TotalEnergies Q1 2025 Earnings Call Transcript

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Operator

Ladies and gentlemen, welcome to Total Energy's First Quarter twenty twenty five Results Conference Call. I now hand over to Patrick Pouyanne, Chairman and CEO and Jean Pierre Breuer, CFO, who will lead you through this call.

Operator

Sir, please go ahead.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

Good afternoon, everybody, or good morning if you are connecting from The U. S. Before Jean Pierre will go through the detail of the first quarter results, I would like just to make some few opening remarks on what appears to be today a more challenging global environment and the ways that Total Energy intends to leverage our consistent strategy to deliver resilient results, benefiting from our energy production growth and attractive shareholder returns. We have indeed entered into a period of heightened macroeconomics and geopolitical uncertainty. We've, and this list is not exhaustive, current fragile negotiations on the Ukrainian Russian conflicts, the new but fluid tariff policy enacted by The U.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

S, decision of OPEC plus to unwound its voluntary production cuts. Even if the impacts are not yet fully appreciated and might evolve in the coming months, this moving context is creating uncertainties, notably on oil demand, along with volatility in the oil markets oriented on the downside over the past few weeks and also on cost for new projects in The U. S. Because of tariffs impacts. In this quite, I would say, fluid and landscape, Total Energy has and will, I would say, continue as unique strengths that we have consistently built over the last ten years.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

And our efforts are paying off. First, of course and foremost, we have been strong and never gave up on oil and gas. We have built over the last ten years one of the best low cost, low emissions oil and gas portfolio with more than twelve years of reserves life, which today gives us substantial leverage for strong and accretive growth, but clearly differentiates us versus our peers. Delivering this growth is, of course, one way to protect our future cash flows. We are growing companies with two pillars, including the second pillar on electricity, which is not dependent on the oil price, which give an additional resilience to our model.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

As you will see with Jean Pierre, this quarter, delivered robust year on year production growth of nearly 4% in Oil and Gas and 18% in Electricity, which represents a unique total energy production growth of close to 5%. But we are also at the same time in control of our costs. Our CapEx first, because most of our CapEx have been engaged and are based on lump sum EPC contracts but secure the level of CapEx. But also on the OpEx side, have maintained in the last year, despite the inflationary trends, our cost per barrel or OpEx per barrel is lower than $5 per barrel and again this quarter. And finally, we are benefiting and our balance sheet remains strong.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

We are confident in our ability to achieve our growth objective for '25 and keep figuring under control. Because we have confidence in our business model, the Board has decided to maintain attractive shareholder returns despite the uncertain environment. The Board first and foremost confirmed the first interim dividend, which was announced in February at EUR 85 per share, which is a 7.6% increase compared to EUR 24. In dollar terms, I would say it's even more than that. It's more than 10% at the current exchange rate of 1.14.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

As you know, dividend is a first priority in our capital allocation framework, and we'll continue to maintain and to grow the dividends in future years, even in these uncertain environments. Remember that we did not cut the dividends during COVID period. After 12 quarters in a row of $2,000,000,000 more of share buybacks, the Board has once again announced share buybacks of up to $2,000,000,000 for the second quarter. Despite the softening price environment, we went below $70 per barrel since the April and in an uncertain geopolitical and macroeconomic context. Just as we have done during over volatile times, the Board will continue to monitor the buyback on a quarterly basis.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

Within the guidance we gave to the market last September to maintain a 2,000,000,000 buyback in reasonable market conditions. And to conclude this introductory remarks, as you will see again today with our Q1 results, I think we are well equipped and we're prepared to navigate uncertain environments. We remain focused on delivering on our 2025 objectives and to maintain attractive shareholder returns. On that note, I will now turn over to Jean Pierre, who will go through the details of the first quarter results.

Jean-Pierre Sbraire
Jean-Pierre Sbraire
Chief Financial Officer at TotalEnergies

Thank you, Patrick. So my first comment will be on the price environment in the first quarter that was globally similar to the environment we had in the fourth quarter of twenty twenty four. So Brent was at $76 per barrel versus $75 per barrel in the fourth quarter. TTF, the European gas price, was $14.4 per BTU, up 6% compared to Q4. And the average LNG price was $10 per million BTU, down 4% compared to Q4.

Jean-Pierre Sbraire
Jean-Pierre Sbraire
Chief Financial Officer at TotalEnergies

And the year end, so our indicator for European refining margin, remained weak, averaging $29 per tonne over the quarter. So in this context, the company reported adjusted net income of $4,200,000,000 and a CFFO of $7,000,000,000 for the first quarter twenty twenty five. Profitability remained robust with return on capital employed for the twelve months ending in March at 13.2%. Furthermore, Total Energy continued its strong track record of attractive shareholder distribution with $2,000,000,000 of buybacks executing during the first quarter and, as Patrick mentioned, a 7.6% year on year increase in the first interim dividend of €25 to €0.85 per share, which is up 20% versus pre COVID level. Now moving to the business segment results and starting with Hydrocarbons.

Jean-Pierre Sbraire
Jean-Pierre Sbraire
Chief Financial Officer at TotalEnergies

'25 is off to a strong start. First quarter production was above the high end of the guidance range at 2,560,000 barrels per day, representing nearly 4% growth year on year. Production benefited from continued ramp up of projects in Brazil, in The United States, in Malaysia, in Argentina and Denmark. In addition, we continue to be successful at keeping operating costs at low level. It was $4.9 per barrel equivalent during the first quarter.

Jean-Pierre Sbraire
Jean-Pierre Sbraire
Chief Financial Officer at TotalEnergies

Looking forward, second quarter production is expected to grow 2% to 3% year on year, reflecting more planned maintenance compared to the first quarter, which had an impact of around 50,000 barrel per barrel equivalent per day. Given the strong 4% growth achieved in the first quarter, we reiterate full year 2025 production growth guidance of more than 3% compared to 2024. Moving now to exploration and production. So the company continues to execute very well. E and P reported strong and growing results with adjusted net operating income of $2,500,000,000 and a cash flow of $4,300,000,000 in the first quarter, up 69% quarter to quarter respectively.

Jean-Pierre Sbraire
Jean-Pierre Sbraire
Chief Financial Officer at TotalEnergies

Cash flow benefited from accretive new low cost and low emission oil production, which generated roughly an additional $100,000,000 of cash flow above what the portfolio average would have delivered during the first quarter. We anticipate additional accretion throughout the year with the Balimo offshore field in The U. S, having achieved first oil earlier this month and Merufo in Brazil expected to be online in the third quarter, both of which are adding high margin barrels that will enhance the cash flow. Moving on to Integrated LNG. LNG sales were stable at 10,600,000 tonnes, and Integrated LNG achieved adjusted net operating income of $1,300,000,000 up 6% year on year and down 10% quarter to quarter, in line with the evolution of the average LNG price I've already commented.

Jean-Pierre Sbraire
Jean-Pierre Sbraire
Chief Financial Officer at TotalEnergies

Compared to last quarter, cash flow of $1,200,000,000 was impacted by the timing effects of dividend payments from some equity affiliates. LAV trading continues to perform in line with expectations for 2025. Gas trading results were impacted by the unexpected downturn of European markets following new elevated uncertainty on the evolution of the Russia Ukraine conflict. Forward European markets expect gas prices to remain elevated in the second quarter of twenty twenty five in the context of inventory replenishment in Europe. Given the evolution of oil and gas prices in the recent months and the lag effect on price formulas, Total Energy anticipates its average LNG selling price will be between $9 and $9.5 per million meter in the second quarter twenty twenty five.

Jean-Pierre Sbraire
Jean-Pierre Sbraire
Chief Financial Officer at TotalEnergies

For Integrated Power now, first quarter adjusted net operating income was $500,000,000 and cash flow was $600,000,000 As anticipated, this quarter results do not include any positive impact of sound down, which are expected later in the year. Thus, it's a matter of timing, and it is driving a 1% temporary decrease in ROACE to 9% this quarter, which is expected to reverse as far down will progress. Looking forward, the company is on track to achieve the annual cash flow guidance. Additionally, we are progressing on multiple fronts in the Integrated Power segment. Total Energy signed a premium clean some power contract with estimated Ecoelectronics of 1.5 terawatt hour over fifteen years during the first quarter.

