TotalEnergies SE (TTE) Earnings Call Transcript & Summary

Good morning, good afternoon or good evening wherever you are. We are delighted to welcome you to TotalEnergies' Strategy and Outlook Presentation 2023. We are today in the heart of New York at the 102nd floor of the One World Trade Center in Manhattan. You can also follow us on our website totalenerges.com. The program today will have first the strategy and outlook presentation for a bit more than 1 hour with several speakers, including Patrick, of course. And then we'll have a comprehensive Q&A session where you will be able to ask questions from the room. And we will have also the possibility for people who are not able to join today to ask audio questions. After the Q&A, we'll have the cocktail and lunch around 12 p.m. But without further delay, I invite Namita Shah, President OneTech to come on stage to launch the meeting with a safety moment. Namita?

Thank you very much. Hello, everybody. No, as you know, we always start our meeting with a safety moment. And today, I'm going to talk to you on our safety moment about how we use artificial intelligence to improve safety of our drilling operations. Just to give you a little bit of context, when we drill, we enter into a reservoir that is under pressure. And in order to control and to have safe operations, we need to ensure that new oil and gas from the reservoir enters the well during the drilling operation. When small amounts of oil and gas do enter the reservoir, this is what our drillers call [kick]. Where we have number of processes and procedures, both technical and human safety barriers in order to control these situations. Clearly, what that means is the earlier we do that we have a kick, we are able to control it. And so as a result, our team decided to look at the history of all the [ kicks ] that we had in the company over the past 25 years. So as an example, you'll see between 2015 and 2021, we had 19 kicks on our operated [indiscernible] and tendential drilling operations. We look at history to see if we could identify critical parameters, anomalies in these critical parameters that occurred before we experience a kick. We define the [pump] parameters, we define the anomalies and then we feed all this information into an artificial intelligence tool to identify these parameters and to identify the anomaly. Tested this with [worst] at end of 2019 on a live drilling. The slide that you see over here on -- the information that you see on the right-hand side of the slide is basically, the first time this tool accurately identified the anomalies and gave an alarm of possible kick and kick did indeed arrive a few hours later. Over time, we have vastly included the tool. We get alarm very early in the process. And as you can see, it has been deployed across all our conventional drilling operations. And in 2022, 2023, we generated 31 kicks, but we were able to ensure that we took all the proportions necessary and controls, so we would not actually experience any kicks in those drilling operations. So we are now going to be training this tool further to look into more complex wells and more complex reservoirs to continue to help us to manage this type of risk. Now we'll go into the heart of the presentation for today with, of course, first point on safety performance in 2023, as you know safety is the core value for the company. [indiscernible] our two key pillars. One is occupational safety and the other is a prevention of major risk, very specifically the prevention and looking into technological risk. As you can see on the left-hand side or my left-hand side, you're right hand side of this slide, we have worked a lot on occupational safety. And you can see that our numbers that we used to measure our performance on total recordable injury rate versus our peers has vastly improved. However, we have lost two people this year. We have lost [ Joston ] in the Refining & Chemicals branch who was 55 years old and married and had children and [ Isador ] in the Marketing and Services branch who was 63 years old, who also married and had children. And of course, for us, it is extremely important that we continue to work towards ensuring that we lose absolutely no one during the course of our operations. We also work on major risk. And this year, we have decided to [indiscernible] everybody in the company [indiscernible] technological risk. As you know, safety is a continuous learning process and continuous way of reminding people to think about the same thing over and over again differently. And so we have launched 2-year campaign on technological risk this year. But as you can see on the slide, we have always worked on major risks. And a few years ago, we decided to actually monitor and then actively reduce the number of losses of containment. So simply put leads of a certain [circum size] that we wanted to ensure that we reduced the release what was impact on the environment. And you can see that over the past 5 years, we have reduced the number of these events by over [indiscernible]. Just an example, the kind of work that we are doing we saw that we it would be the best absolutely that we plan in terms of safety for our people, for the environment, for our assets. So with that, I will now hand over to the [indiscernible] for the next part of presentation. Thank you.

Thanks, Namita. Good morning, [Audio Gap] Absolutely, the kind of summary of what I'm going to say we [indiscernible] this morning. Our market environment is good. And you're going to hear that we have a great deal of project. Bearing in mind that, as always, our strategy is driven by market fundamentals. But I also get that energy, the commodity market and in a commodity market, you need to be sure that you understand what people are going to buy. So let's say we go but once again market fundamentals as do we see them. One of the key aspects of future energy demand is the growth that will be coming out of the emerging markets. so called Total [indiscernible] 5 billion people today, excluding China, 7 billion people tomorrow. And these people, they need much more and much better energy to be lifted out of poverty. We, in the richer countries have to keep that in mind as we continue to push forward and advance the energy transition. And these aspirations are the so-called global sales are factored into the high-level market drivers that we remind that right here on the chart. It concern our three -- four markets. Oil, which is the #1 energy today, I believe, natural gas, key energy for the transition. And how that will eventually some point in time take ever from oil as the #1 energy in Total [indiscernible]. When our demand is pushed up by growing populations and higher living standards. This is true notwithstanding the continued innovation efforts substitute oil whatever it can be done and what's going on in the electrification of passenger car is a good example of that. Biofuel demand is centrally driven by mandates here and there in the world, but the overall opportunity is kept because of feedstock [indiscernible]. The fuels are still very far from prime time. Regarding gas, the growth is coming from LNG and we agree that LNG remains absolutely critical all through the transition. It is key also to [indiscernible] lower carbon energy system that we are working on, both support to back up all and to [indiscernible] commit and renew. Low carbon gases are set to pick up over time. Biogas is today not much more than a profitable need. Finally, power, growing demand on a global scale is accelerated by the net zero policies of the richer countries. The increased penetration of renewables means that it's not going to be trivial to deliver what the customer ultimately wants, which is clean power. Now a quick word on the shorter-term trends for each of these three markets. On oil, I'm sure that you all picked up on the latest report from the IEA, saying that demand will grow through the decade. Guess what? We agree when the IEA may say that. And we show here their own forecast were rising all demand to 106 million barrels per day in 2028. Unlike what we heard here and there in the past, including from senior industry executive, oil demand did not peak like in 2019. As a matter of fact, it reached an all-time high in June this year. Of course, that is remarkable given that the overall macro picture is somewhat mixed, and it's entirely linked to the long-term drivers that we just spoke about, demand in emerging markets. Supply on the other hand, remains constrained with two notable factors that we are listing here, which is the OPEC [growth] policy led by Saudi going a clear intent to steer oil prices through volume [indiscernible]. And secondly, early signs that U.S. shale will not be able to grow forever due to [variable] discipline flowing productivity gains, higher returns to investors and sometimes simply also the lack of skilled labor. And all these agents combined created [complete] outlook for oil. Moving onto LNG. What you see here to the left is our internal analysis of the evolution of supply and demand until 2030. We expect demand to grow at around 5% per annum between now and 2030. LNG demand is known to vary both with weather and with prices. So this is not necessarily going to be linear. That being said, the bulk of the growth will come from Asia. It has been competing with Europe for available suppliers ever since the onset of the war in Ukraine. Bear in mind that Asia's level of demand of LNG is still below what it was in 2021 because Europe has been taking share. It continues to grow above global market in 2023. So all in all, we're bullish on LNG demand. Supply on the other hand is going to be constrained as the chart shows for 2026, '27. And new LNG projects coming mostly out of the U.S. and Qatar will only come onstream in the 2026,'28 timeframe. Because of the current tight market conditions right now, any supply disruptions anywhere in the world linked to port measures, linked to operational hiccups or strikes down under, all these unforeseen events create volatility and price spike. As long as the market is short, meaning, as you can see on the chart, over the next 3 to 4 years, price environment for LNG is going to be supportive. After that, the availability of new and more supply will trigger a further uptick in demand. Just a last word on power. What's striking on power markets is that at the macro level, there are a lot of similarities in the oil and gas markets, meaning growing demand and tensions on supply. Power markets are increasing at a brisk pace of around 3% per annum until the end of the decade. This is triggered by the electrification of final energy consumption in the richer countries, net zero ambitions and by increased populations in emerging markets, as mentioned earlier. And well, in front of this growing demand, pocket [certainly] is constrained. With lots of attention on power network around the world due to aging infrastructure, permitting delays, supply chain disruptions and also sometimes extreme weather events. Another point is that the ongoing decarbonization effort of power will make our systems much more complex to manage due to the massive arrival of these intermittent renewables [indiscernible]. dispatchable generation, balancing, storage, remuneration of standby capacity, all these elements are therefore going to be needed to ensure proper network management and balancing and availability. Overall, this creates a support price trends for [indiscernible] and attractive investment opportunity for us as you're going to hear a little later. Before that, Patrick, I hand over to you.

