TotalEnergies SE

Ladies and gentlemen, welcome to Total Energy's third quarter 2025 results conference call. At this time, all participants are in listen-only mode. After the speech, there will be a question and answer session. To ask a question during the session, you will need to press star and 1 on your telephone. I must advise you that this conference is being recorded today on the 30th of October 2025. Thank you for holding. The conference will begin shortly. Right after this message, please clearly announce your first name, surname, and cite your company name. Thank you. Thank you. Thank you. Ladies and gentlemen, welcome to Total Energy's third quarter 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. Good morning, everyone. Before Jean-Pierre goes through the details of the third quarter results, I would like to make a few opening comments. Almost exactly one month ago, we updated you for strategy during our Capital Markets Day in New York, and we had four key messages, consistency and resilience of our two-pillar strategy, strong and secure production growth in our oil and gas business, a creative cash flow generation, and capital discipline. I believe that this company has strong third quarter results, but again Jean-Pierre will detail with you, perfectly illustrates these key catalysts and highlights the value proposition of a consistent and profitable growth model. The strategy is still in motion and is translating into more cash flow, even in a more challenging environment. Indeed, despite oil pricing dropping by more than $10 per barrel year on year, the cash flow for the third quarter increased by 4%, and adjusted net income for the third quarter held steadily. Why? Primarily for two reasons. First, the hydrocarbon growth, production growth is a reality and is highly accretive. The new project barrels coming online, such as Mewfields in Brazil, deepwater projects in the U.S. offshore for oil, Tura and Phoenix for gas, have an average cash flow margin that is roughly twice higher than the base portfolio, and they have contributed 170,000 barrels per day during the first nine months of 2025 compared to 2024. These new barrels have generated around $400 million of additional cash flow year-on-year, so growth volume around $200 million and higher margin, another $200 million. And so they have contributed to absorb the equivalent of $6 per barrel of decrease in the Brent in terms of cash flow. So that's, I think, a strong demonstration that a disciplined investment framework that includes strict sanctioning criteria, less than $20 per barrel technical cost, or $30 per barrel break-even for E&P projects is delivering its fruits. And we expect, of course, that the cash flow tailoring from new high margin barrels will continue as we work our way through our deep project queue. As a reminder, starting from 25, continuing in 26, the company is growing upstream production by 3% per year for 2030. And what is the differentiation factor that stands out of our business model? is clearly that more than 95% of this production by 2030 is already either online or under construction, and largely under lump-sum EPC contracts, which means there is a cost. So projects are in hand, and we are executing them. And again, this year and this last quarter demonstrate that we are well in the delivery mode. Some people think we are boring, but we are boring for the good. Cash is growing. The second pillar of these good results have been the recovery of the downstream, which contributed to the company's resiliency, with cash flow up by almost $500 million. It is true that the refining markets were better, but it's also true that we managed to capture them. Thanks to a good availability of our assets, and in particular, there were several turnarounds during the quarter, but they were executed in time, in schedule, and in budget, and it allows us to reach our objective. And of course, marketing and services continue to deliver consistent results and demonstrate that the priority given to value over volume in this segment is the right approach. In addition to highlighting the strength of our consistent strategy, this third quarter demonstrates as well that we are delivering the short-term, specifically on the second half 2025 plan that we laid out during the July earnings call, which included four key elements. Again, the accretive production growth, giving more cash flows. A downward inflection in our net investments, coming back to the capital discipline, which decreased by $3.5 billion quarter over quarter. A reversal of the seasonal working capital, as we have released this quarter of $1.3 billion. And lastly, of course, all these elements improve the gearing, which is now classed to 70% compared to next to 18%. So the end result is that during the third quarter, at $69 per barrel, the company generated excess free cash flow, with cash flow including working capital variation, more than covering net investment, plus $4.5 billion of shareholder returns in the form of dividends and buyback. It's leading me to shareholder returns. The company, of course, continues its strong track record of dividend growth. The board of directors decided to increase the third interim dividend of close to 8% in euro and more than 10% in dollars compared to 2024. On the buyback side, as announced on September 24, the Board of Directors authorized up to $1.5 billion of share buybacks for the fourth quarter of 2025. And therefore, assuming annual cash flow between $27.5 and $28 billion, in particular supported by the better refining margin that we observe currently, the 2025 payout ratio is expected to remain around 56%. Looking forward, we expect to maintain a strong momentum for the fourth quarter. Upstream production is anticipated to grow more than 4% year on year, like this quarter. The net investments are expected to decrease quarter over quarter in particular because we will deliver the disposal proceeds, $2 billion expected, and at the end, the net of acquisition will represent $1.5 billion of cash inflow in the balance sheet, and that with another anticipated positive contribution from the seasonal working capital, we anticipate to continue to strengthen the balance sheet with gearing forecasted further decline to 15%, 16% at year-end. Last but not least, we have approved the roadmap to transform our ADRs into ordinary shares, and we're happy to announce that we ordered today J.P. Morgan to launch the termination process of the ADR program with the objective that ordinary shares are expected to begin trading on the New York Stock Exchange from December 8th. This is, of course, an important milestone for the company, as it will allow for a single class of total energy shares to trade with extended hours. It will be essentially a continuous listing from Paris 9 a.m. to New York 4 p.m., 10 p.m. Paris time. And we hope that this ordinary shares listing will be a clear catalyst for the stock in 2026 in both Paris and New York markets, and in turn, to market his ordinary shares on the U.S. market even more actively than today. I will now turn the call over to Jean-Pierre, who will go through the details of these first quarter financials.

