TotalEnergies SE Ordinary Shares

Good morning. Welcome and thank you for joining the Total Energy's 2022 results and 2022 objectives webcast. At this time, I would like to turn the conference over to Mr. Patrick Pouyanné, Total Energy's chairman and chief executive officer, and Jean-Pierre Spreire, Total Energy's chief financial officer. Please go ahead, sir.

Good morning, good afternoon, wherever you are. Welcome to Total Energy's 2022 results and 2023 objectives. We are presenting from Paris in all virtual mode. Our program today, we will start with a safety moment with Thierry Fimlin, our president, marketing and services. And then Patrick and Jean-Pierre will drive us through the results of last year and the objectives set for 2023. And then we'll have a Q&A session. But for now, a safety moment with Thierry.

Good morning. I've chosen a safety moment to speak about the fatal accident which happened during rebranding work at service station in Burkina Faso last year. But let's start with a description of this sad accident. On April 27th, in our service station in Ouagadougou, Two operators from a contracted company moved a mobile scaffolding between the totem and the station canopy in proximity of a 15,000-volt overhead power line. The third operator, who was the sole victim, helped them, but his leg hit a security barrier at the same time, and he became a conductor of the current when the electrical arch occurred. This third operator collapsed due to electrocution. He died on the spot despite the cardiac massages performed. Kader was 26 years old. The in-depth inquiry made following This dramatic accident showed that the work procedure was respected before the start of the work, including pre-visit and risk analysis, pointing on the nearby presence of overhead power lines, and the need to move the scaffolding in unmounted position. On the day of the accident, the specific work permit had been signed. So what went wrong? The investigation of the accident identified two key non-compliances with the work statement. Inappropriate decision by the operator to reduce the height of the scaffolding rather than dismantle it in order to go safely under the power line. And failing supervision at the moment of the accident because the person in charge of this supervision was distracted in a phone conversation. How did we react? We immediately suspended rebranding work worldwide on a site with presence of overhead power lines. A return experience was issued and explained to define the conditions for restarting the works with four main points. First, the obligation to always consider as a priority isolation by the electrical network company. Second, the guarantee of minimum lateral safety distances with specific surveillance. Third, the strict control with competent supervisors. And the last one, which most probably is the most important one, no scaffolding under live power lines. However, this fatal accident shows that we must push further the appropriation in the field of our safety rules and programs. And this has to apply to our teams and to our partner companies. I'm convinced that we must pursue in this way to improve our safety culture. Thank you for your attention.

Thank you, Thierry, for this safety moment. I will come back, obviously, on safety. But before, just to introduce this presentation this morning about our results in 2022 and the objectives for 2023, I just would like to underline that, in fact, this year, 2022, has demonstrated once again the consistency of the multi-energy strategy that we are following consistently within TotalEnergies for many years. On oil, we continue to invest in oil in order to maintain our production, to capture opportunities like the one in Brazil. We are, of course, driven by the fundamental objective for many years to keep our breakeven under $25 per barrel. It was $24. And at $100 per barrel, like it was the price of our price last year, we have the full benefit. On LNG and gas, we embarked in a bold strategy in order to become a very large player. We have, by the way, in 2022 manage 48 million ton of energy which is more than 10 percent of the market which was 400 million 12 percent exactly with strong positions in europe and this strategy is delivering of course this integrated strategy is integrated of course results in a exceptionally high gas price environment which was around 200 dollar per barrel Integration is about also refining with $100 per ton, exceptional refining margins, but the high utilization rate, 82%, and the benefit is there. And last but not least, electricity, which I've demonstrated that there is room for price increase in these markets as well, in which we are investing for the future. Consistency, resiliency, integrations are the key of our strategy. And today, in order to continue to demonstrate that we're transparent and with profitability we want to deliver to all our investors, we are announcing that you will have, from this beginning of 23, a clear transparency on two segments, which are the pillars of our growth, integrated energy on one side, integrated power on the other side. I would like to underline also in this introduction I would say superior results that TotalEnergies is delivering. We'll come back on it, but you will notice that we have the strongest net cash flow per share increase among all the major majors, and by far, and we have the strongest return on average capital employed of more than 28 percent, which demonstrates that we can combine profitability, strong profitability, and transition to new energies. I would also say that this year is giving us, we'll come back on it, but a strong guarantee for the future by the deleveraging of the balance sheet, which allow us to express a very clear framework of return to shareholders in last September, which is a clear framework of return to shareholders through the cycles. We announced 35-40%, we delivered 37% of cash payout to shareholders in 2022. Thanks to a policy which is clear and which the board of directors has decided to even reinforce. First, a support to the ordinary dividend the cycles thanks to the buybacks we execute but also to the underlying cash flow growth and we have announced that we will increase by more than by 7.25 percent uh the uh residual the final dividend quarter and the and the next quarterly dividends in 23. But also continuing our buyback program with $2 billion as previously quoted, no decrease despite a lower environment, and find last but not least room for special dividends like we've done in 22 if we have super, I would say, super profits like people said. So no zigzag in our strategy, consistency, and that's the key for, I would say, the future results and profitability. And this is what we will demonstrate today together with Jean-Pierre. So if I move over first on safety, after the safety moment, of course at total energies we repeat this message very often safety is a core value and comes first because safety requires discipline and discipline is at the core of operational excellence so that's this continuum that we insist on I would say that on the one hand, we can be proud of implementing for the company of safety culture, which has led to a significant decrease in the accident rate as measured and shown here by the, what we call the total recordable injury rate, and we are today managed in the last decade to become among the best in the measure, if not the best, but there is a big but. However, on the other hand, we report with Deep regret that there were three fatalities in 2022, which I consider unacceptable. And that see a sign, and we see as a sign that we must do more to strengthen our safety culture. But to be sure that this culture is really embedded all over the world in all our operations, wherever they are, whatever they are. We purposely show on this slide the details of the three fatalities as well as the steps we are taking on a continuous basis to address and mitigate these ever-present risks. We'll talk today about our strong 2022 results. It's a fact. but understand that we carry the knowledge of this facility like a weight on our shoulders, and therefore we as a company and I as a leader cannot be completely satisfied that we were as successful last year as we should have been. 2022 is definitely a year, as I said, where we have managed to get the most out of our assets in different businesses. Of course, first this year was a year of LNG, I would say, which became a star in many around the world because suddenly, because of our invasion, If you compare Russia and the impact on the European gas, the European market needs more gas. We are in a strong position, the first U.S. exporter, the first Europe regas holder, and we have used a lot of these regasification capacities in Europe, 86%. And we have increased our LNG sales by 15%, 14.8%. Integrated and all the other success, as I said, is a very strong utilization rate of our refining system, more than 80%, 82%. In the market, which was really quite high, thanks in particular to distillates, we managed to capture a very high refining margin, and our downstream business has reached a record cash flow generation. But we have also been able to consolidate these assets through some smart M&A, like the one we've done in Brazil at the end of 21, where in a year after, it generated more than $700 million of cash flow. Of course, 22 successes are also to prepare the future in all these operations. Preparing the future is, yes, of course, and you will not see in this presentation the word Russia, Russia is behind us, but we have been able to build the future in LNG through the successes of becoming the largest international player in Northfield East and Northfield South Qatar projects. We also, I would say, underline the success that we had in exploration, oil exploration. We'll come back on it in Namima and Surminam. So that's also part of our future and future profits. And last but not least, Smart M&A to consolidate on integrated power businesses. Why I say Smart M&A? Because both are characterized by the fact that it's direct negotiations to obtain in attractive conditions strong position in the US on one side with clear energy, in Brazil with the other side. All these successes about growing our production, growing our energies, It's also we keep in mind that we have at the same time to lower our emissions and you will see the results knowing that we'll come back end of March with our sustainability climate report deeply in details of our, I would say, net zero ambition. So at the end, this is a slide we introduced in September but which is for me the result and give me again the strong comfort for the future is that, yes, we had a record cash generation, but what is important to me is that when you compare the 2022 cash generation to 2020, Ten years ago, 2012, with even a higher oil price, we have increased our cash generation by more than 50%, thanks to the strong decrease of the break-even. And the challenge now is to maintain this break-even under $25 per barrel by the selection of assets, by the action on cost. despite some inflationary environment, and we'll manage it. And of course, thanks to these cash flows, we allocate quite a lot, like Jean-Pierre will tell you, to deliver the company, and that's the best guarantee for the future. I will then leave the floor to Jean-Pierre to describe in detail these 22 results.

