Good morning. Good everybody. I'm happy to be here with you and to welcome you today in this beautiful room. Yes, it's the first time that we come to make the presentation to London. I had the chance to celebrate the 20th anniversary of our listings in New York by ringing the bell early in the year. I think if we came to New York, it's a recognition to the fact that our U.S. investors are in fact the largest group among our investors, representing 32%-33% of the capital of TotalEnergies. Followed by the French investor, 25%, the U.K. 13%, European investors representing around 55%-60% of the capital of the company. I'm not alone today. We are here for a long day and a full day of presentations.
I am, of course, with our CFO, Patrick de La Chevardière, as you know very well, but also with other leaders of the company, executive committee members. Because we will make this morning a global presentation, Patrick and myself, followed by a Q&A session. This afternoon we'll have some focus on six topics which we consider the core of the strategy of the company. It will be Deepwater by Arnaud Breuillac, our President, E&P. Arnaud is there. Laurent Vivier, our President Gas, will speak about LNG, which of course is a big activity for the company. Then we'll have, on the downstream, Bernard Pinatel for petrochemical strategy. Momar Nguer, of course, for the future of Marketing & Services. Momar is there fourth row.
Then, to speak about the future, we'll have Marie-Noëlle Semeria, who is our Chief Technology Officer, for speaking about technology and of it will contribute to the future of strategy. Philippe Sauquet will end with a focus on the climate trajectory of the company, which is a way to come back on the whole strategy of the company. We have a lot of time. We have planned some Q&A this morning, and after every two sessions this afternoon, we'll have a chance to ask questions. We have also the lunch. For those who can stay with us, we have also planned to have a dinner with you, which will give opportunities to have many great exchanges and better explanations maybe, but going deeper than the presentation themselves. Starting with the strategy. You will have no surprise today, just to be clear.
We don't change the strategy of a company like TotalEnergies every quarter or every semester. I think it's well established. I would say the cornerstone of the strategy for me is the word deliver. You will see that along these presentations, the words consistently delivering. I will come back several times because I think we insisted for the last three years that we need to be excellent on what we control, and it's a condition precedent to be able to build the future of the company. I think we can say that we have a track record in the company of reliable execution. It's very important because it is the basis on which we will build the future of the company. That's the first important message. It will be deliver and continuing to deliver with thanks to this good track record.
strategy as if I try to characterize it, is another word which is important, integration. Integration of the full value chain. We have demonstrated very again the last three years that it's important in the oil value chain to be not only along the full value chain and that downstream is giving a strong contribution to cash flows of the company. Of course, it's moving with the price of oil, but it's not moving, in fact, as we will see, because we managed to maintain a good track record on the downstream. Integration is a key word. It's also the one on which we build the strategy for the gas value chain, as you will see it, in particular the LNG, which will go even downstream to power and to go along the full value chain.
The other element on which we build our strategy is, of course, the anticipated market trends. They are moving in the energy field, it's not an easy exercise, but when you think to the future of the company, we want, of course, to position the group on what will be the growing market, energy market. This, of course, is linked to the evolution of this trend market because of technology, because of environmental challenges. We'll come back on it. To execute this strategy, of course, we believe that's written there. We need to act. We need to act by being able to manage our portfolio and taking benefit on the low cycle to manage the portfolio countercyclically. We'll come back on this to demonstrate to you how we can create value for our shareholders and profitability by this portfolio management.
Of course also by, I would say, playing to our strengths to build the future of the company. We will describe you a group, the evolution strategy today, which is of course mainly an oil and gas company, we are proud to produce oil and gas. We will add, as it's clearer probably after some acquisition we've done in the recent years, how we want to build a low-carbon electricity business, and we'll come back on it. That's today the program that we will develop in front of you. On one side, have we consistently deliver the objective we set to ourselves for the benefit of creating increasing shareholder value, and then the strategy of an oil and gas, a responsible oil and gas and low-carbon electricity company. Safety. You've seen this movie.
I like the movie because it pays tribute to all the men and women of the company, which are the core of all what I said. When we speak about consistently delivering, it's not only figures. This is a lot of work of all the men and women in the group among 130 countries where we operate. Safety is not only, of course, a question of respect for all the human people who are working in the company. It's more than that. It's at the core of our consistently delivering, a way to consistently deliver what we want to deliver. It's a cornerstone of the operational efficiency.
