Q3 2026 TotalEnergies SE Earnings Call

October 29, 2026

Operator: Ladies and gentlemen, welcome to the TotalEnergies Q3 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: ahead.

Patrick Pouyanné: Hello, everybody. Good afternoon or good morning, wherever you are. It is the Q3 result, not the first one, just to begin. It is a live intervention, live speech. As Jean-Pierre will show you in a moment, TotalEnergies has demonstrated once again in this quarter its capacity to achieve an outstanding operational performance and to deliver a very strong set of results and cash flow, clearly reflecting the ability of the company to fully capture high prices. I would say all is green, not only the different market indicators, but also the operational performance, and I must praise all our teams around the world that delivered these results. I could add that all is green as well, not only for the Q3, but also for the first month of this Q4 and probably for the rest of the year.

Speaker #2: flow. Clearly reflecting the ability of the company to fully capture high prices. I would say all is green, not only the different market indicators but also the operational performance.

Speaker #2: I could add that all is green as well, not only for the third quarter but also for the first month of this fourth quarter.

Speaker #2: And probably for the rest of the year. Market conditions have been indeed very supportive. For all commodities that we are selling, the oil prices started the quarter at $80 per barrel.

Patrick Pouyanné: Market conditions have been indeed very supportive for all commodities that we are selling. The oil prices started the quarter at $80 per barrel, on the hopes of the lasting ceasefire, signed between the US and Iran, the MOU signed between the US, Iran, and finally rose again at levels above $100, $110 a barrel and the Dated Brent being today at $121 per barrel as a result of the broadening of the conflict through Bab el-Mandeb Strait of Saudi Arabia and reflecting the persistent volatility of the situation in the region. The petroleum product prices, diesel, gasoline, have increased in a larger and unprecedented way as a consequence of massive disruption to the refined products logistic chain. Triggered not only by the conflict in the Middle East, but also by the unavailability of some Russian refining capacities due to the efficiency of the Ukrainian attacks.

Speaker #2: On the ops of the last thing CS5, signed between the US and Iran, the MOU signed between the US and Iran, and finally rose again at levels above $100, $110 per barrel.

Speaker #2: And the dated brand being today at $121 per barrel. As a result of the broadening of the conflict to Pamel Mendez strait of Saudi Arabia, and reflecting the persistent volatility of the situation in the region.

Speaker #2: The petroleum product prices, diesel, gasoline have increased in a larger and unprecedented way. As a consequence of massive disruption to the refined product logistic chain, triggered not only by the conflict in the Middle East but also by the unavailability of some Russian refining capacities due to the efficiency of the Ukrainian attacks.

Patrick Pouyanné: Refining margins have reached historical records in Europe and in the rest of the world. Gas and energy prices in Europe and Asia started to rally this quarter as countries have started replenishing their inventories in view of winter consumption. This rally consequently pushed electricity prices up in some European country where gas reflects the marginal cost of production of electricity. Beyond these favorable market conditions, these strong sets of results highlights the strategic strengths of TotalEnergies, the integration and the geographical diversification of the company. I explained during our last CMD in New York that these two differentiating factors, together with our leading position being a low-cost producer, makes TotalEnergies best positioned to capture value from market disruptions. First, this quarter, we were able to fully leverage our integrated business model to capture margins. In the oil value chain, integration has never been so relevant.

Speaker #2: And so refining margins have reached historical records in Europe and in the rest of the world. Gas and energy prices in Europe and Asia started to rally this quarter as countries have started replenishing their inventories in view of winter consumption.

Speaker #2: This rally consequently pushed electricity prices up in some European countries where gas reflects a marginal cost of production of electricity. But beyond this favorable market conditions, this strong set of results highlights the strategic strength of TotalEnergies: the integration and the geographical diversification of the company.

Speaker #2: I explained during our last CMD in New York that this two differentiating factors together were leading position being a low-cost producer, make TotalEnergies best position to capture value from market disruptions.

Speaker #2: First, this quarter we were able to fully leverage our integrated business model to capture margins. In the all-value chain, integration has never been so relevant.

Patrick Pouyanné: We have been able to capture oil prices from our growing upstream activities, while taking full advantage of our midstream and trading capabilities to bring crude oil into our refineries and capture record high refining margins. This reflects highly valuable integration. The downstream have delivered the best quarter ever from an exceptional combination of record high margin and strong throughput increase as all our refineries are running up at full speed and SATORP is now back at nominal capacity since the end of Q3. We anticipate, of course, same level of refining treatment in Q4. In the gas and LNG value chain, our LNG and gas traders were able this quarter to capture benefits of our long position on gas, which is now proving to be a winning position as gas prices have been rising during Q1.

Speaker #2: We have been able to capture all prices from our growing upstream activities. We have while taking full advantage of our midstream and trading capabilities to bring crude into crude oil into our refineries.

Speaker #2: And capture record high refining margins this reflects highly valuable integration. The downstream have delivered the best quarter ever from an exceptional combination of record high margin and strong throughput increase as all our refineries are running up at full speed and SATOP is now back at nominal capacity since the end of the third quarter.

Speaker #2: And we anticipate, of course, same level of treatment refining treatment in the fourth quarter. In the gas and energy value chain, our energy and gas traders were able to this quarter to capture benefits of their long position on gas.

Speaker #2: Which is now proving to be a winning position as gas prices have been rallying during first quarter. This Europe with Europe attracting more energy volumes right now and the TTF currently at around or above $30 per million BTU.

Patrick Pouyanné: With Europe attracting more LNG volumes right now and the TTF currently at around or above $30 per million BTU, LNG is still going up and we anticipate strong results as well for gas trading in Q4, and not only for gas trading, for LNG trading more globally. Second, our geographic diversification allowed us to mitigate the impacts of the Middle East crisis on our productions. The impact of the crisis in the Middle East on TotalEnergies overall production was reduced to around 5% over the quarter on average, which was in the low range of the guidance provided last quarter. Still, the company was able to grow oil and gas production by more than 3% quarter-to-quarter, supported by the ramp-up of projects launched in 2025, located mainly outside the Middle East.

Speaker #2: Energy is still going up and we anticipate strong results as well for gas trading in Q4. And not only for gas trading, for LNG trading more globally.

Speaker #2: Second, our geographic diversification allowed us to mitigate the impacts of the Middle East crisis on our productions. The impact of the crisis in the Middle East on TotalEnergies overall production was reduced to around 5% over the quarter on average.

Speaker #2: Which was in the low range of the guidance provided last quarter. Still, the company was able to grow oil and gas production by more than 3% quarter to quarter, supported by the ramp-up of projects launched in 2025, located mainly outside the Middle East.

Patrick Pouyanné: Excluding Middle East impact, the production growth even exceeds 4% year-on-year, clearly reflecting our diversification in upstream growth. By the way, importantly as well, as we explained during the last CMD, during this quarter, we took a certain number of final investment decision. Cronos in Cyprus, Ima in Nigeria, Umm Shaif Gas Cap in Abu Dhabi, and Absheron Phase 2 in Azerbaijan. Now all the projects contributing to achieving the upstream production growth target of more than 3% per year by 2030 are in execution phase. In integrated LNG, with geographic diversification, we are producing LNG in 11 countries. As well, the length of our LNG portfolio allowed us this quarter to compensate the effects of charter volumes lost and not declare any force majeure to our LNG customers, which today is making TotalEnergies very popular in Asia.

Speaker #2: Excluding Middle East impact, the production growth even exceeds 4% year on year, clearly reflecting our diversification in upstream growth. On the way by the way, importantly as well, as we explained during the last CMD, during this quarter we took a certain number of final investment decisions, chronos in Cyprus, in Nigeria, Sharif Gas Cap in Abu Dhabi, and phase two in Azerbaijan. projects contributing to achieving the upstream production growth target of more than 3% per year by 2030 are in execution phase.

Speaker #2: And as well the length for In integrated LNG portfolio allowed us this quarter to compensate the effects of cater volumes lost or and not declare any force measure to our LNG customers.

Speaker #2: Which today is making TotalEnergies very popular in Asia and gas tech Asian buyers were lining up at our booth to negotiate long-term contracts. By the way, this was also possible because we had a large LNG fleet tanker available at a cheap cost.

Patrick Pouyanné: At Gastech, Asian buyers were lining up at our booth to negotiate long-term contracts. By the way, this was also possible because we had a large LNG fleet tanker available at a cheap cost, which means that this, I would say, no force majeure had no impact, in fact, on our costs, on our global costs, and we delivered that very efficiently to our customers. We also achieved some key milestones this quarter, establishing our LNG marketing JV with Kumul Petroleum, the national oil company in PNG, for 2.4 million ton per year, and the signature of an offtake LNG agreement of 1.5 million ton per year, strengthening the diversification of our LNG portfolio towards fast-growing Asian markets.

Speaker #2: Which means that this, I would say, no force measure had any impact in fact on our costs, on our global costs, and we delivered that very efficiently to our customers.

Speaker #2: We also achieved some key milestones this quarter. Establishing our LNG marketing GV with Cumul Petroleum, the national oil company in PNG for 2.4 million ton per year and the signature of an off-take LNG agreement of 1.5 million ton per year.

Speaker #2: Strengthening the diversification of our LNG portfolio towards fast growing Asian markets. So I would say that this geographic diversification but some we are considering some times ago as a weakness because being deemed to be too explosive globally is considered today as a strength by our customers.

Patrick Pouyanné: I would say that this geographic diversification that some were considering some times ago as a weakness, because being deemed to be too exposed globally is considered today as a strength by our customers and a strong edge against geopolitical risks. Finally, and very importantly, our operational performance across all business area has been excellent again this quarter, I would say once again. Running our refineries at full capacity, optimizing utilization resulted in an increase of nearly 10% of our refining throughput this quarter, enabling the company to fully capture record high refining margins in Europe, but also in the US and in the rest of the world, in particular Saudi Arabia. The company, once again, demonstrating its leadership to control costs with operating costs of $4.7 per barrel. Anchored strongly below $5 per barrel.

Speaker #2: And a strong edge against geopolitical risks. Finally, and not a very importantly, our operational performance across all business areas has been excellent again this quarter.

Speaker #2: I would say once again, the refine running our refineries at full capacity, optimizing utilization results in an increase of nearly 10% of our refining throughput this quarter.

Speaker #2: Enabling the company to fully capture record high refining margins in Europe but also in the US. And in the rest of the world. In particular Saudi Arabia.

Speaker #2: The company once again demonstrating its leadership to control cost. We've operating cost of 4.7 dollar per barrel. Anchored strongly below 5 dollar per barrel.

Patrick Pouyanné: By the way, this is the results of the cash saving program we launched in 2025. You will bearish year 2026, but the program is still live today and delivering. The power business also saw an increase of more than 20% in net production this quarter, taking, of course, full benefits from the integration of the assets from OGV with EPH. Integrated Power is again well on track and will be net cash positive in 2027. Given the company's strong operational and financial result delivered by each business segment this quarter, given the sustained high prices, the full year 2026 cash flow is now expected to be above $42 billion and maybe around even reaching $43 billion, supporting dividend growth while anchoring gearing below 10%. It is already 9%, but will be lower by the end of the year.

Speaker #2: By the way, this is a result of the cash saving program we launched in 25 in view of a bearish year 26. But the program is still live today.

Speaker #2: And delivering. The power business also saw an increase of more than 20% in net production this quarter. Taking of course full benefits from the integration of the assets from our GV with EPH.

Speaker #2: Integrated power is again well on track and will be net cash positive in 27. Given the company's strong operational and financial result delivered by business its business segment this quarter.

Speaker #2: Given the sustained high prices the full year 2026 cash flow is no expected to be above 42 billion dollar. And maybe around even reaching 43 billion dollar.

Speaker #2: Supporting dividend growth while anchoring gearing below 10%. It's already 9% but will be lower by the end of the year. In this context, and in line with the objective and the commitment of returning 40% of cash flow to shareholders.

Patrick Pouyanné: In this context, and in line with the objective and the commitment of returning 40% of cash flow to shareholders, the board of directors has taken following decisions. First, we confirm the third interim dividend at €0.90 per share, up 5.9% compared to 2025. Second, the board authorized share buybacks of $2.5 billion in the Q4 and also $2.5 billion share buybacks in the Q1. The board finally asked me to tell you that it reiterates its commitment to return 40% of cash flow to shareholders, and that if necessary, it might adjust upwards the final dividend to meet the 40% return. I will now hand over to Jean-Pierre Sbraire to go through the details of the Q3 financials.

Speaker #2: The board of directors has taken following decisions first we confirmed the third interim dividend and 90 cents of euro per share up 5.9% 9% compared to 25.

Speaker #2: Second, we've the board authorized share buybacks of 2.5 billion dollar in the fourth quarter and also 2.5 billion dollar share buybacks in the first quarter.

Speaker #2: The board finally asked me to read to tell you that he reiterates his commitment to return 40% of cash flow to shareholders. And that if necessary it might adjust upward the final dividend to meet the 40% return.

Speaker #2: I will now hand over to Jean-Pierre to go through the details of the third quarter financials.

Jean-Pierre Sbraire: Thank you, Patrick Pouyanné. I will start by commenting on the price environment for the Q1 2026 versus the Q2. We capture high prices across most commodities. Brent and liquid price remain elevated and increased throughout the quarter with the prolonged impact of the Middle East conflicts. Brent averaged $97 per barrel during the Q3 versus $104 per barrel in the Q2, down $7 per barrel, while the average liquid price was $87 per barrel. Liquid selling price continued to reflect an elevated freight cost and decreased by $4.50 per barrel compared to the Q2. TTF averaged $21.5 per million BTU, up 38% since last quarter average price of $15.6 per million BTU, driven by low inventories and the upcoming winter season demands.

Speaker #1: Thank you Patrick. So I will start by commenting on the price environment for the third quarter 26 versus the second quarter. We capture high prices across most commodities.

Speaker #1: Brent and liquid price remain elevated and increased throughout the quarter with the prolonged impact of the Middle East conflicts. Brent average 97 dollar per barrel during the third quarter versus 104 dollar per barrel in the second quarter.

Speaker #1: Down 7 dollar per barrel. While the average liquid price was 87 dollar per barrel. Liquid selling price continue to reflect an elevated threat cost and decreased by 4.5 dollar per barrel compared to the second quarter.

Speaker #1: TTF average 21.5 dollar per million BTU up 38% since last quarter average price of 15.6 dollar per million BTU. Driven by low inventories and the upcoming winter season demands.

Jean-Pierre Sbraire: Our average LNG price increased by 20% to $12.3 per million BTU, reflecting the lag effects embedded in our contract pricing formulas and the increase in spot gas prices. Also, the European refining margin, which includes cost of natural gas, CO2, and freight costs, increased to an historically high level of $33 per barrel on average over the quarter, 2.5 times higher than the last quarter, supported by an unprecedented combination of unavailability of Russian refining capacity, the disruption of the supply from the Middle East, and global inventories at historical lows. In this high-price environment, TotalEnergies leveraged its integrated business model and geographical diversification to deliver very strong financial results, underpinned by the outcoming operational performance of all businesses and the company's ability to capture value upside in disruptions.

