TotalEnergies SE

Ladies and gentlemen, welcome to Total Energy's second quarter and first half 2025 results conference call. I now hand over to Patrick Pouyanné, Chairman and CEO, and Jean-Pierre Sbrer, CFO, who will lead you through this call. Sir, please go ahead.

Good afternoon or good morning, everyone. Before Jean-Pierre goes through the details of the second quarter financials, I would like to make some few opening comments. We are facing an unstable geopolitical and macroeconomic environment, which has been dominated by during the quarter by the Israel-Iran 12 days war and also the tariff war between the U.S. and some commercial partners. In this context, all markets have been volatile during the second quarter, with price broadly fluctuating between $60 and $70 per barrel, an average of $68 per barrel, with a short and ultimately modest increase during the Iran crisis, with crude prices reaching $81 per barrel at the highest point. We could consider, in our view, that this is quite a limited price response to this major crisis. And somewhere it is a signal that the whole market is well supplied, in particular fueled by OPEC Plus' decision to unwind some voluntary production cuts and also facing a weaker demand linked to the global slowdown of economic growth. In such a context, and Jean-Pierre will detail that in a few moments, this quarter Total Energy is once again demonstrating the company's robustness thanks to its balanced and consistent strategy, but also thanks, and it's more important, to its differentiated and unique energy production growth profile, both in oil and gas and in electricity. And that drives cash flow growth as well as attractive and is a basis for attractive shareholder returns through cycles. So starting first with our first pillar, oil and gas, The first half of 2025 production was up more than 3% year-on-year. Demonstrating that we are well on track to achieve our 2025 upstream production growth guidance of more than 3% versus 24%. And as you know, it will be even longer up to the end of the decade, this 3% growth. And it has been supported, and it's also very important, by startups of high-return projects, such as the Balimo Film in the U.S. or Meru4 in Brazil. which, by the way, was one quarter ahead of schedule. And now, Begonia and Clove Free in Angola just came on stream to further feed the Q3 and H2 growth. As I said, importantly, this production is coming from this new project is accretive, increasing the upstream cash flow CFFO per barrel by around $1 per barrel as an average during the quarter, which is, in fact, quite impressive given our large production base. We are also continuing to manage this portfolio, focusing on our projects on which we meet our low-cost, low-emission criteria, and divesting some non-core, higher-cost projects. And during Q2, we consistently, with this strategy, we divested non-proliferative interest in non-core, higher-cost projects in Nigeria, Bonga, and Brazil, Gato do Mato. During the second quarter, we have also reloaded the exploration portfolio, by acquiring exploration permits in the U.S., in the Gulf, in the U.S. Gulf, in Malaysia, in Indonesia, and Algeria. On the energy front, the big news of the second quarter that we continue to strengthen the portfolio by signing a $1.5 million energy off-take agreement from Rio Grande Energy Train 4. We will become the shareholder of this train as well. And we have also taken, I would say, an option potentially on the future projects located on the Pacific coast of Canada, which give access to Asian markets and will benefit, by the way, from very cheap gas in Canada, in Alberta, Canada. On the second pillar, as you can observe, the integrated power continues to deliver solid results and solid cash flows to close to $600 million. is in zone track to achieve also its annual guidance. In line with our strategy, we also continue to unlock value in our power business by progressing farm downs. We have sold, during a quarter, 50% of our 600-megawatt portfolio of renewable assets in Portugal, and there is more to come in the second half. The Q-downstream results benefited from a positive seasonal effect of marketing and services activities, which have done very well. which, in fact, are stronger, with stronger results year on year. Despite near-term improvements in refining margins, to be honest, it's a small improvement in the second quarter, refining chemicals are still facing some headwinds, either on the operational side. Two refineries were not at the optimum, I would say, efficiency, Donge and Port Arthur. And also on the market side, it's more for the polymer business, which is facing overcapacities in the market. Moving to CapEx, during the first half of 2025, net investments totaled $11.6 billion, including $2.2 billion of net acquisitions, in particular the acquisition of ESB. I confirmed today, that was a full year, we anticipate the net investments will be within the $17.5 billion guidance range, given the disposal program planned for the second half of the year, which is already well engaged. In upstream, beyond our stake in Bonga, Nigeria, as announced, we have, in fact, this last week, approved some binding offers for our unconventional oil license in Argentina, and for two other E&P assets, which will represent globally $1 billion of cash flow. We are also working, and the E&P team is working hard, to close our divestments of onshore Nigeria before year-end. This represents next to $1 billion. In integrated power, we are very well advanced for the foundance of the 1.5 gigawatt portfolio in the U.S., a 250 megawatt portfolio in France, and 400 megawatt in Greece. which free farm downs will represent net divestments of CapEx of around $1.5 billion. The gearing stood by the end of June at 18%, increasing quarter to quarter, primarily due to net investments being weighted towards the first half of the year, in particular because of the disposal proceeds, but it was anticipated, and working capital more built on the first half and working capital built on the first half. Estimating the seasonal effects of working capital and the investment base, normalized gearing is 15%. I will conclude my remarks with the shareholder distributions. The message of the board is clear. We maintain shareholder distribution at a high level, I would say, as a payout could stand around 55% in 2025, which is, as you remember, quite above the guidance of more than 40% through cycles. First on dividends, the ordinary dividend is our number one capital allocation priority. We continue our track record of attractive growth. The board of directors approved a second interim dividend of 20.25 of 80 cents of euro per share, which is an increase of 7.6% compared to 24%. and it's up 25% versus pre-COVID. I would like to underline that in U.S. dollar terms, considering the evolution of the U.S. euro exchange rate, this increase of more than 10%, and it was 8% in 23, 8% in 24. So U.S. shareholders have the benefit of that. I would like also to underline that this dividend yield or dividend yield is the best among the majors. Then, comforted by the ability of the company to reach its 2025 underlying growth objective, in particular on energy productions on both sides, the upstream, which continues to deliver good results quarter after quarter, and also integrated power, while maintaining a strong balance sheet, the normalized gearing at 15%. The board has decided to continue share buybacks for up to $2 billion in the third quarter. The board will continue to monitor the buyback on a quarterly basis, looking to the evolution of the macro environment, but also on possible anticipations on the all-gas refining petrochemical markets. We intend to give you more colors on the buyback scheme at our investor day end of September. And now I will turn the call over to Jean-Pierre, who will go through the details of second quarter financials.