We are, as you know, and it's clear in Total, the fact that we have been able to improve our records in safety as a direct impact is directly linked to the better availability of the plants, to the better maintenance of the plants. All that is linked. The way we work on safety is an intuitive approach, which is described on the right side of the slide, which is we learn to improve. We learn to improve. We learn from near misses. We, of course, learn from accidents in order to improve together and to establish a new baseline and to start again with iterative approach. What we've done in the last three years is also to have a unified approach of HSE through the whole group.
Today we have a single group-wide HSE team at the top of the company, with the idea that we need to take best practices among all these various activities that we have in the group. This unified approach of the group is also something symbolic of the way we have, I would say, tried to simplify and to better take value of being 100,000 people around the world, many activities, but to extract, I would say, maximum value of being together. I will move then to three slides about the markets. As I told you, it's very important when we speak about strategy to see how we can see the evolution of the markets. I will not forecast any price of oil because it will be wrong.
What is clear is that when we look to the oil market, we are facing today some supportive elements of the oil markets. Last year when I made this presentation, I think we were around $52 per barrel, today at $80. Of course, the context is not the same. Probably easier for me to speak in front of you. Let's be clear, we don't believe at all that anything is given to the industry. Markets will remain volatile on the long-term. Having said that is clear that the demand is strong, is still strong. IEA is speaking about +1.4, 1.5 million barrel oil per day this year and anticipate for the next five years a demand, higher growth of demand, yearly growth of demand higher than 1 million barrel oil per day. Of course, the prices of oil could influence negatively this demand.
We see in some emerging countries that subsidies have to be increased. This could damage the demand if the price continue to grow. We see also we could anticipate also on the demand some impacts of, I would say, the trade wars, which could damage the global economy growth. Having said that, the demand for oil is continuing to grow at a quick pace. This is an important element which supports the price today. On the short-term as well, we have some on the supply side, we have seen that OPEC and Russia are aligned again, and they are taking back the leadership in the market quite efficiently. At the same time, the U.S. shale oil, which was supposed and people were thinking to flow into the market, is facing some bottlenecks on infrastructures. This will not last, but at least for one year.
I think probably next year at the same time, the infrastructures will be built. Until then, this production cannot flow as easily in the market that it was planned. Since we met last year, of course, some political decisions have been taken by the U.S. as well towards Iran, which has a direct impact on the exports of Iran and it seems that a reduction of exports could be even more stringent than what was anticipated. We have also in this world some countries like Libya and Venezuela, where the production has some hiccups in Venezuela. Unfortunately, it's a continuous decline in production that we can face. I would say on the supportive side of the oil price, you have on, if I think to, it's also the level of investments.
The last three years, obviously, most of the companies around the world have been obliged to be prudent. There were not many sanctions of new oil projects. We see that the companies are still prudent for what they announced for what they do in 2018, 2019. This obviously has some impacts on the oil production capacity for the next three, four years, which will support the price. Having said that, we've seen a very volatile market. Again, $42 in August 2017, more than $80 today for the Brent. It's almost multiplication by two in one year. It's better to be in that position. We could face some downtime in the future.
For Total, that means that we continue to strongly believe that the best position into this type of commodity market is to look to our breakeven, and to be disciplined, and to select the projects more on the breakeven basis rather than on the betting on high prices. The gas market, of course, has changed quite a vision. Gas market in one year has also changed quite a lot, supported by a strong demand coming from China primarily and other Asian countries like Korea. One year ago, the market was anticipating some oversupply because of the wave of Australian projects coming into production. This year, in fact, all that has changed. Picture has changed because of the Chinese policy, which has been reaffirmed at the top of the country, with the objective of China to grow the share of the gas in its energy mix from 6% to 15%.
This would represent big amounts of LNG to be imported in China. Of course, gas production in China could grow, you have some Central Asia and Russian gas pipelines as well, but they will need more LNG. By the way, the LNG demand in the first half of 2018 has increased by 50% in China compared to the first half of 2017. This is a large growth. We anticipate at least 5% per year for the next 15 years. This explain, of course, why Total has positioned itself strongly into that market. When you look to the supply side, I would say there is room for new projects, even not only room. The market will need new projects by 2025 and more than 2030. That, of course, is supportive of a strong strategy in the LNG business.
