TotalEnergies SE Ordinary Shares

Ladies and gentlemen, welcome to the Total Energy's third quarter 2023 results conference call. I will now hand over to Patrick Pouyennet, Chief Executive Officer, and Jean-Pierre Sprart, CFO, who will lead you through this call. Please go ahead, gentlemen.

Hello, everyone. Good afternoon, or good morning if you are in the U.S. I will present with Jean-Pierre our third quarter results, which once again demonstrate the relevance of our strategy. Indeed, our transition strategy is anchored on both pillars, as we explained to you last September, oil and gas on one side, integrated power on the other side, and it allows us to fully leverage upside in supportive energy environments like the one we are experiencing today. As explained in our total strategy and outlook presentation at the end of September, we have stayed the course, and this quarter illustrates all these strategies in motion in all our business segments. Oil and gas, first. As you know, we have developed organically a deep portfolio of projects that are low-cost and low-emissions, which will offer a growth of production of 2% to 3% per year for the next five years. Thanks to this strategy, this quarter, we delivered a 5% increase of production compared to Q3 2022. Several new projects have been put into production, like Meruan in Brazil, Abshalon in Azerbaijan, Block10 in Oman, or Ratawi in Iraq. And they are more than offsetting our natural decline of 3% per year. The downstream is also contributing to this oil and gas business, in particular thanks to our capacity to combine an excellent utilization rate of our refineries with very robust refining margins. On the energy side, the recent price volatility in European gas markets, spiking as much as 28% in a single day during the quarter, is the most obvious example of real-time markets in tension. We capture value along the entire value chain and maximize the margins on both our dominant US and European positions. We are the largest US energy exporters, and we have reinforced This position this quarter with the sanction of Rio Grande LNG in Texas. And the largest, we are also the largest European gas capacity holders. And there again, we are enforcing this position this quarter with the commissioning of our second FSIU in France after the one in Germany earlier this year. The same integrated strategy extends, as you understood, to our integrated power business since the electricity market in Europe follows the gas market. as natural gas plus CO2 sets a marginal power price for many years to come. This market is again once characterized by growing demand and constrained supply, which creates opportunities in the market. As Jean-Pierre will explain to you, integrated power achieved a new milestone this quarter, with both adjusted net income and cash flow exceeding $500 million. We are well on our way to achieving our $2 billion cash flow target for the year in this business. We have announced this morning an interesting acquisition of the German market, which illustrates our integrated power strategy. Quadra is the second largest aggregator of renewable energy in Germany, with 9 gigawatts of virtual onshore wind farm, and offers a very interesting platform for getting value out of a power market dominated by renewables without capital implied in the asset, and so contributes to our profitability in this attractive market. I will write up my introduction by just saying again that the relevance of a balanced transition strategy between oil and gas on one side, integrated power on the other side has never been clearer. More energy, less emission, more cash flows, and this quarter illustrates this relevance with adjusted net income increased to $6.5 billion and CFO increased to $9.3 billion. Total generated $4.2 billion of free cash flow after net investments. Based on the strength of these results and the trust in Companies Outlook, our board approved a third interim dividend in up 7.25% year-on-year at €0.74 per share. Having said that, I turn it to Jean-Pierre who will give you more details through these solid third quarter financial results.

Thank you, Patrick. So now we're moving on to the detailed financial results, starting with our first pillar, oil and gas, which is the cash engine of today. Third quarter hydrocarbon production was nearly 2.5 million barrels of oil equivalent per day, which is notably up 5% year on year, as already mentioned by Patrick, thanks to the startup of several oil and gas projects. On oil, production benefited from new production from the first FPSO on Meru in Brazil, IKK in Nigeria, and our entry in the Hatawi oil field in mid-August in Iraq. Speaking of projects, Meru 2 should be online by the end of the year. Production also benefited for our entry in January into the Saab and Ululu concession in Abu Dhabi. On the gas side, production benefited from the startup of Blacktail in Oman and in Azerbaijan of the Absheron field. Although production was flat quarter-to-quarter, exploration and production posted strong quarterly results, with adjusted net income of $3.1 billion and FFO of $5.2 billion. The 34% increase in adjusted net operating income quarter-to-quarter was primarily driven by higher oil prices and a lower effective tax rate, which is a result of two effects. First, It results from the lower taxation rates on new barrels, Brazil, Azerbaijan, Iraq, compared to declining historic levels barrels, and it results also as a lower weight of North Sea barrels in the segment results for this quarter. Operating costs decreased to $5.5 per barrel this quarter. For the integrated LNG segments, we continue to demonstrate our leadership as a top global LNG player. Integrated LNG production is up 18% year-on-year and stable quarter-to-quarter. LNG sales were down by 5% quarter-to-quarter due to decrease in spot trading volumes in a less volatile environment, and LNG price sales was down 3% quarter-to-quarter linked to a softened environment. However, After our results have landed last quarter from the historic high exceptional results experienced in 2022, Integrated LNG maintained this quarter robust results with adjusted net operating income flats quarter to quarter at $1.3 billion and CFFO at $1.6 billion, down 8% compared to previous quarter, in line with sales down by 5% and prices by 3%. Despite entering the winter period with high natural gas inventories in Europe, in a tense market, gas prices remain at good levels and very reactive to production disruption, as we have seen over the last several months. Given the evolution of oil and gas prices in recent months and the lag effect on price formulas, we anticipate that our average LNG selling price should be above $10 per million BTU in the fourth quarter of 2023. For the combined downstream, adjusted net upper income and safe FO increased sequentially to $1.8 billion and $2.2 billion, respectively. Despite lower petrochemical results due to the European environment, our results reflect higher refining margins in Europe and a higher utilization rate during the third quarter, which was supported by greater availability of our French refineries to be noticed for once. The utilization rate on processed crude increased quarter to quarter to 84%, despite having an unplanned shutdown at the Poartour refinery in the U.S. For the fourth quarter, the utilization rate should be above 80% and includes the restart of Poartour in mid-November. Moving now to the second pillar. We continue to develop a profitable and differentiated integrated power model. building a world-class, cost-competitive portfolio that combines renewable assets, solar, offshore, wind, onshore wind, and flexible assets, such as CCGTs and storage, to deliver clean, firm power. As mentioned by Patrick, this quarter will achieve a milestone in the integrated power business segment, with adjusted net income and cash flow both exceeding $500 million, and we are well prepared on our way to achieving our targets of generating $2 billion cash flow in 2023, having already generated close to $1.5 billion through the first three quarters. All the value chains contributed this quarter to these $508 million results, renewables, flexible assets, and trading, supply to customers as well. During the third quarter, we also acquired 100% of TotalRN, which contributed to the growth of our electricity productions, and results. Early October, we signed a corporate PPA with Saint-Gobain in the US to supply clean power from our Danish field solar farm in Texas. The agreement is a good illustration of our strategy in integrated power, as it includes an upside-sharing mechanism under which both companies share potential upside arising from spot market prices over the contract term. We recently achieved another milestone Earlier this month, our Seagreen offshore wind farm in Scotland became fully operational and is running at the design capacity of more than 1 gigawatt. This project was delivered within budget, only 5% cost of the run, and is Total Energy's biggest offshore wind farm globally. I'll wrap up with CapEx and shareholder returns. Year-to-date net investments as of the end of the third quarter, totaled $16.1 billion. As a reminder, we expect to receive cash proceeds from the sales of our Canadian assets and from the deal with Alimentation Couchetard in the fourth quarter. Therefore, we reiterate full year guidance of $16 to $17 billion of capex this year. Our balance sheet is strong. Our gearing slightly increased from 11.1% at the end of the second quarter to 12.3% at the end of the third quarter. That is mainly due to the consolidation in our accounts of total errand debts. Proceeds from disposals should bring gearing back below 8% by end of the year. Over the last 12 months, ROHHA was 20.1% and return on equity was more than 22%. In September, we raised our annual payout guidance from 35-40% of cash flow to more than 40%. We're on track for 2023, having paid out a cumulative 43% through the third quarter. Our payout is a combination of ordinary dividends and buybacks, as we believe our stock, despite having reached its historical high this quarter, is still undervalued by the markets. We bought back $6.1 billion of stock through the third quarter, and so we are well underway in executing our $9 billion buy-buy program for full year 2023, as the Board decided to allocate $1.5 billion of Canadian sale proceeds to this buy-buy program in 2023. This concludes my comments, and now we can move to the Q&A.

