Good morning. Good morning, everybody. For traditional State of Union is a season here in St. Pancras for results outlook that I will present you together with your preferred P2, and I will say together as well with all the executive committee members who are today in the room and who will join us for the Q&A session. This tradition will be a little. There will be some novelty, like always in Total, because this afternoon, if you agree to stay with us after the lunch, we will innovate by presenting you our first ever Energy Outlook 2040 markets on oil markets, natural gas markets and power markets. Will be followed by our climate presentation, which logically comes after the market trends. Let's begin first, of course, with these results and outlook presentation.
You will have no surprise, I think, as our results are in line with our message. We think we have demonstrated in the last years, and 2018 was another proof, that we are consistently executing and delivering onto our strategy. It's another year, I would say, of strong delivery on most, if not all, our objectives, and in particular, outstanding production growth more than 8%, finally. You were right last year when you told me you are a little shy on your growth. We'll not be shy for next year, you will see. Also not only, and there is no change in our speech today, it's not volume above value, it's value over volume, but also a strong profitability ratio. We are pleased to see that our return on capital employed is next to 12% this year.
Of course, we are at $71 per barrel, but it's a strong improvement. All that has been done because we also managed to maintain also a strong discipline on spendings in CapEx and OpEx. This growth and discipline allows us to have growing cash flows, and it underpins the plan we delivered to you last year in the same room on February 17th, 2018, about shareholder returns. We executed, and we have a strong visibility, which will be the main message again today, like I delivered to you in last September. Strong visibility about our cash flow growth, which underpins our higher shareholder returns. We have also, of course, in 2018, continued to build the future of the company.
We have this strategy, which is to integrate the value chain of oil, of natural gas, and our low carbon electricity, which is more material today after the value M&A business we have done last year. We have in our hand an attractive portfolio to deliver this strategy post 2020. You will see, by the way, that our renewal of reserves is quite high. Now priority for the next year, for 2019, will be, of course, to deliver this production and with that, most of the projects have been launched. Projects deliver the cash flows, shareholder returns, but also to launch the new wave of future projects. Just before I leave the floor to Patrick to describe to you the results, a few words as always, first on safety. I like the films that you've seen.
Safety, of course, is a question of human behavior, but it's also a matter of technologies. It's nice to see that all these AI technology can be applied to safety. I think not only in a smart way, there is a strong enthusiasm about it among the teams in the company. It's a question for us now on these AI stories and digital stories, to be able to scale up all these proof of concepts. In terms of safety, I think, this slide is interesting as on the right-hand side, you can see, we took the example of Saft. We acquired this battery company in 2016. There are 4,000 people working there. We can see that the Total Recordable Injury Rate was quite high, above 12. In fact, if we would have put on the slide the 2014, 2015, 2016, it was 12.
No improvement in Saft. We came in, we told them, "This is clearly not acceptable. We need to implement in your company the same way we work and the same records." By the way, one of them being that Total Recordable Injury Rate is an objective and as an incentive to people. You can see, when speak about safety culture in the company, I think this is a very good example and demonstration that in two years they went down from 12 to less than three. It seems to be impossible when we told them that last, if I remember. There is a strong discussion every year, I'm convinced that we reach a level of 1 that we have in the company. Because a company like Hutchinson, which is another manufacturing company in the group, is less than 1.
That's proof that when we speak about value and culture, this is real. Those results are like you can see at the group level, we are plateauing at 0.9. We have set a target of lower than that for next year because we think there is no reason to stay there at this level. There are some peers which are a little better than us. These results are good, there was some shadows. In particular, we suffered, this is unacceptable, four fatalities this year. one driver in Ethiopia in Marketing business, two operators in an explosion of a storage on a depot in Egypt, clearly about mismanagement, misoperation, one carry stifling in Congo in E&P activity. This is much too high.
Of course, it's proof that we need to permanently remind to everybody that safety is a value and is a top priority. So after that, two words about the markets to set the scene. Oil markets, you know I will not give you any guess about what will be the oil price. Everybody is wrong in this market. We have also the strong volatility in 2018, pricing going up to 85, in one month going down to 55. I think there are some fundamentals which makes me optimistic, I would say. First is that the demand is continuing to grow at a high pace, in particular because we observe a sensitivity to the price. At $ 50-$60 per barrel, the International Energy Agency is announcing plus 1.4 for next year.
By the way, we just reached 100 million barrel of oil per day in the last quarter of demand. The demand is there. Of course, there are some, I would say, question marks about the impact of trade wars on the emerging market growth and stability of financial markets. Fundamentally, what we observe is that when the price is reasonable, under EUR 50-EUR 60 range, emerging markets which need more energy, in particular Southeast Asia, Africa, we have a strong demand. On the supply side, it's of course, I would say some trends there, opposing trends. I think OPEC countries and Russia have taken a good lesson in 2018. In June, they thought they were able to stop quota, relaxing the quota. We have observed the impact on the market.
The decision they announced in the end of November, I'm very convinced that Saudi Arabia is determined to execute it. They already implemented, also the other countries. Of course, we have key countries like Venezuela, I will not comment on it now, which are not in a very good shape to increase their production or export from Iran. People have been surprised on the high side, the decision of the U.S., maybe we'll see some restrictions coming by May. Libya, it's up and downs. The industry, globally speaking, still does not invest a lot, even if it's true that EUR 1 today is, in terms of volume of investments, is much more than the EUR yesterday because of cost have been driven down by 30%-40%. We have, of course, the U.S. shale supply, which today, as we've seen a big growth in 2018.
The bottlenecks, the pipeline bottlenecks will be out by second half of 2019, most of them. We should see more U.S. shale oil coming into the market. There are opposing trends, it's difficult to anticipate. I will not do it. We continue to drive the company by sanctioning the projects at EUR 50 per barrel. We have keeping our permanent eye on the breakeven under EUR 30 per barrel, EUR 50 with dividend. These fundamentals are strong because it's our jobs. We like to be excellent at what we control. The prices are higher, we will be able to deliver, of course, higher returns. One market which is clearer to us is the LNG market, where clearly we are always short of forecasting the increase of demands.
When I look to the last three years, this year has been again 10%, was 11% last year, it was 9% as an average. We always say it will be five for the next 5-10 years. In fact, for the time being, this market is growing very quickly, in particular driven by, of course, the policy in China. China has grown again this year by 40%. It was 40% last year. It was almost 40% two years ago. I don't know if it's permanent, its anticipation are still very strong, that your gas in the energy mix of China is still low. For, I would say, environmental issues, air quality in the cities of China, big Chinese cities, very strong momentum for LNG. 55 million tons have been imported there this year.
Japan stays stable at around 80 million tons, despite the fact that nuclear is a little more available and should be stable. You have other countries like India, which have seen a growth also of more than 30% this year and reaching 25 million tons. You have a strong momentum there. With all the environmental trends and the fact that LNG is more and more a commodity, many points of productions, so easier to be cost efficient in term of delivery to the customers, makes us still quite optimistic about this market. It's why, by the way, it's an axis of the strategy of the company.
You can see that on this, on the other side, that there is by 2025, if we want to continue this demand, to match this demand, you have room for another 100 million ton of projects and around 150 by 2030. Of course, there are many projects around the world, but there is a room there to develop low breakeven projects in LNG. Having said that, to set the scene for the markets, I will leave the floor now to Patrick to give you the results of 2018.
Good morning, everyone. I'm quite happy to be there once again. The news is good, and you know when the news is good, the job is easier. Let's have a look to the strong result. We are continuing to deliver consistently strong result with 2019, 2018, sorry, adjusted net income increasing by 28% to $13.6 billion. The E&P segment at the bottom of the chart on the left increased its contribution by 71%, while Brent increased by 32%. This reflects, of course, the benefit of the 8% production growth and also the benefit of our portfolio management. You can see on the left also the new Integrated Gas, Renewables & Power segment that we will give you the data quarter after quarter. It's a new reporting format. It increased its contribution largely on the strength of better results for integrated LNG and natural gas.
We can also say that GRP, Gas, Renewables & Power, without the LNG, deliver a result 56% higher in 2018 compared to 2017. In contrast, of course, the environment for downstream was weaker. Nevertheless, we are well-positioned. The combined downstream generated $5 billion of adjusted net income with a ROACE above 25%. Basically, Total downstream is the best in class. Let's have a look. Sorry, I did not comment the right side of the slide. On the right, you have the average capital employed, where Total is close to 12%, and once again, the best in class. This reflects in part our efforts to reduce our non-producing asset and capital employed by half from 2014. We are around 24% today. Let's move to the cash. Cash flow is an important metric for us. Our new high-margin upstream projects are making a strong contribution.
We generate $24.7 billion of cash flow from ops, coming from Upstream, of course, an increase of 54%, and Downstream up to $6.5 billion. Working capital reversed in the fourth quarter and basically is neutral over the year. Our portfolio is quite resilient to the long time. You saw that the past year, and is increasingly able to capture the upside. The cash outlay, we are bang in line with the guidance. CapEx was $15.6 billion. First-year buyback was $1.5 billion. Dividend with the 3.2% increase was at $7.7 billion. Of course, we are reinvesting in the future. On an organic pre-dividend basis, we have reduced the break even to less than $30 billion. Sorry, $30 per barrel. Let's move to Exploration. From the left to the right, we start with some positive news this year from Exploration.
The budget is stable at $1.2 billion. In 2019, with the same amount we will do, thanks to cost structure, we will do more well in 2019 than in 2018. On the left, following the Glendronach discovery last year, we announced the Glengorm discovery in January, which appears to be the largest gas discovery made in the U.K. over the past 10 years. I remember that Glengorm, we acquired it from Maersk, which is adding value, of course, to this acquisition. Next, we open a new world-class play offshore South Africa with the Brulpadda gas condensate and light oil discovery with a potential resources of about one billion barrel. On the right, thanks to our partnership with Novatek, where we own close to 20%, 19.6% exactly, point four, sorry, percent. Novatek made one of the largest discovery of the industry in 2018 on the Yamal Peninsula.
This underlines the importance of Russia as an LNG supplier. While Exploration was playing a great role, we highlight the significant success achieved through M&A. 2018 was extremely active in term of M&A, and we grew and high-grade the 2P reserve base. The Maersk Oil acquisition, which we did with shares, was by far the largest for us last year, $7.5 billion. It contributed strongly to the 2018 1P reserve replacement that we will show you. In term of M&A for E&P, we sold $3.2 billion of asset with a breakeven at around $40 per barrel. We acquire by $4.5 billion in cash of asset of higher quality, low breakeven below $30 per barrel asset. We basically reallocate capital employed from asset with a breakeven above $40 to asset with a breakeven below $30. This is including Maersk Oil. We moved at the right time and at the right price.
The net effect was to contribute to the 1.4 billion barrel increase in 2P reserve, which represent for us 20 years of production. Our portfolio management has played a role in concentrating our 2P reserve within eight countries including four OECD countries, which are Australia, Canada, Norway, and the U.S. Have a look to the Downstream. Downstream, I remind you, it's the best-in-class Downstream among the major with a ROACE of above 25%. We show a cash flow contribution of $6.5 billion in line with our guidance of about $7 billion despite the volatility, the weaker environment. I like also to remind you that since 2015, we already sold $8 billion of asset in the Downstream. Achieving $6.5 billion in a weaker environment after having sold $8 billion of asset is quite an achievement.
You can see the well-balanced split on the right between Refining & Chemicals, and Marketing & Services of the cash flow. We are managing this balance of diversity and resilience from the future by investing in advanced feedstock petrochemicals, in core area for the Refining & Chemicals, and fast-growing new market for Marketing & Services. We believe that we are the best-in-class Downstream, and I'd like to point out that in 2018, the profitability of Refining & Chemicals was 31%, and Marketing & Services was at 25%. I do consider that the strong balance sheet is an important part of supporting our strategy. We have a very strong balance sheet despite of all the acquisition we have made, gearing far below 20% at 15.5%. I remind you also, it's an element of the executive compensation scheme. I am happy to report that this gearing is completely under control.
On the right, you see and you know that there will be a new IFRS 16 to be put in place by 2019. Side effect of this IFRS 16, the gearing will increase by around 3%, capital employed by EUR 5 billion-6 billion, and the cash flow by about EUR 1 billion. This is a summary of all the objective we set and what we have delivered. 2018 was highlight by very successful portfolio management in a very volatile environment. Two point I like to show you specifically, we outperform on cost reduction. We were a little short on OpEx at EUR 5.7 per BO instead of EUR 5.5, which was the target. This is due to the integration of Maersk, but we will have this EUR 5.5 target for 2019. Downstream cash flow still strong in term of free cash flow generation, and profitability was good also due to good operational performance.
The strongest performance, obviously, was the production growth at 8%, and now the stage is to set for 2019 to be an even more interesting year. Of course, we started our share buyback program by buying EUR 1.5 billion. Once again, the slide we show you every year where Total is obviously the best. We specifically, dedicatedly choose the criteria production, Downstream ROACE, Group ROACE, which is the best-in-class. Gearing, of course. That's a great achievement to be made and made by Total for the past three years. Every year we show you this slide. Compared to our peers, I like to say that the story had been largely de-risked. The execution risk for production growth is minimal at that point. I remind you that our objective is to create value and that the increase of volume is a secondary effect.
The 9% production growth we post for 2019 is a secondary effect of our main target to create value. Of course, we are on track to the shareholder return program. As you know, I am retiring this coming summer. This will be my last presentation. I became CFO in 2008, so it was a long time ago, 11 years. I think I am done at that time. So it's time to pass the floor to Patrick and tentatively to Jean-Pierre Sbraire in the future.
Patrick is not gone. He's still there. I still have to say yes. He will be there with us for the next AGM and Q2 results. Yes, it's true because there was news in the newspapers March, December. Now it's during summertime. Jean-Pierre, that you begin to know, I think, which is probably in the room, is there. Yes, will be the next CFO of TotalEnergies. It's clear, it's approved by the board, and it will be made public very soon. Let's work, and we'll have the opportunity to say to Patrick all, but we appreciate all of us, and I know also our shareholders. It has been fortunate to have him during the financial crisis when he took his job and then the collapse of the oil price with myself.
We'll have opportunity to celebrate that, even if we'll be sad to see him leaving the company. I'm coming back to for two parts. The first part will be to tell you what is exactly the, I already described it in my introduction, the program for the next year, then to give you to update about the strategy post 2020. The keywords, like we said just before, is discipline and cash flow growth. I would say it's growth, production growth and profitability again, this is our cash flow. Of course, the production growth is feeding our cash flow growth, it will feed our return, higher return to shareholders. The cash flow, yes, it's outstanding, and like Patrick said, it's de-risked.
We are, in fact, comfortable to say, to tell you that we'll do more than a growth of 9% because most of the key projects are started by end of the year at January, December 30th, 2018. The teams were nice with us. Kaombo Norte and will be followed by Kaombo Sul by middle of the year. The FPSO of Kaombo Sul is already anchored on the site, so we are on time. Of course, the two large project and new projects, Yamal, which has managed to start as the last train, the third train, one year in advance compared to our plans. Of course, and this is done in a very smooth way. It's a remarkable achievement by Novatek teams together with our engineers, which were there in Yamal. Ichthys was a little long, now it's down at higher cost, it started.
For us, it represent more or less 100,000 barrel per day, Ichthys. We are 26%, and the ramp-up is smooth today. That means that most of this growth is in our hand. We have some few startups of giant projects coming in front of us. Kaombo Sul, I mentioned. Culzean from the Maersk Oil portfolio in the North Sea. Johan Sverdrup, our operator, is better informed than myself, but I'm confident they will deliver this project by their timetable. Iara 1 is in Brazil, on which we expect also as a startup next year. One of the characteristics is that we'll have a strong growth of LNG production, more than 40% increase in LNG, which is the reason why we decided to change our reporting to give more clarity on the LNG figures.
You will see the production being reported to you through E&P tomorrow and from through iGRP. E&P being most fundamentally all the oil production plus the domestic gas. iGRP being all the integrated gas, LNG. It will give you more information about this growing business. As it is one of the key areas of growth and investment for us in the future, I think it is good that you have better, more data about this segment. Another characteristic, which is underlying the year production growth of more than 9%, is that, as we told you, we have some short-cycle projects, and we begin to sanction some of them. It will contribute 60,000 barrels per day, which is a way, in fact, to manage our decline rates, and which will be quite low, around 3%. This is an outstanding production growth.
We confirm the 5% 2017-2022, I will come back on this later in presentation. It is combined with keeping the capital investment discipline. I had some questions from you in September. Do you change your discipline? We told you no. By the way, we are right because we see the price going down. We keep the guideline of $ 15 billion-$17 billion. In fact, for 2019, we are around EUR 15 billion-EUR 16 billion, including EUR 1 billion-EUR 2 billion net acquisition for 2019. Last year, we told you as an average of net acquisitions, acquisition minus sales around EUR 2 billion as an average. We have done EUR 3 billion this year, we target a little lower this year, EUR 1 billion-EUR 2 billion, giving priority to more organic CapEx.
You can see that the split, it is one of the interests, I think, of the new reporting we put in place, that you have a more balanced vision of the CapEx figures. In fact, we invest more or less 20%, EUR 3 billion in the downstream. It is quite stable. We invest EUR 4 billion in iGRP, integrated gas, renewable power. It is EUR 2 billion-EUR 3 billion from energy and EUR 1 billion-EUR 2 billion from low-carbon electricity, more or less, depends on the year. E&P, traditional E&P represents around 55% of the investments. We are in line with the guidelines. We maintain the discipline, and this will allow us to prepare the future growth of the company, as I will show you. We keep in place all our cost savings program. There again, despite some discussions when the price was higher, we are right to do that.
In fact, we even delivered more than what we showed you last year. The target was above EUR 4 billion. We have delivered EUR 4.2 billion. We are confident for 2019 that the target will be EUR 4.7 billion, which means that our program was targeting globally EUR 5 billion of savings between 2020 and 2014, will probably, at the end, land above the EUR 5 billion. Upstream and downstream are both contributing to these efficiency gains, and it is of essence, in fact, because in our industry, again, the margin, the refining margins or the marketing margins or upstream price, does not follow the inflation. As we have some costs, in particular our salary base, which take inflation, we need to permanently look for more efficiency. It is possible also, by the way, all these digital technologies can help us, will help us in the future to manage these savings.
You can see that we are best in class in OpEx per barrel. We are around $5.50 per barrel. It's true that Maersk Oil in the North Sea was a little more expensive, but it's minimum, in fact, when you look at the impact. We have an internal target that because of the savings, but also because of the synergies on Maersk Oil, on which we are in line to deliver the EUR 300 million cost synergies, which will help us to go down to this 5.5. We have there a competitive advantage that we want to maintain. It's also a choice, as Patrick told you, in our M&A activity of selecting the assets which are fitting with the strategy fundamentally, which is to permanently look carefully to a break-even of the company, price of the company.