Jean-Pierre Sbraire
Jean-Pierre Sbraire
Chief Financial Officer at TotalEnergies

In addition, the company further deployed its differentiated integrated power model in Germany with the launch of six new battery storage projects developed by Ichion, the company that we acquired last year during the first quarter and the closing of the acquisition of the renewable developer, DSB, closed earlier this month. Turning now to Downstream. In the context of weak refining margins, together with declining petrochemicals and biofuels margin in Europe, Downstream posted adjusted net operating income of $500,000,000 and a cash flow of $1,100,000,000 in the first quarter of twenty twenty five. Cash flow this quarter was impacted by several factors, first one being the usual seasonability in the Market and Services businesses and the timing impact of dividend payment from equity affiliates in Refining and Chemicals. But beyond that, the macro environment remained challenged with Refining, Petrochemicals and Biofuel margin lower than our planning case, impacting cash flow by about $150,000,000 On operations, we encountered some issues at Daunouche refinery and Pouratoux refinery that negatively impacted cash flow by about $200,000,000 These issues at Corratio have been resolved and work continues at Danske refineries.

Jean-Pierre Sbraire
Jean-Pierre Sbraire
Chief Financial Officer at TotalEnergies

However, there are no systemic operational issues as performance was strong at other sites such as on Werck or Leuna, boosting the global refining utilization rate to 87% in the first quarter of twenty twenty five from 82% in the first quarter. Let's move now to the company level. At the company level, net investment totaled $4,900,000,000 during the first quarter, and we reiterate full year 2025 guidance in the range $17,000,000,000 to $17,500,000,000 We reported a seasonal working cap build of $4,400,000,000 this quarter. Thus, I have to remind you that it's less than the $6,000,000,000 reported in the first quarter of twenty twenty four and in line, in fact, with the $3,400,000,000 to $4,400,000,000 range reported in the first quarter of twenty twenty two or 2023. The drivers of this quarter working cap builds are mainly: first, a €1,000,000,000 reversal of exceptional working cap items reported in the fourth quarter of twenty twenty four secondly, a $2,000,000,000 seasonal effect from gas and power distribution activities in Europe and related to advanced payments occurring in the first quarter of twenty twenty five and third, a $1,000,000,000 impact from evolution of the business related to stocks and sales increased at the end of the quarter.

Jean-Pierre Sbraire
Jean-Pierre Sbraire
Chief Financial Officer at TotalEnergies

Lastly, the balance sheet remains strong. Gearing is at 14.3%. But as indicated earlier, the $4,400,000,000 working cap build this quarter is highly seasonal. Excluding this impact of this seasonality, the normalized gearing would be 11%. Now Patrick and myself are available to answer your questions.

Jean-Pierre Sbraire
Jean-Pierre Sbraire
Chief Financial Officer at TotalEnergies

So please open up the line.

Operator

Thank you. Ladies and gentlemen, we will now begin the question and answer session. The first question is from Doug Leggate of Wolfe Research.

Doug Leggate
Managing Director - Senior Research Analyst at Wolfe Research

Good morning. A very early morning from Houston, Patrick and JP. Thanks for taking my question. I think the reaction to the debt move this quarter, JP, is obviously weighing on your stock. And I think this is probably thank you for the explanation on moving parts.

Doug Leggate
Managing Director - Senior Research Analyst at Wolfe Research

But I think it begs the question, how do you think about sustaining the 40% payout, the share buyback, if that means that you end up leaning on the balance sheet to fund the capital program? What is the trade off? How resilient or how much would you be prepared to continue to do that? Is there a limit where the buyback would become or the payout would become under question? And I have a follow-up please.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

Because the 40% cash flow for buyback is not 40% of cash flow is not at all into question. It's a clear and a strong guidance. So we'll be above 40% by the end of the year. I can't commit it to that. What we said about the buyback, I remind you, the guidance we gave you in September is that and I repeated it in my speech, is that our guidance is to maintain a $2,000,000,000 buyback per quarter in reasonable market conditions.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

The Board obviously considered that these conditions that we experienced during the first quarter and even since the April, where I remind you, power is there was between $65 70 dollars I think going down, is still giving a set of reasonable market conditions, of course, will be appreciated. It's a global it's not one specific price limit. It's more global, I would say, approach to the macroeconomic. So we observe like you. In fact, the world, as I said, is very uncertain because this tariff seems to be a hit, but it's quite fluid, and we could expect maybe The U.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

S. To come back to more reasonable approach and all that. It's not impossible. We have to adapt ourselves. That's one of the difficulties.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

And so in fact, the reaction of the Board like we've done during COVID is first, no panic. The fundamentals of the company are strong. We delivered strong cash flow. So why should we overreact today? No, let's look because we could see some policies change on the one side, the other side.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

It's true that the old markets and in fact, are more looking to on our side to what the OPEC plus will do. In fact, it's more important for us, really, in this type of environment. So that's why 40% for sure of cash flow and distribution, keep it as a strong guidance. But I remind you, last year, were even at 50%, not 40%. And by the way, I think if we the first two quarters with €4,000,000,000 of buybacks plus a strong commitment to the dividends, as you said, and I repeated what I said permanently, is that the first dividend is the first capital allocation.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

It means that we are on the basis of $12,000,000,000 at least and more between 12,000,000,000 and $16 I would say, obviously, you make the math, you will find your 40%, so no point about it. You can be sure of it. And again, the second important part of that is why what we monitor at the board level is what this concept of normalized gearing that we shared with you, which was not because I was sure about the reaction of the market in this context. And we monitor it. And in fact, as we told you at the beginning in February, at $70 per barrel, we are targeting gearing by 12%, thirteen % as of the year.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

Today, without excluding some of these seasonal effects, we would be at 11%. So honestly, is nothing maybe if the price is at 65% the whole year and that's at 70%, it will give something around 14% instead of 12%, thirteen %. That's again a guidance which works well. So at the Board level, I think we are confident in the fundamentals. Low growth is coming.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

The growth is delivered, which is, of course, fundamental. It's not just worth, growth. Controlling our costs, we have a strong experience and a strike record on that. And so we think it's the best signal we should send to our investors is, as I said, like for the strategy, to know consistency. I think the key the word I want you to have in mind is Total Energy is a consistent company, and even more when the environment is unstable rather than just making short term reactions.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

It's not at all the way we monitor the company for the last ten years and the board is aligned on this great attitude.

Doug Leggate
Managing Director - Senior Research Analyst at Wolfe Research

Thank you, Patrick. My follow-up is related to that. You have built in capital flexibility to the plan, particularly around integrated power. You've talked about a 2,000,000,000 flex. What would it take for you in the macro environment to consider a spending reduction on your net capital guidance?

Doug Leggate
Managing Director - Senior Research Analyst at Wolfe Research

And I'll leave it there. Thank you.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

I think honestly, think I'm clear as well. We have a plan. We could have some flexibility. No way today to activate that. Again, we are at $65 per barrel.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

I'm confident in the way to move forward for this environment. So it's not the point. The point might be on what could be led us is more of the impact of the tariff on the supply chain of, for example, renewable projects in The U. S. Or batteries projects in The U.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

S. If you apply some tariff, 20% or 25% of importing Indian panels in The U. S, obviously, I we could save some money there, just to be clear. I say that because we just took that decision recently on there was a 600 megawatt project, which was approved by the Excom by March. After the tariff impact, we asked our teams to look again to it.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

And we say, okay, let's pause it. We'll not invest. We will postpone it, maybe because of tariffs because, obviously, we are not exactly without tariff, this project was more about around 12%. With tariff, it's less than 10%. So we suppose we are not in a hurry.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

It's not volume, not on value. We have to take care. So that's the type of things which could happen. But again, it's more on the cost side, the impact on the CapEx side is more because of the tariff, and we need to monitor that precisely and not to be driven by volume over the value. So but again, I'm comfortable to maintain the guidance on the CapEx.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

The question of flexibility is more if we go down like during COVID. When we go down to lower than $50 then we will have to act. And as you follow us for long, Doug, you know that during COVID, we saved we're able to save $3,000,000,000 So we are not there. We have some flexibility. And again, I know that Nicolas Terraz on the TRIM part is beginning to ask his teams, okay, to be clear, maybe $500,000,000 could be activated.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

So he's beginning to take actions at his level. But at the corporate company level, I'm fine and to monitor that with our balance sheet.