Ladies and gentlemen, welcome to Total Energy's third quarter 2023 results conference call. We will now begin the question and answer session. As a reminder, if you wish to ask a question, please press star and one on your touchtone telephone and wait for your name to be announced. Please kindly mute any audio sources while asking a question. If you wish to cancel a request, please press star and two. Once again, please press star and one for questions. One moment for the first question. The first question comes from Oswald Clint of Bernstein. Please go ahead, sir.

Thank you very much, both of you. Two questions. The first one on the US offshore wind, please. Attentive energy. It was a good press release this week. Lots of information that's not normally presented for these types of deals. And it helps us kind of get to the returns, I think. With the 40% tax credit, we were getting to something like 13.5% on an equity basis. And I just wondered if that was anywhere close to your own expectations for a project like that. And perhaps at this point, you could say, how much of your $20 billion of capital employed in integrated power is currently in production. That's the first one. And secondly, I wanted to ask about geopolitical risk. You always have your finger on the pulse. And obviously, I wanted to get a sense of how you're thinking about the portfolio risk at the moment, especially Middle Eastern exposure, and whether any strategic changes or indeed M&A moves may be needed or may be considered if things were to worsen. Thank you.

Thank you, Oswald. Thank you for the comments. Yes, as you know, the offshore wind industry sometimes is questioned. So, in fact, these offshore wind, by the way, in our portfolio, we had two good news, in fact, for me, these last weeks. And so we wanted to share. First, Seagreen in Scotland, we managed to make that project within 5% only of our own cost, $4 billion. So it's quite... It demonstrates that... And we have a good CFD on Seagreens who will make money now from this project. So it's a monster that you can execute a no-flow wind project when you are a good team, a good project team within the budget. And I would say not much delay, in fact, in that case, which, of course, I'll link. So first comment. Second comment, in New York, you know, yes, that's true that we are, and I think the NICE said, even if we're not allowed to disclose what is the level of our price, you know, they mentioned an average price of around... $145 per megawatt hour nominal. And so, you know, you change the range compared to previous ones. And I think it is a lesson I explained to you last time that, actually, you need to be pragmatic about what would be the cost, and then you enter into a discussion. In the U.S., in particular, this type of price plus the 40% IRA are giving us good support. And, honestly, you are quite good in your math. I would say I would have answered to you 12 to 15, so you are quite good in your math. Congratulations. So we can indeed develop a profitable showing project based on equity. And one of the key, by the way, people might be surprised by the level of price announced by the state of New York, which is much higher than before. I can tell you one of the key has been to have a model partnership. As we announced, we have introduced in the partnership, Coyo, which is our worldwide partner, but also LS Power, which is a U.S. company, very well established in New York. And again, for me, there is a strong lesson. When you have a local partner, well implemented, it helps a lot in these discussions with local authorities. We would have been alone, total energies in front of New York State. I'm not sure we would have achieved the same result. So that comforts my strong belief, renewable required to identify local partner. And by the way, LS Power is a very interesting partner for us in the future, including to develop maybe more business in the PGM area. So that's this one, so for offshore wind. On the geopolitical risk, our exposure, you know, when you look to a portfolio, we have many countries, but there are two countries fundamentally which are contributing to the cash flow. By the way, yes, to come back on the second question, capital employed, Out of $20 billion under production or in offshore wind, I think it's less than two today, probably less than two billion, probably 10%. 10% of the capital employed are in offshore wind today out of the $20 billion of the integrated power business, just to give you an idea. And more or less, you know, in our perspective to 2030, 10% is more or less what we expect from offshore wind, more or less. So geopolitical risk, two countries for us which are key are Abu Dhabi and Qatar. In fact, in reality, where the cash flow is coming from today, you have also Libya, which is out of the area. And to be honest, in Abu Dhabi, the geopolitical risk is limited, but it's well controlled, and Qatar also. So I'm not so... When I think to what situation, which is a dramatic situation, I don't see too many... I would say consequence for that. Of course, we need to manage the situation to be fair in Iraq, of course, in Lebanon, but it was only exploration. And so in Egypt, I would say our exposure is very limited in Egypt. So I'm not considering that it's an issue for total energy, maybe for others. So that's, I would say, where I'm at. M&A move, if things are worsening, the price of oil will go up, and then we'll see what we'll do. But there's no M&A move linked to that situation for me in that period.

Super. Very clear. Thank you.