We have, thanks to this growth and thanks to this discipline, a very clear visibility on the cash flow growth. I just update the figure we gave you in September for 2019. You can see on this chart that we'll have more debt-adjusted cash flow at $60 per barrel in 2019. EUR 26 billion we delivered in 2018 at $71 per barrel. In fact, a little less than EUR 2 billion above the figures of this year. In fact, there is an increase of EUR 6 billion of cash flows between 2017 and 2019 at $60. 2020 will be EUR 8 billion. This is why we are confident, and we put in place our more active and often dynamic shareholder return policy. These cash flows is coming again. It's visible from projects which started already, Kaombo, Ichthys, Egina represent, in 2019, EUR 3 billion of additional cash flows at $60.
The acquisition which have been completed now represent EUR 2.5 billion. It will increase to EUR 3 billion next year with some startups which have been mentioned. We have a sensitivity to the oil price, which is increasing. If we realize a liquid price, an increase of $10, we have EUR 3.2 billion extra cash flows. This came to this slide that we introduced to you last year for the first time with the board discussions and approval, which is a priorities of cash flow allocation. There is no change. We execute it. We gave you that picture for the next three years. We are in this plan. Capital Investments, again, we are in the range. It's a priority of the company. The dividend increase, second priority.
We announced that for 2019, we will increase the quarterly interim dividends and then to buy another 3.1%, 3.2%, EUR 0.08 per year, which will make 6.5% globally from 2017 to 2019, and we will reach the 10% as planned by 2020. Gearing is of essence, but strong balance sheet is the third priority. Patrick explained you that gearing is under 20% under strong control, and I hope Jean-Pierre will keep the same policy. Of course, the board is adamant to maintain our grade A credit rating. As Patrick said, by the way, it's one of the key parameters of the executives' variable pay. The share buyback, which has been introduced last year as a way to return more to shareholders if the price is higher. We told you beginning of February that we were planning to buy back EUR 1 billion at $60.
The price was obviously higher. It was 71. We increased the buyback to EUR 1.5 billion. By the way, you've seen in the chart of cash flow allocation that Patrick showed you that we generated EUR 26 billion, EUR 1 billion for payments of interest payments, so EUR 25 billion. The EUR 25 billion were perfectly split to EUR 16 billion for capital intensity and EUR 15.6 billion for capital investments and all the rest returned to shareholders. This was executed exactly like planned. We increased it. This year, in 2019, at EUR 60, we'll buy back the same amount that we've done in 2018 at EUR 71 for EUR 1.5 billion. If the price is different, we'll have the same flexibility for returning more to shareholders through share buybacks. At this stage, there is no reason to change a EUR 5 billion program. We'll see what the price will be in 2019.
Again, the last 3 months have demonstrated to us that we need to be humble about this type of forecast. We are exactly executing this shareholder return plan as explained last year. Having said that, there is a strong visibility again and confidence of the board of directors and myself as Chairman and CEO and of all the executive team about what will happen in the company for the next 2 years. Our duty today is to prepare the future growth. Of course, this future growth, again, you know that slide. I will present it again this afternoon. It doesn't change. It's fundamentally a strategy of the group is in line to potential anticipated market trends. We don't know if the world will be able to make a 2-degree scenario. There are some doubts around the world.
In whatever will happen, there are some market trends in terms of new technologies which we need to take into account. That means that we need to focus on oil, which is again, low break-even oil, because we could face some situation where the oil demand will be slow or even decline. On the contrary, there is a strong space for seeing a growth for the gas, natural gas. That's why we invest more and more in all the chain of the gas value chain. The other characteristics of the demand of energy is that electricity demand should almost double in the next 20 years, coming either from natural gas or from renewables. It's why we invest in this low-carbon electricity business. We also play to our strengths when we speak about oil and gas. We have some areas of expertise.
We want to stay integrated company business model. We are, of course, producing. In particular, we have a strong footprint in deep water. I will come back on it, but also LNG for natural gas and petrochemicals, which is the integration downstream and retail and lubricants. We have some key geographic areas where we have put most of our efforts, where we are very confident and our teams have the right skills to develop projects in a profitable way, which is Africa, where we are a market leader. Middle East and North Africa for the last 3, 4 years have demonstrated as we are a partner of choice. The North Sea, which we have reinforced with the Maersk Oil acquisition. We have been very active in the last 3, 4 years. We acquired EUR 24 billion of assets. We sold EUR 16 billion or EUR 17 billion of assets.
In cash, by the way, we bought 2016, 2017, we sold 2016, 2017. On the top of it, we added shares and debt acquisition of Maersk Oil, which allow us to make quite a lot of move rotation in our portfolio. In the production, the E&P production, the 3 million barrel of oil per day production 2019, more than 20% of this production has been acquired during the last three years, but some have been sold as well. We acquired 7 billion barrel of resource of less than $2.5 per barrel as an average. They will generate more than $4 billion of cash flow. It's what I show you on the slide. With a WACC at $60 around 10%.
A word about the Engie LNG deal, which was also a landmark deal on this activity of M&A activity in 2018 because it allow us to become by far the second publicly traded company in the LNG world with a portfolio of 20 million tons per year. This will generate $300 million- $400 million per year and WACC of 20%. The payout is around three to four years. We begin to see the positive effect on our portfolio, LNG portfolio trading management since middle of the year in 2018. All that, of course, of this activity has given us, and Patrick show you with big improvement of the portfolio of 2P reserves and the 1P renewable rate of 157% is very high.
Now we are main of activity for us and the main focus we have in 2019 will be to clearly sanction all these projects, to transform these reserves in production in order to feed the growth. We have on here this slide, I will go through, you have more than 700,000 barrels per day of potential production to be announced by 2020. Just by sanctioning all that, we have already in our portfolio a growth between 2020 and 2025 of more than 2%. Do not misinterpret that it's a minimum growth that we'll do, I don't think we begin to slip. We'll have opportunity to select more new projects if they are value accretive, I would say. We have already embedded more than 2% growth, which is more than the hydrocarbon markets.
When you look to these projects, as you can see, have a weighted average. I told you that we manage the company at $50 per barrel to sanction the projects above 15%. Not all of them are above 15% because I would lie to you if I would tell you that LNG projects are above 15%. No, LNG projects are quite capital intensive, the cash generation is also very strong and stable, we sanction them on other parameters. Globally speaking, we are having this global project. We have a profitability above 15%, which will enhance, of course, the return on capital employed in the future. When you look to the map, you can see that we have sanctioned in 2018 around seven projects. Three in the North Sea, two in Africa, and some in Al Shaheen Phase 2 and in Argentina.
In front of us, what are the characteristics for the year to come? We have a lot of projects in Brazil, so it will be a deepwater Brazilian year. The Mero-2, which should be sanctioned by middle of the year. It's the phase 2 of Libra. You know we have 3 billion-4 billion barrels of reserves in Libra to be developed with at least four FPSOs. We have Lula-3, which is a new phase of development of this license, in which we have entered this year with a strategic deal with Petrobras. And Lapa-3, which is a new phase of development of the pre-salt field that Total operates now in Brazil. We are the first pre-salt operator, and we will build on it to extend this life of the field. So this is Brazil deepwater.
We have also a characteristic of we have some projects in the deepwater in the Gulf of Mexico at North Platte that we operate since we made the acquisition at a nice value of the Cobalt assets, but also the projects where we are partner with Chevron. We made a strong alliance on exploring together with Chevron, which is a successful operator in the Gulf of Mexico. We have discovered Ballymore. We should be able to connect in the first phase Ballymore to existing Chevron infrastructure. Anchor as well, but it's another discovery on which we have launched the engineering studies and going to sanction that in 2020. So they are good projects. The other characteristics, as I say, is LNG on this map. I will come back on the LNG projects. We have five projects in the LNG business that we want also to sanction.
This will be the priority for all of us, for all teams, to put in action and to transform all these resources into production. On the top of it's not only these, I would say, medium and long-term projects. We focus also on some short-cycle developments, which are very flexible. We have and we plan to sanction around 400 million barrels of reserves. We identified more than 1 billion. These are highly profitable projects, more than 20% at EUR 50 a barrel because they are marginal to existing infrastructures and CapEx under EUR 7 per barrel. We have some few examples there on this chart. It helps, of course, to manage the decline rate, which is again at 3%, probably one of the best in class. Integration is important, and by the way, this is a way to illustrate it in this company.
In Total, we produce 1.6 million barrels of oil per day. We refine 1.9 and we market 1.8. When we speak about integration, it's not physical integration, it's economic integration. We are a little over refiner, but you can see that economically, we are well-balanced, and we intend to maintain this balance along the oil value chain. One field that Patrick mentioned of areas of interest is to grow in petrochemicals, and in particular, I would say in advantage feedstock petrochemicals. You don't see Total investing in any new naphtha cracker because there is no competitive advantage, but you see us moving and being quite aggressive.
2018 has been an excellent year, by the way, for the Refining & Chemicals business unit led by Bernard, because not only they delivered EUR 4.3 billion of cash flows and a ROACE of 31%, but also we have been able to launch new projects. New cracker in the U.S., it has been sanctioned together with Borealis and NOVA Chemicals. It's not only a cracker, it's also a big increase of PE capacity. Our success story in Korea with Hanwha. Each year we built on new capacities, PE and PP, based there on propane extension. Every propane will be imported from the U.S. We have two new projects in the Middle East, North Africa region, where we can have access to advantaged feedstock. One being in Saudi Arabia, with a very large expansion of SATORP. We speak about a EUR 5 billion projects investment.
It's a mixed feed cracker with some ethane and some advantage of our advantaged liquids in SATORP, which we benefit from the policy of Saudi Arabia together with Saudi Aramco. In Algeria, where we have launched engineering studies together with Sonatrach of a new propane dehydrogenation unit to build on polypropylene business. She will be new for Algeria, part of it being for the domestic bracket, but the other part being exported with the knowledge of the team of Total. I would not mention petrochemical without saying a word about this alliance, which has been just announced recently with 30 other companies on the end of plastic waste.
It's very important when we speak about being responsible and having a sustainable development petrochemical by the whole industry, and not only the producing industry, but also our customers together with us think seriously about the way to manage all this plastic waste. It's a matter of recycling, but it's decision we cannot take alone because we need, for example, what the plastics A to be recycled is a color. We need to convince Procter & Gamble to stop selling to the women of the world pink shampoo bottles, because we cannot recycle them. That's very strong, but it's question of just an example of this alliance will be strong, a strong commitment.
In the world today, it could be, when we speak about petrochemicals and we speak about growth of around 3%-4%, one of stakeholder could be this issue of plastic waste. It's a strong commitment within the company and for the Refining & Chemicals division to develop more projects in recycling, also bioplastics, as we've done recently in Thailand. A word about Marketing & Services. 2018 has also been a great year for them because they delivered EUR 2.2 billion of cash flow from operation, growing another EUR 100 million, like they promised to us. Net result is stable, but the cash flow is a little higher. Because they implemented, under the leadership of Momar, the strategy we seek to enter into some large growing markets in retail. We are there making some, in particular Mexico, Brazil, and India.
In Mexico now we have, I think, 200 stations. With an alliance with local partner, we increase to grow to 400. In Brazil, we make an acquisition. It's an interesting market. It's a biofuel-dominated market. We have made 300 stations. We intend to grow in Brazil. It's not only an upstream business. Brazil is a large market, but it's also for us a downstream market that we want to benefit off of. India, we have identified an Indian private partner, Adani Group, which has been very active and successful in India. In order to set a JV, which will in fact encompass some LNG regas terminals, but also a retail network of more than 1,000 stations within the next 10 years in India.
Last but not least, we are everywhere in marketing and services in Africa, except the country which is one of the most important ones for us, in Angola. It's a sign, by the way, of the opening policy of the new president of Angola, the fact that we have been able to set this JV in downstream, and 50 stations will be shared with Sonangol and with more to come. It's a positive signal for the investors, I think, for investment in Angola. M&S is steadily growing. Its target is around 2.5, 2.6 CFFO by 2022. It's less cyclical or if not cyclical, which is of course good for the company.
I come to the last part, which is not the oil and gas, it's more the, even if we speak about LNG, this new Gas, Renewables and Power business, which is a combination again of energy and gas value chain, I would say integrated gas value chain and low carbon electricity. It's true that it's important for me that we can disclose you this type of more precise data, because it's an area where we will continue to invest. Growth investment will be around $4 billion per year for the next two years. It's also an area where the growth cash flow are growing quite quickly. You can see that between 2019 and 2018, if you take the high side, which is $70, the white line is at $60.
You can see that there is an increase of more than 60%, which is of course led mainly by the increase of the LNG production, but also by the growing volume of LNG trading we can do since we acquired the Engie portfolio. We will reach, by 2020, a sort of balanced situation where we should be able in these new segments, growth segments around more than $4 billion of cash flows and investing more or less $4 billion. This is our plans for the future. LNG focus, more precise data, but integrated LNG. Again, we grow from $2 billion- $3 billion in 2020. It's a 64% growth. It's a strong contribution from the 2018 startups, Yamal, Arctic LNG 2. Cameron will come on stream by middle of the year for the first train. That's what we have in our portfolio.
You can see that we have also, I was mentioning 5 projects to be sanctioned, which are quite a, let's say, large task to be done. Two of them in the U.S. together with Sempra. We managed to enter into a discussion, that's one of the good consequence of the deal with Engie, it's not only joining Sempra on Cameron train 1 to 3, but it's entering with this large utility company in the U.S. to more projects and in particular this Energía Costa Azul project, which would give us a position on the Pacific Coast. We would avoid a lot of logistic cost by not going from the Gulf Coast through Panama Canal, but directly from the Pacific Coast to China, Japan or Korea, to Asia. We save a little less than EUR 1 per million BTU. It's quite interesting.
We have also the expansion there, of course, of Cameron LNG train 4 and 5. We could have mentioned Tellurian, which is taking shape. We are 20% shareholder of Tellurian, I know that our colleagues are progressing on this project. We have Arctic LNG 2 together with Novatek which is moving forward. The FID and the sanction is planned by the second half of the year. We have Papua LNG with together with Exxon and Oil Search, which is a key target to be able to finalize the agreements. We announced the FID as well there in November. We have a technical scheme which is today agreed, which is efficient. In particular because we will expand, in fact, the existing plant and not create a new LNG plant.
Nigeria LNG extension is probably one of the best project because there, again, it's a brownfield projects and it's a question of decision in Nigeria, which might be complex, but all partners are today aligned to move on this project for 7.5 million ton per year. About low-carbon electricity business. 2018 has been a year where we really shape it in a sizable way, we have a better visibility in what we want to do. It's a segment where we invest EUR 1.5 billion- EUR 2 billion per year. It will depend on opportunities. Fundamentally, we have on one side, production capacities because we want to be integrated. 3 gigawatts of gas-to-electricity are in fact in our hand, because we have signed a deal with GE Power. We have a new deal coming in with Uniper EPH by the end of the year.
The rest of the portfolio, it's 30% natural gas, 70% renewable production capacity worldwide. We have several subsidiaries working on that in order to make a profitable business. I will come back on that. We have some supply training activities and the marketing, the distribution. We have now 4 million customers in France and Belgium. In 2018, we want to grow this base in France and Belgium to 7 million customers with the full Direct Energie, which is a very active company. We managed to get this year a number of new customers and to reach our objectives. A word about renewables, because there are many questions in my roadshows about how do you make money with renewables. Let's be clear. It's the business model we apply in the company in Total.
It is clear that when you bid to make a large solar farm or an offshore wind farm or onshore wind farm, generally it's a utility business. The project IRR is around 5% to 6%, 7%. Of course, there is, in particular in this environment, a way to leverage all this project because when you have 15- 20 years PPA, you can leverage these projects and you can enhance the profitability for this leverage. You can also, if you are ready to take on your balance sheet the CapEx until completion of the project, you can then farm down in a very efficient way to financial investors. We've done that on many projects, and we managed to reach this more than 15% rate of return.
That means at the end of the day, that you keep 50% more or less of your project. If I want to reach my 7 gigawatt capacity, I need to in fact develop 15 to get seven. This way to leverage financial interest rate and then to farm down to other investors, we see some interest to get 7% instead of, is a way to, at the end, get an acceptable equity return, which is matching the rest of our portfolio because of course for the company, we intend and we have some objective of return on equity of 12% $60. This activity should not be, of course, a burden. This is a way we want to develop this renewable business. I hope it clarifies to you how we will manage the portfolio that we have in our hand.
All this strategy is contributing to and we want to be a positive player to tackle the climate challenge. We show you this figure. We'll come back this afternoon on this climate section because I know that there's a lot of interest from many investors. We show you this slide last September. Our ambition is to diminish gradually the carbon intensity of all the energy products we sold to our customers. This is, I would say, a Scope 3 approach for all of you who understand, who knows that. We have the ambition to reduce it by 15% between 2050 and 2030 to go. By 2040, 2045, 2055, it's difficult to anticipate because there are new technology. It depends also on the government policies. We'll come back on that. Fundamentally, the roadmap is a matter of course, being accountable about our own emissions.
This afternoon, we will set a target to our own emissions, in order to decrease them and to be committed to that. Also natural gas is part of the future mix and is a positive add-on to the energy mix. It's a good complement to renewables. Low carbon electricity business, biofuels, which are also contributing positively to this roadmap of lowering the carbon intensity of our products. Last but not least, to invest in carbon sink businesses, either natural carbon sinks or CCUS. I will come back also on it. Being responsible is also a question of, and we have also quite a lot of this question during our roadshow of do you share the added value of Total? This is the image of the company, and I think there are many debates today around the world.
A company like TotalEnergies, we take an average of 2010-2018. We generated EUR 15 billion, more or less, a little less, but as an average of added value. Over half of it has been reinvested in the company. We are highly capital intensive business. Priority is clearly to reinvest in the company to continue to be able to deliver more energy to our customers, affordable and clean energy. The second, the other half is more or less split into three-thirds, so 1/6 for each of them. In fact, the salaries or employees are little higher than that. EUR 12 billion were given back to our employees, but the employees are fundamental. Obviously, without them, there will be no profits and no dividends. We are not a business which is highly intensive in terms of number of people, but they got 1/6 of that.
The states, on this period have taken another sixth of it. We are a business where we delivered around EUR 10 billion per year as an average of taxations. It was lower the last three years, but it increased again this year. The dividends, which is the last share, 1/6 of it, around EUR 8 billion-EUR 9 billion per year as an average. This is the image of the way we share the company's added value and cash flows through our various stakeholders for the benefit of all our 15 million customers that we serve daily around the world. Finally, as a conclusion to this presentation, I think you are not probably surprised by the message. It's also good to be consistent. The message we deliver to investors, we don't try to surprise you.