Thank you, Patrick. So I will start by commenting on the price environment in the second quarter. which was overall weaker quarter over quarter. Brent averaged $68 per barrel versus $76 per barrel in the first quarter, so down 10%. TTF, the European Gas Marker, averaged $11.9 per million per mTU versus $14.4 per million per mTU in the Q1, down 18%. And the average LNG price also decreased to $9.10 per million BTU versus $10 per million BTU in the first quarter, down again by 10%. For refining, the ERM, so European Refining Margin, slightly improved to $13.50 per ton during the second quarter, but, as mentioned by Patrick, still remained at low level. In this context, the company reported robust financial results, demonstrating the strength of our business model and of our operations, with adjusted net income of $3.6 billion and cash flow from operations of $6.6 billion for the second quarter, which were supported by attractive production growth. Profitability remains strong, with return on equity for the 12 months ending June at 14.1%. Now moving to the business segments, starting with hydrocarbons. As anticipated, second quarter production was slightly lower than the first quarter due to planned maintenance. However, on a year-over-year basis, the second quarter marked yet another increase in upstream production, which amounted to a strong 2.5% thanks to new projects, startups, and ramp-ups. On the cost side, the company continues to be a leading low-cost operator, which upstream operating costs at $4.9 per barrel for the first half of the year. Looking forward, we expect hydrocarbon production in the third quarter to increase by more than 3% compared to the third quarter, 24. Turning now to exploration and production. So this segment generated second quarter, 25 adjusted net operating income of $2 billion and a cash flow of $3.8 billion. Importantly, our project Q is delivering new, low-cost, low-emission oil and gas that is accretive with an average upstream CFFO per barrel equivalent that is roughly two times the base portfolio. In fact, during the second quarter, production from the new project improved the upstream CFFO per barrel equivalent by around $1 per barrel equivalent, generating something like $180 million more than if they had come from the base portfolio. On a cumulative basis of the first half of 2025, the extra CFFO generated by new projects totaled close to $300 million. An integrated LNG business. Our sales were stable at 10.6 million tons for the second quarter, and the company achieved $1 billion of adjusted net operating income and cash flow of $1.2 billion for the second quarter, reflecting the 10% increase in the average LNG selling price. related to declining crude price, as well as low market volatility for gas trading activities. Forward, European gas prices continue to be sustained at around $12 per million for the first quarter and for 25-26 winter periods due to storage replenishment in Europe. Given the evolution of oil and gas prices in the recent months and the lag effect on pricing formulas, the company anticipates an average energy selling price of $9 to $9.5 per million BTU in the third quarter. On integrated power, the net power generation increased 28% year-on-year to 11.6 TWh due to growth in renewable sources and the impact of the 1.3 GW CCGT acquisition in the UK closed in 2014. Integrated power adjusted net operating income was close to $580 million, up 14% year-on-year, and cash flow was $562 million. First half 25 cash flow total $1.2 billion, and we're on track to achieve the annual cash flow guidance. Lastly, we're progressing on the company's countdown strategy, which optimized, as you know, capital allocation. During the second quarter, the company sold 50% of a 600 million-watt portfolio of renewable assets in Portugal. And as Patrick mentioned, there is more to come, with the 50% farm-down of a 1.5-gigawatt portfolio in the U.S., 400 megawatts in Greece, and 250 megawatts in France. Moving now to downstream. Although we find the market improved during the second quarter, $35 per ton, overall will remain in a global weak price environment. In this context, downstream reported second quarter adjusted net operating income of $0.8 billion and cash flow of $1.5 billion. Results benefited from positive seasonality in marketing and services business with results higher year on year. In refining, the utilization rate increased in the second quarter due to improved efficiency and low maintenance. But the result suffers from some operational difficulties at Port Arthur and those refineries, as well as weak petrochemical margins as the polymers business is facing a global glut of new capacity in China and in the US. Looking ahead, we anticipate refining utilization in the range 80% to 85% in the third quarter, 2025, which reflects scheduled maintenance at Antwerp, Port Arthur, and HTC in Korea. In terms of downstream environments, in petrochemicals, we see continued pressure on pricing from the record incremental production capacity that was placed in operation in 22 and 23. And in SAF business, imports to Europe have significantly increased, pushing prices down and likely impacting value margin for the rest of the year. Moving now to the company On working cap, the company reported a $0.5 billion increase in working cap requirements, mainly due to the unfavorable effects of declining prices on tax liabilities and payments during the quarter of the capital gain tax from divesting the German distribution networks to alimentation costs. This was partially offset by the seasonal release on gas and electricity supply activities in Europe after a strong build in the first quarter. Note that the increase in the first half 25 working cap requirements of $4.9 billion is essentially at the same level that was reported one year ago in the first half 24. Looking ahead, the company expects that most of the seasonal working cap built that was observed in the first quarter 25 should be released in the second half of the year. On net investment sides, So net investment totaled $6.6 billion in the second quarter, which notably included the closing of the GSD acquisition for 1.6 billion euros and $11.6 billion for the first half of the year. We anticipate full-year net investments to be within the guidance range based on planned disposal during the second quarter half of the year at Patrick's pension. That means that the gearing by end of June is impacted by something like $2.6, $2.8 billion of capex. With that, Patrick and I are now available to answer your question. And now we can open the line.

Thank you.

Thank you, ladies and gentlemen. 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 telephone and wait for your name to be announced. Please kindly mute any audio sources while asking a question. If you wish to cancel your request, please press the star and two key. Once again, please press star and one if you wish to ask a question. The first question is from Michele de la Vina, Goldman Sachs. Please go ahead.

Thank you very much. Two quick questions on the LNG market, actually. You continue to grow it very strongly with both long-term contracts and new projects. I'm just wondering, at what point do you think that it will become really difficult to sign new contracts? long-term supply contracts with customers. It feels like we're starting to build a bit of an oversupply for the coming years and that the oil linkage is probably approaching that 12%, which starts to become less attractive. Just wanted your view there also because it would be interesting to see at what point we start to see a slowdown in new FIDs. And then related to that, in the U.S., how do tariffs impact the cost of building new LNG plants? There are various elements. I think the steel tariffs probably are the most relevant ones. And does that make you be more cautious to do an FID on a new LNG project in the U.S. or that's actually manageable in the context of your portfolio? Thank you.

Thank you, Michele. You are right. There is clearly a big... An increase of LNG supply, which will come on stream, as we said, 27, 28, 29. For me, 26 still will be quiet because these projects are always a little difficult to ramp up, I would say. Projecting Qatar is more or less on time. The first train we expect from NFE is mid-26. Then every six months, a new train. So 26, for me, will not be so much impacted by this new capacity. From 27, you will see clearly an impact. That's why we, since last year, we decided to move to a clear strategy, which is to sign some medium-long-term contract linked to Brent, because I'm more optimistic on the Brent contract oil price than on the, I would say, GKM spot gas price. And we continue to have some success on that. We have announced this year quite a number of million tons. Last year, and we'll continue. The question is, why do customers behave like that? I think the customers, they have been, I think, honestly, caught in 22 by some big hike. We are in a world which is honestly quite volatile. Geopolitics play a game in the market more than ever. It's not just supply and demand. That's, by the way, not easy for traders today to manage this geopolitical risk, even if I would say all traders within TotalEnergies have done very well in the second quarter, despite this environment. So that's true, but I think the buyers continue to look at it as a way to hedge themselves. Yes, it's true, it's better to sign at 13%, but at 12%, I fully agree with you. But you know, by the way, when you have a long-term contract at the end for a company like Total Energy, it's not only percentage which counts, it's also all the optionalities, you know, because we have a large portfolio and then we can... Do you have the capacity to redirect the cargoes? That's a lot of things which are also important for us. So around a medium-long-term contract, there is more value to extract than just a pure formula. That's why it's important to be a portfolio company. And I think, in fact, one of the advantages of the position of certainness is when we meet these buyers, they see us as a portfolio company and not just as a point-to-point company. I would say seller and buyer, you know, it's just project one. But, you know, we are today marketing PNG, Papua LNG, sorry, marketing Papua LNG, and we have some good results in some Asian countries because of the location. So these dynamics are still there, and we continue to work on that. U.S. tariff, I have some good news for you, for us, because we have a real figure. We know we are just... We are not far from approving, sanctioning, but not us, Rio Grande, next decade. It's not far from sanctioning the 24, or maybe 25. So there have been some, I would say, EPC contracts discussed with Bechtel. And I will tell you, Michele, I was a little afraid. And where do we land with this tariff impact? Finally, of course, there is some inflation, but it's less than 10%, I would say. So it's very reasonable. And so, for me, again, NXDK wants also to commercialize its LNG, so it's more a question of marketing. I think 24 is full, 25 is not yet, but things are moving on, and it's their job. But fundamentally, from this real case, I would say, But we manage, and I think it's also the dynamic when you have a very good EPC contractor. We see some advantage. I think Rio Grande Energy is a success story, trend one, two, three. If we are able to continue on trend four and trend five, then there is also some synergies there. So your answer to you, I would say on this specific case, we are comfortable. We don't see much impact on the tariff. We will see more impact on the tariff, I think, on topics like batteries, because batteries, you have to import most of the cells in the world are manufactured in China. So even if you build the modules in the US, you have to import the cells. So this type of business might will be more impacted. But from this perspective, I think my My colleagues who are drilling U.S. shale oil are probably more impacted by the increase of tariff on the steel because they are using some specific steel. Most of this steel is impacted, so probably the cost of oil in U.S. shale is more impacted by our own business in the U.S. today. Thank you, Patrick.