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

Hi, good afternoon, gentlemen. Thank you for having me ask this question. The only question I would like to ask is just around your views around consolidation, Jean-Pierre, in terms of what we're seeing in the U.S. How would you read two parts? One, their sort of opportunistic chasing of growth in terms of volumes through their balance sheet as opposed to building organically, and then two, Where does that position total energies in the upstream, medium term, particularly if, based on what they're doing, it suggests that they are looking for oil as well as backing the back end of the curve, so to speak? So do you feel like you have a little bit of FOMO, or are you very comfortable with your upstream growth? And I guess the question I'm asking is, why don't you feel the need to do consolidation, particularly given you're building these two pillars and building it through scale? Thank you.

To be honest, as you know, we are not a position in the U.S. So I think I understand that it might be consolidation in the U.S. with quite a spread in the industry, in the shale industry. So I have no comment, but it's not our case. Historically, you make consolidations when you have low price of the barrel to gain synergies. That's the history of our industry. You are driven by a low price of barrel. You try to synergize. And scale, obviously, generates synergies, and so you are trying to... That's the story of our industry. We are not at all in that situation today. Price is brilliant. We are even at, for most of us, at the top of our historical value. So I would say that's not what I would look for, honestly. And for total energies, we would not have neither synergies in terms of operations nor in terms of cost. So I think that's not, for us, the type of things we are looking. By the way, we have quite a strong and deep We have a deep portfolio of projects in oil and gas. I think it was what we presented to you end of September. So I don't feel the necessity to add more on this one. Again, we mentioned that we might have to look to more shale gas in the U.S. for feeding integration to the LNG, which we mentioned in September. That's all what I mentioned. So I observe this move. It means that my colleagues are thinking that the price of oil will remain high for a moment, so I'm happy. That's what I can comment to you. But for us, I think we have a clear strategy. We execute the strategy, and let's be consistent.

Thank you.

The next question is from Lydia Rainforth of Barclays.

Thank you, and good afternoon. Two questions, if I could. One, just building up on the virtual power plant acquisition from this morning, can you just walk us through why that idea works in terms of virtual power plants and just any indication on price on that? And then secondly, just in the – we're clearly seeing a lot of volatility on the gas market. Could you just walk us through what you think might happen over the winter period for us? Thank you. Yes, please.

Okay. Now, a virtual power plant, what is it? It's just integrated. You know, you can build assets. You can also aggregate some assets. And I think it's the idea that this Quadra company has established very strong. They are number two in the German market. They have been able to connect with 4,000 wind renewable developers in Germany, quite a large base, aggregating 9 gigawatts, which is a big volume, of course. With that, you can... or you can even if you are pricing it and you make two euros per megawatt hour of margin out of it, it gives you access to something. You don't have any capital employed, almost nothing. It's an acquisition, I would say, of people with a know-how and a knowledge. There is no assets. So I can mention to you that the price that we acquire is around 200 to 250 million euros. So it's not very expensive, but you have a lot of skills. You have access. It's a complement to our model. We have some assets, and we try to complement it with, again, low-capital employed base in order to develop the business. And it gave us, again, we explained to you, in the integration, it's important to have sources of supply, and when you have customers, you make the intermediation. It gives you a more... flexibility for a trading platform in Germany. Germany, again, is for us an interesting market. I repeat it. This is for us one of the key targets because it's really the mix will be renewable and gas plus ETS, so that means quite a good price, a lot of potentials. So we are building step-by-step our position in Germany, and this one is interesting because we enter in a big way. Again, it's the number two of this market, and we have a large base, a 9 gigawatts, some PPA, some more short-term. So I think it's an interesting way to progress in the integrated power strategy on this important market. On the second one, volatility gas market for the winter, I don't know if it will be cold. Today it's a little cold in Paris, to be honest, since the beginning of the week, even if I hope it will not be too cold for the final of the Rugby World Cup tomorrow, or the day after tomorrow. No, but more seriously, You know, it's very volatile. You know, it's clear. The market is in tension. I'll be clear. There is no margin in this market. So each time you have a hiccup, you know, the strike in Australia, then you had the stoppage of the Tamar field in Israel, which was going to Egypt and back to energy to Europe. Then you had, of course, this Baltic pipeline. So each time you have a hiccup, poof, the market is taking almost 30%, 40% in a day. So that proves that it's super tensioned. So we always said that for this winter, by the way, the full world are more around $16 per million BTU. We still remain high. Yes, the storage are full, but we don't have enough storage in Europe to go through the winter if the winter is cold. It's not only me. It's repeated by the IEA recently. So any event in these conditions is putting the price up. knowing that you noticed as well that the Asian buyers are back in the LNG business. They are back. Today, the GKM is TTF plus $2 to $3, which means that, in fact, they are ready to buy. And today, most of the cargoes are going to Asia because the sport market is in favor of Asia. So you might have in this type of market more call for LNG coming from Asia, so it puts an additional tension on this LNG market. So let's see. Okay, the weather will be important again. And again, if there is any, it's clear that if you have like one year ago, one or two years ago, an event like in Freeport on one plant, this will be obviously immediately reflected in the gas market. So that's why, again, generally we are wrong on the future, but the tension, I'm sure there is a gas market in their tension today. Thank you.

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

Thank you very much. I wanted to ask two questions, if possible. The first one is back to M&A, but thinking of it more counter-cyclically. Energy prices are quite high. A lot of companies are consolidating. I was wondering if this could actually be a good time to dispose of some of the EMP assets that may be more marginal to your portfolio and maybe, again, going countercyclical in some of the energy transition assets that have substantially derated over the last year. And then remaining on the theme of clean tech and renewables, congratulations on the very consistent delivery of earnings of cash flow. I was wondering if you could perhaps unpick a little bit for us the half a billion dollar you make in integrated power per quarter between renewable CCGTs and trading, definitely highlighting the integrated nature of that business, but also perhaps helping us to understand a bit more the scale of those different moving parts. Thank you.

