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TotalEnergies' CEO, fresh from a trip to Suriname, is set to address investors in New York on Wednesday, asserting that the energy company can sustain returns through 2030 despite declining prices, largely due to its cost-effective oil projects, including its latest venture in South America.
Patrick Pouyanne is also expected to share updates regarding the French company's plans to list shares in New York, as U.S. investors now represent the majority of its shareholder base.
In response to years of pressure from investors to shift towards renewable energy, TotalEnergies is now firmly committed to expanding its traditional business, boasting 24 gigawatts of installed renewable capacity, which surpasses the combined totals of competitors such as Shell, BP, Equinor, and Eni.
However, Brent crude prices have recently fallen below $70 per barrel, down from over $90 in April, leading some analysts to revise their share price predictions for oil and gas companies and express concerns about potential reductions in dividend payments and share buybacks.
TotalEnergies, which did not reduce dividends during the COVID-19 pandemic, plans to showcase projects initiated this year in Angola, Brazil, and Suriname, which yield oil at low costs—some below $20 per barrel—demonstrating its ability to maintain payouts during market downturns.
HSBC analyst Kim Fustier noted that Total's $8 billion annual buyback program is more resilient than those of its peers and is sustainable as long as oil prices remain above $70 per barrel.
Additionally, TotalEnergies is mitigating market volatility by entering into long-term liquefied natural gas (LNG) sales agreements linked to oil and U.S. natural gas prices. The company is currently the leading exporter of U.S. gas, with approximately 10 million metric tons of U.S. LNG under contract.
This advantageous position is expected to expand through 2030, but it may also pose risks as global gas prices are projected to decline in 2026 and 2027 with the introduction of new LNG export projects, alongside uncertainties regarding future demand in the European Union due to decarbonization policies.
RBC analyst Biraj Borkhataria noted last week that with the inclusion of Rio Grande, Costa Azul, and the Cameron LNG expansion in its portfolio, TotalEnergies appears poised to increase its short position. This observation highlights a widening gap between the company's supply and its confirmed buyers. However, the signing of six long-term LNG contracts this year, amounting to 4.65 million tons annually, secures customers who will pay above TotalEnergies' costs for fuel well into the future, beyond 2030.
To mitigate the impact of remaining volumes priced according to the U.S. Henry Hub benchmark, TotalEnergies has also acquired stakes in two upstream U.S. gas fields, allowing access to more affordable volumes that can be profitably sold if Henry Hub prices increase. Borkhataria mentioned to Reuters this week that while TotalEnergies remains short in the long term, the gap is narrowing.
Additionally, the Mozambique LNG project, which continues to factor into the company's annual growth calculations despite being on hold since 2021 due to force majeure, raises concerns. Ongoing criminal complaints and investigations in France regarding Total's potential liability for fatalities near the project have been reported, although the company has denied any wrongdoing.