaker #2: So you have an underperformance reversed not only from 500, but to less than 300 compared to a normal situation. So you merit a certain distinction.

Bertrand Hodee: The second question, probably on your comment that those long position that did not work out in Q2 was now being in positive territory. Is that a hint that we could be headed for another performance-

Speaker #4: And the second question probably on the on your comment that those long position that did not work out in Q2 was now being in positive territory.

Speaker #4: Is that a hint that we could be headed for an overperformance? Of LNG trading in Q2 by Q3 by the same magnitude?

Patrick Pouyanné: Exactly

Bertrand Hodee: of LNG trading in Q2?

Patrick Pouyanné: Yeah.

Bertrand Hodee: By Q3, by the same magnitude?

Speaker #2: Exactly. But maybe we are only in July. So maybe it could be larger. I don't know. Okay. Okay. No, to be clear, yes, it could be in the same magnitude.

Patrick Pouyanné: Exactly. Maybe we are only in July.

Jean-Pierre Sbraire: We are in July.

Patrick Pouyanné: Maybe it could be larger, I don't know. Okay. No, be clear. Yes, it could be in the same magnitude. Be clear. These markets, when they are volatile, they are volatile. When you take EUR 5 per million BTU in 20 or 30 days, 20 days, I can tell you these type of positions are making ben-ben. The question will be not only what the results are not finished on 22 July, but on 30 September. We'll come back. It's possible, yes. We might come back to you with the good news of the same magnitude.

Speaker #2: Be clear. Because this market, when they are volatile, they are volatile. You know, when you take 5 dollars per million BTU in 20 or 30 days, 20 days, I can tell you, this type of position are making then then the question will be not only what the results are not finished on July 22nd, but on September 30th.

Speaker #2: So we'll come back, but it's possible, yes, but we might come back to you with the good news of the same magnitude.

Speaker #4: I hope so. Thank you.

Bertrand Hodee: I hope so. Thank you.

Speaker #2: Thank you for your support.

Patrick Pouyanné: Thank you for your support.

Speaker #5: The next question is from Fergus Neve Rothschild and Co Redburn.

Operator 2: The next question is from Fergus Nagle, Rothschild & Co Redburn.

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

Speaker #6: Yeah. Hi there. Thank you very much for taking my questions. Just on the LNG growth price line, it was positive to see the ECA LNG project start up earlier this month.

Fergus Nagle: Yeah. Hi there. Thank you very much for taking my questions. Just on the LNG growth pipeline, it was positive to see the ECA LNG project start up earlier this month. Could you provide a quick update of where the FID for Papua LNG stands today, and also how the Mozambique project is progressing? Secondly, just on the refining environment, I was wondering if you could comment at all on how your margin has looked so far in July. Thanks.

Fergus Neve: Yeah. Hi there. Thank you very much for taking my questions. Just on the LNG growth pipeline, it was positive to see the ECA LNG project start up earlier this month. Could you provide a quick update of where the FID for Papua LNG stands today, and also how the Mozambique project is progressing? Secondly, just on the refining environment, I was wondering if you could comment at all on how your margin has looked so far in July. Thanks.

Speaker #6: Could you provide a quick update on where the FRD for Papua LNG stands today and also how the Mozambique project is progressing? And then secondly, just on the refining environment, I was wondering if you could comment at all on how your margin has looked so far in July.

Speaker #6: Thanks.

Speaker #2: In July, it just looks very well. I can tell you the average margin on the last 30 days were at 31 dollars per barrel.

Patrick Pouyanné: In July, it looks very well. I can tell you the average margin on the last 30 days were at $31 a barrel. It looks very well, and I think July is probably around $35 a barrel right now. It reached an historic record for me, which were more than 40, 44, I've seen one day. Today it's a little backtracking because, again, the crude oil is going up. In fact, I have one observation to make you since the Strait of Hormuz was again blocked since 9 July. When you make the sum of crude oil and refining margin, we are almost at $130 a year, day after day. I don't know if there is a tweak, but probably. That's what I mentioned that in my opening comments.

Speaker #2: So July, so it looked very well. And I think July is probably around $35 per barrel, when— and it's rich in historic records for me, which were more than $40, $44, I've seen one day.

Speaker #2: So today it's a little backtracking because again, the crude oil is going up. In fact, I have one observation to make you since last since the Strait of Hormuz was again blocked since July 9.

Speaker #2: When you make the sum of crude oil and refining margin, you are almost at 130 dollars day after day. I mean, I don't know if there is a trick, but probably.

Speaker #2: So that's what I mentioned in my opening comments. So, the second one—The first one, on Papua LNG, we are working all together, very closely with ExxonMobil, with Santos, with the government, of course.