Yeah. On the second question, I think Jean-Pierre mentioned that it was coming from three segments, renewables, flexible assets, CCGs, and trading, and also a marketing business, by the way. So the supply business to customers is also prototyping. So consider that it's coming from all of them. So everything is contributed to this integrated power and in a positive way. So that's what I can just explain to you. On the first question. It's clear, as you know, that I'm a strong believer that in M&A it's better to be counter-cyclical than to be pro-cyclical. That's very clear. That's for me, in this business, the commodity business, where you have cycles, I mean, you take a risk when you make an acquisition at the top. So, yes, you are right on E&P, but by the way, we've just done it. Mind you, Michele, but we've just diversified our Canadian Sands assets at the top of the market, and We will receive $4.4 billion plus an extra amount next year of $400 billion. So I'm happy. It's a good value for these assets. And so we've done it. We've just done it. We have cleaned a lot of the portfolio since 2015. We rotated a lot. We have cleaned a lot. But that does not mean that I don't think we have a lot of wants. We might have, as I said, some quite – you know that some – Exposure, which are high on some countries, like, for example, Nigeria, where we want to continue to invest. So we might be willing to use that environment to reshape the Nigeria portfolio. I'm not a very... The whole onshore in Nigeria, for me, is a mini issue. So that's the type of assets. And it's a good environment to monetize them if we find some buyers, of course. That's part of things we could do. But we have cleaned, I would say, the portfolio in terms of most of the portfolio today are in the definition of low cost, low emissions. The work has been done. So it's more optimizing things in some countries where we could do, and I would prefer, for example, to be at a higher stake when we are operator and maybe lower stake when we are non-operator. So if we are non-operator position, to diversify, to reinforce, I would say, our When we are operator in control of our future, I like to be more in control of our destiny rather than just being a non-operated company, even if it's operated by a large peer. And then the other question, of course, that you mentioned is about the transition assets. You know, today our priority, and I think what we've done this morning with Quadrise is more, as I explained to you in September, to complement in some key markets through some targeted acquisitions. I mentioned either Texas, flexible assets in Texas, gas-fired power plants will come one of these days. Or what we've done in Germany with this quadro, we might look to rather than making a big acquisition. Because even if it's derated, it's still high. So I think it could go even lower and lower. And honestly, when you think, for example, to offshore wind, I mean, I'm very happy to build ourselves a portfolio with exactly the one in New York where we control what we do. Part of it will be covered by CFD. Part of it will be merchant. So that's better for us because, again, our strategy is not to acquire a portfolio of fully secured, renewable assets with no upside. It's not what we described to you. So I think it's better to continue and to continue. deliver our strategy in the way we explained to you at the end of September. Thank you.

The next question is from Irene Himona of Societe Generale.

Thank you very much. Good afternoon. Two questions, please. You formed the new joint venture with Adani Green in India during the quarter. Earlier this year, when there was the financial crisis with the Adani Group, I think you had said that you would likely slow down that Indian expansion and wait for the outcome. Can we presume that you're satisfied with that group's financial situation and therefore back to normal in terms of Total continuing to invest in Indian renewables? And then the second question on chemicals, where obviously it's a weak industry, your nine-month volumes are down. When you look at the balance of new capacity versus this weak demand picture, what is your expectation for that business over the next year? Thank you.

Okay. On India, I think, again, what we said in the beginning of the year is that we wanted to have a clarity on the situation. We have engaged with Adani Group. You have noticed that what we've done, in fact, for me, you should make a difference. We are a shareholder of Adani Green, not Adani Group. Adani Green is a strong company with a large base of assets. The question for us is, how do we continue to contribute to the development of Adani Green? What we have elected is to do it through a GV between Adani Green and ourselves. So let's be clear, this is a venture. where we have direct access to the assets, which is fundamental. So it's not putting, we didn't put more money in Adani Green as a shareholder, but we made it and we help and we contribute to the development of Adani Green, making access direct to the asset. So for me, Adani Green has a portfolio. We share part of this portfolio, the equivalent of 1.4 gigawatts together, but 50% of it being owned by Total Energy. So Total Energy is is protected, and I think it helps Orkut to consolidate Adeligrin to continue its growth, which is as a shareholder of Adeligrin or interest. That's the first point. And we are, I would say, in the conditions in which we have discussed that deal are attractive in terms of metrics for total energies as a company. On the chemicals in Europe, we know that chemicals in Europe are clearly... quite linked to GDP. You know, the GDP in Europe is softening more than that, so you have less demand in Europe. So, like, it was very good two years ago. Today, it's the reverse of it. So that's part of the value chain. Our exposure to Europe in chemicals is not so strong. I mean, let me be clear for us, the polymers part are compared to the other part because, in fact, what we make more money on refining and on NAFTA, we make less money on the petrochemicals in Europe. All our strategy, by the way, is not to develop any new capacity in Europe, to be clear. We did not announce, I think, since I have been in charge of refining and chemicals 12 years ago, I don't think you announced a single extra capacity in chemicals of total energy in Europe. I think you have even more listened to either closing or selling some of them. So I don't think it's the best place to invest, to be clear. All the strategy in chemical total energies has been more either based on cheap feedstock either in the US or in Saudi Arabia with Amiral. But Amiral is targeting markets in China, India, on the east. So that's where the demand is. So I would say for total energies, in fact, it's more managing the history, the historical portfolio.

The next question is from Barrage Borkhartaria of RBC.

Hi, thanks for taking my questions. Two quick ones, please. The first one is on your debt profile. Could you just confirm what proportion of your gross debt is on sort of long-term fixed interest rates? And then the second question is on... The recent U.S. wind bid, there's a provision in the PPA that suggests it goes up with industry-specific inflation. I was wondering what you assume inflation-wise for that kind of project from here to FID. Thank you.

Yes, perhaps I will take the first question. More than 80% of our debt has been fixed. a couple of years ago, so that means that we benefited on that portion from very low coupon, around 3%, and so the remaining is flexible.

Clear answer. Second answer is quite clear, but, you know, we have, between today and the FID, we have more probably three years to work, so you will have inflation of the next three years, so it might be, I think, let's say 5% to 10% probably in the three years. We'll see. But, again, there is a provision which, I would say... protect us until the FID, then of course we'll take the risk of execution, but I think it's a fair protection which is offered by the New York State to the investors. It's one of the elements of the bid and of the discussion negotiation we managed to obtain, so we are satisfied. Again, we'll see if it's higher than that, but we don't expect much more than that.

Okay, very clear. Thank you both.

The next question comes from Martin Ratz of Morgan Stanley.

Yeah, hello. I just want to follow up on the question that Deborah actually just asked about the debt. Because interest rates continue to rise and rise, and total bonds are not escaping that, some of the longer-term debt that you hold is now sort of yielding 6%. And I was wondering, in addition to the mechanical impact that this may have on the interest expense every quarter, how this affects possibly any investment decision-making, particularly in the new energy areas. I mean, the question has been put to me, can we have an energy transition when U.S. Treasury yields, the 10-year U.S. Treasury yields are 5%, and it's kind of a sort of an intriguing one. Therefore, can I ask you, how are these rising interest rates impacting your investment decision-making, and also what are you seeing in others, particularly in sort of CapEx-intensive areas like renewables? What's the impact that you're seeing?