You begin to know that we know our strategy well, it's a question of execution and deliver. The next years will be clearly a benefit from an outstanding production growth. We maintain our discipline because it's fundamental to clue to the break even permanently. We are also doing at the same time, growth and profits and profitability. This is, we're able to combine both, because the discipline, of course, helping us with this ROACE of 12%, that we managed to reach this year. We have strong cash flows, which underpins our shareholder returns. Maintaining the policy on increasing dividend, ending the scrip option, and developing the buyback program. Of course, the activity, will be also to shape the company for the future beyond 2020 with attractive portfolio we have in our hand. Thank you for your attention.
I propose that, Patrick, Arnaud, Momar, Bernard, and Amita will join me on the stage.
Okay. While the executive committee join Patrick on the stage, we've got about an hour of questioning time before we pause for lunch at 12:00 P.M. If I could remind you, we're gonna have a lot of questions. If we could have one primary question and then a follow-up. Everyone's available for answering. I'm gonna start at the left-hand corner. If I start with Oswald, and then followed by Michele, and then Thomas.
Thank you very much, Brendan. Thank you very much for the presentation. Patrick, you just mentioned you don't like to surprise investors, and you haven't today. I guess the one number that's missing through this presentation is the CapEx after 2020. You've shown significant growth projects. All of them fit in your LNG deep water portfolio. The returns are attractive, there's no line of sight on that 2021 CapEx, which could be a surprise. Hopefully you could just talk about where you're thinking at least the upstream CapEx might end up as we look into the next decade, please. Just secondly, quickly, on the LNG portfolio, perhaps it's one for Philippe. The EUR 2 billion- EUR 3 billion by 2020, the 40% increase in production volumes coming through this year.
It looks like it's just the volume driving that cash flow up, therefore, you're not assuming any arbitrage contribution as you scale up this portfolio. Perhaps you could talk about is that additional upside we should start to think about as the portfolio gets bigger, just in terms of modeling. Thank you.
Okay. The CapEx. The more I give you, the more you want, of course. This will be for September of this year, more precise. You know we have better clarity on the production. Again, let me be clear, this 2% with the math are still the same. You will maybe add to 17 and not to 16, but not far from that, so it's still the range, more or less. We will invest, I would say, downstream, the EUR 3 billion is stable fundamentally. EUR 4 billion for iGRP, I think is the right figure. With that, we can deliver the projects there. You have some leverage on these projects or it's far. We have to grow if you want to grow by at least 2%, we'll be a company at, what we have, 3.1 million barrel oil per day. It takes decline five.
We need to make 5% per year, 150,000 barrel per day. We take a matrix more or less of 40,000-50,000 barrel per day, EUR per barrel per day. You take, you find EUR 7 billion. Plus some maintenance costs, renewal of reserves, you reach more or less EUR 17 billion. It's maybe not 15, it's more 17, but it's not very far different from that. There is something fundamental to that. It's because I mentioned it during this presentation. EUR 1 of CapEx this year is not the EUR 1 that we spent in the last five years. With EUR 1 of CapEx, I make 30% more volume or 40% more volume because the costs are down. One of the key target, why did I say we want to focus now to sanction the project?
In the international oil and gas business where we are mainly versed, not the case in the U.S. share, but the costs are quite low. We made the tenders recently for Uganda and for other projects. We have been always surprised by what we obtain because there is strong competition there. If we can sanction this project today, we will capture this 30%-40% lower cost and so when we spend EUR 1, we make the 15, well I would say in E&P, if we spend EUR 12 billion, it's the equivalent of EUR 16 billion-EUR 17 billion of yesterday. When we give you a range of 15-17, it's 21-22 compared to yesterday. That's a fundamental driver why I'm confident that we will stay around these type of figures.
I take your point, to be clear, it's not we told you we have at least 2%, we can do more, we will see. I take your point, we will have better clarity. This is for me, the timing is of essence. We need to sanction now to capture this low cost. That's the key priority from Arnaud and his teams. I can tell you we are all working hard to launch these Uganda projects, and will take time on this PNG project because this is the right time to do it. We will keep the discipline. Philippe, about additional upside portfolio.
Yes, on LNG. Our portfolio, as you noted, is nearly doubling between 2018 and 2020. The equity part, so traditional liquefaction project are increasing from 11 billion- 20 billion. Our portfolio is nearly doubling. The pure LNG trading portfolio from 10 million-220 million. What is clear is that in the figure that you see, the increase from EUR 2 billion-EUR 3 billion is coming in cash, is coming from the E&P liquefaction project. We have, for the time being, been rather cautious in term of additional LNG optimization. There is some that have been included, we try to be cautious on that. You know that the optimization arose from market conditions. The second half of 2018 was very profitable in term of optimization. At the time when we speak, market is favoring all LNG deliveries coming to Europe in a great way.
Next time there is additional demand in Asia or additional cold front in Asia, you will see additional opportunity to optimize. Some optimization, but yes, we can hope that it will be much more.
For example, maybe you've seen that in papers, there was a tender in Taiwan for delivering more LNG and the two companies who win are Shell and Total. Why? Because we are able today with the portfolio to offer flexible contracts to our customers, and we can optimize the sources of productions and the destination. For me, it's just the point that this market is commoditizing and the larger player have added value will be able to gain more contracts. That's an example of what just happened very recently.
Yes.
Other question.
Michele Della Vigna from Goldman Sachs. Patrick, two questions if I may. The first one is on CapEx. If I look at your budget, it looks like organically you will spend about EUR 2 billion more in 2019 than in 2018. I was wondering if you could give us some of the moving parts there, in particular, how much more you will spend on high profitability short cycle developments. Then the second question is on the LNG market. You project a very bullish view long term, but I was wondering over the next one to two years as the U.S. export projects are ramping up very fast after a few years of delays and the Chinese demand growth in gas continues but slows down from the exceptional level in 2017 and 2018.
If you fear that actually for one to two years we could face an oversupply LNG market before tightening again in the early 2020s.
The first, the CapEx. It's true. Your calculations are very good. It's going from EUR 12.5 to EUR 14. That's clear. I would say, in fact, the effort is not only in particular in LNG. In LNG figures, iGRP will benefit for another EUR 1 billion this year. It's part of this increase. You show it on the map, you see two to three, in terms of organic CapEx. The E&P, Arnaud can comment on it. It's true that we have sanctioned some, I would say, short cycle projects. Do you have any indications to give to Michele on it?
Yes. Just to put things in perspective, when we put the brake on investment two, three years ago, the first CapEx project we could put on the back burner were the short cycle infield drilling. We have all of them on stock. As you know now, drilling rigs are half the price they were three, four years ago. We have optimized the development all over the world. We have, as was shown in the presentation, actually a stock of very good infield projects that we can sanction. Now is really the time countercyclically to sanction them. We see them in West Africa with Akpo. We have Moho. We see them, of course, in the North Sea. We are doing some more drilling in Central Gabon, in the Northern North Sea assets. We see them in the U.S. Gulf.
We have plenty of opportunities to do very efficient tie-backs that clearly now we are taking sanction. As you saw, we are going to be sanctioning between 2018 and 2019 about 400 million barrel of oil. That will be oil equivalent. That will be sanctioned during the period.
About LNG. I'm optimistic about this market. We are moving our thinkings about LNG to one year and a half ago, it was oversupplied, then booming. The Chinese policy is very strong. It's fundamental to them. It's not only a question of price, it's a question of air quality, of social unrest in China. That's true that we benefited from Increased 40% during the last 3 years, so maybe not 40%, but they are at 55 million tons. Japanese are at 80 million tons. I would not be surprised to see them even importing more than Japan by end of next year. It's really 2020. It's really a strong policy. Even I'm surprised, to be honest, they think that there is no real impact of the higher prices that we observe this year on this policy.
This country, it's really embedded into their strong governmental policy. Of course, the U.S. will ramp up, but these are the only projects which will ramp up, by the way, during the next two, three years. In fact, the rest of the world, Australia is down, Russia is down, Qatar is nowhere. Yes, that's true, that will be some ramp-ups from the U.S. There is also a market today which is more gas, which is Europe, by the way. Production in Europe declined, so you have there potential for gas. Philippe, you are optimistic or not?
I remain very optimistic. I've always been.
If you are not, I will-
As you've seen, we are forecasting and planning our assumption on the 5% increase between 2015 and 2030. As you know, the three last years, we have been way above this and we were at 10% that we'd see again in 2018. Yes, I remain optimistic, cautiously optimistic, but very optimistic on the LNG growth.
Morning. Thomas Adolff from Credit Suisse. I've got two questions as well. Firstly, Patrick, you've been the CEO of Total for now just over four years, and you started at a very interesting time in the industry. If we go back to the start of the period and think about the ideas you've had for the company, have they all gone according to plan? What are the key lessons learned from the past four years? Secondly, also going back to LNG, if we say LNG demand growth doubles by 2035 from 2017 levels, that's roughly 16 million- 17 million tons per annum of demand growth. Over the past three months, we've seen around 30 million tons of project FID, and you plan to sanction about 30 million tons in 2019. The math doesn't quite add up.
The question I have is, do you intend to take FID without project funding and signing long-term contract? Does the service industry has the capacity to do so many project at the same time? Thank you.
Two good questions. The first one, no, not everything was planned, to be honest. By the way, because as you said, the environment changed very dramatically, we had to focus together with P2 and all the Executive Committee on changing the momentum in the company from pure growth story to a more value and cost and discipline story. To be honest, one of the strong lesson is that this company is able to react in a very strong way. Maybe people discuss, once it's done, they execute in an absolutely superb way. The fact that we are able to continue to deliver these cost savings programs, in mind the first discussion has been even better than what I was expecting. I'm very confident in the capacity of execution of this company and the group everywhere in all businesses.
It's the trademark today of capacity to execute in terms of. It's of essence for me because, again, we are an industrial company, not a financial holding. We need to be able to execute. That's the first characteristic. The second one I would say is that, yes, we had in mind, I had in mind that this could be the nice time to make M&As if you are able to countercyclical. I learned that when I was in this company, that it's better to move when you have the big countercyclical in. I remind that one of my colleague, by the way, one day I will reveal the name, said that during an executive committee beginning of 2015. I keep that in mind. The question is to be able to be opportunistic. That's more, you don't plan that.
It's a question of looking around. From this perspective, we have been able, again, one of the lesson which was mentioned by Patrick, the strong balance sheet is absolutely fundamental because we could have been more active beginning of 2016 when the price went down to EUR 30 if we had the balance sheet. We didn't have at that time, so we waited. I know the first two years, we decided, okay, priority is to have a stronger balance sheet, and then we use it in 2017 for Maersk Oil and other deals. That's the second lesson there. The reality is that there again, we have been able to do it and to manage this balance sheet, including, by the way, you've seen this year we have some hiccups on working capital.
Finally, at the end of the day, everything came back into order under the leadership of the executive committee members and Patrick. These are the two lessons, it gave me confidence that we have a strong basis to move forward and to be offensive. I would like to tell you that I would have seen the company being today at having increased its production by 40%, that all that would have been done, which it has been done. The part which was not clear, to be fully honest, was this low carbon electricity and renewables. We are only in one solar plant at the end of business. We are, I think, clarified today what we want to do there and what we don't want to do.
I'm much more comfortable, and I think we are more comfortable with the strategy we want to develop in that diversification area, what I was four way because four years ago, it was not clear to me. At the same time, I think this idea that to be a progressive player in this climate change, I think is more and more clear to us that the future of oil and gas companies is to be oil and gas contributing to be active if we want to offer to our investors a longer future. That's what I think the investors are waiting from us. Second question was about LNG, no.
Yes.
Yeah. Too many projects being sanctioned. Some are right, some are wrong. I agree with your point. I see that. There was a lack of sanction during five years. Now today you have another wave. It's clear that there are risks, to be honest. It's a question that I'm asking to Philippe, please tackle these projects. I hope that some of them will not take off. Maybe it's a question of, again, being able to be disciplined in terms of what type of project do you sanction in terms of break even for them, each of them. The question is, do we have long-term contracts for them?
Yes, for some of them, I would say. We want to maintain this discipline. We are ready because we have changed our position with the portfolio we have, and we are building as well a portfolio company. We are ready to take part of the risk ourselves on our portfolio. Not all of it. It depends, of course, of the risk of the cost of the project. I think a project like PNG probably will be launched if it's sold and we have enough buyers to sell. It's very attractive to many Asian buyers. There is a discussion today about Arctic II with Novatek about what is the amount of LNG we want to sell. We see partners coming into the project from Asia because they want also the LNG, and that's part of the PT.
You have a question about the U.S. projects. Honestly, on Energía Costa Azul, we want to keep the volumes for us. They are very good volumes, so we prefer to market them ourselves. On Cameron LNG, we'll have to see if we want also to find some buyers. It's a mix. I think as the market is changing, is moving to a more commodity project from a pure long-term contract, and ourselves, we consider that we have the people and the capacity to take value out of managing a larger portfolio like another peer that I mentioned already. I think it's a question of balancing the risk, we are ready to take more risk than before, not on all the full projects.
This could change, by the way, I think when you look around the world, the various projects which are being developed, probably it will be a question mark for some of them at the pace of development.
Okay. Before we move to the right-hand side of the room, we'll pick up Irene and then followed by John.
Thank you. Irene Himona, Société Générale. One question on effectively costs and CapEx. Your CapEx discipline has been very strong and commendable. Some of your peers are saying that the industry has a lot of very material potential ahead for costs to continue to step down. In fact, one of them refers to the field of the future as having 30% lower capital costs and 50% lower operating costs if all the available technologies today were to be utilized, such as automation, digitalization. Do you share that view, Patrick? If that is the case, where is Total? What are the obstacles standing in the way to implement that today and to step down further?
You should ask to the guy who said that. For the time being, the people who have the lower OpEx per barrel is Total. Maybe we are not genius, but at least we deliver. Now, honestly, I think we should not exaggerate that. Of course, these technologies have some potential and we are looking to that. I said to my colleagues, I want LNG CapEx per ton to go back to $500. We're still not there. We are at $600- $700, even in the U.S. I remember that we deliver Yemen LNG for $300 million per ton and not for $500 or $700. The question is, of course, it's back to your question, by the way, it's probably because in the LNG business you have quite a lot of projects.
At the end, it's a question of service companies who are able to deliver your projects, to build the projects. We answered, I don't know where the magic come from the 30%. Maybe we are more cautious there again. We think that we can reach 15%-20%. Again, I think that why don't we implement today? It's a question of being able to scale them up. We have plenty of proof of concepts, like we've seen with robotics there in the company. One of, for example, we delivered an AI system in the U.K. about optimizing the maintenance cost and the way we manage all the mature wells on the mature wells. It's proven it works. The question that I asked when I discovered that, it's beautiful, okay, nice.
I said, "Well, now, okay, why don't we do that everywhere?" It's a question of having the talents in the company. One of the difficulties is to attract in the oil and gas industry all these guys which are in digital world. If you are a new digital engineer, I think you prefer to work for Google or for Samsung maybe than for Total. We have one chance in France. We have a strong basis of engineers who are doing that still. We in turn, one of the decision we have taken very recently, beginning of the year, we decided that with Arnaud and Bernard, we will establish a real digital division aside your exploitation and project.
As well, as long as we don't have a strong team, 30- 50 people who are able to move forward to scale up, this will remain only nice examples, but not at the large scale. I think the question for us is to scale up. To do that, we need to attract the people and to establish strong terms and not to leave to the traditional methods. The fact that you need to work on it, so they do things, but not quick enough to answer. It will not be today, maybe it will be tomorrow, but I ask my colleague what is his recipe to lower by 30%. At least being disciplined. Again, it's not a question by the way. On digital, one figure, we increase our budget on digital. I think we are spending, it was $400 million this year?
Yeah.
$400 million on digital technologies and development in the company. It begins to be quite sizable, in fact, in the company.
Thank you.
Thanks. It's Jon Rigby from UBS. Your CapEx, the way you describe CapEx sort of acknowledges that there is portfolio churn going on the whole time with the net number that you talk about. Can I just look at two areas? The first is on the disposal side. It felt to me over the last maybe three or four years, you've got less enthusiastic about Canada. I just wonder, with the effect that it had on the upstream in the fourth quarter and the fact that you didn't get the benefit in the downstream that a number of your peers did through light heavy spreads in North America, whether that encourages you further to think that ultimately you need to exit that region.
The second is, it seems to me that there are two examples of you addressing a strategic gap in your portfolio over the last couple of years that have been addressed differently. The Gulf of Mexico, where you had an obvious shortfall for a long period of time, you seem to have been able to address within the scope of the organic process. LNG, you decided to step out of that organic and went inorganic. I just wondered whether the other obvious gap in your portfolio, which is shale, you think you can do within the organic in a slow, measured fashion or whether it requires a somewhat more daring move. If I could treat that as the first question, just one very quick one is, on Papua LNG, is it my impression that it slipped back a little bit?
It seemed to me that it was probably the best brownfield project globally at one stage and it seems to have slipped out of 2019. You're shaking your head, I guess I know the answer.
No, it doesn't slip back. It's just a matter of, again, it's a little far away from Europe and from the U.S., I think. To go there. In Papua New Guinea, you face a country with not so many people being able to decide. We need to be involved at high level. We made a strong move forward in November when we signed the head of terms because we solved fundamental points about the future framework, we are drafting all the agreements. Next target is by April, I think. I plan to be there again. No, I think 2018 was a very important year on this project because we have aligned the views, technical views of Total and Exxon on the same project. We know what we want to do. I can tell you between Darren and myself, we perfectly agree.
We know that we want to expand the plant with 3 additional trains, two trains for the gas coming from our reserves, one train for the gas coming from their reserves. The government wants to have two discussions, one with Total, one with Exxon. We'll do it like that, but we are aligned fundamentally. When we went there, together with some of the colleagues of Exxon, we were agreeing. Since that's done between us, now it is only discussion with the government, and we settled most fundamental issues last time. Now we need to draft. In some countries there's some difficulty when you need to draft complex papers because we speak about billions of EUR and you have fiscal issues and it takes a little time sometimes to align the people.
It's one of the projects and I don't think we have been slow. We spent some time, I will tell you, I said that to Darren, between ourselves, between both companies. We could have saved six months between us, it's done. Now let's move on fundamentally and all the share cost issue between Exxon and Total has been settled, that's good. We are behind that. Maybe we could have been a little quicker between the two majors, it's done. I'm positive. Coming back on your points. You are not surprised by my. Are we making the same answer on the second question, it's very easy. Where do you think I can be organic in shale oil? You see some people of Total in the field there? There is nothing organic.
I will not begin to buy some land pieces by pieces in the middle of Permian. Obviously, this is, again, I observe what happens, you know my answer. It is clear that you have there some sizable resource and potential production. The question for us is the cost of access. The cost of access mean not only cost of access, capacity to develop, having access to a machine, human resource machine. If we move, it can be only done in quite a sizable way. Otherwise, it makes no sense for me to make an acquisition of EUR 5 billion to have 30,000 barrel per day in the Permian just to fill the gaps and to tell you I'm there. What is the added value for Total? It's either sizable or no.