Patrick Pouyanné: The second one, the first one on Papua LNG, we are working all together very closely with ExxonMobil, with Santos, with the government, of course. The government has just launched the last part of the procedures, the local hearings. The objective is to clearly to sanction all that before year-end, November, I think, is the target. We are aligning the interest of all the partner in the interest of the projects, and we have a studying how we can maximize synergies today between Papua, PNG, LNG, in order to deliver the most efficient project to the government. Again, in close cooperation with the government. I'm happy to see that the different stakeholders are all the same objective today and, okay, we need to put together some few.

Speaker #2: The government has just launched the last part of the procedures, the local hearings. The objective is to clearly to sanction all that before year end, November, I think, is a target.

Speaker #2: But we are aligning the interests of all the partners in the interest of the projects, and we have studying how we can maximize synergies today between Papua, PNG, LNG in order to deliver the most efficient project to the government.

Speaker #2: But again, in close cooperation with the government. So I'm happy to see that the different stakeholders all have the same objective today, and, okay, we need to put together a few.

Speaker #2: It's not an easy one, but I'm optimistic we could reach the sanction and we are all working for that. And we are very aligned on that.

Patrick Pouyanné: It's not an easy one, but I'm optimistic we could reach this sanction, and we are all working for that, and we are very aligned on that. On Mozambique LNG project, okay, it has restarted, as you know, since January, and today we are, in fact, increasing the mobilization of people on the ground. I think we are at 7,000 or 8,000 people. Project is progressing, let's be clear. We are facing some few difficulties because some of the equipments were, in fact, being built in Dubai and the different yards in the Middle East. We had to face some tough times to exit all this equipment. I think it's done now. The progress, so we are progressing. In fact, today, when we compare to the progress here, we are almost at 45% of completion.

Speaker #2: On the Mozambique LNG project, so okay, it has restarted, as you know, since January, and today we are in fact increasing the mobilization of people on the ground.

Speaker #2: I think we are at 7,000 or 8,000 people doing. So we are project is progressing. Let me be clear. We are facing some few difficulties because some of the equipments were in fact being built in Dubai and the different yards in the Middle East.

Speaker #2: So we had to face some tough times to exit to exit all these equipments. I think it's down now. So we put it as some but the progress of so we are progressing on and in fact today when we compare to the progress here, we are almost at 45% of completion.

Speaker #2: But we still have a lot of things to build on, to build on whatever in our 4G and offshore. So that's on its way, with the target being ‘29 for the first train, and we'll work on it.

Patrick Pouyanné: Next, we have still a lot of things to build on the, I would say, there in LNG and offshore. That's on its way with the target being 2029 for the first train, and we'll work on it.

Speaker #6: Brilliant. Thank you very much.

Operator 1: Brilliant. Thank you very much.

Fergus Neve: Brilliant. Thank you very much.

Speaker #5: The next question is from Jean-Luc Romain, CIC CIB.

Operator 2: The next question is from Jean-Luc Romain, CIC CIB.

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

Speaker #7: Thank you for taking my question. It relates to refining and your plan to introduce more green hydrogen in your system. Where are you with this and are there regulations in Europe which are not going fast enough to for you to progress on that?

Jean-Luc Romain: Thank you for taking my question. It relates to refining and your plan to introduce more green hydrogen in your system. Where are you with this, and are there regulations in Europe which are not going fast enough for you to progress on that?

Speaker #2: Yeah. The French one. No, but we are working on it. No, where are we? In fact, we have done the no, we have. Nice offers.

Patrick Pouyanné: Yeah, the French one. We are working on it. Where are we? In fact, we have nice offers. The good news of the quarter is that the German government has adopted its own regulation. Today we are very clear on the German part and positively passed. Leuna will be able to maximize the use of green hydrogen. That's the good news. There was bad news on the Netherlands part, which has been adopted, but not in the maximum part. I think the Zeeland refinery will be able to take 30%, more or less, of what we are planning to take. Again, if there is no fiscal support, we cannot do that.

Speaker #2: As you know, the good news of the quarter is that the German Parliament has adopted its own regulation. So today, we are very clear on the German part and on the positive part.

Speaker #2: So Lorena will be able to maximize the use of green hydrogen. So that's a good news. You know, there was a bad news on the Netherlands part, which has been adopted, but not in the maximum part.

Speaker #2: So, I think the refinery will be able to take 30% more or less of what we are planning to obtain. But again, if there is no fiscal support, we cannot do that.