Thank you, Patrick. So I will concentrate my comments on 2022. A year when we established new records, thanks to perfect match between, on one side, our well-positioned assets, and with no surprise, we'll talk about gas and energy, and on the other side, very favorable markets, which have set new records in 2022. The 2022 environment provided favorable tail wheels for all our activities. Normally, there is a mix of positive and negative. It was not obviously the case in 2022. And so we were able to fully leverage the strength of our global integrated portfolio. Patrick will cover the macro later on, so I will not come back on the rational. Our oil price sensitivity is sometimes underestimated, but clearly in 2022, we benefited strongly from the rise in oil prices, thanks to our low break-even, low-cost portfolio, which allows us to capture this price increase. Please note, as Patrick already mentioned, that in 2022, we have the strongest increase of net cash flow per shares among major. I will show you the data later on. Refining margins are linked to oil, but we saw in 2022 massive supply disruption, particularly affecting middle distillates related to sanctions in Russia and more recently to the European embargoes on both crude and oil products. For gas and LNG, it is a similar story. The Russia-Ukraine war drove gas and LNG prices to never-before-seen levels, as Europe scrambled to cut decouple from Russian pipe gas by importing additional 50 million tons of LNG last year. This represents more than 10% of the market. So clearly, across all our business in 2022, markets were favorable. Here, you see the list of key metrics demonstrating that for 2022, we talked the talk, we walked the walk. A slight miss on production, mainly due to security issues in Niger Delta, some delays in projects, and the price effect on our PSCs. Better than expected performance for refining. You see 82% utilization rate in 2022. LNG sales. a four million tonne target, four million tonne above target, because of intense LNG spot business in Europe, and we maximise the value of our re-gas capacities, and of course renewable as well. While at the same time, meeting our scope one plus two emission reductions, despite high utilisation of CCGTs in Europe. As announced in July, investment came in above 22 objectives at $16.3 billion. This reflects increased short-cycle activity to benefit from a strong price environment, higher net acquisitions, mainly for oil in Brazil and renewable in the U.S., but no meaningful impact from inflation. and I think a great bottom line for shareholders, a plus $1 billion of underlying cash flow growth, a key element, as you know, supporting dividend growth, and $47 billion of debt adjusted cash flow in 2022. So let's move to IGRP results. So IGRP adjusted net operating income was $12 billion in 2022, almost doubling compared to 2021. Thanks again to fully integrated energy, which position us to maximize the capture of the high price environments, but also thanks to strong growth in integrated power generation. Cash flow globally at the level of IGRP was $11 billion, up 76% year on year. You have here a very important message on that slide. To provide a better understanding of the growth strategy of LNG on one side and electricity renewable on the other side, the board has decided to split IGRP into two new segments from the first quarter 23. That means that from that date, we will report separately integrated LNG and integrated power. So integrated LNG is comprised of our LNG assets, gas and energy trading, plus biogas and hydrogen. And integrated power is comprised of renewable and flexible power generation, power trading, plus power and gas marketing. We provide you here with some metrics for these two segments, 22 versus 21. For high LNG, sales were up 15% to 48 million tons in 2022, thanks to our number one position in European regas, which allowed increased spot purchases and sales in the context of record LNG demand in Europe. Cash flow increased to $10 billion, up nearly 80%, and adjusted net operating income was $11 billion, doubling the contribution compared to 2021. High power generated $1 billion of cash flow and earnings over 2022. Production was 33 terawatt hour, up 57%, thanks to higher utilization rate of CCGTs in Europe, and a 53% increase in power generation from renewables. At Yeohan 2022, we had 17 gigawatts of renewable capacity installed. A lot of you have been asking for this split to better understand our two fastest growing activity, LNG and integrated power. We are happy to do it from 2023. In nearly every way, 2022 was a record-setting year for total energy. Benefiting from the favorable environment, the increase in energy sales, plus 15%, and thanks to our unique position in Europe, total energy generated a very positive adjusted income at $36.2 billion in 2022. Including nearly $15 billion of impairment related to our Russian upstream assets, our reported IFRS net income was $20.5 billion in 2022. Return on equity was 32%, and ROACHE return on capital employed, 28% in 2022. This demonstrating again the quality of our portfolio. and the capacity of TotalEnergy to benefit from price increase. Along with record earnings, TotalEnergy generated $46 billion of cash flow in 2022, an all-time high, shown on the left side of the slide, split by segments. All segments made stronger cash flow contributions in 2022, $26 billion from E&P, up 39% on higher oil and gas prices, and despite the UK windfall tax profits, which has represented in 2022 $1 billion. $10 billion from LNG, a record high that we covered on the previous slides. $10 billion from downstream, driven by the contribution from refining, of close to $8 billion, more than 2.5 times contribution in 2021, thanks to higher refining utilization rates that allow us to capture high margins. And $1 billion, an important milestone for integrated power. On the right, We show the cash flow allocations, which was pretty evenly divided among shareholders, investments, and debt reduction. $17 billion return to shareholders, representing 37.2% payouts, delivering on our 35-40% commitments, comprised of $7.3 billion for the ordinary dividends, plus $7 billion of buybacks and $2.7 billion of special dividends that was paid in December. $16.3 billion for investments, but I will cover that in the next slides. And $14.5 billion of net debt reduction, which cuts our gearing by more than half, 7% end of 2022 compared to 15.3% end of 2021. The 2022 environment allows us for all our segments to demonstrate their strong underlying potential. Typically, with an integrated model, we count on strength in one activity to offset possible market challenges in turnover. But in 2022, each segment had a chance to shine. Capital investments came in at $16.3 billion in 2022, above the guidance $14 to $15 billion. mainly due to acceleration of short cycle projects in West African countries, but also in the North Sea, in order to benefit in 2023, 2024 from a good environment. And $5.9 billion of smart acquisition, notably in Brazil for oil and in the US for integrated power. Also included here are divestments for $1.4 billion mainly from ongoing farm-down activities, which is key to the profitability of integrated power. For example, in that figure, you have the farm-down of 50% of a 230 megawatt portfolio of renewable in France, but also partial sales of our CCGT in L'Indivisio, also in France. In that figure, you have also the sales of some E&P mature assets, notably our interest in block 14 in Angola, but also the Sarsong field in Iraq. Important to note that inflation did not have meaningful impact on 2022 increase in capex. We remain disciplined on capital with strict criteria for sanctioning projects. I will give you more about that on the next slide. But important to say that we determined last year, particularly in light of the rapid strengthening of our balance sheets, that passing on the opportunities noted here would not serve our shareholders' best interests. To the right, we split 2022 investments by type of activity. Oil generated most of our cash flow, and we allocated about 60% of capex to it, with a split between 60% and 40% between maintenance and growth. And a big piece, $2.8 billion, of that growth was for Sepia and Atapu, the deep offshore field in Brazil. Integrated power and low-carbon energy including, of course, the Clearway acquisition, was $4 billion, representing 25% globally of the CapEx in 2022. Integrated LNG represented the balance of roughly $2 billion, reflecting the timing of expenditure, as Qatar NFE and Qatar NFS was not recorded in 2022. It will be the case in the first quarter of 2023. When prices increase, cost might follow. However, 2022 cost inflation was not so severe in our key regions and activities, except, of course, energy costs, but we benefited of price increases. There are some upward pressure shown on the right in that slide, but we effectively controlled it in 2022. Using SA9032 OPEX as a benchmark, TotalEnergie continues to be the lowest cost producer among the major at about $5.50 per barrel equivalent. On an ongoing basis, we benefit from a high-quality global portfolio that allows us to leverage on purchases per hour, to negotiate favorable contracts with suppliers and service companies. On deep offshore day rates, we signed medium-duration contracts that largely isolate us from inflation in 2022. But nearly all of our rates are set at about the same level for 2023, with options taking us into 2024 at good prices. For new projects, we adhere to strict selection criteria shown on the right to maintain the high quality of the portfolio in terms of average costs, but also in terms of emissions per barrel as well. Important to note that our criteria on emissions per barrel will be more severe in the future as the portfolio average has lowered to 19 kilograms CO2 per barrel equivalent. In terms of the constant progress of high-grading the portfolio, for example, adding low-cost barrels in Brazil last year at APR-CPU, implementing the spin-off of our E&P subsidiaries in Canada with higher-cost barrels this year will reduce our overall cost per barrel in the future. To conclude the 2022 result presentation, where you have here the benchmark of performance of Total Energy versus the other four super majors. In terms of growing net cash flow per share, you see here the data, we were the strongest by far, doubling in to almost $13 per share. Similarly, Total Energy was best in class for profitability, with 28% return on capital employed, For the three years return to shareholders, we outperform our European peers by maintaining the dividend in 2020. We haven't cut the dividend in the middle of the COVID crisis and ended up trailing our US peers. And to conclude, based on the sustainability ranking, total energy has the highest ESG rating among the supermajors. We consider that this continues to be an important factor in terms of ESG leadership through this period of growth and transformation. In summary, an historic year for the company, a big step up in terms of financial strength and flexibility, in large part due to the strategies that position us to fully benefit from the 2022 favorable market environment. And with that, I leave the floor to Patrick. Thank you.