Speaker #1: Our average LNG priced increased by 20% to 12.3 dollar per million BTU. Reflecting the lag effect embedded in our contracts pricing formulas. And the increase in spot gas prices.

Speaker #1: But also the European refining margin which include cost of natural gas CO2 and threat cost increased to an historically high level of 33 dollar per barrel on average over the quarter.

Speaker #1: 2.5 times higher than the last quarter. Supported by non precedent combination of unavailability of Russian refining capacity. The disruption of the supply from the Middle East and global inventories at historical lows.

Speaker #1: In this high price environment TotalEnergies leverage its integrated business model and geographical diversification. To deliver very strong financial results underpinned by the outcoming operational performance of all businesses.

Speaker #1: And the company's ability to capture value upside in disruptions. We reporting indeed adjusting net income of 9.1 billion dollar in the third quarter. Increasing by more than 50% compared to the second quarter.

Jean-Pierre Sbraire: We are reporting adjusted net income of $9.1 billion in Q3, increasing by more than 50% compared to Q2, and cash flow of $12.3 billion. TotalEnergies has delivered strong profitability this quarter with return on equity at 19.6% and ROACE at 17.4%. Let me now highlight four key takeaways from the quarter. Upstream delivered production growth up more than 3% quarter to quarter, notably due to the lower impact from the Middle East conflicts. Downstream achieved record high quarterly results, with cash flow increasing by almost $2 billion compared with the previous quarter, underpinned by all our well-functioning refineries. This allowed the company to fully capture historically high refining margins in Europe and worldwide. Oil trading activities also outperformed at a level comparable with the two previous quarters.

Speaker #1: And cash flow of 12.3 billion dollar. TotalEnergies has delivered strong profitability this quarter. We've returned on equity at 19.6% and royalty at 17.4%. Let me now highlight four key takeaways from the quarter.

Speaker #1: Upstream delivered production growth up more than 3% quarter to quarter. Notably due to lower to the lower impact from the Middle East conflicts. Downstream achieved record high quarterly results.

Speaker #1: With cash flow increasing by almost 2 billion dollar. Compared with the previous quarter. Underpinned by all our well functioning refineries. This allowed the company to fully capture historical high refining margins in Europe and worldwide.

Speaker #1: Oil trading activity activities also outperformed at a level comparable with the two previous quarters. Integrated LNG delivered very strong results more than doubling compared to the previous quarter.

Jean-Pierre Sbraire: Integrated LNG delivered very strong results, more than doubling compared to the previous quarter, reflecting the 20% increase in average LNG price and the outperformance of LNG and gas trading activities in the bull markets. Integrated Power cash flow generation continued to increase this quarter, supported by full quarter contribution from TTEP, our joint venture with EPH. Let's now dive into each of the business segments, starting with hydrocarbons. Q3 hydrocarbons production was 2.47 million barrel of oil equivalent per day. On a year-on-year basis, excluding the impact of the Middle East conflict, production would be up by more than 4%, supported by the startups and ramp-ups of the project launched since the beginning of 2025 and benefiting from gradual return to normal oil operation in the Middle East.

Speaker #1: Reflecting the 20% increase in average LNG price and the outperformance of LNG and gas trading activities in a bull market. Integrated power cash flow generation continued to increase this quarter.

Speaker #1: Supported by full quarter contribution from TTEP our joint venture with EPH. Let's now dive into each of the business segment starting with hydrocarbons. Third quarter hydrocarbons production was 2.47 million barrel of oil equivalent per day.

Speaker #1: On a year on year basis excluding the impact of the Middle East conflict. Production would be up by more than 4%. Supported by a startups and ramp ups of the project launched since the beginning of 25.

Speaker #1: And benefiting from gradual return to normal oil operation in the Middle East. Over the quarter the impact on production from the conflict in the Middle East is limited to around 5%.

Jean-Pierre Sbraire: Over the quarter, the impact on production from the conflict in the Middle East is limited to around 5%, which is in the low range of the guidance given last quarter, this guidance being 5% to 10%. Looking forward, we expect to maintain strong momentum with hydrocarbons production in Q1, excluding the Middle East impact, expected to grow by more than 3% year-on-year in line with the annual guidance. At present, we observe the impact of the Middle East below 5%, mostly coming from limited export from LNG volumes through the Strait of Hormuz. We note that the situation remains volatile. Turning now to quarterly results for E&P.

Speaker #1: Which is in the low range of the guidance given last quarter. This guidance being 5 to 10%. Looking forward we expect to maintain strong momentum with hydrocarbons production in the fourth quarter excluding the Middle East impact.

Speaker #1: Expected to grow by more than 3% year-on-year, in line with the annual guidance. At present, we observe the impact of the Middle East below 5%, mostly coming from limited exports from LNG volumes.

Speaker #1: Through the strait of Hormuz. But we note that the situation remains volatile. Turning now to quarterly results for ANP. The segments generated an adjusted net operating income of 2 of sorry 3.2 billion dollar in this quarter.

Jean-Pierre Sbraire: The segment generated an adjusted net operating income of $3.2 billion in this quarter, and a cash flow of $5.4 billion, reflecting production growth and sensitivity to declining oil price and rising gas prices quarter-to-quarter. On the cost side, as mentioned by Patrick, we continue to lead low-cost operation with an average OPEX per barrel of $4.7 below our guidance of less than $5 per barrel of oil equivalents. On Integrated LNG, the LNG production decreased by 7% quarter-to-quarter, mainly due to planned maintenance, notably on Angola LNG and Ichthys LNG.

Speaker #1: And the cash flow of 5.4 billion dollar. Reflecting production growth and sensitivity to declining oil price and rising gas prices quarter to quarter. On the cost side as mentioned by Patrick.

Speaker #1: We continue to lead low cost operation with an average OPEX per barrel of 4.7. Below our guidance of less than 5 dollar per barrel of oil equivalent.

Speaker #1: On integrated LNG. So the production of the LNG production decreased by 7% quarter to quarter. Mainly due to plant maintenance notably on Angola LNG and Xtis LNG.

Jean-Pierre Sbraire: Adjusted net operating income was $1.9 billion, and CFFO was $1.7 billion, underpinned by a 20% increase of average LNG prices, and in contrast with Q2, positively impacted by the outperformance of LNG and gas trading activities in the bull markets, given the ongoing conflict in the Strait of Hormuz and seasonality of demand. Given the evolution of oil and gas prices in recent months and the lag effect on pricing formula, the company anticipates an average LNG selling price above $14 per million BTU for Q1 2026. Turning now to Integrated Power. Over the first nine months of 2026, net power generation increased to 44.3 terawatt hour, up 25% year-on-year, driven by the growth of Integrated Power generation portfolio, notably the commissioning of new renewable capacities and the contribution of TTEP's assets in line with expectations.

Speaker #1: Adjusted net operating income was $1.9 billion, and CFFO was $1.7 billion, underpinned by a 20% increase in average LNG prices, and in contrast with the second quarter.

Speaker #1: Positively impacted by the outperformance of LNG and gas trading activities in a bull market. Given the ongoing conflict in the strait of Hormuz and seasonality of demands.

Speaker #1: Given the evolution of oil and gas prices in recent months. And the lag effect on pricing formula. The company anticipates an average LNG selling price above 14 dollar per million per million BTU for the first quarter 26.

Speaker #1: Turning now to integrated power. Over the first nine months of 26. Net power generation increased to 40 44.3 terawatt hour of 25% year on year.

Speaker #1: Driven by the growth of integrated power generation portfolio. Notably the commissioning of new renewable capacities and the contribution of TTEP's assets in line with expectation.

Jean-Pierre Sbraire: TotalEnergies is therefore on track to reach its annual objective in Integrated Power business to generate more than 60 terawatt hour over the year. Cash flow from operation was up 7% quarter-to-quarter at nearly $0.8 billion, supported by the contribution from TTEP assets over a full quarter. Moving to Downstream. During Q3, Refining and Chemicals achieved record results, driven by refinery throughputs up nearly 10% over the quarter, underpinned by all refineries well functioning in Europe and in the United States, Port Arthur, and the progressive return of the SATORP refinery in Saudi Arabia to its nominal capacity successfully reached at the end of the quarter.

Speaker #1: TotalEnergies therefore on track to reach its annual objective in integrated power business to generate more than 60 terawatt hour over the year. And cash flow from operation was up 7% quarter to quarter.

Speaker #1: At nearly 0.8 billion dollar. Supported by the contribution from TTEP assets over a full quarter. Moving to downstream. During the third quarter refining and chemicals achieved record results driven by the refinery throughputs of nearly 10% over the quarter.

Speaker #1: Underpinned by all refineries well-functioning in Europe and in the United States, for Arthur, and the progressive return of the Saudi Arabia refinery setup to its nominal capacity.

Speaker #1: Successfully reached at the end of the quarter. Refining and chemicals adjusted net operating income was up to 3.6 billion dollar. And cash flow was up to 3.9 billion dollar.

Jean-Pierre Sbraire: Refining and Chemicals adjusted net operating income was up to $3.6 billion, and cash flow was up to $3.9 billion, demonstrating the segment's ability to capture historically high refining margins in Europe and worldwide. Meanwhile, oil trading activities continue to outperform. Marketing and Services delivered solid results with adjusted net operating income of nearly $0.5 billion and cash flow of nearly $0.7 billion in Q3, reflecting higher unit margins that more than offset lower volumes. Let me reemphasize the strong CFFO generated by the company over the quarter of $12.3 billion, up 25% compared to last quarter. Net investments remain disciplined at $3.3 billion in Q3, in line with the annual guidance of a full year of 2026 net investments of $15 billion.

Speaker #1: Demonstrating the segments ability to capture historically high refining margin in Europe and worldwide. Meanwhile oil trading activities continued to outperform. Marketing and services delivered solid results with adjusted net operating income of nearly 0.5 billion dollar.

Speaker #1: And cash flow of nearly 0.7 billion dollar in the third quarter. Reflecting higher unit margins that more than offset lower volumes. Let me reemphasize the strong CFFO generated by the company over the quarter.

Speaker #1: Of 12.3 billion dollar up 25% compared to last quarter. Net investment remained disciplined at 3.3 billion dollar in the third quarter. In line with the annual guidance of a full year 26 net investment of 15 billion dollar.

Jean-Pierre Sbraire: The company delivered an attractive shareholder return this quarter, totaling $3.7 billion, including dividends of $2.2 billion and share buyback of $1.5 billion. At the same time, the company reduced its net debts, underpinned by a free cash flow after payment of dividends of more than $6 billion and a positive working capital contribution of $3.1 billion during Q3. This reduction of the working capital, notably driven by the increase in tax liability related to higher prices and an increase in suppliers payable related to the increased shipping costs. As a result, the gearing improved by 4 percentage points to reach 9.1%, already below the 10% level we guide at CMD for end 2026.

Speaker #1: The company delivered an attractive shareholder return this quarter. Totaling 3.7 billion dollar. Including dividends of 2.2 and share buyback of 1.5 billion dollar. At the same time the company reduced its net debts underpinned by a free cash flow after payment of dividends of more than 6 billion dollar.

Speaker #1: And a positive working cap contribution of 3.1 billion dollar during the third quarter. This reduction of the working cap notably driven by the increase in tax eligibility related to higher prices.

Speaker #1: And an increase in suppliers payable related to the increased shipping costs. As a result the gearing improved by 4 percentage points to reach 9.1 billion 9.1%.

Speaker #1: Already below the 10% level we guide at CMD for end 26. To conclude. The integrated model and geographical diversification of TotalEnergies continues to demonstrate the company exceptional ability to produce and deliver reliable energy.

Jean-Pierre Sbraire: To conclude, the integrated model and geographical diversification of TotalEnergies continues to demonstrate the company's exceptional ability to produce and deliver reliable energy and to capture higher prices and higher margin. With growing cash flow that supports growing the dividend, deleveraging the company, investing to deliver accretive growth by 2030 and beyond, and increasing share buybacks for our shareholders to $2.5 billion per quarter in Q1, and in Q1 2027. With that, Patrick and I are available for your question. Operator, please open the line for questions.

Speaker #1: And to capture higher prices and higher margin with a growing cash flow that supports growing the dividend deleveraging the company. Investing to deliver attractive growth by 2030 and beyond.

Speaker #1: And increasing share buybacks for our shareholders to 2.5 billion dollar per quarter in the first quarter and in the first quarter 27. With that Patrick and I are available for your question.

Speaker #1: Operator please open the line for questions.

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 1 on your telephone and wait for your name to be announced. Please kindly mute any audio resources when asking a question. If you wish to cancel your request, please press star 2. Once again, please press star 1 if you wish to ask a question. The first question is from Lydia Rainforth from Barclays. Please go ahead.

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 one on your telephone.

Speaker #2: And wait for your name to be announced. Please kindly mute any audio resources while asking a question. If you wish to cancel your request please press the star two once again please press star one if you wish to ask a question.

Speaker #2: The first question is from Lydia Rainworth from Berkeley. Please go ahead.

Lydia Rainforth: Thank you, and good afternoon to both of you, and I really appreciate the quarter. Two questions, if I could. Firstly, just coming back to Patrick, what you said on the potential for the final dividends being adjusted upwards. Are you thinking special dividends on that one? Secondly, I know it's only a month since we had the Capital Markets Day, but I did want to come back to the upstream growth ambitions to 2035, because there has been a lot of discussions about the resources that need to be added. I know the ability to add resources at a competitive cost has always been a strength of TotalEnergies, and you've given us a lot of visibility on the plans for 2035.

Speaker #3: Thank you and good afternoon to both of you. And I really appreciate the quarter. Two questions if I could. Firstly just coming back to Patrick what you said on the potential for the final dividend to be adjusted upwards.

Speaker #3: Is that—are you thinking special dividend on that one? And then secondly, I know it's only a month since we had the Capital Markets Day.

Speaker #3: But I did want to come back to the upstream growth ambitions to 2035 because there has been a lot of discussions about the resources that need to be added.

Speaker #3: And I know the ability to add resources at a competitive cost has always been a strength of TotalEnergies. And you've given us a lot of visibility on the plans for 2035.

Lydia Rainforth: But the gap that you have, is that an unusual gap this far out, or are you better positioned than you would expect or slightly weaker? I just want to get a sense of the urgency in which you might want to add resources or whether it is something that you are relaxed about. Thanks.

Speaker #3: But the gap that you have is that an unusual gap this far out? Or are you better positioned than you would expect or slightly weaker?

Speaker #3: I just want to get a sense of the urgency in which you might want to add resources or whether it's something that you're relaxed about.

Speaker #3: Thanks.

Patrick Pouyanné: Okay. The second question is just related to the Q3 results versus CMD. Just to clarify, we have no urgency at all. I will be clear. I think what we told you at the CMD is that we have already in 2026 until 2035, we see a plateau of 3 million barrel oil per day. It is quite unusual for an oil and gas company to have zero decline during 5 years. We gave you the list of the projects which are already there. From this strong basis, announcing potential growth for 2% to 3% is not, I would say, there is nothing spectacular. Of course, 2% it will be easier than 3%. It is just a normal, I would say. We are demonstrating our ability in the last 10 years, either through exploration or through access to DROs to, I would say, deliver this growth.