The next question is from Biraj Borkataria, RBC. Please go ahead.

Hi, thank you for taking my questions. First of all, just on working capital, and if I look at these quarterly changes in working capital over the last few years, it looks like the magnitude, both up and down on a quarterly basis, looks like it's increasing over the last few years. I'm thinking about the period 2017-18 to now. Just trying to understand if that's something we should expect going forward, whether it's the growth of the power business or something else, whether there's any particular reason for that. And the second question is just a quick one on the buyback. In Q1, you said up to $2 billion buyback. I noted you did $1.7 billion this quarter. Was that just a timing issue or liquidity or a conscious decision to do a bit less there or anything? Any comment on that would be helpful. Thank you.

Second question, it's easy. You have to find the right result. It's more a question of timing. We have the 2 billion have been bought by the 13th of July. It was a question of liquidity. So no message for the 1.7. We will catch up according to the guidance of the board. Okay, so we are working on it. But it's easy to answer the second question. It's to give you insurance on that. On the first one, the quarterly, look, I think Jean-Pierre told you to make a remark If I'm looking at the end of the first half of 2024, first half of 2025, we had both years built of around $5 billion. In 2023, it was around $4 billion or $3.5 billion. So there is an increase because the more we develop this B2C business in gas and power, which is growing in the company, the more we have a seasonal effect, which is that, in fact, the people are using us, are winning us. So we are burning a lot of using electricity, consume, sorry, consume electricity and gas during winter times. And as their bill is spread about 12 months, we are working capital effects, which is we catch up. That's increasing a little. Having said that, just to be clear with you, last year, at the end of the last year, we told you in our working capital, the green went down to seven. We made a modification. We told you to be careful. There is an exceptional, I would say, positive element of 1.5 billion. So, for me, what I'm expecting between today and the end of the year is a $5 billion build of the first arch should be, in fact, erased by 3.5, I would say. If I don't have any other exception at all, normally we should, like we've done the previous years, Jean-Pierre has shown a nice graph in front of us. Maybe one day we'll share it with you, which demonstrates the seasonality. And we, of course, presented that to the board, and we are comfortable with the type of metrics I just gave you to give you more insights of what happened. Okay, thank you. And so that's also why, to be honest, when we put together to the board, and I'm just repeating what I said, this working capital analysis plus this, I would say, CapEx, which have been more weighted on the first half because of the disposal role, And because, as I tried to, I mean, I hope you convinced, I gave you a list of all the proposals which we are committed to and which we are really binding offers on, which we are now translating that in SPA, the Board considered that all these elements give him confidence to maintain this buyback at 2 billion. Knowing that... As an average for the year, we are at $70 per barrel. Like, by the way, we made a presentation in February at $70 per barrel, giving you some guidance. And so the $70 per barrel has been the average for the year. Today, when I'm looking to screen, I have a $70. And well, people can say low bearish on demand supply, but at the end of the day, this is the market. And so we keep trust on that.

The next question is from Irene Himona Bernstein. Please go ahead.

Thank you. Good afternoon. Patrick, you told us before that the $2 billion quarterly share buyback is affordable at $70 and at reasonable market conditions. When you look at the balance sheet with the current 15% normalized giving, what is the the normalized gearing range, let's say, that you would see as reasonable. In other words, how high would that normalized gearing have to go to remain acceptable in a $70 environment? And then my second question on integrated gas and LNG, the CFFO in the division declined about 6% in the first half year on year. Are you confident in the cash flow guidance you provided for that division out to 2028? Thank you.

Be clear. At $70, we told you at the beginning of the year that the target guidance for the gearing was around 12%, 13%, if I remember well. There were some pure assumptions in it. So, in particular, there was the idea that the downstream could target a cash of $7 billion. To be honest, today, we've done 2.5 the first year. We think the downstream will improve because the margins, the third quarter margins on refining are always better. As is the case, we have margins today of about $60 per tonne. It's good. Second, I'm really confident that the performance of the two assets I've mentioned will improve. Teams are working hard. So I would say maybe not seven, maybe six, but we are not so far. So I have one. So I would say for me, at the end, we are still targeting 14%, 15% gearing by the end of the year. So the normalized gearing for us at 15% is a good guidance. And the board is comfortable with 15% at $70. This is a message I think we deliver to you. So again, it's not only the gearing, the balance sheet. We know that there is volatility. It's more, we observe the markets. And today, as I said, there are some pros, some cons. We not only look to be all markets. Gas markets, I would say we are quite confident for next year. But also the petrochemical markets, the downstream markets. There are some good reasons to think that the diesel spread is quite strong, in particular with all what happens around Russia. So it's a global approach that we take. But let's say at $70, 15% we are comfortable to maintain this buyback level. Then the second question, and I understand your question, why? But, I mean, we will, of course, give you more information by end of September, September investor meeting. We come back, you know, traditionally with all the data of our five-year business plan. So we'll, of course, update you on both the growth for upstream, the LNG part as well. I can tell you that I think last year we gave you some guidance which were something like $6 billion or $60 billion, $7.5 billion or $80 billion. And the figures that I read recently from our five-year business plans are confirming this guidance. So we will give more color by the end of September, but I'm confident we can do that. Honestly, the small miss that I observe as well, to be clear, it's not so big. It's linked to in the gas, in fact. In fact, gas markets were in Europe, but they have no volatility. You've seen quite a good volatility in the oil price, moving from $60 to $70, even $81. And our traders were really able to capture that during the second quarter. So congratulations to them. On the gas, when you look at the gas price in Europe, the TTF, I think, was moving from $11 to $12, maybe a little $12.5. So there was little volatility, and And by the way, again, it's true, I've seen some comments from one of our peers, that in this type of market where sometimes it's not only supply and demand, it's more political impacts, traders are a little more cautious not to take direct directional positions, which could be hit by a tweet. So it's a little more difficult for them to analyze the market beyond the fundamentals, which is their job, normally, fundamentals to do. That's the point. So there will be no change in the guidance. Our energy business will grow, will deliver the growth from Qatar, from the U.S., and it will positively impact the CFFO.

Thank you, Patrick.

The next question is from Martin Ratz, Morgan Stanley. Please go ahead.

Yeah, I wanted to ask you two. First, If I can pick you up on the point on refining, because, of course, I read your outlook statement, which looks quite cautious on the outlook for refining, talking about long-term structural challenges. But we have really quite encouraging refining margin on the screen. As of today, over the last couple of weeks, there's a lot of strength in middle distillate. So reading the outlook statement, what sort of was shining through was a clear belief, I think, that this is sort of temporary. And I was wondering if you could say a few words about refining. in your mind, what is explaining this recent bout of strength, but also how long this could last and how it could dissipate. We're closing a lot of refineries in Europe this year, so I kind of thought that the remaining refineries of Total, at least in Europe, actually should have quite a decent 2026 as well. But I was hoping you could give a few thoughts on that. And also, I wanted to ask if you could give us an update on Mozambique and the project there and what we can expect going forward.