Yeah, and this slide demonstrates that you can really deliver at the same time superior results and sustainability. There is no opposition between both of us. So executive strategy, of course, will be the motto for 2023. And just some words about the environment. Of course, the price today of oil is no more than $100, but more around $80. But I would say... When we look to the trends of the old markets, for me, there is some uncertainty on the demand in particular because there is a feeling, even this feeling maybe is disappearing a little of the risk of what we call recession, global economy slowdown. But again, this feeling today is a little erased because of what we observe in China and, of course, on the energy markets, either oil or gas. The Chinese recovery, economic recovery, will be fundamental, easing of lockdown restrictions. What is clear, by the way, and I know that in our world of oil and gas, there is a new Bible, which is a net zero scenario of the IEA. which is supposed to decrease the demand every year, to decrease the supply, is that for 2023, all experts, including the IAEA, are announcing a higher demand for oil, around 100%. 2 million barrels per day, which will be a record year. So the reality of our world is that the old demand continues to grow, and that we need to face, in fact, we have the supply. On the supply side, we don't see a lot of, I would say, margin. We see we are entering into this year with very low inventories of products, in particular, very low compared to the last 10 years. We have the impact of the sanctions on Russian crude and refined products. Russian crude oil is finding its place in the market, China, India, but the refined products of Russia, it's less obvious where the diesel will go, Africa, South America, that's a mystery. And by the way, we have also, of course, the supply side is clearly supported by the OPEC discipline, with the cut which happened, and the OPEC countries supported wants to maintain the order by $80 per barrel, will take actions. And the other, we could have expected more supply from the U.S. share, but as it was the case previous COVID, but it's no more the case, U.S. shareholders want some returns, and today have more speaking about returns than growth. So that means that when you look to this landscape, I think from our perspective, there is more support to U.S. I would say, a higher price than $80 and a lower one. And so looking, we would not be surprised to see $100 power coming back. By the way, the old market, and this is very important to understand, is also, for me, today, there is no more a world old market, in fact. And that's a big lesson of what's happening. We are splitting the market between Europe, which has bonds. There are some contracts. cap on the prices so we have today several markets which does not help obviously to ease the price and i think we did not have seen all the consequences of the growing grey markets and the for for visa the supply of these of oil On the gas side, this slide is a little complex, but just today we can have a better vision, better view, and maybe even draw some lessons for what could happen in 2023. In Europe, as you see, the European gas is driving the energy and the power markets for Europe. So you have on this slide what happened in 22 compared to 21 first. Production in 21 and supply demand was around 380 million tons. It grows to 400 million tons by end 22, so plus 20 million tons. But at the same time, the European demand for LNG has grown by $50 million. You can see on the graph on the right here, bottom corner, that the demand of gas, and we have all translated in this slide, in million ton of LNG. The demand in 2021 for gas in Europe was the equivalent of 170 million tons. In fact, 100 million tons was delivered by Pabgas. It is a famous one, the 130 BCM from Russia. But we had already imported 67 million tons in 21. For 22, So Russian gas has been divided by more than two. We see the equivalent of 44 million tons of LNG. And so we had to add on it one more LNG, and there is an increase of up to 115 million tons of LNG. You can see, by the way, that the bar of 22 is a little lower than the bar of 21 because there was a decrease of demand around 15% because of the high prices. So to do that, we have done it at the expense of our regions, I would say. And as you can see, there was a sort of supply gaps. So to attract these 15 million tons to Europe, we had, in fact, taken out 15 million tons, 16 exactly, from China. China probably, because there was a slowdown in the Chinese economy, which went down from 80 million tons to 65, more or less, but also from other countries like Bangladesh and others. So, in fact, the supply of Europe has been possible because we took all the LNG out of other countries, which, by the way, have shifted to coal. So yes, the security of supply of Europe has been secured, but at the expense somewhere of the emissions of other countries. Of course, we have done that with a very higher price in order to attract this energy. So what is the perspective for 2023? Might be wrong, but there are some fundamentals. First fundamental is that we expect the Russian gas to be lower in 23 than in 22, because in fact, we have been supplied by Russian gas and Nord Stream pipelines until middle of the year in 22, and these pipelines are down today. So we expect, I would say, half, maybe up to 20 BCM, only mainly by the Ukrainian pipeline. And so even if there is a potential again, destruction of demand we expect more energy being required by europe than in 23 and 22 15 25 million tons are our expectations depending on demand The increase of supply in 23 compared to 22 is only 10 million tons, 410. So these 15 to 25, we see it's more than what will be supplied worldwide. And we could expect as well, again, the same question mark, a recovery by China and an acceleration of the economy in China, a recovery part of all of the 15 million tons that we acquired last year. We derived, we extracted from China. So the supply gap is very grand, and so it's why we think there will be some tension. Of course, on the gas, there is one element which is different, which is a small note on the bottom right corner, which is the storage level. The storage level were 54% last year by end of January. Today, they are 85% in Europe. We cannot store more because there is a limited capacity of storage in Europe. This is why today the prices are lower. But again, we will consume this gas. And so we think that some tensions will appear by the middle of the year between the different markets for LNG. So 23, our activity in front of this environment will continue to deploy our strategy. We have already announced, of course, on the LNG side, we are adding some gas capacity in Europe. The one in Germany has been opened, is operational. You know, we have put FSIU in Lubmin, which is a the point where the Nord Stream is landing, which is a perfect access to the German market. So our LNG traders are quite happy with this infrastructure. We have booked half of the infrastructure for our own business. We are adding another one in France, where we intend also to book half of it. So that's LNG. And we continue, of course, to chase opportunities in LNG. As you know, we have ambition in the US, and we'll come back to you later. The second part of deploying our strategy, and it's important, refining and chemicals, where we have Bernard and his team have worked hard during years to consolidate these Jubile platforms, the SATOP platforms. You know our strategy is expanding fundamentally in an integrated way. We have been happy to take the FID of the Amiral project, which is an $11 billion world-class petrochemical integrated complex, which will come on stream in 2027. It will consolidate the profitability of our integrated downstream business. And last but not least, integrated power, which is the other pillar of the growth, will benefit in 2023 from the acquisition of 70% remaining shares of Total Iran. We have exercised our options. It was, as you know, a transaction where the negotiation took place in 2016 at a time where the multiples on renewable assets were reasonable. So that's already there. So it gives some work to our teams, but there will be more to come. Of course, we'll not just... sleep during the year but we'll continue to find smart developments in all our projects with lowering of course our emissions it's always you know our motto is more energy less emissions so growing our energies for sure and our delivery for energy lowering our emissions in particular we have announced in september we have launched a worldwide energy saving plan in the companies as Teams have been super reactive. So the $1 billion has been distributed at an average by the cost of $50 per ton. It begins to be spent in 2023 for $400 million. It's spread over the two years. And it will allow us, by the way, to lower our targets on scope one and two emissions by 2 million tons for 2025. We'll come back on that in March. Second point of 23, and I think it's important for all the investors, is our cash allocation priorities. The scheme now has been put in place. Remind you that we want to deliver 35, 40% of cash payout for the cycles, 37.2% in 22. So we have taken some first decisions with the board of directors on this first dividend that we begin to call an ordinary dividend to differentiate it from the special dividend. We want it to be sustainable and of course the increase of 7.25% we have announced yesterday for the 22 final dividends and the 23 interim dividends is supported by both. The share buybacks which we have done last year which were representing almost 5% of capital. This 5% is a return to shareholders only if we translate that in an increase of dividends, which we'll do, and we do more. We go up because there is also an increase of the underlying cash flow growth. So this is the reason why we've done this increase, which is a larger one, but the one we have decided for the full year 2022, 6.5. I would like to remind to all of you that The difference of some of the peers, we didn't cut the dividend in 2020. And so maybe we have less room to increase this year, but we increase the dividend year after year, 22, 6.5%. The basis for more than 7% in 2023. And so that's our commitment. The capex, I will come back on it. We gave you a range of 1418 in September. It will be 1618 in the high part, of course. Five billion in low carbon energies. The balance sheet, difficult to express a target for the gearing. It's down to 7%, so it will be strange to you to say minus, I don't know what. So we express our ambition in another way, which is to continue to strengthen the balance sheet because it's a guarantee for the future. Today, we are A+, I think. We want to target to better AA credit rating. It's an ambition for, it's the objective of my CFO. So he told me it's aspirational. I told him, no, it's a real objective for you and your team. And I think it's true because, again, for me, that is the best answer to ensure you that all our strategy works. in capex and return to sheldon will be delivered through the cycles and the surplus cash flows are of course allocated part of it first to buybacks and last year we were on an average of a little less than 2 billion it was 1.75 billion dollar We increase it to $2 billion in the last quarter for this 2023 in an environment of $80, which is lower than the one of last year at $100 per barrel. So I think it's a commitment to this buyback. And the special dividend is only in case of super profits. We will come back on it even if... As I will explain to you, there will be. The shareholders of Total Energy will be rewarded with a special dividend in kind as we will organize a spin-off of our Canada upstream assets. I will come back on it. So I think this is a full program which demonstrates the real way we think to the future. When you look to, in fact, the column 1 and 4 are for the shareholders. The column 2 and 3 are for the company. And we think of that. Of course, we have to come back to the other stakeholders. So the capital investment of 23 will support the transition, $16, $18 billion, out of which $5 billion for low-carbon energies, let's say a quarter four for energy. integrated power, and more than before on the new molecules, because we grew our ambition in the various segments. In particular, in carbon capture and storage, we have been awarded new projects in Denmark now, so we have Norway, Denmark, Netherlands. So we built, I would say, our position in this business. Also included in this part is our energy savings, the negative emissions that we can do. And you can see that we have also new projects, of course, coming into our hydrocarbon businesses, oil and gas. In gas, it's growing because it's a category project. There is no Russian LNG anymore in our spending, but which was... Of course, there was less investment in 22, but the Qatar projects are there. We have the Cameroon projects, we have the PNG projects, PNG targeting FID by the end of the year, Cameroon targeting FID by September. So there is a lot of work on LNG, but of course on all as well, because we have some new projects on which we work. Like in particular in Brazil, we have Miro 2 will come on stream. We have Atapu 2 and Sepia 2 to sanction this year. We have also Uganda. So we have new projects coming. You can see that, by the way, we have as much new projects on both sides, a little less in hydrocarbons and low-carbon energies. And we have the rest of the capacity, the maintenance. We need to invest more or less $7 to $8 billion each year to maintain, I would say, the whole system. So V23 production will grow, more energy will grow, mainly coming from LNG again. There is no new project coming on stream, but last year we had some, I would say, not a full utilization of Novit, which came back on stream by middle of the year, and from ICTIS because there were some big overhaul in ICTIS. So 9% more production of LNG and pipe gas to Europe. Oil will benefit from the full year of Brazil, plus 5%, so it's good in this environment. So production will go only by 2% because at the same time we have some perimeter effect on domestic gas. We have exited from Myanmar, we have exited from Thermo Castavoyer, and we will exit from Thailand. Honestly, these are domestic gas. Why did we differentiate them from the rest of the gas is that there is no upside on this type of gas or limited upside linked to the gas price, international gas price, or international oil price. So in terms of economic impacts, we don't have the volume, but the upside is more limited. So that's the end. So what is more important for me are what we do in LNG and pipe gas to Europe, because there you see the upside of this market, plus the oil. Startups in Oman, Block 10 has started, Meru to Brazil middle of the year, and Absheron in Azerbaijan for gas. Just to mention that we are quite, in our company, we don't speak about decrease of oil or decrease of gas. We speak about gas. stabilizing, growing, continuing to supply the market, being a key player of the energy supply, and taking a role, even if we are not a very large player, but we do our role, which means that we continue to focus as well on reserve replacement, You can see that the 22 reserve replacement ratio in the year are quite good, 108% at the same price, 85% with the price effect, around 100%. There are not so many major companies which have been able in the last years to maintain their replacement rate at 100%. And we are one of them. Without Russia, which was of course for us a source of reserves, but we can do it without it, as it has been done in 2022. So let's continue. The integrated LNG portfolio, the ambition, as I just mentioned, more production. So it helps if we help our colleagues of the downstream LNG to sell more. Of course, there is a spot uncertainty, but our position, as I said before, is strong in regas in Europe. We are increasing our regas capacity in Europe thanks to the Lubmin and the Le Havre FSIUs. So we have more than 20 million tons of LNG regas capacity, which is good, which is strong. It will help us to continue to monetize these capacities. As you can see, the split on this slide, which is important, we split it into, I would say, three pockets according to the margins. There is a pocket of, I would say, long-term Asia, Latin America portfolio, which is fundamentally giving us results and cash. It's a difference between brand and the cost of production. That's the idea. Then we have the European and flexible markets where, in fact, we supply the energy from the U.S. to the spot index. So there the profit will be, I would say, spot minus energy hub. So today, it's $20 more or less per million BTU minus free, or a little less than free. So you can see the margin. And then you have the spot ones where, in fact, it's some sense of margin. But this activity helps us, of course, to, by the way, absorb the cost of the re-gas and to contribute to security of supply. We have put at the top Yamal because there is always a... Today, Yamal, by the way, to be clear, we have only... We have stopped... We have all the volumes, the 4 million tons of volume of the long-term contract on which we are committed, but we are strictly only with volumes as all the activity which was linked to spot extra volumes, we don't take them anymore as per our commitment vis-à-vis the Russia business. Integrated power will continue to grow, clear, because, of course, the gigawatt of capacity, as it was said by Jean-Pierre, we have managed more than the 16 gigawatt by end of 22 capacity, gross capacity. We are at 16.8, 17. By the way, I would like to tell you that there are not so many companies able to grow their renewable business by 7 gigawatt in a year. You can look around. We are among the top. And so, again, when we do things in total, we are consistent. We do that seriously, and we intend to deliver not only growth but value because it's why. And this is a fundamental reason why we have decided to anticipate the split of IGAP into two reporting segments. By the way, there is no split of organizations. Stéphane is leading the whole organization. businesses. Just to be clear, it's a reporting. We have done it because I think now it's time not only to speak about volume, but value. And the best way to deliver the value is to report the results and to show it as we will improve it. Of course, we have quite a lot of capital unemployed today, but it will come on stream year after year. So we target an increase of production by around 30%, mainly from renewables. We benefit today from a very high rate of user utilization rate of the gas-fired power plant in Europe, but there are also some capture of special taxes in Europe on this gas-fired power plant. Having said that, we expect an increase of our integrated power cash flow from 1 billion to, let's say, plus 30, 40% we'll see, but these capacities will move and we will have to deliver this growth. The year 2023, coming back on oil, and I think it's important to tell you that we have decided to mobilize most 50% of our exploration budget on Namibia. We have maybe today in total energy, and I hope it's true. And I don't have wood, but only plastic here. But it's clearly, according to, by the way, Wood Mackenzie, the largest discovery which has been done in 2022. We are maybe at the helm of a new golden block. So we decided to mobilize two rigs and $300 million in total energy share to, I would say, tell the tale, return the cards, with one, two, three rigs, three wells, plus tests, and to have dynamic tests to really know what we have in our hand, and with the idea that we, to accelerate the time to market, not to upraise everything and to be, I would say, to know everything, but if we have the chance to really confirm the volumes which seem to have been discovered, there will be room to make fast-track developments like we've done on Block 17 25 years ago. So this is, from my perspective, very important because this could be a new chapter of the whole business in the company. So we mobilized the teams and all ENP teams under the supervision of Nicolas and also the OneTech teams on these important projects. At the same time, we will divest some oil, the expensive oil. We know we have clearly said two years ago we made some improvements that not only Canadian assets are not in line with our climate strategy, but fundamentally they are high OPEC assets. And we are not fitting with our old strategy and our old portfolio. So we look to various options and we confirm today that we consider that the best way is to maximize value for shareholders is to introduce this independent Canadian company in the market. The idea is to do it. The objective, the project is to listed on the Toronto Stock Exchange in the second half of the year. By the way, you can see the metrics of this independent company of 2022. It was a company which produced $110,000 per day, which delivered more than $1.5 billion of cash flow from operations and almost $1.3 billion of free cash flow. So it's quite an interesting matrix. We have appointed a leadership team from Canadian which is working in the company, will become CEO of this company, and chairmanship as well by an ex-executive of the company who knows very well Canada. The idea after that is that in order to manage, I would say, the backflow in this type of listing operation, we'll maintain more or less 30%, not more. It will be for some years in order to stabilize the company, but fundamentally the idea is it will not be a company controlled by Total Energy, not at all. We think we'll have to take maybe one director out of it, but it has to be, it will be managed as an independent company. By the way, this is the reason why we just preempted for this company, not for Total Energy, I would say, for SpinCo, 6% of 40, there was a transactions between Sunco and Tech. And we considered that if we were in charge of this independent company, obviously, because these were attractive conditions, we would have to preempt. So we've done it in order to strengthen the company before its listing. So for shareholders of TotalEnergies, they will have to approve. this spinoff at the AGM of 2023 in May. And they would receive distribution in kind, so special dividend in kind of these new spin co-company. We will report to you, of course, along the coming months on the progress of this project. Coming back to the 2023 objective, which is important, is a cash flow generation. I'm happy to tell you with the support of the growth in integrated LNG, in integrated power, but also on the oil production, the underlying cash flow growth will grow by another billion. I know we have announced one billion per year. It is the case. This billion is feeding the growth of the dividend. You can see that we gave you there on this chart... I would say an indication of what could be the cash flow from operation expected at $80, $100 per barrel. We are navigating it in both. And you can compare to 22. At $100 per barrel, in the same condition, we expect $1 billion more. If $80 per barrel, you have the sensitivity. on the right. It's $3 billion extra cash for $10 per Brent. It's a little lower than last year, 3.2, because of the impact of the UK taxation, and also because we have deconsolidated, I would say, Novatec, which part of Yamal condensates, because Yamal is linked to Brent, more or less. So we keep or shares in Yamal, but we have deconsolidated, of all accounts, all the share of Novatec in Yamal. So that's why the sensitivity is a little lower. The $0.4 billion for $2 per million BTU is also lower than last year because of the UK taxation, fundamentally. And for the margin sensitivity on the refining margin, I would say it didn't change. Just to remind you, and I would like to insist, is that there is obviously, for the total energy cells, quite a good potential for stock re-rating. Free cash flow yield in 22 was at 19.4%, and we have enterprise value per DCF ratio of only less than four, multiple less than four. So this, we're expecting, we hope that these strong results will be translated in the value of the company. Finally, I would like to tell you that, of course, the company, I've shown you before that we are allocating our cash flows to the company by cap investments and debt reduction in a large way, but also to the shareholders by way of the ordinary dividends, special dividends, buybacks. We are also thinking to other stakeholders. There is one stakeholder missing on this slide, which are the states. The states are benefiting a lot of the oil and gas profits, you know, and people are complaining from time to time, but for total energies, we have doubled, more than doubled, the taxes that we will have paid to states around the world, $16 billion in 2022, $33 billion in 2023. Of course, they are mainly paid to producing countries, but a country like the UK is $3.7 billion, Norway $7 billion. and not to the consuming countries, that's clear. But it is a strong contribution, I think, to, I would say, the public good for the taxes we deliver. We are also thinking to our customers and to our employees. Our employees are, of course, very, are the engine of all these results. We should never forget that strategy, what is our 100,000 worldwide employees which are delivering the strategy. We are rewarded with a special one month salary bonus. Taking into account the inflation in each country to increase the salary. So we share the value of our salaries, which are also, by the way, shareholders, and which 7% of the capital is a property of our employees. So they are also receiving their part of the dividend. For the customers, we have been probably followed a different route than some of peers. We have decided to make proactively some sharing profit with our customers in order to, I would say, take part of the pain of these high prices, high energy prices. You know, 2022 was, in many of our countries, a debate of energy which was dominated by security of supply, but of course, affordability. So we have put in place some fuel rebates program, a massive one, more than 500 million euros for benefit of customers in France. In 2023, we had to face some also other energy crises, like the SMEs customers or SME customers suffering of very high electricity prices, which were contracts because of the increase of electricity price to the sky in Europe. uh second half of 2022 so we take actions and we continue to take actions because we consider that it's part of our social responsibility to take care of all our stakeholders of course the shareholders the company the employees the states and also our customers so i will stop there and thank you for the intention we'll be happy to answer to your question

