Ladies and gentlemen, welcome to the TotalEnergies Third Quarter 2023 Results Conference Call. I will now hand over to Patrick Pouyanne, Chief Executive Officer; and Jean-Pierre Sbraire, CFO, who will lead you through this call. Please go ahead, gentlemen..

Hello, everybody, everyone. Good afternoon. So -- good morning if you are in the U.S. So today, we will present with Jean-Pierre, our third quarter results, which once again demonstrates the relevance of our strategy. Indeed, our transition strategy is incurred on both pillars, as we explained to you last September.

On oil and gas on 1 side, integrated power on the other side. And it allows us to fully leverage upside in supportive energy environments like the 1 we are experiencing today.

As explained in our total strategy and outlook presentation end of September, we have stayed the course, and this quarter illustrates all the strategies in motion in all of business segments. Oil and gas first, as you know, we have developed organically a deep portfolio of projects.

But our low cost and low emissions, which will offer a growth production of 2% to 3% per year for the next 5 years.

Thanks to this strategy, this quarter, we delivered a 5% increase of production compared to Q3 '22, as several new projects have been put into production like Mero 1 in Brazil, Absheron in Azerbaijan, Block 10 in Oman and Ratawi in Iraq. And they are more than offsetting our natural decline of 3% per year.

The downstream is also contributing to this oil and gas business, in particular, thanks to our capacity to combine an excellent utilization rate of our refineries with very robust refining margins.

On the LNG side, the recent price volatility in European gas markets, price spiking as much as 28% in a single day during the quarter is the most obvious example of real-time market intention. We capture value along the entire value chain and maximize the margins on both our dominant U.S. and European positions. We are the largest U.S.

LNG exposures, and we have reinforced this positions this quarter with the sanction of Rio Grande LNG in Texas. And the largest, we are also the largest European oil and gas capacity holders. And there again, we are reinforcing this position this quarter with the commissioning of our second FSRU in France after the 1 in Germany earlier this year.

The same integrated strategy extend, as you understood, to our integrated power business since the electricity market in Europe follows the gas market as natural gas plus CO2 sets a marginal power price for many years to come.

This market is again once characterized by growing demand and constrained supply, which experience opportunities in the market. As Jean-Pierre will explain you, Integrated Power achieved a new milestone this quarter with both adjusted net income and cash flow exceeding $500 million.

We are well on our way to achieving our $2 billion cash flow target for the year in this business. We have announced this morning an interesting acquisition on the German market, which illustrates our integrated power strategy.

Quadra is the second largest segregator of renewable energy in Germany with 9 gigawatt of virtual onshore wind farm and offers a very interesting platform from getting value out of the power market dominated by renewable without capital implied in the asset and so contribute to our profitability in this attractive market.

I will write up my introduction by just saying again there's the relevance of a balanced transition strategy between oil and gas and 1 side integrated power on the other side has never been clearer, more energy, less emission, more cash flows, and this quarter illustrates this relevance with adjusted net income increased to $6.5 billion and CFFO increased to $9.3 billion.

Total generated $4.2 billion of free cash flow after net investments. Based on the strength of these results and the trust in the company's outlook, our Board approved the third interim dividend up 7.25% year-on-year at EUR 0.74 per share.

Having said that, I'll turn it to Jean-Pierre, who will give you more details through the solid third quarter financial results..

Thank you, Patrick. So now we're moving on to the detailed financial results, starting with our first pillar, Oil and Gas, which is the cash engine of today. Third quarter hydrocarbon production was nearly 2.5 million barrels of oil equivalent per day, which is notably up 5% year-on-year, as already mentioned by Patrick.

Thanks to the startup of several oil and gas projects. On oil, production benefited from new production from the first FPSO on Mero in Brazil, EKK in Nigeria and our entry in the Ratawi oil field in mid-August in Iraq. Speaking of projects, Mero 2 should be online by the end of the year.

Production also benefited for our entry in January into the [indiscernible] in Abu Dhabi. On the gas side, production benefited from the startup of Block 10 in Oman and Azerbaijan of the Absheron.

Although production was flat quarter-to-quarter, exploration and production posted strong quarterly results with adjusted net income of $3.1 million and CFFO of $5.2 billion. The 34% increase in adjusted net operating income quarter-to-quarter was primarily driven by higher oil price and a lower effective tax rate, which is a result of 2 effects.

First, it results from the lower taxation rates on new barrels, Brazil, Azerbaijan, Iraq, compared to declining historic levels, barrels and its results also has a lower weight of North Sea barrels in the segment results for this quarter. Operating costs decreased to $5.5 per barrel this quarter.

For the integrated LNG segment, we continue to demonstrate our leadership as a top global LNG player. Integrated LNG production is up 18% year-on-year and stable quarter-to-quarter.

LNG sales were down by 5% quarter-to-quarter due to decrease in spot traded volumes in a less volatile environment, and LNG price sales was down 3% quarter-to-quarter linked to a certain environment.

However, after our results have landed last quarter from the historic high exceptional results experienced in '22, integrated LNG maintained this quarter robust results with adjusted net operating income flat quarter-to-quarter at $1.3 billion and CFFO at $1.6 billion, down 8% compared to previous quarter, in line with sales down by 5% and prices by 3%.

Despite entering the winter period with high natural gas inventories in Europe, in a tense market, gas prices remain at good levels and very reactive to production disruption as we have seen over the last several months.

Given the evolution of oil and gas prices in recent months and the lag effect on price formulas, we anticipate that our average LNG selling price should be above $10 per million BTU in the fourth quarter '23. For the combined Downstream adjusted net operative income and CFFO increased sequentially to $1.8 billion and $2.2 billion, respectively.

Despite lower petrochemical results due to the European environment, our results reflect higher refining margins in Europe and a higher utilization rate during the third quarter, which was supported by greater probability of our French refineries to be noticed for once.

The utilization rate on processed crudes increase quarter-to-quarter to 84% despite having an unplanned shutdown at the [indiscernible] refinery in the U.S. For the fourth quarter, the acquisition rate should be above 80% and includes the restart of [indiscernible] in mid-November. Moving now to the second pillar.

We continue to develop a profitable and differentiated integrated power model. Building a world-class cost-competitive portfolio that combines renewable assets, solar, offshore wind, onshore wind and flexible assets such as CVTs and storage to deliver clean firm power.

As mentioned by Patrick, this quarter, we achieved a milestone in integrated power business segments with adjusted net income and cash flow, both exceeding $500 million, and we are well on our way to achieving our target of generating $2 billion cash flow in '23, having already generated close to $1.5 billion through the first 3 quarters.