The last slide that we introduced for the first time this year on the market is electricity demand. Why? Because, of course, when you speak about natural gas and our strategy is quite driven by natural gas, at the end, this natural gas is used in particular to provide electricity. The electricity demand in any scenarios, we are not expert of electricity, but we consider all the IEA scenarios will increase by at least 50% in 25 years, more than 2% per year. More importantly for us is that when you look to the graph, what is impressive is that in all these scenarios, the origin of this electricity will be mainly low carbon electricity, either natural gas or renewables. This will double the share of natural gas and renewable will double, which represent a big increase and big growth.
Of course, for energy companies, oil and gas companies, we have no choice than to face that, to integrate climate change into our long-term strategy. This electricity demand growth is representing an opportunity to further expand our integrated model into this evolving low carbon energy market. We will come back on it, but figures of growth, this is clearly the highest growth in the energy market, which is offered by electricity. I will give the floor to Patrick, which will comment how the teams of Total manage to consistently deliver on the objective we set to themselves.
Good morning, everyone. This morning, I will start by reviewing our recent performance and try and highlight some of our key objectives. Our track record of consistent delivery since 2014 differentiate us from our peers. We set ambitious objectives, we achieve them. As a result, we outperform our peers in the market. This track record of success is built on a foundation of disciplined management. In the company, there is accountability, we demand safety, cost, execution, and delivery. Let's have a look to the numbers. Here are four of the main objective we set. The bar shows the performances. The black line shows the objective and the initial targets. In every case, we have consistently delivered. To manage a company, we concentrate mainly on managing the cash flow. This has been a necessity since 2014. Over the three-year period, we increased production by 20%.
We improved margin by cutting OpEx from close to EUR 10 per BOE in 2014 to EUR 5.4 per BOE in 2017. We manage organic CapEx down by more than EUR 8 billion a year. We announced asset sales of EUR 13 billion. This performance demonstrates discipline management through the organization. Total is known for delivering outstanding production growth. In 2017, we started up five major projects and increased production by 5% to 2.57 million barrels per day. Taking the benefit of the well-timed acquisition, plus the next wave of startups, we target best-in-class production growth of 6%-7% per year on average from 2018 to 2020. This is possible because of new projects, I will talk about next slide, which represent more than 600,000 barrels per day. Let's say about 20% of the 2020 production.
Of course, this was due to M&A over the 2015-2018 period, like new contract in Abu Dhabi, like the acquisition of Maersk Oil, and the alliance with Petrobras. Both acquisition will represent close to 700,000 barrels per day of projected 2020 production. We anticipate, and this is something we repeat every year, we anticipate a relatively low decline rate of about 3%. This is due, as you know, to the high proportion of stable, long plateau production that we enjoy in our portfolio. About 50% of it is long plateau. For the five-year period, 2017-2022, we confirm a production CAGR of 5%, and this is consistent with the growth rate of 3%-4% post-2020. Taking a closer look to the new projects. On this slide, you have in blue the projects that have started. There are seven of them.
You have, in addition, 12 more that are scheduled to start up by 2020. These new field, and this is important, these new field are accretive to our average cash flow per barrel. On the right, we compare the new startup of the average cash flow per barrel of the IOCs based on a WoodMac data. These project generate at $50. I mean, our Total project generate at $50 Brent, was the IOCs generate with a $60 per barrel Brent. In our $60 per barrel Brent base case, this project generate about $20 per BOE of cash flow. At Total, our strategy is to emphasize value over volume. We will benefit from this production growth, but it is equally important that we are improving the cash margin and profitability per barrel.
In every commodity business, there is a constant battle against inflation, and we are relentless in our cost reduction program. Compared to the 2014 base, we cut our 2017 OpEx by $3.7 billion, well above our initial target of $3.5 billion. We increased our 2018 target from $4 billion to $4.2 billion, and our 2020 target is to reduce operating cost by $5 billion across the group. I must emphasize the point that we are cutting costs while we are growing the company, which is not obvious. Upstream represents more than half of the cost reduction. Here again, you can see how important it is to add low-cost production to the portfolio. On the right, we show the target production cost per barrel, and you see that we are roughly stable at around $5.5 per BOE.