Anyone who wishes to ask a question may press star and 1 on the telephone. Please pick up the receiver when asking questions. Anyone with a question may press star and 1 at this time. The first question is from Oswald Klint of Bernstein. Please go ahead.

Oswald Klint Good morning. Thank you very much. Could I ask, please, Patrick, just on the dividend again. 7.25% increase. You said you couldn't do more. That's understandable. It's helped by the buyback. We understand that too. But in the context of the long term where you've done, let's say, 5% or 6% growth the last one, two, three decades, is if we can sustain the dividend and the commodity view cooperates, as you seem to indicate could, six to seven or seven to eight percent become a new trend line, at least for that ordinary dividend, is the first question. And then thinking about future profits and Namibia, interesting slide you have. So do you think we could get some proper resource numbers in 2023? And when you talk about fast tracking, if successful, what does that mean in terms of time and And a linked question, obviously Shell's John Kerwell has come in, which might give you confidence on an easterly extension of Venus, but does also pose some unitization risks further down the line that actually could delay things. Thank you.

Okay, on the dividend, we didn't tell you we couldn't do more. We have decided to do it at 7.5%, which is, yes, you are right, a change of the past trends. But I think, again, for me, it's also the translation of the fact that we have increased the buyback. So as we have bought back almost 5%, it gives some comfort. I think when people speak about return to shareholder for buybacks, if we don't translate it in a higher increase ratio, I don't understand why it's a return to shareholders. It's a saving for the company of dividend, for sure. So that's logic. I think I've been very logical with what we declared, and the board is logic. And as long as we can allocate some cash to these buybacks because we have more cash flows, and we are, again, we continue. We did not decrease the buyback rate. We maintain it despite the lower environment, and i think some of our some of our peers have decreased the buyback program for the first quarter we don't do that we maintain it and that's proof that so the answer is to you maintaining this buyback program yes will will help us to support a new normal which might be seven to eight percent and uh will uh in the future so that's in the future years but again there are two engine to to feed the increase of the dividend. On one side, these buybacks. On the other side, it is the underlying cash flow growth. And I am announcing again that we target $1 billion. By the way, I understand that the board, among the new criteria for the viable pay of the CEO, has decided to introduce the underlying cash flow growth. So we walk the talk in the company. And so that's what I can answer to you. Again, don't forget, and then like you can compare it to companies who have increased by 10, but these companies have divided by two or more in 2020, which could give more room to maneuver, to increase. We didn't decrease at all. So we are also starting from a much higher point from this perspective. You spoke about Namibia, and let's keep Namibia. We have a program. I just tell you we have one world, one world. People are super excited. They speak to me about billions of barrels, but we don't have the data. We have no dynamic data. We all know that as long as we don't have a test, a dynamic test, Maybe if there is no good permeability, it could be complex. So we are excited. It's clear. As we mobilize, and we have decided to mobilize a lot of exploration resource this year to Namibia because we want to know what we have. And if it's true that we have this type of size of resource, obviously there will be more. a lot of room to develop. Honestly, unitization, we will not do this. We speak about billions. We can make a first project on our side without making complex stories. Having said that, I can tell you on this project specifically, there is a very good cooperation between the Shell and Total Energy teams. We share the data. We have an agreement. So we will discuss together. But the idea, if it's really big, is not to be a super optimization to appraise all the discoveries. There is another idea. Like we've done in Angola, let's see if there is a first development. Then we'll have time to optimize. I also remind you that there is the same partner on both sides of the license, which is Cato Energy. We are happy to do it. So let's see. It's premature to speak of a size of what I hope. is that when we have drilled all this program, which has been organized in order to have free wells and free tests, in fact, with two rigs, then we'll have a better clarity, and we can speak to you about resources. Today is premature. Let's do the job, and we'll come back to you, but I can tell you that as the CEO of the company, we are quite excited like we were when I interned the company. I was lucky. I was assigned in Angola on the block 17, so I hope we'll have the same in our hand. for the next 35 years. Okay, next question.

The next question is from Alec Christian of JP Morgan. Please go ahead.

