By Alexander Miller, consultant in energy markets. Eurasia Business News, October 2, 2024. Article n°1251.

France’s TotalEnergies SE has slightly improved its long-term forecast for increased oil and gas production due to the launch of new projects.

The energy giant expects that the average growth rate of production in the period up to 2030 inclusive will be about 3%, in particular, due to an increase in LNG production. Previously, an increase of 2-3% was expected.

This forecast is due to the company’s launch of six major projects in 2024 (two in Brazil, Suriname, Angola, Oman and Nigeria), according to TotalEnergies’ presentation as part of the Investor Day.

Over the next two years 2025 and 2026, growth will exceed 3% per year due to the start-up of several high margin projects (US GoM, Brazil, Iraq, Uganda, Argentina, Malaysia, Qatar) which are accretive in net income per barrel and cash-flow per barrel. In 2024, the Company has also de-risked its LNG exposure to spot gas prices by signing long-term LNG sales contracts mainly indexed on Brent and by developing its upstream gas production in the US through two low-cost acquisitions.

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TotalEnergies confirms net investments between $16-18 billion per year during 2025-2030, of which around $5 billion will be dedicated to low-carbon energies. The Company retains flexibility to reduce its net investments by $2 billion in case of a sharp drop in prices.

The company expects its free cash flow to increase by at least $10 billion by 2030 compared to the current year. It still plans to allocate more than 40% of its annual free cash flow to encourage shareholders. In 2024, the volume of share buybacks will amount to $8 billion, which is about 5% of the capital.

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In 2025, the buyback will also amount to $2 billion per quarter, if market conditions allow, TotalEnergies said in a statement. In addition, the company plans to increase its dividend by at least 5% next year.

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© Copyright 2024 – Eurasia Business News. Article no. 1251.