Speaker #1: Okay. Second question is not related to the third quarter result but to CMD. But just to clarify we have no urgency at all. I'll be clear.

Speaker #1: I think what we told you at the CMD is that we have already in 2026 until 2035 we see a plateau of 3 million by all of all per day.

Speaker #1: It's quite unusual for an oil and gas company to have zero decline during five years. So and we gave you the list of the projects which are already there.

Speaker #1: So, from this strong basis, announcing potential growth of two to three percent is not—I would say there is nothing spectacular. Of course, two percent will be easier than three percent.

Speaker #1: It's just a normal I would say and we have demonstration or demonstrating our ability. In the last 10 years either through exploration or through access to DROs to I would say deliver this growth.

Patrick Pouyanné: It is just a continuity, so we have no urgency. Secondly, I would say, just wait maybe with Monday morning, you will have a beginning of the answer to that. We will make some announcements about access to DROs. You will see that we continue to be active on this matter. It is a permanent, I would say, I think the strength of TotalEnergies. Since 2015, we have consistently looked to, I would say, book reserves, either 1P, 2P, and I think it is a strength of the company, so that is just a question of trust. So we are very good. Yes, and I would say, are you better positioned than usually? The answer is yes, because we have already a visibility of zero decline until 2035, from 2030 to 2035. Thank you, Lydia, for the question. I hope I clarified. Maybe my English is not good enough.

Speaker #1: So it's just a continuity. So we have no urgency. And secondly I would say just wait maybe with Monday morning you will have a beginning of the answer to that.

Speaker #1: We will make some announcements about access to DROs. You will see that we continue to be active. On this matter. It's a permanent I would say.

Speaker #1: I think the strength for TotalEnergies is 2015 we had consistently look to I would say book reserves. Either 1P 2P. And I think it's a strength of the company.

Speaker #1: So that's just a question of trust. So we are very good. We are yes. And I would say are you better positioned than usually?

Speaker #1: The answer is yes because we have already a visibility of zero decline until 2035. From 2030 to 2035. So thank you Lydia for the question.

Speaker #1: I hope I clarified maybe my English is not good enough. The question I just mentioned to you. Look we committed to 40%. Okay. If you take 42 billion dollar 40% with 8 billion of buyback plus 8.6 billion dollar dividend it's okay.

Patrick Pouyanné: The question I just mentioned to you. Look, we committed to 40%. If you take $42 billion, 40% with $8 billion of buyback plus $8.6 billion dividend, it is okay. If we are not at $42 billion, but we are at $43 billion, and I mentioned that figure during my speech, then there is a lack somewhere of, let us say, $400 million, let us say 500. So the question for the board is just what I told you. The board asked me to tell you that in that case, when we will decide the final dividend in February, in fact, we have a normal final dividend, but we will consider, I would say, an uplift of the final dividend and $400 or $500 billion represent 2,400 is $0.20 per share, in fact. We have 2.5 billion shares.

Speaker #1: If we are not at $42 billion but we are at $43 billion, and I mentioned that figure during my speech, then there is a lack somewhere of, let's say, $400 million.

Speaker #1: Let's say 500. So the question for the board is just what we I told you the board asked me to tell you that in that case when we will decide the final dividend at the in February in fact.

Speaker #1: We have a normal final dividend but we'll consider I would say an uplift of the final dividend. And 400 or 500 million dollar represent 20 400 is 20 cents per per share in fact.

Speaker #1: We have 2.5 billion shares. We might consider in order to meet the commitment to put I would say I don't know if you call it special an uplift dividend on the final dividend.

Patrick Pouyanné: We might consider, in order to meet the commitment, to put, I would say, I don't know if you call it special, an uplift dividend on the final dividend, not making it. We will pay it together with the final dividend. That's the way that we want to respect the commitment. Honestly, we will all be happy if we reach 43 billion rather than 42. That's, I would say, what I'm adding today. First, some of you told us we are conservative on the 40 billion at the CMD. I'm not sure. Honestly, we learn month after month, but today maybe we are less. We say 42 and maybe even 43, and then we are committed to 40%. That's what you need to understand.

Speaker #1: Not making it and we'll pay it together with the final dividend. That's the way that we want to respect the commitment in order and honestly we will all be happy if we reach 43 billion rather than 42.

Speaker #1: But that's I would say what I'm adding today so first some of you told us we are conservative on the 40 billion at the CMD not sure.

Speaker #1: Honestly we we learned month after month. But today we maybe we are less. We say 42 and maybe even 43. And then we are committed to 40%.

Speaker #1: But once you you need to to understand. Thank you.

Lydia Rainforth: Amazing. Thank you.

Patrick Pouyanné: Thank you.

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

Speaker #2: The next question is from Biray y Burkataria from RBC. Please go ahead.

Biraj Borkhataria: Hi. Thanks for taking my question. Just two, please. The first one is on Integrated Gas. You had a really strong result, and obviously you flagged the long gas position with the CMD and the commentary around that. I was wondering how we should think about the flow-through into Q4 and sort of the exceptional element and the reversal in Q3, and how we should think about the earnings sustaining at this level into Q4. The second question is just on Uganda. Can you get a quick update ahead of the startup and commissioning activities and where we are now and risk factors and so on? Thank you.

Speaker #4: Hi. Thanks for taking my question. Just two please. The first one is on integrated gas. You had a really strong result and obviously you flagged the long gas position with the CMD in the commentary around that.

Speaker #4: I was wondering how we should think about the flow through into the fourth quarter and sort of the exceptional element on the reversal in third quarter and how we should think about the earnings you know sustaining at this level into the fourth quarter.

Speaker #4: And then second question is just on Uganda. Can you get a quick update ahead of the startup and sort of commissioning activities and where we are now and and risk factors and so on?

Speaker #4: Thank you.

Patrick Pouyanné: On LNG, I told you during my speech, I think I gave you a good indication of what we anticipate on Q4. In fact, our position, you have seen that TTF continues to go up. It is at $33 per million BTU. We anticipate, I would say I was looking to exactly what I just told you a few minutes ago. I just told you that with Europe attracting more LNG volume right now and TTF currently around or above $30 per million BTU, LNG is still going up and we anticipate strong results as well as for gas trading in Q4, which means you should expect the performance in the same range for Q4. That is part of why when I am trying to anticipate or I would say the global cash flow for the year, there is today a range of 42, 43.

Speaker #1: So on the energy I told you during my speech I think I gave you a good indication of what could be what we anticipate on the fourth quarter.

Speaker #1: In fact our position you know you've seen that TTF continues to go up. It's at 43 dollar per million BTU. And so we anticipate I would say I was looking to exactly what I just told you a few minutes ago.

Speaker #1: I just told you that with Europe attracting more energy volume right now and TTF currently around or above 30 dollar per million BTU. Energy is still going up and we anticipate strong results as well as for gas trading in Q4 which means you should expect a performance in the same range for Q4.

Speaker #1: But part of why when I'm trying to anticipate or I would say the global cash flow for the year there is today a range of 42 43.

Patrick Pouyanné: I would add as well that we put in the forecast, we announced that the LNG price will be above $14 per million BTU. In fact, it was based on an assumption on TTF, I think around 25 or 27. At 33, we are more next to 15 than 14, I would say. I see only potentially, I would say some good upsides on the LNG business in Q4. That is what I could comment on this one. On Uganda, I think there are two different things. We have, of course, EACOP, the pipeline, which is progressing well because the intent is to start up Kingfisher, the offshore production, this year. That means, of course, to start up Kingfisher, we need the EACOP to be fully commissioned. We are at 95%, I think, or something like that.

Speaker #1: I would add as well that we we put in the forecast we announced that the energy price will be above 14 dollar per million BTU.

Speaker #1: In fact it was based on an assumption on TTF I think around 25 or 27. At 33 we are next more next to 15 than 14 I would say.

Speaker #1: So so there are I see only potentially I would say some upsides on the LNG business in the fourth quarter. That's what I could comment on this one.

Speaker #1: On on Uganda I think there are two different things. You know we have of course EACOP the pipeline which is progressing well because the interns need to start up Kingfisher the offshore production.

Speaker #1: This year. And so that of course to start up Kingfisher we need the EACOP to be I would say fully commissioned. So we are at 95% I think or something like that.

Patrick Pouyanné: As I said during the CMD on Kingfisher, we expect to start up during H1, I think of 2027, because as I explained, we had some delays on some equipment coming, going through the Strait of Hormuz. We have, say, a six-month delay, but all the teams are today working hard in order to deliver this production by H1. That is what I can tell you on your two topics.

Speaker #1: And as I said during the CMD until India we expect to start up during the first half I think of 2020 7 because as I explained we had some delays on some equipments coming going through the strait of Ormuz.

Speaker #1: So we have I would say six month delay but all the teams are today working hard in order to deliver this production by first half.

Speaker #1: That's what I can tell you on your two topics.

Biraj Borkhataria: Thank you.

Speaker #4: Thank you.

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

Speaker #2: The next question is from Jason. Gableman from TD Cowan. Please go ahead.

Jason Gabelman: Yeah. Hey, thanks for taking my questions. Patrick, you commented at the CMD a month ago about potential appetite for US shale acquisitions, and we have had investors asking about those comments since then. Prior to the event, you previously said you were interested in shale gas rather than shale oil. So I was hoping you could clarify if you want to grow your oil business in the United States and if it involves shale. I will ask my second question now as well. The other focus from investors that we have heard is on the uncertainty in France. I was hoping you could talk through TotalEnergies's earnings exposure directly to France, potential risks of new taxes the government can impose on TotalEnergies, and any thoughts around impact on cost of capital given what is going on in the country. Thank you.

Speaker #4: Yeah. Hey. Thanks for taking my questions. Patrick you know you commented at the CMD a month ago about potential appetite for US shale acquisitions.

Speaker #4: And and we've had investors asking about those comments since then. Prior to the event you previously said you were interested in shale gas rather than shale oil.

Speaker #4: So I was hoping you could clarify if you want to grow your oil business in the United States and and if it involves shale and and I'll ask my second question now as well.

Speaker #4: You know the the other focus from investors that we've heard is on the uncertainty in France I was hoping you could talk through Total's earnings exposure directly to France potential risks of new taxes the government can impose on Total and then any thoughts around impact on cost of capital given what's going on in the country.

Speaker #4: Thank you.

Patrick Pouyanné: Okay. Thank you for the two questions, which will help me to clarify the first one. Let me be clear. Our M&A is countercyclical. I am not sure that acquiring any oil production in the world today will be a lot, will be countercyclical when you see the price of oil. So no panic. Secondly, we always said in the US that our priority is on gas, natural gas. We have a big LNG position. We want to integrate the value chain. By the way, today, natural gas is quite low and it is more countercyclical. Today it is $3, I would say. But there are also some liquids with gas. That is all my comments. So I like gas, I like the liquids as well. There is no position of the liquid. So that is the priority today. We said that we are targeting something like 1 BCFD.

Speaker #1: Okay. Thank you for the two questions which will help me to clarify the first one. Let me be clear. Our M&A is countercyclical. I'm not sure that acquiring any oil production in the world today would be a lot will be a countercyclical when you see the price of oil.

Speaker #1: So no no panic. Secondly we always said in the US that our priority is on gas natural gas. You know we are we have a big LNG position.

Speaker #1: We want to integrate the value chain. By the way today natural gas is quite low and it's more countercyclical today at 3 dollar I would say.

Speaker #1: But but there are also some liquids with gas. That's all my comments. You know so I I I like gas. I I like the liquids as well.

Speaker #1: There is no no opposition of the liquids. Then so that's the the that's the priority today. We we we said that we we are targeting something like 1 BCFD we want to continue to grow in the LNG in the US.

Patrick Pouyanné: We want to continue to grow in the LNG in the US, so one, 1.5, 2 BCFD would be, for us, a good target. Keep that in mind. My comments has been a foot extrapolated. I just continue to think that liquid is good as well as gas. That's all. And the US is a good area of investment for TotalEnergies. We are, I would say, compared to OP's, not weaker. I would say less exposed to the US, if I can speak about exposure. We have a larger base of US investors, so board is pushing, is supportive of move in the US if we have the opportunity. But again, as I said also today, we have a strong base of growth today, so it's not to grow, it's more to another position to be at. So it's a question of finding reasonable access to resource.

Speaker #1: So 1 1.5 2 BCFD would be for us a good good target. So keep that in mind. My comments has been I put extrapolated.

Speaker #1: I just continue to think that liquids is good as well as gas. That's all. And the US is a good area of investment for Total Energies.

Speaker #1: We are, I would say, compared to OPs, not weaker. I would say less exposed to the US, if I can speak about exposure. We have a larger buyer base of US investors.

Speaker #1: So both is pushing is supportive of move in the US if we have the opportunity. But again as I said also today it's more we have a strong base of growth today.

Speaker #1: So it's not to grow. It's more to in order the position to be edged. So it's a question of finding reasonable reasonable access to resource.

Patrick Pouyanné: We have done already three GBs natural gas. We'll continue to work as well on this mode of continuing to develop the gas position. We'll have some news in 2 months on that. France, good question. First, I repeat to all of you, the French state is not a shareholder of TotalEnergies. I spent my roadshows to re-explaining that to all our investors. So maybe you could help me, all of us, all of you, by explaining that there is no direct interest of French state in TotalEnergies. There is no golden share. There is no say. We are a publicly listed company which is managed independently. First comment. Second comment, we are a global company, largely international company. I think our results, our cash flow, let's say, and capital employed is around 7% is located in France.

Speaker #1: We have already done three GVs of natural gas. We'll continue to work as well in this mode to continue to develop the gas position. We'll have some news in a few months on that.

Speaker #1: France good question. So first I repeat to all of you the French state is not a shareholder of Total Energies. I spent my roadshows to re-explaining that to all our investors.

Speaker #1: So maybe you could help me. All of us all of you by explaining that there is no direct interest of French state in Total Energies.

Speaker #1: There is no golden share. There is no say. We are publicly listed company which is managed independently. First comment. Second comment. We are a global company largely international company.

Speaker #1: I think our results, or our cash flow, let's say, and the capital employed—around 7% is located in France. I mean, just to give you a round figure for the years.

Patrick Pouyanné: To give you a round figure, I don't know if it's 6, 7, 8, depends on the years. So it's not a French company. It's headquartered in France, and we are proud of that, like all the French people. We have grown on that basis. I think it's even sometimes a strong advantage in some parts of the world. Geopolitically, we are the only non-Anglo-Saxon major oil and gas company, so it adds some value as well. So I would say that's the second point. Third, on taxation. If you had listened yesterday to the debate at the parliament, it was a lot about the taxation of TotalEnergies. The government has pushed back all the amendments. None of them has been adopted. And because why? Because again, I repeat, we took this initiative in the country to put a ceiling on the gasoline and diesel price for the customers.

Speaker #1: So it's not a French company. It's a headquartered in France and we are proud of that. You know like all the French people we have grown on that basis.