Speaker #2: And then we are working today with the last two governments, which is the Belgian one, where the draft are not so positive. And the French ones where the draft are positive, but the problem, the French system is that you need to go to the parliament and to make fiscal reforms in the French parliament is not an easy task for the government.

Patrick Pouyanné: We are working today with the last two governments, which is a Belgian one, where the drafts are not so positive, and the French ones, where the drafts are positive, the problem with the French system is that you need to go to the parliament, to make fiscal reforms in the French parliament is not an easy task for the government. We are working on it, and I think we'd like to have the definitive scheme and not an interim one, to be honest, because, of course, if we commit for long-term contracts of 10, 15 years, we need to have a scheme which will give us some, I would say, certain level of comfort. It's a very technical matter, to be honest.

Speaker #2: But we are working on it, and I think we'd like to have the definitive scheme and not an interim one, to be honest, because, of course, if we commit to long-term contracts of 10 or 15 years, we need to have a scheme which will give us, I would say, a certain level of comfort.

Speaker #2: But we have some it's a very technical matters, to be honest. It's one of the most complex topic I know because to explain to a political leader the red free and what it is to make a green hydrogen in Europe getting some support, it's this one is tough, to be honest.

Patrick Pouyanné: It's one of the most complex topic I know, because to explain to a political leader the RED III and what it is to make a green hydrogen in Europe, getting some support, this one is tough, to be honest. We have some momentum, so we are working on that. Not only ourselves, by the way, in France, of course, we are working hand in hand with Air Liquide, which is also interested to get these regulations. Progressing, but still, again, for us to commit on long-term contracts, we need to have all these regulations being enacted. It's the beauty of Europe. You think you've done the work because there is a directive in Brussels, you take four years to implement it in each country.

Speaker #2: So but we get some we have some momentum. So we are working on that. And not only ourselves, by the way, in France, of course, we are working hand in hand with our liquid, which is also interested to get this regulations.

Speaker #2: So progressing but still, again, for us to commit on long-term contracts, we need to have all these regulations being enacted. You know, it's a beauty of Europe.

Speaker #2: You think you've done the work because there is a directive in Brussels and then you take four years to implement it in each country.

Speaker #2: And then, by the way, I'm afraid that I just discovered that there is a new directive, which could again come back to the definition of green hydrogen—the RED IV.

Patrick Pouyanné: By the way, where I'm afraid that I just discovered that there is a new directive which could, again, come back to the definition of green hydrogen, the RED IV, based on consultation. To be honest, when you read that, you begin to be afraid because it's a problem already is coming from regulation, so it could be difficult. Okay?

Speaker #2: There is some consultation. So, to be honest, when you read that, you begin to be afraid because it's probably all coming from regulation.

Speaker #2: So it could be difficult. Okay.

Speaker #7: Thank you very much.

Jean-Luc Romain: Thank you very much.

Speaker #5: And the last question is from Ben Selen Adobe HF.

Operator 2: The last question is from Ben Challum, Oddo BHF.

Operator: The last question is from Ben Challum, Oddo BHF.

Speaker #8: Hi, Patrick, and thank you for taking my question. In light of the recent escalation in the Middle East, has your view on geopolitical risk changed?

Ben Challum: Hi, Patrick, thank you for taking my question. In the light of the recent escalation in the Middle East, has your view on geopolitical risk changed? Which region do you see as offering the most attractive risk-adjusted investment opportunities of the coming years? How might this influence your future capital allocation priorities? I know it's maybe for the CMD, but I think it's important. Thank you.

Ben Salem: Hi, Patrick, thank you for taking my question. In the light of the recent escalation in the Middle East, has your view on geopolitical risk changed? Which region do you see as offering the most attractive risk-adjusted investment opportunities of the coming years? How might this influence your future capital allocation priorities? I know it's maybe for the CMD, but I think it's important. Thank you.

Speaker #8: Which region do you see as offering the most attractive risk-adjusted investment opportunities of the coming years? And how might this influence your future capital allocation priorities?

Speaker #8: I know it was made before the CMD, but I think it's important. Thank you.

Speaker #2: Yeah, thank you, Ahmed. But you know, we continue to consider the Middle East as an investable region. There is no doubt about it. It's a question, of course, and then at the end of the day, it's a question of risk and reward.

Patrick Pouyanné: Yeah, thank you, Ahmed. You know we continue to consider the Middle East as an investable region. There is no doubt about it. It's a question, of course, and then at the end of the day, it's a question of risk and reward. Maybe the reward will be to have a little higher. When I saw my US competitors rushing to Iraq during the last weekend, if I notice the number of MoU signed to develop hundreds of thousands of barrels, I don't know why these US companies suddenly would like to see lower geopolitical risk and ourselves, which have more, I would say, DNA in the region, would consider it as a higher one. We think it's a question of risk and reward. It's always policy.