Having said that, the question mark for the Chairman and CEO of the company and with us, all of us, is this the best way to allocate the CapEx of Total? Is it that or do we have other opportunities? Let me be clear. I would not tell you we don't like it. It's not question to like or not to like. It's question of best allocation of capital. We keep a permanent eyes. What I've observed, by the way, is that the value of the asset begin to diminish there. Don't know if it's for long. Maybe, we have to be patient to wait for the next cycle. Again, for me, it's not a question of just filling a gap. It's a question of doing it in a proper way and comparing that option to other options.
In the U.S., where we are investing quite heavily. Patrick mentioned to you that the U.S. are becoming one of our top eight countries in terms of reserves. More comfortable to invest in energy, like we are doing in several projects, because there we know what we want to do. It's fitting well with strategy than there. Again, I'm not in the same situation by some of my peers who inherit from some lands, which is very prolific. That's the point. Let's organically, no, I don't think is our best way to do that. The Canada, I don't know why you want us to sell Canada. I mean, it's a permanent question. Of course, we have an issue with Canada. We have 100,000 barrels per day, I think, in Canada.
Yeah.
We invested quite a lot of money. The integration, by the way, is not so right. We have a capacity to treat 50,000 barrels per day in Port Arthur, if we want to do that, and we have the logistics to go down to Port Arthur. We have a half of integration, in fact. It's not true that we are not fully integrated. We do it, we don't do it, depends on the market issues. That's true that the oil price in Canada was quite low. By the way, if there is issues in Canada, in Venezuela, maybe it will give again, a good or better valorization to Canada to feed all these refineries in the Gulf Coast, if we stop exporting from Venezuela to the U.S. Gulf Coast.
We are not in a hurry. There is no way for me to accept. I'm not desperate to sell Canada. We have invested. If there is a good value proposition, we will study it. For the time being, it's not the case. We are in a waiting mode.
The next question, we're going to start on the right-hand side here with Jason Gammel, and then Shannon, if we can then follow with Chris, please. Chris Cooper.
Okay, thanks Brendan. It's Jason Gammel with Jefferies. I had two on the upstream, please. You've got a pretty deep inventory of deep water projects sitting in the queue. I was hoping you could address how the cost structure has improved in the deep water over the last couple of years, where we're at on breakevens, and the scope for further cost reduction through standardization, et cetera. The second question I had was on the exploration program. Clearly been an area that has added quite a bit of value this year. Can you talk about the level of investment you'll be making in exploration in 2019, and where your activity will be directed, please?
Okay. Arnaud will answer to you on the deep water projects. On exploration, we are at EUR 1.2 billion. We maintain that. We think it's a good level of effort. There is no scale effect. I'm very, to be honest, it's one of the good news of the year that we had last year discovered Glendronach, now Glengorm, now South Africa. Maybe we are entering a positive cycle. It's not a question of spending more and more money, in fact, it's more a question of having the right ideas. I think we have some areas of interest in our portfolio. I think about the Guyana licenses that we will begin to drill around the discoveries of ExxonMobil and Hess and CNOOC in this year. We have other projects that maybe Arnaud is more able to me.
We plan to drill 20, 25 wells this year. The fact that this discovery in South Africa is interesting. It's a new province. We have, by the way, quite a large acreage which was acquired. We will look at it. We will have some opportunities. We have also the Gulf of Mexico portfolio, which has been rebuilt, is of interest. Together with Chevron, I think we have quite two new wells being this year. Gulf of Mexico, Guyana will begin. We have also taken some acreage on West Africa, in Senegal and Mauritania, were quite large, and we intend to begin also to drill there. We have prospective areas, but I would say what changed is not the pure giant, quite low probability that we try to target during a certain period.
It's more around identify prolific areas like Senegal, Mauritania, like Guyana, to try to put more money there. We'll see. It's exploration, I'm always prudent on that. I see all that as a positive sign. If on the top of what we have been able to do and being demonstrated, we have been very active and demonstrating our capacities in having access to, and develop a discovered resource, we are able on the top of it to also have a positive exploration engine, it will of course make our future even more brilliant. Arnaud, about deepwater improvement, Brazil, Gulf of Mexico.
Most of you will remember that at the last meeting we had in September, there was actually a focus on deepwater. We were able to explain to you that in our portfolio, in fact, we've been able in the last few years to work on the design, the standardization, as you mentioned. We happen to have also in our portfolio a lot of subsea tieback opportunities to existing deepwater infrastructure. What we see in deepwater is a repeat in a way of the story we had successfully in the North Sea or in the U.S. GoM, where we can tie back to existing infrastructure discoveries. We see that in Nigeria with Preowei that will be tied back to Egina. We have Owowo also. This very significant discoveries that will be developed as subsea deepwater development, subsea tieback, very efficient, very profitable.
Clearly we have also work, we are working on optimizing deepwater developments. Brazil, which is, as was mentioned in the presentation, the coming next wave of large FPSO development. Libra is, the field is called Mero now, but is a case in study because this is 3 billion-4 billion barrels of the same oil from the same reservoir with excellent characteristics. I remind you, up to 50,000 barrels of oil per well. This, we see again economies of scale, we can see that we have been able to make deepwater extremely competitive in terms of return on investment.
I think Brazil is around EUR 35 per barrel of breakeven, more or less. We learned a lot, by the way, from Petrobras.
In order to be able to be efficient and cost efficiency. I can tell you these teams are quite good in the way also to replicate FPSOs. What, for me, one of the lessons, coming back to your question, is that all teams which are in charge of deepwater have really been able to put themselves into question. If we want to make these projects now, we need to simplify the well structure, we've seen Egina from this point of view. We managed to save EUR 1.5 billion.
On the next
On the drilling program by simplifying all the wells. I think our duty now as management is to keep them being stable, by the way, being simple. We have a program, of course, in the company Be Simple, but we need to be sure that they stay simple. The same on FPSO. When we look, for example, the way we imagine to develop this in the Gulf of Mexico, the North Platte discovery, the way our teams are thinking to that, it's a very simple platform to It's not a giant, nice to have platform. It's much more simple. They know that if we want to develop this 350 million barrel of oil, we need to be able to simplify and to make it efficient. That's a thing, a mindset as well. That's a good lesson. Other question, maybe?
The next question's going to be Christopher Kuplent, and then followed by Lydia.
Thank you. Christopher Kuplent from Bank of America Merrill Lynch. I think I only want to ask you one question, you're probably going to tell me there is three questions in there.
Hola.
It's about your 2030 and 2040 carbon footprint targets. It sounds quite far away, but even just a 15% cut from here to 2030 doesn't leave you a lot of time. I wonder whether you could fill the void a little bit. Your presentation today is focused on next year and 2020. You're spending around EUR 2 billion on your low carbon electricity efforts. Is that something that makes you confident, that level, that you achieve already a 15% cut in your carbon footprint out to 2030? Or is there a message that within the next 10 years, actually, your, well, I suppose, ambition to keep at the very least replacing your black oil production at some stage will go? Because you gave us earlier a calculation that upstream, EUR 8 billion to EUR 10 billion of CapEx. You've got downstream commitments in refining and chemicals.
That, in the end, doesn't leave you a lot more room to actually step up your low carbon budget. I know it's a convoluted way of asking you how you feel about the next decade, and perhaps a slight shift in priorities in terms of capital allocation.
No. We come back this afternoon on that. If we came, you can imagine that the way we manage the company, if we came out in September with such schematic, it's because behind that there was a lot of work of does it fit with a growing oil and gas company, but being also able to manage this carbon footprint. There is no message, I said that in September, that we intend to stop growing in oil and gas. That's not at all the case. By being, and it's a lot of work behind it's a combination and we will on our own operations, finding new scheme of development, for example, one of our peer is in advance from this point of view. Electrification of the process. Developing the fields in another way.
You can slash down easily five, 10 million tons of CO2, and we will announce a target this afternoon about if you are focusing on your own operations. There are ways to do it internally. Stop flaring. Electrification of process. It makes, by the way, the technology. That, we need to be active now to stop, to integrate this technology and not waiting till 2025 to begin. That's one point. The second point is natural gas is helping us to reach the target. Because if we In natural gas, and one key target will be to be more efficient in the energy technologies in terms of energy efficiency. Low carbon electricity is part of it, but with EUR 2 billion per year during 10 years, it's fine. I can do a lot with EUR 20 billion if you make the math.
That's true, that there is an ambition, which is to grow in this area. I don't think we'll do much more with that. The math are It's okay. We can do that. We have biofuels, which are something which could be efficient. It's why we move in Brazil. There are ways to improve our mix of products. The last thing, last but not least, is what we mentioned about natural carbon sinks. With less than EUR 10 per ton, you can do a lot in developing some businesses with, in around forests, degraded lands, and that's an area in which we will invest. We intend to invest EUR 100 million per year. With that, we can generate also some offset of our footprint. It's a mix of combination.
What I can tell you, there is no message that we intend to stop our growth in oil and gas. Maybe we'll produce probably more gas than oil, it's linked to the market. It's a combination of gas, oil, and low carbon and electricity. To describe you, one of your colleagues asked me, "You didn't give me the CapEx for 2021." I will not describe to you the CapEx between 2021 and 2030. I will make some efforts in September to give more clarity on what is beyond 2020. That's clear. Honestly, the 15% is an ambition. We have decided yesterday at the board of director that we'll have an objective on the Scope 1 and 2 to reduce our CO2 footprint, and that the variable pay of the CEO and the top executive will be linked to the Scope 1 and 2 reduction.
Scope 3 are different matters because there are some. This is something on which we believe, and 15% are achievable without shifting the dramatically strategy. Keeping in parallel the five routes, and I will come back on it this afternoon.
Lydia.
What was the original?
Thank you. It's Lydia Rainforth from Barclays here. Two questions, please. On the capital allocation side, clearly over the last couple of years, production's been better than expected. Costs have been better, cash flow's been better. As an observation, it does appear that those incremental improvements are going into higher CapEx on the portfolio development side. Can you just ask what is the right balance between those and looking at whether you would increase the share repurchase scheme, and at what point that might trigger?
Sure.
Secondly, probably another one for Patrick. Can you just comment on the Venezuela sanctions and the impact there? Thank you.
Sure. Patrick will answer you on the first question because I spoke a lot. Venezuela, for us, is 50,000 barrel per day, $200 million of cash in 2018. You have the magnitude of the problem, which is not huge. $60 is $150. We will obviously observe the sanction very strictly. We are trying to understand what it means legally. Probably we'll have to manage Venezuela, not from the U.S., but from Europe. For the time being, the priority has been clearly the safety of all our people and everybody has been evacuated since last Monday. That's the first priority. In terms of impact of Total, it's not very big. I read papers, I prefer to give you the figures. Chemicals, might read some papers that we were very hit.
No, we'll not be very hit, we have to manage it and within the portfolio. Patrick, the first question.
Yeah. Okay. Let's answer on buyback first. The idea we had at the executive committee level one year and a half ago was to return more cash to the shareholder in order to rerate the share price of Total in comparison to the other. That was the objective. How much will we return? We design the EUR 5 billion buyback program in the sense that at $60, we can make it, first. Second, that the cash payout of the company dividend plus share buyback was consistent with what we can see on the market from the other. I remind you that the main objective for us is CapEx. We designed our capability to share buyback EUR 5 billion because we have in our portfolio enough to develop EUR 16 billion, EUR 15 billion of CapEx. They are two linked, and obviously at $ 60, the math works.
We can invest EUR 15 billion, EUR 16 billion a year. Having our share buyback program plus the increase of the dividend. It's all an equilibrium. It work at $ 60. Of course, if we are at EUR 80, we could review our target. That's another story. Something I learned within the past 11 years, all of our forecasts are wrong.
By the way, this is why we will not review the target despite all your push, because board of director is comfortable with that level. Again, it's not the end of the world in 2020. There is a follow-up. The cash flow will continue to be there after that. Obviously, like you said, it was one, 1.5, 2.5. That means that this policy, and I think we are fundamental idea, we use the buyback in order to share with you the additional upside of the price. We keep steady the dividend because none of us, it's a strong commitment. When we increase the dividend, that's a permanent commitment. There is no willingness at all to cut the dividend. By the way, we didn't do it during 30 years, I will not begin to do that. It's a combination.
Again, the table I show you, like Patrick said, priority is investments in the company. If we have the feeling that we have a better opportunity because at a low cycle, there is something to be done to answer to some question of John, we'll do it, and we will explain. It's a matter of discussion. If we can demonstrate to investors that it's better value creation. Again, I think also one of the objective of board is when we analyze under Patrick guidance, why this share is maybe undervalued. One of the objective, we observe that the return in term of cash, the cash out to shareholder was lower than most of our peers. We have an objective to increase the cash out to our shareholders to come back into the pack, I would say, of a colleague. You have done the math.
That's what is driving. Increase of dividend and/or buyback. We will have a cash out not to have to be undervalued because of that.
The next question's coming from the central middle here, Christyan Malek, before coming back over for Al Simon.
Christyan Malek from JP Morgan. Two questions, please. First of all, just want to come back on your production growth outlook of a minimum of 2% beyond 2022. The minimum. How do you think about balancing that against your cash return target? Is there a case being considered ahead of your September CMD that you move away from a pro-volume strategy to one that is pro-cash return? That balance seems to me. Put another way, if the world's got too many barrels, why do you need to grow above 5% volumes in the long run? The second question is, your gearing is one the best of the super majors now at 15%. The only reason I can see it wanting to go lower is if you were going to do a large deal or M&A.
Can you talk about why you need to do a deal when you've got such fantastic pipeline of projects? Put another way, does that mean that you're prioritizing something away from oil and gas? You've got all these projects. You don't need to do a deal. You can continue sanctioning them and therefore, it's more likely you do something in power or something else. Just talk about that prioritization and the need to take advantage of opportunities, please.
I think that you are right. We never said that we want to make a deal, a big deal. We just told you that the priority was to sanction all the projects to deliver what we have in our hands. It was my strong message 2019. When I answer to a question from John, but don't misinterpret what I told you. Again, there is no. Strong balance sheet, again, its first reason is to face the volatility.
It's fundamental. Again, we managed to face this period with peak, Patrick, because we had to put a scrip dividend in place. We had to sell EUR 10 billion of assets, and these assets which have been sold are sold. I don't have this weapon in my hand if the low cycle come back again. The lesson for me, fundamental lesson, is to have a strong balance sheet is the best way to face the volatility of the oil price in a, I would say, more quiet way, because then I don't need to sell. I have that. I can use like some of my two U.S. peers have done that when I observe it, and they are back again to our level. I think it's a lesson.
Keeping quite a low gearing, even if the price is at $ 60-$ 70, it's the best policy because then we are comfortable to face a low cycle. Maybe we can use it, the balance sheet, at least we don't have to make a scrip dividend again, and We are obliged to take action. That I agree with you. That's a fundamental reason. Don't misinterpret it. It's not because Patrick will go that suddenly we'll change the discipline policy and that we have in mind to make a big deal. No, we have not in mind to make a big deal.
All the bankers are coming to our office because the fact that we have been active thinks that we will continue to be active, we have been active on things where we are thinking we are able to deliver value to our shareholders, and I'm convinced that Maersk was a good move. There is no maybe. There is no Maersk every day under that. It's not the main target. The first point was about the 2%, no?
Yeah, moving from volume to value.
Yeah, no surprise. I think I told you about four years ago and our No. By the way, let me be clear. I didn't tell you that our target is two. Again, I was very precise in my wording. I told you that with all what we have there, the 700,000 barrel per day are to be sanctioned. We have at least a growth of 2%. I added that will not slip during five years. It's just the fact that we have already embedded a growth of 2% if we develop all these projects, and we intend to develop it. It's not a target of two, but it's more than two. Keeping in mind that we want to continue this capacity on one side to grow, on the other side to be profitable. It's a question of choice of projects.
If we can add new projects to this portfolio which reach our 15% hurdle at $50, why not? I would be happy to put them on board. It's not 2%. By the way, again, making at least two, is more than the hydrocarbon market, but probably room for more. No, the 5% we gave you was an average of 2017 to 2022, which is still there. If 2018 and 2019, we make 17%, we have the room for 2020, 2021, 2022 for eight. You divide by three, you will find three to 2%. We are, that means by the years to come, we are landing. Again, we don't have the same CapEx intensity as well.
Okay.
It's true that from 2015 to 2018, we were able to spend all the money to achieve all these projects. Note we did sanction a lot of projects. We have a momentum that we cannot break. Okay? Is it clear or?
Thank you.
Alastair Syme.
Hi, it's Alastair Syme, Citi. I wanted to ask about the 2P resource base of 20 billion. Really two questions. One is, how much of that is, do you think, economic at EUR 60? Is it all of it economic or is there some sort of element of price assumption that's built into it? Secondly, related, is 20 billion the right number? How do you think what the right size of the resource base should be for this company?
20 billion is 20 years. It's a permanent shadow system. You need to replenish, which we have been successful. Let's be clear, 2P means that everybody is developable. Not at $60 and $ 50. The definition for us in the company, if we put it in our proved and probable reserves, that means that everything which is there is developable at $50 per barrel. This is the way we manage it. You have 20 billion barrels in front of you, which are developable, and it's a question of scale. Some of them are being already developed. What are the key countries there in the eight? You have Russia, you have Abu Dhabi, you have Qatar. We have some long-term reserves which are being developed, and we cannot accelerate that development in some of the countries. Some others, it's up to us to accelerate that.
20 billion are fully economically developable. Otherwise, we'll not mention that. We'll not put them there. If it's not, we put them in another category, which is called reserves. We have 2P reserves, and then we have reserves, which some of them are not yet developable. For example, the discovery in South Africa at this stage is reserves because we didn't work yet on the development scheme. Maybe we shift to 2P reserves. That was the first point. What was the second? Was this all, okay, Eddy, regarding this one? No. What was your question again?
20 years.
There is no bible in the oil industry. We have 20 years. I think it's fine. An horizon of 20 years or to be 2P reserve, it's not too bad. I'm not Saudi Arabia. No, I could give you another figure. I could give you, I have 40 years of resource base, which is true. Again, 40 years of resource, now in these resources, there is a lot of it maybe will never be developed. I prefer to give you since so. Metrics of 20 years is not too bad. I mean, it's an average. We were a little. Of course, when we grow, we have to think to that permanently. We had that metric in the company since I joined the company 20 years ago with some targets around 12 years of proven and 20 years of 2P.
I don't know where it come from. I should ask Thierry Desmarest, my predecessors. The majors are more or less in this range.
Okay. Turn to the last question to the man right down the front here before we pause for lunch.
Hi. Hello. It's Martijn Rats, Morgan Stanley. I have two questions. Just to check on slide 19, at the bottom it says, $8 billion in incremental cash flow between 2017 and 2020. Is the math as simple as saying you expect to generate more than $30 billion in operating cash flow in 2020 at $60?