Good morning. It's Christian Malik from J.P. Morgan. Two questions, Patrick. First, I know that we've shared a fairly similar view on a sort of super cycle prospect in oil over the coming years and you've positioned for that in the context of your portfolio. So can you walk us through that? where you see your growth prospects on a three to five-year view, I mean, coming back when you had the best-in-class growth rate for oil up at sort of 5%, 6%, do you envision a situation where you could lean into that growth and sanction projects? I know you're moving to short cycles, one of the bases of your increase in capex, but if you can provide us with what would be the upside risk on your volume growth if you were to choose to sanction more projects and take a longer-term view, around investing in FIDs, a term that I think has become quite rare in this industry. And the second question linked to that and linked to your Canada IPO, do you think this is a template going forward if the market's not going to recognize the value associated with oil, whether it's because of ESG, because of net zero? Could this be a rollout of other projects or other regions going forward where ultimately your IPA, your oil business, in a way that generates better value for shareholders. Thank you.

I can tell you, if we can sanction projects, we'll do it. And we have in 2023 three big projects to sanction in the company, oil projects. We have the Block 2021 in Angola, Kamea Golfino. We have the offers, and we are working on it now. very hard in order to manage the cost of the projects. That's a key issue, but we'll do it. We have in Brazil, because of the acquisition we've done, we have two projects to sanction. One is at Apu2. The other one is CPI2. So this will feed the growth. And we are looking to offer opportunities to grow our portfolio with always the same motto, it has to be resilient through the cycles, so less than $20 per barrel, or $30 of cost, technical cost, or $30 breakeven, and less than 19 kilograms per barrel of emissions now, as we lowered it because it's the average of the portfolio. So, again, we're consistent, consistent. And there are opportunities, and I hope we'll be able to announce you smart opportunities in the coming weeks, in the next weeks. So, and again, by the way, we have also in our portfolio Suriname and Namibia. I just described Namibia. Suriname, as you know, is a little more complex, but there was good news by the end of the year because the Saqqa-Parasoth project, Appraisal is positive, so we have at least the first pool, all pool, of a potential project. Half of it is confirmed. We are drilling wells on the Krakbadu and around discoveries. No, two wells, I think. We have accelerated as well. And I hope that by the middle of the year, we'll be able to confirm that we have the whole pool that we are looking for in Suriname. So... There is also the short cycle projects. I think this is what has been done in 2022 to accelerate the mobilization of rigs. Angola, in particular, is delivering a lot, Nigeria, Congo. So these are the, because there we have already some infrastructures, FPSO, so we can build adding wells on the infrastructure. So that's the way we look at it. So the answer is super cycle, but what we will not do And investing in expensive oil just because today on the short term the price is good. So this is the second question on Canada. This is why we think, by the way, that it's the right time. I don't know if the market will fully recognize the value, but I'm sure that it's probably the best time that it could recognize it. So with the figures that we just announced. And so, you know, we have been – people know that we want to diversify these assets. They are not fitting with the strategy. We make money this year, but this could disappear. So we have the ambition to get a good value out of it. The values acquisition offer we received were not in line with expectations. And so – I will say, but we are optimistic about the capacity of the market, which is for us the best way to monetize these assets. Is it a model to roll out over E&P assets? No. No, it's a specific model because, again, these assets are high cost. They are not fitting our strategy, and we are not the best shareholder. But the reality, there is a potential to grow in these assets. Surmont is a very high-quality asset. Fortier suffered but could deliver more. But we are not the best ones because we don't want to put capex. So why should we keep in our portfolio assets on which we are not the best shareholder? But the other assets that we have in our portfolio, we are very happy shareholders. So in particular, I'm quite happy to have directly access to the cash of all the North Sea assets in TotalEnergies today.

Thank you.

The next question is from Irene Jimona of Societe Generale. Please go ahead.

Thank you. Good afternoon, Patrick, and congratulations on these results. My first question is on the balance sheet. You obviously enjoy an exceptional balance sheet already with only 7% gearing. And you seem to want to strengthen it further with reference to reaching AA credit rating. I wonder what is the real significance of an AA credit rating, please? And then my second question on LNG sales up very strongly last year, 22% in Q4. You're still selling Yamal cargoes, obviously. Can you let us know, please, how are you getting paid exactly in the middle of these sanctions? Thank you.

Okay. Why is it important? I think just, you know, I'm trying to fill the gaps with the valuation of some of our peers. So we are quite systematic. We look to the difference. There is one gap, which is that our U.S. peers are rated AA. We are not yet rated AA. And when I look and I compare... the metrics and the results of total energies with at least one of both, I see very similar metrics. So maybe there is something missing. So I think, again, I think it's also a message, because for me, that means that AAA would mean that our shareholders and new investors could really believe in the future and the guarantee of the future return to shareholders. So I think it's a strong signal. Again, it's the way with the board we discussed. Can we express again a new objective of gearing? It seems to be difficult. Why minus 5? Why minus 10? Keeping the minus 15 would be odd to you today. So we think that there is room to go to another step and, again, giving some challenge to Jean-Pierre. But no, again, I think it would be a translation of the very strong strength of the company. So let's work. We'll see if we can convince. Energy, Yamal. First, Yamal, which is the only asset remaining, is a source of two assets. cash flows. There is the direct interest in Yamal as an asset, 20%, and this company sell its LNG to different buyers, one of them being TotalEnergies, on brand basis. It is true that we have received some dividends from Yamal in 2022, but some is becoming more complex. We have, by the way, decided to book the cash flow from Yamal only when we receive really the dividend. By the way, this is one of the explanations, because I've seen a question mark coming, why it seems there is a gap. on the IGAP cash flow, on energy cash flow, it's because we don't book the full reserve. We have decided to be prudent. We book in our accounts cash flow from Yemen when we see the dividend In Paris, or somewhere in our pockets. We are prudent, but you know, because again, there is a strengthening of sanctions. So that's the first part of the Yamal cash. But there is another part, which is this long-term LNG contract, which the teams of Stéphane and Ling, they acquire this LNG on a brand basis, and they sell it. at the TTF price when it comes to Europe or the GKM if it goes to Asia. So that's also quite a large source of cash. And by the way, it's even better, maybe a better, we don't edge anymore this contract. Because why we do this decision? Because we are not sure that sanctions on one side or the other side, by the way, could not derail this volume. So that means that, in fact, most of our energy volumes are aged one year in advance. But Yamal and Yamal will really, these volumes of these 4 million tons, will reflect in our accounts the reality of the TTF spot market or the GKN spot market compared to the Brent in the year 23. So, in fact, Stefan, most of his business is already done. He has edged a lot. Then he can optimize around the edging. But he has this amount of these contracts which could deliver. And this is not Russian money. This is a European contract. So this long-term contract and the cash we derive from this YAML is today in Europe. There is no constraint. And it's reported in our account like the other long-term contract that we managed in our portfolio. I hope it's clear where we are today.

Thank you very much.

The next question is from Christopher Coupland of Bank of America. Please go ahead.

Thank you very much, and good afternoon, gentlemen. Two quick ones, please, if I may, Patrick Jean-Pierre. If you are looking at your CapEx outlook, can you maybe give us a little more granularity in terms of your assumptions embedded in that 16 to 18 number for 2023, particularly looking for your assumptions regarding underlying inflation? Jean-Pierre, you said there wasn't really any to report in 2022. Just wondering what you're assuming for 2023. And if you can, maybe give us a hint, as you usually do, about how much of that you think will be inorganic. And then lastly, on your point, Patrick, regarding the iPower, the new disclosure, Maybe you could give us, if you had, a view on, as you rightly said, a lot of unemployed capital that we will see growing in the next few years. So maybe you could tell us where you see capital employed going for that integrated power business because you've got access to that pipeline you've worked hard to achieve. I think that would be probably a more important figure than your earnings progression into 2023 here.

Thank you. Okay. capex inflation embedded for inflation honestly on the short term it's quite low i think maybe it's a two to five percent which has been mentioned by uh but on the short term there is no real impact on capex the capex the inflation for us the edec for nicola and namita is more about the new projects because of course the contractors want to embed higher costs in the new projects and we don't want so this is fundamentally the debate for the execution of the projects which are, and most of the capex of the year, you know, are more the old projects which are already sanctioned than the new ones. The new ones generally are impacted quite, will impact the next years. And so there is no real inflation, I would say. And the rig could be one of them, but as Jean-Pierre explained, for 2023, we are covered by good rates. So for me, the debate about inflation with contractors is more for these new projects we want to sanction that I mentioned to you. That's a point on which we need to be all serious. Otherwise, we'll wait, because we'll not repeat the mistake we've done in 2010, 2014, which is to sanction whatever the cost is. I will not do that. So M&A, I think there is a net assumptions of inorganic, which is around $1 to $2 billion. It's a matter of buying and selling. And we have some different options in the portfolio to buy and sell. And so we'll keep you aware. But this is, I would say, and it's part why we keep the range. Because, of course, when we don't, the range is, for me, Sometimes, you know, you have divestments which are done, but you, for example, Dunga, we work during one year, but we will receive the proceeds only in 23, not in 22. So you might have some time of execution, which in this type of divestments. So that's the idea. So most of the capex we gave you are organic, in fact, to be clear. most of it. On high power, It's a new reporting, so you will have a full reporting by, you have to be a little patient, because Jean-Pierre and his teams are working. And so from first quarter 2023 in April, or end of March, no, in April, sorry, end of April, we'll deliver to you not only the quarterly results, but the previous years. We will restate the three previous years. So you will have some indication. It's a business where most of the CMO, we have sub-capital employed, of course, and productive, but the cycle is quicker than in oil and gas. Because normally to build an onshore solar plant or an onshore wind farm, it's more two years than four years, I would say. So normally the cycle is quicker. Having said that, we also have offshore wind. and offshore wind is more like an exploration cycle than an emp cycle than on a short cycle i mean a non-shore renewable cycle we have also in our as we make some acquisition we have also some I would say, value. I don't have the precise figures and I don't want to introduce something wrong, but I have the idea that the capital employed of this high power is around today $15 billion. I will confirm that to you. This is what I have seen in in some first figures. And I think you have maybe probably a third of it which might be unproductive, just round figures. But I think the exercise to oblige yourself to make this new reporting is very important. I know that there are question marks. about the profitability of this business, and we have to deliver to you. And when you report, you focus on it, and you will improve. That's a lesson that I learned from refining and chemicals. And I said to Stefan, you go to Bernard, you ask him, have we improved the refining and chemicals profitability from 5% to 20% today, or 15%. So I think focusing is important, and is the answer. And we intend, clearly, to be consistent with his strategy. And integrated power, all the words are important. It's not only renewables, again. It's really the capacity to deliver value from a volatile market and from price, which will go upwards because we need more and more electricity. So that's my answers.