Thank you, Namita and Helle to have introduced the safety of the company and the landscape of the energy markets in which we drive our strategy. I will, today, because you will have no surprise about the strategy. We consider that in these energy markets or strategy, which is fundamentally driven by demand and Helle explained you why the transition of fundamentally supportive for energy markets and prices. We consider our strategy, which is a balanced strategy between two pillars or the oil & gas one side, energy of today, as the demand continues to grow and it brings [indiscernible] transition strategy by profitable growth of integrated oil segment well adapted. And will be a nice way to grow value and to offer attractive return to shareholders. So I will -- you will see in 12 slides summarize the headlines of this strategy. And then Nicolas will speak about oil & gas and Stephane will think about integrated [indiscernible] before I come back to final conclusion to give you the headlines of the guidance we want to give to the company, our investors for distribution [indiscernible]. Let us just say there are two pillars in our strategy. One is what we say DNA, which is oil & gas, which we continue to invest, continue to grow, and I will come back on it. We refocused our portfolio on some fundamental, I would say, characteristics, which is a low cost, resilient through cycles in order to deliver the value low cost, low breakeven and also, of course, low emissions because our first duty as an oil and gas producer it's to slide down the greenhouse gas emissions linked to our operations. We have developed and we'll come back on it during this presentation, which upstream project portfolio, which will feed our future growth. First, we have a core also focus on LNG, we have developed and the reasons were explained by we are company has been positioned itself in the top 3 global LNG integrated portfolio with very [indiscernible] and strong LNG project portfolio. This has allowed us to deliver in this type of price environment, high return on capital employed, 23, more than -- around 20%. We look the oil and gas upstream activity. Second pillar of the strategy of this transition strategy is to build a profitable segment called Integrated Power. All wells are important, integration, in particular, not only a matter of renewables, it's a matter of driving value from integration, integration packing renewables, intermittent [indiscernible] and flexible assets and also integration of the value chain. And Stephane and I will explain you how we will net cash positive by 2028 in this segment, knowing that we invest $4 billion per year in sizable business. This strategy [indiscernible] in a transition strategy. That's not -- it's not -- it's fully compatible with a high level of profitability. I remind you that last year in '22 TotalEnergies offers the highest average capital return on capital employed among the majors, which demonstrates that you can be strong in oil and gas [and the] transition strategy while remaining profitable. This strategy also will also offer to the company the highest production growth -- energy production growth in the coming -- until the end of the decade with 4% of energy production growth. First pillar is oil and gas. And oil and gas, as I said, will rich portfolio of projects. You have there a trajectory for the next 5 years that we intend to follow, which will offer to the company, a growing oil and gas projection of more than 2% -- 2% to 3%. but with of all projects oil projects in particular in the coming years, all the [indiscernible] projects in Brazil around Mero, but also in the Gulf of Mexico. And [indiscernible] projects in Iraq since August 16, 2023, followed by projects in Uganda, Angola, and Suriname on which we'll come back. Energy, we have a large portfolio of projects in Qatar, Papua LNG, Mozambique and Rio Grande LNG in [Texas], a growth between 25% and 28%. [indiscernible] figure at the same price deck, the increase of cash flow from operation from vis--vis oil and Gas will be around $3 billion between '23 and '28. What is this portfolio of projects? You have on this map, again, all the major projects, which we really intend to develop in the next 5 years. On the oil side, it's primarily deepwater, large giant ships in deepwater, several projects in Brazil beyond the Mero but I mentioned, we have also coming to sanction Spia 2 and Atapu 2 on the licenses that we acquired end of '21. And we have also in the Gulf of Mexico, I mentioned then. And then in the Suriname with the success of our exploration where we will develop a 200,000 barrel per day project. Onshore, we have two large projects, one in Uganda, the other one, what we call GGIP with Iraq in Ratawi oil field in Iraq. As you can see at $60 per barrel, this project offers a return about 20%. The LNG projects at $8 per million Btu, European gas price from [15%] the leverage. $8 is quite relevant what we experienced today, but it's comparable more or less to be $60 [indiscernible]. As I mentioned, one thing which has also supportive of our growth in the oil and gas business, particularly on the oil side has been our exploration success. I must today pay tribute to our exploration teams. We have decided in 2015 to refocus the team on, I would say, streamlining the bed debt, $800 million to $1 billion seems to be efficient. They have made some selective choices and few of them recently have been quite successful. In the Suriname, first, which we entered end of 2019, of the 15 wells of oil discovery, some of [indiscernible]. But the good news is that we have today able to define quite a large project, 700 million-barrel oil project. Nicolas will come back on it on the eastern part of the block that is present by [indiscernible]. In Nigeria [indiscernible] we drilled the conventional offshore, but it's very, I would say, time to market will be short. It's a prolific with the conventional when we discovered around 100 million barrels of oil recoverable reserves, which can be linked to the Ofon platforms in the coming years. In Namibia, we heard that you all expect news from Namibia. Don't believe everybody. And people are -- we're confounding potential hydrocarbon in place and when you can produce, it is just a factor in between it ability, the project go well. So we are continuing. We had some positive views on Namibia. On the Venus discovery, which was, I remind you, covered by what we call Venus-1x. We made a positive appraisal well Venus-1A, made a test of Venus-1X we made a positive appraisal. This year Venus-1A made a test of Venus-1X with best results, it's a positive flow test, I mean [indiscernible]. We will be making -- we had the next operation is to confirm this flow test on Venus-1A, which is first upcoming. So with these wells, but there will be oil development there on Venus. Size of it, exactly yet to be determined. We'll intend to continue to explore, you can see on this map sort of prospects [of the north of Venus] mandated, which will be doing soon. So we go to the north there, and we in turn as well potentially to make a last appraisal well on the more for Venus [Audio Gap]. One failure, what we call [indiscernible] was drastic in the U.S. which one build to be all bearing, of you go to the west. [indiscernible]. Like Suriname, it's clear that it's a fit the future growth. But we need to continue to work. And already, we are beginning to think to the development, knowing that there is also gas like always like Suriname, but that is Suriname project through experience and sometimes in the quarter. [indiscernible] attention you can see in the center of this slide, the two important parameters that we look at it, which we follow very carefully. The intensity of the Scope 1 and two of operations in terms of kilograms of CO2 per barrel was about 20 kilograms per barrel [indiscernible]. We can produce oil and gas differently. And the methane is the same. We focused on it in since 2010, 2020 with 50%. We induced increase to 5% between 2020 and '22 could be again met intensity in the industry and what we decided better emission like zero emission. Like aiming for your own fraternity. Because what we have the technologies to do it. So, we will do a target which was minus -- less than 0.2% to less than 0.1%. Really, we were able to make [indiscernible] have some cycle for us. We could not be a mistake. We've done 2005 and 2016 [indiscernible] price environment and $100 per ton carbon price in order to introduce exactly the strategy to take down the emissions. And we approved projects. [indiscernible] some threshold less than $20 per barrel CapEx is OpEx for less than $30 per barrel OpEX, CapEx breakeven. And in terms of emissions, the projects, that have emission and [indiscernible] lower than their averages of the portfolio. So here, it's more demanding to our teams, to Namita teams, and Nicolas and [indiscernible]. But it's very virtuous. Since we have implemented that role, you can see the trajectory. Trajectory is really decreasing. I think this is what society expects from oil and gas company. So LNG, which, of course, is at the core of our strategy and our growth. Of course, we have established a global integrated LNG player from a premium to [indiscernible], trading shipping, regas terminals to long-term customers. We have a strong position, in particular, in Europe with more than 20 million total regas capacity, which, of course, in the present market since last year in value in order to have access to the European market, and in fact, be able to safely market or LNG, in particular, U.S. LNG. We are the largest U.S. LNG exporter. We have today a supply of 10 million tonnes. We announced in December that grow a number of LNG projects, Rio Grande LNG in South Texas. Where we are located where we took the commitment of taking 5 million tons. So we have more than 15 million tons of LNG available through supply into market, an increase of our growth business between '23 and '2030 of more than 50%. Of course, we have to grow our LNG carrier fleet globally, it's in line with our expectations on the market. The second pillar, after oil and gas or LNG is integrated power. Stephane, of course, will come back on these more detail on his slide. This slide is fundamental to me because we have practically worked in order to set the strategic framework to deliver profitability part of this business. At the beginning of this year, we published the Integrated Power results. You've seen that we'll make this year. We are underway to make [indiscernible] billion of cash with return on capital employed around [20%]. So the markets are, of course, supportive, which is what Stephane reminded, because a little -- but when we look to the way we want to develop this business, we will be net cash positive by 2028 and we target return on capital employed 12%, which is more or less equivalent to [indiscernible] return on capital employed at [indiscernible] you know the debate. And so we want the company, you could say, maybe it's a cautious environment, but it's 12% of return on capital employed on oil and gas at $50 and Integrated Power. So how we will do that, fundamentally, because we think to develop this business as we say as an integrated energy business model, where we've done oil and gas, not as a [multimodel]. We have no debt. We can leverage our balance sheet [total value], in particular through [indiscernible] exposure. We have to work hard, like in oil and gas to lower the cost. It's the commodity on CapEx and on OpEx, strengthening renewables leading digital, who are leveraging of [indiscernible] the fundamental product we want to sell at the end is a Clean firm power. Customers because this is, I think, where we can and added value. And again, Stephane will come back on this [indiscernible] the profitability for integrated power. Important, of course, for us is to understand that this strategy, having [indiscernible] no merchant exposure. It well, of course, in, I would say, the regulated [indiscernible] market in Europe, the U.S., in Australia. it sure is a core focus of our activity, in fact, today in our portfolio more than 50% already of the portfolio. So we are already focused. We have also -- and it's important to notice the strategy to combine to bring renewables and efficiency in our oil and gas countries. Why? Because these countries themselves onto transition because also there is a leverage in both ways. The contract which we managed we signed in Iraq. In fact, the first discussion were around the authorities about gas and power because we are able to discuss about gas and power and power in particular, but then to finance the full projects we put into acting into the contract an oil field, which will increase its production from 50,000 barrels per day [indiscernible]. It would be the same somewhere in some of the countries like Libya. So there is a leverage in that way, but is also in the other way, the fact that because we are in an oil and gas country, we are a main player. We can have access to, I would say, a very interesting renewable contracts and projects securing the revenue through our oil productions like Angola or Mozambique. So that's the primary focus of our activity. A word about the low carbon molecules in this presentation, where we spend more or less $1 billion per year of CapEx. The whole idea is fundamentally to use our European refining assets as a base to first transition them; and second, to also on our side, develop our businesses on two pillars. One is sustainable aviation fuel on the right because we can convert our existing refining assets quite efficiently, to process some of the biomass feedstock in our refineries in order to develop this attractive business of sustainable aviation fuel with an ambition of 1.5 million tons per year by 2030, the market will be around 25 million tons by this global market horizon. Of course, what is key is to secure the feedstock. So we are -- if we made some [indiscernible] extremely from animal fats producers in France. We are also in order to be up looking to new technologies, in particular [indiscernible] will offer us access to another source of feedstock for future development in sustainable aviation. All that being supported by the EU mandate is why Europe mainly at the end, for us, a good playing field because European mandates through the green deal are really supportive for creating this new demand from low carbon molecules offering, in fact, profitable, I would say, playing fields. On hydrogen, it's the same. It's the [indiscernible] carbon molecules. But there again, we will use our refineries. On one side, we need to decarbonize our European refining system, and we have the equivalent of around more or less of 5 million tons of CO2, today which is Scope 1 or Scope 2 or Scope 1 plus 2 linked to hydrogen goods in our refinery. So the idea is to decarbonize that by developed -- by using green hydrogen. Why do I say green or bio hydrogen because in Europe, according to the European regulations, the new ones, that must be mandated by the government. Today is what we call the [indiscernible] regulation, which means renewable fuel of non-biological origin. Which offers impact on economy to [indiscernible] we will use green hydrogen or bio hydrogen in our refineries. We'll have an economic advantage. So these new products will be, again, facilitate growing the economy [indiscernible] to develop some projects. So we will develop some local projects, like we are doing today in La Mde on 120-megawatt projects, which will be in place in [indiscernible] in Grandpuits where we have a biorefinery and we can product bio hydrogen together with the liquid. We have also already signed some supply agreements in Leuna and Normandy. And we have just announced [indiscernible] the tender for way as well to established to contribute to establish to [VNG Leuna] industry, a large tender to supply by up to 500,000 tons per year. We'll see what will be because we will receive [Audio Gap]. So in terms of CapEx, framing to support this strategy, we hit the guidance we gave you, $14 billion to $18 billion full cycles. For the next 5 years this 14$, $18, we think because we are, as [indiscernible] explained to you, we are bullish on the price deck, we are on the base of $16 billion, $18 billion, but important to remain with the global guidance, have identified in the plan, $2 billion per year of downward flexibility, particular of short-term CapEx, which we could arbitrate on both sides, either on oil and gas or integrated power. And the scheme you see there, it remains the same, but I think it's very important in energy industry to be who have a CapEx framework, we go through cycles, again, $4 billion integrated power, an additional $1 billion on low carbon molecules, which make $5 billion, more or less 1/3, there's been the CapEx and on oil and gas to support, of course, our existing customer growth as well for CapEx and the rest in [indiscernible] to new projects [indiscernible]. Just a slight reiterate to what I just described with the 2023 activity. On oil, we have acquired a [indiscernible] in Abu Dhabi, SARB / Umm Lulu, very low cost, low emission. By the way, Abu Dhabi being at the forefront of [indiscernible] of the whole oil operation. So it's fitting very well with our objectives. in Suriname, we are going now. We are working now towards FID by end of '24. In the same idea, we have divested businesses. In '23, one is the Oil sands [indiscernible] for refocusing of our business on low cost and low emissions and as well our EU retail business in order to refocus Stephane will comment what the variety is in Europe on EV mobility. The gas, we had this sanction of Rio Grande LNG, which is demonstration of the strategy plus the first gas in a [indiscernible] in Integrated Power, two major operations. One is the full integration of Total Eren, which was established 5 years ago. We own 30%, now we are 100%. We had oa very good multiple to acquire. So we [indiscernible] now we are particularly sole owners [indiscernible] explain you why this must be consistent with our strategy. Last but at least, Iraq is sort of flagship of our multi-energy strategy with combined oil, gas cutting down gasoline producing gas and power. And success. We came back in Iraq where we are born 100 years ago in 2024 will be the end of the -- 100-year anniversary of the company. In '23, in terms of cash flow allocation, you see that we'll generate the end of the year, about around $37 billion, $38 billion of cash flow. So we invest $16, $17 net capital investments dividend to be $8 billion and buybacks that will come on it $9 billion. cash will be allocated to strengthen the balance sheet. So the last slide of this strategy, which is a good summary, more energy, growing the energy production, less emissions and growing the cash flow. So all in all, There is oil and gas and our integrated power will grow our energy product by 4%. Which is the core of the future growth of cash flows. We continue to, again, lower our emissions. I already commented top 1 and 2, I will not do it again. But we follow, because for me, it's a long debate about [indiscernible] but convince absolute target because I think it makes a little change. One, which for me is important because it demonstrates -- in fact, it's a marker of its transition strategy, the intensity of the life cycle carbon, so Scope 1 plus 2, plus 3 type of products. And last year, we announced that we want to reduce by 25% between '15 and '30. So that will be the company is transitioning. I think we'll be already at minus 12%. So we are well on the way of making this transition. All that, of course, the objective is the company to grow cash flows and we are to be able to grow distribution would be my [indiscernible] later. what I described to you, between '21 and '28 -- '21 that was the real price deck, $71 Brent, $16 Permian BTU for European gas and the refining margin was quite low. If we take a sort of $80 per barrel environment, [$8 for the gas] and $35 per ton for refining margin. Considering the volume growth that I just described, will generate more than $10 billion by BTU, and it will be explained to you now by Nicolas and Stephane in more detail before I come back.