All the value chain contributed this quarter to this $500 million results, renewables, flexible assets and heavy supply to customers as well. During the third quarter, we also acquired 100% of Total Eren, which contributed to the growth of our electricity production and results. Early October, we signed a corporate PPA with Saint-Gobain in the U.S.

to supply clean power from our Danish field solar farm in Texas. The agreement is a good illustration of our strategy in integrated power, and it includes an upside sharing mechanism under which both companies share potential upside arising from spot market prices over the contracts or term. We recently achieved another milestone.

Earlier this month, our Seagreen offshore wind farm in Scotland became fully operational and is running at the design capacity of more than 1 gigawatt. This project was delivered within budget, only 5% persevere and is TotalEnergies' biggest offshore wind farm globally. I'll wrap up with CapEx and shareholder returns.

Year-to-date net investments as of the end of the third quarter totaled $16.1 billion. As a reminder, we expect to receive cash proceeds from the sales of our Canadian assets and from the deal with [indiscernible] in the fourth quarter. Therefore, we reiterate full year guidance of $16 billion to $17 billion of CapEx this year.

Our balance sheet is strong. Our gearing slightly increased from 11.1% at the end of the second quarter to 12.3% at the end of the third quarter, that is mainly due to the consolidation in our accounts of Total Eren debt. Proceeds from disposals should bring gearing back below 8% by end of the year.

Over the last 12 months, OHA was 20.1% and return on equity was more than 22%. In September, we raised our annual payout guidance from 35%, 40% of cash flow to more than 40%. We're on track for '23, having paid out a cumulative 43% for the third quarter.

Our payout is a combination of ordinary dividends and buybacks as we believe our stock despite having reached historical high this quarter is still undervalued by the market. We bought back $6.1 billion of stock through the third quarter.

And so we are well underway in executing our $9 billion buyback program for full year '23 as the Board decided to allocate $1.5 billion of Canadian sale proceeds to this buyback program in '23. This concludes my comments, and now we can move to the Q&A..

[Operator Instructions]. The first question comes from Oswald Clint of Bernstein..

Two questions. The first one on the U.S. offshore wind please, attentive energy. It's -- it was a good press release this week, lots of information that's not normally presented for these types of deals, and it helps us kind of get to the returns, I think. With the 40% tax credit we were getting to something like 13.5% on an equity basis.

And I just wondered if that was anywhere close to your own expectation for a project like that. And perhaps at this point, you could say how much of your $20 billion of capital employed in Integrated Power is currently in production? That's the first one. And secondly, I wanted to ask about geopolitical risk.

You always have your finger on the pulse and obviously, I wanted to get a sense of how you're thinking about the portfolio risk at the moment, especially Middle Eastern exposure.

And were there any strategic changes or indeed, M&A moves may be needed or may be considered if things were to worsen?.

Thank you, Oswald. Thank you for the comments. Yes, we -- as you know, the flow in the industry sometimes is questioned. So in fact, this flow in, by the way, in all -- in our portfolio, we had 2 good news.

In fact, for me, this last week, and so we wanted to share first Seagreen in Scotland, we managed to make that project within 5% only overrun costs, EUR 4 billion. So it's quite -- it demonstrates that -- and we have a good CFD on Seagreen who will make money now from this project.

So it demonstrates that you can execute a no-showing projects when you are a good team, a good project team within the budget, and I would say, not much delay in fact, in that case, which, of course, are linked. So first comment. Second comment on -- in New York.

Yes, that's true that we -- and I think that I said even if we're not allowed to disclose what is the level of our price, they mentioned an average price of around $145 per megawatt hour nominal. And so you change the range compared to previous ones.

And I think it is a lesson I explained you last time but offshore wind, you need to -- to have -- to be pragmatic about what would be the cost and then you enter into a discussion in the U.S. in particular, this type of price plus the 40% IRA are giving us a good support. And honestly, you are quite good in your math.

I would say I would have answered to you 12 to 15. So you are quite good in your math. Congratulations. So we can indeed develop a profitable showing projects based on equity. And 1 of the key by the way, people might be surprised by the level of price announced by the State of New York, which is much higher than before.

I can tell you, 1 of the key has been to have among our partnership as we announced, we have introduced in the partnership, [indiscernible], which is our worldwide partner but also [indiscernible], which is a U.S. company, very well established in New York. And again, for me, there's a strong lesson.

When you have a local partner, well implemented, it helps a lot in these discussions with local authorities. We would have been a low on TotalEnergies in front of New York State. I'm not sure we would have achieved the same results. So that comfort my strong belief, renewable required to identify local partner.

And by the way, [indiscernible] is a very interesting partner for us in the future, including to develop maybe more business in the PGM area. So that's this one, so for offshore wind. On the geopolitical risk.

Our exposure, when you look to our portfolio, we have many countries, but there are 2 countries fundamentally, which are contributing to the cash flow.

By the way, yes, to come back on the -- and the second question, capital employed out of $20 billion under production in offshore wind, I think it's less than [indiscernible] probably like $2 billion, probably 10%. 10% of the capital employed are in offshore wind today out of the $20 billion of the integrated power business, just to give you an idea.

And more or less, in a perspective to 2030, 10% is more or less what we expect from offshore, more or less. So geopolitical. 2 countries [indiscernible] Abu Dhabi and Qatar. In fact, when you -- reality where the cash flow is coming from today, we have over -- you have also Libya, which is out of -- to the area.

And to be honest, in Abu Dhabi, the things -- the geopolitics risk, the risk is limited there. It's well controlled and it also, I would say. So I'm not so really not -- when I think to what situation, which is a dramatic situation, I don't see too many, I would say, consequence for that.

Of course, we need to manage the situation to be far in Iraq, of course, in Lebanon, but it was only exploration. And so in Egypt, I would say, our exposure is very limited in Egypt. So I'm not considering that it's an issue for TotalEnergies, maybe for others. So that's I would say where I'm there. M&A things are worsened.

If things are worsening, the price of oil will go up and then we'll have to see what we'll do, but there's no M&A move into that situation for me in that period..

The next question is from Malek Christyan of JPMorgan..

The only question I would like to ask is just around your views around consolidation, Jean-Pierre, in terms of what we're seeing in the U.S.

How would you read 2 parts, one, there sort of opportunistic chasing of growth in terms of volumes through their balance sheet as opposed to building organically? And then two, where does that position to TotalEnergies in the upstream medium-term particularly if based on what they're doing, it suggests that they are looking for as well as backing the back end of the curve, so to speak.