Thank you very much. Look forward to it.

The next question is from Lydia Rainforth of Barclays. Please go ahead.

Thank you, and good morning. Two questions, if I could. Patrick, thank you for the very comprehensive update around what you're seeing on the commodity markets at the moment. Given everything you said in the kind of cash payout ratio, do you expect that you'll be in a position or Total will be in a position to pay a special dividend this year, later on in the year? And then secondly, if I could come back to Adani and the relatively small amount of capital employed there, But does it change anything in terms of how you think about your approach to renewables in certain countries or JVs within that and the great prospects? Thank you.

First, there will be a special dividend, which is a special dividend in kind with the spin-off of Canada. And it's not zero. When I see the figures, it might represent not far from a dollar per share. So don't underestimate that value. So it will come. Again, the special dividend, we are very clear. We told you priority to buy back. And then if we have, again, an environment like we had last year, we might consider that. But that's my answer to you. It's premature. By the way, it's premature because today what they observe since the beginning of the year is $80 per hour. So I don't see less than $20 per million BTUs. So there is no reason at this type of environment to We will not have a special dividend. We prefer the buybacks. This is why we maintain the $2 billion. We don't decrease it. If we come back to an environment like last year, we might consider that. But again, there will be a special dividend in kind for the Canada spin-off. Adani, no, it does not change. I think, again, first, on Adani, I see a lot of papers, and I thank some of you for having tried to calm down these markets. We have an exposure which is quite limited of $3 billion, $3.1 billion. Obviously, the hydrogen projects which was discussed will be put on hold as long as we don't have a clarity on all that stuff. I'm confident in the fact that Adani and Gautam Adani is taking care of his business in a smart way. But as Total Energies, of course, we have to form of prudence to understand. We are there. By the way, all the companies of Adani in which we invest, we looked yesterday to Adani Green, for example. It's a very safe company. They generate $1 billion per year of revenues. They have a debt of $5 billion, so it's a sustainable border. Maybe this could impair the growth. I'm not sure. But again, at the end, the equation is more a strategic one. Do we need to do it by our own or not? Honestly, doing it by our own, renewable business in India or even in Brazil, I think it's too complex. I think I prefer, again, I think finding the right partners. is the right way. We have been pleased by the way that Adani has delivered. Again, Adani Green Energy Limited or Adani Total Gas Limited, the companies which are managed by independent CEOs, smart CEOs. We are happy with them. And we are happy also with the partnership with Adani. And of course, then it's Adani to explain what is the way they finance all that. But again, for me, fundamentally, no. It does not change the approach we have. It's true that, again, we knew that electricity is not really, again, a renewable. Electricity business is more local, so you take more local risk. But maybe it's also local opportunities. So I don't want to be too – don't look to the glass half empty, half full is better. So, again, we'll work on this one.

Wonderful. Thank you.

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

Thank you very much for your insights today. I had two questions, if I may. The first one is on your low-carbon strategy, and I was wondering how much the IRA has changed your capital allocation. It feels like the renewable molecules businesses like bioenergy, carbon capture, hydrogen, are becoming increasingly attractive, while renewable electrons are perhaps lagging a little bit behind, especially in a higher interest rate environment. And I wonder if that is reflected in your green cap exallocation as well into the coming years. And then second question, I wanted to come back for a moment on the comment you made about your exposure to spot LNG. It's very clear your exposure to spot gas in Europe, TTF and MBP, 200 million for $1 per MCF. I was wondering if you could give us a sensitivity to spot LNG as well, also including what you've actually hedged over the next 12 months. Thank you.

OK, the IRA is good for everybody, not only for molecules, but also for renewables. So maybe you don't follow that carefully, but there is some advantage linked to the IRA that we benefit from more. In particular, there was a production tax credit, which was mainly in favor of wind, which became, through the IRA, technology neutral, and which solar will benefit. So solar projects are now eligible to this type of tax credit, and so it's also another advantage. In fact, the IRA is an extensive law in order to support all green infrastructures, including renewable projects, including, by the way, storage projects. Storage as well is supported, you know, and when we speak about, for us it's very important because we speak renewables, we want to be integrated, so capacity to build some battery storage capacities is important, energy storage capacities. So the area is also supportive of that. So it's reinforced, in fact, the IRA has given even more value to the Clearway acquisition we have done this year. So it's a happy new for me because we didn't integrate, obviously, this type of support to the full portfolio of Clearway, and we benefit from it. So it's an upside which will materialize because we have a very large portfolio. Having said that, coming back to the molecule business, of course, when you speak about hydrogen today, you know, I was asked... by the French Minister of Economy in Abu Dhabi, do you want to invest in hydrogen? I answered to him, yes, in the US. He was not so happy with my questions, my answer. But you know, that's the reality. I mean, you have $3 per kilogram. Having said that, the question is not to make projects if you have no demand. So the rush to infrastructure is good, but we need to find the demand. And I would like to be sure that the demand will follow beyond what is obvious. And I think because you have two types of demand for hydrogen, green hydrogen or blue hydrogen, whatever it is, it is the, I would say... the hard-to-abate industry, the refining industry, the local industry, where we need to make local projects because we have local customers, where there is a market for decarbonization. This one I understand, and we'll look to that. And we are investing and... We have less assets in the U.S., but we could. We are looking with Bernard to see if we could benefit from it for decarbonizing Port Arthur, for example. It's obvious. And then you have the export markets, the massive markets, which does not exist for the time being. So I would like to see where it is. before to speak about it. Having said that, we begin to see how we could leverage the IRA. For example, we are looking to make sense to make e-methane projects in the U.S. in order to export synthetic methane in the future for liquefaction plants. That could be a nice answer to have these long-term investments, and the U.S. might be the place to make some e-methane. So that type of things that we are... We are working at CCS. This is another point. It makes sense to look if there are some projects. I think the direct capture projects today, obviously, the place to try to test this technology is the U.S., thanks to this IRA. So it's part of the technology investments we need to do to coping with our ambition net zero. What I hope, by the way, is that Europe, instead of complaining, should do the same. That's all. We need to have, if we are serious about the global net zero ambition of the world, to make this type of support to invest green infrastructure all over the world. That's the answer to do. So I think, so I took it as a comfort to not only our I would say electricity strategy, but also, of course, to develop the new molecules. You've seen in our budget, it's coming upwards. I didn't mention, of course, the sustainable addition fuel, which is the obvious market that everybody's rushing to. At this point, there will be too many projects because there is not an infinite demand. The question, honestly, is not only demand is demand, not only in volume, but also in affordable demand, accepting to pay more. And regulations will be necessary for that. Exposure to spot LNG. you uh you uh we gave you some sensitivity on our uh on our but it's more the upstream asset i don't i'm not sure you have the lng sensitivity in the figure we gave we have it yes okay so the figures we gave for the sensitivity is a global sensitivity so on an oil portfolio but the impact

on the LNG portfolio as well, the portion that is linked to oil, and the same for NBP, so the gas pie plus the portion of the LNG sold on an index gas.

In another way, what we age, let's skip, you take the 48 million tonnes, you deduct Yamal 4 million tonnes, you deduct the 13 million tonnes spot, so it makes 30 million tonnes, so if I'm not wrong, I see, Stéphane, We have edged more or less with 30 million tons of energy, which was a long-term supply, either from the assets or from the long-term supply agreements, the contracts in the U.S. The rest is not edged, so this is why I made the comment on Yamal. Yamal is sensitive to TDF minus rent.

The next question is from Bertrand Audet of Kepler-Chevreux. Please go ahead.

Yes, thank you for taking my question. Two questions, if I may. The first is coming back on the cash distribution to shareholders. I understand the 35-40% through cycle commitment. That is very clear. But when thinking about 2023, given your balance sheet and default price there, where they are $80 plus strong refining margin, could we frame the board to go above 40% cash distribution to shareholders? And my second question is a follow-up on LNG. You indicated that you generally age over a one-year period. Last year, my belief was that You had probably hedged at lower prices than the forward curve. Now, given the recent fall in natural gas spot prices and LNG prices and the forward curve, how should we think of your hedging position over the next 12 months? Thank you.

Well, first one, the board. I'm chairman of the board, so I have to convince myself. So just to fully the board, I'm the chairman of the board. So I'm fully consistent with myself, I would say. And, of course, we – no, I think, honestly, don't be – again, don't – I mean, we are very consistent for the cycle. We did not reduce this dividend at a time where there are many reasons to do it in 2020, more reasons to do it than to maintain it. We do it because we want to demonstrate our consistency and that we are fundamentally resilient. So if you compare the increase of 7% to 8% that we propose today to people who have cut the dividend, you say it's less. Yes, it's less, but OK, that's a game that I will not play. I prefer to be consistent for the cycle. And again, I think it's an increase. So you should look to that. As it was asked to me by, I think it was Oswald, the first question, if I remember, a long time, we were more at under 5%. We go in years, and so we recognize it. But again, for me, it's very important that it has to be supported for cycles. And we don't want to come to buy sustainable. The balance sheet you write gave us more to support it. It's why we go up. But again, I think we have also the buybacks to continue to feed these superior, these higher cycles. in the future let's see what uh it's difficult to anticipate what will happen fully in 23 uh so we have already good news to you and to your shareholders uh you've seen that last year we did not hesitate to to give a special dividend we'll see what will be the price in 23. LNG was edged in 2022 with a low price. I hope not. Otherwise, I will be super unhappy with Stephane and his teams because the prices in 2022 were incredibly high. So, normally, 2023 will benefit from this edging. I don't understand. By the way, today we are lower. The present ETF level is lower than the average of last year. So I should have more returns from this edging in 2022. So I don't fully understand your question. And we'll continue. We have a policy which is not to edge everything, but we want to edge. Why don't we edge everything? Because we experienced in 2022 the Freeport interruption. on which we add to tag, because edging is fine unless you have a physical issue, you know? So we don't edge all the volumes, and in fact, in 22, we're quite lucky because we managed to, the production was interrupted, but we had some no edge on other volumes, so we managed to get it. But it's, so we edge a certain, I think it's 80 to 90%, and when we keep the rest open, But honestly, 22 with this price is still good. And as I described the anticipation we have on the energy market, it's a little slow today. I mean, I know. It's not low at all. It's $20 per barrel. $20 per million BTU is quite good, in fact. We would have told that two years or three years ago. I would tell you we'd have signed immediately. We don't even dream it. So I think it's a policy that we need to manage these positions. We have long-term contracts. We have exposures to sport markets, you know, and we want to manage this exposure, not to keep it fully on the balance sheet because then you have mark-to-market stories and all that, so we prefer to. So we are fine with the policy, and we will continue to implement it. But 2023 will benefit from the edging of 2022, and 2024 might also benefit from the edging of 2023.