Thank you, Patrick. I will start by commenting on the price environment in the first quarter versus the second quarter. Brent averaged $59 per barrel during the first quarter versus $68 per barrel in the second quarter, up 2%, but down more than $10 per barrel compared to the third quarter, 24%. EDF averaged $11.3 per million BTU versus $11.9 per million BTU, down 5%. And the average LNG price decreased to $8. $9 per million BTU versus $9.1 per million BTU, down 2%. On the other side, for refining, the European refining margin significantly improved to $63 per tonne compared to $35 per tonne during the second quarter, up close to 80%. In this price environment, the company reported strong financial results with third quarter 25 cash flow increasing by 7% compared to the second quarter, and adjusted net income increasing by 11% thanks to the continued positive impact of the new attractive upstream barriers and strong downstream results that reflect the company's ability to capture higher refining margins in Europe. Overall, profitability remains strong, with return on equity for the 12th month ending September 30th at 14.2% and Roacher close to 12.5%. Moving now to the business segment, starting with hydrocarbons. On a year-on-year basis, third quarter hydrocarbons production exceeded expectations and increased by more than 4%, making it the company's highest growth quarter so far this year. We anticipate that this trend will continue with fourth quarter hydrocarbon production expected to grow more than 4% compared to the fourth quarter of 24, notably benefiting from the restart of XSLMD in Australia. Turning to the quarterly results and starting with exploration and production, this segment generated during the third quarter of 25 an adjusted net income of $2.2 billion, up 10% quarter over quarter, in a similar price environment and outpacing quarter-over-quarter EMP production growth of around 4%. Similarly, cash flow growth was strong at $4 billion, up 6% quarter-over-quarter. Importantly, our project portfolio is delivering new low-cost, low-emission oil and gas production that is attractive, with an average upstream CFO per barrel that is roughly two times the base portfolio. Regarding an ENP project, we are progressing on all fronts. On the project side, we have achieved first oil in Begonia and close to three offshore fields in Angola, and we sanctioned phase two of the redevelopment of the Ratawi oil field in Iraq, which is part of the GGIP project. As we have now launched all phases of GGIP, we are looking forward to the first oil for phase one of the redevelopment early 26th. On M&A, the company is consistently high-grading its portfolio. During the last earnings call, we mentioned that we are expecting several E&P divestments in the second half of the year. And during the third quarter, we divested two international blocks in Vaca Muerta in Argentina, which closed this quarter, and three satellite fields on Ecofisc in Norway, out of our strict investment criteria, which is expected to close in the fourth quarter. And lastly, on exploration, We continue to reload the hopper to complement existing opportunities. And this quarter, we announced new license awards in Nigeria, in the Republic of the Congo, and in Liberia. Moving to integrated LNG. Third-quarter LNG sales of 10.4 million tons were essentially flat quarter over quarter as third-party purchases offset lower sales from equity production. Cash flow of $1.1 billion was in line with the second quarter in a stable price environment with an average energy price of around $9 per million. Adjusting net operating income of $0.9 billion was down 18% quarter over quarter, primarily due to the plant surrounds at ICTIS LNG in Australia that impacted production, but by around 50,000 barrels of oil equivalent per day for the quarter. On the price outlook, forward European gas prices continue to be sustained at around $11 per million BTU for the first quarter of 2025, as winter 2025-2026 due to anticipated winter demand. 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 saving price of around $8.5 per million BTU for the first quarter of 2025. On the adjustment of our LNG strategy, we are pleased to continue to grow our U.S. presence with the recent FID on Rio Grande LNG 24 in South Texas, and we enhanced resilience in our LNG and gas-to-power strategy by acquiring interest in shale gas assets from continental resources in the Anadarko Basin in the US. Turning to integrated power. Net power generation increased 9% quarter over quarter to 12.6 terawatt hour due to increased outputs from flexible generation capacity in Europe. The value of total energy unique integrated model is illustrated in the third quarter financials. Total cash flow from operations was $0.6 billion, up 9% quarter over quarter, and in line with annual guidance. To provide more granularity in the integrated power financial performance, this quarter, we disclosed the splits in cash flow between production assets, renewable and gas-fired power plants on one side, and sales activity, B2B, B2C, and trading on the other side, showing that each contributed equally During the third quarter, the company has executed well on the farm downside of its integrated power business model, which contributes capital recycling and will generate a tailwind for free cash flow in the fourth quarter. The company signed an agreement for the sale of 50% of the 1.4 gigawatt renewable portfolio in North America. and close the sale of 50% of 270 megawatts renewable portfolio in France. These deals have combined cash impact of around $1.5 billion, and in this deal, Total Energy retains a 50% stake in the assets and will continue to be the operator after closing and to offtake 100% of the electrons. This is in line with our business model. As an important reminder, our effective upstream growth is not the only contributor to the company's resilience. Integrated power will take a key role in this too, since it is a differentiated and growing cash flow stream that is outside of crude cycles and with strong demand fundamentals. Moving to downstream, as Patrick mentioned, during the third quarter, downstream efficiently captured the high retaining margins in Europe and contributed to the company's resilient financials. Third quarter adjusted net operating income of $1.1 billion was up more than 30% quarter over quarter. Cash flow of $1.7 billion was up 11% quarter over quarter, thanks to good availability of assets that allowed us to successfully capture improved European margins. In terms of free cash flow during the third quarter, downstream cash flow from operating activities exceeded net investment by over $2.5 billion. In refining, the European refining margin marker strengthened during the third quarter due to the tension on the diesel supply chain in the context of low inventories. Utilization was 84%, which was towards the high end of the guidance range of 80% to 85%. and it reflects efficient operations and planned turnarounds at Porastur in the U.S. and HTC in Korea. In marketing and services, results remain consistently strong, with high-margin activities offsetting lower volumes. Looking ahead, we anticipate refined utilization of 80% to 84% in the fourth quarter, which accounts for scheduled turnarounds at Antwerp and Satop. Moving now to the company level and starting with working capital. As expected, we benefited from the working cap release during the first quarter, which was $1.3 billion, positive contribution to cash. Furthermore, for the fourth quarter, we anticipate another positive contribution. On net investments, They meaningfully decreased to $3.1 billion in the first quarter, which includes $0.4 billion of divestment net of acquisitions. In the fourth quarter, as mentioned by Patrick, disposals are estimated to total $2 billion, including the closing of Nigeria and Norway divestments for exploration and production. as well as farm-down of renewable assets in North America and Greece for integrated power. And we reiterate full year 25 net investment guidance of $17 to $17.5 billion. Based on anticipated net investments and working gap, we expect gearing to decrease to 15% to 16% at year-end compared to 17.3% at the end of the third quarter. With that, Patrick and I are now available to answer your question. And the operator, so please open up the line for questions.

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 by asking a question. If you wish to cancel your request, please press the hash key. Once again, please press star and 1 if you wish to ask a question. The first question is from Lydia Rainforth Barclays. Please go ahead.

Thank you and good afternoon to both of you and thank you for the presentation. Two questions, if I could. The first one, can I just get your clarification on where we are on the tax issues in France? I've seen headlines this morning about tax on share buybacks, what that actually means. And then the second one, I think, Patrick, this comes back to your point around the growth in production is obviously doing quite well, but also the growth in cash flow numbers. So when you're thinking about 2026, can you give us an indication as to how much more cash flow might grow than production for next year? Just remind us of that. Thank you.

Okay. Good morning. Good afternoon, Lydia. First, as you observed, there is quite a huge, quite a big fiscal creativity in the French Parliament these last days. and clearly the full recipe will not work. And we don't know, you know, and so be careful not to overreact to the night news. There was a super tax on multinationals, which is completely out of the rule of law. You know, France has signed 125 fiscal agreements with many countries. The principle is no double taxation, and this is... very anchored, and as the government reminded to the Parliament, this is the right rule, so we will not be touched by that. And you know there is also in the Constitution some already decision that when you want to tax above what is reasonable, then these types of taxations are not approved or cancelled. So, honestly, you know the political situation in France is not very stable. There is a huge debate making a lot of noise. But I trust that at the end of the day, we'll land to a reasonable avenue. And as you all know as well, TotalEnergies does make a lot of benefit in France. So I would say we'll follow this debate. But again, I'm comfortable with the fact that at the end of the day, governments will take the right decisions to maintain, in fact, which is fundamental, what we call the supply policy to, you know, if you want, before to redistribute in a country, you need to create wealth. You need to produce. You need to create results, revenues. And then you can speak about distribution. And we will come back to that. So I understand that. And I think, by the way, that this situation in France is waiting on the share price of total energies. But I remind you as well that we are a global company. But again, largely, 90%, 95%, I think, of our cash flows and our results are not coming from our country where we have the . So again, I think from this perspective, the profile of TotalEnergies is quite different from other French companies. And that market should integrate it. For 2026, honestly, Lydia, you are asking me a question to which I will answer more precisely in February. As we know, we have a meeting for annual results and what is the plan for 2026. So, I mean, as I told you, in New York, we anticipate a growth of 3%, more than 3% for 2026 again. For the cash flows, I don't have all figures. Of course, it's related to the new production coming on stream. But part of the, I would say, new production of 25, like the Brazilian production, will have the full effect in 26. So I anticipate another accretive effect on our accretive effects. The size of it, I mean, you have to be a little patient. But again, clearly, we are in a delivery mode. We deliver the production growth. more than three, and this year probably will be next to four. In fact, at the end of the year, I don't think, 3.5 to 4 for 2025. Next year, at least three, and then let's deliver the, okay, the accretive cash. But you know, this is a roadmap, not only 2025, 2026, for the next five years. And Famous, we reminded you, and we, I think, gave you comfort during the New York presentation, that we will deliver this $10 billion of additional free cash from all our segments in the next five years.

