Patrick Pouyanné : "TotalEnergies est la plus profitable des majors pétrolières !"

Hello.

I think first it's the growth, because we showed growth in our energy production: 4% for oil and gas, 20% for electricity. So it's a growth value, and it's not just volume growth, it's growth in the cash we generate. Last year our oil production grew 4% but cash flow grew 10%, so our new barrels bring in more. That means free cash flow, which fuels dividends and shareholder returns, increases. The second point is the consistency of our strategy, progressing in both oil and gas and electricity. The good news for 2025 was that when we announced the big electricity operation to buy 50% of EPH's gas plants in Europe, the market reacted positively even though we paid with shares, so we diluted shareholders a bit, but the stock rose 10%. And finally, the consistency of the strategy including the dividend increase of 5.6%, which among all major oil companies is the strongest growth. So an energy transition strategy oil-gas-electricity, and we are the most profitable of the majors. That makes a cocktail. Also, relative to our European peers, a point raised by analysts: we have a long reserve life of more than 12 years versus 7-8 years for peers, and that is now seen as an advantage. Five years ago we didn't dare talk about oil and gas; now it's an asset. That proves that the strategy of betting on both pillars is paying off.

Historically, because we have the lowest production cost, simply. $5 per barrel on average, others are between $7 and $10. So when the price drops, since it costs me less, I resist better. And at the same time, I am growing with new barrels that bring in more. Last year we absorbed about $5 per barrel. The price fell by $10, but our cash fell only by half. So the 15% drop in oil shows in our results mechanically, but in cash we only see 7%. And that will continue in 2026 as we keep growing; over two years we will have absorbed $10 per barrel. I think that also reassures and attracts investors.

No, it will be difficult because number one is Qatar, and I don't have the size of Qatar alone. But being top 3 with 10% of the global market, our ambition is a market that will grow by 50%, from 400 million tonnes to 600 million tonnes. We will follow; we are building capacity in the US, Qatar, Mozambique, and elsewhere to follow the market growth. So we will keep this position, and it will represent more and more of our revenues. Today we are 50% oil, 40% gas, 10% electricity. In five years, we will be 40% oil, 40% gas, 20% electricity, which is the other characteristic of our growth.

We are in a cyclical industry, and I was the first to say it would come down, so we adapt. But unfortunately in commodity industries, industrialists are somewhat stupid: when the price is high, everyone invests simultaneously; when it's low, everyone stops, so we create the cycles ourselves. The good news is that between 2022 and 2027, a new LNG market has emerged: Europe. A major fact because much of the additional capacity will be absorbed by the European market since the European Parliament has voted to ban Russian gas by pipeline and LNG by 2027. That alone represents a growth of 60 million tonnes to 150 million tonnes. So in the growth from 400 to 600, half of the extra capacity will be absorbed by Europe. That's why we have taken a major position in the US. In 2025 we will have exported 18% of US LNG, so we are a very big player. And we are also a big importer in Europe, representing 16%. So there is a market that has developed and is growing. Yes, prices will fall for a while because capacity will need to be absorbed, but for now it's still good. Last year it was $70 per barrel equivalent. This year we bet on $60-65. We think it will fall to $50 equivalent by 2027-28 depending on capacity growth speed. But the European market in 2027 due to the definitive end of Russian gas will absorb 30-35 million tonnes itself. So I am not worried. For consumers it's good news. For us, we knew it. We have taken measures. First, we signed medium and long-term contracts with Asian buyers that link the price to oil, which is expected not to fall as much. Second, we are transforming gas into electricity in Europe; the price of gas may be lower, but electricity won't necessarily follow exactly. So this value chain integration is a second form of protection. In cycles, the winners are the companies with the best balance sheets and strongest positions. Our results will of course decline then, but we will use it to rebound better.

This was the good news of 2025 for us, which probably explains the investor appetite for our stock: the explosion of the data center and AI market. You've seen the announcements from Google, Microsoft – billions of dollars. For us it's manna from heaven because we are building renewables in the US and also have gas plants. So a market has opened up. There is such avidity that industrialists like us who have available electrical capacity with connections and ready land are now rare. And with Google, in that contract for 1 GW, there is a premium – about 10% premium over a normal contract. So it's growing. For example, in Texas, the electricity market grows 5% per year. We are there, so we benefit from that growth and it's more remunerative for our projects.

Yes, of course. With Google we have a true strategic partnership. We are building not only in the US but also in Malaysia, and we are looking at projects in Europe. I have a call this afternoon with the head of Google Cloud to discuss future developments. The idea is to supply both renewable and gas power to give them reliable electricity – for data centers the availability rate must be 99.99%, even when it's night or there's no wind.

I would sign for everything. You know, I adapt the company. Of course 70 is better than 60 or 50, and less good than 80. I am not going to say otherwise. But I am rather surprised, honestly. We have presented our projections to investors at $60 per barrel, because fundamentals: global oil demand grows but at about 1% per year (1 million barrels per day per year), supply is abundant, OPEC has been easing quotas, US shale has peaked, but at $60 we saw a slowdown in drilling in the US and OPEC stopped easing quotas. Also there is the geopolitical factor: the tension between the US and Iran, but more structurally, the decisions by the US and Europe to enforce sanctions on Russia harder. There is a hunt for Russian ships, and we observe more and more Russian oil on tankers but unable to find buyers due to fear of sanctions. India just signed a trade deal with the US to stop buying Russian oil; India was buying 2 million barrels per day of Russian oil out of Russian exports of 3-4 million. So if they stop, that oil must find a place. So that explains the current price tension.

We left for reasons explained: that oil is expensive to produce because it's heavy and requires heavy investment, it emits a lot of CO2, and we have other playgrounds. I prefer to continue investing in Iraq where we have a fine project that will be profitable with controlled emissions. As for Venezuela, for now we'll wait and see how things stabilize. We are long-term investors. There is only one country in 25 years where we were nationalized: Venezuela. That leaves a mark. Thierry Desmarest told me: you will make mistakes but you don't have the right to make the same mistake twice. So when you've experienced that, you draw lessons, and that marks generations of management.

First, we need to grow, and our organic growth should bring us close to $20 billion. It's not a goal in itself. Our results also depend on oil price. We are a strange company that invests enormously but does not control its product price – it's the global market. But the growth we have and the more important thing for our investors is free cash flow – how much I have available to serve them. And there, we have told them and are doing it: that free cash flow will increase by nearly $10 billion over the next five years if prices remain stable. So we will absorb a lot of price drops. And if prices rise, then we will see very high times.