The answer is quite clear. You transfer the interest rate to the customer. I will tell you at the end. So the question is, does it affect the space of the transition? It might, but it's clear that it's against the idea that it will contribute maybe, by the way, to have a segment which will stop price going down and down. But it has already an impact, in fact, I can tell you. In fact, in the U.S., I take the U.S. as a good example. You have the IRA on one side, which we also have the obligation to make projects with solar modules being manufactured in the U.S. It has an impact on the cost of the project. So this cost of the project today, when we discuss and renegotiate PPAs with our customers, it has an impact on the high side. So today you signed the last PPA. We signed this recently with Saint-Gobain in the U.S. It's reflecting, let's be clear. higher cost of manufacturing in the U.S. and a higher interest rate because when we bid, we don't use a 3% of total energy for when we price a project in the U.S. You know, we are pricing a higher one, which makes us more profitable. We compete with people. We have competitors which have, in fact, a higher cost of debt. So we use their cost of debt and maybe we benefit from that to win the deals, but we keep the difference for us, in fact, as a company. So I would say, yes, you're right. It might affect the pace. But you know, I think we are back in a normal world. It's much better for the world economy to have a 5% interest rate world rather than 0%, I think, in particular for our companies, oil and gas companies, with a strong balance sheet and cash delivery. I think it was for me the anomaly where during five, ten years, having the 0% world after the 2008 crisis, it was a way to absorb it and then the COVID. But for me, that's more the anomaly than the contrary. So I think for me, it's a new normal. We have to integrate it. It will have an impact probably, of course, on the competitor, which have a very, we have more leverage than us. And from this perspective, the strength of the balance sheet of total energies is an asset. And I think that's why we continue to, part of the cash flow, we continue to strengthen the balance sheet.

Very clear. Thank you.

The next question is from Lucas Herman of BNP Paribas.

Yeah, thanks very much. A couple of straightforward ones, I think. Firstly, just on your reporting, For the last, as long as I can remember, actually, Patrick, 20-odd years, divisions may have changed, but your reporting method has always been consistent on a quarterly basis, and yet today you've elected to alter it. And I just wondered whether there was any particular reason that you're disclosing more around cash or other items with the things that you're trying to emphasize to us. And the second question, just staying with that... Some of the adjustment items. In integrated power, I notice that there's a 400, 420-odd million asset impairment provision charge taken this quarter. Just if you could provide some further detail on what that impairment concerns. That's it. Thank you.

On the second one, it's written. I think it's written that we have impaired some of the goodwill when we made some acquisition linked to customers, in fact. Yes. Because, in fact, when we made the acquisition of some of these small companies, part of the goodwill was allocated to the customer portfolio, but the customer portfolio has a churn which is quite high, so it's a certain point. When we reviewed the situation, which we do regularly with our auditors, we decided that this goodwill is better to implement. That's right. So that's what we've done.

It's a normal review that we have to do.

Okay. Then, it's again for the CFO, but I think I'll be clear and transparent with you. We had some exchange, like... Like other companies with the SEC, as you know, we are using non-GAAP API, I would say, indicators. We have to reconcile the GAAP and the non-GAAP, so it was quite a formal exchange during the last month, and Jean-Pierre has spent some time, but honestly, nothing fundamental. At the end of the day, we concluded that with them, but they wanted to have a clear reconciliation between the gap and the non-gap, and so some of the tables have to be just complemented. Some have to be removed, and some have to be complemented. So that's why you have that moving, that change. Honestly, we reviewed it with the audit committee and the board, and there was nothing major. It's more formal, but I think they were right. We have a gap, and we need to give clarity between the IFRS... I would say RFRS referential and what we use. So that's the reason why you have seen some moves. But thank you, Luca, because it demonstrates that you are very precise in reading all our reports, including all the pages and all the tables. So I recognize your longstanding position following TotalEnergies, but you know I know you for almost 20 years. So that's why you are right to support. But again, it's modernization in line with good practice, and we support it.

Yeah, sadly, it's also modernization of the mold model as well, Patrick, so thank you. That's a lot of work, but there we go. Thank you very much. Thank you, Luca.

The next question, sir, is from Kim Foussier of HSBC.

Hi, good afternoon, and thank you for taking my question. Firstly, I wondered if you could talk about the 3.5 million ton SPA with Qatar Energy on LNG volumes. Some people have noticed the 27-year duration, and it seems like other off-takers have signed shorter-term contracts, and it also takes you well beyond 2050. So I just wondered whether this was a requirement from Qatar Energy, and also the LNG will be delivered in France, I believe. Can you say whether there was a destination clause or whether you can redirect the volumes? Secondly, I wanted to ask a broader question on climate. I wondered if you could share your expectations of what Total and the broader oil industry could potentially announce at COP28 next month. You've already got a target of reducing methane emissions by 80% by the end of this decade, and that's Paris Align. So could the ambition be to share your best practices on methane monitoring and emission reductions and encourage other oil companies to do the same? Thank you.

Good question. Thank you, Kim. The first one, no, we are not alone. The 27-year duration, in fact, is for all the LNG off-takers. All the partners of Northfield East and Northfield South, which were the last new ventures, were asked to take their share of off-take on the 27 years. So we are not the only one. All my colleagues, and you will see, by the way, I think they issued over press release with... or 2 over European companies. It's only the German companies which are not part of the ventures, of the developments which have decided to elect for 15 or 20 years. So that's clear. By the way, honestly, 2026 plus 2027 makes 2053. It's not so far beyond 2050. And by the way, in our portfolio, And in the net zero company that we described in our last sustainable and climate report about total energy in 2050, you still see in the mix of our portfolio, we can be some energy being there, even quite a large share of energy. It's a gas is there in the transition. So we have no problem. Will it go at the end to France or to Europe? I think yes. I think I don't see if you could manage, again, a complex energy markets in Europe with a lot of renewables without having flexible assets. So on that I'm quite clear. So it's not France, by the way, who committed. It's Total Energy. So we are comfortable. And if we need to redirect part of this energy to our country, I think Kateri and ourselves, if it's our interest, we'll do it. No, in fact, these 27 years is a line on the duration of the concession into which we enter on NFE and NFS. It's just a pure alignment between we invest, we take three years to invest, and then we have 27 years remaining. It covers, in fact, the full concession, which is, I think, a 30-year concession. And I can tell you we are very happy of the conditions in which we are present. joined this NFE, NFS venture in Qatar. So there, that's where. So can we redirect? Yes, if it is the interest of both parties, we will have in the agreement, we can redirect with Qatar agreement and might be the case. Climate. Climate, Nathan, yes, we have strong targets. We are leading, it would say, recently. I can just confirm to you that we have entered into, we make our job, you know, What Sultan and Joubert would like to do in COP28 is to have more national companies, in fact, joining the IOCs, because Total Energies and the others, all the OGCI companies, we are at the forefront of this fight. We have already set the target. You know, on methane, my motto is near zero methane by 2030, in fact, which means stop clearing, stop venting, and in particular, using technologies to detect fugitive emissions with drones, which we do in all our assets. And we are just in the way to share these technologies with some national companies. And we are signing some agreements, which will be disclosed before COP. So we have signed one or two already. But we have to respect the will of the countries to announce them. So it will be done. So we are on total energies committed. in order to propose these technologies, measuring with, again, not only XL5, but with direct emissions to cover assets, and not only from Total, but larger assets from national companies. So we promote this technology. We do our job, and we'll be able, I think, to announce, I'm sure, to announce some of these in some countries where we are also, obviously, we are operating and we have good relationships with national companies. we will offer them and deploy this strategy. So we are doing our job on this perspective, and I think it's very important for the whole oil and gas industry to engage more national companies in these efforts.