So do you feel like you have a little bit of FOMO? Or are you very comfortable with your upstream growth? And I guess the question I'm asking is, why don't you feel the need to do consolidation, particularly given you're building these 2 pillars and building it through scale?.

To be honest, as you know, we are -- we don't have any -- we are not in a position in the U.S. So I think I understand that might be consolidation in the U.S. It is quite a spreaded industry in the shale industry. So I have no comment, but it's not our case. Historically, you make consolidations when you have low price of the barrel to gain synergies.

That's the history of our industry. You are driven by a low price of barrel, you try to synergize and scale, obviously, generate synergies. And so you are trying to -- but the story of our industry. We are not at all in that situation today. Price is brilliant.

We are even for most of us at the top of our historical values, I would say that's not what I would look for, honestly, I don't say and for TotalEnergies, we will not have diverse synergies in terms of operations or no in terms of cost. So I think that's not for us the type of things we are looking.

By the way, we have quite a strong and deep -- we have a deep portfolio of projects in oil and gas. I think it was what we presented to you end of September. So I don't feel a necessity to add more on this one. Again, we mentioned that we might have to look to more shale gas in the U.S.

for feeding integration to the LNG, which we mentioned in September. That's all what I mentioned. So I observe this move. It means that my colleagues are thinking that the price of oil will go -- will remain high for a moment, so I'm happy. That's what I can comment to you. But for us, I think we have a clear strategy.

We execute the strategy and let's be consistent..

The next question is from Lydia Rainforth of Barclays..

Two questions, if I could. One, just building up on the virtual power plant acquisition from this morning. Can you just walk us through why that idea works in terms of special power plants? And just any indication on price on that? And then secondly, I mean just in the -- we're clearly seeing a lot of volatility on the gas market.

Could you just walk through what you think might happen over the winter period for us?.

Okay. No, virtual power plant, what is it? It's just integrated -- you can't build assets, you can also aggregate some assets. And I think it's the idea that this Quadra company has established is very strong. We are #2 in the German market.

They have been able to connect with 4,000 wind renewable developer in Germany, quite a large base, aggregating 9 gigawatts, which is a big volume, of course. With that, you can trade it or you can even if you have pricing it and you make EUR 2 megawatt hour of margin out of it.

It gives you access to something you don't have any capital employed, almost nothing. It's an acquisition, I would say, of people with know-how and the knowledge. There is no assets. So I can mention to you about the price that we acquired is around EUR 200 million to EUR 250 million. So it's not very expensive, but you have a lot of skills.

You are -- you have access, it's a complement to our model. We have some assets, and we try to complement it with again, low capital employed base in order to develop the business. And it gave us -- again, we explained the integration, it's important to have sources of supply.

And then you have customers, you may be intermediation, if it gives you more flexibility for our trading platform in Germany. Germany, again, it's -- for us, it's an interesting market. I repeat it. This is first 1 of the key target because it's really -- the mix will be renewable and gas plus ETS, so that means quite a good price. A lot of potentials.

So we are building step-by-step our position in Germany. And this 1 is interesting because we enter in a big way, again, it's the #2 of this market and we have a large base, 9 gigawatts, some PPAs, some more short term. So I think it's an interesting way to progress in the integrated product strategy on this important market.

On the second one, volatility gas market for the winter. I don't know if it will be cold. Today, it's a little cold in Paris, to be honest, since the beginning of the week. Even if I hope it will not be too cold for the final of the Rugby World Cup tomorrow or day after tomorrow. Now but more seriously, it's very volatile.

It's clear what the market's intention. I'll be clear. There is no margin in this market. So each time you have a hiccup, the strike in Australia, then you had the stoppage of the Tamar field in Israel, which was going to Egypt and back to LNG to Europe. Then you had, of course, this Baltic pipeline.

And so each time you have a hiccup proof, the market is taking almost 30%, 40% in the day. So that's full but it's super attention. So we always said that for this winter, by the way, the full or more around $16 per million BTU, we still remain high.

If yes, the storage are full, but we don't have enough storage in Europe to go through the winter if the winter is cold. It's not only me, it's repeated by the IEF recently. So in any event in this condition is pushing -- is putting the price up knowing that you noticed as well, but the Asian buyers are back in the LNG business.

They are back today, the GK is TTF plus $2 to $3, which means that, in fact, they are ready to buy. And today, most of the cargoes are going to Asia because the spot market is in favor of Asia. So you might have in this type of market, more cool for LNG coming from Asia, so it put an additional tension on this LNG market. So let's see, okay.

The weather will be important again. And again, if there is any, it's clear that if you have like 1 year ago, 1 and 2 years ago, an event like in Freeport on 1 plant, this will be obviously immediately reflected in the gas market.

So -- but while again, generally, we are wrong on the future, but this attention, I'm sure there is a market -- a gas market in the attention today..

Next question is from Michele Vigna of Goldman Sachs..

I wanted to ask 2 questions, if possible. The first 1 is back to M&A, but thinking of it more countercyclically, energy prices are quite high. A lot of companies are consolidating.

I was wondering if this could actually be a good time to dispose of some of the E&P assets that may be more marginal to your portfolio? And maybe again, going countercyclical in some of the energy transition assets that have substantially deteriorated over the last year. And then remaining on the theme of clean tech and renewables.

Congratulations on the very consistent delivery of earnings of cash flow.

I was wondering if you could perhaps unpick a little bit for us the $0.5 billion you make in integrated power per quarter between renewable CCGTs and trading, definitely highlighting the integrated nature of that business, but also perhaps helping us to understand a bit more the scale of those different moving parts?.

renewables, flexible asset CCGTs and trading, and also marketing business, by the way. So the supply business to customers, it's also for them. So consider that it's coming from all of them. So it's -- everything is contributing to this integrated power and in a positive way. So that's what I can just explain to you.

On the first question, it's clear, as you know that I'm a strong believer that in M&A, it's better to become too cyclical than to be procyclical. That's very clear. But for me, in this business, the commodity business, where you have cycles, I mean, you take a risk when you make acquisitions out of the top. So yes, you are right on E&P.

But by the way, we've just done it. I remind you, Michele, but we just divested our Canadian sands assets at the top of the market, and we will receive $4.4 billion plus an extra earnout next year of $400 million. So I'm happy. It's a good value for these assets. And so we've done it. We've just done it.

We have cleaned a lot of the portfolio in the last -- since 2015, we rotated a lot. We have cleaned a lot, but does not mean that -- I don't think we have a lot of one. We might have, as I said, some quite -- you know that some exposure, which are high in some countries, like, for example, Nigeria and where we want to continue to invest.

