TotalEnergies' bonds: Aurélien Hamelle's hearing

Mr. President, Mr. Rapporteur, ladies and gentlemen senators. I am Director General of Strategy and Sustainable Development since January, previously legal director. I supervised compliance regarding Russia. Since the late 2000s, TotalEnergies made investments in Russia. In December 2009, we took a 49% stake in Terneftegaz, a joint venture with Novatek. We sold that stake in September 2022. A complaint was dismissed. We had a 20% stake in Kharyaga, sold in July 2022. We hold 19.4% in Novatek, removed board members. We have 20% in Yamal LNG, with long-term contracts; it is not sanctioned. We had 10% in Arctic LNG 2, but suspended after US sanctions. We sold our lubricants subsidiary. Saft suspended activities. Our principles: transparency, compliance, responsibility for European energy security. We recorded $14.8 billion in impairments. We maintained LNG supply from Yamal LNG as it contributes to European security. I supervised a dedicated team to ensure compliance with EU sanctions.

Mr. Senator, thank you for your question. We have emission reduction targets for our direct emissions. We have achieved a 24% reduction since 2015. Our target is a 40% net reduction by 2030, with carbon offsets only after 2030. Before that, reductions are industrial. We invest $100 million per year in nature-based solutions, including afforestation projects like Bacazi. We have specialists in forestry. These projects aim for highly certified carbon credits. Regarding Bacazi, we ensure local populations are involved and compensated.

We also have agricultural solutions, and you mentioned sustainable agriculture. We have a project in Australia on this that should help create a carbon credit stock of about 50 million tonnes, usable starting in 2030, not before, at roughly 10% per year. So from 2030 it will factor into reducing our emissions. I also recall that in the International Energy Agency scenarios, industrial or natural CO2 capture solutions are part of the toolkit for energy transition strategies. Regarding your question on the Bacassi project in Congo: there is no relocation—no one is being moved from their homes, as far as I know, but we can provide written details. However, there is an impact on agricultural activities. The project was designed so that movements within the area remain free—no enclosures, no physical limitations. Impact studies and compensation procedures have been conducted for affected households, known as PAPs, as my colleague Nicolas Terrasse explained regarding Uganda. Compensations have been calculated and are being paid out to those whose usage rights are affected. That's what I can tell you, Mr. Senator, about the Bacassi project.

Thank you, Mr. President and senators, for your questions. I will take them in order. Regarding Uganda and Tanzania: planting trees is not sufficient, and we haven't limited our biodiversity action to that. Both the oil production project and the pipeline have biodiversity action plans, including protection of Murchison Falls Park in consultation with forestry and wildlife authorities. TotalEnergies is not involved in any airport or refinery project—there is a refinery project, but we are not part of it. On the pipeline: it is heated because the oil is viscous; it will be buried for most of its 1,400 km, with brief above-ground sections for technical and safety reasons. The heating will be solar-powered, reducing its carbon footprint. The CO2 intensity of this project is 13 kg per barrel produced, vs. the industry average of 60, so it is particularly efficient. On your second question: we announced on March 22, 2022, that TotalEnergies ceased all spot trading of Russian gas as of February 25, 2022. We have no activity on Russian gas beyond long-term purchase contracts I already mentioned. My colleague Nicolas Terrasse addressed the gas project in Azerbaijan where we hold a 35% stake: the Absheron project sells all its gas to the national company SOCAR for the domestic market. Finally, on investments: two-thirds go to oil and gas (mainly maintenance and new projects), and one-third to low-carbon energy, primarily electricity. We are the largest investor in our industry in this area, recently ranked first by the TPI (Transition Pathway Initiative) for climate efforts. R&D spending is over two-thirds oriented toward transition activities—CO2 capture and new low-carbon technologies.

Thank you, Mr. President and Mr. Rapporteur. I'll take your questions in order. On Uganda and the protests: my colleague Nicolas Terrasse outlined our responses. We can provide you with the letters sent to Ugandan authorities regarding arrests, in which we reaffirmed our attachment to freedom of expression, the right to oppose the project, and respect for the rights of those arrested. On the IEA scenarios: the IEA publishes several reference scenarios, including the NZE you cited, which determines a trajectory for fossil fuel demand to 2050. They also have the APS (Announced Pledges) scenario and the STEPS (Stated Policies) scenario. Our teams at TotalEnergies publish an annual Outlook, providing our own vision for energy demand to guide transition decisions. As COP28 stated, transitioning away from fossil fuels must be orderly, just, and equitable—so companies like ours will have different activities worldwide. The pace of transition is not the same in developing and developed countries. On the NZE scenario: it assumes a 4% annual decline in demand, which is not happening today. Meanwhile, we must maintain a functioning energy system. We invest one-third of our capital in low-carbon electricity. On a personal note, as you asked: I am the son of immigrants from behind the Iron Curtain, and sustainable development is important to me. On the carbon budget: the independent extra-financial rating agency MSCI recently rated TotalEnergies' decarbonization trajectory as compatible with warming below 2°C (1.8°C) per the Paris Agreement. On gas and shale gas: COP28 recognized gas as a transition energy because it can decarbonize power generation. Coal produces about three-quarters of power sector CO2 emissions, while gas produces half that for the same electricity. The US reduced emissions by substituting coal with gas from shale. We also focus on methane reduction—we've cut our methane emissions by 47% since 2020, with targets of 50% by 2025 and 80% by 2030. We promoted and signed the Oil and Gas Decarbonisation Charter from COP28, which includes state-owned companies representing ~70% of global production. For all these reasons, our gas strategy is coherent with our energy transition strategy.

Mr. President, sir, thank you, Mr. Senator. To answer your two questions: On Azerbaijan, I'm sorry but I'm somewhat at a loss because, as I said and as my colleague Nicolas Terrasse explained in his hearing, our 35% stake is in a field whose entire gas production is sold locally to SOCAR for the domestic network. So it is Azerbaijani gas, and to my knowledge this project is not involved in importing Russian gas into Azerbaijan. Additionally, TotalEnergies ceased spot trading of Russian gas as of late February 2022. So I'm unable to answer further because we are not involved in those activities. On your second question: Novatek has a minority shareholder (holding less than 24%) that is subject to US and European sanctions—it's a minority shareholder, not the chairman. Under European rules and the clear position of the Commission, when a minority shareholder of a company is sanctioned, that does not 'contaminate' the company itself. Therefore, Novatek is not sanctioned, either directly or indirectly.