Perfect. Thank you.

The next question is Michele de la Viña, Goldman Sachs. Please go ahead.

Thank you, and congratulations on the strong growth. Two questions, if I may. First, I was wondering... if you feel like you're able at the moment to capture the extraordinary refining margins we're seeing and how the improvements to your Port Arthur and Donge refineries are progressing. And then secondly, I was just wondering what you're seeing in terms of disruptions of the Russian volumes following the latest sanctions and if you start to see an impact on the physical market through your trading and optimization divisions. Thank you.

Thank you for this question, Michele. To be honest, when I read again our press release, I think we're a little bearish on the oil price and the refining margins. The refining margins that we captured since the beginning of October for the last month is around $75 per ton. So when we guided you at about $50, I think we're a little shy. And in fact, it's fundamentally linked because we begin to see a real impact in the market. of these last Russian sanctions. I think the market is underestimating what it means when you have U.S. sanctions against two large Russian companies, which are the core of trading Russian oil, by the way. And when Europe says that we are targeting countries which are considered, I would say, dangerous, like India, Turkey, and China, but if you trade oil or products from these countries, you could be under sanction, the reaction today in the market and the I shared some views with some of my colleagues, including in, I was in Riyadh last two days. I can, I feel it today, including trading houses as well, are more cautious. And we see that everybody is taking this risk very seriously, including secondary sanctions, you know, which might become. And so I see some impact. And I think the refining margins today is more around $100 per tonne than the $75 on average. And it is linked clearly to, in fact, this sanction will oblige to reroute some volumes and to find a way to bring, I would say, products and crude oil more expensively to the different locations of the planet. So I think this is clear. That also could have an impact, by the way, on the oil price, I mean, the crude oil price. We've seen a reaction, whatever, announced today is still $65. $65, I think, is a good assumption for this quarter, maybe a little more. So I would say more bullish, that's what we wrote a few days ago, because I begin to realize that these sanctions will have a real impact in this market. And most of the players are taking them seriously, which is good, by the way. Total energy, as you know, we stopped trading any Russian oil since the end of 2022. Somewhere we penalized ourselves compared to other practices. But I think it was the right way to comply and to be strict on the Russian sanctions. So capturing the refining margins is for sure the good news of the first quarter is that we managed to do it. We had a turnaround on Port Arthur, which is down. So it's fully back online now. Donge as well is running. So it's not fully, not the last equipment we are waiting for by the end of the year, but it's running. So we deliver results. The fourth quarter, we have two turnarounds, one in Anwerp, one in Satop, which are two big machines in our reserves. But I expect that this will be, I would say, compensated, again, by the other assets and by the fact that the margins are higher. So I'm positive. And when I gave you a guidance of 27.5% for 2018, I was maybe too bearish by stating 27 in New York. It's because, as well, I integrate these elements, which, again, the duty and all the organization of refining chemicals and Vincent Stocart are dedicated to capture these margins, which are good. So this is where we are, and I'm bullish on that. Thank you.

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

Thank you. Good morning, Patrick and Jean-Pierre. I wonder if I could start with your upstream margin. The volume guidance is, again, pretty strong for Q4, but I guess what we're observing is that your upstream margin seems to be moving up as well as the volumes. And I'm trying to understand what happens as the mix changes going forward. So, for example, Iraq never historically had great margins. So how do you see the margin mix continuing as the growth trajectory sustains over the next several years? That's my first question. Now, my second question, if I may, is a quick one. Oil appears still to be in a very technical market. So we all see the oversupply, but it seems to... keep bouncing around that 60 level. I guess my question is, if you ended up with better cash flow than you thought when you reset the buyback, what would be the first call on cash? Would it go to the balance sheet to continue the deleveraging, or would it go to the higher end of the buybacks? Thank you.

The second question is clear. It will go to the balance sheet. Thank you. So the second answer, I would say, is clear. It will go to the balance sheet. We'll go to the balance sheet because I observed that, and I spent quite a lot of time with investors in the last month. And clearly, I would say long-term investor, leveraging the balance sheet is important for all of us. And if you want to be the best buyback policy, it would be to be counter-cyclical. To be counter-cyclical, you need to have a strong balance sheet. So that's the position I would take. So consider the guidance we gave you. We gave you quite a good guidance, and we told you 0.75 to 1.5 between 60 and 70, $2,080,000. And I'm answering for 26, to be clear. If we continue, and we see the plan to deliver more and more pre-cash, the roadmap to 10 billion then we might revisit this scheme but today in 26 if it's coming in your case if we are above 60 in 26 or about 70 then we will continue to deliverage uh upstream margins no iraq is a good contract so i know it's slightly but it's not at all the case you know As I told you, we are far away from the historical service contract. When we came back in Iraq, it was clear that either we had a good contract, a strong contract. It was a matter of risk and reward, you know, and risk and reward. And in particular, the Iraqi contract is quite reactive to the oil price. We captured some upside on it, which, of course, is important. We benefit in Iraq from quite low-cost production, so the break-even is low. And so it will contribute. The active barrels don't make a mistake, are contributing to the increase, are active. And again, I can give you a bit. I think we gave you in New York. But in fact, the base barrels are then average around $19, $20 per barrel. And today, these new barrels are more between $30 and $40 per barrel. So it's why we have an active growth in upstream. So I think you will continue to see, again, the free cash flow from upstream will move quicker than the growth of production.

That's very helpful. Thank you, guys.

The next question is Biraj Borkatariar, RBC. Please go ahead.

Hi, thanks for taking my questions. And firstly, it's nice to see that production growth being the accretion coming through. That really is a differentiator. Two questions. The first was on the divestments for the year. I know you mentioned Nigeria in the $2 billion. I believe there were two deals that you're planning to do, one of which wasn't approved. So could you just outline whether the SPDC site, that sale was... Is that in the 2 billion or is that on top of the 2 billion? And then secondly, recently you signed a letter with a number of other CEOs around European competitiveness. I was just wondering if you could talk about whether that letter has actually catalyzed any kind of response on the policy front. Any color there would be helpful. Thank you.