Thank you, Patrick. Good morning all of you. It's a pleasure to be here. So over the next 6 slides, I'm going to focus on the oil and gas pillar, particularly our projects, our focus on operational excellence and what we're doing to achieve it. So as Patrick indicated, we expect to increase our oil and gas production by 2% to 3% over the next 5 years. You can see the chart, good chunk of this growth is coming from gas and particularly our LNG projects, and I will give you a bit more details on this with also some growth in oil production, hanks to a very rich pool of project. I will show to you as well in the next slide. While growing our products in -- of course, our focus remains on value on cash flow on this project. And you can see that this increase in production will lead $3 billion increase in this result. Oil and gas pillar, producing nominal [indiscernible]. Of course, we are very much focused on the execution of our project to deliver on the production growth that they have done just before. Actually, a lot of our teams are working on that currently. We have a rich pipelines project or the four main projects. Integrated project in Iraq, all the agreements were signed in July, our entry in Ratawi was effective in August. Today, the field is producing [60,000] barrels per day. We are launching Phase 1 upgrade to this project [indiscernible]. Brazil, we are continuing with Petrobas, the development of [indiscernible] field, a great success story. The Mero-1 is [indiscernible] was stopped last year. Mero-2 is expected to start at the end of this year in December, and Mero-3 and Mero-4 will follow very productive field allowing a lot of focus on low emission intensity. In the U.S. as well, 2 deepwater projects, Anchor and Ballymore. Start simultaneously on the following year. And last, Uganda, where we are now in the development phase of our [indiscernible] project, ongoing facility construction has started. It's a large project with a [indiscernible]. So altogether, if you add them, they represent more than 300,000 barrels per day of fuel production by 2028 FFO [indiscernible]. $8 billion there are annually to $50 per barrel, pretty good pretty good upside and price on the side with FFO including 2.5 million barrel annually, $7 per barrel. All these projects, they meet our requirements, of course, in terms of [indiscernible] on the flow emissions. Tough on the right to you the technical cost, the full technical costs of this project. So you can see, of course, the onshore projects with a very advantage that it can sequester. Lack of growth undergone now. Deepwater Brazil [indiscernible] around $20 per barrel. LNG as showed in the production chart before, we expect to deliver the best-in-class growth of our LNG production with four flagship projects. First one being Qatar the North Field South expansion project is now ongoing. This should bring us 3.5 million tons of equity[indiscernible]. LNG, Patrick mentioned it in the U.S., where we entered in July with the [net higher offtake] volume, competitive projects, very good size, no dredging, no drilling, proximity to Eagle Ford [indiscernible]. So again, a project [indiscernible]. On Papua LNG, we are progressing towards the FID, completing the engineering design of the project with an FID targeted early next year. [indiscernible] synergies that we mentioned the kwy with 2 of the LNG. The tough LNG in [indiscernible]. This project will add [2 million ton] to our LNG product. And last Mozambique LNG, we are working to create the conditions for a restart of the activities and target started in 2028, 3 million tonne per annum in company share [indiscernible] competitive unit cost for the LNG plant because contract was awarded in 2019 and favorable conditions or even with [indiscernible]. And you see those projects here on the [indiscernible]. Let me Come back on Suriname that Patrick commented on. Suriname is a good example of how we can create value from exploration. We entered [indiscernible] in 2019, which repeated a number of wells, and now we've fully appraised the oil discoveries bringing together close to [indiscernible] to have sufficient -- to have a robust development. The concept is now selected. So we're going to go for a 200,000 barrel per day TSO, full gas transaction. FID targeted by the end of 2024 with first oil in '28. Again, this project meets our requirements in terms of cost on emissions intensity. We will access quite a lot of oil actually [indiscernible] dollar rate of return, about [indiscernible] in current scenario. At our [indiscernible] project, we will continue focusing on maximizing the value of our portfolio start working continuously on operational efficacy and maximizing the production from our existing assets. I'm doing so, of course. And by the way, operational efficiencies go together. We continue to work on lowering our unit OpEx with the objective of keeping our OpEx [indiscernible] competitive advantage of the company. [indiscernible] we want to maintain that by working lean operations on site by working on the logistics, by working on site selections and all the levers we have to bring our OpEx down. And of course, we are very much focused on the execution of our projects and delivering the major projects I've shown you before on time within budget. Fully upgrading is important. Patrick mentioned it. I think what we've done in 2023, a good illustration of what we want to achieve in our portfolio with the divestment of our assets in Canada. You see the technical cost of these assets in the chart in the middle. So obviously, the adjustment had a positive impact on our average typical cost on within three low-cost assets, SARB/Umm Lulu in the UAE plus at FID projects, [indiscernible] So overall, if you look at the chart in the vision, what it was on 2024. We expect to improve early [indiscernible]. But first, we focus on our existing assets. We have a target to reach. We have a target to reach 0 [indiscernible] emissions by 2025 and 2040. Minus 50%, minus 80%. I want to do this by, of course, we need to measure our emission. So I think we're quite proud that we developed [indiscernible] emissions on our sites we have deployed on all our operated assets at our main operating assets, 2022 to be able to monitor our progress and make sure that we're on the right trend towards zero emission. We are committed to the [indiscernible]. So basically, oil flaring will be divided by two. [indiscernible]. And we are continuing to work to deliver our energy efficiency improvement plan, $1 billion which is about reducing greenhouse gas emissions including energy efficiency, but also reducing our energy cost on our OpEx [indiscernible] good business. For new projects, we are [indiscernible] flaring all our new projects in the case in Suriname of course, which time we can, we are using renewable power also to meet upstream projects, own power requirements and we're doing it in Uganda [indiscernible] LNG as well. Papua LNG interesting project because we're going to reinject all the native CO2 [indiscernible]. And although new trains will be electric trains this will allow Papua LNG to have a best-in-class greenhouse gas emission intensity. All for our offshore projects. We are working on improving the efficiency of the power generation onboard our FPSOs and one way to do this is to implement combined cycle gas turbines offshore. And last, we innovate in e-fuels. A good example of this is our investment in the joint venture with TES in the U.S. to develop a project to produce e-natural gas e-methane with renewable power to produce hydrogen and then a combination of this hydrogen with biogenic CO2 with the objective of producing 100,000 to 200,000 tonnes per annum of e-methane. And one advantage of this is that this gas is fully compatible with existing infrastructure, so can be monetized to the market easily. I will now hand over to Stephane for Integrated Power pillar.

Thank you, Nicolas. Good morning, everyone. I hope you enjoy the view on the sunny day. For me now, I see plenty of gigawatt and dollar coming from our solar plant in PGM. So I guess that's what we mean by the transition. So I'm going to present you the second pillar of our growth strategy, integrated power. And in particular, how we plan to build a profitable cash engine. And I guess that profitable, it's obviously a relative notion. But for us, as Patrick mentioned it, it's quite precise. That means reaching 12% return on capital in the coming years. So to do that, obviously, we can't just copy or become a pure renewable player [indiscernible] intermittent player power and bet on decreasing costs and decreasing interest rate. We can't copy either the business model of utilities, which is based on guaranteed price and high leverage because we know that those business models are not going to deliver the kind of target we are looking for. That's why our strategy is really to deploy what we call an integrated power model, where we will leverage on our strengths, the size, the balance sheet to extract value from on one side, taking more merchant exposure and on the other side, selling clean firm power. For that, the integration is key, and that integration is going along 2 dimensions. The first 1 is the one you see on the left side. The integration of different type of technology of production where we plan to blend intermittent assets coming from renewable and flexible assets coming from [indiscernible] plant, storage, Pump hydro, hydro, so that we have a good blend that allow us 2 things: one, to manage our [indiscernible] exposure, 2 to sell to the customer and extract value from that clean firm power. Obviously, the blend depends on which market you are. The weight of the various type of technology will depend on the market we are. But the basic fundamental idea of that integration is integrated, flexible and renewable at the same time. The second idea of the integration is to integrate along the value chain to be able to extract more value from the way we sell our electron. And to do that, there are 2 ideas. One is clearly to build a very strong trading exactly the same way we have done on oil and gas. Today, we have already a big team, big power team in Geneva for Europe. We are building it as well for all the market in the U.S. from [indiscernible]. And the last idea is to develop our marketing capacity, targeting the large B2B, where we are going to sell at the same time, corporate PPA, renewable corporate PPA, but as well, what we call the clean firm power, which are fundamentally structured PPA will come back to that. You know that we have as well a B2C presence, especially in France, Spain and Belgium, but I would say that the key of our focus is really on B2B and on B2C, we'll try to consolidate our position. With all that, the target is to reach above 100 terawatt hour of production by 2030. And you see that I'm talking about terawatt hour because at the end of the day, what matters is production because production is revenue, not that much capacity. And I'm talking about 100 terawatt of power production coming obviously for renewables, but as well from the risk because part of the value is coming from that integration. Why do we target 100 terawatt because at the end of the day, size matter, size matter, and I will come to that in terms of building a meaningful business for the company. And you see that with all that, we will be roughly 20% of the energy we sell by 2030. And because if you want to count in that game, especially with the supplier and the contractor, you have to be big. So to implement that business model and to make it profitable, we have -- we are going to [indiscernible] 5 levers on which we have worked in the last 6 months and where we have now full action plan, people in charge, and we'll do as we do in oil and gas, very methodologically implement all that. So the first idea is that, that model of integration only works on the regulated market. So we are going to focus our growth on the regulated market. Patrick mentioned it, 1/3 in Europe, 1/3 in the U.S., a bit of Brazil and Australia, and the rest will represent less than 20% of our sales. That's one. Second, we need to grow 4x to 5x versus our current renewable production of 20 terawatt hour and double our production of flexible assets. To do that on renewable, today, we have 20 gigawatts of capacity under construction. We will meet our target of 35% by 2025. And as you know, we have a pipe of 40 gigawatt of early or mature or mid-stage project post [ 2005 ] to fuel the growth. Then the question is how to make that profitable. And here, there are 4 dimensions. The first one is that we will be putting on stream around 10 gigawatt capacity after 2026. And to develop that, obviously, you need to initiate that process. So that means focus on a limited number of countries, but where we can have big projects and good project. And the way we have done that was to really partner with the top player in the market where we are. Electricity and specialty development is a local business. And we, for example, have developed in the U.S. by partnering with Clearway, which is one of the top 5 developers; in Brazil with #1 with [indiscernible] for example, in India with Adani and really try to leverage that strength to be able to build a very strong portfolio. Obviously, on the development side, we buy as well projects like other from developer, but we want as well to have our own platform of development, which is the case, for example, in France, in the U.S., in U.K. or, for example, Portugal [indiscernible]. That's for the development part. Then obviously, if you go in the merchant market, you're exposed to cost and you need to compete on cost. And we aim to have the lower cost of the industry and [indiscernible] the same way we did it to oil and gas. And so we target to be able to lower our unit OpEx and CapEx by 10% and to improve our efficiency to target really the first quartile of the industry. Obviously, to do that, you have to benchmark your assets internally, externally. You have to standardize your design to be able to use your size effect. And so today, for example, we have standardized the design of our solar plant to limit to 5 or 6 models. You have to play on your purchasing power. We just signed 2 capacity reservation contracts, one with First Solar and one with Jinko in China, where we see that in average versus the rest of the market, we can lower our cost of supply by 5%. And last but not least, you need as well to control your operation. That means for sure, have in-house operation on the way you operate your solar and wind farm. But as well, centralize all that so that you can operate them on real time and in the most efficient way. Part of the difficulty of renewables is that you have thousands if not million, of [indiscernible] to manage. And you need to realize when something goes wrong very quickly. And for that, you need a lot of digital and AI, which now we have. So that's how to develop better, produce better. Clearly, the question is how to sell better. And on that, there are 2 dimensions, as I said. One is to take more merchant exposure. We have a view today that small developer needs to hedge is production and for that is ready to pay a premium to get a long-term as produced PPA. And there is value to be taken to take merchant exposure in that market. same when you have flexible assets. And second, on the 70% of the production we are going to sell, here, we are convinced as well that we can extract value by selling to the customer more sophisticated product. The first one is just to sell clean, firm power because at the end of the day, you want to buy power when you need it, not when it's produced. And here, we clearly see that there is a premium to catch. Obviously, to do that, you need a stronger short-term trading, real-time trading that we have built in Europe today and that we plan to deploy in the U.S. as well. Last but not least, the portfolio. As I said, you need a good blend of flexible assets on one side and intermittent on the other side. And that's why we need to add -- if I take, for example, Spain, where we have a large solar portfolio, we need a bit of wind, exactly the opposite in ERCOT, what it would be -- the same in ERCOT where we need a bit of wind. There are markets where you need to add storage. So that's the dimension on which we work as well. And then there is a cost of financing all that with the 2 dimensions using our balance sheet to minimize the cost of the debt. That's one. And second, you know that in our business model, we farm down 50% of the asset at [ COD ]. And yielded a lot of sale where we want to, in this regard that process and work with specific partners. So that's our strategy and the bulk of our strategy. There are 3 subjects I would like to mention in addition to that. The first one is offshore wind. Why offshore wind? offshore wind should represent 10% to 15% of both our production and investment. So that's not the bulk of our strategy. But nevertheless, it's an interesting technology, but as well the technology, and we've seen that some of our peers that could struggle. To remark on that, it's true that costs have increased and the interest rate increase doesn't tell. But at the same time, it's clearly a technology that is quite close of our traditional oil and gas activity, long project, CapEx intensive, of course, offshore, where you have -- where you have to manage the execution risk, things at which we are quite good. So we believe that clearly, offshore wind has a role to play, but we want to do that selectively and profitably and choose carefully our market. And the market on which we want to go are one, market where there is good wind because you need competitive asset. So the asset needs to be competitive. And one of the interesting aspect is especially when the grid is paying for the connection which is not the case everywhere, but which make a big difference on your cost of production. And of course, bottom fixed because today, bottom fees can be in several markets that [indiscernible], and that's not the case for floating offshore. Finally, if you want to be completely consistent with your model, you need to be -- to have the freedom of doing whatever you want with your electron. And that's why we notably choose the German power market because Germany has all those characteristics. One, it's a very dynamic market in terms of corporate PPA. Second, you can plan offshore with solar, and we have projects in Germany to do that. That's a market where exiting from nuclear means that costs are done by the price of gas. And today, we see that PPA are above $80 per megawatt. So structurally, it's a very interesting and promising market. And at the same time, when you look at offshore wind, you have low technical cost because it's a bottom fixed, load factors are very good. And we had the possibility to access to a long-term lease in what we consider as attractive entry conditions because. At the end of the day, you pay only 10% of the bid amount we have paid. And as I said, the grid connection is paid by the state. And then it's true that you will have to pay a kind of royalty or profit, if you wish to compare with the model over time, but it will come when you have decided to take your FID and over the life of the asset. All the assets, that's why we went for that action, and we are very satisfied to have [indiscernible] gigawatt, and we are confident actually that we will deliver on that project like the other, the return of capital, as mentioned, of 12%. Second remark, as Patrick mentioned, we stay on regulated market for 2 reasons. While because you have the oil and gas country, and as Patrick mentioned on that, we can leverage the multi-energy model. We can get good contract like Angola, Qatar or Kazakhstan or contract with big size that help us to leverage our position with our supplier. And at the same time, that's a way as well to get good oil and gas contracts like in Iraq or in Libya. So the idea is to be profitable. We don't go in this country not to be profitable, but we believe that we have a competitive advantage. That should represent around 10% of our production where the extra value is not going to come from integration with flexible asset, but from our oil and gas presence. And then you have the rest of the portfolio is to remark. You still have markets that are interesting where you can create value. That's what we believe we are doing in India with JV with Adani Green company, where here, the idea is to access the asset, and we have 2 JV 3 gigawatt [indiscernible] and the new one, we have just signed of 1.4 gigawatt and then we inherit from the Total Eren portfolio, a large number of countries where at a very good price, as mentioned by Patrick, because multiple of EBITDA was low where we are reviewing that and we will monetize for sure, noncore assets. That's one of the tasks for the months to come. Last but not least, Electromobility where here, the target is really highways and city hubs for EV charging and B2B segment. Why is that? Because there is an obvious synergy with our current position. leveraging our presence on highway and city hub. And as you can see, we are already #1 in France with more than 1,000 high power charger already installed and where, obviously, we try to secure the scarce prime location as well we have relation on -- with customers on the B2B market, thanks to our fleet card system. And here, we want to use that specific relation to provide mobility services to our customer and to deploy our EV charging. It's clear that on B2B, even if it's necessary not large volumes, there is a synergy as well with the integrated power business because that's a demand on which you can make load shift which has clearly some value in terms of demand response. Finally, but there, it's much more selective where we continue to work on but we are selective because we don't want to sacrifice profitability on that segment. All that should lead to a strong increase of our production going from 30 terawatt hour to above 100 in the next 5, 7 years. And obviously, with growth on one side and improvement of OpEx, CapEx and revenue, we plan to be able to go from $2 billion cash flow generation in 2003 to more than $4 billion in 2028. And if is important because we plan to spend $4 billion per year to do that. So the target is clearly to be net cash flow positive by 2028. I'm done and I will hand over the floor to Patrick for the part you are waiting for so distribution.