Which slide is it? 19?
Slide 19 at the bottom.
The math are very easy. We expect 22 plus eight. It makes EUR 31 billion.
Yes, more than EUR 30 billion, right?
Yeah.
That is.
Yeah. It's very easy.
Frankly, it's a punchy number.
I know you have the figure, so I help you. You can fill it in your spreadsheet.
Yes.
It's done.
Okay. All right.
You have everything, I help you.
I think they're a little forecast out there, that's-
Why did we give you? Because we are 99% sure that everything is clear. Clear visibility is why we gave you the figure.
Okay, good. The second question I wanted to ask you briefly, slide 25, which shows your project map. You used to have Uganda on there. I know there's been some delays, it's now not even on there anymore in terms of sanctioning before the end of 2020. I was wondering if you have an update on your plans.
I can tell you, we have decided that it will be the task of the year for the CEO of Total together with Arnaud. I went to Entebbe. Arnaud I met President Museveni in Davos, I'm committed. It's a difficult project because it's landlocked. We have this pipeline going through Tanzania to align the interest. It's a new country to oil. There is no regulations. We need to create everything. I'm optimistic. I think we had some good meetings. We have settled many things about the refinery, about the pipeline tariff, about the transaction with Tullow, which has been delayed, and we have Lake Albert where there are many crocodiles in the lake. We need to domestic the crocodiles in order to move forward. I don't know if I will fight with the crocodile, but we know.
I consider that it's too long, all that. Now it's a priority. The project's engineering is done. We have even some tenders. We have made the tenders. The price in term of cost is very acceptable. We need to fine-tune and as I said to President Museveni, I think I will come back again to your country several times, but we'll manage that. We need to solve it. It's again like PNG. It's a problem when you have new country to oil to align many people. We think that the discussion with major public traded company is unbalanced. They are not very comfortable because when they see us managing different concepts, and they think that fundamentally they are prudent. I told him, "Okay, no, we are in the same boat.
It's a project we can deliver to you around EUR 1 billion per year." More than to me, in fact, but if we move Again, it's establishing good relationship, and it's a priority. I hope we'll be able, an objective to deliver you good news next year. I'm committed, and Momar is helping, Arnaud is helping. We are all on the boat. No, we want to solve this issue. Otherwise, Momar will not retire, he will stay, which is a good idea, by the way, to stay with it. Okay.
That was the last question, Patrick.
It was the last question. Thank you for this attention. We'll have the lunch with you. I hope we'll have continuing the discussion. Again, this afternoon, we will have another topic. Presentation this afternoon will be done first by Helle and Ladislas, all to strategy and for natural gas and power, and Ladislas strategy at the group level. Then we'll come back on the climate.
Sorry my dear I will not deliver you all the strategy on the next year-by-year of the climate, you will have a better insight of what we want to do. Thank you.
Okay. Thank you very much. Remind you that this is going to be webcast. This next section will run hard stop to 3:00 P.M . I'd like to welcome the first two presenters. We've got Ladislas Paszkiewicz and Helle Kristoffersen, they'll be presenting on the TotalEnergies outlook. If they can take the stage, please.
All right. Good afternoon, thank you for giving me the opportunity to share with you a study, work that we've done with Helle's team on analyzing what an outlook for energy demand could be by 2040. We've run a bottom-up model. Of course, before I start entering to the details, I'd like to remind you or to tell you the way we have looked at this energy outlook, how we've built it with relying on two set of fundamentals aspects for demand. One fundamentals driver being, of course, economic growth, first of all, GDP growth that we have taken as 3.3% per year, slightly higher than historic GDP growth. The second impact for energy demand, which is key, of course, is evolution of population, with rising population expected to increase by about 1% per year on average between 2015 and 2040.
The consequence of these two factors, by the way, being that the GDP per capita is supposed to increase, is expected to increase quite significantly in the 25 years to come. That's very important because that raises the middle class demand very significantly. When GDP per capita increases fast, that moves, that increases middle class having access to energy, and middle class, in particular in non-OECD country, has the characteristic of the willing more mobility, more energy. That's the key driver, of course, for energy demand growth. On the other hand, there are opposite aspects with energy savings, which are very significant. That's going to take place in the years to come, and I will get back to that in more detail. This is driven by regulation and policies, and of course, also by technological improvement.
At the end, when we combine both drivers together who go in opposite ways, you have multiple scenarios possible. We have decided to present today two main scenarios. One, which is called Momentum, which is quite an aggressive scenario. It assumes, for instance, that by 2040, 50% of the cars will run electric, which is quite significant as a move, of course, compared to today. This aggressive view is mixed with the fact that we have assumed in this Momentum scenario that policies and regulation are as had been announced already, and there is no breakthrough in technologies, meaning state-of-the-art technologies are being maintained in this scenario, even though that would lead to a decrease of energy intensity by about 2.2% per year, which means that overall energy demand over the period to 2040 would increase by about 1% per year on average.
This scenario does not comply with the two-degree scenario from IEA, as a consequence, we have imagined a Rupture scenario that would be consistent complying with this two-degree scenario, which requires technological breakthroughs, major shifts in public policies in order to get there, this will be presented in more detail afterwards. What we propose to do is to go for oil, for gas, and for electricity to describe, to present to you under this Momentum scenario, what are the findings or thoughts that we could share with you. Starting with oil. You see here on the left-hand side of the slide that the vast majority of oil is being used for transportation and for petrochemicals. 2/3 of oil is being used for these two segments. For transportation, you have passenger transportation, about half of it, and commercial transportation, the other half of it.
The rest, Residential and commercial industry power generation does not, as far as oil is concerned, represent a large share of oil demand. You can see on the right-hand side of the slide how we expect growth actually to be shared between these different sectors. It's interesting to note that transportation is the main driver for growth in oil demand, as well as petrochemicals. The other sectors, I will not come back to them really, for instance, residential and commercial or power generation, demand for oil is going to decrease over time, actually, on those sectors, which already does not represent actually a large share of oil demand. If we go now more in detail sector by sector.
For light-duty vehicle, you see here that growth of cars actually the number of cars is supposed to rise from 1.1 to more than 2 billion, especially because as GDP per capita increases, demand for mobility, in particular for non-OECD country, increases quite significantly. What it is worth noting is that about 60% of this growth, and that's the dark blue bar that you see on the left-hand side of the slide, the efficiency gains do reduce actually by this impact of growing needs by about 60%. That means that cars that today, on average, consume about 8.5 liters per 100 kilometers will be reduced by 2040 to about six liters per 100 kilometers, which means that new cars, by the way, being sold in 2040, will run with even much less than six liters per 100 kilometers.
We have taken an assumption of 30% efficiency gain due mainly to environmental regulations. Second aspect, which is key, is penetration of electric vehicles. You see here that, as I mentioned, that 50% of the sales or 32% of the fleet is supposed to be on electric vehicles by 2040, which compares actually quite aggressively with other assumptions taken by different analyses. It would move at the end of the day by about 8 million barrels per day consumption of oil by 2040, as you can see. The last element is the switch, which is linked to biofuels. Here the assumption is that on average, current biofuel integration incorporation in gasoline and diesel is about 3%. It would move up worldwide to about 8%.
The impact, as you can see, would remain quite limited, so we would have still some increase for light-duty vehicles. Heavy-duty vehicle now is an interesting one, as growth is more or less linked to GDP. It's commercial activity, and it's expected to grow at that level. Efficiency gains are a little bit lower than what they would be for light-duty vehicle, in particular because regulations in some parts of the world are not as stringent as for LDVs. Here we have taken as an assumption that the switch to electric vehicles, in particular for buses, would be quite significant. We have assumed that more than 50% of buses would run electric by 2040. This, by the way, is a modification compared to what we had presented 18 months ago, where we had not seen that level of switch for heavy-duty vehicles on electricity.
On the other hand, the natural gas switch, whether it is for compressed natural gas or LNG, is due to be much more important for HDV compared to light-duty vehicles. For the rest of transportation business, I'll be quite quick. You have the maritime activity, which is supposed to grow, here the main point is that there will be some significant switch to natural gas, probably IMO regulations will even enhance this switch to natural gas, as low sulfur fuel oil will be more expensive. For aviation, at that stage, I have to recognize it's difficult to imagine that there would be significant substitution. As a consequence, as demand is going to grow both for cargo and for people, yes, there should be some increase in jet fuel demand for aviation in the years to come. Coming now to petrochemicals.
I said that's the second driver. You see here that growth actually will be significant because rising global prosperity does have some strong impact on plastics demand. The key aspect of that slide is probably the recycling aspect. You see here that we have taken as an assumption that 25% of the feedstock would be displaced by expanding plastic recycling from about 10% or even less than 10% today. That means that there will be some demand growth from petrochemicals. This demand growth, by the way, will mostly be focused on ethane and LPG more than on naphtha, even though today, of course, it runs very much out of naphtha. As time goes on, petrochemicals will be produced more and more out of ethane or LPGs.
When we wrap it up and take it all together, at the end of the day, what we observe is that increased oil demand will be, to a certain extent, offset by efficiency gains that will reduce, I would say, the impact of growth by about 40%, 45%. It will be reduced as well by a switch to natural gas. More than 10 million barrels per day of oil will be displaced by gas in our analysis by 2040, as well as displacement by electricity through EV penetration. At the end of the day, we do see still a net increase that could be around 10 million barrels per day compared to current oil demand. Of course, all of these figures are not certain.
That's the least I could say. That's the reason why, because uncertainty is, of course, everywhere by 2040, by the way, that we've decided to run some sensitivities in order for you to have a sense of what it would impact in terms of oil demand in case, for instance, economic growth would not be 3.3%, GDP growth would not be 3.3, but 2.8 or 3.8, which is a very large, very significant difference. In this case, it would move the transportation need for oil by about ±7 million barrels per day. What would happen in case efficiency of new vehicle would be 1/3 better than what we have expected? It would move, again, demand by about 6 million barrels per day.
Finally, let's assume that it's not 50% of the sales of electric vehicles by 2040, but 70%, which means almost addressing everything that can be addressed, given that there will always be some IC vehicles staying in the market. The impact would be an additional 3 million barrels per day of energy of oil being moved out of the market. Finally, what I would like to share also with you is the geographical split of this oil demand. You see that in 2015, developed countries represented more than 50% of oil demand, and this is due to be reduced by about 10%, which is a strong shift, by 2040 to the benefit, of course, of Asian countries, of India. I point out, in particular, the role of Africa.
Africa, even though it is only 4% of oil demand today, it should represent actually about 8%, doubling, that's the large increase due to the increase in the population, of oil demand by 2040. That ends this oil demand part, and I switch to Helle for gas and electricity.
Thank you, Ladislas. After oil, moving on to gas and power. This is the first time we are talking about these markets in some detail, so I hope you'll find it useful. In any case, as you know, they are important markets for our strategy. Here you see a picture of one of the recently acquired CCGTs by Total in Europe, and of course, these power plants, they run on gas. The first chart shows here a breakdown of the worldwide natural gas demand in 2015 by sector, and then the growth path between 2015 and 2040. There are three sectors driving gas demand. As you can see to the left, it's power generation and heat generation, 41% market share, industry 24%, and residential and commercial 21%.
In terms of growth, our Momentum scenario shows 1.8 gigawatts between 2015 and 2040, which is almost double up the growth in overall energy demand. Almost. The market goes from 3,400 BCM per year in 2015 to 5,400 BCM in 2040. The use of gas, as you can see to the right, is on the rise in all sectors, but power and industry represent, in our modeling work, 2/3 of the pickup in demand. There are no major changes in the market shares between now and 2040, except for what Ladislas mentioned, which is that transport will grow in its use of gas, and that will happen at the expense of residential and commercial. Zooming in now on power generation. Once again, it's the number one sector in terms of demand for natural gas.
You can see that we estimate the CAGR between now and 2040 at 1.8, so exactly the same as the overall gas demand, and this is why the market share doesn't change, obviously. The increased use of natural gas for power is linked to GDP growth, and then linked to the electrification of energy use, which is another core theme, and I'll come back to that just in a while when we talk about power. Then the net fuel switch. If you look at the graph here, you may be surprised to see that it's relatively low, the little orange bar, net fuel switch. The reason for that is the following. We do expect a lot of pushing out of coal by natural gas in a number of countries, such as Europe, the U.S., or China.
We've also modeled that in other countries, gas will be pushed out by renewables. Conservatively, perhaps, in our growth shown here, the net fuel switching impact is only 7% of future growth in demand. Efficiency gains in natural gas power plants, CCGTs, and increased yield are also leading to gas savings in terms of feedstock, which is the last piece in blue. That, of course, reduces demand a little bit. Moving on to industry. Industry is an area where we expect growth will slightly outpace overall demand for natural gas. Because industry uses gas both as an energy source and then as a feedstock for certain industries, such as fertilizers or methanol plants, for instance. The growth, again, is driven by economic activity.
We also model a net fuel switching impact in the sense that we believe there'll be fuel switching in many industries, for instance, those using boilers, and that could be the case, say, in Latin America or in China. We'll expect these industries to switch to more use of natural gas, driven both by regulation and then by the availability and cheap affordability of gas, and that switch will occur at the expense of coal and oil. Energy efficiency, on the other hand, is holding back demand, together with a structural shift towards lighter industries, so less heavy industries in the overall GDP mix moving forward. I'm not coming back on the gas demand for transport. Ladislas covered that. Let's just keep in mind that in our growth scenario, the share of transport in natural gas demand will move from roughly 1% today to 5% in 2040.
The last zoom I have per sector is on residential and commercial. In this sector, gas demand should be slightly below average, only 1% growth per annum between now and 2040. Demand, again, is driven by economic growth on one side, then on the other hand, by better household living standards in terms of heating and cooking. Over time, there will be a switch away from coal, oil, and biomass in favor of gas, we've modeled 2/3 of that switch to occur in China. Of course, other parts of the world as well, Africa, for instance, or Latin America. However, the switching effect in the residential and commercial sector is entirely wiped off by higher efficiency, especially in the services sector, and also, in fact, by a negative switch away from gas to more power.
The chart here shows you how this natural gas demand translate into LNG demand, we discussed this a little bit this morning already. The unit here is BCM, not tons. The first message is that the LNG growth should be around 5% between now and 2040. For the decade also going from 2030 presented this morning until 2040. Very strong growth, very good market opportunity, as Patrick explained, it's true that I think we all tend to underestimate the potential of LNG. Let's just keep in mind, in any case, that the LNG markets are undergoing very rapid transformation right now, they are for sure no longer a niche. That is, in fact, the second message which you can see to the right of the chart. LNG will overtake pipeline in terms of worldwide gas trade share.
The share of LNG will move from 10% in 2015 to close to 20% in 2040. LNG will therefore become a much larger, much broader, much deeper market, creating opportunities for portfolio players like Total. To the left, as you know, you will note that the LNG demand growth is coming a lot from Asia, let's say non-China and non-Korea, Japan, and Taiwan. Effectively, demand is growing across the board. On other, just if you wonder, within other, we have roughly half of that other size in 2040 is linked to the bunkering switching that Ladislas hinted to. That's a big opportunity, and we don't think we've been particularly aggressive in modeling the bunker opportunity for LNG. Here is a chart on sensitivity that Ladislas also had, which is actually, I think, the more fun part of the modeling work.
The assumed GDP growth has, of course, a big impact on gas demand, obviously. Here we show what an impact of more or less 0.5% GDP growth worldwide would mean in terms of more or less demand for natural gas. It is roughly a 7% impact, the 407% of 2040 demand. Energy efficiency is obviously also a driver of more or less demand for gas. I'll let you look at the numbers. There would be a significant boost in gas demand from the level Ladislas presented if there was even more widespread use of gas in transport. Increasing the baseline from Ladislas' slide by 10% more market share for gas in long distance trucks and in bunkers would mean 250 BCM more gas demand in 2040. Our model also already assumes pretty, let's say, proactive pushing out of coal and power.
If we switch 10% of the remaining coal use of power in 2040, if we switch that to gas, that would drive 200 more BCM of demand. Of course, it would be much better for worldwide CO2 emissions, which is also something we all care about. On the negative side, gas may face even higher competition from renewables. In our model, we assume that gas takes roughly 26% of all new power installations in the world. If that were to drop by 5%, so going to 21%, that would mean 200 BCM less of gas demand in 2040. There are many different ways of modeling sensitivities, and these are just a few of those we're looking at. Finally, I have a last section on power.
Once again, as for oil and for gas, the first chart on power demand in 2015 and the expected growth in our Momentum scenario until 2040. I think you know that power markets are the fastest-growing energy markets. Power demand in our model will grow by 2.2% per annum between now and 2040, which is more than twice as fast as overall energy demand. You know it. It's called the electrification of energy demand, and it's an important trend. In terms of terawatt hours used per year, the market moved from roughly 24,000 terawatt hours to 42,000 terawatt hours, almost that number, in 2040. Residential, commercial, and industry make up most of today's power demand, as you can see to the left, almost 80%. These two sectors will also make up 3/4 of the estimated growth between now and 2040.
That being said, as you can see to the right, all sectors are growing their demand for power. Transport growth shown here is in line with the baseline Ladislas presented in terms of EV penetration. Transport makes up for 12%-13% of the growth in demand. A few words on the residential and commercial sector that represents 45% of the increased power demand. Growth is triggered again by the increase in GDP, more people, and then also higher living standards, higher GDP per capita, as Ladislas said, meaning more electrical appliances in households, more AC and so on. Of course, also more services in the overall GDP, including data centers that use a lot of power.
The residential and commercial power sector is also stimulated by the electrification of energy use, and this would be the case in Africa, for instance, where we expect to switch away from traditional biomass and LPG use in favor of more power. All of this is partially offset by energy efficiency gains and technical improvements in appliances, including basic things such as better building insulation and the use of LEDs for lighting. Moving on to industry power demand, that will be roughly 30% of anticipated growth. The main message here is that industry power demand will be spurred by the electrification of a whole range of industrial processes, more automation, more robotics, and so on. If you just look at growth, the demand in the industry for power should almost double in the coming 25 years.
However, that growth is offset by energy efficiency linked to the adoption of new technologies and simple things such as more efficient electrical motors. It is also limited by energy efficiency and the change in industrial structure moving away from electro-intensive industries. In terms of power supply, we have just one chart here showing you the origin of generated power. To the left is the picture of 2015, and to the right is the growth between 2015 and 2040. I think you all know this. We certainly believe that the worldwide power mix will evolve away from oil and coal to more low-carbon power, meaning natural gas and renewables. Of course, these are markets that Total is targeting.