What is the second question? Sorry, I didn't catch it well. Okay, I understood. Okay, I know, I know, I know. Okay, I understood. European Competitiveness Letter. Okay. First, on divestments, I will be very precise with you. The 2 billion, I will give you where it's coming from. We intend to close, and we have already closed some of them, but we are intending to close, and all, I think, we have signed, and we are in the process, and it's a matter of closure. The Bonga Divestment in Nigeria... Norway, the satellite EcoFix field. Some renewable assets in the U.S., renewable assets which will be announced in Greece. And as well, we have another project where we will, but I cannot yet disclose to you guys, another $300 million which will be announced soon. So it's $2 billion. That does not include, to be precise, SBDC-GV divestment, not only because it was not approved, but because we, in fact, we were not able to close. There were some conditions present on our side. We consider that it was not reasonable to close with, I would say, the supposed buyer. So we are discussing today, we have advanced discussion with two additional partners two new buyers, which are, I think, serious ones. But we will not be able to be clear to answer your question to close it before this quarter. So it's for next year. By the way, it's good because it's part of the plan for next year. So from this perspective, you know, what we have observed is that divestments of E&P assets generally take time. It takes more time, even if we have demonstrated with our divestments in Argentina that we were able to sign and to close in the same quarter. So sometimes it's going quicker. So the plan is really clear. And we have some interested buyers and serious buyers on it. So we are working on this one. There are others, like I mentioned to you, other ideas for this year and next year that I mentioned in New York on which we work as well. On the European competitions later, the answers you probably follow that some tweets or LinkedIn. European leaders are not really, I mean, are listening to our requests. They have been, I would say, we had some calls with some discussions with some European commissioners who took the letter seriously from 40 CEOs to say, look, so we understood, they think we are maybe asking them too much, but I think it's a sort of wake-up call from these 40 CEOs. We, myself, and the CEMENT CEO, we are the spokesperson, let's be clear. We were just reflecting what people expressed during our meetings between French and German CEOs. I've seen that on some topics, which are, I would say, giving some more polemics, there have been some calls that were not only from European CEOs, but from U.S. Energy Secretary and Qatar Energy Minister to call to revisit some of this legislation, which seems to be, in fact, against competitiveness, and again, for some of them, putting at stake the security of supply of Europe. So I think this is something which is serious, and we are European CEOs, and we, of course, want to continue to contribute to Europe's development and growth, But to do it, I think it's also our job to speak up when we consider that conditions are changing and it might be difficult for us to contribute to European prosperity. So it's a moving, you know, it's a continuous, I would say, fight, but let's contribute to it.

Thank you very much.

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

Yeah, hi, hello. I've got two of them. First of all, what I thought has been really surprising this year is the strength of new LNG FIDs. Already a year, year and a half ago, many of us were writing reports about the surplus in the LNG market in the second half of the decade. And yet 2025 has been a near record year of new LNG capacity to be commissioned. And Total still has a few projects it needs to decide on. I was wondering if you perhaps could share with us your thoughts on, you know, despite the outlook, the number of new FIDs being as strong as they are, and also how it impacts your own decisions in terms of future energy FIDs. And the second one I wanted to ask is about the shares and the equivalence between sort of the pair of shares and sort of US shares, and sort of consolidating this into one single class of shares. I was wondering if this could impact the execution of your buyback program in the sense that I was wondering if this is in place from December the 8th onwards, as I now understand it, if some of the buyback program could be executed in New York listed shares. And of course, the context behind the question is then also like if that could then be a way to avoid some of the proposals that have creatively been floated, as I think you put it, in French Parliament over the last couple of days.

Okay, the second question on ADR, no, it does not impact at all the execution of the buyback program. I remind you that the ADR conversion is about around 9-10% of all shares, so if you see the buyback program will be executed on the Paris stock market, to be clear, and not on the New York listed because it would be strange for us to buy back from New York where we want, on the contrary, to give more life to this New York market. So I prefer more activity and finding more. We will buy back shares in New York when we will see we'll have much more shares on this side of the Atlantic, I would say. So first point. And honestly, no, it will not, by the way, it will not avoid in any way tax proposals. And again, the tax proposals are funny proposals. Again, there are some principles. You know, when the president learned to try to impose, by the way, he tried to impose a 3% tax, extra tax on dividends, which was canceled by the European Union and by the French Constitutional Court. And all of us have the coup of money they took during three, four years. So again, there are some principles. You know, we are in a rule of law continent and a rule of law country. And this is the reality. So you must make a split between the political debates, which are quite vigorous, I would say, and eventually creative, and the reality of the rule of law. And we know that there is some limit. And when I see the figures, and I will tell you what I'm thinking, the higher it is, the better it is. Because then I'm sure it will not go through the system. So I mean, that's the reality. And in the French Constitution, you cannot deprive people unreasonably to their profits and their results. And buybacks are not at all a profit, you know. Buyback is just a matter of distribution and, by the way, of investment in the company. We invest in the company. So, I mean, I'm ready again. I think it's a topic on which I'm ready to continue to explain to Parliament members what are buybacks. But I think, again, don't overreact to this type of... I would say, of news. And I'm afraid we'll have all the news during the next 30 days coming from the Parliament. At the end of the day, I trust the government. First question, FIDs. Sorry, FIDs. Okay, I mean, I'm not sure. I mean, there was a lot of announcements. I'm not sure about how many FIDs exactly, because between the announcements and you have a flow of news, of projects being revised because they get the permitting or they get the approval for non-FTA countries export from the U.S. administration. So you have a new flow coming. Then FID, I know train four and five in next decade. Yes, I know them. I know that one or two computers are serious and are progressing because I said in New York, all these projects, they need to find the financing, to find the financing. And again, an acceptable, a good financing, you know, a good financing, not a, An expensive one, otherwise you destroy the value on 24. We managed to put in place a project financing of Rio Grande, 6.4, around 6.5%, which was good project financing, which helped to leverage on it. All the projects don't have the same good fathers, I would say, than Rio Grande and Rio Grande LNG. So then, of course, I agree that we need to take that into consideration. You know, we have a strong policy, a clear view. We decided to transfer most of our exposure on the GKM, I would say, LNG sports market to the Brent formulas, and we have been active. I think we are very right to do it. I'm more bullish on the oil price, as I explained, but on this one by the end of the decade. So, of course, then we need to assess and to take into account that We postponed Cameron 24 because the capex were too high. It's not the time to run again on Cameron 24. And the other decision we have, in fact, in our portfolio is Papua New Guinea. You know that we are working on the capex to lower the capex. And it's clear that lowering the capex is of utmost importance in a market which could be, from this perspective, weaker when we launch a project. So that's a topic on which we will have to work. And we have demonstrated already that we know how to be disciplined in that market, giving priority to, I would say, first and second quarter projects in our portfolio. And that's an element which will have to be taken into consideration. By the way, we have announced that we have lifted the fourth measure on Mozambique. There is a funny figure which is in some press news agencies which speak about $25 billion. We are not at all, and I want to be clear and strong on this news. I don't know. People are playing games, which is not acceptable. They have access to some people have relinquished a letter that I sent to the president of Mozambique. It's clear. It's written $20 billion in the letter, out of which $4.5 billion came from the what we spent in the last four years. So the budget in 20, when we left in 2021, was around, it was 15, 16 billion. You add 4.5, you are down to 20, 20.5 billion. That's the reality of this budget. And by the way, this cost, the real cost, you know, what we've done is that we've spent, we've done all the detailed engineering and all the procurement has been done. And so today, as soon as we fully remobilize everybody, we are purely in a construction mode. And that's why we said we are able to deliver the project by 2029. And so I've discovered some people were surprised. But in fact, we spent some money in order to, I would say, recapture part of the time which was under forced measures. So the budget is not a total of 25. And I want to be strong. It's 20, $20.5 billion. as we will restart. And again, I can confirm it because we had long discussions, of course, with contractors, and so we have put all these figures together with them. And including on the delivery in 29, we have strong commitments, so we have realigned the whole system in order to be able to execute properly this project.