And you are expecting that. But in order to grow the distribution, we need to grow the business and cash flows. There is no miracle. And so why should you continue or more -- acquire investments in too TotalEnergies, which is more important. First, some figures in chart, but we summarized, in fact, I would say, by this presentation. So the cash flow growth I would say, the same price deck. I don't say that the 2028 price deck will be the same by 2023. I just said the same price deck, whatever it is. We'll generate $6 billion cash flow, additional from a pure volume effect, around -- more than $3 billion in upstream oil & gas, which was explained to you by Nicolas, the integrated power an additional $2 billion. And what was not described, but I gave you the figure, in the downstream petrochemicals plus the low carbon molecules, which I mentioned with sustainable aviation fuel and these [indiscernible] molecules in Europe around $1 billion. So it's globally a volume effect of $6 billion. You have the price sensitivities, which do not move too much, $3 billion for $10 per Brent, $400 million for $2 per million Btu of European gas price and $500 million for $10 per million refining proxy. By the way, on the proxy today, it's a good sensitivity because the margin is quite good and quite high. More importantly, on the right side, you've seen there the important metrics on which the Board of Directors, in fact, works. The first one is at $50. If I take the 6 years from '23 to '28 in years, we will generate, as you can see, more than 100 -- between $150 billion and $170 billion. We spent and kept disciplined capital investments around 6 years around $100 billion. The existing dividend represents more or less $50 billion. So we have, in fact, a post dividend breakeven, which is lower than $50 per barrel, which is, of course, very important metrics in particular, when you combine it with the fact that thanks to the cash flow from the year 2022 and '23, the balance sheet, the gearing is lower 10%. So that, of course, will allow some flexibility, I would say, upward flexibility on the distribution policy. And at $80 per barrel with the metrics we mentioned, in fact, we are generating beyond the capital investment, more than $100 billion of cash flows, but on the dividend, $45 billion. But you see you have room to improve distribution full dividend or buyback. And this is what this was the key, I would say, slides and discussion we had with the Board. which led to this improving shareholder distribution guidance that we gave you today. We have a strong confidence of the Board. We had again a meeting -- a Board meeting this morning, by the way, after a strategic similar last week in order to consolidate all the positions at the unanimity of the Board. So we talked last year, we went out of traditional, I would say, 30% guidance to 35%, 40%. With all what we described to you and in fact, strong confidence in the capacity to grow the business, either oil and gas or in integrated power and both pillars are important to be able to give a guidance above 40% of the cash flow from operation, distribution -- being distributed to shareholders either through dividend or buyback. For 2023, in April, we mentioned that when we announced that we were announcing to the IPO of the Canadian oil sands, but we have divestments we have to deal with Suncor at time. But Board will look to what is the best way to return part of these proceeds to shareholders, either through a buyback or a special dividend. We made some -- had some discussions with major shareholders. We concluded but today in the market, clearly. And because as well, we consider that share price went up in the last month. There is still room to go higher. And so I know if I see [indiscernible] smiling. He has always been a strong believer in buyback. But the Board has convinced, so we decided to allocate $1.5 billion to these proceeds to buybacks. So we'll raise the buyback from $2 to $9 billion. We maintained the $2 billion during several quarters. We make an additional $1 billion, which should lead to a distribution more or less around 44%. So we are well -- last year, it was 37%, 40%. So I think it's a clear change in the way as a company and its Board are looking to primary first importance of distribution. But again, it's linked to the fortress balance sheet and our capacity to grow the business. So I think it's important guidance and indication, I would say, I'm sure I will have the question, what do we do for next year? I would say for next year, we don't have a special proceeds from Canada. But I would say going -- maintaining this $2 billion per quarter is a nice pace in this type of environment. And then if you combine with 40%, you can see that we'll be above 40% knowing that, as I explained you last year in terms of dividend, we will buy back with $9 billion, we will buy back more than 6%, 6%, 6.5% of our capital over equity. And so that will immediately feed the growth of the dividend next year. So you have some -- this year, we grew by 7%, 7.2%, I think we should not be surprised next year, not to be around these things -- this type of growth. So I think this consistency, what we target to the Board is to be more consistent in the distribution policy, in fact, years after years because I know from time to time, you had some question marks, but our investors needs to be -- I want to reassure them by a strong commitment to this distribution policy. And I don't forget when we speak about investment case of TotalEnergies, the fact that for some investors, both sides of the Atlantic, by the way, our ESG policy is also taken into consideration. We have a strategy, and in fact, it's not for transition strategy, which has been well explained and which we stick and which will deliver, again, the fact that we transition our own business, but growing the energy production and 25% less carbon in our scope -- in our carbon intensity index is very important. So you can see that some -- then this slide, you have some key agencies, I think, in evaluating the different oil & gas companies. We know that oil & gas companies are not considered as a star of ESG. But among the around this group, I can say that we are today recognized as having a good position, and we have improved it in MSCI, Sustainalytics, Moody or S&P Global or maintain it. And so among our peers, we are continuing to lead the pack. And I think it's important for the investment case of the company, and I hope investors will appreciate it. So last slide which summarizes, I would say, as a global presentation. Again, it's more energy of 2% to 3% oil & gas, more on integrated power but 4% growth average. Less emissions, minus 40% intensity scope 1 and 2, minus 25%, Scope 1 and 2 and 3 intensity, growing cash flows, which is even more important because this is, of course, we intend to do in order to grow the distribution. We keep, I would say, the capital allocation framework that we described to you in the previous years. continuing to have a sustainable growing dividend, fed in particular by the buybacks. Disciplined CapEx policy, but through cycles, but which allow us to grow our businesses. So we are comfortable with the guidance. The balance sheet, the fortress balance sheet. Jean-Pierre has a special objective to raise our -- creating to AA. I think on Moody's side is optimistic. We'll see if it comes. And the surplus being shared through buybacks fundamentally. We used special dividend last year, but it was an exceptional year. Primarily, I would say, tool is a buyback because, again, at the end, the rating of the share value is our primary objective with this new guidance of more than 40% payout for the cycle. So thank you for the attention, and we'll be now happy with my colleagues and not only Stephane, Jean-Pierre, Helle and Nicolas, who are there, but also in the room, we have Thierry and Bernard and Namita Shah with whom some of you will have some discussion this afternoon. We'll be able to come back and answer to your questions. Thank you for your attention.

Let's start the Q&A session. So the basic rule today is we will alternate between questions in the room. Priorities in the room will have also your questions. So please introduce yourself when you are asking questions. I see a gentleman here who raised the end. Go ahead, please introduce yourself.

Hi, everybody. Sam Margolin with Wolfe Search. Thanks for the event. I just wanted to clarify the growth targets. And I know it's all on the slide, but I just want to make sure even I can understand because $3 billion does seem somewhat conservative within oil & gas. So I just wanted to see if there were also some other asset sales embedded in that or base decline or if it's simply a price deck issue and then specifically within that with Suriname, if that's excluding the payback of the carry too because that affects the 2028 time frame. So in a shorter version...

There is no price effect. There is, of course, you have the -- when you come -- Don't forget that we have natural decline as well in our portfolio. So you have a 3% natural decline. So when you increase your -- through these 4 projects, I think Nicolas gave you some precise figures. You you are adding 300,000 barrels per day and some cash flows, but we are losing part of the cash flow as well. So it's a balance between both. In divestments, we don't have major divestments in view. We continue to monitor, might have some mature assets somewhere time to time. We say -- it's part of the dynamic that I want to maintain in the company because I think it's worth continuing reviewing. But the $4 billion are consistent with, I would say, the rate of 2% to plus -- 2% plus of growth of the hydrocarbon business according to our metrics. So Suriname carry does not have any real impact on that. It's -- I mean, on the cash flow, I don't know why there is. In '28, we will produce. So normally, we even have some cash flow coming in. It has been neutralized, I think, in the paper. Because again, the carry, we got access to the owner. We have 75% of the cost oil of our partner, which is for us. So in fact, it's a discarry. Honestly, it's not a big deal for us. It's just sort of rule that we repaid quite quickly and 3 years at $60 per barrel.

Well, so that was my follow-up about the Suriname carry and with respect to capital allocation and distributions in particular, because there's layers of it, there's the concession cost recovery and then you have one from the partner, too. So the cash flow almost manifests like an asset sale because it's so unloaded.

Yes. But again, there is the Suriname -- I'm not sure to understand for your question why you are -- what is the background of your question on this impact because the PSC will work normally. We have all share over CapEx. We are paying part of the CapEx of our partner. And we recover all that in 3 years from their cost, not our cost, their cost we capture the oil. So it represents quite a big amount of oil, in fact, which are for us. And the higher the price will be, the quicker it will be.

Okay. Yes. The question was just if that impacts distributions when it comes in at a different pace.

Positively not negatively. Positively. But as you know, as you said, we are always considered as conservative to consider that if we say today, more than 40% of distribution, it's because we believe we will deliver it.

The other question in the room, Chris Kuplent.

It's Chris Kuplent from Bank of America. I want to go back to the last comment you made, Patrick, the fortress balance sheet and attached 2 quick questions that probably you're used to hearing from me. The first one, you've laid out a number of organic growth options. And I wonder what your thoughts are regarding your appetite for inorganic growth because that fortress is going to get a lot stronger. I think in the next few months, you're getting $8 billion of disposal proceeds through the doors. So maybe you can explain to us a bit more how strong the Fortress will need to be or maybe Jean-Pierre on AA or not, any characteristics around how much stronger the fortress needs to be. Because it looks to me like your...

Yes, closely $8 billion, we already this year, maybe you didn't notice, but we have been quite active in the acquisition side because we acquired for more than $6 billion. So the M&A activity is not for -- it's quite active in the company. So -- but when we acquire, we need also to divest. So $8 billion are already somewhere quite spent. So I don't expect much but appetite for inorganic. I will stay on with the same comments. You make a good acquisition when you are countercyclical. And so you might have some opportunities like the one we had last year in Abu Dhabi because one company was willing to divest oil and gas upstream. You have another strategy, so we acquire. That's the point. But honestly, oil and gas assets today are quite on the high side. On the other side, obviously, you can all see that interest rates going up in the renewable space, there are a lot of decrease, but be patient. It will continue to decrease back to reality, all that. Now again, we have quite a large portfolio. So we are satisfied again. On the -- you can expect us to do on the integrated power to do what Stephane described to you, which is more to complement the portfolio through some flexible assets. Because we need that to execute the strategy, we need to have a mix. And we have some in Europe. We don't have that in all the markets we are targeting. So this is more the core not large organic -- inorganic growth is in our view today. It's not a priority. The AA, again, I think I said to metrics, which are used by Moody's should allow us to get.

And so it all lead to a grade.

Standard depos, to be honest, is more complex because if you want to be AA in [indiscernible] I should stop the buyback and allocate everything to the balance sheet which I'm not sure you investors will be. So we have -- so this was -- we expressed all that to the board, and we came to the conclusion that it's now again, as I said last year, the fact that we have a hearing under 10% has changed a lot of flexibility in all these compared to previous years. So we are satisfied to that, and it's the right balance.

But you wouldn't be comfortable paying out more than free cash flow?

It depends on the year. Again, I will commit to 40%.

Okay. Question from Michele Della Vigna.