Speaker #1: I think it's even sometimes a strong advantage in some part of the world geopolitically. We are the only non-Anglo-Saxon major oil and gas company.

Speaker #1: So it has some value as well. So I would say that's the second point. Third on taxation. I'm it's it's I'm if you had learned if you had listened yesterday to the debate of the parliament it was a lot about taxation of Total Energies of government has pushed back all the amendments none of them has been adopted.

Speaker #1: And because why? Because again I repeat you know we took this initiative in the country to put a ceiling on the gasoline and diesel price for the customers.

Patrick Pouyanné: We have been very clear with all the authorities that if they were taxing us, then we will, of course, give up this ceiling. And I think today, government, rightly, I think also, consider that what we bring as a protection to the customers is largely worth, I would say, politically, the addition, what would be a taxation. By the way, you probably noticed that France did not sign the letter to the European Commission to ask for a special taxation of oil and gas companies. So, of course, politics is politics, but that's the situation. And I'm convinced that our direct action to customers in France was the right move that is done. Of course, I know it's bold, it's innovative, but it's a way to preserve. And by the way, we have the benefit of it in terms of image with our customers.

Speaker #1: We have been very clear with all the authorities that if they were taxing us then we will of course given give up this ceiling.

Speaker #1: And I think today government rightly I think I saw consider that what we bring as a protection to the customers is largely worth I would say politically the addition of what would be a taxation.

Speaker #1: By the way, you probably noticed when France did not sign the letter to the EU Commission to ask for a special taxation of oil and gas companies.

Speaker #1: So I'm I'm I'm of course politics is politics. But that's the situation. And I I'm convinced that our direct action to customers in France was the right move that we've done.

Speaker #1: Of course I know it's a bold it's innovative. But it's a way to preserve and by the way we have the benefit of it in terms of image with our customers.

Patrick Pouyanné: I'm sure you have asked questions. The cost of this protection is, of course, more expensive today because with the diesel and gasoline going up, it costs us a little more, is around, I would say, by end October, around $500 million, more or less. We anticipate. I remind you that in 2022, we paid more taxes. By the way, for French people and French auditors, the good news is that because we have good French business this year, refining in France are running well, we should pay around €500 million of corporate tax. If I'm adding up both, it's an exceptional contribution to the country of EUR 1 billion, I would say, which I think is quite sizable with a direct impact to customers. That's my comments.

Speaker #1: I'm sure you have asked questions the the cost of this protection is of course more expensive today because with the diesel and gasoline going up it cost me it cost us a little more.

Speaker #1: It's around I would say by end October a little around 500 billion dollar more or less. And we anticipate that's that's this. But I remind you that in 2022 we paid more taxes.

Speaker #1: By the way for French people and French auditors the good news is that because we have good French business this year we're finding in France are running well.

Speaker #1: We should pay around 500 million euro of corporate tax. So if I'm adding both it's a an exceptional contribution to the country of 1 billion I would say euro which I think has a quite sizable with a direct impact to customers.

Speaker #1: So that's my comment. Again, we don't control politics, but we do our best in order to explain that today. And I think it is more and more perceived by TotalEnergies as an asset for the country and should be considered as such by the different leaderships.

Patrick Pouyanné: Again, we don't control politics, but we do our best in order to explain that today, and I think it's more and more perceived by TotalEnergies as an asset for the country and should be considered by the different leaderships.

Jason Gabelman: Great. Thanks for the answers, Patrick.

Speaker #2: Great. Thanks for the answers Patrick.

Patrick Pouyanné: Yeah.

Speaker #1: Yeah.

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

Speaker #3: The next question is from Martin Ratz of Morgan Stanley. Please go ahead.

Martijn Rats: Yeah. Hi. Hello. Two questions from my side as well. I just wanted to come back to the CFFO figure of $42 billion to $43 billion. Because if you look at where commodity prices are, Dated Brent is $120 TTF, nearly 100 yesterday. The refining margin is pretty darn good. If the comment is also that trading in Q4 will be once again strong, it wouldn't be beyond the wit of man that Q4 would be even higher than that. This then raises the question whether the $42 billion to $43 billion sort of indication either just embeds some conservatism because, okay, these prices are on the screen now, but they might change. Or whether there might perhaps be some working capital outflow or some payments that might be overlooking, that might be sort of a bit unusual in Q4.

Speaker #2: Yeah. Hi. Hello. Two questions. From my side as well. I just wanted to come back to the CFFO figure of 42 to 43 billion.

Speaker #2: Because if you look at where our commodity prices are dated Brent is 120 TTF nearly 100 yesterday. We're finding margins pretty darn good. If the comment is also.

Speaker #2: That frustrating in the fourth quarter we once again strong. It wouldn't be beyond the width of man to think that the fourth quarter would be would be even higher than that.

Speaker #2: Which then raises the question of whether the 42 to 43 sort of indication either just embeds some conservatism because, okay, these prices are on the screen now, but they might change.

Speaker #2: Or whether there might perhaps be some working capital outflow or some payments that we you know that might be overlooking that might be sort of a bit unusual in the fourth quarter.

Martijn Rats: I presume it's the former rather than the latter, but I wanted to raise the question nonetheless, whether there might be anything in Q4 that we should be aware of from a cash perspective. The second question I wanted to ask relates to the hybrid. There was about $1.7 billion in the net debt from the €1.5 billion hybrid that you called, and I was wondering what your approach to hybrids now is. Would you expect the hybrid to be refinanced with another hybrid, or is this hybrid now called and that's sort of the end of it? Perhaps give some clarity on that and also how that is impacting the various line items in the balance sheet. Maybe some detail on that, because that can be quite tricky to figure out.

Speaker #2: I presume it's the former rather than the latter, but I wanted to raise the question nonetheless: whether there might be anything in the fourth quarter that we should be aware of from a cash perspective.

Speaker #2: And the second quarter the second question I wanted to ask relates to the hybrid. The there is a about 1.7 billion in the net debt from the from the 1.5 billion euro hybrid that you called.

Speaker #2: And I was wondering what your approach to to hybrids now is. Would you expect the hybrid to be refinanced with another hybrid or is this hybrid now called and that's sort of the end of it.

Speaker #2: Can you perhaps give some clarity on that. And also how that is impacting the various line items in the balance sheets. Maybe some detail on that because that that can be quite tricky to figure out.

Patrick Pouyanné: Hold on. First, no, I said cash flow from operation will be above 42, might be around 43. With that, honestly, Martijn, I don't know if you know and whoever knows in the planet what the US president will decide after the midterms in the Middle East. I don't know. Nobody knows, in fact. There was an article in The Wall Street Journal that it could be a short but brutal conflict. I don't know. We'll see. So what will be the impact on the market? Honestly, today, I'm somewhere amazed. In the spring, everybody and the forward curve, all the markets were behaving as if the war will end by summertime. I don't know where it was written. The forward were lower. Today, everybody believes, the market believes the war will stay for long. I don't know.

Speaker #1: Paula. Paula.

Speaker #4: First. No. I think I said cash flow formation will be above 42 might be around 43. So with that honestly I'm Martin I don't know if you know and whoever knows in the planet what the US president will decide after the midterms in the Middle East.

Speaker #4: You know I don't know. We nobody knows in fact. So there are there was an article in the World Trade Journal but it could be a short but but brutal conflict.

Speaker #4: I don't know. We'll see. So, what will be the impact on the market? You know, honestly, today it's quite—I mean, I'm somewhat amazed.

Speaker #4: In the in the spring everybody and the forward curve was every all the markets were behaving as if the war will end by summertime.

Speaker #4: I don't know where it was written. The forward were low were lower. Today everything believe everybody believes the market believes the war will stay for long.

Patrick Pouyanné: Honestly, by giving you, I would say, a guidance of about 42 and around 43, I think we are probably in the right ballpark. If it's more, again, the commitment of the board is that if it was 43.5, for example, you will get back the 40% of the additional cash flow from the place on the final dividend. That's what I can tell you. On the second point, when we speak about cash flow from operation, there is no impact on working capital. Honestly, on Q4, that's true that this quarter is quite unusual. We had, I would say, quite a big inflow in Q3, generally Q4. We explain you why.

Speaker #4: I don't know. So honestly I have by giving you a or I would say a guidance of above 42 and around 43 I think we are probably in the right in the ballpark.

Speaker #4: If it's more again the commitment of the board is that if it was 43.5 for example you will get back the 40% of the additional cash flow from and at least on the final dividend.

Speaker #4: That's what I can tell you. There is no way—no, no. Second point: when we speak about cash flow from operations, there is no impact on working capital.

Speaker #4: We don’t, honestly, on the fourth quarter—that’s true, this quarter is quite unusual. We had, I would say, an inflow, quite a big inflow, in the third quarter.

Speaker #4: Generally, in the fourth quarter, we explain to you why. We anticipate, but it's very difficult, to be honest, to anticipate working capital movement with these, because with the price of oil—which has an impact on all the inventories, et cetera—where will the company, where will the price of Brent be at the end of the year?

Patrick Pouyanné: But it is very difficult to be honest to anticipate working capital movements with this, because with the price of oil, which has an impact on all the inventories, et cetera, where the price of Brent will be end of the year, I do not know. Today, I would say we anticipate a +1/-1, a neutral position on Q4 under the control of Jean-Pierre. We do not have any unusual cash items that we anticipate for Q4. Again, I would be happy to have been wrong, but I think we give you a good guidance today. If we are wrong because we make more cash flow, that will not be bad for our investors because, again, we return 40%. The hybrids.

Speaker #4: I don't know. Today I would say we anticipate a plus one minus one. I mean a neutral position on the fourth quarter. And there's a control of of Jean-Pierre.

Speaker #4: And we don't have any unusual cash items that we anticipate for the fourth quarter. So again I would be happy to have been wrong but I think we give you a good guidance today and if we are wrong because we make more cash flow.

Speaker #4: But we'll not be bad for our investors because again we'll we'll return 40%. The hybrids. The hybrids it's a typical topic for Jean-Pierre which is an expert in hybrids.

Patrick Pouyanné: The hybrids, it is a typical topic for Jean-Pierre, which is an expert in hybrids, so I will give him the floor to explain. But today, in fact

Speaker #4: So I will give him the floor to explain but today in fact yeah that's true that we that we call hybrid maturing in October in our balance sheet will impact in our balance sheet end of September for 1.5 billion euro.

Jean-Pierre Sbraire: Yeah, that is true that we call hybrids maturing in October in our balance sheet, will impact in our balance sheet end of September for €1.5 billion, so $1.7 billion. Year after year, we decrease the hybrid stocks. We will see in the future, the strategy that we will follow on that topic.

Speaker #4: So 1.7 billion dollar. So year after year we decrease the the hybrid stocks. So we'll we'll see in the future the strategy that we will follow on that that topic.

Patrick Pouyanné: No, but I think it is important, Jean-Pierre is a fan of the hybrid because of the cost of the hybrid.

Speaker #1: No, but I think the important thing with Jean-Pierre is he's a fan of the hybrid because of the cost of the hybrids. It's 3%. So the question for us, at 3%, you know, today if we issue a bond, it's above 3—3.5 to 4.

Jean-Pierre Sbraire: Yeah, it's 3%.

Patrick Pouyanné: It's 3%.

Jean-Pierre Sbraire: Yes.

Patrick Pouyanné: The question for us, at 3%, today, if we issue a bond, it's about 3.5, or 4.

Jean-Pierre Sbraire: 4, yes.

Patrick Pouyanné: Why should we get rid of these hybrids at 3%? Of course, the question will be, and it is a good question, linked to what will be the perspective of the interest rates, at which price could we refinance this hybrid or not. But again, and it is linked to, I would say, the low gearing position. If we continue to have some cash flow, of course this could impact the way we manage the different source of, I would say, treasury for the company. This is one of them. There are also, as you know, some standards, and if standards is the right name.

Speaker #4: Yeah. 4. Yes.

Speaker #1: So why should we get rid of these hybrids at 3%? Of course the question will be and it's a good question linked to what will be the perspective of the interest rates.

Speaker #1: At which price could we refinance these hybrids or not. But again and it's linked to I would say the the low gearing position. If we continue to have some in cash flow of course this could impact the way we manage these different source of I would say treasury for the company.

Speaker #1: This is one of them. There are also you know as you know some standards and we standards is the right name. Discussions regularly with rating agencies.

Jean-Pierre Sbraire: Yes.

Patrick Pouyanné: Discussions regularly with rating agencies, and at which point do we consider that hybrids are equity and at which point they become a debt. That is part of the debate. Again, for me, on this topic, I would say to you, what is the most important for me as a CEO is what is the cost of the debt. This is a cost for me, which is for the company, because this is the out cash. Is it called a hybrid or is it called a bond? I do not see much difference from my office. That is the policy that we are following on this topic. To have the detail of the impact on the balance sheet, I think before to explain you that, Martijn, I will need Jean-Pierre and Arnaud to explain that to me. It will take a little time.

Speaker #1: And to at which point do we consider that hybrids are equity and at which point they become a debt. So that's part of the of the debate.

Speaker #1: Again for me on this topic I would say to you what is the most important from as a CEO is what is the cost of the debt.

Speaker #1: And this is the cost for me.

Speaker #4: Which is for the company because this is the out cash. Is it called an hybrid or is it called a bond. I don't see much difference from my office.

Speaker #4: Maybe so that's that's the policy. But we are following on this topic. So to have the detail of the impact of the balance sheet I think before to explain you that Martin I will be I will need Jean-Pierre and Arnaud to explain me that to me.

Speaker #4: It will take a little time you know. So

Martijn Rats: I recognize that.

Speaker #2: I recognize that.

Patrick Pouyanné: Okay. Thank you.

Speaker #4: Okay. Thank you.

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

Speaker #3: The next question is from Christopher Coopland from Bank of America. Please go ahead.

Christopher Kuplent: Yeah. Thank you very much. Patrick, I am going to keep it to one question on your outlook regarding Europe's gas prices and the market that we now enter into. Given we have heating season and you have, I guess, more insight than we have into what is happening at Yamal, do you think, with the re-routings going on in 2027, that Yamal can maintain its utilization? Or do you think there will be a net loss of LNG volumes because it will be harder to send tankers around the world if Europe is no longer taking it? Thank you.

Speaker #2: Yeah. Thank you very much. Patrick I'm going to keep it to one question on your outlook regarding Europe's gas prices and the market that we now enter into given we have heating season and you have I guess more insight than we have into what's happening at Yamal do you think with the reroutings going on in 2027 that Yamal can maintain its utilization or do you think there will be a net loss of LNG volumes because it'll be harder to to to send tankers around the world if if Europe's no longer no longer taking it.

Speaker #2: Thank you.

Patrick Pouyanné: I think you have the answer in your question. Because as you know, first, on the outlook of European gas price, I would say it is quite clear that we are entering in a dangerous period. We have seen the price has reached as anticipated, by the way, EUR 100 per megawatt hour, so it becomes to be a political, I would say, a strong signal. It is clear that unfortunately, winter season is a peak season, but Qatar has restarted some LNG production and exports. But today, in September, October, I would say you had more or less around from Qatar or from Abu Dhabi, by the way, because both countries are producing. We had only 25% of the normal LNG tankers flow going through the Strait of Hormuz compared to pre-war.