To continue to achieve our cost reduction target, we are concentrating on improving efficiency across the group, in part by consolidating shared services and implementing innovative digital solution to cut costs. There will be a presentation by Marie-Noëlle to show you those high-tech. We have an ongoing effort also to simplify our processes and our organization. Total Global Services or TGS was created to make sustainable improvement in efficiency by centralizing and consolidating shared services to the group. In 2017, TGS generated saving of about $400 million. The target is to save $1 billion by 2020. Along these same lines, we launched a group-wide program to simplify and streamline the organization. The idea behind the One Total Be Simple program is to promote efficiency within the group. One Total chairperson has been nominated in any country in comparison to one representative per branch.
The cross-segment support function has been consolidated under Total Global Services. The discipline on cost and efficiency carries through to our capital investment strategy. We confirm a CapEx in the EUR 15 billion-EUR 17 billion per year range for 2018-2020 period, so nothing new. For 2018, we narrow the target range to EUR 16 billion-EUR 17 billion earlier this year. What is new here is the reconfiguration of the business segment on the right. We have moved essentially the LNG-related natural gas-producing activities from E&P and include them in the new Integrated Gas, Renewables & Power segment, or iGRP, and you see that on the right side. For 2018-2020, capital investment split is about 55%-60% for E&P, 25% for iGRP, and 15%-20% for the Downstream, which include Marketing & Services and Refining & Chemical.
Cost inflation has not been an issue for us to this point, and we believe that there is ample availability of services to meet the needs of the industry. We don't talk about the bottleneck that we can see on the U.S. onshore activity. Based on our current project slate and cost environment, we are confident that our CapEx target to 2020 are sufficient to cover the projects that we are presenting today. A word on exploration. In late 2014, if you remember, we reevaluated our exploration strategy and began to bring some outside people. We rely on exploration as part of our resource renewal strategy, and exploration is starting to deliver. Ballymore on the left is a giant 500 million-1 billion barrel oil discovery in the deepwater Gulf of Mexico. Sururu in Brazil is a giant deepwater oil discovery.
A6 is offshore gas Myanmar that we will be able to develop through our Yadana field. Glendronach is offshore gas that is close to Edradour Glenlivet. We should begin to monetize it quickly. These discoveries are strengthening our position in key areas. On top of that, we maintain an exploration budget of EUR 1.2 billion-EUR 1.3 billion a year. We talk a lot about upstream, which is in a great shape, but you should also remind that TotalEnergies Downstream is the best-in-class company among the major. Downstream has been remarkably consistent in delivering cash flow of around EUR 7 billion per year through the cycle and despite the sale of EUR 7 billion of asset in the past three years. Optimizing Refining & Chemical is a constant and ongoing process. We are improving plant availability. We are reducing our European footprint.
In 2018, for example, we include upgrading Antwerp and debottleneck SATORP, our two largest platforms. Marketing & Services is a different type of business. The strategy there is to expand in high-potential areas. Marketing has grown their cash flow contribution by about EUR 100 million per year on average since 2014, and we expect it to be EUR 2.2 billion by 2018. Our Downstream provide a reliable stream of cash flow, EUR 7 billion per year, and generate best-in-class ROACE of more than 25%. I think this slide is quite key to understand what we have done in the company. The most impressive accomplishment I can show you is the speed and the magnitude of our progress in driving down the breakeven. By 2014, we needed a Brent well above EUR 100 per barrel to cover CapEx and dividend.
By 2017, we cut that down to about $50 per barrel, which is about where we are this year. This has been possible by maintaining a strong discipline on spend, both on CapEx and OpEx, by growing high margin upstream production. A good example is the acquisition of Maersk. A continuous contribution from our robust downstream activities. In the current environment, we are generating, obviously, a very strong cash flow. With the lower breakeven and a higher margin production, along with the new startup from our acquisition and organic, our upstream sensitivity to oil price is increasing. From $2.8 billion a year for $10 per barrel change in Brent in 2018, to $3.3 billion by 2019 for $10 change. This is a slide we design and we select very carefully the item we will show to you because we are the best everywhere on this one.
To close this section, this is a benchmark and I particularly enjoy it. We are consistently delivering on an ambitious set of objectives. Upstream continue to set the pace for production growth, the production growth will drive the increase in cash flow with the fact that we are adding accretive barrels. Downstream continues to deliver best-in-class returns. Overall profitability is improving with a return on equity above 10%. Gearing at 16% at mid-year is well within our target. That end my presentation. I will leave this slide so that you can check it carefully.