The next question is from Amy Wong of Credit Suisse. Please go ahead.

Hi there. Good afternoon, and thanks for taking my question. I had a question about your emissions targets. Recall in September 2022, you guys increased low-carbon capex, and then you teased us with the potential to introduce a Scope 3 worldwide emission reduction target by 2025 and also a revision of the Scope 1-2 net emission target. Now, Patrick, in your prepared remarks, you did mention a few numbers. And could I push you just to talk a bit more about what those emission targets can look like in 2025? And more importantly, I'd love to hear how you think about, you know, returns on, you know, that specific CAPEX where it's going towards reducing Thank you.

What do targets look like? And what is the second question? I did not catch the second question, Beth.

I'd love to think about, you know, your emphasis on your CAPEC is always on value over volume and, you know, very high hurdle rates for your capital investment. So for something like low-carbon CAPECs that go specifically to reducing CO2, I'd love to hear about how you think about the returns there.

Okay, the emission targets. First, when we speak about 425, let me be clear. The previous target was 40 million tons, COP 1 and 2. I just mentioned that the plan of energy savings that we have put in place should deliver 2 million tons lower. So that means that the target will be reduced for 40 to 38 million tons. I mean, I... I'm anticipating on the board decision, but I think there is a logic there, by 25. So we'll improve the target by 25, by 2 million tons. But we are reviewing not only this one, we are reviewing like always every year what is the status on the various intensity in order to monitor that properly. So I don't want to anticipate whose decision will be taken. But this is on scope one and two, I'm quite clear on this criteria. Low carbon, but these emission targets that we have today, lowering our emissions today is not a matter of carbon capture by 25, it's a matter of A lot of projects which are just being more efficient. There's some technology to implement on methane, on everything. So we could describe to you at a point the type of projects. Maybe it will be a good idea in September. We'll have a strategic day to come back on this topic if most of you are interested in it. So carbon capture are more for 2030 plus targets where we will need to have implemented it. return criteria for carbon capture, you know, it's just a matter of price of CO2. That's why I think in the U.S., you have the IRA. In Europe, you have a $100 per ton price. So when you compare both, at the end it's more or less it gives another economy and from this perspective as europe seems to be very serious about co2 pricing i think on the long term it's it's something which is maybe more sustainable but a fiscal incentive which could which is sustainable for tennis could disappear afterwards the key on ccs will be of course the size of the market we need because there is some infrastructures to to amortize so my view is that you need to reach at least 10 10 million tons 15 million tons per year of storage if you want to have a profitable model that means proposing transport and storage services to a cement industry of less than 50 per ton Because they capture costs, they could go around $50 per ton. So if you speak about $100 per ton, you need to split it between both. It works, again, if the support for infrastructure is key, if you have enough tons to put into the projects. From this perspective, you know the Denmark project is well located, not far from Germany. It's shorter to make a pipeline from German industries to Denmark than from Germans to Norway. Just looking to a map. So that might be a better volume. The Dutch project is good because you have the Rotterdam and Antwerp large industrial platforms which could give some customers to these Dutch projects, Aramis, that we are working on. So that's the idea. return criteria again uh it's uh we have to look to uh we have to do it because it's by the way for me uh for the oil and gas industry you know it's a question of permit to operate all right We have to be serious about lowering OSCOP 1 and 2 emissions. You know that I'm not very a big fan of the scope-free debate, but OSCOP 1 and 2, I'm very serious because it is a duty for us to do it. We have technologies. We have capacity. So it's a cost. It might become an opportunity if we can commercialize the technology to third parties, and this is our one B2B opportunity. Entity is trying to develop that. We have a first project with Orsim in Belgium on this type of thing. But again, for me, we will develop first this project because we have to do it for our own emissions. It's a question of permit to operate and of the oil and gas industry. And this is embedded in the global strategy of the company. But as I show you, we can be... Very profitable, like we are, among the best. And at the same time, having CAPEX for low-carbon energies, carbon capture. We do it in a large way. It's possible. It's building the future of the company. The $5 billion that we have mentioned for 2023, I think, is a level which will be maintained for the following three years. We don't intend to grow it very much higher. I think it's a good level. If we want now to combine growth, and profitability if and we want to do it so it's not if we want to do it so i think it's a it's a good level and it's a it's obliges to be selective but uh selectiveness in a large way so we have room for improve to for develop deploying visa why say that because just because we are not in 2020 Two, we have managed our six gigawatts per year with this type of amounts. So for me, I have enough CapEx to make my six gigawatts per year, which is more or less the objective, which I assigned to the teams of Stéphane. So I should see, yes, and the only point is coming back to Michele's question, is what is the size of the ambition is the new molecules. And for me, the question on hydrogen and all that is more about where is the market, which will drive our expansion of CAPEX.

Thanks for that. Very thorough. Thank you.

The next question is from Jason Jebelman of Cohen. Please go ahead.

Yeah, hey, this is Jason Jebelman from Cowen. I have a couple questions. The first is you press released last week that you had farmed down a position in a renewable power asset at a high multiple, but it was a low overall cash contribution asset. One that I wouldn't have guessed reached the materiality of press releasing was a few hundred million dollars. And I'm wondering why you decided to press release this, given the thought was you had been farming down these assets all along, and if that potentially indicates that, given the market environment, you're possibly accelerating the farm bounds of the developed renewable power industry. business over the next year and what type of cash flow contribution that could bring. My second question is on the LNG portfolio. You're obviously undergoing the review in Mozambique, but there's also been some reporting that you could take a large stake, either offtake or equity in a U.S. LNG project. And I'm wondering if your pace of growth is in the U.S. LNG market is at all dependent on what happens in Mozambique. And if you still continue to view the U.S. LNG market as one in which you want to grow. Thanks.

Jason, you are a complex question, but easy to answer. First, no, there is no acceleration at all. We have been always very clear that that to reach the double-digit profitability we want to have in renewables, we'll have to integrate farmlands. It's part of the business model. This one, we have some gross capacity objectives that is 35 gigawatt growth, but at the end, we'll keep more or less half of it. This is very clear. We stated that three or five years ago when we began the strategy, and we implemented it, so there is no acceleration. it came on our desk there was some assets in france which were part of to have it to be found on it has been done in very good way and thanks to this father we are we have on these assets more than a double digit return much better we don't we don't give all the details because there are also a counterpart but that's clear so it's to be clear and we have embedded in the strategy the fact that maybe we develop at 100% of the project, but then we farm down. And by the way, I always explain to you several times, it's not only a matter for me of profitability, it's a matter of managing the risks. I prefer to have two times 50% of two projects than one times 100%. It's just a matter of things could happen. So that's, yes, I can tell you, by the way, it was 16 times EBITDA, if somebody give me an indication, 16 times EBITDA. So I think 16 times I can tell you I have no problem. I can continue to develop my renewable business with this type of returns of 50% of my portfolio. And this gives the cash also to recirculate the cash and there is a project. So I think it's a smart way and we'll stick on this strategy. No, there is no link between Mozambique and the U.S. We like both. We like energy, okay? We want to continue to grow in a growing business which is energy. Energy is good. Energy is international gas. Energy is a way to decarbonize the coal-fired power plants in Asia and elsewhere. So there is no... No fear about it. Maybe there may be some cycles. Today it's at the top. It could go down because we are not able in the industry, of course, to plan all the plans very smartly. We invest. So we think that the U.S. on the long term is competitive because you have the U.S. gas industry. price is about the lowest in the in the world so three to five dollars even five dollars per million btu it will be very very profitable so that's the reason why so yes we have cameron lng yes we have eca in barra california Phase one, which is being built, and phase two, maybe in the near future, we are looking to offer opportunities in the US. And it's independently of Mozambique. Mozambique, just to make, as you asked the question, I spent a day last week, Friday, a day in Cabo Delgado. Because my bet with my company, I said there is no way for me to envisage Any restart of Mozambique, as you don't allow me to visit and I can travel around with a car, not an army, but alone. So we were only three of us, two cars. I want to go there. I want to check. I want, in fact, to go to see if life is back to normal. I can tell you what I've seen from a security point of view is good. Even life is back to normal. Villages, people are back. But it's one step. There is more steps to be done. The two next steps, because there have been some, I would say, controversies about human rights around the project. Not because of us. We inherited that from another co-acquisition. So I want a clear view on these human rights issues, which is a salient issue for me. It's important. I have given a mission to a specialist of human rights, a very well-known doctor in France, Mr. Ruffin, who has accepted. He's making his job, so I'm waiting to see his report to understand exactly what is, I would say, a What are these issues? If there are things to be done, we will execute the recommendation. We will be transparent on it. We will share, obviously, with our partners, because it's a Mozambican energy decision to restart. It's not a total energy decision. All the partners should be on board. And there is a third step, which I can use this question to deliver, is that, of course, we have to re-engage with the contractors. And one key condition to restart will be to maintain the costs that we had. If I see the costs going up and up, we'll wait. We have wait, we can continue to wait. And the contractors will wait as well. So I'm not in a hurry in this condition to restart. So there are security conditions I think are okay. Human rights, I need a report. Costs, I will need another report from my teams. We will ask them to re-engage, but smoothly, no hurry. Again, I can wait on Mozambique LNG. If costs increase, we will repeat and we'll take the time. So that's where we are on these projects. So my message is positive, but it will take time. And it's not in competition in the U.S. We are ready to finance both. We have the capacity to finance both within our $16, $18 billion. These are two good projects. All that, by the way, on the U.S. projects, it could be the same. What I see when we discuss with some projects, is that costs are increasing also. So it's good to rush for volumes, but if you destroy the value because cost is too high, we know what is the impact at the end, and we experience it. So that's the same for me debate. It's more a question today on we are very convinced by the energy market, but we need to have cost efficiency in the project. Volume there again.

Thank you.

The next question is from Lucas Herman of Exxon. Please go ahead.