Doug Leggate
Managing Director - Senior Research Analyst at Wolfe Research

Thank you very much indeed, guys.

Operator

The next question is from Michele Della Vigna of Goldman Sachs.

Michele Della Vigna
Michele Della Vigna
Managing Director at Goldman Sachs

Thank you very much. I had two questions, if I may. First, I wanted to come back to your point, Patrick, on tariffs. It's pretty clear that they would materially impact the renewable business in The U. S.

Michele Della Vigna
Michele Della Vigna
Managing Director at Goldman Sachs

But I was wondering whether it could also affect some of the oil and gas projects. And also, if there could be any issue with the LNG vessels globally, given that so many of them are Chinese built? And then the second question, you may not have an answer, but I was wondering if you had a view on what happened to the Iberian power systems these days and if there was anything in terms of structural change to the power systems with renewables that you think need to be addressed? Thank you.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

Okay. On the tariff, you have to we have to be clear. As I said, I think this could have an impact on the new projects, which have to be sanctioned. And we have on our in most of our projects that we have already the Rio Grande, 20 20 1 To 20 3 are secured. I'm not I don't expect any impact on the tariff because of that we're securing a strong contract, EPC, which is going well, by the way, is in advance.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

Progress Rio Grande is in advance. It's already at 39% compared to 31%. We had a good news, by the way, during the quarter. As you know, the legal issue of the permitting has been pushed away, so it's growing. We were on Train four and probably five.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

This is a topic on which we'll expecting to see if there is an impact on the tariff because our tariff on steel for new projects that might have, again, the difficulty might be more to be sure in which tariff are we speaking about. Is it finally, at the end of the day, 10% across the board? Okay. That probably could be absorbed. Because in fact, in The U.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

S. Projects, remember the foreign policy was not only increasing tariff, there was a sort of countermeasure, which was to lower the net tax the income tax, in fact, the tax. So we don't have this part. But this is also something we have to keep in mind. It's not only a matter of cost, it's a matter of profits at the end.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

So if the countermeasures and the reconciliation bill, which will come before the end of the year, is for me very important. So for me, it's more, at this stage, a question to monitor a six month uncertainty. And I think we'll have much more clarity on The U. S. Investment case by the end of the year because we'll have probably all these negotiations of the tariff will have landed, so one way or the other.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

And on the other side, we will have the bill, which lowering the tax the corporate tax, which, of course, is important in The U. S. System. So for me, that's the point. So the way we monitor that.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

But I don't see on the rest of the projects for us at this stage outside of The U. S, we didn't see any impact on the tariffs. To be clear, it's not an issue. Your second question on the LNG export is interesting because that's true. But I think The U.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

S. Understands that if they want to export LNG without Chinese vessels, I'm afraid the export will be limited. And I think that it has been raised. I understand, by the way, that there are a lot of discussions and negotiations about this idea to have a special tax on all vessels, which are not built in The U. S, but they begin to see some, I would say, amendments or a low way.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

I read a paper yesterday that we are going in the right direction. Honestly, yes, it has been raised to The U. S. Authorities, but it could be a real issue. So for everybody, including for customers, including for that.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

So we know that it's a long way it lasts again. Let's look at it. So again, that's why, again, at the Board, we took a position, which is, okay, no overreaction, no panic. Let's look. We will have more clarity, I hope, and getting out of the small and big issues, is a lot of noise.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

But I think at the end of the day, business will prevail. Business interest will prevail for everybody. Iberian Power Systems, no, I don't know. I know specific group. I mean, there are lessons, I think, at the end.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

And I will tell you, Michele, what happened in fact, we observed what happened in Germany in February when we had one week without wind. That struck me because I can tell you, we have no problem in Germany, but one week without wind, if you don't have the full backup system with your gas fired power plant, but here it was more a power power plant, then you have an issue. And I think the lesson for me of all that is that it's good time when we think about integrated power and globally to speak about the grids, which needs to be adapted. We observe that when the grids are more than 30% of renewable, it becomes more unstable. So we need to investment in the grids, invest back investment in flexible assets.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

I think the two lessons I drove from the February event, and I'm suspecting, again, I've got no specific idea that Iberia might be the same type of, in fact, tax. We cannot think that the full renewable system will work in electricity. This is not this is a lesson I know, which, in fact, honestly, reconfortably in our own strategy, which is to maintain this gas to power together with renewables. We gave a guidance seventy-thirty between both. Maybe we should adapt it in the future, having more flexible assets to monitor this type of intermittency and impacts on the system.

Michele Della Vigna
Michele Della Vigna
Managing Director at Goldman Sachs

Thank you.

Operator

The next question is from Lydia Rainforth of Barclays.

Lydia Rainforth
MD & Energy and Energy Transition Equity Research at Barclays Corporate & Investment Bank

Thank you and good afternoon to everybody. Patrick, if I just come back to the idea around the sustainability, affordability of the buyback, part of the reason that there is that shortfall is that the pace of growth that Total Energy is delivering. And I'm just wondering, could you give us an idea of the difference in CapEx that you would need just to keep the business flat versus delivering the growth you are? So really, what's the growth CapEx? And the reason I ask that is that clearly others in the sector are delivering slightly higher free cash flow, but actually are growing less than Total Energy does.

Lydia Rainforth
MD & Energy and Energy Transition Equity Research at Barclays Corporate & Investment Bank

And then the second one, just linked again to the balance sheet, it's clearly strong at the moment, but that weaker market always creates opportunities. So how should we think about how else you would look to deploy the balance sheet potentially for acquisitions? Or put another way, are there any holes in the portfolio that you would like to fill? Thank you.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

Great questions, Lydia. Thank you. The first one, let me clear. We are driven by value. So we have some good projects in delivering accretive value.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

So the growth is coming from accretive projects. So this one must be preserved. That's a medium and long term industry. We need to develop it. Then, of course, again, if we have to cut CapEx, again, I remind you, I'm able to cut CapEx, but not on the fundamentals of the growth in oil and gas where we will deliver accretive cash flows for our shareholders.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

But I will not but I have other ways to arbitrate. If I need to invest less in EBIT charging, don't worry, I will do it. I will give you a list of things on which we can be around CCS. So we are spending some money. This will be reviewed.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

By the way, we are making our business plan exercise in June, July, and I will look at it with preparing the future '26 and our future investors meetings by October. We look at it, obviously, with a scenario, what happens if and looking to flexibility and define it to arbitrate. But I will not arbitrate what is a fundamental future cash flow growth for shareholders. This is clear. It's already we have these projects have been sanctioned.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

They are being they will be delivered. And in fact, the priority must be to maintain their budget and their timing rather than beginning to arbitrate. But we have enough. When you speak about $17,000,000,000 budget. To find $2,000,000,000 is not so complex in a company like that.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

I will lie. If we have to do it, we will do it, as we have done it in the past. And I think we have a track record over the last ten years. We demonstrated you that we are able to do it. But I want to do it in a smart way and not, again, at the expense of a future cash flow growth.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

The balance sheet. You know my position. My position is, in fact, it's always good to be countercyclical. So the question is, can we create value when we buy at a low price? And then the question for us is an arbitration.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

Of course, buybacks, today, price is low. It's cheap. And it's good to be to buy your shares. They are cheap, even cheaper. And it's by the way, it's a cost in terms of cost, it's the debt is lower than the cost of capital.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

So it's a good investment. But then we will have to compare that against can we do a beautiful acquisition with each chip, which will be accretive for everything. But the way to think about it, the way to use, in fact, the balance sheet, this is a trade off at which the Board will have to answer. Today, we are not there. Today, I'm sorry, I don't see $50 I don't see chip acquisitions.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

I'm more we are divesting some few fixed and might continue to sell them at $60 at $70 per barrel. So we'll see. But this is the type of things which I think we need to think again to the medium and long term. And do we create more value, more cash flows for our shareholders? That's the fundamental way to speak about the balance sheet and the way to use the flexibility which we have.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

At this stage, the buyback is okay. Clearly, that's why we maintain this €2,000,000,000 for the quarter.