Michele Della Vigna from Goldman Sachs, and congratulations on the leading payout ratio announced today. I had 2 questions. The first one goes back to Helle's slide on LNG, it shows some mild oversupply from 2028. And I was wondering if that is somewhat influencing your contracting strategy with probably more long-term oil-linked contracts. And I was wondering how the environment for that is evolving. And broadly, what kind of percentage of oil price we can expect for contracts signed throughout this time period. My second question is on costs. We are seeing an enormous shift in the industry towards short-cycle investments, which are very drilling-intensive with a lot of well completion. And I was wondering if you're starting to see inflation emerging there, which, at some point, could make the economics of those developments actually less attractive even in a generous oil price environment?

So good, 2 good questions, like always with Michele. No. I mean on the first one, yes, we have to be transparent. But again, if you look to the slide, you've seen that the upper supply might come from some Pre-FID or maybe some people -- maybe it's a slide to one of us, not us. Be careful. If you FID your project, you can come, it's true. Having said that, but it's cyclical, yes, we'll have some few good years in front of us. But after that, we might face that knowing that in the LNG industry, delays to the delivery plants are quite -- are not unusual, I would say. These are huge projects. So yes, the conclusion is right. It's a good time today because it's more a seller market than a buyer want to secure some long-term contracts with oil index, exactly that. But a higher level that what we experienced in the line previous 5 years -- so this is what we do today. For example, in Papua LNG, we are not far to conclude oil linked project contract. I'm not sure I can deliver to you maybe in a one-to-one discussion. But publicly what is the percentage because I think mild but I'm going to cater to inaugurate NFE/NFS and I'm sure that Sal will not be happy if they begin to disclose this type of percentage. No, but it's clearly higher today. And so it's a good opportunity, and that's a primary focus today for Stephane teams LNG teams to market it. So if that's the right answer to bring. Again, that's a better market but it does not mean -- but it means as well, that we have a good portfolio today, and we don't want to add more at that horizon. So until 2030, we have all these projects. It's okay. We have big growth, let's concentrate on delivering them. That's the first point. On the -- but again, if that happens, that means that the price of LNG will go down and then the demand will remain because the 5% that was mentioned by [indiscernible] for us is an average, you don't see that today, but you could say -- I remember 2015, 2020, was more 10% per year because it was supported by a lower price. And we know that there is an appetite in Asia for LNG, but it's linked to the price as well. So it could might help to the demand. It will help the demand to re-burn. Costs. Costs, yes, we have a long discussion. We are working hard on the rig strategy today in order to secure lower rig costs, even long term, maybe making JVs in order. So we try to be innovative in order to control the cost. But that's true that you have today, I observe in the drilling rig companies, the strategy. They prefer to keep some rigs stacked in order to contribute like OPEC control, rather than putting more rigs in the market to see the rates going down. So we are facing that. Until now, to be honest in '23 because of our strategy in the years before, we are protective. Now for the future development. It's something that we need to address. We see deep offshore rigs today around $400,000 per day which is back to some all time. So we need to find ways to manage that. It could influence. You are right, some of these short term strategy. But honestly, we'll -- I would say, at this time, I mean, we -- with the metrics we have less than $20 OpEx plus per CapEx. And as long as we stick that's why we are strong on these metrics, we can cope with the cost.

Question maybe. Maybe we should take one from abroad. I think Christian, maybe we could alter alternate. You say alternate. So if you give the floor to everybody. So let's alternate and then we'll come back to also -- don't worry we will answer to all the questions. Christian Malek. You can ask your question.

Can you hear me? Just checking.

Yes, very well.

So Christyan Malek from JPMorgan. And congratulations on the presentation, and apologies I can't be there in person. A couple of questions. First, on the macro outlook and specifically the long-term $80 view. Last time -- last year, you framed the $50 barrel with upside flex to the long-term price. So in our supercycle report last week, we've got quite a lot of pushback on $80 oil price long term, which is well above the back end of the curve. So I'm wondering what gives you the confidence in this outlook, especially if you've got IEA calling for peak demand this decade? And that's my first question, please. The second question and related to that sort of is it's not clear to me how much of the upgrade in the cash flow outlook is a result of a more bullish macro view versus an underlying volume and margin increase. So could you help potentially to disaggregate what percentage of the increase is because you're more bullish versus underlying value add? And finally, I'm sorry to ask 3 but I may have missed this, but what exactly is your new oil growth rate you guided to -- you had guided to 1.5% to 2% oil compound is [ 2.7% ] and now we're back to 2% to 3% total oil and gas. And within that, I guess, you could help -- we -- I'm getting a lot of questions on this myself. What are the quantum of barrels that you expect in Namibia as I think the jury is -- how scalable it is. Especially given the mixed success on exploration to date?

Many questions for one. Maybe we missed something, no. Again, we told you that we continue to sanction projects at $50 per barrel, we keep the discipline. In this present market, we thought there was a long discussion. Do we put $70, $80, okay, we don't -- it would have been a strange presentation in a market which clearly today is more at $95 to come with $50 or $60, you would have think that we are super cautious. So we don't tell you, but we have a long-term view of $80, but we see a lot of indication, which I think we are clearly supported by Elo presentation, why today? We are -- yes, we are more bullish because, honestly, my view is that OPEC+ has taken the control of the market. And -- but it seems these guys, they don't want to -- they like to have a high oil price because the dynamic on the supply side is not so clear and in particular, in the Shell oil. We see today a strong discipline compared to the previous period. So that's why we think that we have entered into world where the oil price might be higher. Having said that, we keep a discipline on low investments and the allocation of north, that's the way we sanctioned the project. So that's the answer. No, on the cash flow outlook, it'd be clear, you have the figure, Christyan. All the figures we have given to you. All this $6 billion or the $3 billion that one of you seems to think not sufficient, where clearly, without impact of oil price and it's the same nominal price deck. So -- and so when we -- in the slide, I think the slide at the end of my own part, which was a slide number, I don't remember 23, you see more than $10 billion. You can clearly see that $6 billion or $7 billion because we started from '21. So $7 billion is the volume growth and the [ $3 other billion ] comes from the price deck, which was different in that slide. So again, the underlying value add for '23 to '26 is $6 billion, as I explained you in the 1 of my final slide. Oil growth rate, you can calculate it from the slide with your friend, if you want. And Namibia, let's wait a little more. I told you there will be a little, let's see. It's not finished. Don't jump too quickly into the conclusion. I gave you some indication -- positive indication, but today, it's pre-mature because I could be over, again, conservative if I answer to you and then you will criticize us or too optimistic. So let's drill the well. Let's make the test. Yes, Helle wants to add something.

Yes, Christyan. Since you mentioned the IEA, I just want to tell everybody to read carefully the statements that come out of the IEA and especially [ FATF ] -- because when [ FATF ] says or the IEA says oil demand is going to peak in this decade. There is also in the sentence, not always repeated by the press. If all the countries deliver their targets by 2013, 2015, it's a big if. And secondly, you may have noticed that very recently, he also adds that even if demand were to peak, it would peak at a slower, it would decline after that at a slower rate than the natural decline of the oil fields. So now he also says, mind you, we will continue to need more oil and gas projects, which is a way of saying careful here on supply. Okay? So I think it's important to go back to everything he says and not just the headlines that the press uses.

Okay. We get back. Biraj [indiscernible] Please -- first. Yes.

It's Biraj Borkhataria from RBC. First question is on dividend growth. So you're pointing to 2% to 3% volume growth in the Upstream, plus it looks like to some underlying margin improvement. And then you're buying back at this point, 5% to 6% of your shares plus as you get to the end of the plan, the integrated power business becomes less of a drag on free cash flow. So I would have thought, is it reasonable to expect dividend growth in the region of 10% in the similar environment, which is higher than the -- what you name checked about 6% to 7%. So I just want to get a sense check of how you're thinking about medium-term dividend growth. Second question, just as I [ summon ] on to last year, you presented everything excluding Russia in terms of the cash flow targets. Could you just clarify for 2023, what you're expecting to receive from the Novatek dividend, if at all, or the Yamal dividend?

On Russia, as you know, most of the cash flow is coming from the long-term contract that we got, which is not a Russian asset, but it's linked to a Russian asset, but it's -- it's a European contract, I would say. So that's the core of it, and it works. We -- only with the -- strictly with the long-term volume, which we are committed, not much because we stopped all the short term, but it's a profitable business as it was before. I think for Novatek dividend, we received nothing first time being should be clear in '23 year to date. So, it's quite easy. And then on the first one, no, I will not go -- will not answer your question. I have given to you some guidance. One is more than 40% of distribution. I told you that all when we buy back shares, we cancel the shares, and it will, of course, be replicated in the dividend a year after, then let the board decide what will be the -- what they want to share between dividend and buyback. I mentioned during my speech, I think that 7% last year might be for next year again. But let's keep this, I would say, this flexibility between dividend buyback to the Board. I don't want to over constrain everything. Last year, I remind you that we tried a year in 2018 to announce future growth of the dividend. -- and then the share went down. So since that day, I'm cautious about that. Today, I'm happy the share is going up because we announced a global higher premium distribution policy, which I think is good. So I don't want to over constrain the system and let's keep some flexibility.

Let's keep maybe question online.

No, no, no, no. Continue. I will tell you when we go online because I see many hands raised here.

Okay. Alistair. This sides -- to change.

Alistair Syme. Citi. Patrick, can you talk about -- you touched on your presentation about the retail business, just the strategy for it because you did the deal earlier this year with Couche-Tard. You sold part of the business, you still got France. So what's the sort of the path going forward.

No, we are fine with France. We have a leading position Again, in these European countries where Germany, Netherlands and half of Belgium, we had limited market share -- a good offer on the table. 15x our net cash flow. So why should we refuse the offer? We don't -- we see a limited synergy between these networks and EV, in fact. EV for us, as we said, we want to constrain on highways and city apps. We have plenty of stations which are not fitting with these 2 definitions where we don't see much very strong EV business because don't forget that people will charge in many provincial cities, they will charge at home, in fact, or at office. So we have to be careful in the trends, the impact on European networks of this transition going to EVs, which by 2035, will become even mandatory. So that's why we had a good opportunity. We kept -- and the French position is strong by itself. I think it's better to control the pricing policy in France, considering where our [ headquarters ] are located. So we are fine. So we have, I think, today and Stephane done it in the name of Thierry, which is there because we don't want to have a comprehensive view. As Stephane explained where they might have some synergies. We have defined what we want to do in the EV mobility and again, highways where we have taken in France for quite a number, 40%, I think, of the concession already. So we are even stronger on EV charging on highways and motorways rather than on oil today. And City hubs where we are really developing an aggressive strategy for Europe. I should have that there is a segment in the B2B, which is, of course, trucking. It's trucks. We have a large. We have a very strong asset, which is what we call -- I don't remember the name [indiscernible]. I think covering Europe from Poland to Portugal for and that we intend to accelerate also high-power charging for trucks in the future on this network. So that's a key part of it. So that's the reason why so French position is strong, we'll keep it.

Okay. So, maybe Jason?

Jason Gabelman from TD Cowen. Thanks for the presentation. Two questions. First, on the projects you list on Slide 13, Iraq and Mozambique are, I think, 2 large contributors to cash flow growth, maybe $1 billion of cash flow each. And some kind of fits and starts on both of those. So can you just one, confirm that it's still about $1 billion of cash flow that you would expect from each of those projects. And address any uncertainties in both of those given the fits and starts and the confidence that they're going to start up by '28.

Iraq will start for sure, we already produced in Iraq. So because the contract in Iraq, as you know, we have taken immediately from -- since August 16. Access to a production of an existing thing. We need to grow it now in order to finance. So in fact, the exposure to Iraq in terms of financing, in particular, because we take it at a time where the price of oil is $90, which was not really the assumption when we negotiated 3 years ago. So we have access. Now we will grow it. So we have already some cash flows coming from Iraq. Situation. If we have decided the situation in Basra area is -- our security teams have, of course, made a full audit of it -- are under control, and we are -- I think we can do it. Like others, by the way, we are not the only one to operate in Iraq for many years. So it's a matter of discipline of security, of course. And this is a primary importance for us. But I think -- and we have been very welcomed by the Basra oil company and all the stakeholders. It's considered today in Iraq as a major project. So we have a strong support of all -- many stakeholders, in fact, in Iraq because some of cover companies decided to leave. So we came and gave us was the opportunity to have a different contract than the one which we have signed before. So on Iraq, yes, we are conscious of the situation, but we take all measures to be able to -- we don't face at all the same type of certainty even in Mozambique. In Mozambique, we are on the fourth measure since 2021, I think. Situation has clearly improved because the governmental forces supported by other countries, in particular, Ronda, have taken back the control of the situation in Cabo delgado, we make a number of audits which are satisfactory. And our objective is to restart the project before year-end. Today, in fact, we still have 2 -- 1 major, I would say, which is a relationship with our contractors because some of the contractors would like to benefit from the situation to increase their costs. We disagree. So we have some negotiations, including to retendering some of the package in order to mean to control the cost of the project, but we'll have clarity of that in the coming months. Yes, I would say, security. But if we restart is because we came to the conclusion that we don't want to start to stop again to be clear. So we are able to execute the project fully. And it's not only shared by TotalEnergies but by our partners as well. So the improvement in the situation is strong enough. And in order to be able to remobilize contractors and to develop the project.

Great. And my follow-up, just on the underlying cash flow growth, that's $6 billion. I was wondering if there's any consideration for LNG trading strength in 2023. So either do you expect that to fall off and normalize moving forward, and that's embedded in the $6 billion of cash flow growth? Or conversely, because LNG trading has been so strong, do you expect that to support the LNG business moving forward?