Speaker #1: I think the answer is in your question. Because, as you know, first on the outlook of European gas prices, I would say it's quite clear that we are entering a dangerous period, you know.

Speaker #1: We have seen the price have reached as anticipated by the way 100 euro per megawatt hour. So it becomes to be a political I would say a strong signal.

Speaker #1: It's clear that unfortunately winter season is a peak season that Qatar has restarted some LNG production and exports but today in September October I would say you had more or less around from Qatar or from Abu Dhabi by the way because both countries are producing we had only 25% of the normal LNG tankers flow going through the Strait of Hormuz compared to pre-war you know.

Patrick Pouyanné: Only 25%, that means that you have quite a big volume, knowing a month is more or less 6, 7, 8 million ton, 7 million ton. If you have 25, you have a lack of LNG, and this LNG would be useful. That is true, but there is a stress, and today you have, I would say, a competition again between Europe and Asia to get this LNG, the remaining LNG flowing to Europe. Europeans are ready to pay for that. That is, I would say. Yamal, as you know, first, from 1 January 2027, Yamal LNG will not come to Europe anymore, to the EU, by the sanction regime.

Speaker #1: So only 25, that means that you have quite a big volume, knowing the amounts are more or less 6, 7, 8 million tonnes—7 million tonnes. If you have 25, you have a lack of LNG, and this LNG would be useful.

Speaker #1: So that's true. But there is a stress and today you have I would say a competition again between Europe and Asia to get these LNG the remaining LNG flowing to Europe.

Speaker #1: And so Europeans are ready to pay to pay for that. So that's I would say Yamal as you know first from January 27th 1st of January 27th Yamal LNG will not come to Europe anymore to the EU by by the sanction regime.

Patrick Pouyanné: Yamal was representing, in fact, more or less 15 million tons, I think, to Europe in 2026 or 2025, 15.15. The rest of the production of Yamal, which is around 19 or 20, if I remember, is going to China, to Asia, fundamentally to China. As you also know, there has been an amendment to the sanction in July, in which there is Dynagas, which is an EU ship owner of LNG tanker, has been authorized to ship some LNG from Yamal outside of the EU. That means that this fleet is limited. It is a limited LNG fleet. Of course, there is an impact. Where will the LNG go? If it goes to Mediterranean Sea, that is not much different with EU. If it has to go to India, of course, it is a longer trip. If it goes to China, it is even longer trip.

Speaker #1: Yamal was representing in fact more or less 15 million tonnes I think to Europe in 26 or 25 15 1 5. The rest of the production of Yamal which is around 19 or 20 if I remember is going to China to Asia fundamentally to China to China.

Speaker #1: So as you also know there has been an amendment to the sanction in July in which there is a deny gas which is a EU ship owner of LNG tanker has been authorized to to to ship some LNG from Yamal outside of the EU.

Speaker #1: So that means that we have that this fleet is limited. You don't have a it's a limited LNG fleet. And of course there is an impact where will the LNG go.

Speaker #1: If it goes to Mediterranean Sea there is not much difference with the EU. If it has to go to India of course it's a longer trip.

Speaker #1: If it goes to China, it's an even longer trip. So on our side, historically, we had—I don't want to make—a 5 million tonnes of LNG transfers with Yamal.

Patrick Pouyanné: On our side, historically, we had, I don't want to make 5 million tons of LNG contracts with Yamal. There is 1 million ton, which is in fact, not possible because of the sanctions for different reason, which is not eligible. So we have 4, and when we make the math today, we think that we might off-take between 3, maybe 4, let's say 3 million tons. It will depend again, about where this LNG will go through. I just described you for TotalEnergies, just to explain to you that I don't have the full picture of Yamal, to be honest, because we have limited today our interest only on what can be done according to the EU sanctions. But yes, the answer to you is yes, there will be an impact.

Speaker #1: There is one million tonnes, which is in fact not possible because of the sanctions for different reasons, which are not eligible. So we have four.

Speaker #1: And when we make the math today we think that we might obtain between 3 maybe 4 3 let's say 3 million tonnes it will depend again about where this LNG will go through.

Speaker #1: So I just describe you for TotalEnergies just to explain you that I don't have the full picture of Yamal to be honest because we are we have limited today our interest only on the what can be done according to the EU sanctions.

Speaker #1: But yes the answer to you is yes there will be an impact if you have no with less the EU was a natural destination from the LNG tankers just because of optimizing the the shipping freights in fact the shipping costs.

Patrick Pouyanné: If you have, with less, the EU was a natural destination from the LNG tankers just because of optimizing the shipping freight, in fact, and the shipping costs. The fact that it cannot come to EU definitely from January 2012, will have an impact on the capacity of the plant to export its full volumes. I don't have a clear vision as well, to be honest, about the relationship today between Yamal and the Chinese off-takers, because this is also the other part of the equation. That's my comment on this one.

Speaker #1: So the fact that it does not come come to EU definitely from January 27th. I will have an impact on the capacity of the plant to export its full volumes.

Speaker #1: I don't have the clear vision as well to be honest about the relationship today between Yamal and the Chinese offtakers because this is also the other part of the equation.

Speaker #1: So that's my my comment on this one.

Christopher Kuplent: Thank you.

Speaker #2: Thank you.

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

Speaker #3: The next question is from Michele Della Vigna of Goldman Sachs. Please go go ahead.

Michele Della Vigna: Thank you, and congratulations on the strong quarter. Two things I wanted to ask. First, in a quarter of unprecedented freight rates, I was wondering if you could tell us a little bit how you think about your current tanker portfolio, how much is on long-term rates versus spot, and how this impacts your realizations and trading capabilities. Then finally, we have seen a big increase in appetite for long-term LNG contracts with customers trying to diversify away from Hormuz. I was wondering if that is leading to an improvement in the pricing. I would think recently the oiling contracts have been around 12.5% oil slope, if we are seeing any improvement on that. Thank you.

Speaker #2: Thank you, and congratulations on the strong quarter. Two things I wanted to ask. First, in a quarter of unprecedented freight rates, I was wondering if you could tell us a little bit about how you think about your current tanker portfolio.

Speaker #2: How much is on long-term rates versus spot, and how does this impact your realizations and trading capabilities? And then finally, we've seen a big increase in appetite for long-term LNG contracts, with customers trying to diversify away from Hormuz.

Speaker #2: I was wondering if that is leading to an improved in the pricing. I would think recently the oiling contracts have been around 12 and a half percent.

Speaker #2: Oil slope—if we're seeing an improvement on that. Thank you.

Patrick Pouyanné: So two questions. Thank you. First, freight rates, I think it is a new topic. I never had a question since I am CEO about freight rates, and only they become popular. Different comments on this one. First, you probably noticed that our liquid realization, there was a difference between Q3 and Q2 of $6 per barrel. The $6 per barrel represents more or less these additional freight costs, which is, in fact, in our portfolio, quite limited because our policy, in fact, today, we have some long-term, medium and long-term, I would say charter, which represent more or less 40% of the equity that we off-take. Why 40% is a good figure?

Speaker #1: So two questions there. Thank you. First wait wait I think it's a new topic I never I never had a question since I'm CEO but freight rates are only they become popular.

Speaker #1: But different comments on this one. First you probably noticed that our liquid realization there was a difference between the third quarter and the second quarter of $6 per barrel.

Speaker #1: The $6 per barrel represents more or less these additional freight costs. Which is in fact in our portfolio quite limited because our policy in fact today we have some long-term medium and long-term I would say what do I call some charter which represent more or less 40% of the equity that we obtain.

Speaker #1: Why 40% is a good figure because in fact as you know our average taxation rate on upstream is around 45%. So 40% that means that we are somewhere trying to neutralize the impacts on our equity crude oil of I would say variable freights.

Patrick Pouyanné: Because, in fact, as you know, our average taxation rate on upstream is around 45%, so 40%, that means that we are somewhere trying to neutralize the impact on our equity crude oil of, I would say, variable rates. The second comment is that all charter with medium and long-term are really with fixed rates. We do not sign within TotalEnergies charters, which will be with a link to a, I would say, a spot market. We do not just reserve a capacity. We have a capacity. We have the tanker plus a freight, and of course our traders this week during this quarter, and I think next quarter, are benefiting today from having this fleet available, which of course is giving some positive results to their value chain, in fact. So that is, I would say, the second strength of the positions.

Speaker #1: The second comment is that our charters for medium and long-term are really with fixed rates. We don't sign, within TotalEnergies, charters which would be linked to, I would say, a spot market.

Speaker #1: We don't just reserve a capacity. We we have a capacity. We have the tanker. Plus a freight. And of course our traders this week during this quarter and I think next quarter are benefiting today from having this fleet available.

Speaker #1: Which of course is giving some positive results to their value chain in fact. So that's I would say the second strength of the positions.

Patrick Pouyanné: So it is impacting, I would say, positively trading capabilities. Then, of course, it is up or trading by the way, for the rest of their business. They are also negotiating, it is their job, access to a third party, I would say, tankers. One of the success of Q3, which I think will move on Q4, is that they have been able to have access to some tankers going inside the Strait of Hormuz, of taking, in particular, some Iraqi crude oil, and then exiting, and then making this trade as generating some positive results. So that is our philosophy on trading rates. I think there is a difference between different companies, because some competitors have some charters but linked to the spot market for freight, which is not our case. When we charter, we charter on fixed rates. Yes, second question.

Speaker #1: So it's impacting I would say positively trading capabilities. And then of course it's up our trading by the way for the rest of their business.

Speaker #1: They are also negotiating. It's their job. Access to third-party I would say tankers. One of the success of the third quarter which I think will move on on the fourth quarter is that they have been able to go to have access to some tankers going within in inside the Strait of Hormuz of taking in particular some Iraqi crude oil.

Speaker #1: And then exiting and then making this trade as generating some positive results. So that's our our philosophy on on on trading rates. And I think there is a difference between different companies because some competitors have some charters but linked to the spot market for freights which is not okay.

Speaker #1: It's when we we charter we charter on fixed rates. Yes second questions. It's true but again as I mentioned during my speech at Gaztech we had a number of long queue of customers coming to us.

Patrick Pouyanné: It is true, but again, as I mentioned during my speech, at Gastech, we had a number of long queue of customers coming to us. Clearly, there is a trend there in Asia, I would say, to try to escape from the volatility of the JKM. JKM is not very popular. It was the case in 2022. We tend to forget in 2024, 2025. Today, again, this volatility, clearly for these economies, is not good. So they are coming back to ask a link to Brent. Of course, in such an environment, there is a trend for some of them to move from 12 to 8.5. The improvement is not as well, I would say. You do not pitch today higher than 12.5, I would say. But again, it is negotiation, so it depends where you are, of course, where the LNG is procured.

Speaker #1: Clearly, there is a trend in Asia, I would say, to try to escape from the volatility of the GKM. You know, GKM is not very popular today.

Speaker #1: It was a case in '22 where it had to forget in '24, 5. Today, again, this volatility is clearly not good for these economies.

Speaker #1: So they are coming back to ask link to Brent and of course in such an environment there is a trend for some of them to move from 12 12 12.5.

Speaker #1: It's not the improvement is not as well I would say you don't reach today higher than 12.5 I would say. But again it's it's negotiation so it depends where you are of course where the LNG is procured with just in charge we are just commercializing the Papua LNG I would say volumes 2.4 million tons with Komoot and we have some good results from this perspective.

Patrick Pouyanné: In short, we are just commercializing the Papua LNG, I would say, volumes, 2.4 on terms with Kumul Petroleum, and we have some good results from this perspective, which will help the profitability of Papua LNG.

Speaker #1: Which we have a profitability of Papua LNG.

Michele Della Vigna: Thank you, Patrick.

Speaker #2: Thank you Patrick.

Operator: The next question is from Alastair Syme from Citi. Please go ahead.

Speaker #3: The next question is from Aliter. Sime from City. Please go ahead.

Alastair Syme: Thank you. Hi, Patrick. Just one question. I wanted to get your thoughts about the current environment in downstream, and whether that makes you think any differently about investing in that business. I am really thinking about geographical mix or pushing more into biofuels or mix of assets versus trading. Is there anything on your mind from what we have seen in recent months? Thank you.

Speaker #2: Thank you. Hi Patrick. Just one question I wanted to. Get your thoughts about the current environment in in downstream and whether that makes you think any differently about investing in that business.

Speaker #2: You know, I'm really thinking about geographical mix, or pushing more into biofuels, or mixed assets versus trading. Is there anything on your mind from what we've seen in recent months?

Speaker #2: Thank you.

Patrick Pouyanné: I have been blunt during the CMD. I told you, no, I will not invest in new refineries. I maintain that position. I think it is quite exceptional. Of course, it encouraged us to maybe consider maintaining these capacities, and that is the old ports. Biofuels, honestly, it is a complex economy. It is a regulated economy, so there might be some pocket, but we have to be careful about the way that the regulation will evolve. There is, in some countries, a trend to more biofuels, but you know in Europe, there is always a debate between food and biofuel, which is continuously impacting the development of that business. We have been opportunistic. We will start up the Grandpuits biorefinery in this quarter. We will have access to more HVO. HVO seems to become a more popular fuel.

Speaker #1: Bye. I’ve been blunt during the CME. I told you: No, I will not invest in new refineries. I maintain that position. I think it’s quite exceptional.

Speaker #1: Of course it's encourage us to maybe consider maintaining this capacities and that's the whole thought. Biofuels honestly it's a complex economy. It's regulated economy.

Speaker #1: So there might be some pocket but we have to be careful about the way that the regulation will evolve. There is in some countries a trend to more biofuels but you know in Europe there is always a debate between food and biofuel which is continuously impacting the development of that business.

Speaker #1: So I'm a little I'm we have been opportunistic. We will start start up the Grand Prix biorefinery in this quarter. So we'll have access to more HVO.

Speaker #1: HVO seems to be becoming a more popular fuel. You know, in Europe, there has been a deal between France and Germany about the new, I think, light vehicles regulation, where the French have accepted that an IC vehicle which is supplied by 100% HVO will be acceptable.

Patrick Pouyanné: In Europe, there has been a deal between France and Germany about the new, I think, light vehicles regulation, where the French have accepted that a vehicle, an IC vehicle, which would be supplied by 100% HVO, would be acceptable. We do not know for which volume, because it is a matter of volume. There is something happening there. All that is regulated. We need, of course, to be sure that this regulation will not change again in 2 years. In our environment today, I would say, by the way, what we have done fundamentally was to maintain, reduce the European exposure because of the trend. This is a question mark that we maintain. Outside, we have developed our platforms in Port Arthur, and we have developed it by integration of petrochemical. We have this big refinery of SATORP, which we complement by Amiral.

Speaker #1: So we don't know for which volume because it's a matter of of volume. But so there is something happening there. I'm we are we are all that is regulated we need of course to to be sure that this regulation will change again in few years.

Speaker #1: In our environment today I would say by the way so we are you know what we've done. Fundamentally was to maintain reduce the European exposure because of the trend.