Lydia Rainforth
MD & Energy and Energy Transition Equity Research at Barclays Corporate & Investment Bank

Brilliant. Thanks, Mih.

Operator

The next question is from Biraj Borkhataria of RBC.

Biraj Borkhataria
Biraj Borkhataria
Global Head, Energy Transition Research at RBC Capital Markets

Hi, thank you for taking my question and thanks for the comments. The first one is just a quick clarification on the way you and the Board look at the normalized gearing versus the number that we see? Is it just the seasonal factors that are in there, the adjustments? I think Jean Pierre talked about $3,000,000,000 roughly of seasonal factors, and I can't quite reconcile that with the 11% normalized gearing. And then second question is just on the latest situation in Mozambique.

Biraj Borkhataria
Biraj Borkhataria
Global Head, Energy Transition Research at RBC Capital Markets

Obviously, we're a few months on from the election, important project for you. Just wanted to update there. Thank you.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

Jean Pierre, but to be clear on the calculation, yes, we took up 3,400,000,000.0 saved you at the €4,400,000,000 working capital build. There was €1,000,000,000 of reversal of exceptional elements we mentioned at the end of the year. So when you make the math with €3,400,000,000 and instead of minus €3.4 you find 11%. Jean Pierre could give you and the team can provide you the details, but it's very easy. It's straightforward, in fact.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

That's what has been done because fundamentally, what we observe and again, we as a team can provide you the slide and you can align the you can do it yourself because it's public. The build and the release of working capital for a year, in fact, we know that what is built at the beginning will come back along the year, except some exceptional elements. We mentioned to you luxury end of remember in February, but there was end of twenty twenty four, dollars '1 point '5 billion exceptional. 1,000,000,000 has been reversed. There's still 500,000,000 which we should come one day.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

So this one, we cannot it's not seasonal. It's something which we lose. But again, so we are confident because we have observed the company and the way it's able to erase this seasonal effect around the year. Because he's working during the early quarter of the So that's what I think. And you know there is more release by the end of the last quarter.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

We have a bit of the first quarter, a strong release in the fourth quarter. In between, things are moving down and that's the point. The Mozambique update. Mozambique, I mean, you had the good news. So all the financing is back on track, thanks to U.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

S. Ex I'm decision. So now the shareholders have decided fundamentally to move forward with the projects. We are all working on it. We are still expecting one or two answers, but in fact, we could finance with our equity with the and in fact, it's more a question of paperwork.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

On the ground, the security of the industrial area where we are building our projects is a huge area, is completely secure, it's safe. So what we are working with contractors today is to be sure that all contractors will remain within the perimeter of the secured area. This is a point on which we work with them. And if there is no on the other side, as you noticed, we have worked in order to answer to some controversies about human rights. I don't know if it happens or not, these events.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

We have no proof at all. But we have worked, we worked myself, I went to visit the President to tell him, you need to take your General Prosecutor. We want really an inquiry. We took the initiative to consult the National Commission of Human Rights in order for them to make to be sure that this inquiry will be done properly and they will they are committed to make a report. So I think we have taken some actions in line on our side, which is our societal responsibility, would say.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

And I think we have done it. So I would say if I'm the target is to be able somewhere to relaunch this project by middle of the year.

Biraj Borkhataria
Biraj Borkhataria
Global Head, Energy Transition Research at RBC Capital Markets

Thank you.

Operator

The next question is from Irene Himona of Bernstein.

Irene Himona
Managing Director - Oil & Gas at Bernstein

Thank you very much. Good afternoon. Going back to your adjusted gearing, it is obviously low at 11%. So there's no issue with the $2,000,000,000 quarterly buyback.

Irene Himona
Managing Director - Oil & Gas at Bernstein

But I was wondering if there is a level we cannot know if $65 Brent a floor. Is there a level for that normalized gearing where the Board would feel the need to revisit the $2,000,000,000 quarterly buyback? And my second question on Namibia. Is there an update on the time line of maturing that project and progressing towards FID? Thank you.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

Okay. I think thank you, Irene, for the two questions. I think I've answered somewhere by previously to Duke. Think, again, we gave you a guidance at the beginning of the year, but the Board was ready at $70 to go to 12%, thirteen %. I just told you at $65 will be somewhere around 14%.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

So if I'm saying that, that we are that means we are comfortable with that somewhere. It's not an issue, but it's not a precise figure, but this is a range where we are comfortable to use the balance sheet. And secondly, honestly, I will not play that game. But I think in New York, I told you at 50%, obviously, we will revisit it. Probably lower at 55% as well, just to be clear.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

But we are not there. So let's monitor that one step by step. And again, I think we have I prefer the consistency rather than being erratic on that. Namibia, I was in Namibia last week. I visited Namibia for the first time, the authorities.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

We are working on this one. To be clear, we have projects which we have given some use of information, by the way, on in February. I think it's a matter now to find a common ground between us and the authorities. It's a project which face, as you know, in fact, fundamentally some challenges. It's feasible.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

We have quite a lot of oil, and we have something like seven fifty million barrels of oil. So it's quite a big pool of oil. There is a low permeability. So it means that, in fact, when you inject the gas, it's a longer plateau. So need to have a long license to produce a seven fifty million barrel of oil.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

We need as well because it's are some challenges. It's a 3,000 meter water depth, which means CapEx with the lines pipeline, flow lines are more expensive. All that makes $20 per barrel, let me say. So in terms of course, I expressed to the government that we have some thresholds in terms of, I would say, IRR targets and that I need to protect my the project in case the price of oil will go down. So we have opened the discussion.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

It's premature. But I'm again, it's like I see a very similar situation as the one we had in Suriname One Year ago, where at the end of the day, we find a way to find a common ground between the government and ourselves in order to be able to move forward the project. So it was, of course, the first visit. I don't expect any answer. But I've noticed that there is a will in Namibia to open the oil and gas industry.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

We could be the first mover, which means sometimes also some additional cost because of logistics. So the authorities have also taken that into consideration. Again, we have a very large pipeline of projects. And as I said last year in Suriname, at the end, I'm not driven by the volumes of volume, and we have already quite a good growth. So adding Namibia will be, of course, it's of common interest, but it will be down if we find, again, if we are fitting with our return targets for us.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

And if I spend my time to visit Namibia, it's because I think there is possibility to find a common space, but it has to be we need to be two to be to have two persons to play a tango.

Irene Himona
Managing Director - Oil & Gas at Bernstein

Thank you.

Operator

The

Operator

next question is from Giacomo Romeo of Jefferies.

Giacomo Romeo
Energy Analyst at Jefferies & Company Inc

Thank you. Two questions for me. I think your message on buybacks in the current macro environment is very clear. However, just wanted to go back to what you showed in your slide in the CMD, where you were showing the community CFFO below $50 In there, give us a flex level of capital investments, and you would expect those levels to generate free cash flow above the dividend. So is there a minimum level of buyback in that macro environment that you think you'd be able to sustain?