Again, LNG trading was very strong, in fact, in '22, to be very clear. I think the '23 already has been normalized somewhere. I'm speaking about under the control of Stephane. So we consider that for the future, we could be able -- so compared to '22 there was -- you can in the figures that we report integrated LNG. So you can see that we are landing on something which is probably more normal. But in fact, trading activity is linked to volatility, not on the absolute term. What is -- with traders, very low volatility. Volatility is lower, busier than it was. But we don't see -- we think, honestly you've seen this summer fear of strike in Australia and both the markets are taking 30% or 40% in a few days. So the volatility -- my view is that the LNG market for the year to come in the situation which was described by Helle, where you have more demand than on supply. So a constrained supply is a fragile market. So volatility might be there, but lower than in '22. So we normalize that at the level of '23 for the future years, and that's a target for trading teams. But there is no $6 billion in additional trading activities. So this $6 billion, again, just to clarify, these are the assets, the assets by themselves, only the assets without optimizing, et cetera, will deliver at -- in the same environment and additional $6 billion or $3 billion for the oil and gas assets. What can be done around the assets, so that the optimization is not taken into account there okay? So maybe we are conservative from this point of view. I take Oswald maybe, and then I come back in the room.

Okay. So we take Oswald online. Oswald, if you are on there.

Yes. Thank you very much, and apologies for not being there as well. We have our annual conference today and tomorrow. But firstly, if I could ask -- I loved Slide 33, the levers, the profitability in Integrated Power and the topic around 12% returns and the comment there you have about 10% OpEx and CapEx below the market levels and the 1% efficiency above. I think that's the first time you've explicitly stated those. And obviously, they're quite critical to internal rates of return calculation. So I was wondering if you could elaborate on those numbers? Are you starting to lock in those types of savings already? And of course, we know there's a smaller group of suppliers on the other side who are under some duress at the moment and whether can really expect those types of savings to be locked in here? That's the first question. Secondly, perhaps just following up on that last question on LNG and trading. I mean this year, we could probably have 65 million, 70 million tonnes of LNG sanctions, which would be a record. And there's a lot of portfolio players lifting a lot of that from the U.S. and a lot of them will be seeking to build out trading businesses and optimization. So it's kind of linked, but is there any threat here that some of these players start to just take some of these arbitrage divergent opportunities through the medium term from the Total portfolio.

The second question is -- welcome to the club. They have to learn before to be able to do what we do. So on the first question, but Stephane, you can elaborate both questions, if you want to, I can give you the floor for the first and if you want to continue the second one.

On the first question, what we've done first was to understand where we are and start the benchmarking exercise. What you figure out is what is the common sense in the refining and chemical with Solomon index, for example, is not necessarily the case yet on renewables, it's starting. And we believe that there is a lot to learn on the benchmarking, standardizing and so on. So yes, the 10% CapEx and OpEx is based on what we learned from that exercise of benchmarking and on the assessment of already profit CapEx and OpEx savings that we have identified. And we have started to catch some of them. I mentioned the one on the capacity reservation agreement with solar supplier. Now obviously, it's going to take a few years to fully get to that. But I've got project manager, action plan identify. We've gone through the CapEx and OpEx cutting exercise. I've gone personally in [indiscernible] in 2014 in oil and gas. We know how to do it, and we are going to do exactly the same thing because it's the same way it's going to work. That's one. On the second aspect on Energy Trading, yes, you have a U.S. player -- may arbitrage is about getting a global portfolio with global shipping, Regas capacity plans, both in Middle East, Asia and the U.S., if you really weren't able to extract the maximum value of all that. And I don't buy the idea that if you are just a player in the U.S., you can do that. It's -- that's clearly one I consider of the strength and if you look at one thing, for example, the ability we had in 2000 to divert volume coming from the U.S. that we are supposed to go in Asia that at the end of the day went to Europe. And you look at the conversion ratio we get, we were by far the first one to be able to do that.

Because the Regas capacities and all the midstream assets are important when you want to play this type of activity. Okay. Lucas I see you in front of me raising your hand. So I will not wait for the -- I will go on the table behind.

Yes, Patrick. So it's Lucas Hermann at BNP Exane. Two, if I might. The first goes back to the return question that -- or the return observation that Oswald made a moment ago on the renewable power build, the integrated power business. Historically, you talked about 10% return on equity. You're now talking 12% return on capital employed. I would have thought the return on equity would actually be even higher than 12% if that's the way. But question one is really Stephane, whether there are -- is it everything you've said that drives that improvement is quite material. And can you just put the free cash comment in the context of EBITDA? The old target used to be in $3.5 billion, $4 billion of EBITDA. Now you're talking around free cash or cash flow from operations. So just to context your [indiscernible] and then second, more broadly, on CapEx, this has been a big year for divestments. When I look at everything that you're doing in LNG, in the upstream, in the renewable power business, we're going through a pretty intensive organic growth phase in many respects, you're high-grading the portfolio. How should we be thinking about divestments going forward, Patrick, in terms of absolute scale. And when you talk the cash flow numbers and the cash flow growth, how much cash flow do you look to see from businesses that you're likely to divest over the 5-year period as you high grade for 1 of a better phrase, the upstream portfolio in particular.

Can you take the first question?

Yes. On the first question, yes, the answer is yes, the 12% return on capital is clearly taking into account the 4 levers that I've mentioned. And globally, you can say that 1/3 of the improvement is going to come from OpEx, CapEx, 1/3 from selling better on 1/3 for the portfolio optimization. That's one. Then obviously, the question on return on equity depends on the cost of debt so which is moving. And at the end of the day, we choose to communicate on return on capital because at the end of the day, that the metric we use on oil and gas and to be consistent. And actually, that's what we started to publish in the beginning of the year. That's one. Second, the same way as now we publish the cash flow from operation, we'll continue to fix target on cash flow from operation. If I look at the ratio between EBITDA and cash flow from operations, the ratio we had in 2022 is pretty much the same in [ 2023 ]. And so we go from 2 to 4 on 1 side, which is doubling the [ NBA. ] You can expect the same thing on proportional EBITDA.

On the divestment in our plan. Divestment acquisitions are more or less equal on the next 5 years. So when we acquired we divest, don't forget that we have some funds coming from the divestment policy from Stephane portfolio as we divest 50% of renewable assets. So more we grow this portfolio, the more we have some proceeds from these renewable sale divestments, which can feed the acquisition part. So again, the target we gave you does not -- are just is our existing portfolio, there is no further acquisitions beyond what the target is by additional cash flow. It is the asset base that we have today, which will deliver an additional $6 billion in 5 years. Okay Lucas? [indiscernible].

Paul, go ahead. Paul, on the other side, please?

Paul Cheng, Scotiabank. Two questions. First, Patrick, one maybe is [indiscernible] Since you finished the launch appraisal well in Suriname. You stopped drilling any exploration well for the remaining of the year. Is there any implication is that you just don't see the opportunity on the further exploration? Or I mean, any reason or we just reading too much on that. On the second question is on the integrated power. If we assume the higher interest rate environment is here to stay for the next several years, is there in any shape or form going to change your business model or lead to a modification? And also maybe for Stephane, that in your presentation, you're saying you expect a 10% or you aim for a 10% lower OpEx and CapEx comparing to the market average. So can you tell us that what is the current position. Are you at the market average or you're above the market average by 10%, 20%?

Yes, if we want some improvements because we are not yet there. So I'll be clear. So this is what -- no, there was a time when we go quickly that business in 5 years. So now we have a large portfolio, so we can begin to benchmark. We've done it for France. We've done it from some countries. We need to expand it. And clearly, we consider because it was -- this portfolio has been built from many inorganic, organic, small developers. So there is a huge action what we call our strengthening the industrialization of renewables. And this is the next -- and we just -- as Stephane just reorganized its business unit of renewables in order to specify it everybody was concentrating on the development, business development. Now we need teams to dedicate into projects and teams dedicating to operations exactly what we've done in oil and gas historically. So this is what the model is. And so we expect -- this is why we think this 10%, minus 10, minus 10 are achievable in order to industrialize again the way we produce and we build all these projects. On Suriname, the key -- I mean, let me be clear. Most -- we drilled 15 wells -- or 14, 14 wells. So we have honestly covered quite a lot of the large targets. There are some -- still some marginal. There are some targets, but which, in fact, which will be tieback -- future tieback to the development we envision. So they are not very large, but which might -- which will extend the plateau of this initial development. But so we don't need to rush to explore today, to put them into production in 7 or 8 years. So the priority now is to put into production is what we have discovered. To keep the flexibility in the way we design the development in order to be able to make some tiebacks. So for me, it's more extending the plateau of this 200,000 barrel per day rather than add new discoveries. Then to complete in the north of the block, we have some few large prospects, but everything which has been drilled in the north, either on our block or on the adjustment has been negative. So there is a certain point where we consider that it's -- we have a good understanding of what happens. So exploration is no more priority. It does not mean that it's not yet target smaller targets, more tiebacks for the future. Okay? But the oil part, then there is a gas -- [ half gas front discoveries ] on the western part of the block where the question is how to monetize all that and monetization of the gas is not very obvious in that part of the world. But we'll work on a priority today is to produce oil and to deliver cash flows to monetize the exploration.

We have one question there, please.

Great. Thanks. Ryan Todd at Piper Sandler. Maybe a couple of quick ones. One, on your -- as we think about your gas and power strategy, you've got a constructive long-term view on natural gas. You've got a constructive long-term view on power pricing. I think that underpins part of your investments here. How -- are those necessarily linked in a way do you view the linkage of natural gas prices and power prices as linked in any way? And as you think about your -- how do you think about risk in those markets longer term, your willingness to take 30% merchant exposure, if -- how much of the project economics depend on that merchant exposure over the longer term as you think about managing those businesses over time? And then maybe as a second question, you talked about how you've been pretty active in the acquisition market. Most of your acquisitions have been on renewable and no-carbon areas. Do you have -- going forward, is there appetite for oil and gas focused acquisitions as well? And how would you characterize the kind of the market opportunities there?

The second point is not true. We will provide you the data. In fact, we have acquired this year of the $6 billion, it's more than $3 billion are in oil and gas, in fact. So, no, it's not true -- it's -- maybe you have a feeling, but in fact, when you acquired Abu Dhabi, when you acquired positions in Brazil, in Qatar it's not far. So we in fact, we are acquiring Brazil before. So in fact, we are spending -- we continue to develop oil and gas, primary focus. And again, there are 2 pillars that are equivalent and one is bigger than the other one. So we continue. We have appetite, we have appetite. We need -- we have already said several times that are growing our business, LNG business in the U.S. we're required to consolidate the upstream at a certain point. So we are -- permanently we are looking to opportunities in both aspects. Again, when price of oil are quite high, it's more complex to have access to good opportunities in the upstream part, but it's not very countercyclical today, so -- but we look at it. On the first one, they are linked somewhere in Europe but at the CO2 price in Europe. So power price marginal power price is done by natural gas plus CO2, not only by gas and the CO2 market and the CO2 is important. Do you want to -- honestly, if we want to keep merchant exposure, it's not only a risk, it's an opportunity. It's because we like to have some upside as well. So in fact, what we just want to do is to use -- contribute to utilities, which have high debt. We don't have a debt. So we can't take this type -- exactly what we've done in LNG. We can't take a risk to cover part of our risk, and then we can keep open to the market a certain amount of capacities of our productions. We are resilient. It's why it's very important, like Stephane explained to have a quality portfolio from an OpEx point of view, like the $5 per barrel on the oil and gas side in order to be resilient when the market is lower, but it will be to capture the upside when price is going up. It's the same philosophy in electricity. Obviously, you have -- it's more volatile because you have a daily volatility, a weekly one. And it's more volatile. So this volatility needs to be more sophisticated tools and also to have a flexible assets in order to be able of storage capacities in order to be able to capture this volatility. So that's the idea. So it's more fundamentally for us keeping part of the upside and not what we don't want at all is to have a secured warranted business with PPAs. That's not what we want to cover because it's not what our investors are expecting. Other comments on natural gas and price link that you would like to add. Unless the natural gas price will depend as well on different markets. In Europe, clearly, now the price will be driven by U.S. LNG import. Russian gas has disappeared. So that's the key driver on it. This might impact over world market, but the power prices are more subject to logo regulations after. So you don't have a direct link necessarily in the worldwide market, gas market and the local price market. You want to add something?

Yes, just one comment to what you say, Patrick. It's clear that in Europe, power price are linked to natural gas and CO2. And following the crisis last year, natural gas price in Europe now are very much connected to LNG. And by the way, that's one of our competitive advantage versus the play in Europe is that we have a deep understanding of the LNG market, hence potentially the dynamic of the power market, which I believe is clearly for our integrated business, power business as well, a nice competitive advantage we have because of that connection.

There was a long discussion internally. If we should split the teams in charge of trading gas and trading electricity as there is electricity. But I would say the medium, long term is next, but the short-term is different. We decided to split. But locally, we localize the offices in Geneva next to each other to exchange and to keep all this knowledge. So even if now we have 2 different business units because we want -- we need to grow the power trading in order to cope with all these, I would say, short-term volatility, which is quite an interesting part of capturing again when you have intermittencies and flexible capacities, you need to optimize the systems.

Okay. So we have Giacomo.