Wonderful. Thank you.

The next question is from Hsbc. Please go ahead.

Hi, good afternoon. Thanks for taking my questions. A couple of weeks ago at an industry conference, you mentioned that the LNG market is getting more competitive and it's harder to make money in trading. I guess that's not exactly a secret, but I was wondering if you could provide any more color on this. And I was wondering how much of the decline in LNG trading profits would you ascribe to heightened competition versus the more normalized conditions you know, lower volatility, lower spreads, et cetera. And then I also wanted to come back to the EU sustainability rules. I mean, I suppose, let's see if the EU rules could be amended, but if they broadly stick, then how would you ensure compliance with the CSDDD rules in practice? And then hypothetically, what would be your options if some LNG supply is deemed to be non-compliant? Would you be able to redirect it? Thank you.

Okay, first question. You know, I mean, to be clear, I think we made a demonstration in New York. The message is not that we have a decline of energy trading. We told you that there are exceptional trading profits from 21, 22, 23, and that we are back to a normal environment with lower volatility. And by the way, the results of 25 on integrated LNG are in line with 24. So I'm just that. We don't benefit from the growth on this part at this stage. Later, we'll have a growth of volume, but this stage is stable. And in fact, they are quite related to the results of 2019 before this crisis. So I cannot. What is also true is that you have observed, like me, There are more trading hours which came to this energy business because maybe we were considering we may be making good money. But today, answering your question, no, it's just my view is that today we came back to, I would say, more standard revenues. And I hope, of course, the main growth for LNG trading profits from TotalEnergies will come from the growth of volume of assets. So we have a volume impact on our trading business, which will generate additional profits And we made a mistake when we did not plan 2025 because we are thinking that we could replicate the last quarter of 2024 in full 2025, which is not the case. So I have to... And again, because that's clear that the volatility in 2025 from the gas, you know, the European gas price, it moved between $11 and $12 per million BTU. So it's not a big volatility. By the way, I'm not unhappy. Because $11 or $12 per million BTU for my Norwegian gas and my British gas and my Danish gas, it's a very good price. So, I mean, people, we should not give an overweight to the trading business. You know, the trading business is adding value, but the base business is, in fact, our upstream and our production. So, I'm happy to, I prefer to gain $12 per billion BTU of profits on my gas. North Sea gas, and maybe a little lower volatility on the trading. So let's be... We never... Maybe because there were exceptional years, incredible years, 22, 23, again, 21, 3, you consider it was a new normal. We never said it was a new normal. We even told you, be careful, there are exceptional results. Each time, exceptional means exceptional. So that's what I want to comment on. And again, I remind you, and why I'm linking that to a growth volume is that the trading within TotalEnergies is trading around assets. It's an asset-based trading. We don't play casinos. It's not the case. So that's the base of what we do. There are more competitors, but again, we have more assets than others. So it will help our trading business. And I think this is the idea. This is the fundamental idea of integration. It's because we have more assets, more volumes, But we have more medium and long-term contracts in Asia. What we signed in the last year, these branch-related medium and long-term contracts, offer some optionalities to our traders. And the optionalities that we produce in these contracts have a value. And this is why I'm linking that to my assets and my business. This is the base of it. And some competitors do not have the same assets and contracts. Then about the competitive sustainability rules, I mean, the question is not to have an engine non-compliant. The CS3D does not define compliance. The CS3D is a matter of putting in place some rules, but you have to have a duty of vigilance on the supply chain. Some countries have been strong in the letter. I invite you to read the letter of the Secretary of the Right and Minister Al-Kahabi. If you didn't read it, they sent a letter to the European leaders, tell them, if you keep that in place, we will not deliver, we will not take the risk to deliver LNG to Europe. I would say if we don't have LNG coming neither from the US nor from Qatar, we will have my European North Sea assets are taking a lot of value, you know. So I would say it's not. I mean, so it's not a matter of compliance. It's a matter of legal risk, because in fact, why do they complain? In fact, in this case, really, if you were found guilty by a judge, your penalty could be up to 5% of your worldwide turnover, which is just crazy. So the sanction size is completely disproportionate to, in fact, A rule which is against, of course, we are all here, we are for human rights, but you can ask efforts to companies to control the supply chain, but we don't control everything, you know. But if you transform supposed not enough vigilance in such a penalty risk, then it's completely disproportionate, and this is a call coming from these two countries. For me, again, and I consider, to be honest, that when we produce LNG in the U.S., as we are the largest exporter of U.S. LNG, we are fully compliant with the duty of vigilance law with all what we produce in the U.S. Thank you. In Qatar as well, by the way.

The next question is from Matt Lofting, J.P. Morgan. Please go ahead.

Thanks for taking the questions. I wanted to follow up on your earlier comments on the refining portfolio, 80% to 84% utilization in the fourth quarter looks towards the lower half of the historical range. Obviously, from a near-term perspective, planned turnarounds and maintenance need to be done and undertaken, but when you look forward into 2026, how do you see the normalized throughput of the business now, and has there been any deterioration in that normalized level versus what you saw and how you saw it, say, two, three years ago. Thank you.

Yeah, I think, so the question, maybe we are cautious again. We were cautious on the $50 per ton. Maybe there, 8084 is just, as I told you, we have Anwerp and Sato, which are two big machines we have entered into a large plant in the round. So they execute, but of course, it has an impact on the global market. I would say delivery from your portfolio. Let's say you can give, if you take 82%, it's this quarter, I think we were at 84, maybe 82% is probably the mid-average of the guidance, probably the right one to take into account. But I told you that it will be more than compensated with capturing better margins on all the other assets. For next year, we are more in the range of 84, 86%, I think, for budget. But again, I didn't begin to look to what our colleagues are planning, so I'm waiting to see. But I think there are less turnarounds next year, so we should have a From this perspective, it should be a better year. And as well, and again, as we mentioned to you, there were some, I would say, difficulties before the turnaround on Port Arthur. The turnaround is done, so we expect to have a better availability. And on Donge, again, we intend to put into service the new unit, which will enhance the margins on Donge by the beginning of 2026. So from this perspective, the perspective is... If the refining margins remains at quite a good level, we will be able to capture even more value this year.

Thanks, Patrick.

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

Thank you very much. Good afternoon. My first question is on marketing, if I may. Because your unit margins were up this quarter and I wonder if you can talk around the drivers of that margin improvement, whether it is structural or temporary. And then my second question, I noted this quarter you signed some partnerships on the deployment of AI and a global data platform. I obviously don't have the context of your ongoing digitalization effort. I wanted to ask whether it is correct to look at these partnerships perhaps as an effort to speed up and widen the digitalization you have been working on for a number of years. Thank you.