The next question comes from Alistair Syme of Citi.

Thanks, Patrick. Any updates on Namibia you want to share? I know you updated at the recent Capital Markets Day, but you're right in the middle of your assessment, and I guess how's the production test of Venus 1A looking? And then secondly, can you just, on the question of debt, can you just remind us on the hybrids? I mean, they are perpetual, but I think as they start to be callable, the coupons change. So can you just talk a little bit about that mechanic, please?

OK, Jean-Pierre will come back on this higher rate to explain you, give you all the details. What I know is that the cost of the higher rate is quite interesting. So Jean-Pierre will give you some details in this world of, I would say, higher interest rate. On the other side, in Namibia, no, we don't have any updates. I can tell you that we started the Mangeti well, which is a discovery in the exploration well. Sorry, not a discovery. It's exploration. The well drilling has started the 7th of October, I think, beginning of the month. So it's on its way. So nothing to report today. It takes two, three months to drill. And the test on the second well in Venice has just started. The test will start this day, so this week. So sorry, but our drilling operation did not follow our quarterly call. So you will have to wait for more news. But again, as I said recently, let's be clear, we will develop the Venus discovery. There is a development. So it's a matter for us now to try to assess the full size of it and then to find the right scheme of development, considering that there is quite a good ICGL. But again, it's optimizing the development that we are looking for, the oil development again on Venus. So we'll come back with you, I think, Probably in February, when we have the annual results, we'll be able to disclose more information about it. I think we'll have the results on both these wells and to have more clarity on Venus expansion. We plan to do a third well in the north, but we'll have a lot of data.

Okay. Hybrid? Hybrid, yes. That's true. We benefit from a very competitive hybrid bond portfolio because, on average, the coupon is two. 0.3%, so very low, very, I would say, cheap equity. So the problem now is that, as mentioned by Patrick, the refinancing has become more expensive, 6%, more or less, for a maturity of seven years. So we used the flexibility offered by S&P to be able to reduce by 10% the global portfolio without losing the equity treatments. We used this flexibility. Because in the second quarter, we have one tranche maturing. And so we decided not to refinance this one. So now we have to say, we have to see in the future how we can continue to lower the portfolio, hybrid portfolio, without losing the equity treatment. So it's what I have on my agenda for the coming months.

Fundamentally, we will use the 10% flexibility quarter after quarter or year after year in order to... At the end, I would say to respect, of course, the rules, but I will do it year after year, considering the law.

Is it clear? Sorry, Jean-Pierre, just to be clear, is it the bit that's callable? Does the coupon change on that element, or does it stay the same?

No, it is stable.

Okay.

Thank you. The next question is from Henri Patricot of UBS.

Thank you for the update. Two questions from my side. The first one, on the outlook for oil demand and refining margins, because we've seen quite a sharp drop in refining margins over the past month, obviously from a very high level. Just wondering if you're getting a bit more concerned about the outlook for oil demand and refining margins at the moment. And secondly, I wanted to ask you about wind, and this time we're on the European front. We've seen the Commission this week setting up more actions to support the European industry. I wanted you to have your initial assessments of these actions and what you see potentially better dynamics for European wind and acceleration in wind over here. Thank you.