So we might be willing to use that environment to reshape the Nigeria portfolio. I'm not very -- the all onshore in Nigeria for me is many -- has many issues about the type of assets, and it's a good environment to monetize them if we find some buyers, of course. But part of it we could do.

But we have clean, I would say, the portfolio in terms of most of the portfolio today are in the definition of low cost, low emissions have been really -- the work has been done. So it's more optimizing things in some countries where we could do.

And I would prefer, for example, to be at higher stake when we are operator and mainly lower stake where nonoperated.

So if we have a nonoperated position to divest them, to reinforce, I would say, when we are operator in control of our future, I like to be more in control of our destiny rather than just being a nonoperated company, even if it's operated by a large peer. And then the other question, of course, that you mentioned is about the transition assets.

Today, our priority, and I think when we've done this morning with Quadra [indiscernible] is more as I explained to you in September, to complement in some key markets through some targeted acquisitions.

I mentioned [indiscernible] Texas, flexible assets in Texas, gas-fired power plants will come one of these days, or what we've done in Germany with this Quadra, we might look to rather than making a big acquisition. Because even if it's derated, it's still high. So I think it could go even lower and lower.

So -- and honestly, when you think, for example, to offshore wind, I mean, I'm very happy to build ourselves for portfolio with exactly the 1 in New York, where we control what we do. We are part of the -- will be covered by CFD, part of it will be merchant.

So that's better for us because, again, our strategy is not to acquire a portfolio of fully secured renewable assets with no upside. It's not what we described to you. So I think it's better to continue and to deliver our strategy in the way we explained to you end of September..

The next question is from Irene Himona of Societe Generale..

Two questions, please. You formed a new joint venture with Adani Green in India during the quarter. Earlier this year, when there was the financial crisis with the Adani Group, I think you had said that you would likely slow down that Indian expansion and wait for the outcome.

Can we presume that you're satisfied with that group's financial situation and therefore, back to normal in terms of total continuing to invest in Indian renewables? And then the second question on Chemicals where, obviously, it's a weak industry. Your 9-month volumes are down.

When you look at the balance of new capacity versus this weak demand picture, what is your expectation for that business over the next year?.

Okay. On India, I think, again, what we said in the beginning of the year is that we wanted to have a clarity on the situation. We have engaged with Adani Group. You have noticed that what we've done, in fact, for me, you should make a difference between -- we are a shareholder of Adani Green, not of Adani Group.

Adani Green is a strong company with a large base of assets. The question for us is how do we continue to contribute to the development of Adani Green. We could do -- we -- what we have elected is to do it through a JV between Adani Green and ourselves.

So let's be clear, this is a venture where we have direct access to the assets, which is fundamental. So it's not putting -- we didn't put more money in Adani Green as a shareholder, but we made it and we help and we contribute to the development of Adani Green making access direct to the asset.

So for me, that's -- Adani Green as a portfolio, we share part of this portfolio, the equivalent of 1.4 gigawatts together, but 50% of it being owned by TotalEnergies. So TotalEnergies is protected, and I think it helps our core to consolidate Adani Green to continue with growth, which is as a shareholder of Adani Green or interest.

That's the first point. And we are, I would say, in the conditions in which we have discussed that deal are attractive in terms of metrics for TotalEnergies as a company. On the chemicals in Europe, but we know that chemicals in Europe are clearly quite linked to GDP. The GDP in Europe is softening more than that. So you have less demand in Europe.

So like it was very good 2 years ago. Today, it's a reverse of it. So that's part of the value chain, our exposure to Europe in chemicals is not so strong.

I mean, they'd be clear for us, the polymers part are compared to the other part because, in fact, what we make more money on refining and on naphtha, we make less money on the petrochemicals in Europe, all our strategy, by the way, is not to develop any new capacity in Europe to be clear.

We did not announce, I think, since I am I've been in charge of Refining & Chemicals, 12 years ago, I don't think you announced a single extra capacity in chemicals of the [indiscernible] in Europe. I think you have even more listened to either closing or selling some of them. So I don't think it's the best place to invest, to be clear.

All the strategy in chemical TotalEnergies has been more either based on cheap feedstock, either in the U.S. or in Saudi Arabia with [indiscernible], but [indiscernible] is targeting markets in China, India, on the East. So that's where the demand is.

So I would say for TotalEnergies, in fact, it's more managing the history, the historical portfolio in the best possible way. And again, when I'm looking today to my -- to our position, refining, petrochemicals and polymers in Europe, that is quite positive today, by the way, it contributes to a good return on capital employed.

So that's what I could comment. For next year, I don't expect much more, okay..

The next question is from Biraj Borkhataria of RBC..

Two quick ones, please. The first 1 is on your debt profile. Could you just confirm what proportion of your gross debt is on sort of long-term fixed interest rates? And then the second question is on the recent U.S. wind bid. There's a provision in the PPA that suggests the -- it goes up with industry-specific inflation.

I was wondering what you assume inflation wise for that kind of project from here to FID?.

Yes, perhaps I will take the first question. More than 80% of our debt have been fixed a couple of years ago. So that means that we benefited on that portion from very low coupon around 3%. And so the remaining is flexible..

Clear answer. Second answer is quite clear, but we have -- within today and the FID, we have more probably 3 years to work. So you will have inflation over the next 3 years. So it might be, I think, let's say, 5% to 10%, probably in the 3 years, we'll see.

But again, there is a provision which, I would say, protect us until the FID then, of course, we'll take the risk of execution, but I think it's a fair protection, which is offered by the New York State to the investors. So we were -- it's 1 of the element of the bid and of the discussion negotiation we managed to obtain. So we are satisfied.

Again, we'll see if it's higher than that, but we don't expect much more than that..

Next question comes from Martijn Rats of Morgan Stanley..

I just want to follow up on the question that Biraj actually just asked about the debt. Because interest rates continue to rise and rise and Total bonds are not escaping that some of the longer-term debt that you hold is now sort of yielding 6%.

And I was wondering, in addition to the mechanical impact that this may have on the interest expense every quarter, how this affects possibly sort of any investment decision making, particularly in the new energy areas? I mean the question has been put to me, can we have an energy transition when U.S.

treasury yields, the 10-year or treasuries yields are 5% and it's kind of sort of an intriguing one.

Therefore, can I ask you how are these rising interest rates impacting your investment decision-making? And also, what are you seeing in others, particularly in sort of CapEx intensive areas like renewables? What is the impact that you're seeing?.