Yeah, I take the second question. First, as we told you, yeah, we have, and I think it will be a topic on which we could focus more on what we are doing. In fact, since 2020, we have put in place a digital factory in a bottom-up approach With 300, I would say, data experts or data scientists, and at a very high level, a good team. But what we observed is that if we want to deploy these new technologies, which are speeding up on a worldwide basis, going from the bottom up to scale up is difficult. So we decided that it's time now to have a broad effort, a worldwide effort, on organizing all these data's. Because there are plenty of data on platforms in refineries, but all that is not connected. And if you want to really, for example, enhance your linear program in refineries, it's the best would be to have access to all this data, to develop new tools in order to enhance another additional percent of, I would say, use of the refinery and better margins. So we have engaged with two large programs, which are quite an investment, an investment on the platform with Amazon, which is called, I don't remember them now, with Amazon in order to, in nation, in order to connect all these physical data to, I would say, a large database, all physically, and it would take two years and a half, three years to deploy, because we need to go on all the sites We know where the data is, but we need to connect them, and then they will be available. And we have also engaged in a very large worldwide program on the ENP side with Cognite, which is in advance, I would say, from digitalization. And we have made some different pilots with them. Now we are all convinced. So another big program to deploy these Cognite softwares, which obviously will help us to really accelerate the use of AI. So for me, 2025 will be the year where we have really decided to scale and to go from a scale and to take some large worldwide program to give us the capacity to take the most of these new AI tools. It will take a few years to install all that. But if we want to be efficient, and I'm sure, and you know, it's not cost-cutting in our case. It's more additional revenues. If I can, with advanced process control tools, thanks to AI, produce 1% more of all my old fields and my refineries, I can tell you it's quite a lot of free cash. So it's worth making investments, and this is what we have done. On marketing, so I think there is different drivers. But again, fundamentally, the strategy which is put in place in marketing is value over volume, which means not chasing the additional growth. It's difficult for marketers. They love to show you more tons. But what we discovered is that it's quite mature markets. They are mature markets. Whatever in European market is mature. The lubricant market is mature. So it's very difficult to gain market share. The only way to do it is to do it at the expense of margins. And what we have decided is to enter into a policy which is bet higher margins and not not less volumes, but not to sacrifice, I would say, the margins at the expense of the volume. And this is why, by the way, if you observe our results, we have sold our network in Germany and Netherlands and half of Belgium. There is not much impact, in fact, because we have managed to absorb it. I would say, so it's also because fundamentally in marketing, You know, we have decided to divest or to stop, well, divest, not divest, but to stop a business which was very low margin, which was, I would say, sharing some logistics assets which were creating a lot of pass-through volumes, but with a minimum margin. So this has been reduced because it was not really adding money. It was quite using a lot of people. So structurally... So your answer to your question is that structurally we are in a mode to enhance the margin on marketing and services. That's where we are. And this will continue. I hope I'm clear.

Thank you.

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

Yeah, thanks for taking my questions. Patrick, I wonder whether we could talk about another area of French creativity. There is an idea floating around that we should remunerate electricity or wholesale power prices differently. What can you tell us is current appetite for signing new PPAs? How has that market evolved considering that rather interesting regulatory backdrop? You've recently signed a project deal with RWE in France, but also have some considerable capex left to go in Germany on the offshore wind front. So maybe you can put things into context and give us the risk reward behind taking that regulatory risk. And then you've mentioned it already, just wondered whether you could give us an update on how quickly we should expect news from Mozambique on the ground now that the force majeure has been lifted. Thank you.

On Mozambique, you know, again, we have lifted the force majeure. We are now expecting the government to approve our new plan and budget, and we are remobilizing the contractors in order to be able to execute the project successfully. within this schedule with time work, time table of 2029, and that's where we are. So I think consider we are moving on. On the first question, it's a complex question because I'm not sure to have fully understood. I'm not in favor of regulations and regulatory approach. We are more merchant people. We like the market. So for us, that means that signing PPAs is the best way to commercialize or, I would say, or assets. And so we know that we need, in Europe, you know, you need to sign when you develop, I think you were referring to offshore wind. We signed a contract in France at $65 or 66 euro per megawatt hour, which is a contract, by the way, which the price can be adapted if the capex are higher. price, the capex risk is in fact covered because we could, we have, not only we have given the price, but the capex linked to the price. So that's a protection. It's also partly inflated through the OPEX. So, and at this level, honestly, we can develop an offshore wind project in Europe because it is projects where, in fact, the connection is developed and paid by the DSO, not by us. We are only in charge of the plant itself. But again, we follow that. I think today, you know, there are many creativity there, again, in different circles. All that, we are in a European market. European market is a unique European market, which are fundamentally driven by some market rules, in fact. And when I discuss with European authorities, they see little appetite from Europe. in the Commission to put into, I would say, even in some countries like Germany, who believe in the market, to change the rule of this, I would say, electricity market. So, again, that's a debate. But I am, and you know, by the way, in France, the same people who were complaining about the famous system of nuclear commercialization, which was called AREN, Two years ago, no one was complaining of the new system. So people will never be happy. What they want is electricity for free. But that's difficult. At the end, we need to invest. And if everything is too much regulated, it will be against investment. And Europe desperately needs to invest more in renewables, gas-fired power plants, grids. if we want to ensure security of supply, but the reality. So you cannot get both. So I think, I would say I trust Bergen's political leaders, which are spending a lot of time on this energy story to take the right decision and not to be complacent. Okay, thank you.

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

Yeah, Patrick, thanks very much. And another slightly generic question, but I just wanted to ask for your sort of thoughts on the one part of the complex which is really having a difficult time, chemicals, and the extent to which when you talk within, when you look at the industry, look at where margins are, you're starting to see, you know, better signs of movement to try and restructure, not necessarily your own business, but, you know, business across the industry so that we might actually move to a place where you know, profits start to improve. And as ever, I mean, if you could give us some indication of, you know, the extent to which the associates line within all, well, the profit, well, within the refining and chemicals business, what proportion of profit actually comes from chemicals now, given just how difficult the environment is? Thanks very much.

Okay, no, I'm not a chemical company. We are a refining and petrochemical company, and we make crack ethylene and polyethylene, you know, basics. Sorry, Patrick, that's what I'm referring to. No, no, but just to tell you, the proof is that you know the situation. The situation is that, in fact, in terms of cracking capacity, ethylene capacity, China in the last five years went from 50 million tons of cracker to 100 million tons of cracker. And so they have, in fact, almost self-sufficient. So they were moving from a large importing country to almost self-sufficient, even exporting. So of course that changed the world patterns. By the way, Chinese companies also suffer from the situation, but other places suffer from the situation. For me, I've always been very clear with you. If you want to invest, In petrochemicals, you have the fundamental matter, the fundamental competitive factor is feedstock. Either you are an ethane ship LPGs in the U.S. or in the Middle East, or you will face difficulties. So that's the situation. So we know that our NAFTA crackers in Europe are facing competition, which is super difficult, either from the U.S. crackers or from... By the way, TotalEnergies, since I'm CEO, we have invested in two crackers, one in Port Arthur with Borealis, one with Amiral in Saudi Arabia. So consistent. That's what I think fundamentally. And we are shutting down some crackers like the one we have just decided in Antwerp. So that's my view. To come back on the proportion, I don't know. It's not big. It's not good. It's not big. I have no miracle recipe compared to my competitors on this one. But again, it's not a major part of our downstream results and cash flow. So most is coming from refining and training more than chemicals. But again, it's part of the integration. When the margins are good, we are happy to capture them. But again, fundamentals, let's invest in the U.S. and in the Middle East. That's all.