In our model to the right, wind and solar alone, not all renewables, but only wind and solar, will make up for 50% of incremental power generated, and gas around 25%-26%. The result of that is that the carbon intensity of power, meaning the number of kilograms of CO2 emissions per produced megawatt-hour, is going to decrease by roughly 1/3 . Then the chart on sensitivity. Again, power demand is hugely sensitive to GDP assumptions. It happens that in our modeling, more or less 0.5% GDP means more or less 3,000 terawatt-hours in 2040, which is 7%, more or less demand. Remember, it's because residential, commercial, and industry are making up the bulk of power demand. It is very sensitive to overall economic activity.
The next two sensitivities are straightforward, linked to energy efficiency on one hand, or to a boost in electrical car penetration, what Ladislas already presented. I'll jump to the last block, which is more amusing, which is to assume that China's per capita power demand would catch up with 1/3 of the level of power demand observed in OECD countries, or conversely, that India per capita power demand would catch up with 1/3 of the gap to China's power demand per capita. In both cases, that would add 1,000 more terawatt-hours of demand in 2040. A beginning of convergence in the per capita use of power worldwide. The last chart is on the regional weight in power demand, and unsurprisingly, these weights will shift massively between now and 2040.
Non-OECD Asia will overtake, in terms of power demand, the sum of North America, of Europe, and of OECD Asia. The share would be around 48%, which is actually the same share as the share of non-OECD Asia in the worldwide population in 2040. Africa, on the other hand, as you can see on the chart here, would only represent 5% of the worldwide power demand, whereas its population would be close to 20% of the worldwide population. There is definitely a case for being more aggressive on power demand than what we have modeled so far. Coming now on to the last section, and perhaps the most interesting piece of our modeling work, bringing everything together and looking at primary energy demand and then CO2 emissions. Here you see the world primary energy demand in our Momentum scenario.
The total primary energy demand grows by 1% per annum between now and 2040, and that would be going, in terms of millions of barrels equivalent, from 270- 350. You can see on the bar chart that the share of gas and renewables is rising strongly. The precise number is from 36%- 46%. A big push on low-carbon energy, which again, are markets we're looking at. Coal drops from 28%- 22%, oil from 32%- 27%. If you look at the right, in this scenario, the total emission level, measured in terms of gigatons of CO2 per annum, is not curbed and remains high. In fact, you will note that the level of CO2 we show here in our Momentum scenario is close to the one of the IEA New Policies scenario.
Therefore, since it's close in terms of emissions to the NP, it's far away from the Sustainable Development scenario. We have been looking at what we called an optimized Momentum scenario, and we built that by cumulating all the nice or desirable sensitivities that we have been discussed, Ladislas and I, from the Momentum scenario. What have we done? We have cumulated the following sensitivities. More energy efficiency per annum, 0.1% more. 33% more efficiency in new combustion engine cars sold on the market. 10% higher EV penetration. 10% higher gas penetration in transport for long-haul trucks and buses, and bunkering, sorry. 10% extra coal switch, pushing out coal from gas. Also 5% more pushing out of gas in favor of renewables.
When we do that and add up all these sensitivities, total primary energy demand grows no longer at 1%, but at 0.8%, essentially because of the higher energy efficiency assumption. You can see to the right that the level of emission is going down, but is still not close to the two-degree scenario. In fact, we only make up approximately 16% of the way to the two-degree scenario emission level in 2040, which therefore clearly says that we need a completely different set of assumptions if we want to have a primary energy demand that would be compatible with the emission level of the sustainable development scenario in 2040. This is the basis for our Rupture scenario.
The main drivers are shown here, but the main drivers are high level technological breakthroughs, a very strong shift in public policies, and I would add also a big change in the energy consumption patterns of all of us, including us who are in the room here today. This scenario is built on four major drivers. Number 1, huge energy intensity improvements of more than 3% per annum, which would lead to an energy demand that would be almost flat between 2015 and 2040. That result could also be achieved via reduced economic growth. Second driver, much, much faster electrification in industry, in transport, and in buildings. That could happen, for instance, via breakthrough in mass storage of power, which would also need to have the right price points. As a consequence of much faster electrification, power demand would double in this scenario between now and 2040.
That would also mean that the share of EVs in the light vehicle fleet would jump above 60% from the level we discussed earlier. In terms of power generation, the third driver would be a very strong acceleration of the transformation that is already ongoing towards lower carbon power, and there would be a massive shift to renewables, pushing out more than 2/3 of the coal that we had in the Momentum scenario. Finally, we would need a significant amount of carbon sequestration, with at minimum 2.5 gigatons of CO2 stored in one way or another in 2040. With all these assumptions, here is then what the Rupture scenario would look like. Primary energy demand on the chart here in the Rupture scenario would be only growing by 0.1%, so almost flat with 2015. The use of coal is collapsing. You can see that.
The black bar is very small. The share of oil is down to 21%, and the share of natural gas and renewables in this Rupture scenario goes all the way up to 62%. There's a little bit of nuclear left, of course. More interestingly, the CO2 emission level that you can see to the right does reach the two-degree scenario level in terms of emissions in 2040. This is all I wanted to share with you on our modeling work. We are there to answer questions later, but first I'll hand over to Patrick, who is going to talk about TotalEnergies and how we integrate climate into our strategy, which is a very good follow-on. Thank you.
Yeah. This study is maybe not. Please leave the previous slide. Yeah. The message is, again, we've spent quite a lot of time, I think some of our peers are more or less same conclusion, is that fundamentally, with all what we know today, even some momentum is quite aggressive in many assumptions. Reality of the world, by the way, we should not forget what the state have proposed at the Paris Agreement. They all agreed to set a target of 1.5- degree, the contribution of other national contributions were not fitting at all with the 1.5- degrees, more with 3- degrees.
The momentum scenario, which is already quite aggressive, is not there just to justify that is only in gas and hydrocarbons, more that if really if the world wants some bit two degrees, there is a huge shift which have to be done. In particular, just to comment on one assumption, just to have in mind, all of you, that on the long term basis, when the world is making 1% per year of energy intensity improvement. To reach 3%, if you want to keep the same economic growth, it's just something which is a revolution in the world. In fact, reality is that two degree scenario is also a world where the economic growth is reduced. Otherwise, we don't reach it. Having said that, it's not a reason why we should not act as Total.
I will come to the strategy of Total, which is, again, I already presented. In fact, this presentation has been done to you by Philippe in New York. I think it's good that first the CEO will do it himself, because it's a result of a lot of works being done with the board of directors. Second, because we have also some question marks, we wanted to have today an open discussion, we have also introduced, as you will see, a new element of a Scope 1 and 2 target. By the way, this solar plant developed by SunPower. The strategy again, what do we take? What do we do in Total?
I could put now the Momentum, and I will do it by the way next time, the Momentum Rupture scenario as with trademark by Total and not using the IEA Sustainable Development Scenario, which was not very different from Rupture. Again, what we have decided, it's because we have some fundamental market trends, is to embed in our strategy these trends. Of course, we don't say that it will happen. We say that it might happen, even if, again, the demonstration is that it's not in our hand today, we can think that there are trends, I don't know if it's 2040, 2050, we need to be responsible and to observe it. What I say clearly is that a two degree world would be a world with lower demand of oil.
momentum scenario does not give us that, it's not, by the way, there is no more growth. The conclusion is that natural gas is a right combination with renewables to ensure, I would say, the stability of the energy system, the permanency of the energy system. In all the scenario, you have the growth in renewables, mainly driven by the growth in electricity demand. You know this slide, just repeat the presentation this morning. These are the three axes of the strategy of the group. Oil, low breakeven oil, in order to be ready to face a market where there is plenty of oil and less demand.
The answer will be, I'm not a chance to run Saudi Aramco, but I need to be sure that my oil projects will be live by 2040, will be at the lower range of the cost curve. Otherwise, we could face troubles in such scenarios. Natural gas, there is room for developing. We speak about transportation, we speak about power, we speak about many domains where natural gas can be and has some virtue, in particular if we want to be serious, substituting coal by natural gas is obviously something which, by the way, takes place in some part of this world, like the U.S. Last but not least, electricity. Sure that the 21st century will be the century of electricity. It offers a larger growth or higher growth than the other fuels, 2% of growth even in the momentum scenario.
That means that there is, our economy is more and more electrified, we need to look at this business. To speak about roadmap, I will go through the roadmap of Total through various fields of what we can do in order to tackle the climate challenge at all level to be responsible. Of course, the first thing to be done in a company like Total is to further improve the efficiency of our operations. This is in our hands. This is our first responsibility, which means that, by the way, it fits also with some economic objectives. When you are running a Refining & Chemicals business, you learn very quickly that if you can save some energy to be burned in your plants, it's one of the best way to enhance the profitability of your operations.
We have a target internally on which we collectively look carefully, which is to enhance our energy efficiency of 1% per year. It's not so easy, by the way, it's also helped by the fact that the plants are more available. We have been able in the last 10 years to achieve this target. From 2010 to 2018, or sorry, or nine years, we have done just above 10%. We are a little advanced compared to this target. Of course, it goes with some investments. We have allocated for, since 2017, EUR 300 million of capital investments in energy efficiency to our downstream facilities.
It goes as well, if we want to promote it with some assumptions of what will be the CO2 price and what are the hurdles in terms of profitability, what we expect from this type of investments, all very pragmatic issues that our teams are asking us. You ask us to spend, but what are your LE or what do you expect as returns on these energy efficiency? We put a price of EUR 32 per ton and EUR 50. I think we have another assumption of EUR 40 per ton if the price of oil is higher. It's a little complex. We have many engineers in the company. We put that, and of course, we use when there is a market in some areas of the world, we use the assumption of the market.
Another way to look at it, of course, in particular in upstream, in all the flaring, natural gas flaring. On one side, we say natural gas has a potential great future in the energy mix. On the other side, in our companies, we flare gas, we waste gas. There is something contradictory there. I think we have been quite serious about it, and we set some targets. I take my papers. I don't want to make a mistake there. We say to our teams, first, there is a global worldwide commitment that routine flarings to be stopped by 2030. We don't launch any projects with routine flaring. It has been decided some years ago. It has been strictly observed in the company. I remember some debates with the E&P team sometimes, but we have been very strict. No new projects with routine flaring.
On the existing routine flaring, I think we set another target, which was first of the overall flaring. We were in 2010 flaring around 15 million cubic meter per day. We are down. We set a target to be down by 60%, which we have done. We are in 2018 at 6 million cubic meter per day. It has been done. On the routine flaring, we said to the team, we want to be at 80% less than we were in 2010-2020. In 2010, we are at 7.5, today, we are at 1.1. In fact, the objective of 80% is already achieved. It's no more. Routine flaring, the difference between routine and the global flaring is a safety flaring.
On all installations, you have some unstable phases of operations, there is no other way but sometimes to accept the flaring in order to avoid any accidents on our platforms. Fundamentally, we have been very serious about it. The actions have been either to find ways to valorize the natural gas, which is the best way. Or in fact, also sometimes to get out of some assets, to be honest, which we are to hold or to mature in order to build the growth on more environmental friendly assets. The commitment of 2030 will be achieved maybe before if we can do it. We are still with 1 million cubic meter per day of routine flaring. It's not much, but we will tackle this issue.
Another way of being more efficient, I was mentioning that this morning during Q&A, is, of course, to switch our processes to being more electrified. In fact, to use more electricity-driven platforms and to be serious about it. It's really a route which we need to embark and in which we need to think seriously in terms of engineering of our platforms, of our developments. It has a cost, for sure. It's why we need to have some assumptions on CO2 and CO2 prices, and the better the price will be at certain level, better it will be. This is a serious way to do it. We have sometimes some debates with, also sometimes when we have a project where we emit some CO2. Do we invest immediately in re-injecting the CO2, capturing and re-injecting the CO2?
This EUR 30 per ton is a nice threshold to decide, Sometimes it works with this threshold in order to implement it immediately. The second axis of the strategy is natural gas. I showed this slide this morning. On this one, I will not repeat what we said, but obviously it's also, for us, one of the action we have to be proactive is to develop new natural gas markets. In particular, how can we pioneer and develop the LNG for bunkering for maritime businesses. We have signed a contract with CMA CGM last year in order to equip and to provide LNG to all their new generation of containers ships between Europe and Asia. It works. We demonstrated them, but even if the ships are more expensive upfront, they will save some money. We have to develop some infrastructure.
We have taken some decisions to implement some barges in order to provide this LNG once in around the north of Europe, once in Singapore. We are discussing today to implement also a bunkering system in Oman in order to provide the Middle East. This is a proactive action to promote this natural gas, Clearly this is a very clear way to clean this shipping industry in terms of energy. There are some IMO rules, If we can go directly to LNG, it will be super efficient. When we speak about natural gas, one of the key issues, and which is an objection to the growth of natural gas is the methane emissions. We have to take it into account. We cannot speak about promoting natural gas if we are not very serious about methane emissions.
I remind you that methane has a greenhouse gas in power, which is much higher than CO2, We need to tackle it. There are several debates. We have spent quite a lot of time to be able to measure it, in particular in all our operations there, again. Our upstream level is quite low. It's about under 0.3%. We committed with our colleagues of the Oil and Gas Climate Initiative to be under 0.2% by 2025. I think Total should be able to reach that level earlier, considering, in particular our flaring, our no flaring policy. We are making big steps. I remind you that it's very important that when we say all the natural gas producers that we are cleaner, I would say, than the coal, it's true, providing that the methane emissions are managed under 1.5%-2%.
It's under the control of Ladislas, am I right? Yeah. It's along the full value chain. Of course, it's all value chains, not only in the upstream, it's also in the network, in the distribution, and the customers. We are not in this business. We are in some of them. It's true that we need also in the oil and gas industry, even if we are not directly responsible of this downstream of the value chain to bring the natural gas to citizens in some cities to steward, I think, to be a steward of all this methane fight in order to have the cleanest possible chain and to be able to promote natural gas in a comfortable position. I think we can do that. It's clear that the mobilization of all industry is necessary for that.
We have the electricity again. I will explain you all the good potential growth. Entering through low carbon electricity is of course part of the roadmap. I told you that there is a strong increase of demand. You can see that according to various scenarios, it could grow up by 60%-100%, double, you say, in the Rupture scenario. Of course, most of the additional power will come from renewables and some from natural gas. Again, I will show you the various sensitivities. That's why we position the company on this segment. In particular, we said that we have an objective in five years of 10 gigawatts, three from gigawatts from gas, five power plants, seven gigawatts from renewables. This target will be, of course, increased year after year.
It's also why we consider ourselves that in terms of renewables, of course, we have began our journey with solar. We recently, through Direct Energie, acquired some onshore wind position. We also look to other renewables. This is an evolution in the company. The more we look of this business, the offshore wind and hydro are also offering sizable plans, I would say. It's important that there are big improvements in terms of efficiency in offshore wind as well. We are looking some ways to enter into that business. We will with some partners or ourselves. There are ways to. It's clearly a technology which is offering some interesting improvements in terms of capacity to deliver the affordable power.
We have also this battery business, storage of electricity, one of the huge Rupture which is missing, in fact, today because everybody considers that because we are able to do batteries for EVs, we are able to store electricity. It's not true at a large scale. It's quite expensive. The fact that we acquired Saft gave us, we are clear insiders into that business. We observe all the progress. We are taking steps in order to grow the Saft business, in order to really develop these energy storage systems and to combine them renewables. When you combine, of course, some solar, for example, solar and batteries today, the cost is higher. We need also to drive the cost down.
In fact, fundamentally, when people say renewables are competitive with natural gas, it's not true if you take into account the intermittency, the batteries as a way to make it competitive. There are some improvements there, and I think it's one of the segments in which we think we could have also a position. Last but not least, of course, is distributing low carbon electricity to customers, and we establish that business, and we intend to grow it in the future. Biofuels. Biofuels have a mixed reputation. It depends. We have the first generation biofuel, the second generation biofuels. What is clear is that around the world, you have policies and government policies, which in many countries, in fact, are favoring biofuels. We observe a growth of 5% per year in the last eight years. It's a growing market. It's true in Europe.
It's also true in Asia and some in Southeast Asia. It's true in South American countries. It's true in the U.S. According to the IEA scenarios, you have the range of future growth, which is around 4%-6%. One of the issues being, of course, to have sustainable biofuels, I would say, which means the debate about the 1G against the 2G. Let's be clear, the 2G, for the time being, is not very as a technology and the volumes are quite minimal. You have, I would say, some evolution of the 1G biofuel, in particular, what we want to do in our plant in France about used cooking oil or, sorry, I'm missing the word in English. Fat, animal fat, I think, that we want to use in complement of vegetable oil. There are ways to make these sustainable biofuels.
It's also necessary for us to scrutinize the way we supply these vegetable oils to our plants, and we have taken some commitments on that in order to be sure that the whole chain is, I would say, climate friendly. Entering into a Brazil market through our M&S business, where we have an average, I was looking at the figures during lunch, around 30%, in fact, of the fuels which are sold in the network which we simply buy are in fact biofuels. It's 30%. We need to grow it. It's also a way to contribute positively to these reaching objectives. There is another topic which is a little limited today, but gaining momentum, is biogas. On this one, we have, I would say, few productions at experimental level.
It's not very big, but we have one in France, we have one in the Netherlands, and when we took some shares of Clean Energy Fuels Corp. in the U.S., we also inherited this part of this position. I think I will not be surprised to see in future years some mandate policy to promote biogas into natural gas. It's one way, I would say, to also promote natural gas by combining it with some biogas with lowering the CO2 content of the natural gas. Last but not least, in the roadmap, it's about carbon sinks. Carbon sink businesses, I think it's important and it's fundamental. In any scenario, you still have hydrocarbons. It's not only for producing hydrocarbons.
When you have a cement plant or a steel plant, considering the level of heat they need to make their products, we don't see we could avoid, we could have ways to provide them this heating without hydrocarbon. These technologies need to be developed. It's a vital question. In all the scenarios, you have to take care of, let us say 2.5 billion ton in 2040, I hear, say 5 billion ton in 2050. There is a necessity to be serious about it. When we look at it, on one side we are embarking Total and we are participating to projects like the Northern Lights project in Norway together with Equinor and Shell, but also clean gas projects in U.K., which is being developed also with I think Shell and BP, if I remember well.
We want to take a share, to grow experience and to invest. We invest more or less $100 million per year globally in R&D and technology development program in CCUS. There is also the natural sinks, natural carbon sinks, which means investing in preservation of forests, humid areas, degraded lands. This is not an oil and gas business, let me be clear. We are recruiting. We have decided to be serious about it, to consider that there is something which, by the way, in term of economic is much more efficient because you can clearly sequestrate some carbon from less than $10 per ton. It has to be done by professionals, I mean, which are the environmental people, not us, very clearly. We are recruiting a team.