The answer is quite clear, you transfer the interest rate to the customer, I will tell you. So the question is, does it affect the space of the transition? It might, but it's clear that it's against the idea that will contribute maybe, by the way, to have segment, which will stop growing price going down and down, but it has already an impact.

In fact, I can tell you, we -- in fact, in the U.S., take the U.S. as a good example. You have the IRA on 1 side, which has, but we also have the obligation to make projects with solar modules being manufactured in the U.S. It has an impact on the cost of the project.

So this cost of the project today, when we discuss and renegotiate -- by the way renegotiate PPAs with our customers, it has an impact on the high side. So today, you signed the -- last PPA we signed this recently with Saint-Gobain in the U.S. is reflecting. Let's be clear, higher cost of manufacturing in the U.S. and higher interest rate.

Because when we bid, we don't use a 3% of TotalEnergies for when we price project in the [indiscernible]. We are pricing a higher one, which makes us more profitable. We compete with people. We have competitors, which have, in fact, a higher cost of debt.

So we use their cost of debt, and we will -- maybe we benefit from that to win the deals, but we keep the difference from -- for us, in fact, as a company. So I would say, yes, you're right, it might affect the pace. But I think, we are back in a normal world. It's much better for the world economics to have a 5% interest rate world rather than 0%.

I think in particular, for our companies, oil and gas companies, with a strong balance sheet and cash delivery. I think it's -- we have -- it was for me the anomaly we're during 5, 10 years, having this 0% world after the 2008 crisis. It was a way to absorb it and [indiscernible], but for me, it's that more the anomaly than the country.

So I think for me, it's a new normal. We have to integrate it. It will have an impact, probably, of course, on the competitor, which have a very -- we have more leverage than us. And from this perspective, the strength of the balance sheet of TotalEnergies is an asset.

And I think that's why we continue to -- part of the cash flow will continue to strengthen the balance sheet..

The next question is from Lucas Herrmann of BNP Paribas..

A couple of straightforward ones, I think. Firstly, just on your reporting for the last -- as far as -- as long as I can remember, actually, Patrick, 20-odd years divisions may have changed, but your reporting method has always been consistent on a quarterly basis. And yet today, you've elected to alter it.

And I just wondered whether there was any particular reason that you're disclosing more around cash or other items with the other things that you're trying to emphasize to us? And the second question, just staying with that, some of the adjustment items in Integrated Power, I notice that there's a EUR 400 million, EUR 420-odd million asset impairment provision charge taken this quarter.

Just if you could provide some further detail on what that impairment concerns? That's it..

On the second one, it's written.

I think this business that we have impaired some of the goodwill when we made some acquisition linked to customers, in fact, because in fact, when we made the acquisition of some of these smaller [indiscernible] companies that was part of the goodwill that was allocated to the customer portfolio, but the customer portfolio as a churn, which is quite high.

So it's a certain point. We -- when we reviewed the situation, what we do regularly with our auditors, we decided that this goodwill might be -- it would be -- it is better to [indiscernible] that's right in the case. So that's what we've done..

It's a normal review that we have to do. And so we've done that..

Okay. Then -- or it's again for the CFO, but I think it'll be clear I'm transparent with you. It's -- we had some exchange like other companies with the SEC, but the -- as you know, we are using non-GAAP KPI, I would say, indicators. We have to reconcile the gap at the non-GAAP.

So it was quite a formal exchange during the last month and Jean-Pierre has spent some time. But honestly, nothing fundamental. At the end of the day, we concluded but with them, but they wanted to have a clear reconciliation between the GAAP and the non-GAAP. And so some of the tables has to be just complemented. I mean..

Some has to be removed and some has to be [indiscernible]..

That's why you have that moving. That's a change that changes. So it's honestly, we reviewed it with the Audit Committee and the Board, and there was nothing major. It's more formal. But I think they are right. We have a gap, and we need to give clarity between the IFRS, I would say, IFRS referential and what we use.

So that's the reason why you have seen some moves. But it's -- thank you, Lucas, because it demonstrates that you are very precise in reading all our reports including all the pages and all the tables. So I recognize your long-standing position following TotalEnergies, but I know you for almost 20 years. So that's why you are right to support.

But again, it's modernization in line with good practice and we support it..

Yes, it's [indiscernible] modernization of the old model as well, Patrick. So that's a lot of work, but there we go..

Thank you, Lucas..

The next question is from Kim Fustier of HSBC..

Firstly, I wondered if you could talk about the 3.5 million tonne SPA with Qatar Energy on LNG volumes? Some people have noticed the 27-year duration, it seems like other offtakers have signed shorter-term contracts. And it also takes you well beyond 2050.

So I just wondered whether this was a requirement from Qatar Energy? And also the LNG will be delivered in France, I believe. Can you say whether there was a destination cause or whether you can redirect the volumes? Secondly, I wanted to ask a broader question on climate.

I wondered if you could share your expectations of what Total and the broader oil industry could potentially announce at COP 28 next month? You've already got a target of reducing leasing emissions by 80% by the end of this decade, and that's Paris on mind.

So could the ambition be to share your best practices on leasing monitoring and emission reductions and encourage other oil companies to do the same?.

Good question. Thank you, Kim. The first one, no, we are not alone. The 27-year duration, in fact, it's for all the LNG offtake all the partners of Northern East and Northeast South, which were the last new ventures, were asked to take their share of offtake on the 27 years. So we are not the only one, all my colleagues.

And you will see, by the way, I think they issued over press release to other European companies. It's only the German companies, which are not part of the ventures of the developments which have decided to elect for 15 or 20 years. So that's a clear. By the way, honestly, 2026 plus 27, it makes 2053, not so far beyond 2050.

And by the way, in our portfolio, and in the net zero company that we described in our last sustainable and climate report that TotalEnergies in 2050, you still see in the mix in our portfolio, we can need some LNG being there, even quite a large share of LNG. It's a gas is there in the transition. So we have no problem.

Will it go at the end to France or to Europe? I think, yes. I think I don't see if you could manage again a complex power electricity markets in Europe with a lot of renewables without having flexible assets. So on that, I'm quite clear. So it's not France, by the way, we committed. It's TotalEnergies. So we are comfortable.

And if we need to redirect part of these LNG to over a country, I think Qatar and ourself, if it's our interest, we will do it. So no -- in fact, these 27 years is a line on the duration of the concession in which we enter on an NFS. It's just a pure alignment between we invest, we take 3 years to invest, and then we have 27 years remaining.

It covers, in fact, the full concession, which is, I think, a 30-year concession. And I can tell you, we are very happy with the conditions in which we have joined this NFS venture in Qatar.