Okay, refining is an interesting question. I think in particular what is clearly today happened is that there is a diesel driver in the market to explain why refining margins are quite good. And we think that stronger diesel prices become a persistent feature on the global market. It's linked in particular to all what happened around Russia flows. In fact, you know, the Europeans have banned, have stopped buying Russian petroleum products early 23. And that means that the source of diesel, because Europe is fundamentally the deficit of diesel, so we are obliged to import. The source of diesel are coming now from Middle East or from U.S. refineries further away. So it has increased the cost of all that. I would say the last decision of the European Union, which is to ban gasoline, imports from refineries even outside of Russia and targeting some refineries, I think, in India or Turkey, which would use Russian crude oil to be refined to make diesel is impacting again, I would say, increasing the scarcity of source of diesel for Europe. So it's an additional signal which goes in the same direction. On diesel as well, as you have observed, Diesel is easier to produce from heavier crude oil than light crude oil. And in fact, the mix of the crude oil, the basket, is lighter and lighter because of shale oil. So in fact, that means that it's more difficult, more costly to produce diesel. So that's another source, which is again, I would say, and you have also more NGL when we speak about liquid. So NGL plus light oil, again, is not good for making diesel. That is again... pushing diesel prices up. And I think that's the fundamentals. If I try to analyze the diesel, the fundamentals which are supporting this market, in Q3, of course, it's a driving season, so there is more demand. But I think the news coming, people have underestimated this news from the EU banning imports of products from non-Russian refineries if they use Russian crude oil. That, of course, is pushing up. So there is something for me more structural there. Then, you know, it's a margin business. It's not like oil, but this is a point. On Mozambique, we are working. You know, it's a major project. And I would say we are working in order to ensure a very strong alignment between the government of Mozambique and the investors. And this is, for me, absolutely necessary before we re-engage to have a very strong alignment between the Mozambican authorities and the investors. Thank you.

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

Thank you, and good afternoon. Two questions, if I could. Firstly, just picking up on the downstream and the structural side, can you talk about the potential you see from the digital AI deployment that you announced, I think, with Emerson, and how quickly do we start to see results on that? And then secondly, if I can come back to the buyback, I mean, I get the idea that the rest of 25 looks covered by divestments, that gearing doesn't go up, that you can afford the $2 billion per quarter. But you did talk about the payout ratio being high at 55%. So I'm just thinking about as we go into sort of next year, how you're thinking about that and why you want to stick to that $2 billion buyback. Is it just because you're seeing the value in a share price or just really why you still think that's the right level? Thanks, Patrick.

Thank you. First question. Thank you for the question of AI and digital. We are now moving, going, I would say, from words to action. And this is, these announcements with Emerson on data digital is quite fundamental. In fact, we have decided to invest in, I would say, a real-time data platform. We need to structure all this data. It will be done not on a pilot basis, but on a worldwide basis. For all our assets, in downstream and refineries, also in upstream, so the same platform, which is the innovation platform, which behind the platform, we are developing with MSM some softwares, which the objective is to, I would say, enhance the value we can extract from the assets. And there are two programs, one on advanced process control and upstream. Advanced process control is technologies which are used in refineries for long, which were not used in the upstream, so we use them on our upstream assets, and we think, since my upstreamers have discovered it, they are a fan of that, so this is a promote. And we are also working on the downstream to going beyond advanced process control in order to make more developments on software based on data with AI. So it is really for us, and I'm a believer that AI is not only cutting costs, that's for I would say general services, it's enhancing the value of the assets because we could better monitor these machines. So this is a rule of purpose. No, for TotalEnergies, it's action. And we are also, by the way, working with another company, and there will be an announcement soon to another additional AI platform which will come on assets. So that's good because digital, for me, it really is a source of future competitiveness in our operations. We are also establishing, by the way, within One Tech, a full digital line. It's not a question of IT people. It's a matter of business people to put it at the heart of the technology of the assets. And the digital line will be established within One Tech with strong teams. So that's for this one. On the second one, you know, when we think about buyback, Firstly, why do we buy back? It's a fundamental. It's just a matter also of good management of the money of Jean-Pierre. What I observe is that today, Jean-Pierre has been able, with his teams, to make a bond issuance in euros, recently again, at around 3.5%. So we borrow money at a depth of 3.5%. At the same time, but I hope it will not be for long, but considering the share of value share, we serve... The cost of the capital, if I say the dividend over the share value, is around 6%. So why do I make buyback? It's not because it's just, you can demonstrate to anybody, but I'm saving some money from one side and I'm borrowing at the lower side. That's the fundamental. And on the top of it, when you buy back, as I said, it's a base of increasing future dividends. So it's a virtuous circle. So there are the two fundamental reasons. Then the question, we benefit from a strong balance sheet. You know, I In the past, it was a 30%, 40% gearing. Today, people have questions because we move from 10% to 15%. Okay, let me be clear. We should look at it, and I see titles in newspapers, but I'm a little surprised as if it's problematic. No, I think we need to monitor that. For me, again, there is a point. I answer to a question, what is reasonable? I think I said 65%, 70% is reasonable. That means that... At a certain point beyond 60, 65, maybe not reasonable. But we'll see that. And I will come back to you because I know that, unfortunately, we will give guidance to all of you. We want always more color on it. So the reasonable guidance is maybe not enough for you. So end of September, we are working with the board. We'll come with you with, I would say, more information. not fully detailed. We'd like to keep some capacity to maneuver, but we'll give you answering your question. In particular, because we are at 70, we are no more 80. Some people in the market look to 60, so I think it will be time to come back with you with a clearer picture. Today, we stick to what we said. We are $70 for the first half, $70 on the market, and the $70 we committed to $2 billion at the beginning of the year. And even if we have a lower cash flow from the downstream, it does not change dramatically. A billion-dollar miss will not change the full picture like that.

The next question is from Doug Legate, Wolf Research. Please go ahead.

Thank you. Good morning, everyone, or good afternoon over there. Patrick, I think the working capital discussion has been fairly well debated, but I'm wondering about the CapEx guide for the year. You're running pretty hot, obviously, with the acquisitions year to date versus the $17 to $7.5 billion guide. What visibility can you give us on disposals to get you back into that range in the second half of the year?

Okay, Chris. Duke, sorry. I think I gave you in my speech, I tried to give you a lot of visibility, more than ever I've done, I think. So I think it's the first time, because I knew that you will have to be secured with that, because you better know it. Generally, when I say something, we execute it. I know it's a matter of credibility, but what I told you is that we had already Bunga, which has been divested. I told you that we have Approve that the executive committee has taken some binding offers from other assets, in particular, our own conventional oil license in Argentina. We have a good offer. And two other assets that I cannot disclose because it's not yet public, but it will come. So it represents $1 billion. We have another billion coming from closing the onshore Nigeria divestments, which was announced last year. In Nigeria, it's always longer, but we are working on it. And then, of course, we have all the farm downs on the integrated power. which will represent $1.5 billion. So when you make the math, 1 plus 1 plus 1.5 makes $3.5 billion. And it's more or less, you know, the guidance of the year for CapEx was a net between acquisition divestments of zero, which is what I told you at the beginning of the year. And on the organic CapEx, we are in line. To be honest, I assigned even a small margin challenge to my teams telling them that 17, 17.5 is within the range. It would be better to be next to 17 than next to 17.5. It's a challenge. I'm not sure that we will manage, but we are working on that.

It's early here. I guess I missed the details.

Sorry, Patrick, but thank you for... Again, you should benefit of it because I'm not sure I will do it again to give more visibility.