Yeah. I think Patrick has demonstrated to you how we, through disciplined management in the company, it resulted in a significant reduction of a breakeven, which is fundamental, again, because we don't control the prices, but this is what we control. This is something on which we worked hard and which will be at, again, the core of the strong foundation for building the future of the company. By doing that, we created, I think, a sustainable advantage positions within our peer group. Now I will move on, I would say, the developing more about how we can create value in the future. There will be two parts in this presentation there.
One will be how we can create additional value through the cycle, the other one will be how we can do that by playing to our strengths and growing and positioning the group on the growing markets. First, to create value for the cycles, there are two ideas on which two levels there. The first one, of course, is that when you have some cycles like the ones we experience, you have some M&A opportunities, you can capture them under the condition that you have a strong balance sheet that you are in better shape than some competitors. I will come back on it because this is what we've done. The second level is when you have cycles. Of course, when you have low cycles, you have lower costs.
This, of course, gives opportunities to sanction new projects to prepare a future base of assets in better conditions and better profitability for the futures. First about M&A. It's clear that we have been quite active. We have acquired around EUR 15 billion of assets. We sold some assets as well. When we prepared this presentation, we realized that, in fact, in the last 3 years and a half, we have moved 25% of the portfolio. We have been able to acquire 7 billion barrel of resources at less than EUR 2.5 per barrel, so a very low cost of acquisitions. The table on the right of the slide show you that these acquisitions, these M&A activities, has in fact enhanced the global value of our Upstream portfolio.
The gray column show you what is the characteristics of these barrels, which have been acquired in terms of profitability and costs. Compared to on the white column, what is the average of the E&P portfolio. You see that the ROACE of these assets at EUR 60 per barrel is above 10% compared to an average for E&P of 7%-8%. The OpEx per barrel is at EUR 4 per barrel, compared to an average which is already low of EUR 5.5. When we told you that the strategy was to develop low cost barrel, this is a proof. The second, by the way, is even more impressive on the technical cost, which means OpEx plus DD&A, which are of an average of EUR 12, EUR 13 per barrel, compared to E&P average of EUR 19.
Last but not least, which is even more important, is the organic cash breakeven is under EUR 30 per barrel compared to an average for the E&P portfolio of EUR 35. This has been, of course, we have been opportunistic to be able to capture this barrel during these low cycles. This, of course, give a base for the future, explains why today we have a competitive advantage in terms of cash per given, even our OpEx per barrel, and even in terms of profitability. Coming back on what we've done in the North Sea, and the value we can create by this type of activity when you do that at the right time. Maersk Oil acquisition is clearly accretive.
We spent EUR 7.5 billion this year in March. Of course, when we closed the deal, the acquisition, the barrel was not at EUR 50, but it was at EUR 75 per barrel, which helps. As you can see on this chart, in the next 5 years, in fact, at EUR 70 per barrel, we will get EUR 10 billion out of this acquisition which cost us EUR 7.5 billion. In fact, for the next 2 years, 2, 3 years, as one of the operation will stop in Denmark, we'll be able at EUR 70, EUR 80 per barrel, the payout of the Maersk Oil acquisition is around 3 years only. This has been opportunistic. I remind you as well that there are some synergies there that we planned initially EUR 400 million. We increased it to EUR 500 million. We are well on track in Copenhagen. Everything has been done very efficiently.
In less than four months, the new organization is put in place, including on the staff side. In the U.K. as well, we have reshaped the full organization of the U.K. subsidiary and the synergies are being delivered and there is yet more to come. This acquisition of Maersk Oil gave us also the opportunity to high-grade the portfolio of North Sea portfolio by engaging, I would say, a portfolio management activity quite intensively. In fact, Maersk Oil has brought to us some, I would say, young assets, a new base of assets, Culzean in the U.K., Johan Sverdrup in Norway, and the Tyra development in Denmark which have a technical cost around USD 20 per barrel. Compared to some existing assets, the average portfolio of TotalEnergies was at USD 25 per barrel.