Well, two general questions, complex ones. Oil demand, you know, the oil demand in 23 is strong, an increase of almost 2 million barrels per day, mainly coming from China, by the way, 70 more than Stufe, 70% more, from petrochemicals on one side, and from as well kerosene, jet fuel, you know, the air line activity is back almost to normal, not fully, so you still have, in fact, in 24, some demand from the airlines in the world to come back. So we are not yet fully to be a level pre-COVID on the jet fuel demand. So I don't see what it would stop, to be honest, because there is a call for a move in this planet. And secondly, I think the IEA has announced an additional 1 million barrel of oil per day increase for next year. So I take this... I think all traders agree with it. So it's not two, but it's one. So continuing to see a demand increase. And again, by the way, what struck me, despite the doubts that some have on the Chinese economy, is that this year we have plus two, and again, 70% of it coming from China. So when China will come back, I read yesterday that the Chinese government is thinking to make an incentive package, a macroeconomic incentive package, raising more debt in order to give impulse to their economy. We complained about the growth in China, but it's 5%, and it's not 1% or 2%. So I think I'm still a believer that Chinese growth will drive, again, growth. And, in fact, you know, when you look to, by the way, on oil demand, I will give you a clue. It's not very complex. You take the last 20 years. You look to the increase of the population of the world, plus 1.2%. You look to the increase of the oil demand. And in 2019, because you have a gap, it was exactly plus 1.2%. In fact, the old demand is not related to GDP, it's related to the growing population, because it is a fundamental factor. And it's why, by the way, transition will be complex. A growing population, because this 1.2% or 1% is still announced for the next 20 years. So 1% on the planet, it requires more energy, a better way of increasing their life standards, and that's more energy. So that's So it's very aligned. You can see that. We will make a presentation soon on Total Energy's outlook on November 13, and we will explain that again. So that's the demand. Refining margins. Refining margins is different. It depends on the market, supply and demand. We've seen them going to the roof during one or two months. During summertime, everything was under constraint. I think you still have, honestly, in these markets, Downstream business, an impact on the ban of Russian products because all that has put Russian crude oil on one side. So the quality of the crude oil is different in the refining system. And also on the products. You have disorganized, I would say, the transportation. Transportation costs are more expensive. And so today what we face is that the gasoline demand, the gasoline spread is down quite low. because, again, the gasoline demand in Europe is, I think, impacted by the high price. You have an elasticity of the demand to the price. So when, in the third quarter, you've seen $90 per barrel, $95 per barrel, plus a strong margin of refining, the customers, when price is high, they save energy. They reduce their consumption. So which is what we have observed. And so today, the gasoline demand is softening. So the crack is softening. But the diesel crack is still high, very high, $30, because there, on this side, you have an impact of the fact that we have less if you could. So it's more expensive to produce diesel. And so you have some warning, which I think I exaggerated from the earlier, that we might have a lack of diesel. We'll not have a lack of diesel for sure. You know why? Just because the refiners are smart people. When you have a strong crack on diesel and a low crack on gasoline, You adapt your refinery and you make more diesel and less gasoline. So it's quite easy business, you know, and we have flexibility. So today our machines are running to make diesel and so no fear, but a good benefit. So yes, it has suffered, but I would say I would expect a margin around $70, $80 per ton for the next month. It's a good bet. I would be surprised to see them coming back very low because again, you have some inefficiencies in the system because of the Russian ban, not only on oil, but also on products. That creates some, I would say, increased costs. On the wind, yes, the European Commission, and it's more the European wind manufacturing industry which is complaining, if I'm reading carefully, rather than the European wind development industry. The developers are still willing to... to develop with lowest costs, because that's a good question to the Commission, I think. You know, like on solar, do they want to protect the consumers by continuing to have access to the lowest possible cost of renewables, or do they want to protect the manufacturing industries? That's the question. Until now, in the last 10 years, it was always the EU has favored the consumers, in fact. And I've seen a call from the solar developers calling for not protecting them. So we'll see. Again, for us, honestly, at the end of the day, in the U.S., when we are asked by the IRA to use U.S. goods, we are using U.S. goods. In the offshore wind project in New York, we have made a deal with GE. We secured the price and the cost, by the way, of the of the turbines with GE, which will build a new manufacturing plant in New York, creating local jobs. All that has a cost, but it has been integrated in the CFD, which has been accepted and agreed, negotiated. So I think we will adapt. Also, we are flexible. That's why, by the way, we should not anticipate too early this type of CFDs and insurances. Because if you take the insurances too early, then As the environment is moving, you could be trapped in something which becomes less profitable. Because offshore wind is taking more time. Having said that, at the end of the day, I can confirm to you that I see more and more gold wind, Chinese wind farms being built in Europe and in the world.

Thank you.

The next question is from Bertrand Hody of Kepler-Chevreau.

Yes. Hello. Thank you for taking my question. Two very quick ones, if I may. The first one on Namibia, you disclosed that the first DST test on Venus was in line with expectation. Can you share a bit more color on that? you've hinted that if it was, you know, $5,000 per day, it was not good. It was $15,000, it was okay. So can you give us a bit of a color and whether it was above $15,000 or below $15,000? That is essentially my question. And then on U.S. offshore wind in New York, can you disclose in dollar per megawatt, what is your current capex estimated? before any inflation provision.

No, I cannot fill your full Excel file, dear Bertrand. Sorry to tell you that. I didn't know that 15 was a threshold.

It depends from... No, honestly, I think we told you the truth. It's in line with our expectations. That means that it's in line with the assumptions we have taken to plan the development. So if it's in line, that means that we are happy. We introduce, we get the data, they confirm the productivity and the production per well, and we know that with this level of production per well, we can make a profitable development. And I don't want to comment more one test, because we have plenty of tests coming, and so let's continue the job, and you will have to rely on what we say, but as we are listed companies, generally we say the truth. And then on the second one, I think, It's something that I don't remember, to be honest. It's a dollar per megawatt hour before any capex provision. We don't work like that. So we have a capex including contingency. This is the way we work. We work in offshore wind in the same way that in all India is on our side. We have an experience of offshore projects. And we know that when you make an offshore project, you don't stick with only the EPC contract, but you are taking some And when we communicate in All-In-Gaz on the CAPEX, we communicate always including contingencies. Because we perfectly know that in All-In-Gaz, when you make a project, things will not be exactly the sigma of all the EPC contracts. And this is one of the mistakes which is done in this industry by some of the competitors, which believe that you make the EPC and you will execute rightly the EPC. And it's why today you have some EPC contractors which are facing difficulties because then they have huge pressure on them and they are obliged to announce losses. No, it's not the way. The sustainability of this model, business model, like we've done in the oil and gas industry, is to understand that you make a project because your EPC contractors are also surviving and just surviving, making profits. And that's why when we execute a project in oil and gas, we know that we have contingencies. I remember the first time Our offshore wind developers came to the executive committee mentioning it was 2% of provision. We were laughing. We said, no, no. Offshore, it's at least 10%. And we know that by experience. And I will tell you that our experience in Seagreen, installing 100 wind turbines offshore is much more complex than installing one big offshore oil platform. So it's including provision, and we make all our projections and negotiation with the right provision within our CAPEX. Thank you.

Thank you.

The next question is from Paul Chang of Scotiabank.

Thank you. Good morning, or good afternoon. Two questions. One is really short. Maybe it's for John, Paul. Third quarter E&P effective tax rate, they call it round number 45%. Seems a bit low, even taking into consideration of the lower contribution from North Sea. Is there any one-off benefit in tax in the quarter? And also more importantly, based on the current market condition, what is your expectation for the division effective tax rate in the fourth quarter? Second question, I think this is for Patrick. We have seen a pretty substantial reduction in the renewable diesel margin over the past several weeks and that the wind price in the U.S. has been dropping and we have also seen the LCFS price remain relatively low. Does this market condition in any sugar farm impact your thinking of the investment in the alternative fuel by renewable diesel and SAF?

Thank you. In fact, as Jean-Pierre told you, the first question, it's not only the mix, lower NOC, it's the fact and it's more important and we'll come back to you, I think, in February. that the new barrels that we are producing, like in Brazil, like in Iraq, like I think there was another example in Europe.

In Azerbaijan.

In Azerbaijan. In fact, have a lower fiscal burden than the declining barrels from the North Sea. So it's interesting for you because that means that there is a trend in our portfolio with new barrels and higher margins or lower taxes. To give you the real figure for Q4, I mean, it's premature. I cannot guess on that. As you know, we are making quarterly results, and generally, the last quarter, you have some alignments. But to come back, is there any one-off tax? So, Jean-Pierre, confirm.