My follow-up is a little detailed. You bought or you took the 25% of SEPSA's block or share in block 53 in Suriname. And our understanding is that from one of your, basically your FPSO providers that Things might be moving a bit faster there. Can you offer any insight on the timing, your latest thoughts on Grand Morgue, and what Block 53 means for the resource recovery and perhaps the plateau production? Yes, sir.

I mean, on Grand Mogul, honestly, I don't know who is telling you they are moving faster. I would be very happy if we deliver the first hole by beginning first half 28 that we committed. No, I think they are moving. I recently went to KL, to Kuala Lumpur, where I met my teams. There was good news and some a little more cautious news. So I need to take all that. No, honestly, we are, for me, there is no reason to change, no reason to accelerate, but But then block 5053, there was a small discovery there. I mean, we're in the range of 50 million barrels. So we had the opportunity to capture it for quite a decent amount, quite very reasonable ones. You know, Cepsa wants to exit from upstream. So we have the options buyers. So we will connect it. We have, I think we have, the plateau of Grand Mogo is at 220,000 boil per day. You know, these machines, generally, when we are designing them for 220, they can easily go up to 240. It's not 10% is generally the case. So if we can connect these type of things, it will give more value. But for me, as I always told you, since we sanctioned Grand Mogo, There is a lot of hydrocarbons, including around, you know, we made other discoveries that we put behind. So there will be a planning. We are discussing, we are trying to look to come back on some and to appraise some of the previous discoveries. So I've asked my teams because even if there's maybe not enough to make a second FPSO, but for sure the objective is to extend the plateau and to make a higher plateau to create a lot of value from this infrastructure. So it was a very good opportunity for us to make things. And being inside will smooth all these type of unitization stories, you know, and be a partner of it. It will help a lot with our colleagues in order to move these resources quicker.

Thank you very much indeed.

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

Hi there. Thanks for taking my questions. Just two quick ones, please. On FX, can I ask, your dividend has become almost 10% more expensive since the start of the year in dollar terms. Is that still irrelevant in the greater scheme of things, Patrick? As you said, a billion in downstream here or there, 10% of the dividend is less than a billion. How does that inform your take on the overall payout? And secondly, if I may, has the arbitration outcome between Exxon and Hess changed anything the way you are thinking about rights of first refusals in contracts? Thank you.

Well, this question is easy. No, because I think clearly I would say, by the way, I don't like generally too much the right of first refusal or right of preemption because generally when you give that in a contract, You lower the value of the assets because, of course, so it's more complex to monetize an asset when there is this type of right of preemption or right of first refusal. Right of first refusal, by the way, for me, it's never been clear. Right of preemption, I understand what I have to do. Right of first refusal, you are with the debate, you are asking for something, but what is the right to say no? I mean, it's always a source of confusion. I think the outcome is good for the industry because this type of clause exists in many GOAs. They are standard AIP and clause, and it would have been quite a problem if suddenly we had to review all these clauses in all GOAs. So I'm comfortable with the outcome. I don't have all the details, to be honest, of the clause itself, but that's for me the way I'm thinking. I prefer, honestly, right of preemption if I have to accept an error or is a little difficult to manage. On the SPIC, no, I think I'm working on the control of Jean-Pierre. There is no real impact on 25 because, in fact, 25, first, we make quarterly dividends. So the advantage is that most of the dividends at the beginning of the year were even lower. I think one of them was lower than 1.01, 1.06. So on the average of the year, there will be a very limited impact, maybe $200 million or something like that. So it's not sizable. There is an impact. Your question is more relevant, and that's part of when I say the macro environment for the board. There is also this question of US euro exchange rate. We design, I would say, at $17 when we say, in fact, the return to shareholder, you could translate it at $16 billion. It was eight of dividends plus eight of buybacks. 16 at $70, we are considering that it was a high return, but a return we could support. Of course, if we engage and we have not yet enough, I would say, background on the dollar-euro exchange rate, but if we consider the macro is going from 1.1 to 1.2, then the $16 billion could be done in another way, you know, and that's the way the board will think about it. If we have to spend 10% more on the dividend, 26, then we'll have to adapt Keep in mind that it's $16 billion in that case. But it's too uncertain today. Again, I've seen the dollar-euro rate moving down to 1.06 at the beginning of the year, and today it's 1.16. So before to overreact, we are waiting to see what will be done, and we'll have more clarity with quarter to come. But yes, it will be taken into account. If it is a vote, consider that we are entering into a more systemic, I would say, 1.2 euro-dollar rate, then $16 billion could be done in another way, knowing that the dividend is always a priority for the board.

Really appreciate that. Thank you, Patrick.

The next question is from Matt Lofting at JP Morgan. Please go ahead.

Thanks for taking the question. I wanted to just come back on the earlier comments on gearing and the balance sheet. If I understood right, I think you were saying that 12% to 13% gearing year-end of $70 from February is now more in the range of $14 to $15. Sounded like downstream cash flow at around a billion is a part of that, but I guess the margin assumption is $35 looks okay versus where we sit today. So could you just add a bit more color around sort of where the delta is there on gearing and perhaps within the downstream piece, the sources of those moving parts, but perhaps more through asset performance than the margin. Thank you.

Yeah, but I've been clear. Honestly, there is a miss on the first half, I will note, on the downstream part, and partly is leading to the performance in particular of two assets that I mentioned in the second quarter. The bad performance of, I would say, Port Arthur and Donge cost us almost $100 million. There is another element, two other elements in the downstream today. One is the biofuels market in Europe. There is another supply today in Europe on the biofuel market, the famous soft market today. Europe and the airline companies are so afraid there is a miss, but Europe is importing from all over the planet, and it has crushed the margin today. There is little difference today between a biodiesel and a diesel margin. So it has spread again. So that's a low signal. And then petrochemicals. And honestly, on the polymer side, we did not comment that too much. But there are several quotas where we suffer from it, in fact. And it's not only Europe. It's also Korea. In fact, today, we have to think about it. There was a lot of capacity put on stream. In the US, plenty of crackers. not because of a domestic market, but for export markets, exporting to South America or to China. But in the meantime, at the same time, Chinese have built a lot of petrochemical capacities, which, by the way, are supplied by NGOs coming from the U.S. So it's a little funny, all that. And this created, in fact, the Chinese have followed a policy of almost self-supplying in petrochemicals. They try to secure, they are obsessed by this idea of security of sovereign economic sovereignty, economic security. And so today, in fact, when you look, even the Chinese are complaining, by the way, because most of their petrochemicals are on NAFTA, and they are complaining. I met the chairman of Sinopec. I told him, yes, but you are a little, yes, you are. So you have a lot of polymers, U.S., Middle East, China, and that today, in a global macro, which is not so good, you know, you have a global slowdown, and industrial activity in China is not as strong as it was before and so this is clearly on polymers there is an impact and I'm not surprised to see today by the way it's good news but you know we have just announced we shut down one of our crackers in Antwerp but other crackers have been shut down in fact last year in France and so crackers shutting down so of course these industrial tools in Europe begin to face the overcapacity that we have We are obliged now to streamline. So it will take time when we enter into a low cycle because, again, you have to take strong decisions to shut down a plant. So that's the point. So that's also why today we had, I would say, first quarter, first half of the year, we had a miss of around $400, $400 million globally, which I think we can reverse on the second half. Not on the petrochemicals, but my refining margins, as I said, are better. Diesel... driving season, so 6 billion by the end.

The next question is from Lucas Herman, BNP. Please go ahead.