Thank you.

The next question is from Peter Low, Rothschild & Co, Redburn. Please go ahead.

Hi, thanks. The first was just on integrated power. The RACHI has been below 10% for a few quarters now. How confident are you of hitting your 12% target? And really, what are the steps to get it up to that level over the coming years? And then perhaps just a follow-up on the kind of proposed EU ban on Russian LNG imports from 2027. I think you said in the past you'd expect you'd be able to divert your Yamal cargos to alternative markets outside of the EU. Is that still the base case and what you expect to happen? Thanks.

First question, I think Stéphane Michel in New York gave you some answers to that. You know, we never told you if you eat 12% tomorrow, we told you it's a It's a five-year plan going, by the way, from 10 to 11, from 11 to 12. Part of it, as I told you, is that today we have a sort of burden on our capital employed because we have, I mean, quite a large pipeline of projects which are, of course, non-productive, I would say, as capital employed assets, which will be, because we continue to grow, we have growth to 20% per year, and we'll execute, which will, of course, as we don't intend to make... large M&A on this part, which will transform, I would say, non-productive assets into productive assets. So part of it is there. Then the second part of the 1%, the other percent, will come from, I would say, rationalization, better use of the assets, industrializations, and this is what we are doing. We also, I think, frame in New York a clear roadmap by concentrating most of the investments of integrated power on some major markets uh the oil and gas countries which are in emp and then the rest we were clear that where we don't see a potential to contribute about 12 percent there is no future for them in the company portfolio i mean so that's uh i would say in a way what we told you it is a recipe to go to 12 percent so honestly today we are a little lower than 10 but i will recover from it And don't forget that there's a contribution from Farm Downs. They will come in fourth quarter, so all that will give you colors. But I would say I'm there for, we will raise the 10%, and you know, it's a five-year journey, but I'm happy with the development of this business. The next target is to be, for me, net cash positive. As soon as we are net cash positive, I'm sure that the valuation of this part of the business will be better. Because when I will tell you this business is contributing to your dividend, it's a way to have a better leverage on this business. And we plan 28. If we can do 27, we are working on that. EU ban on Russian energy. Honestly, there have been a new regulation, which needs to have some clarification. Because there is some language there we need to understand what it means exactly. Like, by the way, when the EU banned oil in 2022-23, it was the exact situation. There was a regulation, and the energy regulation is a copy-paste of the old one. There was what they call FAQ, you know, where you need to have answers to clarify what is the real scope of the ban. For sure, the ban is not to bring more anymore. ocean energy in Europe, but we want to be sure that the ban is not larger than that. So before to answer your question. And otherwise, yes, in this case, we have a commitment. If there is no further, I would say, ban, I cannot choose a force majeure to cancel the contract. If I don't have force majeure, I am committed to offtake some carbos. We are looking to that I mean, precisely today, our lawyers are working, to be honest. Because, of course, for us, the role is to be sanctioned compliant. So our lawyers are working on it. It's a fresh regulation, so I don't have the full clarity. And I don't want to make more answering longer because I could say something which could become wrong if the lawyers... And again, we are always at the executive committee on the cautiousness side, I would say, from this perspective. And so I'm waiting to see the reports and to understand exactly the scope of the new EU regulation.

Thank you.

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

Hi, thank you. Good morning or good afternoon, Patrick and Jean-Pierre. Two questions. I want to go back, Patrick, in your answer to the question of adoption of AI. You say that it's a fairly sizable investment. Can you quantify how big is the investment over the next couple of years and whether you have sufficient talent within your organization to really adopt or that you need to go out to hire And at this point seems like it's pretty difficult to get the good talent in the AI adoption area. And what is your target in that what you aim to get from AI over the next, say, call it five years? The second question is, yeah, the second question is on you, right? Oh, okay.

So let's move on with your second question.

Sorry. Okay. Sorry, Patrick. Second question is Iraq. Can you tell us how is the situation on the ground? I suppose that the security is good enough for you to deport your people. So what is the bottleneck or the barrier for Iraq to significantly increase their production at this point? you and some of your peers that are all rushing in and signing contracts. If you think that those contracts, the terms are good, is there a concern that Iraq could turn into a major production growth area, which in turn is going to depress oil prices over the next several years? So just wanted to hear how you think about that. Thank you.

Thank you. First question, AI. The program I mentioned represents more or less 300 million euros, or 350 million dollars, I would say, worldwide. So it's quite an investment for these data platforms at the worldwide level, first comment. Second comment, in terms of people, we have some assistance come from the Emerson guys, Aspen Tech, or from Connect. But remember that we have a digital factory with 300 people. And of course, we are using part of these people to help to deploy the program. They are there. They are available. They know about it. We have built these competencies in the last five years. But the second answer, the third answer, is that there is a nice country in order to get access to good AI competencies with not so high cost, which is called India. So it's also a way for us to, in fact, grow in the digital, you know, for us, we are looking today to, we need to grow, I would say, of technical competencies and in terms of people to have more resources in the side of electricity, of power, and in the area of digital. And today we are seriously thinking to enhance or to grow our presence there. And we speak about, we are discussing about competence center in India, It's part, by the way, of our way as well to contribute to the, I would say, cash-saving program that we mentioned. So this is the area. So I know it's a point, but in fact, what I've observed is that we have been able to attract people in this field with a reasonable price. Because we offer them some real, I would say, use case. We are a very interesting use case in the field of energy. You can use AI in many areas, so it's good. Iraq, on the ground, it's okay. Otherwise, I mean, we just signed the full contract, EPC contract. If we had the doubt, we would not have done it. Honestly, in the Basra area, the situation is good. I can speak only for the areas where we are. We have deliberately located our teams in the south of the country, in the Basra area, because it's a more, I would say, united area, unified area from, I would say, in terms in Iraq. There are other areas that I would be more careful, to be clear, but in our area, we are fine. And the barrier, but the barrier partly is still security, because you cannot, what I say for Basra is maybe not true for the whole country, to be honest, and it's not true. And second, in fact, you need investment. And investment, and you know, the issue for Iraq, and again, I'm happy to have been the big company which came back first, but you know, we went there in 21, and We finalized the contract in 23. We are FID all the phases in 25. And we'll produce in 28, 29. So the cycle is eight years. So I think we are maybe a little true. I'm not sure because I can tell you all that is, in fact, from my point of view as a CEO, quite a remarkable journey in a new country. So I'm very happy with all the work the teams have done. I contributed myself by supporting them many times there. So when people think today that, yes, there is a potential in Iraq, it's clear. But it will not depress oil prices before many years. So it's good for the country. And again, the country, and I know what will happen. If there are more companies to come, the temptation will be to decrease the margins and then Again, it will not work. So that's the history. I hope the country has taken some lessons of what happened from 2010 to 2020. If we don't have the right reward for the risk we take, there is no investment. So that's a question of capital allocation. So yes, and that's why, by the way, to answer to your question, to be clear, if we decided to move, to come back in Iraq in 2021, but we see quite a long perspective. And in my plan, in my view, Iraq will be a growth area for total energies beyond 2030. and we'll work on other projects. So that's what I'm thinking. So I don't see an impact on the short-term or short-medium term, but potentially. Thank you.

Thank you.

The next question is from Henry Patrico, UBS. Please go ahead.

