TotalEnergies SE (NYSE:TTE) Q2 2024 Earnings Conference Call July 25, 2024 8:30 AM ET

Company Participants

Patrick Pouyanné – Chief Executive Officer
Jean-Pierre Sbraire – Chief Financial Officer

Conference Call Participants

Lydia Rainforth – Barclays
Doug Leggate – Wolfe Research
Irene Himona – Bernstein
Biraj Borkhataria – RBC
Martijn Rats – Morgan Stanley
Michele Della Vigna – Goldman Sachs
Lucas Herrmann – BNP Paribas
Alastair Syme – Citigroup
Christopher Kuplent – Bank of America
Matt Lofting – JPMorgan
Henri Patricot – UBS
Paul Cheng – Scotiabank
Bertrand Hodee – Kepler Cheuvreux
Jean-Luc Romain – CIC Market Solutions
Jason Gabelman – TD Cowen

Patrick Pouyanné

Good morning or good afternoon, everyone. Patrick Pouyanné speaking. So before Jean-Pierre will go through the second quarter financials, I have thought that midyear would be a good time to check in on the progress that we have been making. I would say the great progress in just the last 10 months since we presented our strategy last September at our Investor Day in New York or I would say, balanced transition strategy, which is incurred on two fundamental pillars: the oil and gas on one side with a perspective of growth and integrated power on the other side, and both pillars are driving the growth for the company.

So during the last first semester and last quarter, beyond the excellent operational performance, which was delivered on our oil and gas pillar, we have sanctioned several major upstream projects. But I would like to remind the [indiscernible] with the financial decisions, some three large FPSOs Kaminho in Angola, Sepia 2 and Atapu 2 on – and both which are world-class oil productivity projects with low technical operating costs and the $20 per barrel sanctioning criteria, Angola is under $30 per barrel breakeven. So these are three major oil projects, but we also have sanctions on the LNG side, two important projects: the Marsa plant in Oman, Marsa LNG, which is a very ultra-low-emissions plant, and the Ubeta gas project in Nigeria, which will supply Nigeria LNG.

So these projects will not only contribute to the objectives to grow our upstream by 2% to 3% per year in the next five years, but they will also boost the underlying free cash flow generation and ultimately shareholder distributions. On the second pillar, integrated power, where we have reached quite a competing ROCE above 10% this quarter and Jean-Pierre will come back on it. We have also made some strong progress towards deploying and completing our integrated power business model by acquiring flexible assets that allows us to extract maximum value from the renewable assets in three key markets in Texas, in the UK, and in Germany. We closed all CCGT deal in Texas and also announced the acquisition of the CCGT in the UK. Both of these markets, we know have all building blocks that define our integrated power model, renewables, flexible assets and, of course, trading and end customers as well in order to deliver clean firm power, which prices at a premium compared to a green intermittent renewable power.