… and privileging value over volume in oil
Total will focus on low cost oil projects, privileging value over volume and develop its portfolio of oil projects, all with profitability above 15% at 50$/b, while ensuring consistency for Capex allocation with climate ambition.
Adapting energy sales to market evolution and engaging in the mobility revolution
As recently demonstrated with the Lindsey refinery divestment and the transformation of Grandpuits refinery into a zero oil platform, Total will adapt refining capacity and sales to demand, particularly in Europe. In the same time, it will further increase its biofuels productions and sales as demand for such renewable products is supported by policies aiming to get to Net Zero. Renewable diesel production is expected to reach more than 2 Mt/y by 2025.
The Group is also committing more than 1 B$ over the next ten years to the e-mobility revolution by investing in battery manufacturing and EV charging with a target of 150,000 charge points by 2025.
Resilience & Growth underpinning compelling investment case
In the current uncertain environment, Total remains focused on what it controls and specifically on the pillars that enable the Group to resist the crisis: HSE, delivery, costs and cash, with a view to continuously improve its organic breakeven below 25 $/boe. Discipline and flexibility will be maintained on capital investments with 13-16 B$ over 2022-25 assuming an oil price between 50 and 60 $/b. Considering the short-term uncertainty and low price environment, capital investment for 2021 should be under 12 B$. Cost reduction efforts will be accelerated and increased to 2 B$ by 2023.
Accelerating its shift toward low carbon businesses while growing its Upstream production by around 2% per year between 2019 and 2025, mainly over 2022-25, the Group confirms a cash flow growth of 5 B$ by 2025 and a ROE greater than 10% in a 50 $/b environment.
Based on this outlook and given the resilience shown by the Group, the Board reaffirms its confidence in the Group’s fundamentals and confirms that the dividend is supported at 40 $/b. Beyond serving the dividend, priority will be given to bringing gearing below 20%. Furthermore, the Board is convinced that Total, with its strategy to become a multi-energy company while offering a high yield dividend, is a compelling investment case supporting stock rerating.
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Following the Strategy & Outlook presentation, there will be a series of thematic presentations made by members of the Executive Committee:
Becoming a world leader in renewables
by Philippe Sauquet, President Gas, Renewables & Power
The mobility revolution
A worldwide ambition in biofuels
by Bernard Pinatel, President Refining & Chemicals
Engaging in the electric mobility revolution
by Alexis Vovk, President Marketing & Services
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