I give you the two main factors in my speech. So, once again, the weighted average high-tax barrels versus low-cost barrels, and the fact that we are now more attractive barrels in our portfolio.

So, there was no one-off. On the second one, the US refining market and LTFS. Honestly, as you probably noticed, Port Arthur was not really running in the Q3. We had an issue. So we have more work here on restarting Port Arthur with Long Haul. And it will restart by mid-November by taking care of the margins in the U.S. because, unfortunately, when the refinery is not working, there is no margin to capture. So I think for me, I will dig, thank you for the question, but I still see every day quite a high margin in the U.S., even if it's lower. Again, like in Europe, we went to the roof. It was around almost not far from $200 per ton, I think, which we've never seen since I am in this company here. During one quarter, it's softening today, but it's softening, remaining around 120, 150, so it's still very high. Does it affect the renewable diesel and SAF? No, because, you know, in fact, all these businesses today, they are regulated, in fact. They are somewhere regulated and somewhere, in Europe in particular, you know, at the end, the SAF price is more guided by the penalty that somebody will pay if he does not fill the mandate rather than the the demand and supply. Because today, in fact, on the SAF, the supply is short of the demand somewhere. So you're still running behind. So it's a regulated business somewhere. And as the penalties are quite high, it does not impact directly the business. In the U.S., we don't make SAF today. So I'm not able to come back to you on this one. We plan to produce SAF in the future in Port Arthur, but we don't do it today. So I cannot help you to understand the this market in the U.S. today specifically. All right. Thank you.

The next question, sir, is from Jean-Luc Roman of CIC Market Solutions.

Good afternoon. Thank you for taking my question. It relates to your acquisition in Germany. I was wondering whether the electricity that you will purchase on medium-time contracts will be accounted for in your power capacity or in your power cells. How will that work? Will it be only an intermediary margin?

It will be a cell, but not a capacity. We don't own the capacity. We manage the capacity. As you know, we are honest people, so we don't invest in the capacity, but we have access to some capacities, which is a good thing. And then we need the cells because we are selling it, for sure. We are selling it to customers, and we might have even, I think in the portfolio, we have two gigawatts out of nine which are under medium-long-term PPA, so that's cells, which will be reported as cells. but not as capacities because we don't own the capacities. That's the way it will work. Like in LNG, you have some reporting in the cells and we don't report when we have... It's like a long-term SPA that we have with a US LNG engineer. We don't account for the capacity in our production because we don't produce it, but we account in the cells. Same mechanics. Parallel is the right one, by the way.

Thanks very much.

The next question is from Jason Gabelman of TD Cohen.

Hey, good afternoon. Just one follow-up on CapEx. I think you mentioned both the oil sands divestment and the sale to Couch Charter would close in 4Q, which implies about $6 billion of divestment proceeds coming in um and it in light of that it seems like uh reiterating the 16 billion to 17 billion uh capex range for 2023 would be a bit high um so i was hoping you just could square those two thanks well no it's not i know because uh

It's not so high because we spend organically 5 to 5 billion, 6 billion per quarter. We are today at the end of the quarter of 16. We spend 5 to 6 billion per quarter. We'll divest, but we have one or two acquisitions that I mentioned which are coming in the quarter as well. So 16, 17 seems to be... It's not 16, 18, by the way. We specified 16, 17 this morning. So I think the 16, 17 seems to be to us... It's the right range, but we will explain you that in the annual water. So take it as it is. I think we have a good view on where we should land.

All right. Thanks.

The next question comes from Alessandro Pozzi of Mediobanca.

Good afternoon. Just one question on the micro side, and I guess in a way it's linked to the recent offtake agreement in Qatar. This week the IEA has published the World Energy Outlook and they downgraded again the gas demand for 2050. I think if you look at the APS, it's down 40% gas demand. I was wondering, is this versus 2022, is this a concern for you, blocking such long-term contracts, or do you think the IEA remains far too bearish on gas demand?

No, I will tell you, I don't know who is right. It's not a matter of IEA, it's a matter of positioning of your projects. In fact, for me, all that is driven by the position in the cost-merit curve of investment in Qatar. In Qatar, you are first quartile. So I can tell you, producing LNG in Qatar even by 2050 will be more efficient than in many places around the planet. So even if there is a reduction of 40%, you still have 60%. And in the 60%, Qatar will be perfectly positioned. So in fact, let me be clear. And this is the whole strategy of the company, to protect all of us. Because you need to make long-term investments in energy, and in particular energy. But in so all, the philosophy of our portfolio is guided by low-cost, first-quartile assets. Because there, whatever will happen on the demand, However, the demand will diminish as planned by VIA. We are protected. You, as investors, are protected. There is no problem. So my question, my answer to you is not is, yes, there are certainties of the demand on oil, on the demand of gas, on the demand of electricity. The key driver of the world strategy is driven by the cost-mary curve. And we are having first-quotient projects. And I can demonstrate the Qatari projects are among the best of the world, if not the best. And everybody knows that, because it's a huge gas field produced 50 meter water depth, conventional, with quite a high content of condensate, as you all know. So at the end, it makes this project very resilient. And even in 2050, they will produce, and even beyond. Because the IEA does not tell you there is no gas. There is still maybe 60%, maybe 70%, maybe 50%. We'll see. But that's our answer. There is no standard asset in the portfolio of total energies.

So you're happy for such a long-term agreement on Qatar? Yeah. The cost of... Exactly. On some of the other projects, you prefer maybe a shorter duration?

No, no, but you know, systematically, when we invest, we invest in an oil project or LNG project only if they are Low cost. In low cost, less than $20 per barrel capex plus opex for oil. And for LNG, they must be first or second quota oil. So that's a protection. Otherwise, we don't do it. We don't do it. We have a large portfolio of LNG projects, and we select them if they are on the right side of the cost breaker because this uncertainty of the demand we admitted is part of. So the answer we give you is low cost.

Thank you.

There are no further questions registered. Back to you, gentlemen, for conclusion.

Thank you very much for your attendance. We will give you a next meeting point with you will be on February 7. We'll make the annual presentation in London in presence because we would like to meet you again. COVID is behind us. So it will be probably 7th February in the morning. Renaud will give you all the details. Thank you for your attendance and As always, you are not surprised by total energy. In fact, you are surprised always positively. So we'll continue. Thank you.

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