We have decided that we will provide them around $100 billion investment budget. If we do that during 10 years, we could reach the equivalent of sequestrating at least, let's say, it's a rough figure, between three to five million tons per year of CO2. It has to be done gradually. It's not given because this business it has to be done very seriously. There are many consequences with the communities, you have to select the projects properly. We think that it's a way to contribute in an efficient way in the climate change challenge. When I come then to what does it give or gave you all the elements of the road maps. When we speak about our emissions, I would say we have our emissions. Our emissions are the one which are coming from our operations.
It's our accountability, is what we call Scope 1 and 2, which in fact, be clear there, are mainly on the yellow and the orange part of oil and gas production and transformation. Of course, our products are sold and then they are used by our customers. There are emissions used by our customers. This is what we call Scope 3. We have decided to take these two elements and to, with the board of director, we had again a discussion yesterday, by the way, about it and to see what we could do in terms of not only saying we are responsible, but acting. First on Scope 1 and 2 and all operations.
We have decided that we'll set to ourselves an absolute target of Scope 1 and 2 emissions from our operated facilities or our operations under our control for all our traditional oil and gas business, E&P plus Refining & Chemicals, plus Marketing & Services. All of these activities were emitting around 46 million tons of greenhouse gas in 2015, which is a year of the Paris Agreement, so we took that as a reference. We want that to be down by under 40 million tons per year. It's an absolute figure. Let me be clear, there is no message of shrinking behind it. We tested that figure even to reassure Christyan that we can grow. If I understand, you don't want me to grow too quickly, but we can grow. It's a strong commitment.
We decided that we had a debate, that it was the best way to show the commitment with an absolute figure, and that we can reach it. We have already made some progress. I think we'll be soon at the 42, 43. But we will be down under 40 by 2025. The Board of Directors has decided that an element of variable pay of the CEO and then of the top executives, because I translate all the targets which are given me to the board to my top executives, will be linked to the progress on these targets on Scope 1 and 2 operated emissions from our traditional segments. The way to do it, I will not repeat, are flaring reduction, methane control, energy efficiency, process electrification, all what I just explained to you before.
The second ambition, which is more global strategy, is to be able to, as I said. We put in place this indicator, which is a weighted average of the life cycle emissions of energy product sold. If you want the explanation that is fast, we give you everything. I can tell you it's well controlled. There is no double counting. All that has been scrutinized. It's perfectly auditable. I know that we speak about, we put an index in base 100 in 2015, but you have the figure of these emissions in 70 grams of CO2 by kilo BTU. We intend to diminish it. If we put in place, if we execute the strategy, which is that growing our natural gas business to, I would say, in 2040, having 45%-55% of the global portfolio of the company being in natural gas.
Having an oil 2030, including biofuels via 30%-40%, and we grow the low carbon electricity businesses to 15%-20% of the global portfolio of the company. We can reach these ambitions in 2030 and 2040. It's difficult to give precise figures. It takes time, but we are already embarked on this journey. This ambition will be, by the way, is fitting very well with what I show you about the market trends on which we face and on which we want to develop the group and the company in future years. Last but not least, the last slide. We are not alone. On this climate change, I think it's important that the major companies are also taking some leadership and not only alone, but also with collective actions.
We have, in Total, a clear policy because we are, but we should engage and being transparent, I think, and should engage in the initiatives which makes sense in order to fit with our strategy. Yes, we are reporting since 2016 every year now of all our figures and how we execute this strategy. I think we already issued three reports, so it will be an annual report. Secondly, we have decided to support the TCFD recommendation by Michael Berenberg. We have even participated positively in the working group to make recommendations or to implement it with some of our peers. I think in our reporting, you can find the disclosure according to TCFD. We need to improve it every year. But, since last year, since 2018, we are doing it.
We are also, in the U.S., joined the Climate Leadership Council, which is advocating for a carbon dividend plan. We have seen that in France there are many debates about carbon CO2 taxation. These U.S. leaders are promoting an interesting way to try to implement and to put, I would say, the citizens on the right side. Ladislas could answer for you some questions if you are interested, but we are a founding member, and we participate actively to promote this idea. Together with our colleagues, we have the Oil and Gas Climate Initiative, and we are also very active and not only in setting some rules. We have a Global Compact being we are one of the 30 lead company on the Global Compact. Last but not least, I mentioned this morning that we joined founding member of the Alliance to End Plastic Waste.
I think it's a global move in the company. Okay, it's going very full transparency. We are open to dialogue. We are open to provide the figures, but also we have, of course, to reach our mission. Our mission is to deliver energy to more people, to deliver an affordable, a reliable, and a clean energy. It makes no sense if we don't reach three objectives. It's not only a clean one, which will be expensive. It doesn't work. Again, the events in France have demonstrated it, even in the developed country. We need to be able, in a company like Total, to combine the three objectives in order to be a progressive player in this field, this is our ambition.
After this presentation, I will be happy to answer to some question, but by the way, it will be Ladislas and Helle, which will mainly, I hope, answer on all this presentation. Thank you.
Okay. The first question I see we'll give to Martijn Rats down the front here. We'll follow that with Christopher Kuplent at the back.
Thanks for this presentation. I thought it was very interesting. I wanted to ask you two things.
Brendan, yeah. Come. One question. Brendan, please come. Can you give me my file, which is over there?
Oh.
I need the notes. Okay. Please go.
All right. Good. I've got 2 questions, if I may, about the various parts of the presentation. The first one relates to the oil demand work that Ladislas presented. In my experience, when people talk about peak oil demand and things that erode oil demand, they end up talking about things that erode gasoline demand rather than just oil demand. If I look at your outlook, this idea is also sort of embedded in here. If I can just sort of pick out a couple of numbers. If I focus on the right-hand chart of exhibit four and pick out the things that are effectively middle distillate. Aviation, I think you have it at plus 4 million barrels a day. That's all middle distillate. Marine, plus 1, that's middle distillate. Road, buses and trucks are 3 million barrels a day, all middle distillate.
In total, there's 8 million barrels a day of middle distillate demand, in this. At the moment, it takes about 2 barrels of crude oil to make a barrel of middle distillate in the global refining system. To make these 8 million barrels of middle distillate, we will end up refining 16 million barrels of crude. The gasoline yield on that is easily a third. If we refine 16 million barrels a day of crude, we end up making 5 million barrels a day of gasoline. There is not 5 million barrels a day of incremental gasoline demand in this outlook. You put cars at only plus 1. In this outlook, it looks like there is an inherent imbalance in the amount of middle distillate that we're going to need versus the amount of gasoline that we're going to need.
There are 2 solutions for this, of course. Either we very heavily invest in hydrocrackers, shut down FCCs, the global refining system very heavily switches away from gasoline towards distillate. In an industry that isn't growing all that much, and frankly, where the margins are rather skimpy, I doubt there'd be appetite for such large investment. The second alternative is, of course, that we have different demand patterns, and that perhaps what we currently consider to be middle distillate demand could turn out to be gasoline demand. You could perhaps talk about, I don't know, gasoline trucks. May sound a little far-fetched, but perhaps we need to go there. My first question is, how do you think this imbalance between the various parts of the barrel will be resolved within your outlook? That's my first question.
The second question that I have, which I recognize is completely different but is perhaps more a question for Patrick. If the outlook is 10 million barrels a day of demand growth over the next 25 years, that's 400,000 barrels a day a year. At the moment, if you look at the industry, both operators and service contractors, we have the ability to develop about 3x that every year. We could easily grow oil demand or oil supply at 1.2 million barrels a day. In terms of our development capability, we could well have a lot of oversupply. If you look at the resource base that we have currently, plenty of resource, we can also develop resource at a much faster rate than 400,000 barrels a day. It looks that both resource and capability to develop resource could well be in oversupply.
If you then think about who is going to capture the economic rent, you could either foresee a scenario where resource-holding countries chase the ability of operators like yourself for your capability to get their oil out of the ground. Alternatively, you could envision a scenario where operators are actually chasing the countries that own this stuff so they can apply their trade. In that tension, where do you think the economic rent will fall in the future if we end up in this scenario? Those are my two questions.
I leave you the first one. Everybody wait first for you. I'm sure the model is fine, but you have to explain to Ladislas.
I have to say that the way we've ran the model is really on primary oil demand, at that stage, it's not been taken into account the refinery aspect of it. It's really moving for the big picture and saying, "How much oil do really I need in order assuming that you'll get there depending on the different slates that you will use afterwards." It's really on the oil aspect. Probably we'll have to refine, with no joke, we'll have to refine the analysis in that regard.
The second question. You are right that this is what Total is doing. We are chasing the producing countries where we find low-cost oil. It's why we have been quite aggressive to take all the position in the Middle East. It's why I prefer to have long-term oil in Abu Dhabi than in other countries, than in Canada, for example. That's clear, your scenario is right. If you follow your scenario, we don't have to worry too much about the cost of the industry, huh? Come back to this morning in terms of capital efficiency of the industry. It's true that I'm Honestly, my strong belief is that all that is, to be honest, it's very com-- this world of two degree, we don't see it at all for the time being.
By the way, in the IEA scenario, when you look at it, there is like that, and then there is a huge drop. You don't know what is happening somewhere. I think this is where we need to keep both aspects in our hands. We need not to be radical. You are right that at the end, the power will shift to the producing countries with the lowest cost of oil. That's clear. It's why we need to keep a position today rather than before, because it's better to negotiate today with them than tomorrow. That I agree. We take that conclusion when I speak low break-even oil, this is we need to look at and to chase it, and we need to take the positions today and not to wait.
If we have spent EUR 3.5 billion to acquire the positions, the concession in Abu Dhabi, it's perfectly because of that. We have the position for 40 years. The point. Of course, obviously, these countries, they know that they have the rents in their hand, the share of rent is different, but you protect your portfolio for the future. Question is that for us, we don't have so many opportunities to take very long term oil, in fact. We don't have so many countries offering that. For the time being Saudi Arabia, we did not manage to convince to give us access even if I'm going to Riyadh regularly. Okay.
Okay, the next question is going to be Christopher Kuplent and then followed by Oswald Clint down the front.
Thank you. Ladislas, you starting your analysis from 2015 and 92.5 million barrels per day. You add 10 million barrels per day, and we're not far away from that today. It looks like we're going to be there in two years' time at current rates. I wonder whether, and I appreciate this, we're dealing with the realm of uncertainties, but I wonder whether you can share with us how you expect the progression into the late 2020s, for example. Do you see an early plateau, or do you see a continued strong increase? And then-
Increase
at what stage, and at what height do you see a peak before we go back to your 2040 number? Thank you.
All right. First, I want to make clear that the 92.5 excludes biofuels and refinery gains. We need to have consistent figures actually when we compare to make sure that the definitions are about the same. Regarding the progression, we do see actually an increase which is flattening at the end of the period, we hardly really see a strong peak rather than a plateau with growth actually being reduced as time goes on.
No, your question is good. Reality is that at the pace of growth today, we are exiting out of any of this scenario. Something should happen somewhere, I don't know when, which will reverse the course. This is the main difficulty. That's true, and scientists are right to try to say there is an urgency to act. The world today, in fact, the reality is that we grow oil demand by 1.3, 1.5, because the price is low, because emerging countries are willing to develop their economy, whatever the consequence are. That's true. Today you have a trend which is not in line with any of the obvious scenario. We cannot hide it. What could be the reverse? What will be the element of reversing? In FC, I see 2 categories of countries.
We have OECD countries where you can find that the policies will be strong enough, like in Europe, that there will be political willingness. We can reverse it, frankly, to see that in most of the emerging economies, which are driving the growth for oil. We should not make a mistake. There is no growth for oil demand in OECD. It's not true. The question then for OECD, do we shift quickly enough to compensate the growth of the emerging economies?
This is the debate today, That's a question mark for the developed economies. It's true that there is somewhere of a contradiction. Again, if you observe quick, as you have done it, I'm sure, the IEA scenario, you see suddenly a sort of break of curve. There is no real explanation. It's difficult to know when. This question, which is a nice quiz in all the conferences, is for me. It's a quiz that's very difficult to answer.
Can maybe just add one thing, which is that this scenario we're showing is already aggressive on EV penetration. Of course, today EV penetration is very low. Just remember that. It's one of the assumptions, that there will be high EV penetration coming up.
Thank you. Just 2 questions, really focusing on the oil demand side and an upside risk and a downside risk. Patrick talked about being an insider with Saft and understanding batteries and storage around renewables. You also have a lot of history with methanol and coal to olefins. You have a 2 million barrel per day reduction in oil demand because of coal and methanol to olefins. I know you did this in the last decade. Total has quite some history with coal to chemicals. Is this using that knowledge?
No coal.
Do you think coal to chemicals works or-
Yeah
It's going to progress?
When I became CEO, my first decision was to exit all this mess.
Well, that's right. Why-
I went to China during the world. The people in the car told me, "You need to advocate for coal to chemicals." By the way, I was in coal to chemicals before. I told them, "Okay." Let's be clear. All that is nice. It's just emitting 5 million tons of CO2 per year to make 1 million tons of polymers. That was the ratio. Honestly, this was not responsible. By the way, the economics were tough. Honestly, coal to chemicals, it's a route. You have to absolutely combine it with CCUS. Does not exist. When you speak about China, to reinject CO2, you cannot find the place. We stopped it. Yes, we had a journey, but we decided that it was making sense. It was an economic driver, which was low feedstock coal in China. It's low feedstock, advantage feedstock.
There was just a drawback. If you put in the math $30 per ton, you just don't do it. That was the reality. Methanol to olefin, which we developed the technology in Feluy. It was interesting when the price of oil was at $100 per barrel, when the price of gas in the U.S. was at $8 per million BTU. In the meantime, something happens, which was just a shift of the gas in the U.S. to $3. Ethane is at $3 or $4. Unfortunately, this technology is more expensive, MTO, than simple cracker. When you make a cracker on ethane, it's more reliable. You don't obtain exactly the same products at the end. I know that some chemical, big, large companies have tried to invest, but they are going slowly. It's just a problem of what is the most competitive technologies.
We have it. I don't say that never we'll do it, but to take the decision today to invest in MTO, and we studied that very seriously as an alternative for our ethane cracker. At the end of the day, the ethane cracker was more interesting.
Sorry, the other question was, you mentioned that electric buses, you've now gone to 50% electric buses, and that's a change from this time last year. Something happened. You incorporated it. I remember BP last year saying plastic straws was a reduction in their chemical demand assumption. Each year, there's another thing that happens where you're changing the numbers. My question is, just how much government policy meetings and interaction you're having, and how much does that increase so that you're on top of future political and policy changes?
Let's be clear. Policies are extremely important in the evolution of what's going to happen, so we have to take that into account. That's definitely significant. For heavy duty vehicles, we had, in the first turn about 18 months ago, assumed that almost it was no switch to EV for this segment of the market. We realized that actually, because we learn and we look outside at what's going on, that probably you have, of course, buses, you have urban delivery trucks that are going to move faster than what we had anticipated, probably.
You know, I think there is.
Paul
Today you assist return to something very new for Total. Five years ago, we were only making exercise on the supply side. We decided in 2015, no, we need to look at demand. I told to my colleagues, I want to hear about demand in this company. All what is happening around us, demand is just fundamental. We can stack all the supply from all the country one by one, and we were doing that exercise every year, every two years with E&P, and we say, "No, I want to see the demand and better understand." We opened our mindset.
We also, I will tell you on these electric cars, electricity, I invited to the board of director a CEO of a car manufacturing. We had a session with our executive committee. He told us frankly, "I'm convinced that all the cities, the big cities of the OECD world will be plenty of electricity. Forget about all the" It obliged us to think about it and to listen, to discuss with people, to open our mind. I think it's a very important exercise that our company, not because we are producers, but we are. Our production and our choice of decision strategically must be also driven by better understanding the demand. This is moving very quickly. All the buses will be electric, I think, in Paris in three years, four years. All Chinese, by the way. They are the most efficient. It's moving very quickly.
You need to change your mind, in particular on trucks. Electric trucks could take part of it, in particular light trucks. We can see some evolution of this technology is going quickly. It's a world which is changing very quickly. For the car manufacturing companies, it's even more adequate for us, I think. We have to understand and to be in the contact with them and to tell this is true, that we are trying to listen. Not only in Europe or in our continent, but also to listen to what is happening in the other part of the world, because the visions is not exactly the same. There is an evolution, that's true. You mentioned about petrochemicals.
That's true that two years ago, three years ago, all the oil and gas company, we want to do petrochemicals. There is a huge growth, petrochemicals. That's true also that I'm convinced that part of this growth will be taken by recycling.
Part of it will not be virgin oil or virgin gas. We have to introduce that in the models. It's more complex because there you are obliged to take plenty of assumption because, in fact, it's technologies which today are a very early stage. I think it's very important that we understand better the demand if we want to establish a strategy.
Alastair Syme, Citi. Two questions, one for Helle. If you look at your models on learning rates in solar and storage, do you think the combination becomes competitive with base load generation gas and coal by 2040? Is that economically viable?
It depends on which country, in fact.
I will tell you, in Australia, Helle, will take the floor, what I observe, it depends, frankly, on the price of electricity in each country, which are very different. Helle, you want to elaborate?
No. It's a good point first that electricity markets are entirely local, there are all kinds of specificities to local markets, it's hard to give an overall answer. Number 2, the Rupture Scenario we showed is a kind of top-down assumption embedded in there, which is the answer is yes. Cheap mass storage of power certainly changes the game, that's what we have taken as an assumption in the Rupture Scenario. In the Momentum Scenario, we're improving, we are not making this discontinuity in terms of availability, affordability, and safety. You know that within Saft, we are working both on ESS based on today's technology, Saft is investing also in next-gen technology called solid-state, which
We have on the ground experience. We have convinced Momar that we need to solarize our retail stations around the world. We enter into a huge program. 5,000 retail station will be just solarized and governed. We just recently, and I think maybe it's something we could share with you, it could be interesting. It's maybe microeconomic, it gives a right idea. We just went through these feedback from the teams, going through all the countries and looking to the profitability of this decision, which was a sort of consistent decision, we've, "Okay, let's do it." By the way, it was a way to support SunPower panels, Momar contributed to our investment in SunPower. I can tell you in combination of solar and some batteries in Africa, in most of the countries today, it's profitable.
You are above 20% rate of return. It works, even if it's expensive. When you come to France, which benefits from the best or one of the lowest power electricity price, it doesn't work at all. In fact, there Momar is subsidizing Philippe and SunPower. That's interesting. It depends really of what is the cost today of providing electricity.
Yeah.
For example, in Australia, I understand that the situation is quite expensive to provide electricity.
Combination, it works without a lot of subsidies.
The same applies to these non-connected areas like islands, where Saft has already today deployed storage in connection with either wind or solar farms. It works because the power prices are very expensive. They can pay, so to speak, for that kind of generation. Again, it's a sum of individual and local conditions.
My follow-up, Patrick, was just this morning you mentioned, when you talked about the project sanctions, that not all the LNG projects meet a 15% hurdle rate. How do you think about, in a Rupture scenario, what that could do to gas pricing and whether that would further impact on those returns?