Giacomo, and then we'll take Lydia, so that Lydia can prepare herself.

Thank you. And Giacomo Romeo, Jefferies. Patrick, you talked about the importance of having somewhat predictable shareholder returns. And obviously, you have moved from a range distribution policy to open, a somewhat more open-ended distribution policy. I'm just thinking in weaker macro environment, to what extent do you feel comfortable to increase these policy CFFO distributions in order to avoid being excessively procyclical in your shareholder distributions? And somewhat related to that, you highlighted $2 billion downwards CapEx flexibility and just thinking which kind of -- what oil price would you start considering flexing down your CapEx?

Okay, $50. Quite easy [indiscernible] but that's the idea. Okay. $50 [indiscernible] what happens, you need to have flexibility when you...

By the way, during the COVID, we were able to cut CapEx [indiscernible].

Okay. $50. The first one -- I mean a French question last year when we gave a range, people immediately say, can you go beyond the upper limit? And no, we give no range. And why don't you have a range. So I'm a little disturbed by your question. But again, it's not procyclical. It's just that, again, we were keeping 40% -- above 40%, you can do it. There's a big difference in the balance sheet. Again, we can -- it was your question before, one of you asked me, can you go beyond your CFFO in case you need it to maintain your distribution? The answer is yes. Maybe I didn't capture fully your question.

Yes. I think the open end, it makes sense on just a question [indiscernible] to what level you feel comfortable stretching that?

About 40% is okay, and then it depends on the situation. But again -- so balance sheet allow us to maintain the distribution policy. By the way, I remind you that this company maintained its dividend during the COVID, unlike others, so we can be quite stubborn in maintaining this distribution policy for cycle using the balance sheet again, if we need. Lydia, and then I'm coming back, Lydia.

Lydia online, if we can get Lydia.

Sorry that I can't be there today. But even from this distance, the message from the day seems to be one of growth, both on oil and gas and integrated power. How long do you see that growth being able to last? Is it the idea that as energy demand continues to grow globally, TotalEnergies should be able to grow faster than kind of overall energy demand and that's the growing business. The second one was then just coming back to the 12% return on capital on power. I'm sorry if I missed this, but can you go through how to get to that number, the interest rates, the power prices just because in this interest rate environment, that does seem high. And then one very final question, if I could. Everything you said, Patrick, that's brilliant. What are you worried about? Where are the things that kind of could go wrong that we need to watch for -- just is it inflation, that sort of thing?

It's probably the period of since I'm CEO, but I'm less worried than some other periods, to be honest. I think the strategy is in place. Markets are okay. So of course, something will happen. I don't know what, but we'll have to look at it. The macro environment is a little worrying somewhere because we have a sort of disconnect between financial markets and all these interest rates. And in fact, fundamentally, the first time in economic history where we have to adapt very quickly to a higher interest rate and higher inflation, which probably was never apparent at this space. Certainly, we've seen everything moving. So we don't -- I'm not sure we have understood fully the implication [indiscernible] macro of such a shock of interest rate and inflation because when you look to the economic history, it was not very frequent to see such a shock. So that's something that we need to [indiscernible]. But having said that, the company itself, TotalEnergies against our balance sheet and other markets on which we are uncomfortable to be able to navigate even if there are some hiccups, which in front of us, I would say. So I'm comfortable. The growth lasting on both oil and gas integrated power raised the market on one side and raised TotalEnergies on the other side. Again, I think it's really -- my view is that we have capacity, we have been able, again, thanks to all our strategy we deployed during the years to build a rich portfolio of projects, and we intend to continue to build it even for the next years, as I think Nicolas' message was clear. The focus will be more on delivering all that and focusing on execution because we have been quite active to get access to these projects. Now we need to deliver them in different environments, including the fact that we go to new countries where we need to be able to establish our position. On integrated power. It's an arbitration, of course, between growth and profitability at a certain point. That's why we -- our view with Stephane is clear that with $4 billion per year CapEx, it's okay. It's fine. We will not continue to grow it. We want to keep it as it is. We think it's the right level to be able to grow to 100 -- there more than 100 terawatt hour of production. And we intend to maintain that because it's in business where, of course, the leverage is important, and the interest rate is part of the equation, which might have an impact, but it's -- I think it's the right place to do it. On oil and gas, it's a market of one size. We continue to dynamic and our capacity to identify new opportunities. But even when we defined a few years ago, [indiscernible] which is low-cost, low-emission, what you can observe is that we have been able to inside this [indiscernible] even if we stop or we divest some assets like in oil because they don't fit with long-term perspective, we are able to deliver growth. So that's our view. I would say on the longer term, the question -- the key question for LNG and natural gas will be, can we really displace coal, like everybody thinks or we'll have a world of renewables and coal, which in countries, which is not good for climate, but that's an option which we could see in some countries. 12% or do we get to that number? I would say we are already at 10%. So we have to go from 10% to 12%, but it's -- again, the target is what we set. I think we explained the philosophy is that we want that business to be compatible with the oil and gas business at $60 per barrel. And when we look with the Stephane's teams to what -- is it achievable? I think it is achievable. I remember when I became President for Refining & Chemicals, the return was 6%. I had exactly that 12% target. Today, Bernard is at 18%. So now it's just a question, I think, of having the focus not only on growth but also on profitability. And maybe you have additional view, Stephane?

No. Actually to turn the 6% to 18%, at that time, you were President of Refining & Chemical, it was really a bottom-up approach where you looked at every stone and worked on it, and that's exactly what we are going to do.

To apply. Okay. So maybe we could take somebody here?

Yes. Duke.

There are less hands raised. So [indiscernible], you can prepare yourself for the next question.

It's [indiscernible] from Bank of America. So I want to go back to Suriname on one of the comments you made about the payback. You said the payback is about 3 years at $60 oil. That would put your share at about $1.5 billion in 2028, your E&P growth is $3 billion. How much of that $1.5 billion have you included in your $3 billion growth?

But I think the start-up is in '28, does not mean you have a full year in '28. So that's part of the equation to somebody. I was thinking that, in fact, Suriname, the full year is not '28, it's '29. So [indiscernible] 5 years, but next year, you will have a figure. So your figure is right, but including the carry, but it's not '28, it's '29.

So my follow-up is on that 2028. Three years of exploration, concept selection is already done. Typically, FPSOs are ordered well ahead of time, and you've given yourselves 5 years to first oil. Are you being conservative on the timing?

I mean we know we just defined the concept is done, but the front-end engineering will start, and we need to make the tenders. And if we can accelerate, we'll do it, we are looking to another scheme to go quicker, but that means that it's a matter of direct negotiation on some specific concept. We'll see if it can go quicker. But honestly, we are not so conservative. We are at a point. We just -- I've made the appraisal. We set the target. We know we need to develop engineering for 6 months. My teams would be there. We said that end' 24 [indiscernible] we are not so keen on '24. I think we told them, okay, hurry up, please. No, but there is one way maybe to go quicker, but we have to understand exactly what to do. So 2028 is fine. We need, again, a year to go to the FID just because the tender of FPSO of this size, it takes 6 months, more or less. So engineering 9 months, 6 months for tender and then execution, it takes more or less 4 years, 3 to 4 years. If we can do quicker, we'll do it [indiscernible] we are driven by time. We know time is money. But -- it's big FPSO compared to what was planned because when people were speaking there before, I know my partner was speaking a little too much, we are the operator, by the way, we should not forget it time to time and we are in charge. No, but I mean what they had in mind was a smaller development. We are not at 160 or 150. We decided to go to 200 because we have the potential for 200. And because if we give more flexibility for the tiebacks in the future that I mentioned in terms of potential exploration around. So 200 is quite a big beast. Okay. And as you -- Stephane Michel said, we want to have zero flaring. So we need to reinject, so we have quite a large gas capacity on board in order because there is -- of course, it's an all development, but in Suriname, we are struggling with the gas-oil ratio. So we identified this pool of oil with lower gas-oil ratio, but still you have gas to manage. So that makes also things when people think you can find an FPSO in a supermarket with this type of equipment, not sure. No, with gas. So full, it's quite a big installation that we need to build.

Okay. Let's take Irene online.

Irene Himona from Societe Generale. I had 2 questions, both on power. So first of all, on your concept of industrializing integrated power, you referred briefly to it, but if you can just expand a little bit on the components. I mean it sounds like having a coherent process and organization but what else is it in practice? Will you look at whole project standardization in each technology hub perhaps or each region? Will you aim to sign long-term framework agreements with contractors as you do in oil and gas? And by the way, related question, is this, do you think, a competitive advantage derived from oil and gas? Or is it something the big players already do? And then secondly, still in integrated power. You referred to maximizing value by utilizing the trading power which you're building. I struggle a little bit with the concept because as you said, electricity is a global business. With oil and gas, you load it on bankers, you send it off to the most profitable market. What does trading actually mean in practice for the integrated power business?

Stephane, you can take the second one. On the first one, honestly, I think the best might have some big competitors who are doing it, one is in the U.S., by the way, our next one is a good example of when you try to strengthen renewable industrialization. It goes for digital. By the way, you can -- in renewables, you can have some large digital platform where you commend your old assets, you follow them in order to maximize amendments, lowering the cost, the human cost, labor cost. So there is a lot of things. Size is a way -- again, scale is a way to reduce your OpEx. On the CapEx, I think Stephane commented during his presentation, the idea to have a certain limited number of solar development, solar design, which we have now optimized. So again, you have to understand, Irene, as well. But today, we published these results, and we are today at around 10% of return on capital employed held by the market. But -- and we have done -- we didn't work on that part, in fact, until now, because we have more -- and so Stephane has integrated with his team and saw a number of developments around the world. So this idea of industry leading for us is clearly an added value, which will come in front of us and joining the best of the class, best-in-class companies doing that for 4 years, which will give us additional returns and profitability. This is a fundamental idea that we want to deliver. And again, working in the same way that we are doing, yes, in other businesses. On the trading, you can explain why integrated power can make money from trading, even if it's our local markets.

So it's true that integrated power trading is to some extent, a local market, even if when you look at Europe, it's clear that you can trade France alone, you are going to trade France, Germany, Spain, the Nordics and even a bit [indiscernible] at least for the 3 months liquidity period. And here, clearly, what are the opportunity of arbitrage, trading powers is trading the difference first between gas, power and CO2, especially in Europe because power prices are made of the [indiscernible]. So that's one aspect of trading. Just take a small example to try to elaborate. If you look at the power dynamics between France and Germany, you have to understand the spread of gas price between France and Germany, which is done. We had a lot of volatility in 2022. And then the [indiscernible] in France and Germany. And everything of that is linked. And here, you have a lot of value that can be done because of our arbitrage capacity, especially if you are in all markets. Just talking about flexible assets, if then I look at the intermittent asset, it's clear that on one side, you have something which is very depending on [indiscernible] but at the same time, you sell firm power on the market. So there is a big risk managing that position and a huge spread between those 2. Depending on your capacity to blend the right asset and then to have the right coverage, thanks to flexible asset, you can as well extract a lot of value. And that is not only at the local scale, but that's the European scale. You can look, it's quite funny because there is clearly an anticorrelation, for example, between wind on the Eastern part of Europe and solar on the western part of Europe that today you can, for example, arbitrage. That level of complexity that we are starting to address and quite successfully, actually in last year and this year. And then if I compare to the U.S. In the U.S., it's even more complex because we don't have zonal system [indiscernible] system so if you just take EACOP, for example, trading between trading east and west, you have plenty as well, plenty of opportunity of arbitration.

Okay. Stay in the room, maybe. We have Kim, I see. And then we will take Martijn on the audio.

It's Kim from HSBC. Just 2 quick clarification questions, if I may. Just on Slide 23, there's a divergence in trajectories between oil production on the one hand, which is growing and oil sales, which are declining. I just wanted to clarify, is this decline coming from the sale of assets to Couche-Tard, which has already been announced? Or does this assume future asset disposals, which look like they might be needed for you to hit your Scope 3 targets on the oil side? My second follow-up is on integrated power. You talked about utilizing your fortress balance sheet. And I think you previously guided to 70% project financing and 30% equity. Could you quantify where this mix could go if you're planning to use more equity? And as a result, could this impact your CapEx guidance, i.e., could this move to more than $4 billion a year?

On the -- this guidance has been given to you for the renewable part, which I think is still valid. So it doesn't change the guidance of 30% equity, 70% projects on the renewable part. On the -- which means that when we put $4 billion, in fact, in our CapEx, we financed more or less $10 billion of projects, in fact. So let's be clear, if I made the math. No, I think it's clear. We didn't -- we did not elaborate this year about the refining strategy because it didn't change. We announced here that we were -- this is still through, I would say, 4 years, we were clearly producing 1.4 million barrel of oil per day and selling for refining and marketing to more than 2 billion-barrel of oil per day. We decided, but we want to realign to integrate our ore because of the evolution potentially of the market. So in fact, we are selling less just because we are -- that's true that we have -- by the way, there is an impact, obviously, of the divestments of some retail networks, but there is also the idea that we will realign and we will continue, as it was explained on one side, transitioning European refining assets from Bernard, that means moving from less oil sales, less oil product sales to more stuff. But when you transition a refinery, we've done [indiscernible]. We'll plan to do another one every 5 years more or less in order to cope with the evolution of the European markets. But of course, we transform -- we sell less oil products and more, I would say, low-carbon molecules. So that's the idea. So there is no change in that chart. It is the same at the end, the idea is fundamentally to produce 1.4, 1.5 and to sell 1.4, 1.5. But it's more coming from the transitioning of our -- we are in downstream, quite exposed to the European market, which is the one which will transition first according to the 2035 deadline. So we need to prepare ourselves to face such a transition in order to, I would say, be less sensible to the downstream oil market, but to benefit at the same time because Europe is offering to us new opportunities in terms of downstream markets, like the sustainable [indiscernible] like the EV mobility so to rebalance our businesses in the downstream, that's the idea. So no change. And honestly, it's not driven by Scope 3. Scope 3 is a consequence. It's not the strategy. Don't -- never misunderstand me. At the end, this is a consequence of the strategy. We think it's good for the company because we need -- we know that these downstream assets are heavy assets socially as well and we prefer to plan that transition [indiscernible] and to what do we do in 2025. So it's better to plan it and to have a trajectory. And again, we can leverage these assets in order to take positions on a more long-term market like the sustainable aviation fuel one. We go to Martijn.