Giacomo Romeo
Energy Analyst at Jefferies & Company Inc

The second question I have for Patrick is on Argentina. We have some I guess, in some of your European peers taking early position in LNG projects in Argentina. There have been some headlines suggesting you're looking to scale back your presence in the country. Just waiting to just get trying to get a bit of your thinking around the investment prospects in the country and whether you think there's some attractiveness around the potential for Argentina to become an LNG exporter. Thank you.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

Yes. So first, you refer to a slide, which was a slide number 53 according to my colleagues, which gave me the slide, which you have the answer, I think, on the slide because if I remember, if I still reading the slide, we told you that $50 per barrel, between a disciplined capital investment, which was down by $2,000,000,000 compared to the global guidance, we were able to deliver the dividend, of course, to grow the dividend. And there were some cash flows remaining for buybacks. So I think you have the answer to your question. So at $50 I don't think the buybacks are going down to zero.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

It's not the case. It's not the idea. So you can make your math up and down. But the teams will give you more information. So for me, the answer was clear.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

We have, in fact, a post dividend breakeven, which is lower than $50 by the end of this period. So that's the way to monitor that. And by the way, today, if the price was going down, I suspect we would have done already $4,000,000,000 by the end of the half of the year. So that's good. But if the Board is confident if we maintain the 2,000,000,000 I remind you as well that there is a strong guidance, which has been a little forgotten and maybe we could have repeated it today, which is more than 40% of cash flow from operations.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

This is another guidance on which we told you repeatedly, it will be full cycles. So more than 40% of cash flow from operations full cycles, it's supportive of the distribution to shareholders. We are committed to that. And this is not and so I know that you had a trend to forget it because we were up to 50%, but we didn't change the guidance of more than 40% full cycles. And in fact, we didn't change it full cycles because it's exactly what we want to cover in case the price is going the oil price is going down.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

So keep that in mind and you can make your map with it. Argentina, yes, we have been active. We have a lot of projects in the world in LNG. I think we have it's a question of allocation of capital in LNG and we consider we have better projects in our we have enough first. We have a lot in Qatar, in U.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

S, in Mozambique, in Papua. We have enough, and we didn't feel we've I would say I know that today, President of The Middle East is making a lot of reforms. But in the along the last twenty five years, Argentina, for equity growth for investors, I think we managed to get some dividends two or three two years out of 25. So to invest in heavy infrastructure in a country which has quite an unstable, I would say, exchange foreign exchange policy is not really for me my priority. And again, by the way, we have other ways to monetize our gas, Argentinian gas on which we work.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

We recently signed some interesting contract to monetize our gas to Brazil, to Bolivia. So this is more our prices. So I respect the decision of others, to be clear. But on both sides, we didn't put and I visited Argentina Last September, and I explained to the President of Argentina, but others can be happy, but for Total Energy, it was not the priority. So again, it's a question of portfolio growth.

Operator

The next question is from Matt Lofting of JPMorgan.

Matthew Lofting
Matthew Lofting
Energy Equity Research Analyst, Executive Director at JP Morgan

Thanks for taking the questions. Two, if I could please. First, I just wanted to follow-up on the earlier comments on buybacks, payout ratios and gearing. If I understood correctly, Patrick, what you said earlier, the Board, it sounds like, views April conditions as well as Q1 as within the bounds of reasonable and 50% to 55% for a sustained period is perhaps where you review. As you were referencing earlier that the mid cycle payout is greater than 40%, When the board thinks about 2026 and beyond, how mechanically and swiftly should investors expect Total Energies to revert to 40% plus as an underlying payout?

Matthew Lofting
Matthew Lofting
Energy Equity Research Analyst, Executive Director at JP Morgan

And then secondly, I just wanted to ask you about working capital. The quarter on quarter fluctuations appear to have been quite substantial over the last six, twelve months versus history perhaps. I wondered if you could touch on some of the reasons behind that and the extent to which you expect that to continue perhaps related to evolutions in the portfolio setup. Thank you.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

So I mean, Matthew, I'm sorry, I didn't I'm sorry to correct you. I never said that it was I just took two examples, 50%, fifty five %. I never said there is a limit somewhere. It's true that this year, this quarter, that we are still at 65%, seventy %, we are comfortable to move forward, which is not a surprise. It was a comment I gave you in New York in last September.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

And again, the 40% is not a mid cycle. It's something which is a sort of a flow. A flow, we said, through full cycles, whatever, will deliver a payout of more than 40%. So that's to remind you that. So it gave you the guidance, which means that it was again, it's a fundamental one.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

I think it's it does not build either, but we will take 40% as a strict what we want to deliver. It's at least 40%. Last year, we delivered 15% and the year before as well, so it's at least 40%. So and in fact, the reality is when considering the dividend of Total Energy, which is represent $8,000,000,000 You are I can tell you, quickly above 30% because of dividend never been cut. We continue to be maintained.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

So even in a low price environment, if we generate a cash flow of only $20,000,000,000 when you have $8,000,000,000 of dividend, you have already the 40%. So I mean, just so don't try to guess more than what we said. I think we and again, we are monitoring that, as I said, as well in the best interest of the shareholders as well. Obviously, when the share price is low, it's good to take to use the balance sheet to buy some cheap shares, and that's the case of buyback is a good one. There is no when you ask me a question of mechanically, no, there is no mechanics, it's not mechanically.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

It's we appraise the situation, the macro environment, geopolitics. It's not the board. It's not just looking to one figure. There is no magic formula hidden. It's more a question of global environment.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

And again, yes, it's true, but we have uncertainty today. But as I said, it's quite fluid, and it could be reversed. Think maybe after the summertime, we could have some calve down after the tempest, we never know. So and we are well positioned to weather the storm, so let's continue. Working capital, no, I think you have two explanations very easily.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

You have some, I would say, structural parts. Part of it is fiscal. We have some fiscal reversal. We have some debts, which grow with working capital, fiscal working capital, which come back every first quarter of Norway or other countries. The other part, which is also seasonal, is the marketing gas and power marketing.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

People, just people, are eating their homes much more in winter times. And in fact, they pay their bill monthly on equal installments along the year. So you have a difference of revenues between the fact that we have some big consumption during the and equal installments, and that creates around €1,000,000,000 at least this phenomenon is this seasonal so it's really seasonal, but we know that at the end of the year, the people will have paid their bills. So this is a type of fix. That's why we have some here between the fiscal and this example.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

And I think we have one or two, which we can we could qualify from seasonal. And that's the point on which we that's why we are comfortable. It will continue, yes. We have observed it for several years. Again, we are monitoring that internally.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

This time, because I was sure when I saw the jump from eight to 14 that you will have some questions. We prefer to share that with you in order to be able to give you some better the way we ourselves, the way we think internally with the Board, which we put on the table, I propose to be so shared with you.

Matthew Lofting
Matthew Lofting
Energy Equity Research Analyst, Executive Director at JP Morgan

Super. Thanks, Patrick.

Operator

The next question is from Henri Patricot of UBS.

Henri Patricot
Henri Patricot
Executive Director at UBS Group

Yes. Hello, everyone. Thank you for the update. Two questions from me, please. The first one, on the integrated power business, you mentioned that ROCE is a bit lower this quarter because of the lack of farm down.

Henri Patricot
Henri Patricot
Executive Director at UBS Group

So I'm just wondering whether it's something that you see that's very much temporary or if you see actually some more challenges in agreeing on these farm downs given the increased uncertainty around renewables, in particular, in The U. S? And then secondly, on the integrated LNG business and the guidance on CFFO, you targeted earlier this year $6,000,000,000 of cash flows. Looking at your Q1 performance, I realize it would be more like a stable cash flow at $5,000,000,000 do you still see as that $6,000,000,000 target as achievable in 2025 in the current environment? Thank you.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

Okay. First one, to be clear, it's clearly a question of timing of the farm downs. You will see our anticipation already on Q2 is that we should have almost two quarters in one, in fact. So in fact, farm downs revenues represent more or less $70,000,000 per equipment. On an annual basis, it's an amount of around 300,000,000 two 80 million three hundred dollars of profits, which has to be taken in which are planned.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

So it's 75,000,000 per quarter, 70,000,000, 70 5 million. In fact, this time there was no pharma, but I know already that we just have closed one in Portugal, which will generate what should have been done in the first quarter. So it's really a question of timing. We don't see much difficulty. We continue to do it.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

We continue to do the farm downs, including in The U. S, by the way. So we have a program to execute. We have put in place a dedicated team, specialized team working with many players, which is a adviser, a smart person. So we have to deliver.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

It's part of the business model. And so at this point, I can tell you, I don't see why the team would not deliver. There is no hint. Of course, it's not linear per quarter. We have quarterly results, but and that's more it has to come.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