Rupture scenario gas. We still have a stable demand in the Rupture scenario by 2040. Yeah?
It's a little lower than in the Momentum. There is still room for gas.
Which is a little different because when we see what is a share of LNG in the natural gas market. LNG today is only 15% of the world gas market.
10%, will go to a little less than 20.
15. You can have a growth of LNG and accepting without having a question of domestic gas.
Yeah.
The gas market is split into different worlds, in fact. I'm not afraid of that. By the way, we are prudent. We take an assumption. The $50 per barrel is equivalent to us to something like, in Europe, EUR 5.50, I think, and in Asia, EUR 7 or something like that.
Yeah.
Our gas assumptions are quite prudent, in fact, when we sanction projects. This is, by the way, for me, one of the consequence of all these studies. Let's be prudent about the assumptions we take.
Our next question here is Carlotta from Church Commissioners for England.
Good afternoon. Carlotta, Church Commissioners for England. I have two questions. Linking with the presentation this morning about some of the future sanctionable projects, a lot of them appear as joint ventures and partnerships. Linking with the presentation this afternoon, one of the issues of great concern to the Church Commissioners for England investing bodies and other investors is the capture of ESG risks, and opportunities associated, especially with the non-operated joint ventures. My question is, how do the non-operated joint ventures feature in the scenarios and projections that you have presented this afternoon? The second question is more for Helle, I believe, on the outlook on LNG in Southeast Asia. What level of additional infrastructure investments may be needed in some of those countries, especially India, to displace faster the coal-fired power plants with gas?
Do you see the political willingness in those countries to create the necessary triggers for that development?
The non-operated ventures. The first decision to take when we decide to partner with a company is do we accept that operator? Does it follow our standards or not? That's fundamental for me, and we trust the operator. The second step is when we are in an operation operated by another company, our duty is to influence them as much as we can so that development will be fit with our standards. Generally, I would say Total is partnering with quite big partners. It's rare that we go with small companies because also we are speaking about large projects. Large projects require investment funds, quite large capital expenditures. When you partner with smaller companies, you have issues about financing the projects everything is delayed.
I would say for us, my answer to you will be that it's also part of why we participate to all these collective actions. I consider that it's in our interest, it's my interest. If I dedicate some time with my OGCI colleagues, it's also that my interest is to embark most of the industry in the same position that we have. It's working. You would be amazed we participate in these meetings where collectively we become smarter together and we engage. I think the answer to you will be that it's of course what we do each project, but it's also to be proactive so that in our industry, we share the same standard.
For example, methane, the fact that 13 companies or 14 companies have signed that commitment, for me, it's a strong progress because if we are alone on our side, we're not able to solve the global problem. That's the way I would answer to you.
Sorry. The question was about whether the non-operated joint ventures were included in the projections and targets, et cetera, that you are disclosing.
They are in the ambition on Scope 3. On Scope 1 and 2, no, because it's operated, the perimeter is clear. They are in the ambition of Scope 3 as soon as we take care of our share of the products.
Yeah.
If we take our share of the products and we are selling them all ourselves, all the sales which are earned by TotalEnergies are included in the scope of the ambition that we set on the Scope 3 parameters. This is a specific answer. Sorry.
LNG in Southeast Asia. First, you mentioned an important point, which is absolutely behind the modeling work we've done in the Momentum scenario, which is to consider that there are gas countries today in Southeast Asia whose, let's say, reserves may begin to decrease severely over the next 25 years. Because they have existing gas infrastructure in place, we make the assumption that they are good candidates to import LNG because, again, it's a marginal cost for them in terms of getting the LNG because the main infrastructure is there for historical reasons. That's certainly a good driver for LNG demand in new countries that will be producing gas today. Effectively, it's not only in Southeast Asia that this may happen. It's true in some North African countries, in Latin America. On India specifically, it's a tough question.
India is certainly in our model, one of the markets where there is remaining coal because they have domestic coal, because we cannot just wipe out energy security aspects, which are very important for governments. Then I would say short term, of course, India is building LNG import terminals, and as Patrick said this morning, as we know, India has been buying more and more LNG recently. We do not assume in the model that coal will be entirely gone in India. We showed you some sensitivity on pushing out 10% residual coal, and India would be a country where that might happen. We've not done the modeling of the investment needed in India. If I then go back to short term, remember the JV we've announced with the Adani Group. There is also an LNG aspect to that story, of course. Thank you.
Thank you.
Michele.
When I look through your Rupture scenario, clearly, there are major technological breakthroughs that need to happen to achieve it. What do you think could be some of the more interesting or likely breakthroughs that we could see in the coming years? The second question on your reduction Scope 1 and 2 emission to below 40 million tons per annum by 2025. Clearly, improved efficiency in the existing operations and more efficient new operations is one way to get there. Another way to get there also would be to exit or dispose of more carbon-intensive existing operations like more mature fields, oil sands, some of the leak infrastructure in West Africa. How much does that become a part of achieving this target?
The target will be achieved. You identify there are many ways. One you mentioned is clear, and it's also linked to the zero flaring. It's also linked to the global strategy of the company.
Again, I don't want to lose any value on any of my assets. The target will be achieved. If we put that on the table, it's because we are totally committed, and we see the ways and to achieve it. That's part of what we could have to do. If we do it's not because of the target.
We consider like economically it makes sense. Don't reverse it. Target, for me, when I began my career, it was in environmental matters. I spent five years of my life. Fundamentally, we make progress in ecology if it makes sense economically. I see no players taking decisions purely, but it's good. If it makes sense, we will have the results. We have a clear roadmap on it. I will not say more. I hate to announce sales of assets. Okay?
Okay. Our next question is just back here, and that'll also be Lydia.
Thank you. Natacha Dmitrijevic, Hermes. You just said that we make progress in ecology when it makes sense economically. Maybe you could give us some sense of the CCUS economics going forward and the 10% that you're putting in R&D and what you intend to get from that. That's the first question. Second question is that you really pointed out that natural gas makes sense if we can manage methane. You are working with your peers on that. Yet there's no disclosure. There's just objectives. We don't know what's measured, what's modeled, modelized. When can we expect some type of disclosure on that? thirdly.
You should read.
Sorry?
Read our report.
Oh, yes, I do. There's one line on it.
We have disclosed-
One line. Yeah.
we have disclosed the emission level that we reached last year.
Yes. We would need to see a little bit more.
What's modelized, what's measured.
If you don't trust us, it doesn't work.
What are you Oh, we trust that.
We are open. We know when we write a figure in a report, an official report of the company, there is a backup behind it. We are open to explain to you if we measure it.
Thank you. You've done presentation to us that were highly convincing. You never published on the back of that. It would be really helpful.
We take it.
Especially as I think you have some good practices.
The next report, we explain everything about methane measurements.
Thank you. My last question is about you mentioned the stability of the supply and the challenges around growth in a two-degree scenarios. I was wondering if in your Momentum scenarios, you took into account on the supply and the demand, the impact of global warming. For instance, Africa will be hit first and with the dire consequences on probably geopolitics, but also access to water onshore, maybe more extreme weather condition for offshore operations. Have you started to modelize the impact of a Momentum scenario on your business?
No, we didn't do it, I think the world should do it. Today, in fact, we are more in the Momentum than in a Rupture scenario. I think there is something which should be done by policymakers, which is to begin to really evaluate the consequence of a three-degree world and what should we do for adaptation. We didn't do it. For clear, we are not equipped enough to do that in Total. We don't know everything. We can participate to studies which are promoting, and we participate with various think tanks, and we finance some issues, studies, we didn't do it. Again, I will tell you, I hope we will be in the Momentum scenario. We are not there today. The CCUS, it's a very interesting question. Again, whatever we think, we need to develop this technology.
This is why, by the way, we also need to have a carbon price. Because there is this chicken and egg, and what is the level of price which prevent the development of technologies. Of course, for the time being, we need some subsidies to be able to develop it. By the way, we subsidize also the renewables. I don't see why we could not subsidize these type of technologies. We are more in the range of EUR 60, EUR 80 a ton. There is ways to progress. By the way, I think, on the long term, there is not only CCS, there is a U, which is use of CO2. Of course, it's a molecule which is very difficult to change, to use.
We have engaged with Stanford, for example, in many research on what could be done with the CO2, because maybe the transformation of the use as materials has more future than just storages, which have, I think, a limitation somewhere in the world. Even if, look, if two countries like Norway and the U.K. are promoting projects today in which we participate, it's because you can think, and we are speaking about as we are becoming strong in Denmark, not only because of Helle, but because we love Denmark. We can think about the future of the North Sea. Once all these fields will be depleted, why not using these reservoirs to reinject some CO2 in all these fields? There is potential industry, a potential activity business.
It's not underground because I think that the storage of CO2 under the ground of people in the city will be super difficult. In areas where, in fact, it was all the reservoirs, it could be done. Of course, we have to ensure that the closure will be firm, et cetera. It's why we are seriously embarking on it, because again, if we don't have this technology, there is no way to reach in any way the targets that we would like the mankind to reach. That's why we have decided to invest R&D, and my CTO would be happy to meet you, I think, and you could exchange with her and the head of the program of R&D, and we are engaging around the world in many programs.
Also in projects in order to develop business models, because at the end, we need to have a pragmatic business model. This is where the Norwegian and the U.K. projects have an interest.
Yeah.
That's commitment. We put some CapEx in it.
Next question is Lydia, and then followed by Irene.
Thank you. It's Lydia Rainforth from Barclays here. Two questions, if I could. The first one is on carbon pricing. I understand what price you put into it, but what happens if you don't have carbon pricing? Is there a risk in terms of gas demand sensitivities that the world ends up going down a route that is coal plus renewables and gas gets left out as it is more expensive without the carbon pricing? The second question is just to come back to the Total strategy and the growth discussions that we were having this morning and that idea of more than 2% growth out to 2025. It looks from this side that's more in line with the Momentum strategy than the other strategy. I was wondering if you can comment around whether that's the correct interpretation.
The carbon pricing. What is it you want now?
On carbon pricing, Lydia, I think it's not just a question of carbon pricing. If you take the case of China, as we discussed many times, it's a question of air quality and so on. Going for renewables on one side and coal on the other side, we think is in any case, not sustainable long term. Of course, carbon pricing helps that in the short term. In our view, you know that we believe gas has intrinsic qualities as a complement to renewables for the intermittence, and then is a flexible, easy to pilot kind of energy. I think the case of China is a good example to illustrate that it goes far beyond carbon pricing.
Yeah. carbon pricing exists in many jurisdictions today, in many countries, and even in Europe. At EUR 20 per ton, the U.K. have shifted from coal to gas, you don't need a very high tax. What happens if there is nothing? There is, by the way. Again, a world of coal and renewables, I'm not sure this is the best way. It doesn't reach at all any target of CO2. It's true that honestly, in what we presented, and you put a finger, Lydia, on something which is for me one of the main challenge, which is, will we be able really to replace coal per gas? Why? Because coal is super cheap. The two larger consumer of energy in the world were China and India, have plenty of coal. Even India has only coal natural resource.
In any country, what I observed is that country security of supplies is beginning by using our own resource. That's a huge challenge, and it's why seeing the penetration of energy and natural gas in India is a huge challenge because we have to compete with domestic coal, which is employing millions of workers. When I met Prime Minister Modi, of course, this debate is super difficult. When they run a country like that, who want to have an economic growth and emerge and putting people out of poverty. That, for me, something which is that's back to our duty, and our duty is to lower the cost of bringing natural gas as much as we can. We are back to our industry, our manufacturing duty.
It's why I'm a strong advocacy of having large portfolio, being able to optimize all these logistics of LNG tankers and all that between. When I see companies like Glencore, Vitol, et cetera, coming to that market, that's good news because the more we will be players there, the more we will be able probably to optimize our logistics by even exchanging tankers. We don't do that today, why are we not able to do that today? There is something fundamental, which is to drive the costs down. Otherwise, all what we said, I'm afraid, will be not at three but at four. It's even more dramatic than the Momentum. Momentum is not given at all. It suppose a huge effort, in particular this one. That was my answer.
Okay, next question is Irene.
Thank you. To perform the scenario analysis.
Sorry, there was a second question by Lydia I was forgetting. I knew. Is it consistent to grow by two and Momentum? It's perfectly consistent. Again, it's a question of choice of oil that I'm selecting in my portfolio. It is consistent, providing by my growth is, again, I would say immune against something which would change in the market. It's why I'm insisting on low break-even oil. You should not be happy with us if we begin to tell you that I will reinvest in oil sales. I think your shareholders, my shareholders should ask to change the CEO because that would be absolutely inconsistent.
I will not do it. I want to keep my job. Sorry, I interrupt you. Sorry, Irene. Sorry.
Thank you.
I didn't want to.
To perform your scenario analysis, obviously by definition, you have to assume no great technological breakthrough. Now, I appreciate it's impossible to answer a hypothetical question, but if we were to assume that sometime, I don't know, tomorrow, next month, a real black swan event happens somewhere in some university, there is a big technological breakthrough, and of course, that we come to recognize it as such because I don't think Nokia in 2007 saw the iPhone for what it was. If that were to happen, from a risk and strategy perspective, does Total just continue to do what it's doing, reduce costs, improve resilience? Or is there, Patrick, some red button somewhere that you press to change something quite quickly?
I will call Patrick de la Chevardière to help me. Red button. I think one of the answer to you for me is, by the way, the fact that we try to diversify the company in being not only in oil and gas, but also in the electricity business, is a way to tackle this type of risks. If we are more diversified, we can maybe follow some technology trends in a better way, if I follow your advice. Otherwise, in the energy business, frankly, we didn't see. There are some technological breakthrough. One of them, by the way, was all the Shell technology, which we observe it, and it changed the full dynamic of the supply in our industry in 10 years. It's possible.
That means that you need to try to open your eyes, to be aware, and to try to understand and to react. I don't have a magic red button. That means that a company like Total, we must listen to what is happening around us. For example, your question on electric bus was very interesting. You know why we did not have any electric bus last time? Because our colleagues wanted to sell oil, so we didn't want to look to electric bus. That's all. It's part of the journey. We have to be sure at the top of a company like Total that we are aware of what is happening not only in our industry but in around.
We spend three days in Las Vegas and Boston, MIT, beginning of the year to open our minds and to listen to what is happening, not in oil and gas, I can tell you, in other fields, in order to say, "Ah, maybe there." For example, it's clear that the 5G technologies and all this which will make Internet of Things a reality with connecting machines is a clear field on which we must invest quickly. That was not too clear to us, but we said out after three days, "Okay, now we need to really have a clear program and a way forward and not just waiting for that." It's out of our industry, which is a difficulty. It's part of what the leaders of the company must incentivize the people in the group to do it and listen and open their eyes.
Okay. I think there were two last hands. Time for just the last two questions. Henry, and then also over here.
Hi, it's Henry Tarr from Berenberg. I guess looking at these ambitions and targets, how much do you currently have within the portfolio already when I think about Saft and SunPower, et cetera, to reach these portfolios looking to 2030 and beyond? How much do you think you might yet still need to bring into the company?
We have 1/3 . We need to bring 2/3 . We have 10 years or 12 years. It's feasible. It's feasible.
Okay, this will be last question before Patrick closes.
Hi. Alex Jason from DNCA. My first question would be, you said your Momentum and vectors scenarios were based on the IEA, NPS, and SDS. Could you explain if there were differences on certain aspect, why there were those divergence? The second question would be, on your renewable and power business, EUR 1.5 billion-EUR 2 billion is a lot to allocate. Can you explain a little bit, I'm guessing it's not only a matter of reaching a certain level of IRR. Can you explain a little bit the broader approach and strategy approach you are making investment in this business?
I can talk about-
This one
the scenario modeling. I think there is a mistake. The scenarios are not based on the IEA new policies or sustainable development scenarios. It's in-house modeling, bottom up, country by country, sector by sector. What we show when we've wrap up is the CO2 emission level that would be associated with the two scenarios, and there we benchmark with the IEA scenarios. This is internal modeling work that we've done with all our teams, and we just use the IEA as a reference. We always use it. We've done that for many years. In terms of CO2 emissions, we benchmark, and then you can compare the data you now have in your booklets. You can compare the energy mix, the primary energy mix that comes out of our scenarios.
You can compare them with all the other scenarios that are available on the market, I would say.
Could you give the main takeaways and the main difference that you've identified?
That's going to be a little long because it's really completely different modeling work. I think it's hard to do that online.
As an example, the IEA doesn't foresee more than 2 billion cars by 2040 by far. Penetration of electric vehicles that we have taken into account is way more aggressive than the scenarios of IEA in the NPS scenario, for instance. I suggest we could use a dialogue if you are interested because we didn't run the models ourselves and to be sure. We are doing a lot of things in the company, but not that. We think if you are interested, it would be good to have the dialogue. By the way, it's a model. It's the first time we decided to make it public, so we'll be improvement on it and we are taking all the questions also are, for me, a way to improve and to come back to you and to revise because all that is moving quickly.
The second point, how do we spend the money? We spend the money by looking to investment. This year, in fact, in Gas, Renewables & Power, the downstream power we spent in fact EUR 3 billion. Acquisition of Direct Energie plus some CCGTs. We were above the two and you have to understand my guidance as an average of the next five years, more than year by year. It's because as we need to do some things inorganically and we want to acquire position at a sizable size, we need to take some quite big bet in fact. That's part of the answer to you. How do we evaluate it? We evaluate it, when we M&A in this field, we do it with the same rules in terms of returns that what we do with our oil and gas business.
I guess my question was more about the strategic approach because obviously Renewables & Power it's a lot of different, like it's retail, it's power generation.
How, like the strategy in-
The strategy.
Yeah, okay. The strategy is, again, I describe it, sorry about this morning. It's been integrated along the chain. To be producer, low carbon electricity producer, either from natural gas or from renewables, mostly from renewables. To be also marketer, distributor, means supplying natural gas and power to power also very low carbon electricity power to end customers. Also in the middle to trade and supply all these low carbon electricity. The strategy is to be along the value chain. If it is your point. You will see us moving from production elements onto also some downstream businesses. Like we do in oil and in natural gas, in fact.
Okay, well in the interest of time, we'll be closing it there. Did you want any final closing comments, Patrick, or?
No. I think thank you for your attendance today. Okay, this session this afternoon was more futuristic and it's more in our way to work September. We didn't want to wait September. We've done it today and I think it was also important to us to reaffirm what we want to do on climate. There are many debates with investors, with some of the stakeholders, which are good debates because it's part of course we learn and we try to be progressive and proactive. Thank you for the attendance. I've seen that there are as many questions this afternoon as this morning. I noticed this morning, but finally, so questions were not too difficult to answer because everything is clear in Total. A clearer in Total than the future of the energy market for sure.
Thank you for your attendance and I think we'll have the opportunity to come back to you before summertime with Patrick. Thank you to all of you and see you soon.