Which gave us the opportunity to divest some of the high-cost assets we had, like in Norway, Martin Linge and Gina Krog. Some small discoveries recently we divested as well to OKEA. We have put on sale a package of U.K. assets, which represent 40,000 barrels per day of productions, which will be marketed in the coming months in the U.K. in order to rationalize the operation. In fact, there is another logic behind all that is as we have large to lower the breakeven, it's better to have a larger base of operation to amortize your fixed costs. This is what we have done in the U.K., where we are rationalizing our base of operation. We announced this morning that we are acquiring a share of Chevron's Danish underground concession in Denmark.
This is, of course, a good opportunity for us to increase our share on an operated asset from 31% to 43%. I think it's one of the strategies, of course, obviously, is to have larger share of participating interest on assets we operate, and this will help us to continue to drive down our breakeven. This is the type of value creation we can do from not only the acquisition per itself by doing it at the right time, but also by then managing the portfolio in order to again enhance its quality. The other part of the benefiting of the cycles, like Patrick said, is that we are facing a favorable cost environment to sanction new projects. I know that it's different here in the U.S., that we see some inflation in U.S. onshore.
On the international arena, I would say it's not true, in particular for TotalEnergies, where we have a lot of activity and projects to sanction deepwaters. Deepwater rig utilization rates is still quite low. We have a spare capacity of almost 50%. When you look to Korean yards or Chinese yards, it's even lower than 50%. I know that the service industry would love to see a more tense market, but it's not the case. In fact, we benefit from the fact that they have built large capacities have been built during the boom when the price of oil was above USD 100 a barrel and this, of course, is still there. The global, you can see on the chart, by the global decrease of capital costs between 2014 and today is around 30%. You can observe a small inflation somewhere, but it's very limited.
This means that we need to take benefit from this cost deflation to sanction new projects. In Total, I would say we are two axes for the strategy. The first one that we mentioned last year to you is that we have accumulated because we are very disciplined in the way we are allocating capital. We have accumulated in the company 1 billion barrels of short cycle resources. One of the instructions we have given when we look to the price of $70, $75 per barrel to our subsidiaries is that they can look again and sanction quickly some of these barrels. We plan to sanction around 400 million barrels of resources by end of 2019 at CapEx of lower than $7 per barrel. What are these barrels?
There are many tiebacks in field wells, in particular in West Africa, where we have in Nigeria, in Gabon, in Angola, a number of these projects. This is a good opportunity for us. It represents quite a large field. In fact, post 2020, this will be translated in additional 100,000 barrels per day of production at which we will deliver more than $30 per barrel of cash flow at $60 per barrel. The condition to be short cycled, of course, is to be able, and this is the instruction we gave them to their teams, to be able to relinquish rigs in case of a reversal in the oil price. As you can see in terms of value creation on the chart on the left side of the slide, this we will invest around $2.5 billion to mobilize these barrels.
This, at $60, $70 per barrel, will create $4 billion in the next three, four years between 2019 and 2022. This is a type of activity which is clearly helping also to enhance the profitability and the added value of the company. The second activity is large projects. We have on the chart a number of large projects. 25 projects are mentioned on this slide. Of course, it's time to sanction them. They will represent, if we are able to sanction all of them by 2020, which is the objective, more than 700,000 barrels per day of new production. We have already sanctioned six of them. They are the yellow ones. Two, four, six of them. We still have a lot of work to be done by the teams of Arnaud.
When you look to the projects, there are the characteristics, and we'll come back in the next part. Characteristics, of course, quite a lot of deep water in Africa, in Nigeria, but also in Brazil, where we have built a strong position with Iara, Lapa, and all the cities of the Mero developments. In the Gulf of Mexico, Patrick spoke about the discovery of Ballymore, but we have also other projects in North Platte. These are deep water projects. There are also some LNG projects. We'll come back on it. Arctic Two, Cameron LNG Extension, Nigeria LNG, Papua LNG. Of course, other ones like the one in Uganda, the two projects, Tilenga and Kingfisher in Uganda, which will be sanctioned first half of 2019.
These are activities which would benefit from a favorable cost environment in order to build a base of assets and of productions which will deliver some value post 2020. This was the cycle of, can be the benefits of the cycle. To present you how we want to grow to benefits from the growing markets by playing to our core strengths and building a responsible energy company. The market trends, I commented the global markets at the beginning of the presentation. When we look to how do we translate that for TotalEnergies and how do we integrate climate into our strategy by taking into account these anticipated market trends of an evolving low carbon energy world, we are looking to what is the most disruptive scenario of International Energy Agency for an oil and gas company like TotalEnergies.