So on the second quarter, you would have a result of farm down, which will be, I would say, higher than what it was planned, okay? And so no, no, no, no challenge on this one, which is the main challenge is that interest rates are higher. But again, you have still quite a good, would say, appetite from these type of assets from InfraForms, etcetera. ILNG, so the guidance, yes, when I look to the slide in February, if you look carefully, it was target six, but it was a shadow part, so it's between 5.56. It's true, we are on this one today, would say, you multiply by four, we are more around 5.5 by six.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

But my teams have honestly, on this one, I want to make a comment on it. In fact, and I think like others, what happens in Q1 twenty twenty five, the fundamentals of the markets were bullish. So we are long on gas. And unfortunately, as others players, by the way, and other competitors, the geopolitics became bearish suddenly because of the comments on Russian Ukrainian story, which was not anticipated to Europe. So in fact, you had a bullish position based on bullish fundamentals, which we are right because we've seen the inventories declining.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

So it was the right position. And this bullish position were suddenly by an upward market reversal taken back by mid quarter to bearish geopolitical level. So that was difficult. And by the way, the business of our traders is quite complex today, to be honest, in this type of fluid and environmental environment because it depends on some we don't know what will happen tomorrow morning. So it's not the position was perfectly right.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

And so we were supportive of it. Suddenly, you have some so we experienced some few losses in February, which were reversed. But globally speaking, the LNG trading was good, was strong. It was mostly gas trading, which was it. So I'm fine.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

We took a decision recently. By the way, we have a new leader for all these gas trading, which has wants to make some some ID, so I'm supportive. And so between 5.56%, just to clarify this guidance, and I maintain it today.

Henri Patricot
Henri Patricot
Executive Director at UBS Group

Got it. Thank you.

Operator

The next question is from Martin Rats of Morgan Stanley.

Martijn Rats
Martijn Rats
Analyst at Morgan Stanley

Hi, hello. I've also got two questions, if I may, which actually sort of just follow-up on the question from Henry. I wanted to ask you about the about your thoughts on the true appetite that Europe might have for more Russian pipeline gas. So many sort of contradictory comments, indicators. It's a real market concern, but clearly, you're connected, talked to a lot of people.

Martijn Rats
Martijn Rats
Analyst at Morgan Stanley

I was wondering, Patrik, what your impression is of how likely this really is, say, a time frame of sort of twelve months or so? I mean, like a multiyear view, probably all sorts of things are possible, but on a sort of twelve month view, how likely is this really? And then secondly, perhaps a bit of a technicality, but I wanted to ask about the guidance for LNG price realizations for the second quarter down to $99.5 per MMBtu. I would imagine that doesn't fully capture the impact of recent sort of spot price declines given the lag that is sort of built into the system. If you had to think about

Martijn Rats
Martijn Rats
Analyst at Morgan Stanley

that guidance for the third quarter,

Martijn Rats
Martijn Rats
Analyst at Morgan Stanley

how much would that sort of incrementally fall assuming, say, oil prices stay and the AKM stays at sort of current levels? Would we see a drop below 9% to 8.58 percent? Is that sort of a trajectory that we should be thinking about? I was interested in your comments on that.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

Okay. The first one, I think my view on that is to be cautious first because I'm not sure of it. I'm just observing what happens on the geopolitical scene. It doesn't seem that it is to land between the different parties. So I'm cautious about it.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

And I think the market has overreacted to some news. It's in very complex situation. What I observed as well is that on one side, you have quite a lot of pressure within the trade negotiations between The U. S. And Europe to buy more U.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

S. Gas. Just and that, in fact, The U. S. LNG is obviously an obvious case to fill the gap.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

And I think we honestly, the European authorities seems to be quite inclined to please The U. S. From this perspective, which is a good news for Total Energy, by the way. As you know, we are quite involved in that business of U. S.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

Between of LNG between The U. S. And Europe. So I see that as a good support for all our business. And I think on the other side, politically, the Europeans do not are not so happy with what happens on the other side.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

You've seen that when I look to the program of the new coalition in Germany, I don't see a lot of support for a lot of Russian pipe gas in that platform on the contrary. And so and I know that there are in the Brussels, they are working on a sort of platform to which is off to exit from Russian fossil fuels because of security of supply. In fact, today, the in fact, it's interesting to observe that the European, I would say, narrative on energy is moving from green to security of supply. There was a conference in London with all the leaders speaking about security of supply, where renewables could contribute. But from this perspective, I don't see much space today politically to take a lot of Russian gas.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

So I think it's more U. S. LNG, which will come, again than Russian gas in Europe. That's my comments. And over the next twelve months, I can even confirm that I would be very surprised to see suddenly a shot of Russian gas coming to Europe in the next twelve months.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

We take time, all that, before it's also a matter of trust between customers and producers, in fact, fundamentally, to rebuild the trust. On the guidance. Okay. Look, if we gave you a figure, dollars 9,000,000 to $9,500,000 when we gave the guidance, when you are making the math, we have some cautiousness. So if there is $0.50 it's because of the spot price, because on the I would say, on the long term contracts related to Brent, generally, you have two months of time So it's quite easy to anticipate what will happen on this contract for the next quarter.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

On the spot, of course, I'm not sure. So this is why we gave you 9% to 9.5%. It's definitely to a bearish one on the spot, which was, I think, around something like was between nine and twelve, I would say, that we took we tested between nine and twelve European gas. Today, we are between ten and eleven. So you should be in the middle of the range.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

I don't know what will happen. Our first quarter, again, I'm not a magician, but it's quite clear that the drop of the oil price during the second quarter, which is today, what happened, April will impact July. That's quite clear. Again, if you want me I don't have the math in front of me, and it's uncertain. What you propose as a range is probably quite reasonable.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

But again, let's it's really difficult today. Again, these markets are super fluid. Maybe tomorrow, the tariff will disappear, and suddenly, the oil price will jump. So let's see.

Martijn Rats
Martijn Rats
Analyst at Morgan Stanley

That's all I hope for that. Wonderful. Thank you.

Operator

The next question is from Lucas Herman of Exane BNP Paribas.

Lucas Herrmann
Analyst at BNP Paribas

Yes, thanks very much. A couple of quick questions, if I might. The first, just going back to debt, but also balance sheet and what's been going on with currencies. In fact, maybe, Patrick, I should ask you more broadly on currency and impact. But the question specifically was the debt that you hold, a proportion of it is euro denominated.

Lucas Herrmann
Analyst at BNP Paribas

And the question simply is the impact that a strengthening euro rate has had on dollar reported debt last quarter. And I guess if currencies remain strong, we should probably expect absolute debt to see a modest uptick as well as a consequence of currency moves. But maybe talk more broadly on given the volatility we've seen in the dollar, the way that plays to your business. And secondly, just a quick question on cash flow and associates. JP, where should we expect the net associate contribution to end up for the year as a whole?

Lucas Herrmann
Analyst at BNP Paribas

Clearly, there's been €400,000,000 of profit booked in the first quarter, which was not covered by dividend. But how do you see things for

Lucas Herrmann
Analyst at BNP Paribas

the year as a whole?

Lucas Herrmann
Analyst at BNP Paribas

What should we be modeling? That's it. Thank you very much.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

Sorry, Lucas, we didn't answer the second question, I didn't catch it up. I mean, $400,000,000 were related to what?

Lucas Herrmann
Analyst at BNP Paribas

Just looking at the associate move, the difference between dividends received and the

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

Yes, yes, It's checking.