Yeah, thanks very much. Two, if I might. One was just a follow-on. Patrick, just going back to Mozambique, you talked about trying to ensure alignment between yourself and the government. I wonder whether you can make any comments on where the misalignment lies. And secondly, staying with chemicals, sorry, it's an asset-specific question or a business-specific question, but Hutchison, just wondered how that asset has been performing and to what extent you feel that that business continues to lie easily within Total's portfolio, given the way that you've been pushing and directing the business. Thanks very much.

No, Mozambique, I think I made comments. Don't misunderstand it negatively what I said. I made a positive comment, which is to start up a lot, to restart a project, we need a strong alignment and we are working on a strong alignment. So don't try to interpret my words. It's just that we are working on it. We speak about large projects, 20 billion. So we need to be sure. And again, you know, we have been obliged to stop, to restart. I need to have all the strong alignment between parties, security, everything. You know, I would say it's important. And we are working on it. And again, summer, I said summer, so summer ends September 19th. So give me time. Okay. Chemicals, no. I mean, again, I think in the chemical business, we have some strong assets, which I would say are the ones which are fundamentally on cheap-fit stock. Cheap-fit stock. And the ones which are historically on NAFTA, which are not so competitive. Most of the European assets are on NAFTA, and the domestic market in Europe is not growing for polymers. It's more... The global, there is no big growth in Europe, and that's the point. So, by the way, should it stay within the TTE portfolio, there is an integration between refinery and crackers which works. It works if we have an integrated platform. But why did we stop, decided to shut down one cracker in Anwerp? It was not integrated at all in our portfolio. We had a cracker, and all the ethylene was in fact sold to ExxonMobil. which was making polymers. ExxonMobil decided to shut down their own polymer plant, so no more integration. I will not keep alive and running a cracker with ethylene with no outcome. So integration is key. It's another demonstration. It's true on the chain. So as long as we have some integration, it works. Then it's better to make, again, to produce these type of polymers in Saudi Arabia or in Qatar with cheap feedstock than with NAFTA, which is more expensive in Europe. So, by the way, maybe you have an idea to whom I could deliver, but I'm afraid that you never make a good business when you sell at a low cycle. You prefer to buy at a low cycle. But I will not buy assets in chemicals. Don't be afraid. Don't be afraid. Look, there is no message. I'm not there. No, I think it's part of the... As long as they are integrated to the refineries and strong refineries, it's okay. Again, when we have weaker assets, we take a decision. And on Antwerp, it has been possible, and we accelerated the decision, by the way, because at the same time, the refinery is doing well. So translating some people, we have a lot of more and more people going in pensions in Antwerp because of retirement age. And so we moved people from the cracker to refinery. So it was a good way to manage this shutdown. So that's where we are. sorry Patrick the question was more on Hutchinson itself you know Hutchinson you should ask the question clearly you know Hutchinson is not a chemical business it's a manufacturing business and by the way Hutchinson performance is very good yeah and the other side of it was to what extent and it still fits very comfortably within your portfolio oh you know it's I don't spend much time I can tell you one hour per quarter okay For a good business, that's fine. But if you find a good buyer, no, no, no joke. Honestly, it's a company which works well. There is no problem. I have other more interesting, I would say, M&A to do for the company, for the future portfolio of the company in oil and gas or in integrated power, not to spend too much time and to have issues or worries about this type of... It works well, so I'm comfortable. That's where we are. I have better ideas for the future of TotalEnergies, and no problem with it being in our portfolio. Thank you.

The next question is from Kim Fustier, HSBC. Please go ahead.

Hi, good afternoon, and thank you for taking my questions. I had two, please, on the upstream. The first one is on your portfolio activity. You've been very active in recent months, and you've done a lot of deals to replenish your upstream and energy portfolio for the post-2030 timeframe. I'm thinking of deals like Algeria, Gulf of Mexico, Malaysia. I just wondered if that signaled a change in your view fundamentally on the prospect or the timing of peak oil demand. Are you effectively trying to extend your production plateau to sort of match the shape of global oil demand? My second question is on disposals. Some of the upstream disposals that you've announced weren't necessarily expected, thinking of Bongo or Argentino Shale. Are these opportunistic deals whereby you're sort of open to incoming bids, or are disposals increasingly an important part of your cash flow cycle as a way of maybe generating cash to support your balance sheet? Thanks.

Okay. A very interesting question, Kim, to both of them. Okay, you know, in an oil and gas company and an energy company, and oil and gas in particular, you have a natural decline. One of the objectives of the management is to think long-term and to not... It's not because we have a very large portfolio of opportunities between today and 2030, but life does not end in 2030. So we must continue, you know? And I think for the time being, it doesn't matter. You know the story, peak oil, peak blah, blah. I don't know, peak oil or peak demand or peak of price or duty. It's clear. We have one way to look to opportunities. If it's first quarter, second quarter, which means less than $20 per barrel, capex plus opex, low break even, less than $30 per barrel, I'm happy to continue to provide this type of opportunity to the portfolio of Total Energy for the future because these opportunities will be profitable even during the 2030 plus, even if you have a beginning of a decline of oil demand It's possible. I don't say no. So the protection that I bring to our shareholders is we are first, second quarter assets, and that means that we can continue to allocate capital to these assets because they will make money even if we decline overall price. Decline of demand, by the way, decline of demand does not mean necessarily decline of overall price. People have Because if everybody anticipates a decline of demand, you have less projects. So it's good to have some projects just to be there and to capture these good opportunities. So yes, we continue to work. By the way, most of what we have done, it's not so much oil in what we have announced. It's more gas, in particular in Malaysia. The Malaysia story, we will come back on it. You know, some of you were probably surprised when we acquired Sapporo OMV last year. Why do we build this position? And now you have this follow-up. We are very happy about the last deal we've done with Petronas, which is 12 blocks, not only explorations, because in the 12 blocks, there is a DRO, a Discovered Resource Opportunity, of 340 CF, which we will develop. So it's giving, I can tell you, a good additional value to the fact that we have acquired this position. These type of things are very logic. It ends gas. Gas in Asia, honestly, there is a bigger demand. So it's good to continue. Divestments, no, I think it's very consistent about divestments. We told you we have a very broad portfolio. Some people even think we have too many opportunities, but I prefer to have a lot of opportunities and then to arbitrate. Of course, look, these two opportunities, which were non-operated by us with minor share, why allocating capital to... Even if it's a project, I don't consider the project is not good. I just say, We prefer to allocate capital to larger, to Suriname and to Block 53 to expand Suriname than putting some millions of dollars, hundreds of millions of dollars to finance a 12.5% share in Banga. So it just makes very sense. And we have a huge portfolio in Brazil, CEPIATU, ATAPUTU, all that, LAPA extension. So it's a matter of managing and to keep the discipline, I think, of the CAPEX. If I keep everything, and so I prefer to arbitrate the non-operated assets, which, by the way, in both cases have a higher cost than $20 per barrel, so are not completely fitting with our metrics, that's quite logic to divest them and to find a buyer, which in both cases, by the way, is the operator. So it makes a lot of sense, and I think it's part of what we have to do for keeping care of the allocation of capital for our shareholders.

The next question is from Alastair Syme, Citi. Please go ahead.

Hi, Patrick. Just one question on biofuels. My observation, maybe I'm wrong, but European countries seem to be quite slow to legislate on Red 3. Do you sense in your discussions that there's any political debate about the cost of biofuels, given that renewable diesel and SAF are still three times the cost of the fuels they're meant to be replacing?

