Renaud Lions: We can go there, Henri.
Henri Patricot: The first question is on the dividend growth you mentioned earlier. We’ve done $2 billion buyback per quarter. You have this 5%, 6% base growth, and then an additional 1%. Could that additional 1% become larger in the future as you get more underlying cash flow growth, integrated power, integrated LNG? Are you more comfortable with the 7%?
Patrick Pouyanné: It will come larger if the share is going up. Because we are looking also to the yield, the yield is at 5.1%, which is on the top of the majors. And we are – it’s linked. You will say maybe the dividend growth [indiscernible] put the price of. It’s a chicken and egg, that story. But no, we are, honestly – there is room to do more, but we are comfortable because, again, we want to – we prefer to increase the dividend in a way that we can secure it even if the cycles go down. So 7%, 8%, $0.01, okay. That’s the type of discussion. But we prefer to have a steady policy of increasing the dividend several years in a row rather than suddenly go down. And so that was the discussion, the philosophy. When we benchmark to our peers, we felt that the 7% is quite on the good side.
And again, we have – I think the big news for TotalEnergies is we’re changing our story, is that we have really enhanced the payout policy to shareholders. We were at 30% a few years ago, went down to up more than 40%. In fact, this year, we’re at 45%. So this is a big change. And including – and this is clearly anchored in the mindset of the Board today, but we need to monitor that because it’s also part, I would say, of the energy transition strategy. We can execute it if we are profitable. And if we return to shareholders a big – a higher share of that. Otherwise, people will tell us why do you invest in this transition? Is it profitable? The fact that we remain very profitable and that we return to shareholders is a way as well to execute the strategy, the transition strategy we want to execute.
And we strongly believe we will deliver cash flows for the future for our shareholders. So that’s the equation. There is no – somebody asked, is it a mathematical formula? There is not a mathematical formula. We are looking to what we think is the right balance.
Henri Patricot: Understood. And then secondly, I wanted to follow-up on a couple of LNG projects that you mentioned. Just firstly on Mozambique LNG, if you can give an update on security situation, and how quickly you think you could get back to the construction there. And secondly, on Artic LNG 2, I mean how do you see that project ramping up? And what have you factored in for your guidance?
Patrick Pouyanné: Arctic LNG 2 is quite easy. It’s under sanctions. So, I would say I would be clear. I never – honestly, I am – unfortunately, I mean not surprised what was happening. We were very cautious in ‘22 when we announced that we have written off all that. It will – so projects has been – has moved on because these Novatek guys are quite incredible. We are able to put into production a new train despite all the sanctions and etcetera. So, in fact, in terms of engineering, it’s quite really a remarkable achievement. I am not surprised, because it was difficult to – the Europeans need to have this Yamal LNG, 20 million tons. But to add more Ocean LNG in the mix is a little politically complex, to add more.
So, I am not super surprised on that. So, that’s where we are. So, honestly, today we are not more in the governance. We have no – we have put in force measure everything. So, I cannot give you more information because we are not there anymore. And of course, I mean trading team or LNG teams were in contact, but we have put forth measure because it’s – that’s the reality. No way to expose the company to any type of secondary sanction. That’s clear to me. So, we are in the process. On what I understand, just to share with you, is that they are willing to install the second train. The third train for me is on hold, which I understand. But the second train seems to move. Where is the market, not in Europe. So, there is only one possible market, one or two.
But it’s not in our assets anymore. On Mozambique LNG, listen, I mean we have made – we make them – we monitor permanently the situation on the ground. As you know, there are some – the Mozambique State is helped by another African state, namely Rwanda, to control the situation today. And more importantly to us, the civil population is back in the area. Life is back to normality. There have been a few incidents recently linked to the Gaza tensions, I would say. We can observe in the planet that you have some gas sales which are being reactivated, just to – not only there, in many countries, we have seen some. So, that’s unfortunate. But there is a link. So, we have to monitor that. But today, in fact, it’s more to reactivate your contract, there is still some engineering to be done, so that’s part.
So, construction, I hope it will come back by middle of the year. We monitor that. Again, what I don’t want to do is to take a decision to bring back people to be obliged to get out again, because that would be too complex, so. But again, today, the discussion with – we have progressed a lot with the suppliers, I mean the different contractors. In a good way, I mean including on the costs, we had some debate. They have listened to our messages. They want to reactivate it. But no, the final point again is to put back, it’s Jean-Pierre, work, we have team and so global financing, it was a big financing CapEx that we need to reactivate. We are working on it. It should come in the coming months.
Alastair Syme: It’s Alastair Syme at Citi. Patrick, are you more or less optimistic on Namibia than you were last September? And I guess you are putting a third of your exploration budgeting, so I am guessing you are optimistic, but…
Patrick Pouyanné: No, I have said the same. I told you. I think I am completely optimistic.
Alastair Syme: I kind of have the impression…
Patrick Pouyanné: I am more optimistic than my colleague, because we don’t have the same license.
Alastair Syme: But what does Mangetti do? I was certainly under the impression that would add another resource base.
Patrick Pouyanné: No, it’s – we find back the revenues [ph] horizon, I can say. So, it’s adding additional resources. It’s not huge.
Alastair Syme: And the DST results that you had?
Patrick Pouyanné: We don’t have the DST yet.
Alastair Syme: The two venous wells.
Patrick Pouyanné: Yes. But on venous, again, we had one very good DST. The second one, again, the location of the well isn’t perfect. It demonstrates some heterogeneity. That’s why we need to find to be sure that when we develop, we develop and we locate the FPSO on the right spot, not to be too far from the sweet spot we want to develop. It will be a little like Suriname. It will be a combination of different sweet spots. So, the location where you put, because then you have the length of your pipeline, the subsea system. So, if you want to minimize the cost of the subsea system, you have to look at it properly to operate in order to be at the optimum for location.
Alastair Syme: Okay. But bigger than Suriname?
Patrick Pouyanné: Wait and see.
Alastair Syme: Okay. My second question is just on German power prices. I think when you did the auction last year, you sort of indicated a view the €70 to €80 a megawatt hour. It’s kind of where we have now pulled back to. In Germany, prices have pulled back a long way. But what’s been remarkable is there is no real demand elasticity, like the industrial demand is still really weak. Does that worry you that the economy can’t support these power prices?
Patrick Pouyanné: No. Because again, Germany has decided that they exit from nuclear and they exit from coal. So, the poor price in Germany will be fundamentally driven, on one side by these renewables, but also by, fundamentally, gas plus ETS. Don’t forget the ETS. So, the fundamental element in fact, in the electricity economy in Europe is also the ETS price. And think to that because at the end the marginal price will be done by the ETS on the top of the gap. So, when you are a country which decide that they will go from a gas plus – gas plants plus renewables, the price will remain a good price. So, today, I am – I think the full worth curve in Europe today in ‘25 is €79 per megawatt hour. Okay. That’s okay.
We are fine with that. So, I am – no, we are comfortable with developing this offshore wind in Germany. And we will find customers who are ready to commit on the long-term because it’s a question of, what the industries don’t like is the volatility of the price. So, we were afraid. So, it helped us to consider that, when we say €70 to €80 per megawatt hour to some of these industries, it’s okay, we can find them. Let’s see, Germany from this perspective, again, because of the choice of the policymakers is I think one of the good market to take this type of bet to keep some wind – offshore wind merchant in Germany. But it’s also a good market to have some batteries, because when people say, we want 70% of renewables, if you don’t have plenty of batteries everywhere, I can tell you, it will be difficult.