Lucas Herrmann
Analyst at BNP Paribas

Actually, just want understand what you expect for the year.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

Yes, yes, equity fees. Okay. Good. Thank you for the two questions, Lucas, and your support. The first one, so that I will let Jean Pierre answering.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

But what I can tell you on the FX, in fact, the dollar euro foreign exchange rate does not affect our global results. The only positive impact it has today is the dividend is expressed in euro. And when the dollar is at 1.15 or 1.14, in fact, we lower the burden of the dividend by the equivalent of 5%, which can make something like $400,000,000 So it's not neutral. But the rest between the difference, in fact, when I look to the global cash flows and the results, the plus and minus are, in fact, equal when we make the test around the portfolio. We have no global impact.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

We have some on some businesses, of course, but globally, it's not an issue. In fact, when the price dollar is weak, it's better for us on the dividend. And of course, that means, by the way, that our shareholders in The U. S. Would not see a 7% or 10% or more increase of the dividend.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

So but I will let no. On the equity affiliates, honestly, it's just because we have some equity affiliates, which are run on not on a quarterly basis, but on a yearly basis. So some of them are delivering their dividend by the end of the year. Some of them like Nigeria LNG, for example, they make second quarter, third quarter a big fourth quarter, but no first quarter. So we don't have Nigeria LNG.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

We are not only us in control. It's more of this JV of this equity affiliates are run by a Board. And so you have different, I would say, timing of releasing dividends. Of course, our interest, I can tell you, all Board members are pushing to maximize that. So I'm honestly, $400,000,000 they will come back unless, of course, they are affected by the price environment and that you have lower results.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

But the timing so maybe it will not be 400,000,000 but 300,000,000 but it's not I have no doubt that this equity affiliates will deliver dividends because generally, they are all run with a single concept of maximizing the dividend release, respecting, of course, the debt ratios, which may add some debts. That's the way it works. Jean Pierre, so I gave you the time to think about the complex question.

Jean-Pierre Sbraire
Jean-Pierre Sbraire
Chief Financial Officer at TotalEnergies

No, to confirm you, my debt is in dollar because even if I issue bonds on the euro market, given that my business is in dollar, I swap this bond into dollar. So my exposure to FX on my debt is very, very limited because of that.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

So in fact, I should have known the answer, but it's better expressed by the CFO. You trust him better.

Lucas Herrmann
Analyst at BNP Paribas

Okay.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

Thank you, Lucas.

Jean-Pierre Sbraire
Jean-Pierre Sbraire
Chief Financial Officer at TotalEnergies

Thank you, Lucas.

Operator

The

Operator

next question is from Paul Cheng of Scotiabank.

Paul Cheng
Analyst at Scotiabank

You. Good morning or good afternoon. Patrick, you guys signed the agreement with Egypt and Cyprus to export the gas there. Can you give us some idea that what's the time line? What's the next step and the size of the projects?

Paul Cheng
Analyst at Scotiabank

Thank you.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

Okay. There was a big step down by P and I is the operator. So Claudio is better positioned than me to answer to you because the operator has antitrust and we support them. There was a good signature in January in Lucero. It was quite an achievement because we managed to have the scheme now to be able to bring the gas from Cyprus through some existing facilities, through those who are one of the LNG plants.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

And in fact, the main discussion for us, the important point was to be sure that we could export the gas. And so I can tell you, even if there is one provision where some part of the gas could be delivered, but as a netback to the Egyptian market, at the end, we protect it and it will be, in fact, LNG going through an existing plant in Egypt in Abiata. So for us and for ENI and I must thank ENI works and also the Egyptian authorities, in particular, Minister Badawi for all the work he has done, the support, I think it's the optimal position to monetize the Cypress gas. And so we are there, supportive of the projects. And so the next step will be for Eni, I think, go to the FID by 2026, which is a target.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

So there is some technical works which is being done and, of course, some paperwork, development plan. But for us, in fact, as Total Energies, we were putting this agreement as a precondition to spend any CapEx even on the engineering side. We didn't want the teams and the operator to spend some money as long as we have not secured a real political agreement between the two countries, which was supportive of an acceptable scheme. Some our engineers really love to spend money to make nice designs. But at the end, if you don't have the commercials, nothing is not a given.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

So as it's quite a complex situation. So it's quite a it's a good progress. We have 50% of the projects, E and I being the average of 50%. And this progress comes forward, but it will by the way, it was not to be clear, it's another project which will come. It was not fitting the roof by 02/1930.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

So maybe, by the way, the delivery I know Eni is very good to time to market. So we'll see how long it will take, but it's something which we could fit, will fit, will fit the growth because the scheme as we are using existing facilities is mainly a subsea and a pipeline. We don't build a lot of processing facilities. There is no processing facility. So we should be able to deliver the gas by 2028, '20 '20 '9.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

So it will feed our growth of production in the future.

Paul Cheng
Analyst at Scotiabank

Okay. Second question, if I could. The U. S. Have a new rule in the Gulf Of America, the downhole commingling that allows the multi zone to be tapped.

Paul Cheng
Analyst at Scotiabank

Is that much of an opportunity for total energy there?

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

Palliogen, I don't think we have Palliogen on our I don't know if ANCO is a Palliogen. ANCO is a Palliogen. Yeah, ANCO is a Palliogen.

Paul Cheng
Analyst at Scotiabank

Yeah.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

We have some JAK and Anchor or Paleogene, no? JAK as well, I think so. JAK and And so what can we do? I didn't know that rule. But, you know, again, yes, obviously, this is good rule.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

By the way, one of the objectives we have, I said that in Houston during Sierra Week, is to we are discussing with some operators to take again exploration in The Gulf in The U. S. Gulf as a priority. Think it's a good thing. So we don't want to operate ourselves, so we are discussing with some other companies.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

But one of the idea of in terms of for the future renewal of reserves is to take again because we are happy with what we've done with the anchor with Balimo. Balimo came on stream last week, I think, or very recently. And Chevron, again, is a very excellent operator in the Gulf Of Mexico. So doing more in the Gulf Of Mexico and exploring again is for me one of the, I would say, of the new action plan for our exploration teams. So that will help to increase production and reserves to lower the cost, so it's a good rule.

Paul Cheng
Analyst at Scotiabank

Thank you.

Operator

The next question is from Christopher Coupland of Bank of America.

Christopher Kuplent
Christopher Kuplent
Analyst at Bank of America Merrill Lynch

Yes. Thank you very much. Just a quick one to follow-up on cash conversion, 7,000,000,000 of CFFO relative to your full year guidance. So what I picked up was LNG and gas trading, the farm downs that are missing and associated dividends. Let us know if you can point to other improvements for cash conversion later in the year.

Christopher Kuplent
Christopher Kuplent
Analyst at Bank of America Merrill Lynch

And the remaining question I had was, Patrick, regarding your appetite for more renewable growth. I thought it was quite important to hear at the March new or tighter even tougher net zero targets. You are now competing against utilities that are being told to do buybacks and stop growing as soft. So I wonder whether you can comment on the competitive environment in this new world, leaving the tariffs uncertainty for one moment out of the debate and just looking at your competitors in the low carbon space? Okay.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

7,000,000,000 compared to 29,000,000,000 seven times four makes 28 Price environment for E and P has done well, has delivered more than what we were anticipating for the full year. So it's in line with our guidance. I told you that it was warehouse, the $1,000,000,000 is a little from gas trading. I'll explain you why. I mentioned to you about $500,000,000 5 point 5 dollars to $6,000,000,000 All in Integrated Power, I'm very fine with the guidance we used, more than two between two point five and three, and we will be there.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

So we are online and there is a growth coming, so I'm fine. And the refining and chemicals is more challenging, to be honest, and you observe it. Having said that, I have the good news. When I wake up this morning, I've seen that the European margin is up to $50 per ton. So maybe, again, we could have some good news.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

Price of all is going down. Integration will work, and I think this is all business model. I did not mention that during my speech as a strength of the company because difficult to argue when you have results which are not so strong. But in fact, so we could have a sort of FX where you would have less on one side and more on the other side, dollars 50 per ton. I hope my refineries are running full, and they capture the $50 per ton these days.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

So I would say, again, it's not the $1,000,000,000 which will make any difference on our global framework that we gave you in January, but to capture the well, issue sorry. Chris, now look, on the growth renewables, we are underway. It's not only renewables, it's integrated power. I mentioned to Ana, during an answer, so that we are looking a lot also not only on renewable flexible assets because it's integration, which makes money, in fact, and we need both. At the end, we sell to customers 20 fourseven power.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

So yes, I observe that others are more under pressure. Maybe they will be it's really easier to capture some licenses over and over again. We are that's possible. But again, our model, we are quite clear on what we will deliver. We are targeting some countries.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

We've built on it. So I mean, it's not a matter of net zero world for me. It's a matter of demand. The news of 2024, when you look to the results of what happened in 2024, electricity has grown by 4% in 2024. The global electricity demand, the demand, not the supply, the demand has grown by 4%.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

And all the strategy of the company is fundamentally driven by moving parts of the company, remaining, of course, strong on oil and gas because this is the energy of today. This is where we can deliver accretive growth, etcetera. But moving parts of the company to a market which offer clearly some good perspective for demand. All these tech companies, the data centers, AI is driven is driving this increase of electricity demand. And by the way, it's good because this again, as I mentioned in my answer before, electricity is not linked to oil.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

So it's another way as well in our company to have a certain resilience, not the same upside, but it's like marketing and sales. You have a resilient business. So for us, the fact that others' competitors maybe have more pressure, less competition, that means access to assets might be better, easier. But we are it's not a matter of net zero. It's a matter for me, of, again, comforting the Total Energy business for Total is in the future, delivering growth and in a resilient way and in a profitable way.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

That's what is what are the drivers of this strategy. Great. Thank you. The

Operator

next question is from Jason Gabelman of TD Cowen.