Yeah, thanks very much. And good afternoon, Patrick. Jean-Pierre. Patrick, simple one for you, I think. Contracting LNG long term, not into portfolio, but out of portfolio. I mean, you've waited some time, I'd say, for the cycle to turn in terms of oil link contracts. Pricing has obviously improved quite significantly. Should we be expecting you to, you know, offload an increasing amount of your unhedged or not unhedged, it's the wrong word, uncontracted volumes in to customers and give yourself greater visibility in ways on duration and long-term people and, you know, oil linkage into the future? That was it. Thank you.

You're right, Lucas. I can employ you if you want to manage my business. LNG business, it's the right time to contract long-term. Of course, the buyers are... There is a little more willingness, by the way, of buyers, because suddenly they see some value. Of course, when you contract long-term, it's linked to brand sometimes, so it's an arbitration between Anriab and Gas, both Spot Index and brand. We have one project on which we want to balance the risks. It's P&G, Papua LNG. We said... Of course, my team today, they would like to keep a volume, so we have the right to keep a volume, but most of the volume will be contracted in the long term because, again, it makes little sense to contract when you You have some 11 or 10, 11% brand proposal from customers. When you are going up to about 13%, you can consider you are again there. So that's the right time. Having said that, I think the philosophy for us is more to keep this balance of 70% long-term, 30% spot. We have the balance sheet. We can use our balance sheet to keep part of the risk. Okay, when you keep an exposure to... Spot index, you take the risk like in 2020, but you keep the upside like these years. So I think this is, for me, the core of the business model of a company like TotalEnergies. So strong balance sheet must allow us to take this type of risks, spot risks. But the 70-30, okay, it's not a Bible, but it's more or less we are comfortable with that in terms of management of risk. in the company as we go. So today, there are some projects on which we will use long-term contracts. And again, it's like, by the way, we can also develop some project being spot, knowing that we can use this window of opportunities to then sign long-term contracts. This is what we say even to our renewable people. You know, you want PPAs, but sometimes we could accept to develop projects not with a PPA, merchant projects, with the idea that tomorrow, when we have the right opportunities, we will cover part of the exposure with a long-term PPA. So that's the beauty of the balance sheet.

I'll tell Stefan my CVs in the post. I'd love to work with him.

The next question is from Paul Chang of Scotiabank. Please go ahead.

Thank you. Good morning. Patrick, both BP and Shell have recently made a pretty large acquisition in the biogas area to jumpstart their operations and also the growth in that area. Just curious that you did mention that you guys have a largest unit of the biogas in France that you just set up. You also have a venture or joint venture with Twin Energy to developing some biogas project in the U.S. Do you think biogas will be a more important part of your low-carbon energy business going forward? Do you think you need to have a larger platform, maybe through an acquisition, to accelerate the growth there? That's the first question. The second question, first, thank you for picking out the integrated power business in the first quarter. Can you tell us what is the return on that business currently that you achieved? Your P is that I think BP and Shell seem to stop questioning the overall return on that business and just want to see what's your view or what you guys have been able to achieve so far. Thank you.

Biogas, honestly, M&A is a way to grow if you can deliver the value you pay. And I have difficulty to be convinced to put several billion dollars in biogas. Why? Because we are doing things. We bought a platform in France. We just bought a new platform which will be announced soon in Poland. Why? Because it's quite a local business. It's like renewables, you know. The way you manage this, the technology is not... You know, okay, you can do larger ones, but there is no rocket science. So then it's becoming a question of local development. And I'm sorry to tell you, it's not because you are good in a Nordic country to develop biogas, but you can be good in France, where the... agriculture organization the agricultural ecosystem is quite different and so on this at this stage we have not been convinced and we have studied some of these files that really these platforms will give us the edge to grow beyond the core country just so we prefer maybe we are wrong to go step by step not being a lot of noise with billion dollars but we prefer by the way to to make smart, direct negotiations about bidding with banks, which of course pushed prices up. In order to do that, there is a country where, obviously, we have more size. It's the U.S. The U.S. are more attractive from this perspective because, by the way, the system, all the SEFS system and all that is more liquid. So you can not only produce, but you can imagine to get more value of trading the volumes and mixing the biogas with others. So the systems, the carbon systems in markets in the U.S. give more liquidity to us. In Europe, It's fragmented. All the regulations are not the same. It's one of my advocacy when I go to Brussels to tell them that if they want this business to be developed, they should have a real unique European market and not the rules are different in all the countries. So it does not help to grow it. So when you are in the gas, you look to buy your gas. In particular, because there are customers looking for that. You have customers. We have made the bet to go to LNG for transportation, which they would love to have bio-LNG. So volume is not there. So there is a good momentum for selling these molecules. Then the question is the scalability of all that, to be clear. And that's a question mark. So we have some options in our portfolio. We grow it more locally locally. If we do something larger, it will be probably in the US rather than in Europe. But that's part of it. I listen to my peers, and again, I respect them. But I think being consistent in a strategy is just fundamental. And we have decided a strategy which is clear. Again, we are... With the business model I described, we will be able to deliver a double-budget business. And that's the commitment we took. uh there is no reason for me today to derive from this objective and from the capacity to do it of course we have to build that we have to be we make a very good project some are not as good but i don't see what we should and i think if we make zigzag on the strategy we'll do nothing at the end of the day so i prefer to to keep on my strategy which is and again we are very consistent by the way i think the decision i have proposed was about to accelerate this segment, this reporting of the IP power, integrated power business. Because having discussed with our shareholders after the presentation in New York in October and November, it is clear that there is a legitimate request from them. You invest this amount of money in this business. We want you to demonstrate the clarity, giving clarity of these businesses. So I think this is a question. But... I've been CEO for nine years now. I think the lesson is you need to stick on the strategy and not to be otherwise in this new low-carbon business, we'll never reach the size. And I prefer to reach a size which is consistent. We will become a key player. And again, being able to grow a renewable business by six, seven gigawatts per year, we are among the largest one compared to the large. And so I think we can. And we're mixing that with our capacity to use the balance sheet to integrate that. in a larger platform, trading, et cetera, will allow us to deliver this profitability. So it's a commitment. It's also part, by the way, of our net zero ambition that we have and on which we are serious about it. But at the end, for me, it's positioning the company on the long term on a profitable business because we are convinced that the world will need more electricity, and more electricity means higher prices.

The next question is from Alessandro Pozzi of Mediobanca. Please go ahead.

Hi there. Thank you for taking my questions. I have two. I think going back to the emissions, I think they came below target in 2022, but they were still up year on year. Part of it, I think most of it, was driven by CCGT, and I was wondering if you can give us perhaps a target for a for 2023, how you see Scope 1 and Scope 2 emission evolving. And also, I'm also seeing that Scope 3 have come down, and I was wondering what are the main drivers for the reduction in Scope 3. That's the first question. The second question is on refining. Of course, the EU ban came into effect on the 5th of February. I was wondering how you see the market for diesel in Europe with a ban. Will we be able to source more diesel from somewhere else, or is it going to be as tight, especially in the second part of last year? And also, on refining, of course, we are seeing protests in France. Is that going to have a

uh an impact on q1 margins that's all for me thank you okay uh emission targets for 23 as i announced that we will lower the 25 target to 38 i think the target for 23 should be something like under 40 million tons so we'll have to repeat at least and lower the same performance but in 22. and no increase so we are accelerating the the target there was a the board has made a linear uh linear decrease i think so probably 39.8 exactly if you want the figure jean-pierre is putting that on the paper uh on scope on refining diesel market honestly it's uh the source of the product is diesel you know there is a strange machine which is organized on the world which is a little strange you know you India and China are buying Russian crude, and they transform it in an Indian and Chinese diesel, which will come to Europe. I'm not sure it's good for the climate. It's not good for the cost. It's not good for the customers, but that will happen. So I'm not worried about finding diesel. It will be just more expensive, but it's a cost. So question for is it real? Does it have a... Does the market has already anticipated or not the disruption of the Russian diesel in the spread of the diesel, which were quite high? That's a question mark. I mean, it's difficult to answer to this. Normally, they anticipate, but there is a cost issue of transportation costs. The margin for the time being, I don't know, difficult for me to predict on Q1 2023. What I have observed since the beginning of the year is that the margin in January were higher than in the last quarter. They came back probably because the market was anticipating, again, this stress. So we see increasing charging. I think we are today at an average since the beginning of the year about $100 per ton probably. So, again, this market is still strong. It's weakening. So we'll see. But, again, it's difficult to understand what the operators in the market are taking into account or not. But this is what I think.

Okay. All right.

Thank you.

The next question is from Henry Patricot of UBS. Please go ahead.

Yes, everyone. Thank you for the presentation. Just one question left on your comments around the global LNG market and European gas in 2023. When you show European LNG imports potentially up to 25 million tons for this year, can you expand on the assumptions around European gas demand? It seems like this will imply quite a rebound this year. Where do you see that coming from?

Thank you.

I'm not sure to have understood the question. Is the European gas demand?

Yeah, in 2022, I think what we have observed is more or less minus 15%. I mean, this is a figure that I have in mind. I mean, I'm controlling. Stéphane confirms. The question for me is, will it be accelerated in 23, because we see a trend. It was a shift mainly from gas, by the way, to oil. A certain number of manufacturing industries shifted from gas to fuel, which we can understand. The gas was $200 per barrel, and the fuel was probably at $120 per barrel. So there was an arbitration down. Part of it has been cool, but less than what we were thinking. What will happen in 2023? I think, again, the price still today is $120 per btc. It's still high, so it could damage it. We gave you, I think in the slide, we are quite clear about our expectations. We think that EU LNG imports will be higher in 2023 than in 2022 by 15-25 billion tons. Maybe part of the demand structure will come back. I'm not fully convinced. It's really linked to the price of it. And again, I think people today, we are entering into a new world in Europe where energy prices are high, energy costs are high. For energy consumers, I think the idea that they should be serious about the way they consume energy will be deeper in their mind and they will invest like we do. By the way, I think this is the only advice we can give to them. If you want to lower your energy invoice, you have to consume less. And so to be efficient like we are doing in total energies with our energy saving plan for refineries, et cetera. Okay.

Okay, thank you.

This was the last question. Back to you for the conclusion.

Thank you. Thank you to all of you. I've seen that you have been in good attendance to this presentation. So next meeting will be in March, either the 21st or 23rd. We'll confirm you the date very soon to make this presentation on strategic sustainability and climate based around our sustainability and climate report like we've done last year. It will be live. It will be live in London. and no more with teams because we like also to have the opportunity to have more discussions, informal discussions with all of you. So thank you for attending this presentation and supporting again the rating of the Total Energy Shares. Thank you.