Speaker #1: This is a question mark. Do we maintain outside? We have developed our platforms in Port Harford and we have developed it by integration of petrochemicals.

Speaker #1: We have this big refinery of Amiraal that we are of Satop which we complement by Amiraal. I think it was a right strategy to go where the energy is cheap in fact.

Patrick Pouyanné: I think it was the right strategy to go where the energy is cheap. In fact, for me, you make refineries, it is better to go where energy is cheap. That is very simple. That is, I would say, but we will not change our strategy. Our strategy is fundamentally orienting as upstream. It is integration and maintaining, I would say, downstream as a cash cow, and I think today it is a super cash cow, so that is good for us. And continuing to invest in Integrated Power, which has a good momentum, by the way, today in both sides of the Atlantic, US and Europe, with all this AI and activity. I would say, I do not see an inflection on the business.

Speaker #1: For me you make refineries it's better to go where energy is cheap. That's that's very simple. So that's I would say. But I would I would not no.

Speaker #1: We will not change our strategy. You know our strategy is fundamentally oil and gas upstream. It's integration and maintaining I would say downstream as a as a cash flow.

Speaker #1: And I think today it's a super cash flow. So that's good for us. And continuing to invest in integrated power. Which has a good momentum as we wait today in both sides of the Atlantic.

Speaker #1: US and Europe with all these AI and activities. So I would say I don't see an inflection on the business. Having said that the question will be again to consider that this midstream assets have a value an opportunistic value and then taking decisions to shut down might be more tricky than it was before.

Patrick Pouyanné: Having said that, the question will be, again, to consider that these midstream assets have a value, an opportunistic value, and then taking decisions to shut down might be more tricky than it was before. That is, I would say, the strategic conclusion. But we will review, and maybe my question will be different if I see three years in a row of $20 per barrel of refining margin. For the time being, I am happy with what happens. I think the refining margin in Europe will remain quite good, quite strong during the H1 2027, because we will embark the consequence of the crisis, low inventories. Beyond, it is very difficult to say what will happen. And honestly, that is one of the most complex questions for us is what assumption do we take on refining margins for 2027 for the budget?

Speaker #1: So that's I would say the the the the the strategic conclusion. But we will review and maybe my question will be different if I see three years in a row of 20 dollar per barrel of refining margin.

Speaker #1: But for the time being I'm happy with what happened. I think the refining margin in Europe will remain quite quite good quite strong during the first half of 27 because we will embark the consequence of the crisis.

Speaker #1: Low inventories beyond it's very difficult to to say what will what will happen. And honestly that's one of the most complex question for us is what assumption do we take on refining margin for 2027 for the budget.

Patrick Pouyanné: So do not ask me, because we will depend on our mood in January or December or January. We will see.

Speaker #1: So don't ask me because we will depend on our mood on February on in January or December or January. We'll see.

Alastair Syme: Great. Thanks very much.

Speaker #2: Great. Thanks very much.

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

Speaker #3: The next question is from Matt Lapping from JP Morgan. Please go ahead.

Matt Lofting: Thanks everybody for taking the questions. I will just ask one on capital allocation. Given the strength of position that this year's cash flow and deleveraging creates for TotalEnergies, did you see any further opportunities outside of the comments that you just made on refining to accelerate the strategy through incremental organic investment, which can further enhance the business' cash flow leverage to price whilst also helping France and Europe solve for energy security? If so, in what areas of the businesses could some of those opportunities sit? Thank you.

Speaker #2: Thanks everybody for taking the questions. I'll I'll just ask one on on capital allocation. Given the strength of position that this year's cash flow and and deleveraging creates for total energies did you see any further opportunities outside of the comments that you just made on refining to accelerate the strategy through incremental organic investment which can further enhance the business's cash flow leverage to price whilst also helping France and Europe solve for energy security.

Speaker #2: And if so in what areas of of the businesses could some of those opportunities sit? Thank you.

Patrick Pouyanné: Honestly, I think for us, first, no. We have a strategy. We have a plan. We will not become to be pro-cyclical because suddenly we have more cash. That's the beginning of the mistake or the short-term mistake. So fundamentally, yes, there is a point. I will say yes on the point, but as I said, during, I think, the CMD. Of course today, making infill wells to produce more oil in Angola, in Nigeria, there are opportunities. We will review their budget soon. If they are asking $500 million or it's not, or 300, I will not say no stupidly because it's a short-term delivery. So of course, this is what this is, for me, the short-term, the short cycle CapEx as we can easily, I would say, arbitrate.

Speaker #1: Honestly I I think for us first no we have been we have a strategy. We have a plan. We'll not become to be a procyclical because suddenly we have more cash.

Speaker #1: Let's be right at the beginning of the mistake or the short term mistake. So fundamentally yes there is a I would say yes on the point that we have as I said during I think the CME of course today making Enfield wells to produce more oil in Angola in Nigeria they are opportunities.

Speaker #1: We'll review. We will have our budget soon. If they're asking $500 million, we'll not — or $300 million — I will not say no stupidly, because it's a short-term delivery.

Speaker #1: So of course this is what this is for me is a the short term the short cycle capex that we can easily I would say are be are betrayed.

Patrick Pouyanné: I think, Matt, one of the lesson is that on the question is of course we are looking to do we need to have, for example, where I am ready to consider to have more, I would say, working capital is maybe more LNG charter if we need to belong on the midstream assets, I would say. That's a possibility to know chartering do not to be perfectly efficient, but to have some margins in order to be able to capture the volatility. That's one of the lesson. I would say investing in some pipeline in the Middle East, because this is part of the security of supply and it's also giving value to our own assets. That I agree. To invest in Europe for energy security in fossil fuels, I will need to see a different Bible at the European Parliament, to be honest.

Speaker #1: I think my one of the lesson is that on the question is of course we looking to do we need to have for example where I'm ready to consider to have more I would say working capital is maybe more LNG charter if we need to to be long on the midstream assets.

Speaker #1: I would say that's a possibility. You know chartering do not to be perfectly efficient but to have some margins in order to be able to capture the volatility.

Speaker #1: That's that's one of the lesson. I would say investing in some in some in some pipeline in the Middle East because this is part of the security of supply and so also giving value to our own assets that I agree.

Speaker #1: To invest in Europe for energy security in fossil fuels, I will need to see a different Bible at the European Parliament, to be honest.

Patrick Pouyanné: I'm not sure we are still there. So honestly, let's not jump suddenly in that direction. I just mentioned that we could maintain our business today, and that's true. To grow in fossil fuels in Europe, I will need to hear a different narrative from the European political leaders, and I'm not sure they are still there. But again, we work with them on that. But our investments for TotalEnergies, honestly, when we contribute to security of supply of Europe, is more when we invest outside of Europe, investing in US energy, investing in Brazilian oil, investing in Mozambique energy. That's contributive to the security of supply of the continent. I think it's more our DNA. We have been created hundreds of years ago on this, I think, assumption, and I think this is what we do. That's my comment.

Speaker #1: I'm not sure we are still there. So I'm honestly let's not jump suddenly and in that direction. I just mentioned that we could maintain or or business today and that's a true to grow in fossile fuels in Europe I will need to hear different narrative from the European political leaders and I'm not sure they are still there.

Speaker #1: But again we work with them on that. But our investments for total energy is honestly when we contribute to security of supply of Europe is more when we invest outside of Europe investing in US energy investing in Brazilian oil investing in Mozambique energy that's contributive to the security of supply of the continent.

Speaker #1: I think it's a it's more our DNA. We have been created 100 years ago on this I think assumption and I think this is what we do.

Speaker #1: That's my comment.

Matt Lofting: Very good. Very clear. Thank you.

Speaker #2: Very good. Very clear. Thank you.

Patrick Pouyanné: Discipline on capital allocation is a key word. Okay.

Patrick Pouyanné: Discipline on capital allocation is a key word.

Speaker #1: So discipline on capital allocation is a key word. Okay.

Matt Lofting: Okay.

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

Speaker #3: The next question is from Kim Fuste of HSBC. Please go ahead.

Kim Fustier: Hi. Good afternoon. Thanks for taking my questions. I have two, please. You have just referred to potentially participating in pipeline routes through Abu Dhabi, Iraq, and Syria. What would you need to see in terms of utilization, tariff, and contractual protection for these investments in new export infrastructure to earn an adequate return, especially if this capacity might be valuable only during periods of disruption? Secondly, given the very high cost of moving crude long distances, have you sort of changed your crude sourcing or refinery optimization to reduce freight exposure? Does your integrated trading system allow you to protect your realized refining margins better than, say, regional or local refiners can? Thank you.

Speaker #4: Hi. Good afternoon. Thanks for taking my questions. I have two please. You've just referred to to potentially participating in pipeline routes through Abu Dhabi, Iraq and Syria.

Speaker #4: What would you need to see in terms of utilization tariffs and contractual protection for these investments in New Export Infrastructure to earn an adequate return especially if this this capacity might be valuable only during periods of disruption?

Speaker #4: And then secondly given the very high cost of moving crude long distances have you sort of changed your crude sourcing or refinery optimization to reduce freight exposure?

Speaker #4: And does your integrated trading system allow you to protect your realized refining margins better than say regional or local refiners can? Thank you.

Patrick Pouyanné: Well, first question, we are discussing today on different schemes. We are participating in two projects. I cannot today, I would say, answer precisely. There are negotiations, so I cannot enter into commercial discussions today with you. Again, I think at the end of the day, the right word is that we need to be sure that the upstream revenue is not moving to the midstream one. It is a question of balancing the position between the upstream and the midstream, and I think that is the question. It is a question of protection, again, yes, I know all that, but this is being discussed, and when we will have better clarity on it, I will come back to you. Today is premature to comment on that, and I do not want to interfere today with any of the discussions.

Speaker #1: Well that's first question we are discussing we have this discussing today on different schemes. We are part we are participating to to to two projects.

Speaker #1: So I cannot today I would say I mean answer precisely there are negotiations so I cannot enter into commercial during commercial discussions today with you.

Speaker #1: Again I think at the end of the day the the right word is that we need to be sure that the upstream revenue is not moving to the midstream one.

Speaker #1: So it's a question of balancing. It's a position between the upstream and and the midstream. And I think that's a question it's a question of protection again yes I know all that but this is being discussed and when we'll have a better clarity on it I will be come back to you today.

Speaker #1: It's premature to comment on that, and I don't want to interfere today with any of the discussion. The second one, it's a permanent, I would say, optimization of the crude slate of refinery—it's part of the permanent job of what we call refining refiner optimizer.

Patrick Pouyanné: The second one, it is a permanent, I would say, optimization of the crude slate of refinery is part of the permanent job of what we call refinery optimizer, working very closely with the traders. We have, in fact, an organization in Geneva around the same desk, but we have the refining of optimizer just next to the crude trader, and they permanently look to the different slates. When we lost the Russian oil, we had to find other slates for refineries. Today, of course, it is an optimization which integrates, obviously, the cost of shipping. That is part of it. Before it was, I would say, cost of shipping was 5% of the cost of Brent. I would say $2 per barrel. Today, we speak about $25 per barrel. Of course, this is part of the equation to optimize the supply of the refinery.

Speaker #1: Working very closely with the traders. We have in fact an organization in Geneva around the same desk where we have the refining of optimizer just next to the food trader and they permanently look to the different slates and you know we had when we lost the Russian oil we had to find other slates for refineries and today of course it's an optimization which integrates obviously the cost of shipping.

Speaker #1: That's part of it. You know when you raise before it was I would say cost of shipping was 5% of the of the cost of rent.

Speaker #1: I would say 2 3 dollar per barrel. Today we speak about 25 dollar per barrel. So of course this is part of the equation.

Speaker #1: To optimize the supply of the refinery of course if you can have access to some barrels from Norway oil barrels from Norway it's more efficient than from from longer distance.

Patrick Pouyanné: Of course, if you can have access to some barrels from Norway, oil barrels from Norway, it is more efficient than from a longer distance. This is why I think fundamentally of the AIT, our model is very efficient integration. At the end, in our results, as you notice, refining chemicals, this is the reason why we integrate in one segment, refinery and trading, because this is, for me, it is up to us to decide what is the price. What I want them together is not to have a fight between traders and refiners, but to optimize the supplies of refineries, which of course, has a value for our traders. By the way, just to clarify for you, in our European refining margin, but I am sure you know about it is not a pure difference of petroleum products minus crude oil.

Speaker #1: But this is why I think fundamentally of the I repeat our model is very efficient integration. At the end in our results as you notice refining chemicals this is the reason why we integrate in one segment refinery and trading because this is for me it's a it's attached to decide what is the price price for price.

Speaker #1: What I want to them together is not to have a fight between traders and refiners but to optimize the supplies of the refineries which of course has a has a value for our traders.

Speaker #1: By the way just to clarify for you you know in our European refining margin but I'm sure you know about it it's not a pure difference of petroleum products minus crude oil.

Patrick Pouyanné: It integrates in the European refining margin, the cost of the freight, the cost of natural gas, and the cost of CO2. That is why when you see $50 in the US, where of course, you have no natural gas, it is very cheap, energy is cheap. I would say, there is no CO2, and the freight is limited to pipelines. Today, Port Arthur is benefiting more from $50 per barrel and not from $25 per barrel. So the indicator is taking into account this long-distance impact, which could happen. Again, we optimize and we change the crude slate according to what is the best mix. Of course, we also optimize considering the slate of the products. If you want to make more diesel, we select crude oil, which are being able to deliver more diesel or jet fuel than gasoline. That is also part of the equation.

Speaker #1: It integrates in the European refining margin the cost of the freight the cost of natural gas and the cost of CO2. That's why when you see 50 dollar in the US where of course in the you have no natural gas is very cheap energy cheap.

Speaker #1: I would say there is no CO2 and the freight is limited to pipelines. The today Port Arthur is benefiting more from 50 dollar per barrel and not from 25 dollar per barrel.

Speaker #1: So the indicator is taking into account this long distance impact which could have. But again we we optimize and we change the crude slate according to what is the best mix of course we also optimize considering the slate of the products if you want to make more diesel we select crude oil which are being able to deliver more more diesel of jet fuel than gasoline.

Speaker #1: That's also part of the equation. It's a by the way it's a very interesting job for young people to to to to optimize permanently the refining optimizer.

Patrick Pouyanné: By the way, it is a very interesting job for young people to optimize permanently, the refining optimizer. Maybe, Kim, you should be invited by one of them during one day. We will see what they do, and we will see that. We will have more interest. We will put you to do that. Thank you.

Speaker #1: Maybe Kim you should be invited by one of them during one day. You will see what they do. See you will have more interest.

Speaker #1: You will refer to you to do that.

Kim Fustier: Thank you.

Speaker #2: Thank you.

Speaker #4: Thank you.

Operator: The next question is from Doug Leggate from Wolfe Research. Please go ahead.

Speaker #3: The next question is from Dag Leggate from Gulf Research. Please go ahead.