So there, that's where -- so can we redirect? Yes, if it is the interest of both parties, we will have in the agreement, we can redirect with Qatar agreement and might be the case. Climate. Climate [indiscernible], yes, we have strong targets. So we are leading, it would say, recently.

I can just confirm to you that we have entered into -- we make our job what [indiscernible] would like to do in Cop2more COP 28, it was more national companies, in fact, joining the IOCs. Because TotalEnergies and the others, all I would say, the OGCI companies, we added to forefront of this fight. We have already set the target.

On methane, my motto is near 0 methane by 2030. In fact, between stop flaring, stop vending and in particular, using technologies to detect fugitive emissions with roads, which we do in all our assets.

And we are just in the way to share these technologies with some national companies, and we are signing some agreements which will be disclosed before COP. So we have signed 1 or 2 already, but we have to respect the will of the countries to announce them. So it will be done.

So we are on TotalEnergies committed in order to propose these technologies, measuring with, again, not only excess 5, but we've directed emissions to cover assets, and not only from Total but larger assets from national companies. So we promote this technology.

We do our job, and we'll be able, I think, to announce, I'm sure to announce some of these -- in some countries where we have also -- obviously, we are operating and we have good relationship with national companies. We will offer them and deploy this strategy. So we are doing our job on this perspective.

And I think it's very important for the oil and gas industry to engage more national companies in these efforts..

The next question comes from Alastair Syme of Citi..

Any updates on Namibia you want to share? I know you updated at the recent Capital Markets Day, but you're right in the middle of your assessment and I guess, how is the production test to be one are you looking? And then secondly, can you just -- the question of debt, can you just remind us on the hybrids. I mean they are perpetual.

But I think as they start to be callable, the coupons change.

So can you just talk a little bit about that mechanic, please?.

Okay. Jean-Pierre will come back on this hybrid to explain you, give you all the details. What I know is that the cost of the hybrid is quite interesting, right? So -- but Jean-Pierre will give you some details in this world of a higher interest rate.

On the other side, in Namibia, no, we don't have any update and I can tell you that we started the [indiscernible], which is a discovery in the exploration well, so it' not a discovery situation. So, well, drilling has started seventh of October, I think, beginning of the month. So it's on its way. So no, nothing to report today.

It takes 2, 3 months to drill. And the test the second well on , just started -- the test will start these days, so this week. So sorry, but it's not -- our drilling operations did not follow our quarterly calls. So you will have to wait for more use. But again, as I said recently, to be clear, we will develop the Vinis discovery. There is a development.

So it's a matter for us now to try to assess the full size of it and then to find the right scheme of development considering that there is quite a good ICGL. But again, it's optimizing the development that we are looking for the oil development again on business.

So we'll come back with you, I think, probably in February, when we will have the annual results, we'll be able to disclose more information about it. They will have the results on both these wells and to have more clarity on Vinis expansion. We plan to do a third well after in the north, but we'll have a lot of data..

Okay. Hybrid, yes, that's true. We benefit from very competitive hybrid bond portfolio because on average, the coupon is 2.3%. So very low, very, I would say, cheap equity. The problem now is that as mentioned by Patrick, the refinancing has become more expensive, 6% more less for a maturity of 7 years.

So we use the flexibility offered by S&P to be able to reduce by 10% the global portfolio without losing the equity treatments. We use this flexibility because in the second quarter, we have 1 tranche maturing. And so we decided not to refinance this one.

So now we have to see in the future how we can continue to lower the portfolio -- hybrid portfolio without losing the equity treatment. So it's -- yes, [indiscernible] at the end that for the coming months..

Fundamentally, we will use the 10% flexibility quarter after quarter or year after year in order to at the end, I would say, to eliminate or respect, of course, the rules, but I will do it year after year considering....

So just to be clear, the bit that's callable, does the coupon change on that element? Or does it stay the same?.

No, it is stable..

The next question is from Henri Patricot of UBS..

Two questions from my side. The first one, on the outlook for oil demand and refining margins because we've seen quite a sharp drop in refining margins at the past month, obviously, from a very high level.

Just wondering if you're getting a bit more concern about the outlook for oil demand and refining margins at the moment? And secondly, I wanted to ask you about wind and some more on the European wind industry, we've seen the commission this week setting up more actions to support the European industry.

I wonder if you have your initial assessments of these actions and what will you see potentially better dynamics for European wind acceleration in wind over here?.

Two general question, complex one. Oil demand, the oil demand in '23 is strong, an increase of almost 2 million barrels per day, mainly coming from China. By the way, more than 2/3, 70% more from petrochemicals on 1 side and from as well kerosene, jet fuel, the payment airline activity is back almost normal, not fully.

So you still have, in fact, in '24, some demand from the airlines in the world to come back. So we are not yet fully to be a level quick of it on the jet fuel demand. So I don't see what it would stop, to be honest, because it's -- there is a call for move in this planet.

And secondly, I think the IEA has announced an additional 1 million-barrel of oil per day increase for next year. So I take this point. I think our traders agree with it. So it's not 2, but it's one. So continuing to see demand increase.

And again, by the way, what struck me despite the part that some have on the Chinese economy, you said this year, we have plus 2 and again, 70% of it is coming from China.

So when China will come back, I read yesterday that the Chinese government is thinking to make an incentive package -- macroeconomic incentive package raising more debt in order to give imports to their economy. By the way we complain about the growth in China, which is 5%, and it's not 1% or 2%.

So I think I'm still a believer that Chinese growth will drive again, growth. And in fact, when you look to -- by the way, on oil demand, I will give you a clue. It's not very complex. You take the last 20 years, you look to the increase of the population of the world, plus 1.2%.

You look to the increase of the oil demand until 2019 because you have a -- it was exactly plus 1.2%. In fact, the oil demand is not related to GDP, is related to the growing population.

Because it is a fundamental factor, and it's why, by the way, transition will be complex, a growing population because this 1.2% or 1% is still announced for the next 20 years. So 1% on the planet, it requires more energy, better way of increasing their life standard, and that's more energy. So that's -- so it's very aligned. You can see that.

We will make a presentation soon on our TotalEnergies' outlook on November 13, and we will explain that again. So that's the demand. Refining margins. Refining margin is different. It depends on the market, supply and demand. We've seen them going to the roof going 1 or 2 months. During summer time, everything was under constraint.

I think you still have, honestly, in this downstream business, an impact on the ban of Russian products because all that has put ocean crude oil on 1 side. So the quality of the crude oil is different in the refining system, and also on the products. You have this organized, I would say, as a transportation. Transportational costs are more expensive.

