TotalEnergies CEO Patrick Pouyanné on the future of global energy markets

Tough, tough.

I think by the way there is one common point between Iran and Venezuela. I think is that the president of the United States wants the price to go down. So he wants to open as many markets as possible. You know, Venezuela crude oil, Iran crude oil, trying to convince OPEC as well to relinquish more oil. I think that the fundamentals of the market, there is still a growing demand plus a little less than 1 million barrels per day. And by the way, for the people who speak about peak oil, I don't see why it is. I see almost 0.9% every year steadily because growing population, because better way of life in many emerging countries, so it's a sort of constant thing except the year of COVID, but I think it's constant. So this still demand. Then in front of that, you know, we just went out of the cycle of three, four years at $190, $80, so a lot more investments in particular here in the United States in shale oil, quite vibrant industry. So of course when you have more investments, more production, more supply, and then we go down to the cycle. That's very logical. I'm not surprised. I think at the same time you have some geopolitical events in this market because honestly fundamentals, we have planned our own budget for 2026 at $60 per barrel. No, we are planning not dramatically low but lower than in 2025.

There are some tensions. You know, we don't know where this conflict with Iran could go. You know, there are threats. You have also, by the way, I think more fundamentally, you had some perturbation, you know, with the Russian what happens in Kazakhstan outlet. You know, there was 400,000 barrels per day which was out of being exported through on the Black Sea. That's in this market which is quite tense. This type of events have a direct impact. And then I think you have the sanctions against Russian oil which are more strictly applied, I would say. You know, we've seen, my traders are telling me that they see 140 to 150 million barrels level of Russian oil which is stuck on the sea in tankers, you know, so there is a limit to that. So all that...

Yeah, I think the sanctions begin to be really implemented. I think the US and Europe are more serious about not letting all these oil exports because honestly Russia, most of Russia's revenues are coming from oil more than gas. You know, we speak a lot of gas, but in fact it's oil which is their source of revenues. So I see there some more stringent ways to have a round of sanctions including from the US, so that I think is part of the explanation why we see this price not at $60 but more at $70, $71. But it doesn't really change how the industry is investing, does it? No, we are not reacting like that. You know, I think you could have some players in particular which are more short cycle players like US shale oil producers, small independent ones, which are maybe more reactive to the oil price, but not the major companies. I think we have a certain way, we invest for medium to long-term, not for immediate investment, you know. So on Venezuela, that was really not a country that TotalEnergies was particularly engaged in. We were until 2022. You know, we have built historically in 2000, 2002, 200,000 barrels per day. But we know what it is to invest in Venezuela because it's not only producing oil, which is a sort of very heavy oil, that's quite easy to produce the oil, but it's not enough. You need the infrastructure. You need upgraders to transform to be able to transport the heavy oil. And so we had to build that complex. Was it in the Orinoco? In the Orinoco it was called Sinco and Petro Sado, and we have been there until 2022. And honestly, the 200,000 barrels per day became 30,000 barrels per day because the system was not maintained. And in fact we left because of safety audits. We were together with Equinor by the way, and we received a safety audit which was quite tough, telling us that the upgrader, which is a big machine, an upgrader is a cooker, it's not a small refinery, it's a big refinery, was in a situation where maintenance, there was only one big turnaround in 15 years in fact, and it was becoming critical. So we have decided to leave because to maintain that was a risk for the company. And by the way, what I understood after we left is that the upgrader has suffered an explosion. So it's not good to say so. So in fact, when we speak about Venezuela oil, it's not only producing oil, it's also having the whole system and you need to put in place some alignment between, and to have if you want to transpose that. So that's why I'm a little, and so today for us, first we had an experience which was not so positive. You know, when you have invested billions and then you left some of them behind you, so you take some lessons. You know, it's the only country in this industry for almost 30 years where we have been nationalized.

The only country in 30 years where we had this nationalization of our assets, a forced nationalization, and it was in 2006-2007 on the Chávez. So you keep that in mind, you know, and so when you have the planet is round, it's finite, but you have opportunities, you know, and so for me, it's a matter of do I rush to make this opportunity or not? And today I have plenty of opportunities to grow my oil production, you know, and just adding Namibia, we have about, so I don't need Venezuela immediately today to rush. And by the way, it does not fit as well too much with our commitment to produce with less emissions. So Namibia is a much more attractive business to be honest. When you speak to me, you know, we have just announced a very important deal with GAP where we have doubled down on business. So today we are the largest player, we have almost 1.5 to 2 billion barrels of oil to be developed. So with the first project Venus, then a second one Mop, we intend to, we hope and we are working in a good spirit with the Namibian authorities to be with the objective we set ourselves is to sanction first projects in 2026 and then to have the second one in 2028. So it could be a new story. It's clearly a province plenty of hydrocarbons. There is probably a lot of gas as well. There is a lot of gas, and honestly I will be very happy to be the number one player and to be able to be the company which will help this country to make this oil industry becoming reality for them.