Doug Leggate: Thank you. Good morning, everyone. Patrick, I wonder if I could take two quick ones. First, your gearing is now under 10%. How much lower are you prepared to allow that to go? I assume, deploying windfall cash flow to the balance sheet is still a good idea. My follow-up is, if you go back to a question from earlier regarding the post 2030 visibility. Really simple question. With what you know today from the portfolio, what is the most likely way to fill the gap to growth? Is it exploration, new project entries or M&A? Thank you.

Speaker #5: Thank you. Good morning everyone. Patrick I I wonder if I could take two quick ones. First your your gearing is now under 10%. How much lower are you you prepared to allow that to go?

Speaker #5: I assume deploying windfall cash flow to the balance sheet is still a good idea. And then my follow up is I can go back to a question from earlier regarding the 20 post 2030 visibility.

Speaker #5: Yeah really simple question. With what you know today from the portfolio what's the most likely way to fill the gap to growth? Is it exploration?

Speaker #5: New project entries or M&A? Thank you.

Patrick Pouyanné: The second question is quite easy. You look to our performance in the last 10 years. DROs access to new projects is clearly the easiest one. In particular, if you are able to make some direct discussions where we have been quite good at. I would say, when you look to down, exploration is also part of it. I would say it is 25%, 75%. M&A is another topic, a different approach. It is not when we speak, when I mentioned the 2% to 3%, we did not have big M&A in ahead, to be clear with you. Just to clarify. The largest M&A we have done in E&P was Maersk Oil, historically for, say, EUR 8 billion or $8 billion. When I mentioned the 2% to 3%, do not interpret that as an announcement of a big M&A.

Speaker #1: Is this a good question? It is quite easy. If you look at our performance in the last 10 years, it's DROs' access to new projects—it's clearly the easiest one.

Speaker #1: In particular if you are able to make some direct discussions where we have been quite good at. So that's I would say when you look to down exploration is also part of it.

Speaker #1: I would say it's 25 M&A it's another topic. It's different it's different approach you know. And it's not when we speak when I mentioned the two to three percent we didn't add big M&A in ahead to be clear with you just to clarify.

Speaker #1: You know the largest M&A we've done in E&B was Mersk Oil historically for say 8 billion euro 8 billion dollar. So when I mentioned the two to three don't interpret that as an announcement of a big M&A there was a big M&A it will be on the top you know.

Patrick Pouyanné: If there was a big M&A, we would be on the top. Or the base will be higher. That is not what we had in mind. It was fundamentally, I would say, 70% DRO, 75% DRO, 25% exploration, actually done during the last 10 years. First one, it is a good question. I had several times this question, so that is good to hear. There is a point there, which is also, it is quite complex equation. Because you could look at it from a financial point of view. There is a point today where as long as the interest rates are low, and that we deliver a debt, if we pay 3% to 4% for the debt, and we have a yield of 5%, I do not know why we would go to 0%. There is a point where we could see a financial balance.

Speaker #1: So or the base will be higher. So that's not what we had in mind. It was fundamentally I would say 70% DRO 75% DRO 25% exploration as we've done during the last 10 years.

Speaker #1: First one, it's a good question. I have had this question several times. Suddenly, it's good to hear. I mean, there is a point there, which is also quite a complex equation.

Speaker #1: Because you could look at it from a financial point of view. There is a point today where I mean when as long as the interest rates are low and that we deliver debt if we pay free for free 4% for the debts and we have a yield of 5% I don't know why we would go at 0%.

Speaker #1: You know there is a point where you could see a financial balance. Then you could also say which is in fact also share that's why the board is will be inclined to be a strong very strong balance sheet.

Patrick Pouyanné: Then you could also say, which is in fact, also shared, that is why the board is to be inclined to be a very strong balance sheet. We have a world of crisis. We do not know where we will go. Today it is a crisis which is pushing price up. You could have another crisis, like we had in 2020, price would go down. To have a very strong balance sheet will allow us to swallow this crisis. Our two US peers in 2015 were in the positive part, and it helped them a lot. I think the journey of these two companies was quite different from 2015 to 2025 to the journey of the European majors, partly because of that. I will be happy to face really, I think to face that questions practically. Maybe it could come.

Speaker #1: We have a world of go. You know today it's I would say it's a crisis which is pushing price up. You could have another crisis like we had in 2020 price would go down and so to have a very strong balance sheet will allow us to to swallow this crisis.

Speaker #1: You know, our two U.S. peers in 2015 were in the positive part, and it helped them a lot, I think. The journey of these two companies was quite different from '15 to '25, compared to the journey of the European majors, partly because of that.

Speaker #1: So that's it's we are still I mean I will be happy to face really I think to face bad questions practically. Maybe it could come.

Patrick Pouyanné: We'll have to continue to evaluate the pros and cons and to say where we go. There is no taboo there. No taboo, but to be pragmatic in the way to, again, manage the global cash of the company, knowing that I noticed that some of you count the lease, et cetera, so we need to look at all the equation as well. Some of you have reported that we are not yet under 10%. We are at 14%. So to be under 10%, for some of you, I need to be under 6%, if I understand correctly the comment this morning. So maybe my objective to be under 6% so that I will stop these comments, but we are not at 10%, but at 14%. So I can work on that. Maybe it's easier as a first target.

Speaker #1: We'll have to to continue to evaluate the pro and cons and to say where we go. But there is a no taboo there. No taboo.

Speaker #1: But to be pragmatic in the way to again manage the the cash of a global cash of the company. Knowing that I noticed that some of you can't be leads etc.

Speaker #1: So we'll need to look at all the equations as well. You know, some of you have reported that you are not yet under 10.

Speaker #1: We had 14. So to be under 10 for some of you I need to be under 6. If I understand correctly the comment this morning.

Speaker #1: So maybe my objective is to be under 6, so that I will stop these comments that we are not at 10 but at 14.

Speaker #1: So so we'll I can work on that. Maybe it's easier as a first target. Okay.

Doug Leggate: Okay.

Doug Leggate: Maybe just for clarification, Patrick, do you see any value in a special dividend?

Speaker #5: Maybe just for clarification Patrick. Do you see any value in a special dividend?

Patrick Pouyanné: No, I told you, I answered to that. I've been clear, we tested. There is a value if you announce it in advance, or in fact, what we are just doing today by telling you, we can put a small top-up on the final dividend, which would be 40% of the difference of cash flow, to meet the 40%. I gave you an equation today. I told you today that 40% of the cash flow, minus $8 billion of buyback, that we have minus $8.6 billion of dividends, will be the base of this, I would say, top-up of the final dividend. That's the way we work on it.

Speaker #1: No. I told you I answered to that. I mean I've been clear. We we tested the it's there is a value if you announce it in advance.

Speaker #1: So in fact what we are just doing today by telling you we can put a small up I mean a top up on the final dividend which would be 40% of the difference of a cash flow to to meet the 40%.

Speaker #1: I give you an equation today. I told you today that 40% of the cash flow minus 8 billion dollar of buyback that we have minus 8.6 billion of dividend will be the base of this I would say top up of the final dividend.

Speaker #1: That's the way we'll work on it. So but again what I will notice when we we were clear at the CMD when we made my investor team has done a road show with all the investors that a large majority not all of them of course but I see 80% or 85% were more in favor of leveraging than a special dividend.

Patrick Pouyanné: Again, what I will notice, when we were clear at the CMD, when me and my investor team has done a roadshow with all the investors, but a large majority, not all of them, of course, but I see 80% or 85% were more in favor of deleveraging than a special dividend. Because the special dividend, we need to put a formula. Consider that today, with a 40% of cash flow, we have a sort of formula. But we could also match it directly with a buyback. The buyback is a normal way to match the 40%. This year, because we are, I would say, running because the positive or high results, we'll do it by putting a top-up on the final dividend.

Speaker #1: So because the special dividend will need to to put a formula consider that today with a 40% of cash flow we have a sort of formula.

Speaker #1: But we could also match it directly with a buyback. So it's I don't want to the buyback is a normal way to match the 40%.

Speaker #1: This year because it's we are I would say running because the positive or high results we'll do it by putting a top up on the on the final dividend.

Doug Leggate: Thank you so much.

Speaker #5: Thank you so much.

Operator: The next question is from Mark Wilson from Jefferies. Please go ahead.

Speaker #2: The next question is from Mark Wilson from Jefferies. Please go ahead.

Mark Wilson: Okay, thank you. Just two points, Patrick, maybe you could clarify. You spoke before about some LNG moving out of the Gulf. There have been reports of volumes getting back to pre-war levels in terms of oil, from some reports. Could you give us your understanding of movement around the straits today or in last few weeks? I appreciate it is volatile. That is the first one. The second one is the Venus development we continue to wait for. Should we be expecting that in the very near future and the moving parts, any movement on that long license extension agreement? Thank you.

Speaker #3: Okay. Thank you. I'm just two points Patrick. Maybe you could clarify on you spoke before about LNG some LNG moving out of the the Gulf.

Speaker #3: There has been reports of of of volumes getting back to pre-war levels in terms of oil from some reports. Could you give us your understanding of of movement around the Straits today or in last few weeks?

Speaker #3: I appreciate its volatile. That's the first one. And then the second one is the Venus development we continue to wait for. Should we be expecting that in the very near future?

Speaker #3: And and the moving parts any movement on that long license extension agreements. Thank you.

Patrick Pouyanné: In Namibia, we are starting the drilling of the Mopane well this month. That is the good news. Second news, do not listen to contractors, but listen to the operator. I think I said everything during the last CMD, that we are optimistic to reach the FID. First point, today, what we can say on through Hormuz, in fact, globally, you could say that there were 20 million barrel oil per day going from the region pre-war. You have 5, 6 through Yanbu. You have 2 through Fujairah, and you have 10, 12 through Hormuz. So that is 20 million crude oil are going to the market with different routes. So we are around for most amounts, now 12 million barrel oil per day, which represents six tankers per night, more or less. It is 2 million barrel oil. VLCC is 2 million. To be honest, it is a new policy.

Speaker #1: In Namibia we are starting the drilling of the open-air well this month. That's a good news. Second news. Don't listen to contractors but listen to the operator.

Speaker #1: And I think I said everything during the last CMD that we are optimistic to reach the FID. Okay. First point today what we can say on four moves in fact globally you could say that there was 20 million barrel of oil per day going from the region.

Speaker #1: Pre-war, you have 5–6 million barrels per day through Yambu, you have 2 million through Fujairah, and you have 10–12 million through Ormuz. So that's the 20 million going to crude oil.

Patrick Pouyanné: You have 2 through Fujairah, and you have 10, 12 through Hormuz. So that is 20 million crude oil are going to the market with different routes. So we are around for most amounts, now 12 million barrel oil per day, which represents six tankers per night, more or less. It is 2 million barrel oil. VLCC is 2 million. To be honest, it is a new policy.

Speaker #1: Crude oil. Crude oil. Are going to the market with different routes. So we are around for almost a month now 12 million barrel of oil per day which represents six tankers per night more or less.

Speaker #1: It's 2 million barrel of oil VLTC is 2 million. To be honest it's a new policy the free NOCs have decided ARAMCO ADNOC Kuwait but also Qatar for crude oil have decided that they have their own tankers.

Patrick Pouyanné: The three NOCs have decided, Aramco, ADNOC, Kuwait, but also Qatar for crude oil, have decided that they have their own tankers, old ones. They go through. They have attacks from their attack by Iran, but they have decided that now they have to go through Strait of Hormuz. On LNG, it is a little more tricky because LNG tankers are a little more sensitive in case of, I would say, attack. Again, I mentioned, I said during, I think the previous question, but what we have observed today is that you have, let's say, 25% of the move in the last two months, compared to pre-war. So around, I would say, 1.5 to million ton, compared to 8. I do not know if it will go up or not. I think it is a decision which is more complex, because then it is more sensitive.

Speaker #1: Old ones they go through. If there are a tax from their tax by Iran but they they have decided that now they have to go through Strait of Ormuz.

Speaker #1: On LNG it's a little more tricky because LNG tankers are a little more sensitive in case of I would say attack. Again I mentioned I said during my just to I think the previous question but what we have observed today is that you have let's say 25% of the of the move in the last two months compared to pre-war so around I would say 1.5 2 million ton compared to 8.

Speaker #1: I don't know if it will go up or not. I think it's a decision which is more complex because again it's it's more sensitive you know.

Patrick Pouyanné: LNG tanker and the value is not exactly the same. But I would say decisions which will be taken by the Qatari authorities, and we are following that.

Speaker #1: LNG tanker is a little it's and the value is not exactly the same. So that's I would say decisions which will be taken by the by the by by the Qatari authorities and we we are following that.

Mark Wilson: Thank you. I will hand it over.

Speaker #3: Thank you. I'll hand it over.

Patrick Pouyanné: Henri? Let's move on to the next one.

Speaker #1: Henri? Let's move on to the next one.

Operator: Yes, the next question is from Henri Patricot from UBS. Please go ahead.

Speaker #2: Yes, the next question is from Henry Patrick Ko from UBS. Please go ahead.

Henri Patricot: Yes, hello, everyone. Just one question from my side, sticking to the Middle East and the Ratawi project in Iraq. Can you give us some date on what you expect in terms of the production ramp-up from the project in the current environment? Thank you.

Speaker #5: Yes. Hello everyone. Yeah. Just one question from my side. Sticking to to the Middle East and the Rataoui project in Iraq. Can you give us some date on what you expect in terms of the the production ramp up from the project in the current environment?

Speaker #5: Thank you.

Patrick Pouyanné: Well, we are moving up. I think we are targeting to move to We are already producing more than 100,000 barrels per day. I think we are starting right now, I think last week, this week, we are starting the first gas project, the first what we call ArtawiGas25. I think it's 15 million scf per day, if I remember well. The full phase one, which is supposed to reach 120,000 barrels per day, will be done by November. We are really, today, ramping up on the oil side and on the gas. The first phase of Ratawi, for me, is done, and then We are working. We have mobilized, I would say, we have 3,000, 4,000 people. I think I was in Iraq recently.

Speaker #1: Well we are moving up. We are we are we will I think we are targeting to move to we are already producing. We are already producing more than 100,000 barrels per day.

Speaker #1: I think we are starting right now. I think last week, this week, we have started the first gas projects — the first, what we call GMP 25.

Speaker #1: I think it's 15 million scuff per day or if I remember well. And the full phase one which is supposed to reach 120,000 barrels per day will be done by November.

Speaker #1: So we are really today ramping up on the oil side and on the gas. So the first phase of Rataoui for me is done and then we are working.

Speaker #1: We have mobilized, I would say, on the—we have 3,000 to 4,000 people. I think there was in Iraq recently, 4,000 people in the field to build the phase—the full field—which will reach 210,000 barrels per day and 300 million scuff per day of gas.

Patrick Pouyanné: 4,000 people in the field to build the full field, which will reach 110,000 oil per day and 300 million scf per day of gas.

Henri Patricot: Thank you.

Speaker #5: Thank you.

Patrick Pouyanné: Next one.

Operator: The next question is from Bertrand Hodée from Kepler Cheuvreux. Please go ahead.

Speaker #2: The next question is from Bertram Hodi from Capital Chevreux. Please go ahead.

