By Ndubuisi Micheal Obineme
Following the Company’s announcement on its ‘Strategy & Outlook Presentation 2023’, TotalEnergies reaffirms the relevance of its balanced multi-energy strategy considering the developments in the oil, gas, and electricity markets. The company’s multi-energy strategy is anchored on two pillars: Oil & Gas, LNG, and Integrated Power.
TotalEnergies Chairman and CEO, Patrick Pouyanné, and the members of the Executive Committee made the presentation about the latest development on TotalEnergies Strategy & Outlook on September 27, 2023 in New York, reaffirming the Company’s commitment to produce “More energy, less emissions, and growing cash-flow”.
In a press statement made known to the Energy Republic, TotalEnergies plans to grow Oil and gas production by 2-3 % per year over the next five years, predominantly from LNG.
According to the company’s press statement, TotalEnergies will develop a top-tier pipeline of LNG projects which include Qatar North Field Expansion, Papua LNG, ECA LNG, and Rio Grande in the US, Mozambique LNG while leveraging its competitive advantage with leading positions in Europe regasification and US exports.
TotalEnergies will also concentrate efforts on developing its portfolio of high-return oil projects in Brazil, the Gulf of Mexico, Iraq, Uganda, Suriname, and Namibia, noting that its Oil and gas business is expected to generate more than $3 billion of additional cash flow by 2028.
However, TotalEnergies is also replicating its integrated Oil and gas business model into electricity to achieve a ROACE of ~12%, equivalent to upstream Oil and gas ROACE at 60 $/b, above the “utility” model traditional returns.
On the other hand, TotalEnergies is building a world-class cost-competitive portfolio combining renewable (solar, onshore wind, offshore wind) and flexible assets (CCGT, storage) to deliver clean firm power to its customers. The Company is leveraging its purchasing power to optimize its investment costs and industrialize its renewable assets through digital to lower operating costs. By utilizing its fortress balance sheet, TotalEnergies will capture additional value from price volatility through merchant exposure.
Furthermore, TotalEnergies aims to grow its power generation to more than 100 TWh by 2030, investing $4 billion per year and increasing cash flow from ~$2 billion in 2023 to more than $4 billion by 2028.
TotalEnergies expects to distribute about 44% of its CFFO in 2023 and increases shareholder distribution guidance to more than 40% of CFFO beyond 2023.
Given the strong fundamentals of the Company, the clear and disciplined investment policy, and the solid potential for cash generation growth in the coming years, the Board of directors has taken the following decisions:
In 2023, allocate $1.5 billion of the Canadian assets’ divestment proceeds to share buybacks, to reach $9 billion. The Company expects to return about 44% of CFFO to shareholders in 2023.
Increase the shareholder distribution guidance to more than 40% of CFFO through the cycles keeping net investments between $16-18 billion per year over 2024-28 to implement the transition of the Company.
TotalEnergies is a global multi-energy company that produces and markets energies: oil and biofuels, natural gas and green gases, renewables, and electricity.
Active in nearly 130 countries, TotalEnergies puts sustainable development in all its dimensions at the heart of its projects and operations to contribute to the well-being of people.