On the biofuels, no, I see most debate about what is around hydrogen and all these type of molecules. On biofuels, I don't think there is a... In fact, the biofuel business is more hit today by different elements. In particular, on the sustainable aviation fuels, there was a new regulation which was issued in summer 24, which allowed to make co-processing in our refineries. We co-process some used cook oil or some HVO that we produce in biorefineries to make sustainable aviation fuels. Of course, the cost, when you co-process in an existing flow, the marginal cost is almost nil, I would say. So that clearly has changed some. And I think some countries begin to think, what is the share we want to allocate to that compared to, I would say, the pure biofuels products? Of course, it's very important for companies like us when we invest in biorefineries. I'm also a coprocessor, so I'm both. And that we need some more clarity, because it's possible that today, because again, what happens in this debate, and airline companies are very vocal, everybody likes Always in Energy. They want the cheapest possible product. They want a low-carbon product, but the cheapest one. If it's cheaper to make it by coprocessing than making as a transformation in a biorefinery, They will favor the first line. And so for us, it's really for me. So that's true. In our plan, we have done Lamed. We have done Grand Prix. We are thinking to a third one. For the time being, we have postponed it because we said to the team, look, there is maybe a chance we are in this market. And let's put, because honestly, to make more co-processing within Total Energy, it requires two tens of millions. I mean, we are not speaking about hundreds. It's less than 50 million. We could produce more. So this is what we will do. So this is slow to regulate. There are new elements of regulation. The lesson is that this biofuel market is a regulated market. These molecules are regulated, heavily regulated. And all that, and it's a little true what you said, Red Free is a European directive, but then each country begins to make its mix. So we have to navigate for that and not to anticipate too much on what could be the regulations. But then we could make some misallocation of capacity. So this is where we are. But the biofuels, I see, I think we need to integrate these. There are some technological disruptions, in fact, which is what happened. Because when I was asking to my refiners, why don't we co-process five years ago, they were speaking about corrosion difficulties. In fact, we make some tests. There is no real corrosion, et cetera. So things are moving. Things are moving in all these new low-carbon fuels. Great, thank you.

The next question is from Henri Patricot, UPS. Please go ahead.

Yes, I want to thank you for the update. Just one topic left, which is Namibia. I was hoping you could give us an update on Venus, the latest online, and also whether the project could change if you get involved in the blocks next door with the demo pain discovery. Thank you.

Next door is a little far away. Yeah, Namibia. I told you that I visited, I don't know, I mentioned that I visited Namibia. I met the new authorities. It's a new government and very willing, of course, to develop the oil industry. We are the first one there with a project. So we have, of course, to tackle some issues with them. I received a letter asking us to engage in the discussion. So I think there have been a team set on the Namibian side reporting directly to the president of Namibia, which was a decision. And on our side, we are ready. So I think it's a matter of we are working. But again, I think we need to do it a little like Mozambique. You know, you have a new country to oil industry. So it's important to ensure the alignment, the good understanding. I don't want to have a We're investing and then discovering a problem because the Namibian authorities would have the feeling that they did not understand all the projects. It's better to take time at the beginning, even if, of course, we are ready. They are very motivated. They would like the oil to be produced before the end of 2019. That means that we should take decisions this year before the end of 2025 if we want to meet the target. This is what we explained to them. And then we'll do it. We are working with them. I cannot tell you more. On the opportunities next door, again, it's not really next door. It's a little far away. We'll see. I mean, we'll see what will happen. We'll see what will happen in this business. But again, I'll let the company working on it. Then what we do, by the way, on our side, Namibia, for me, the next news will be South Africa. Because, you know, we have also some wealth to be drilled. We have some attractive license just across the border. And we have, I think, two or three prospects. And we are working in South Africa. The process to get all the authorization is quite a little long. But we hope to begin to drill South Africa targets in 26, from 26. So that's where that's also linked to this one.

The next question is from Paul Sheng, Scotiabank. Please go ahead.

Thank you. Hi, Patrick. Good morning or good afternoon. Two questions. First, in the U.S., we have a precedent that love to trace it maybe in the middle of the night and subsequently that oftentimes make a significant impact on the market condition. Let's see it. In any shape or form that impact the way how you manage your trading operation, because a lot of times the trade is going to insert an element of predictability. You can't really predict what he may or may not do at a particular moment. So how you guys would be impacted or that you say, okay, this is just part of normal operation, so I'm not going to impact by that. The second question is you've been reducing your European refining and chemical operation for an obvious reason. In the long haul, do you foresee that you may totally exit from refining and chemical in Europe or that you think you ultimately are still going to have some position you just need to strengthen it. So, just how you view on those aspects in the long haul position in your portfolio.

Thank you. Okay. I think on the first one I commented it already, you know, it's true that traders have to be, do not like too much to see, I would say, they fundamentally try to trade around fundamentals to take position about analyzing the supply and demand and the different factors regions and the different optimizing logistics and all that. And, of course, they don't like too much to see this element of uncertainty with markets reacting very quickly to a tweet makes their position quite strange. So, yes, like Jean-Pierre is just telling me, a nice sentence is, volatility around tweets is not tradable. You know, this is what, by the way, what's true. Volatility around trade is not tradable, and that's what our traders told us. So they told us, don't expect us to make, maybe they make very good results about the old business, the old guys. They were completely aligned with our expectations, but they told us, don't expect some time. We could expect more, but we can be reversed, and so we are obliged to be more short-term, I would say. The consequence of that is that if you want to play three, six months, you could be suddenly your position, which seems to be good, could become not in the right direction. So that's the difficulty of it. Having said that, again, they have our trust and our support, and they are, I would say, they are aware, and I trust them. They know what they can do and what is tradable and not. And so, honestly, again, the old trading of total energies is not as expected. So there is no problem. So on refining, okay, look, it depends what will happen. There are two different positions, but it's linked. If Europe really goes to no more gasoline EV vehicles, light vehicles in Europe, we don't need to have refineries to produce gasoline. I'm just saying. So the question is not 2035. 2035 will be... stop commercializing if they really stick on this position. But by 2015, I believe, there should not be a lot of gasoline cars in Europe, you know. But I could think it will be a reality. Then, of course, we have to think to this perspective. It's still a long way, but we have to think to that. We have some very strong assets in Europe. So we see the stronger ones are well-known. It's AMVERP in particular. It's a very strong asset with integration. So the first quarter assets will survive. The third quarter, we need to think of their future. Their future might be to become bio refineries, like we've done for two of them. Or their future for a cracker, if we can do it, of shutting down the cracker in Antwerp, because in Antwerp we are able to, we have taken the decision because we didn't see how to maintain an isolated cracker in this context. So, I mean... Will we keep the position? I think this position is a dynamic position which will evolve according to the market, which is declining. Strengthen it. Strengthening Antwerp, maybe, because it could be one of the last refineries in Europe. We cannot spend too much money on this one. And that's one difficulty, is that refineries, if you want to maintain good availability of refineries with a high level of safety, which for us is fundamental, requires to have a maintenance capex, which is quite burning some cash. So all that is better to have. What we monitor there, I will tell you, is what is the global net cash position on refining in Europe. And of course, if we begin to have a net cash negative, then we have to be tougher on these ones. We know the issue. We are in Europe. It's part as well, you know, That's why if you look to the narrative around energy in Europe, it's more and more about energy security. And refineries are part of the energy security. You've seen the debate in California recently, where California people are very afraid not to have enough refineries. It's quite funny because they have made regulations to shut down all of them. The UK as well, you've seen that two refineries have been announced to be shut down. So That's where, by the way, governments will be in an interesting debate with them. Because on one side, they give us a signal that they don't need gasoline by a certain distance. And on the other side, some people will say, yes, but we need these tools just in case, you know, just in case in the future. So I think we have... So our objective is, at the end of the day, to reinforce the first quarter assets and the others to find a respectful evolution for people.