Bertrand Hodée: Yes. Hello, thank you for taking my question. Two quick ones. You had an underlifting position in your UAE offshore production in Q2. We are wondering whether those underlifting positions have increased in Q3, and what was the impact on the E&P result and cash flow, and whether you can signal whether this will improve in Q4 or not. The second question is, you mentioned that Qatar LNG export is probably back to 25% in October. But I was wondering whether your train in Qatar has restarted or not.

Speaker #6: Yes. Hello. Thank you for taking my question. Two quick ones. You had an underlifting position in your UAE offshore production in Q2. Was wondering whether those underlifting position have increased in Q3 and what was the impact on the NP result and and cash flow and whether you can signal whether this will improve in Q4 or not.

Speaker #6: And the second question is. You mentioned that Qatar LNG exports is probably back to 25% in in in in October. But I was wondering whether your train in Qatar has restarted or not.

Patrick Pouyanné: No, the second question is clearly no. The Qataris are doing that. They are commercializing most. In fact, as you know, most of the LNG is most commercialized by QatarEnergy, I would say themselves. So I would say the supply contracts we have are in force majeure, and I think they are force majeure for long. Today, they prioritize, obviously, their own customers for what they can export, which is quite limited. So no, we are continuing to ensure the supply of our own customers without the supply coming from the Gulf. But it is okay, I commented that before. Yes, there is another lifting offshore UAE because it was difficult to go in the Gulf. We have done some liftings in Q3. But at the same time, the production is back almost where the normal level. So that means that yes, we are in another lifting position.

Speaker #1: No. No. The second question is clearly no. The Qataris are doing that. No. They are a big they are commercializing most in fact as you know most of the LNGs most commercialized by Qatar LNG in fact by Qatar Qatar Energy I would say themselves.

Speaker #1: So, I would say the supply contracts we have are enforced measures, and I think they are enforced measures for the long term. Today, they obviously prioritize their own customers for what they can expose, which is quite limited.

Speaker #1: So no. We are continuing to ensure the supply of our own customers without the supply coming from from the from the Gulf but it's okay.

Speaker #1: I commented right before yes there is an underlifting offshore UAE because it was difficult to go in the Gulf we have done some liftings in the third quarter and but in the same time the production is back almost to where the normal level.

Speaker #1: So that means that yes we are in another lifting position to give the to give the accounting impact on another lifting position Bertram as I'm a little late because I know that well want to speak at 3:30 after me.

Patrick Pouyanné: To give the accounting impact on another lifting position, Bertrand, as I am a little late because I know that Wael wants to speak at 3:30PM after me, I will ask you just to go to the experts of the accounting. It is not me. It is Renaud and his team. Renaud is not an expert, but he has some people in his team which are good in accounting. Sorry for that. So yes, we have an underlifting position. We try to minimize it. We do our best, but we are not the only one. I think all the IOCs are in the situation, and we will catch up as quick as we can. But all that is not an easy task. We are not national companies with our own tankers to expose. We have to pay insurance costs and all that. Okay. Thank you.

Speaker #1: I will ask you just to go to to the experts of the accounting. It's not me. It's Renault and his team and so Renault is not an expert but he has some people in his team which are good in accounting.

Speaker #1: Sorry for that. So yes we have an underlifting position. We tried to minimize it. We do our best but we are not the only one.

Speaker #1: I think all the I IOC are in this situation and we'll catch up as quick as we can but all that is is not an easy an easy task.

Speaker #1: We are not national companies with our own tankers to expose. We have to pay insurance costs and all that. Okay. Thank you.

Bertrand Hodée: Thank you.

Speaker #6: Thank you.

Operator: The next question is from Fergus Neve from Rothschild & Co. Let us burn. Please go ahead.

Speaker #2: The next question is from Fergus Nivi from Rothschild & Co. Let's burn. Please go ahead.

Fergus Neve: Yeah. Hi there. Thanks very much for taking my questions. Just a couple of quick ones on iPower, if I might please. It was good to see another strong cash flow, expert, and capital performance from iPower this quarter. I was just curious what cash generation and asset sale proceeds you envisage in Q4 to finish 2026 free cash flow balanced, and how much of the 2027 positive cash flow target depends on further farm downs. Then secondly, just on the return on capital employed improvements expected in iPower. When do you think we should expect to start seeing those coming through, given that it has been a little weaker over the last couple of quarters?

Speaker #3: Yeah. Hi there. Thanks very much for taking my questions. Just a couple of quick ones on iPower if I might please. It was good to see another strong cash flow exporting capital performance from iPower this quarter.

Speaker #3: I was just curious what cash generation and asset sale proceeds you envisage in four Q to finish 2026 free cash flow balanced. And how much of the 2027 positive cash flow target depends on further farm downs?

Speaker #3: And then secondly just on the return on capital employed improvements expected in iPower when do you think we should expect to start seeing those coming through given that it's been a little weaker over the last couple of quarters?

Patrick Pouyanné: Okay. It is a good question because we have, in fact, in the Q4, we have announced two important sales down, farm down to KKR, for almost 2 gigawatts between Europe and the US, representing an easy global view of $3 billion. So it is quite big. That means that we will get the impacts. By the way, I do not have any questions, but I saw some comments on organic CapEx. In fact, again, our commitment is, I repeat, the commitment is $15 billion of net CapEx. This will be reached because we will have, I would say, some proceeds of this farm down during the full Q3. It is almost $1.5 billion. The impact on the CapEx is even a little higher because we spent some money during the year, which will be recouped. You have also an impact, a positive impact on the cash flow from operation.

Speaker #1: Okay. It's a good question because we have in fact in the first fourth quarter two you know we have announced two important sales down farm downs to KKR.

Speaker #1: For almost two gigawatts between Europe and the US representing an EV globally of three billion dollars. So it's quite big. That means that we'll get the impacts and by the way we don't have any questions but I saw some comments on organic capex.

Speaker #1: In fact again our commitment is I repeat the commitment is 15 billion dollar of net capex. This will be reached because we'll have I would say some proceeds of this farm down during the four third quarter.

Speaker #1: It's almost 1.5 billion dollar the impact on the capex is even a little higher because we spend some money during the year which will be a recoup.

Speaker #1: And you have also an impact a positive impact on the cash flow operation. I think the target for if I it's around 800 million dollar I think for for integrated power we are at almost we were already almost at 800 million dollar this quarter.

Patrick Pouyanné: I think the target for if I, it is around $800 million, I think for Integrated Power. We were already almost at $800 million this quarter. We should go up because I think for the year, the anticipated cash flow from Integrated Power for a full year is around $3 billion. We told you as it might be balanced this year. Free cash flow, we are way more. The CapEx, net CapEx will be around $3 billion. I think the cash flow which I expected is $3 billion. So you will see an improvement which is also coming, of course, from the full effect of the JV with EPH in the accounts. So I would say, yes, we are on the way to, again, 2027 will be a free cash flow positive and Integrated Power will contribute to the dividends of the company. Okay.

Speaker #1: And we should go up because I think for the year, the anticipated cash flow from integrated power for the full year is around $3 billion, around $3 billion.

Speaker #1: You know we told you that we might be balanced this year and free cash flow we are will more the capex net capex will be around three billion I think the cash flow which are expected is three billion.

Speaker #1: So you will see an improvement which is also coming up close from the full effect of the GV with ETH in in the accounts.

Speaker #1: So I would say yes, we are on the way to, again, 2027 will be free cash flow positive, and Integrated Power will contribute to the dividend of the company.

Speaker #1: Okay.

Operator: The next question is from Ahmed Ben Salem from Oddo BHF. Please go ahead.

Speaker #2: The next xt question is from Ahmed Ben Salem from Auto BHS. Please go ahead.

Ahmed Ben Salem: Yeah. Hi. Thank you. Just one question on the geographical mix. You have materially expanded your US offshore acreage with Chevron over the last 18 months. Is this opportunistic or part of broader strategy to scale up in the US Gulf? What is your long-term ambition for this basin? Thank you.

Speaker #5: Yeah. Hi. Thank you. Just one question on the geographical mix. So you have materially expanded your US offshore acreage with a chevron over the last 18 months.

Speaker #5: Is this opportunistic or part of broader strategy to scale up in the US Gulf? And what is your long term ambition for this basin?

Speaker #5: Thank you.

Patrick Pouyanné: Yes, thank you for the question. It is a good question. In fact, you probably noticed that we have done some exploration, I would say, deal or joint with Chevron. In fact, as you know, yes, we have an ambition to continue to grow in the Gulf of Mexico. Today, all our assets are operated by Chevron, the Tahiti, Jack, Anchor. There is another, Ballymore, and we consider they are a very good partner for us there. We had made last year a first deal about exploration. We increase it. By the way, it is not just acquiring some acreage, it is drilling, because we plan to first prospect together in 2027. So for me, yes, it is part of the strategy.

Speaker #1: Yes. Thank you for the question. It's a good question. In fact you probably noticed that we have done some exploration I would say deal or done with chevron.

Speaker #1: In fact as you know yes we have an ambition to continue to grow in the Gulf of Mexico. Today all our assets are operated by chevron.

Speaker #1: Tahiti, Jack, Anchor, there's another body more and we have we consider they are very good partner for us there. We had made last year a first deal about exploration.

Speaker #1: We increase it. By the way, it's not just acquiring some acreage; it's drilling, because we plan to drill the first prospect together in 2027.

Speaker #1: So for me yes it is part of the strategy. We like exploration and honestly our partnership with chevron in in in the Gulf of Mexico is a good fit and we and I think I had recently had the opportunity to discuss that with Mike and we both agree that we continue.

Patrick Pouyanné: We like exploration, and honestly, our partnership with Chevron in the Gulf of Mexico is a good fit, and I think I recently had the opportunity to discuss that with Mike, and we both agree that we continue. On the other side, by the way, you probably noticed that we have announced some JV in exploration with them in Nigeria, for example, in Africa, so where we are strong. We try to combine our strengths in, I would say, our foundation territories, where we are good together in other. As we are both continuing the exploration as an engine for future growth, I think there is a good alignment between both companies. So if we can do more, we will continue to do more. So that is the idea. In question, again, it is completely there, and the US Gulf, US Gulf of America is okay.

Speaker #1: And on the other side, by the way, you probably noticed that we have announced some JV in exploration with them in Nigeria, for example in Africa, so where we are strong.

Speaker #1: So we try to combine our strengths in I would say our our foundation territories where we are good together in other and as we have both considering the exploration as a engine for future growth I think there is a good alignment between both companies and so we'll if we can do more we'll continue to do more.

Speaker #1: So that's that's the idea. But exploration again is completely there and the US Gulf you guess Gulf of America is okay.

Ahmed Ben Salem: Thank you.

Speaker #5: Thank you.

Operator: The next question is from Jean-Luc Romain for CIC-CIB. Please go ahead.

Speaker #2: The next question is from Jean-Luc Romain from CIC. CIB. Please go ahead.

Jean-Luc Romain: Thank you for taking my questions. It is about German offshore wind. It looks like Germany is relaxing its stance over renegotiation of conditions to develop acreage there. You took large positions 2 to 3 years ago, and I was wondering what your willingness is there.

Speaker #5: Thank you for taking my questions. It's about German flow wind. It looks like Germany's is relaxing its stance over renegotiation of conditions to develop acreage there.

Speaker #5: You took large positions two to three years ago, and I was wondering what your willingness is there.

Patrick Pouyanné: Okay. Honestly, there are contradicting news from Germany about what they want to do, what they do not want to do. It is clear that today the merchant of offshore wind in Germany is a challenge, to be honest. We are not the only one to explain that. Maybe we are optimistic, but it is a challenge because, in fact, customers are not complete, because first, the costs are higher. I would also say that the connections are longer. So the German government, which has a commitment to deliver some connections to the concession, does not fully fulfill its commitment. So that is a debate between our companies and the government. So we will see what they mean. On our side, I think we are evaluating the situation. We have different concessions. We have some which have been acquired with a cheap price, on which we intend to continue to work.

Speaker #1: Okay. About I mean honestly they are contradicting news from Germany about what they want to do what they don't want to do. It is clear that today the merchant offshore wind in Germany is a challenge to be honest.

Patrick Pouyanné: We are not the only one to explain that. Maybe we are optimistic, but it is a challenge because, in fact, customers are not complete, because first, the costs are higher. I would also say that the connections are longer. So the German government, which has a commitment to deliver some connections to the concession, does not fully fulfill its commitment. So that is a debate between our companies and the government. So we will see what they mean. On our side, I think we are evaluating the situation. We have different concessions. We have some which have been acquired with a cheap price, on which we intend to continue to work.

Speaker #1: We are not the only one to explain that. Maybe we are optimistic but it's a challenge because in fact customers are not complete because first the costs are higher I would also say that the connections are longer so the German government which is at a commitment to deliver some connections to the concession does not fully fulfill its commitment.

Speaker #1: So that's a debate between our companies and and the government. So we'll see what they mean. On our side I think we need to we are evaluating the situation we have different concessions we have some which have been acquired with a cheap price on which we intend to to continue to work for the other ones we'll have to evaluate the impact at the end.

Patrick Pouyanné: For the other ones, we will have to evaluate the impact. At the end, the objective is to make, I would say, some affordable electricity for customers. So if it is not affordable, I do not know why we should invest. So that, I would say, is a condition of an investment by our side. By the way, you will notice in our accounts for Q4 or Q3, we have made some write-off on some of these concessions just to reflect the fact that today, on some of them, we do not see how we could monetize them in a profitable way for us and for the customers. It is not true for all the German concessions, so I will not be more explicit. But that is the way we consider this business. Thank you. Thank you to all of you. I think we are done. There is no more question.

Speaker #1: The objective is to make I would say some affordable electricity for customers you know. So if it's not affordable I don't know why we should invest so that I would say the condition of any investment by our side by the way you will notice in our accounts of the fourth quarter of the third quarter we have you have made some write off on some of these concession just to reflect the fact that today on some of them we don't see how we could monetize them in a profitable way for us and for the customers.

Patrick Pouyanné: By the way, you will notice in our accounts for Q4 or Q3, we have made some write-off on some of these concessions just to reflect the fact that today, on some of them, we do not see how we could monetize them in a profitable way for us and for the customers. It is not true for all the German concessions, so I will not be more explicit. But that is the way we consider this business. Thank you. Thank you to all of you. I think we are done. There is no more question.

Speaker #1: It's not true for all the German concessions. So I will not be more explicit but that's the way we consider this business. Thank you.

Speaker #1: Thank you to all of you. I think we have done. There is no more question. So in such case I would like to thank you for listening.

Patrick Pouyanné: So in such case, I would like to thank you for listening. I know that you will all rush to the call from a competitor, which is a good friend as well. I wish you the best, and I think our next meeting will be in fact together in February, in London, where we will announce the results for the full year, the Q4, and return to shareholders to meet the 40%. Thank you.

Speaker #1: I know that you will all rush to the to the call from a competitor which is a good friend as well. So I wish you the best and I think our next meeting will be in fact together in February.

Speaker #1: In London where we'll announce the the results for the full year the fourth quarter and return to shareholders to meet the 40%. Thank you.

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