Jason Gabelman
MD - Equity Research at TD Cowen

Hey, thanks for taking my question. The first one is on the integrated LNG business. And I it's difficult to see the benefit from the Sapura OMB acquisition quarter over quarter. I know you've said in the past that, that production is linked to global gas prices and given where they are, I would have expected to see a step up in earnings from that new production. So can you just talk about kind of what that contributed within earnings if it's masked by perhaps lower trading quarter over quarter?

Jason Gabelman
MD - Equity Research at TD Cowen

And then somewhat related to that, one of your large peers noted this morning that the trading environment is a bit more difficult given the new macro risks that the market is dealing with. And I'm wondering if you're seeing that in your own oil and gas trading books and for the duration that the tariff risk kind of remains, does trading become a bit more difficult? Thanks.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

Okay. Honestly, Sapura R and D acquisition is delivering some results, obviously. Just since I don't have that in mind today, I mean, I don't have the details. We don't give the details for asset by asset. It's easy to find if you want to look to Woodmark one year ago, which was isolated, and you will find some figures.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

But Steve can come back to you on this one, but I'm not able to. And I think, Jean Pierre, you can or you cannot as well. So we are not we look to the global one, but it's contributive. And in fact, you will see. I mean, we are working today to capitalize on this position in Malaysia to move to more assets.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

And it's not only one asset, it's a larger story that we are trying to build and we are willing to build today together with Petronas, which is a strong strategic partner of the company and we work. So I mean, that's the point. On trading, I understand the comment. I mentioned it. I think the macro environment makes it more complex.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

All traders told us it's very difficult for them to the fundamentals of tomorrow, which we think could be hit suddenly by some comments, could have an impact or reverse impact. So it's a difficult market to trade. There is some volatility, but difficult to anticipate. So it's true that for traders, it's not the best way. It's not the easiest environment.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

And I can only, I would say, trust them. I'm trusting them. I know their business. They know what they can take, the level of risk they can take. It's up to them.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

We are not guiding them on this one. We trust them to do it. Honestly, the old trading has done well during this quarter. I remind you that the total energy trading is more trading around assets rather on the market. So we are valorizing our assets.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

We have a lot of positions with storages, inventories. So this is the way we trade, hedging some assets, etcetera. So I think it's again, the oil trading has done very well during the quarter, so I can say. And the gas trading has done well. I think the LNG part was very positive.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

Gas won only because of this reverse trend. We are on the right position, again, bullish on it, a long position. Suddenly, we had to reverse it, bearish projects because of the political comments on Russian gas, whereas I think the market has overreacted with something which will be take time, as I mentioned. So yes, it's true. Having said that, again, I think through quarters, we chose the teams to deliver some strong results.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

And so I'm not I mean, if I'm coming back to the guidance we gave you at the beginning of the year, what has been taken as coming from more different trading because it's not only oil, gas, we have power trading, which has done well as well, which is part of integrated power. We are in line with the contribution of trading to our global guidance for the year.

Jason Gabelman
MD - Equity Research at TD Cowen

Great. Thanks for those answers.

Operator

The next question is from Alejandro Vigil of Santander.

Alejandro Vigil
Head of European Integrated Energy Equity Research at Santander

Yes. Hello, Patrick and Jean Pierre for taking my questions. Related to both questions about the downstream business, you have flagged some improvement in refining margins in the short term, but I'm more interested in your thoughts about the medium term outlook for this division. And the second question is about marketing. We have seen some weakness in the first quarter, probably just seasonality, but you can comment on that.

Alejandro Vigil
Head of European Integrated Energy Equity Research at Santander

Thank you.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

The seasonality is quite easy. People are less driving in winter than in summer. It's true in Europe. It's true very well.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

So in fact, there no surprise, in fact, because maybe you don't take attention, but the results of this first quarter is in line with the first quarter of twenty twenty four. Even we have lost some Q1, but it's in line, two sixty million, two 40 million. So there is no it's just seasonal. And then these marketing results are higher during the year. But just so for us, it was I see some comments this morning.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

Of course, it was not a surprise. So I'm not I think the Marketing and Services is on the contrary, a very resilient division. Generally, when they announced that they will deliver on the year €2,200,000,000 2 point 3 billion 2 point 4 billion they deliver their cash flow. So it's quite it's less volatile than others. So it's more a question just less drivers.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

You don't drive as much, but just consumption. The first one, declare about the downstream. It's true, and I'll come back on it because there was an important announcement by the company, which was not commented in tunnel, which is we have announced we closed shutdown one cracker in Hamburg, which is quite an important decision. When you decide to shut down a cracker in a it's a big unit with a lot of people involved, It's true that European refining and European petrochemicals are under pressure. And even from different the consumption is going down.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

The pressure from petrochemicals from other areas is quite strong, including from The U. S, unless there are some tariffs there, but also from Asia. So I think for us, it's true that we have to medium term outlook. It's more to question to monitor, I would say, this decline of the market or this pressure on the margins. And it's true that from this perspective, we contributed to our structure in the Petrochemical by taking the decision that this cracker in number will be off the market by 2027.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

So it took three years to execute it, but we'll do it. And we are looking to that, in fact, for to other assets, as we know it. So this is a point. But we have to do it properly, including our social responsibility, and that's important to me.

Alejandro Vigil
Head of European Integrated Energy Equity Research at Santander

Thank you.

Operator

The last question is from Ritar of Berenberg.

Henry Tarr
Director - Co-Head of Energy & Environment Research at Barenberg

Thanks for squeezing me in.

Henry Tarr
Director - Co-Head of Energy & Environment Research at Barenberg

My question comes back to Russia actually. And in the event that we do see some sort of peace deal with Ukraine, how do you see your sort of interests in the country and how you might sort of look to approach that? Thank you.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

It will all depend on the condition of the piece deal, which I don't know today. Having said that, we have a very strong asset, which is Yamal LNG, which I consider as a prime asset and which we continue to work on it and which is the anchor of the position. This one is a long term asset. For the rest, I think it's just difficult to make some forecasts on geopolitics in this world planet. So I cannot comment more than that.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

I think I told you where we are.

Henry Tarr
Director - Co-Head of Energy & Environment Research at Barenberg

Okay, Thanks.

Operator

And this was the last question. Mr. Pouyone, I'll turn the call back to you.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

So thank you for your attention and to all of you. I think the company again has very strong fundamentals, which gives me a lot of comfort again to reverse the storm and not to overreact. And I think through these results of the first quarter, we demonstrated some of the strengths. In particular, again, our E and P division has done well, delivering the growth, strong cash flows, which is the core of the company. Integrated Power is in line and the others, we face some more difficult, I would say, downstream environment, but the teams are mobilized to run the assets and to capture better margins when we will come.

Patrick Pouyanné
Patrick Pouyanné
Chairman & CEO at TotalEnergies

So thank you for your attention, and see you soon, all of you.

Operator

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

Executives
    • Patrick Pouyanné
      Patrick Pouyanné
      Chairman & CEO
    • Jean-Pierre Sbraire
      Jean-Pierre Sbraire
      Chief Financial Officer
Analysts
Earnings Conference Call
TotalEnergies Q1 2025
00:00 / 00:00

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