The Shareholders' Newsletter #69 - Fall 2022

Chairman’s message


© Khanh Renaud

TotalEnergies is a much more profitable company today than it was 10 years ago: at the same oil equivalent price, it generates an additional $15 billion of cash flow.
Patrick Pouyanné 
Chairman and Chief Executive Officer of TotalEnergies

Dear Shareholders,

The Investor Days on September 27 and 28 were an occasion for TotalEnergies to demonstrate the relevance of its strategy in the context of changing energy markets as a result of the energy transition. Your Company is implementing a balanced multi-energy strategy in the light of the developments in the oil, gas and electricity markets. Thanks to refocusing the oil and gas portfolio on low-cost assets and projects (less than $20/barrel), a strong growth strategy in liquefied natural gas among the top 3 worldwide, and our accelerated development into electricity, mainly renewable to reach the top 5 worldwide, the Company is in a very favorable position to benefit from the evolution of energy markets.

With a breakeven anchored below $25/barrel, TotalEnergies is a much more profitable company today than it was 10 years ago: at the same oil equivalent price, it generates an additional $15 billion of cash flow and can take full advantage of favorable environments. Thus, by the end of 2022, the Company will have a very strong balance sheet with gearing sharply down to around 5%, providing more flexibility. It is positioned to both accelerate its transformation strategy and to offer an attractive return to the shareholder policy.

I would like to emphasize that, on September 28 in New York, we presented TotalEnergies’ outlook without Russia. The Company therefore expects its cash flow (excluding Russia) to grow by $4 billion over the coming 5 years using moderate energy price assumptions ($50/barrel for oil and $8/Mbtu for European gas), knowing that it would generate an additional cash flow of more than $3 billion for every additional $10/barrel increase in the price of oil. This structural cash flow growth will support dividend growth over the next five years.

In this context, the Board of Directors has adopted a cash flow allocation strategy for the coming years. It provides for the allocation of 35-40% of cash flow to shareholders through the cycles while accelerating the Company's transformation strategy with net investments increasing to $14-18 billion per year over 2022-2025. This increase will be dedicated in priority to the development of carbon-free energies and carbon footprint reduction programs which will represent about a third of investments. Investments in carbon-free energies, in particular renewable electricity, will therefore reach $4 billion in 2022 (compared to $3 billion in 2021) and a $1 billion energy savings program will be deployed globally in 2023-2024 to control the cost of energy consumed and accelerate the reduction of emissions. As for investments in hydrocarbons, two thirds will be allocated to maintaining our production, and the remaining third to the growth in LNG on the one hand and, on the other, to the development of new low-cost, low-emissions oil and gas projects to meet demand.

Confident in TotalEnergies' ability to ensure profitable and sustainable growth in the coming years and seeking to share with its shareholders the Company's results in this context of high prices, the Board of Directors has decided, for 2022, to maintain the $7 billion share buyback program as announced in July, and to pay a special interim dividend of €1 per share in December 2022, in addition to the 5% increase in the quarterly interim dividends already announced and implemented.

Thank you for your loyalty.

Patrick Pouyanné
Chairman and Chief Executive Officer of TotalEnergies