And so today, what we face is that you see -- the gasoline demand. The gasoline spread is down, quite low. Because, again, the gasoline demand in Europe is, I think, impacted by the [indiscernible]. You have an elasticity of the demand to the price.

So when in the third quarter, you've seen $90 per barrel, $95 per barrel plus a strong margin of refining. The customers, when price is high, they save energy. They reduce their consumption. So this is what we have observed. And so today, the gasoline demand is happening. So the spread crack is softening.

But the diesel crack is still high, very high, $30. Because there, on this side, you have an impact of the fact that we have less heavy crude. So it's more expensive to produce diesel. And so you had some warning, which I think are exaggerated from [indiscernible] we might have a lack of diesel, will not have a lack of diesel for sure.

You know why? Just because we find our smart people. When you have a strong crack on diesel and a low crack on gasoline, you will adapt your refinery and you make more diesel and less gasoline. So it's quite easy business. And we have flexibility. So today, our machines are running to make diesel. And so no fear, but a good benefit.

So Yes, it has suffered, but I would say I would expect a margin around $70, $80 per tonne for the next month. It's a good bet.

I would be surprised to see them coming back very low because, again, you have some inefficiencies in the system because of the Russian ban, not only on oil, but also on products, [indiscernible] some, I would say, increased costs. On the wind, yes, wind, European Commission.

And it's more the European wind manufacturing industry, which is complaining, if I'm reading carefully rather than the European wind development industry. The developers are still willing to develop with lowest cost because that's a good question to the commission, I think.

Like on solar, do they want to protect the consumers by continuing to have access to the lowest possible cost of renewables or do we want to protect the manufacturing industries? That's a question. Until now, in the last 10 years, it was always EU has favored the consumers, in fact.

And I've seen a call from the solar developers calling for not protecting them. So we'll see, again, for us, honestly, at the end of the day, in the U.S., when we are asked by the IRA to use the U.S. goods, we are using U.S. goods. You know in the offshore wind project in New York, we have made a deal with GE.

We secured the price and the cost, by the way, of the turbines with GE, which will build a new manufacturing plant in New York, creating local jobs. All that has a cost, but it has been integrated in the CFD, which has been accepted and agreed negotiated. So I think -- so up to -- we will adapt ourselves, we are flexible.

That's why, by the way, we should not anticipate too early this type of CFDs in insurance. Because if you take the insurance, it's too early, when as the enrollment is moving, you could be a trap in something which become less profitable. So it's -- because wind -- offshore wind is taking more time.

Having said that, at the end of the day, I can confirm to you, but I see more and more gold wind Chinese wind farms being built in Europe and in the world..

The next question is from Bertrand Hodee of Kepler Chevreux..

Yes. Two very quick ones, if I may. The first 1 on Namibia, you disclosed at the first DST test. So on was in line with expectation. But can you share a bit more color on that? You've hinted that if it was 5,000 barrels of oil equivalent a day was not good. It was 15, it was okay.

So can you give us a bit of a color and whether it was above 15 or below 15? That is essentially my question. And then on U.S. offshore wind in New York.

Can you disclose in dollar per megawatt what is your current CapEx estimate before any inflation provision?.

No, I cannot feel your full [indiscernible], sorry to tell you that. I didn't know that 15 was a threshold. It depends on -- honestly, I think we told you the truth. It's in line with our expectations. That means that it's in line. We have the assumptions, we have taken to plan the development. So if it's in line, that means that we are happy.

We introduced -- we get the data. They confirm the productivity and the production per well. And we know that with this level of production per well, we can make a profitable development. So I don't want to comment more one test, because we have plenty of tests coming. And so let's continue the job, and you will have to rely on what we say.

But as we are listed companies, generally, we say the truth. And then on the second one, I think it's something that I don't remember, to be honest, so dollar per megawatt hour before any CapEx provision or we don't work like that. So we have a CapEx, including contingency. This is the way we work to know.

We work in offshore wind in the same way, but in oil and gas on our side. We are an experience of our projects, offshore projects. And you know that when you make an offshore project, you don't stick with only the EPC contract, but you are taking some contingencies.

And when we communicate in oil and gas on the CapEx, we communicate it always including contingencies. Because we perfectly know, but in oil and gas, when you make the projects, things will not be exactly the sigma will be EPC contracts.

And this is 1 of the mistakes which is done in this industry by some of the competitors, which believe that you make the EPC, it will execute rightly the EPC. And it's why today you have some EPC contractors, which are facing difficulties because when they have built pressure on them, and they are obliged to announce losses. Now it's not a way.

If the sustainability of this model -- business model, like we've done in the oil gas industry is to understand what you make a project because your EPC contractors are also surviving and not just surviving, making profits. And that's why when we execute a project in oil and gas, we know that we have contingencies.

I remember the first time or offshore wind developers came to the Executive Committee were it mentioning to us 2% of provision. We were losing with it. No, no, offshore, it's at least 10%. And we know that by experience.

And I will tell you that our experience in Seagreen installing 100 wind turbines, offshore is much more complex, but installing 1 big offshore oil platform. So it's including provision, and we make all our projections and negotiation with the right provision within our CapEx. Thank you..

The next question is from Paul Cheng of Scotiabank..

Two questions. One is really short. Maybe it's for Jean-Pierre. Third quarter E&P, the effective tax rate, they call it wrong number, 45%, seems a bit low, even thing into consideration of the lower contribution from North Sea.

Is there any one-off benefit in tax in the quarter? And also more importantly, that based on the current market conditions, what is your expectation for the division, the effective tax rate in the fourth quarter? Second question, I think this is for Patrick.

We have seen a pretty substantial reduction in the renewable diesel margin over the past several weeks and that the wind price in the U.S. has been dropping. And we have also seen the LCFS supply remain relatively low.

That's this market condition in any shape or form will impact your thinking of the investment in the alternative fuel by renewable diesel and SAF?.

In fact, as Jean-Pierre told you the first question, it's not only the mix, the lower [indiscernible] is the fact that it's more important, and we'll come back to you, I think in February, that the new barrels that we are producing like in Brazil, like in Iraq, like I think there was another example in Europe..

Azerbaijan?.

In Azerbaijan. In fact, have a lower fiscal burden than the declining barrels from the North Sea. So it's interesting for you because that means that there is a trend in our portfolio with new barrels and higher margins through lower tax. To give you the real figure for Q4, I mean, it's premature. I cannot guess on that.

As you know, we are making quarterly results. In January, the last quarter, you have some alignment. But to come back, is there any 1 -- no, no, Jean-Pierre confirmed..