It's us. But you know, well, I'm proud of that, but I'm more proud because we are the number one company in terms of US energy export in 2025. We have exported in 2025 19 million tons of LNG out of a production around 110 million tons. We are number one. We have 18% of US LNG was exported by TotalEnergies. By the way, most of it, 14 million tons, to Europe. So we are making the bridge. We are the company which makes this bridge between the US and Europe when we speak about security of supply and energy dominance. We are a player part of it, you know, we have one of the instruments, so I'm proud of it. So number one in LNG exports and number five in renewables. And more than renewables, because in the US we have also acquired some gas-fired power plants. And in fact, when I'm looking to more electricity, you know, renewables is one way to produce electricity, it's a nice way, but it's intermittent. It could be quite efficient by the way. Today we just announced 10 days ago a new agreement with Google for one gigawatt data center, and most of it is coming from solar in Texas. So you know, we make the combination, and when I'm discussing with...

It works well. We have more than 10 gigawatts of capacity. So it's a combination again of a lot of solar, wind, solar. We have also some wind, because we have two vehicles. One is ourselves, 100% TotalEnergies, that we develop mainly in the ERCOT market in fact around Texas, where we make the combination of gas and renewable rewards. And then we have another vehicle called Clearway, which is a listed company that we own 50% with 50/50 with GIP. So these two vehicles are developing our position in the US and we are fine with it and we continue to develop it. By the way, our projects, we have a pipeline of projects up to 2029 which is completely fiscally safe-harbored, and so we'll continue to deploy capital. I'm fine. That's true for onshore solar, onshore wind. It is not true for offshore wind. But you know, offshore wind, we have a discussion today with the administration. Frankly, in the US, the lesson that I draw, and we had some concessions we had to, is that honestly when you make the cost merit curve, it's not a matter of religion, it's a matter of just economy. When you look at the cost merit curve and you know the way to produce electricity in the US, offshore wind is quite high in the cost curve. So in fact, for us, allocating capital equity capital to offshore wind in the US is not the best way to produce electricity today. So we prefer to concentrate on the more traditional way, gas-fired power plants and onshore solar and wind.

We have done 60 terawatt hours. The beauty of it is that we have a premium, you know, because they are so hungry for capacity of supply that when we sign a PPA, we get a premium compared to traditional ones. So it's a good market for us.

Yeah, but yes, an interesting interaction, but they have to learn that we are the ones who provide electric energy, you know. So we know, in fact, and the beauty of it when you engage with Google for example or AWS is that we need to have a sort of more strategic approach, a longer-term approach, because they are not developing only data centers in the US, but also for example we have signed a contract in Malaysia. I was going to ask about this. So it's also the global footprint. So a company like us, we are offering them a sort of potential strategic partnership. That's true that they were few years ago quite transactional, I would say, trying to put competition. Today, because of their huge demand, they are more looking to what could be the different partner which could ensure for them a sort of continuous pipeline. And so for example, one of the things we have done in Texas with Google, not only we have given them access to a big solar plant, 1 gigawatt, but also to land, and we are acquiring more land, and the land which is connected to the grid for them has big value. And we have in fact, as negotiating with regulators, grid regulators, not only the capacity to inject in the grid but also to take out of the grid in order to have a security of supply for their data centers. So Google will have the option to build another data center on our land, which is good for us because then we are more in a sort of B2B beyond the market dynamic, and it offers capacity to grow our business.

I think today, because first, fundamentally we believe in oil and gas. You know, when I'm looking at all the scenarios, I know there are plenty of scenarios, but at the end I observe this 1% growth of oil. I see that LNG is a growing market. There is a huge amount of gas resource on the planet. It's quite flexible. The more we look at it, it is a perfect complement to renewable intermittency. So gas, we see that. So we have built and we have kept our stance and become the third largest energy producer coming here in the US in a large way again on energy. We keep that sense and we never committed to, because of climate change or I don't know what, to diminish oil and gas production. And by the way, one thing we have done which is a good KPI is that our reserve life index of proven reserves is still above 12 years, like Exxon. Number two, we are the largest two, the others have done through eight years. So we continue to do it, and we continue to do it for another reason: it's that you know I'm not a magician. If I want to invest $4 billion per year in our electricity business, I need to generate the cash flow from my mainstream business which is oil and gas. So yes, and at the same time we have decided to build this electricity business. Why? Because again, when we are looking at the demand and all the scenarios, whatever they are, the growing demand for electricity is growing more than 3% per year. So that's a constant of all that, and by the way it's accelerated today by data centers and all that. So it's a source of transportation. Some people don't like EVs, but some of us like EVs. It's a fact. We have more transportation electrified. It's also air conditioning in many emerging countries. You know, when people reach a certain level of wealth, they want to be air conditioned. It's quite, and at the end of this new digitization.

Air conditioning. Yeah. Air conditioning. Sorry. And also because when you want to decarbonize industry, it's electrification as well. So you have a big market for electricity, and this is what we want to address. The link by the way is gas, gas to power. So our traditional world is able to produce electricity. It's a foundation of the strategy, and in fact for us it's also a way to add more value on the gas value chain. You know, we are not just gas producer and liquefier and seller. We can transform these molecules into electricity. It's a different business in Europe, a different market in Europe. The gas price, the electricity price is not only linked to gas, it's also linked to the CO2 price, so you have a different dynamic. And in fact, this electricity business is also more resilient, it does not follow the same cycles as oil and gas. So for a company like us, we see that as a good complement. There is a logic, and I think I know that we are the only one today. We continue to do it, but it's a growing business. It's 10% of the company, will be 20% in 2030. It's profitable.