Thank you.

The next question is from Jean-Luc Romaine at CIC Market Solutions. Please go ahead.

Thank you for taking my questions. It relates to the asset sales you plan in the second half in integrated power. Do you believe it will put back the Roche of this division back within your 10%, 12% target? That's the first question. The second is about VSB. Out of the portfolio of VSB, how much went into the under-construction portfolio? tables and how much went into the under development project out of about i think 18 megawatts of projects that were mentioned in the press release of the acquisition okay

The first one, no, I mean, Jean-Luc, it is reasonable. We announced that we want to be at 12% by 2028, 2030. So we will not reach 12% because of the divestment of the single life. No, it takes more time. We are still in a growing mood. So our capital employees are still growing, which is normal. I accept it. So today we are more in the 9%, 10% range, at least for a year. The 12% will require at a certain point to have enough capacity to stabilize all that and to continue to develop the integration, which is done. So, no, I will be cautious this year. We are still, let's say, targeting the 10%, 9 to 10. That's what we want, and this is where it will go, and I'm optimistic about that. But I don't expect 12% in 2025. It's not on the roadmap for my integrated forward teams. They have a lot of challenges in front of them. I don't want to add on this one. So that one maybe I disappoint, but it's more pragmatic. On VSV, I'm looking to my friends to give me a . What is installed? There was 500 megawatts installed, but the question you are asking is what is under construction, and what is more in development? I mean, I know that we have approved recently three projects for PSV, so in the executive committee, they came... In less than two months. In less than two months, they came to us to approve three projects, so I'm quite... I think... I don't have the answer to your question, Jean-Luc, sorry, but I think Renaud and his team will come back to you. I mean, I've seen the figure, but I don't want to make a mistake there, to give you a wrong figure. I think, I will come back to you. Again, we have a, just to demonstrate that we have approved around two free projects recently, which were representing globally, I think, something like 600, 700 megawatts, and there is more to come. So, yeah. What we plan to develop, yeah, but I'm not sure. Okay. In the long term, but I don't know what it is. In the long term plan, that's... Yeah, we could see something like, no, we will come back to you. I think it's around three gigawatts, but I will come back to you. I prefer to give you a wrong information on this one.

Thank you very much. Very clear.

And the last question is from Jason Gableman, TD Cowan. Please go ahead.

Yeah, hey, thanks for taking my questions. I wanted to ask on integrated power in the U.S. specifically. Given some of the changes to the tax credits in the recent tax regulation that was passed, does that change your view on the pace of development in integrated power in the U.S., the returns and the ability to farm down assets there?

I will tell you, in fact, what I observed on the farm land in the country is because there is a fear of scarcity of this type of assets. financial investors, which are, in fact, buying this farm down, are even more aggressive on the valuation. What is more piloting the farm down is more the interest rate, to be honest. But today, the scarcity of assets, or the risk of scarcity, there is some appetite. There is no doubt. And as I said, we are farming down 1.5 gigawatts, and we receive very... good offers in line with our expectations, then don't misinterpret what has been the big, beautiful bill for renewables. In fact, when you look at the end of the process, tax credit, either PTC or FTC, that did not really change, providing that the project will be put into construction before mid-26, or 27, mid-26, I think. And so we are working on that. you know, what we call safe harboring. And we, of course, the condition of safe harboring are important. But when we look to our portfolio of projects, it's for us. When we look to what we were planning to develop between today and 2029, 2030, there is not much impact on all that. If we can safe harbor, of course, correctly and according to the rules. But I think we will come back to you later on this one as well, end of September. But the ITC and PTC quantum did not change, in fact. And you know, the capacity to, I would say, how do we say that, migrate between, the market for ITC, PTCs continue to remain. What has been, the tax partnership and all that remains. So most of the, it's just a matter that it will elapse in time. But with what has been voted in the Senate, it's possible to use that. It could have some impact. One part which is more impacting, in fact, for me, these businesses, is more the tariff, as I said before. Because the tariff, you don't have today in the U.S. enough manufacturing capacity to make all the projects. This tariff, it depends, and other tariffs are not the same for all the countries. We are, I would say, in a shadow today. We don't know. So, of course, it could have an impact on us on diversifying our supply chains, finding new countries. I know that we stopped one project in April with a provider coming from China. We managed to replace it with a provider from Vietnam. And by the way, this Vietnamese company wants to build a manufacturing plant in the U.S. So you will see some ways to, I mean, this dynamic will come. Finally, building a solar plant, manufacturing plant. A manufacturing plant for solar is not so complex, in fact. But we see some trends. So, again, I don't tell you there will not be a form of slowdown, but this will not be... And again, for us, it's value over volume. Let's be clear. I've been very clear with my teams. Okay, you want to grow, but we will grow at a pace which will be allowed by the global framework. And so we need to digest all this information. But the last news I've got, now that the bill has been enacted, are more positive than what we thought. There is one segment which has completely, we put into, I would say, a sleeping mode is offshore wind. This is completely sleeping now. Sleeping means nobody is taking, we have reduced at the minimum any cost on this one. But you know, integrated power is also gas-fired power plants on this one, I can tell you. We could make a lot of money by farming down part of the free 1.5 gigawatts we have acquired two years ago in Texas. At the end, we want electrons we can remove from the totaling scheme. So there are ways to mine to use this type of assets to get some money back. So there are good things as well in what happens in the U.S. on the electricity side, including gas to power, which is, of course, the core as well of our business model. It's not only renewable. Our business model in particular in the U.S., is gas-to-power plus renewable, but gas-to-power are very important.

Yep, got it. And then my follow-up, it's probably fitting to end on a CapEx question, given all the focus on that. So it seems like to hit the organic CapEx target, CapEx needs to slow by almost a billion dollars from 2Q levels. Can you just give us some sense about where the activity is slowing down, and also if Mozambique LNG, if that moves forward, is that already in the CAPEX budget, or would that be incremental?

If Mozambique LNG is moving forward, it would be externally financed, so the impact on the CAPEX budget is quite limited.

Got it. And just more broadly on...

Thank you. Sorry, Jason, but I cannot give you... I mean, I don't have all the details. No, but I mean, we know where we are going. We know why. But for example, I will tell you... This pipeline in Uganda, we put in place a project financing in the middle of the second quarter, so it has a positive impact on the capex on the second part of the year. So the run rate of spending was higher on the beginning of the year than the second half. This is very pragmatic, this one. So when I told you that we will stick on the $17-17.5 billion, I repeat it, you can believe me. You know what is behind.

Okay, thank you.

Thank you. So, I think we come to the end of the call, no?

Yes.

Do we have another one? No? It's okay. So, thank you to all of you for all these debates and questions. Again, I think the key word of Total Energy is, I know it's a little boring, but it's consistency. It's good stuff, so boring, but consistent. Consistent is a strategy, and again, keeping the... The return to shareholders on the high side, so I think it's good news for shareholders. Okay, we are in a cyclical, we are in a commodity business. We don't control the markets, and today there is volatility from supply and demand side, but also from geopolitics, so it could be on one side and we go the other way. What I'm sure is that we manage, we have the flexibility, the agility in the company to manage all this hybrid volatility, and we are growing again. And as always, growth is delivering some additional cash flows, which is very important for the board. The board already monitored as well. Do you deliver what you said in terms of growth of productions on both sides, in integrated power and in oil and gas? And I would be happy to meet all of you again in New York on September 29th. I know it's an annual one, so we will give you even more certainty about our business plans towards 2030, and I am happy to advance and enjoy to meet you there with all my executive committee. Thank you.

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