Yes, everyone, thank you for taking my question. Just two on the topic of exploration. I think you have a new head of exploration since the start of the month, and I was wondering if we should expect any changes in the approach to exploration. And also on that topic, can you give us some data on the latest plans for exploration in Namibia and in South Africa in the next few months? Thank you.

Exploration. You know, I've been consistent. Since I was CEO, I think there is one thing which did not change, which is a budget for exploration. It was $800 to $1 billion. I put it as a sort of rule of the game when I became CEO, because strongly I think it's not because you spend more, but you find more. At a certain point, you need to be efficient and oblige your exploration team to take soldiers. I'm happy, by the way, by the way, Kevin... has led this team during the last 10 years. He became an exploration team manager with the president almost at the same time. He has, I would say, developed some ideas. 10 years is a long cycle in exploration. So when he told us one year ago that he was trying to do something else, it was fine for us because we thought it was the right time to renew. In fact, I have a different approach because, again, exploration is a different business. Again, it's not a matter of dollars. It's a matter of ideas. of which we approach. I'm very happy to have welcome in a company, Nicolas Mavella, which is coming from a successful exploration company. He has, of course, at a different, himself has been educated in different environments, so for a new idea, he will have, I told him that he's free to do, and to let the team, and it's not a one-man show exploration, you know, it's a team building, quite a lot of people, you need to To take the risk to explore, you need to build some consensus, but to know you can drive your people in different, I would say, directions in terms of concepts and being creative. So I think it's very good. I hope and I'm convinced that Nicola will be able to have the same success that we had with Kevin the last 10 years. But it's not a matter of money. It's a matter of ideas and then to make choices. And by the way, you notice that in the last quarter, we have been active on... taking some licenses back in Nigeria, which has been unexplored for more than 10 years. It's a pity. It's probably the most, Niger Delta is probably the most prolific delta in Africa. So no license were awarded. We are happy to have the first ones, two IOCs. We went as well to a country like Liberia. It's a new one. Congo is more mature, but we managed to get a license on which our explorers were excited. I hope they were fine. We'll have a nice gift for Christmas, we'll see. And again, we'll continue to explore in other countries. And so exploration, I heard during my roadshow that it seems that some companies are rediscovering exploration. For Total, we never give up on exploration. I always consider it to be part of the value creation. And again, a lesson to my colleagues, not because you spend more, but you will find more. If you spend more, you take more risk. And if you take more risk, you have more disappointing wealth. So it's a question of finding the right metrics. And I think it's good for an IOC, a major like us, when we can raise 20, 25 wealth per year, that's good. That's enough to find some nice wealth. Namibia, South Africa, you know, Namibia, we have some exploration to continue to do, and we look to priorities also to develop business. And South Africa, you follow, like me, the news. There is a legal context which seems to be more complex than in other countries. Each time we want to do it, we need to go to court. It's a little difficult. But I think that the South African government has made some public statements that they want to find a way to ease the exploration. So we hope it will manage because, of course, for us it's important. We cannot spend money in a geography if we have to face permanently courts and the permitting become really complex. Because it's not only drilling one or two or three exploration wells, it will be to develop. And we explore to develop. We don't explore just to find all. So we need, honestly, on the South Africa side, I hope the government will take the right decision as soon as possible.

Thank you.

The next question is from Jason Gabelman, TD Cowen. Please go ahead.

Yeah, hey, thanks for taking my questions. I wanted to ask firstly on CapEx trajectory, and it looks like organic CapEx has been a bit volatile the past few quarters. I'm wondering what's driving that quarter-to-quarter volatility. We've seen some other peers that have more stable CapEx that kind of peaks in 4Q and So wondering, moving forward, is this level that you're at now a better go-forward pace to consider, or should we expect more volatility quarter to quarter? And then my second one is just on the ramp up in production next year. You know, you've previously guided to a reduction in reinvestment rates in 2027, which I suppose implies a higher cash flow ramping at some point next year, along with new production coming online. So how should we think about that production and cash flow ramp next year and into 27? Is it back half-weighted? Is it 4Q-weighted? Just looking for kind of the arc of that growth. Thanks.

Jason, you are very quarterly driven in your questions. But my commitment to you, the commitment of the company, is the annual budget of CapEx. And by the way, it's an annual budget of net CAPEX. It's organic CAPEX plus acquisition minus sales, minus investments. I think we have a strong practical of being compliant with our annual budget of CAPEX. I think since I've been CEO, I think 10 years in a row, you don't see that we have not respected the CAPEX budget, the annual CAPEX budget. And again, what we told you today, and that we said at the beginning of the year, it will be $17, $17.5 billion. And I can tell you, we'll land in $17, $17.5 billion. As we told you, the net acquisition is expected to be at $1.5 billion. You can calculate yourself the organic capex for the fourth quarter. I don't follow, honestly, the stability of the organic capex through quarters. It depends on some projects. When you put into production, as we have done this year, all Meru in Brazil, T-Rank in Denmark, Ballymore in the U.S., or yeah, Ballymore, or Jack, yeah, Ballymore. That means that this quarter, there was a lot of capex, and then it's decreasing because you have put into production, and some of our capex, some of our projects are ramping up. So I'm not at all, I have no KPIs to have a stable quarterly organic capex, to be honest. At the end of the day, my KPI is to be sure that we are within the annual budget. And if we can be a little lower, I'm happy. But not so much I'm not happy because sometimes it means that some projects are late. So I prefer to really be in our budget. So first point. So sorry to disappoint, but it's not a major issue. I'm not in a, I mean, to be clear, we are not in a company which makes short cycle CapEx permanently. where you can maybe make less volatility. The second one, I think it's the same answer to that, Lydia, if I remember the beginning of the first question I had. You have to wait for 2026. You have to be a little patient until February. We'll give you more color. It's clear that, again, we gave you a point, I think, in the chart of 2027 when we speak about reinvestment rate. So we told you that in 27, yes, I remember, the investment rate, we go down from 70% to something like 50%. It was a chart which was in the New York package. And that's the reality. And it's coming from both. It's coming from, on one side, higher cash flows, because we are delivering along the three years. So, to be clear, the figure of 27 means by end of 27. So, it's a three-year decrease. It's not beginning or I don't know which quarter. And it's an annual one. So, it's the end, to be clear. That doesn't mean that all the growth is back-loaded. It just means that it's an average of the year 27. And it's coming as well from the discipline of the CAFEX, because we have your guidance, it's $16 billion. So, it's both who contribute to this reinvestment rate, which is lower by 20%. So, if you have 20% if you are lowering the investment rate, is good and consistent with a free cash flow per share increase that we have announced. So that's a way to explain why we will be able to increase the free cash flow per share because we have more cash and less capex. And that's where we want to embark all of investors who trust TotalEnergies. Thanks. I think it was the last question. Yeah.

There are no more questions registered at this time.

OK. So thank you to all of you for your attendance. I hope that all the analysis you've done will be reflected in the stock price. It was not the case this morning. But again, we are delivering. This is the message. We are delivering. We have a consistent strategy. We are just executing in. We deliver. And frankly, both the directors and myself, as you, we are quite pleased with the results of this quarter because that demonstrates, and again, that's all what we explain you quarter and year after year is on the delivery mode and that free cash flow will increase. Thank you for your attendance.

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