I wanted to ask a question about my favorite topic, which is refining, which is what you just started. So I think my question follows on quite nicely. So I noted on one of the slides that the plant to 2028 is based on an assumed refining margin in Europe of $35 a tonne. And I was wondering if you could say a few words about the risks around that figure. The reason for asking, of course, is that refining margins at the moment are very, very much higher than that. And also, if you look at forward curves for refined products -- forward refining margins, which suggests a higher number than that. And given the amount of refining capacity in Total, of course, every dollar per barrel and the refining margin is still $0.5 billion of cash flow. So it's not entirely unimportant either. Specifically, in the Atlantic Basin, the market looks pretty tight to me. We've only closed refinery so far and oil demand is broadly flat. So particularly in the area where you are, actually, you could make the argument that the risks around that are quite sort of skewed to the upside. But I was wondering what you thought of that argument.

Honestly, refining margin to be -- okay. Today, they are around $100 per tonne, but take it. I will not put my money, but it will remain at $100 per tonne, maybe for -- so by the way, the reason why do we have high margins today. We have -- it's clearly a consequence of this Russian ban, in fact, somewhere. There are many consequences of Russian ban. Strangely, when the ban came into action in March, we see nothing on diesel, we begin to see it because the ban was announced for March. So everybody's thought the Russian diesel before. So there was no immediate impact. We begin to see that today because there are several impacts. One is that crude oil, and it's also a result of the OPEC policy, the Saudi policy when Saudi Arabia cuts it's production, they get heavy fuel, heavy oil. So we have a lighter -- we have a crude basket, which is lighter, which is not very good when you need to produce fuel oil and in particular, during summertime when they use fuel to climatize themselves. So you have that. You have also the fact that the -- clearly, the fact that today diesel from Russia or gasoline were sold to -- we have disorganized the global oil product markets. Everything was organized to shorten the cost of transportation and it is more expensive. So all that has an impact. We see today will -- and that's true as well. But -- so it's linked to the OPEC policy, but it should -- normally when prices are going up, the refining margin are going down. There is a sort of -- it's not the case. So Bernard is super happy, not sure to fully understand why. To be honest, internally, by the way, the margin until June were quite average, even quite low. Suddenly, we see them going up in summer. Nobody told me end of July, but they will go up in August. So I'm a little -- I'm cautious about it. So I'm not sure it's a fundamental reason as it's more complex refining margin. Okay, let's take it as long as it's good. And then -- so why $35 per tonne is just the assumption which we take on the long term? Because don't forget as well that our refining system proxy in Europe have been hit by the 2 impacts: Cost of energy, natural gas is more expensive in Europe, it's more expensive for refining system. We shifted to LPG, we shifted, but it's more expensive; and cost of CO2, I can tell you because the new policy of European Union on lower -- [indiscernible] has an impact on the breakeven on the margin of refineries. That's also why we think that it's time to transition some of these units because cost of energy will not go down and cost of CO2 will not go down. So all that has an impact. And even if you take action like we're trying to do or want to do on hydrogen to decarbonize part of the cost which is part of the economic equation, by the way, you don't solve that fundamentally. So $35 might be -- might seem low to you, to be honest, when I was in charge of that, but it was lower from time to time. And sometimes we have some debate with Bernard, but is it too high, $35 or not. So today, at this point of time, yes, we are at $100, but it's super volatile and we were at $150 a few weeks ago. We are down to $100, which is high. So I don't see -- except the fact that inventories are low, which is true. That's something which is clear in the market. Inventories are low, which supports, I think, these margins, accept that. And again, this idea that the crude basket has moved to lighter crude, which has an impact on the refining -- on refining of some products. There was also this year the fact that a good strong demand back on jet fuel but that is down. We don't expect growth of jet fuel demand next year at the same pace than this year because it was a recovery from the COVID. It's down. So that should also come down these margins. Who else in the room? We have somebody there. Sorry, Henri, I don't see you.

Henri Patricot from UBS. Just one question on the low-carbon molecules. You mentioned that you've seen good progress in SAF. You also mentioned your efforts in hydrogen. So I wanted to just ask about some of the other areas here in oil and gas and also CCS, looking back over the past year, with the project's progress, regulatory developments, whether anything has changed that would rechange your outlook at 2030 for these businesses?

No, we did not cover voluntarily everything because first, we need to -- we give the message from the presentation is that our key focus is integrated power and we cannot become a sort of energy conglomerate looking to everything. So we take some actions [indiscernible]. CCS is interesting. We decided that we focus on the North, on European because we have a position, legacy position in North Sea, in Norway, in the Netherlands, in Denmark [indiscernible] where we can -- we have better understanding of system. We have also some assets that we want to reconfigurate. So that's our key focus for, I would say, developing a business of CCS as a service beyond CCS for ourselves. So we can -- we will develop capture for our own assets like we do in Australia, [indiscernible] what we want to do in Cameron with our partners in the U.S., but it's more driven by the asset. CCS as a service, by the way, Europe, why? But there is something which, honestly, we have some doubts, I have 2 doubts on CCS as a service is will the government allow us to make that as a real business or a regulated business because it could be considered as some things which you need to have give access, and I would not be surprised. But if you have subsidies to develop CCS somewhere, we'll tell you, okay, my idea, maybe you should control the profitability of it. You have a second issue, which is a long-term liability, on which I would like to be sure that we don't overexpose our companies in the long terms in some jurisdictions. So these are the 2 limits for me as CCS as a service beyond it. But again, on Europe, we are active. We have several projects. Remember that we are part of the only project which really works today, which is Northern Lights. And we are supportive of expanding Northern Lights to Phase II. And so -- and we work on Aramis in Netherlands and other projects in Denmark. So that's for CCS. On biogas, we have established a position in France, which has a stronger, I would say, agricultural potential. It's interesting, but it's a niche business for me. It's not scaling up. Biogas production is quite costly. We cannot do everything. It's an interesting market because there is more demand for biogas than off-supply. So the price is good. But in terms of volume of what you can do, it's quite [indiscernible]. So we'll spend some money concentrating on France. We have taken a position in Poland, I think, some position in the U.S. It's not at the same level of priority but our integrated power business.

Any other question here? Please, Alessandro?

Alessandro Pozzi, Mediobanca. I just wanted to go back to the LNG. As you pointed out earlier, there's a lot more projects under construction and not just in LNG, but across the onshore and we're seeing more project being FID. And I was wondering, can you maybe elaborate on the type of, say, cost inflation, if any, that you see in LNG project, but also across the upstream industry and especially for LNG, whether labor shortage could be a critical factor, manpower, experienced manpower and engineers to design and develop those projects? The second question is on biofuels. What would it take to increase the 1.5 million tonne per year target in 2030? You want to see more demand or you want to have more control on the feedstock? And how much of that 1.5 million in terms of feedstock comes from your own production versus how much you need to buy in the market?

Okay. It's a good question on LNG. In particular, in the U.S. where we see quite a cost inflation. We have selected at the end, we looked at several projects last year to increase our position in the U.S. We have selected this [indiscernible] LNG project because of its location in particular. It's not in Louisiana. It's in South Texas, where you have quite a lot of workforce according to [indiscernible] and in fact, it was last year, we studied several projects where we see quite a lot of cost increase in CapEx in terms of dollar per tonne. We've announced to some of them because of that, and we selected the one which was offering from this perspective for us a more interesting case. And we have a debate today on the Cameron LNG extension because of exactly that, because today, the cost which has been proposed, the EPC costs are much too high and we prefer probably to -- if we don't manage to find a way to go down from something reasonable, we prefer to keep the option for the future, I am rushing. So in the U.S., there is clearly a case. That's why when people say, all these pre-FID projects, I'm not sure that all of them will come, to be honest, and it's clear that you are very clear in Louisiana. I mean in this big part, you have a shortage of workers, in fact. And so you have to be careful in capacity to execute, which might also delay the projects. So that's why I made a comment about the schematic, which was presented by Helle. On biofuels, no, we don't produce our biofuel, to be honest. I'm not -- we have a capacity. We don't produce ourselves. We buy or we integrate, which was the idea, and this is clear. That's a point. Should we look to [indiscernible] production? Yes. I mean it is a point that we need to better understand. But now, it's clear, but it's a limitation. But 1.5 million tonnes per year at the horizon of 2030, I think we -- in a market which will be around 20 million or 20 million to 25 million tonnes is quite a good position. It's more we want to grow it. It's linked to our assets. We will not make greenfield assets to be clear on the field development. We transitioned our asset or we built on our Korean assets with [indiscernible] on which we want to look seriously to do something in Korea. But -- so it's linked to our assets and the way we look as well to develop some SAF production in Saudi Arabia around [indiscernible]. So it's more -- it's a mix of driven by the assets and then transitioning the assets and then finding the fits of controlling the feedstock. We've done a JV in Europe to control the feedstock, which is key in terms of volume and of cost as well. So I think this is an integration model we could develop in the future.

On LNG, just to clarify, when we see Mozambique in the cost curve that is based on the old cost estimate, I guess. With the new cost estimates, where...

No, it's based on the cost estimate we have today.

That we have -- okay.

Including the cost of -- because we have some suspension costs, which were around $1.5 billion, what we have to pay in order to suspend the project during [indiscernible].

Because it's below on Papua LNG, so potentially.

But it's much larger as well. It's benefiting for much larger -- it was a base of -- its much larger projects. Scale in LNG is quite important. Papua is an interesting one, that is why we try to develop maximum synergies [indiscernible] because -- but you have 7, 8 -- you make a project of 6 million tonnes, not a project of 15 million tonnes. So it's not a -- the scale in LNG is fundamental cost per tonne. So Papua is a nice project. That's why we made that scheme where we developed the upstream, but we synergize the whole plant with [indiscernible] plant in order to lower the cost.

So you're happy with the cost that we have for Mozambique where they are now or you want to push them down?

No, no. We will not be happy with the target we put in this figure. So we need to work still. But we are not far too, I hope so, to be happy.

Any other question? We have questions on line still. So maybe we can take the one from Peter.

It's Peter Low from Redburn Atlantic. Of the $1 billion of cash flow growth for downstream low-carbon molecules, could you perhaps outline the key projects and building blocks behind that? And is it fair to say it's predominantly coming from [indiscernible] and then also perhaps the phasing of that growth in the 2023 to '28 period?

It's not only the low carbon, it's downstream and low carbon. So downstream is in particular, is [indiscernible] project with a Aramco in SATORP. But it's also, by the way, marketing, we don't forget the marketing business on [indiscernible] also continuing to develop this cash flow. It's not because we divest an asset, but we don't have other sources of growth. And then you have these projects on sustainable edition fuels, which are -- which will deliver some cash. So it's a mix of these 3 pillars, which gives additional $1 billion. We have Ahmed online from ODDO.

Ahmed Ben Salem from ODDO BHF. Patrick, I have just one on Namibia and the ongoing exploration campaign. We were expecting some results in September. So is it as positive as expected? And if possible, could you give us some indication of the results of the test and the size of the reserves at this stage?

Ahmed, you should listen to my speech because I answered to your question. So I said, I explained that we made a test, which is positive, which is as per expectation on Venus 1-X, which was the appraisal well. We are just -- there is an upcoming test on Venus 1-A, which was -- which was a discovery. Well, I don't know. We have 2 tests. And then we are continuing to explore on the North prospect called [indiscernible] and we'll make last appraisal while on the northern part of Venus, all that being positive and will lead to a first development, but we need to continue to make all these projects. I also mentioned that a dry well which has been drilled in the eastern -- western part, which is called [indiscernible], which is discarding part of the second block we had on the western side. So it's positive in terms of -- but it's -- I also mentioned that [indiscernible] billions. Okay. Okay.

Any other?

Did we cover everything here. Yes. Okay. It was quite a long Q&A session, but we are like perfectly on time, on our 12, exactly, so very well organized. Shorter presentation and more questions, which is a good recipe, I think. So I hope we have answered your questions. So we'll have now -- we'll share some time with you. We have a lunch where we'll continue the discussion with all the executive committees. Some of you will meet my colleagues and some [indiscernible], Jean-Pierre and myself will have a traditional one-to-one roadshows. And but Nicolas, Stephane, Bernard, Namita and Thierry will be this afternoon at your disposal for the ones who have asked to meet them. So thank you again for your attendance today.

Thank you.