I mentioned them to the 2 main factors in my speech. So once again, the weighted average high barriers versus -- high tax barrel versus low-cost barrels. And the fact that we are now more attractive barrels in our portfolio..

So there was no one. On the second one, the U.S. refining market and LCFS, obviously, as you noticed, as you probably noticed, [indiscernible] was not really running in the Q3. We had an issue. So I've been -- we have more work here on restarting for offer with this long haul, and it will restart by mid November by taking care of the margins in the U.S.

because, unfortunately, when the refinery is not working, there is no margin to capture. So I think for me, from my [indiscernible], I will dig, thank you for the question.

But I still see every day, quite a high margin in the U.S., even if it's lower, again, like in Europe, we went to the roof, which was around almost not far from $200 per ton, I think, which we've never seen since I am in this company during 1 quarter. It's softening today, but it's softening, remaining around 120, 150, so it's still very high.

Does it affect the renewable diesel and stuff? No. Because in fact, all these businesses today, they are regulated, in fact, they are somewhere regulated. And somewhere in Europe, in particular, in the end, the stock price is more guided by the penalty that somebody will pay if it does not fill the mandate rather than the demand and supply.

Because today, in fact, on the stock. So supply is short of the demand somewhere. So you're still running behind. So it's more -- it's a regulated business somewhere. And as the penalty are quite high, it does not impact this directly as a business. In the U.S., we don't make [indiscernible] today. So I'm not able to come back to you on this one.

We plan to produce [indiscernible] in the future in [indiscernible], but we don't do it today. So I can't help you to understand the mix market in the U.S. today specifically..

The next question is from Jean-Luc Romain of CIC Market Solutions..

It relates to your acquisition in Germany.

I was wondering with the electricity that you will purchase on medium-term contracts, will be accounted for in your kind of power capacity or in your power sales will that work? Or will it be only an intermediary margin?.

It will be a sale, but not a capacity. We don't own the capacity. We manage the capacity. As you know, we are honest people. So we don't invest in the capacity, but we have access to some capacities, which is a good thing. And then we give the sales because we are selling it for sure.

We are selling it to customers, and we might have even -- I think in the portfolio, we have 2 gigawatts out of the 9 gigawatts, which are under medium, long-term PPAs, so that sales, which will be reported as sales but not as capacities because we don't earn all the capacities. So that's the way it will work.

Like in LNG, you have some reporting in the sales, and we don't report when we have -- it's like a long-term PPA, SPA that we have with the U.S. LNG [indiscernible] we don't account for the capacity in our production because we don't produce it, but we account in the sales, same mechanics [indiscernible] is the right one, by the way..

The next question is from Jason Gabelman of TD Cohen..

Just one follow-up on CapEx. I think you mentioned both the oil sands divestment and the sale to [indiscernible] would close in 4Q, which implies about $6 billion of divestment proceeds coming in and in light of that, it seems like reiterating the $16 billion to $17 billion CapEx range for 2023 would be a bit high.

So I was hoping you just could square those 2?.

Well, no, it's not high. No, because it's not so high because you -- we spend organically $5 billion, $6 billion per quarter. We are today at the end of the quarter. We spent $5 billion to $6 billion per quarter. We'll divest, but we have 1 or 2 acquisitions that I mentioned, which are coming in the quarter as well.

So $16 billion, $17 billion seems to be -- it's not $16 billion, $18 billion. By the way, we specified $16 billion, $17 billion this morning. So we -- I think the $16 billion, $17 billion seems to be to us the right range. But we will explain to you that in the annual [indiscernible].

So take it as -- I think we have a good view on where we should land..

The next question comes from Alessandro Pozzi of Mediobanca..

Just one question on the macro side. And I guess, in a way, it's linked to the recent offtake agreement in Qatar. This week, the IEA has published the world energy outlook and the downgraded again, the gas demand for 2050. I think if you look at the EPS, it's down 40% gas demand.

I was wondering, is this versus 2022? Is this a concern for you blocking such long-term contracts? Or do you think the IEA remains hard to bearish on gas demand?.

No. It's -- I would tell you -- I don't know who is right [indiscernible] the matter of IEA, it's a matter of positioning of your projects. In fact, for me, all that is driven by the position of -- in the cost merit curve of the investment in Qatar. In Qatar, you are first quartile.

So I can tell you, producing LNG in Qatar even by 2050, which would be more efficient than in many places around the planet. So even if there is a reduction of 40%, you still have 60%. And in the 60%, Qatar will be perfectly positioned.

So in fact, let's be clear, and this is the whole strategy of the company, to protect all our -- because you need to make long-term investments in energy and in particular energy.

But [indiscernible] all, the philosophy all our portfolio is guided by low-cost first quartile assets because there whatever will happen on the demand either the demand will diminish as planned by IEA. We are protected you -- as investors are tested. There is no problem.

So my answer to you is yes, there are certainty of the demand on oil and the demand of gas and the demand of electricity. The key driver of the world strategy is driven by the [indiscernible] and they are having first quartile projects, and I can demonstrate the Qatar projects are among the best of the world, if not the best.

And everybody knows that because it's a huge gas still produced 50-meter water depths conventional with quite a high content of condensate, as you all know. So at the end, it makes this project very resilient. And even in 2050, we will produce and even beyond because the IEA does not tell you there is no gas.

There is still maybe 60%, maybe 70%, maybe 50%, we'll see. But that's our answer. There is no stranded asset in the portfolio of TotalEnergies..

So you're happy for such a long-term agreement on Qatar, the cost of [indiscernible] on some of the other projects you prefer maybe a shorter duration?.

No, no. But systematically, when we invest, we invest in oil projects or LNG projects in only in low cost, less than $20 per barrel CapEx or OpEx for oil and for LNG, they must be first or second quarter. So that's the protection. And this is the situation otherwise, we don't do it. We don't do it.

We just -- we have a large portfolio of LNG projects, and we select them. If they are on the right side of the cost price because this uncertainty of the demand we admitted, it's part of sort of the answer we give you is low cost..

There are no further questions registered. Back to you, gentlemen, for conclusion..

Thank you very much for your attendance. We will give you a next meeting point review you will be on January -- on February 7. We'll make the annual presentation in London in presence because we would like to meet you again. COVID is behind us. So it will be probably 7th of February in the morning. Renaud will give you all the details.

Thank you for your attendance. And as always, you are not surprised by TotalEnergies even, in fact, we are surprised always positively. So we'll continue. Thank you..

Ladies and gentlemen, this concludes the conference call. Thank you all for your participation. You may now disconnect..