Speaker #2: Maybe the reward will be a little higher, but when I saw my US competitors rushing to Iraq during the last weekend, and I noticed the number of MOUs signed to develop thousands—hundreds of thousands—of barrels, I don't know why these US companies suddenly would like to see lower geopolitical risk. And ourselves, who have more, I would say, DNA in the region, would consider it as a higher one.

Speaker #2: So we think it's a question of risk and reward. It's always policy. Again, it's also back to my comments about having alternative routes to export the oil to go to the market.

Patrick Pouyanné: Again, it's back also to my comments about, I think, alternative routes to export the oil to go to the market. Having said that, it's clear as well that the policy and strategy of TotalEnergies has been to diversify the portfolio, and that reinforce my strong belief diversification is of essence in this business. We have done it well, in Brazil, in Africa, in new countries in Africa. Of course, the US are also attractive to us, but we are building quite a big position in the US in terms of capital allocation through LNG and through Integrated Power. We are fine. I understand the question, at the end, when you make oil and gas, you go where you find it. If we discover oil and gas in Suriname and in Namibia, we are happy.

Speaker #2: So that having said that, it's clear as well that, you know, the policy and the strategy of TotalEnergies has been to diversify the portfolio and that reinforced my strong belief diversification is of essence in this business.

Speaker #2: We have done well in Brazil and in Africa, in new countries in Africa. Of course, the U.S. is also attractive to us. But we are building quite a big position in the U.S. in terms of capital allocation, through LNG and through integrated power.

Speaker #2: So, we are fine. And so, I understand the question, but at the end, you know, when you make oil and gas, you go where you find it.

Speaker #2: And if we discover oil and gas in Suriname and in Namibia, we are happy. And that's true that we don't find oil and gas in Europe, to answer to your questions.

Patrick Pouyanné: That's true that we don't find oil and gas in Europe, to answer to your questions. By the way, we don't have the right to look for it. That's where we are. For me, the answer to your question is fundamentally to maintain our strategy of diversification. This is what we will present you in September. I think the events that we have faced in the last four months have demonstrated that this is the right one, and we have been able, as an answer, to supply feedstock to Polymers or not to claim any force majeure for our LNG customers, contrary to some competitors, because we have a diversified source of supply of LNG, and from this perspective, building a position in Mozambique. Look to the countries we are developing in the last three years, Suriname, Malaysia, Namibia.

Speaker #2: And by the way, we don't have the right to look for it, so that's where we are. But for me, the answer to your question is fundamentally to maintain our strategy of diversification.

Speaker #2: And this is what we will present you in September. I think the events that we have faced in the last four months have demonstrated that this is the right one and we have been able as I answer to supply fit stock because or to not to claim any force majeure for our LNG for LNG customers contrary to some competitors because we have a diversification diversified source of supply of LNG.

Speaker #2: And from this perspective, building a position in Mozambique—but you know, look to the countries we have developed in the last three years: Suriname, Malaysia, Namibia. So, we are continuing to diversify our stakes, because that's the reality of our business.

Patrick Pouyanné: We are continuing to diversify our stakes because that's the reality of our business. It's not only in 2026 that we discover that. It has been the case for companies one or two years old, and I think it has been the case for long. That's what I would answer to your question.

Speaker #2: And it's not only in 2026, but we discover that, you know, it has been the case for companies one or two years old. And I think it has been the case for long.

Speaker #2: So, that's what I would answer to your question.

Speaker #5: Gentlemen, that was the last question. After the conference, back to you for any closing remarks.

Operator 2: Gentlemen, that was the last question. I turn the conference back to you for any closing remarks.

Operator: Gentlemen, that was the last question. I turn the conference back to you for any closing remarks.

Speaker #2: Yeah, thank you for your support. I remind all of you that we have capital market day in New York City on the 28th of September.

Patrick Pouyanné: Yeah. Thank you for your attendance today and for your support. I remind all of you that we have a Capital Markets Day in New York City on 28 September. I think it is a Monday, if I remember right. Monday, 28 September. Be all ready to attend the TotalEnergies Capital Markets Day. We have more news to come because we continue to work during summertime. Thank you for your attendance, and happy holidays to all of you.

Speaker #2: I think it is a Monday, if I remember right. So, Monday, 28th of September, be all ready to attend the TotalEnergies Capital Market Day.

Speaker #2: We have more news to come, because we continue to work during the summertime. So thank you for your attendance, and holidays to all of you.

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

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

Q2 2026 TotalEnergies SE Earnings Call

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