WPC 2023 - Nicolas Terraz - Workshop 2: Energy, Climate and Technology

The first point I want to make is that the demand for energy is increasing today, not decreasing, because of population increase, particularly in emerging countries in the global South, and because of aspirations for better living standards. So we have a growing demand for energy. The International Energy Agency and other organizations make forecasts about future production and when oil production demand will decline. At TotalEnergies, we see oil production stabilizing over the decade and then starting to decline from 2030. The natural decline of oil field production is about 4-5% per year, so if you do nothing, production drops quickly. Gas is important for the transition because it can substitute for coal, particularly in power generation. We see demand for gas increasing over the coming years. Electrification will be important in the decarbonization of the energy system, requiring massive investments in renewable generation, transportation, and networks. Power systems will become more complex with the arrival of renewables, but we need firm power, so gas-fired power generation or storage will complement renewables. Our strategy is to produce more energy with fewer emissions. We want to continue increasing energy production while diversifying into lower-carbon energy. We aim to reduce our greenhouse gas emissions by 40% between 2015 and 2030. Our strategy is based on two pillars: oil and gas, and low-carbon energies. We are investing $5 billion per year in oil and gas and $5 billion in low-carbon power generation and molecules. For oil and gas, we focus on low-cost, low-emission projects. We have a breakeven below $20 per barrel. We are reducing emissions intensity by electrifying facilities and eliminating flaring. We have a target to reduce emissions by 50% by 2025 and near zero by 2030. For electricity, we target 20% of production from renewables by 2030. We are building an integrated power business with renewable generation and flexible power to deliver firm, clean power to customers. We focus on areas where we are competitive, like offshore wind, and develop multi-energy projects, such as in Iraq where we combine oil production, gas gathering, solar power, and water treatment.

No, not in fact. The project is to supply electricity for local requirements because local needs are high. In Iraq, there is a lot of gas being flared, but the priority is for local generation to benefit the local population and economy.

Battery capability depends on each project and the market. Typically for large projects, you are asking what is the size of storage. It depends, but for GW scale, battery is not the solution to manage intermittency. We are doing pumped storage and others. We are looking at this definitely. Nuclear, no, we are not investing in nuclear.

First, the impact on our business. We communicated our business principles after the invasion of Ukraine. First, we comply with sanctions no matter the impact. We immediately stopped the purchase of Russian oil and started winding down our activities. We had one oil production field in Russia that we sold. We had a gas field for domestic supply. We kept our interest in Novatek, which is supplying LNG to Europe, as European governments consider that desirable. There is no ban. The cost was about $14.8 billion. The government did not help us. It is not our practice to ask for monetary support. We manage our business by diversification. The Russian crisis has demonstrated we need to stick to that rule: maximum 15% in one country, 10% in practice. There is an impact on our production, but we are developing LNG business outside Russia, like in Qatar and Nigeria. We are growing our LNG imports to Europe from other sources, contributing to the continuity of gas supply to Europe.