We don't say that it will happen, if it happens, we have to take it into account. The good news of these scenarios is that the natural gas market will continue to grow, this explain why we are offensive, aggressive, expanding the company along the gas value chain, in particular in LNG. On the contrary, the oil market could stabilize, even decline. I don't know if it will happen because as we observe today, we still see a strong growth of demand for oil. There are some trends, in that case, it's better, this is why we focus the oil projects of the company, not only upstream, but also downstream on the low, looking to their breakeven on low breakeven oil projects.
The last part, of course, I mentioned it, is that there is a large growth in the electricity, low carbon electricity, either from renewables or from natural gas. We want to develop a profitable and sizable business in this low carbon electricity. If we do all that, of course, we will be responsible. Responsible means that we'll be able to continue to grow the company, I think it's important. It's not at all, there is no idea in TotalEnergies to shrink the group. It's to continue to develop our oil and gas business and also to develop a position in this low carbon electricity business. At the same time, to be able to reduce the carbon intensity of our energy sales. This is a way to look at it. There is a possible way there which we'll describe.
We are publishing today our third annual climate report. We introduce a new indicator, which now is even firmer than before, the carbon intensity of energy sales which is a. We set a target to ourselves, we think it's possible, we are committed to that, to be able to diminish this indicator, to diminish the carbon intensity of our sales by 15% between 2015 and 2030. Beyond 2030, we could reach a reduction of 25%-35%, depending on new technologies, depending also on public policies. Just to illustrate the strategy where we could, on the long-term target in terms of possible sales mix for a company like TotalEnergies. This means that by 2040 we could have sales, natural gas could represent between 45% and 55%, oil, including biofuels, around 30%-40%, and low-carbon electricity 15%-20%.
This would represent a clear positive and responsible contribution to tackle the climate change challenge. The world today is not at -1% per year, it is more of +1%. In fact, this is the reality. Of course, there is a link, a direct link with our strategy. It is in fact the result of how we anticipate the market trends, we want to put into actions our strategy by improving our operations efficiency, the natural gas, low carbon electricity, biofuels, and investing in carbon sinks. Philippe Sauquet will come back in more detail this afternoon on this strategy climate roadmap that we intend to put in place, which again is directly linked to the strategy we develop. In oil and gas, to build the future of the company, we play to our strengths. We identify some key areas where we have some expertise.
Four core areas of competencies in deepwater, in LNG, in petrochemicals, and retail and lubricants. They are recognized worldwide. We have also some geographical areas where we have some advantage position, like in Africa where we are a clear market leader. In Middle East and North Africa where we have developed very strong relationships with many NOCs, national oil companies, which help us to have access to some of the resources and develop the group. Also, last but not least, the North Sea where we have built a strong position of operating position by being the number two and operating around 500,000 barrel per day. These competencies will be described more precisely by my colleagues this afternoon. I will just give you some hints of what is the strategy in each of these segments, the core competency.
On deepwater, yes, we are leader in Africa, but we have established a new strong base in Brazil. We have been the early mover, I would say, in Brazil. When you compare what we spent to establish a position on Lapa, Iara, and Libra, compared to what is spent today to acquire some exploration position, I think we were right to be early mover. It will represent something like 150,000 barrel per day of productions, and probably more to come because we have some ambition to build on the position we created with Petrobras. The other part, of course, deepwater area where we could leverage our expertise is the Gulf of Mexico. It was mentioned. Arnaud will come back of it. As you can see, we are producing today around 350,000 barrel per day.
This segment, this deepwater segment, will provide some growth in the future by growing to 500,000 barrel per day by 2025, where, again, it is important with cash flow from operation above $30 per barrel, $60 per barrel. I know there is a debate about deepwater against shale. We can do a very profitable business in deepwater providing you target some giant fields or that you are able to tie backs your discoveries to existing infrastructure. These are the two ways that we want to leverage in the future to create value for deepwater expertise. After that, we have the LNG. Of course, 2018 is very important for us with the acquisition of Engie LNG, which promote Total as clear number two into the market. We will manage a portfolio of 40 million tons per year of LNG. It is more or less 10% of the world market.
We intend to keep into future to maintain this position of 10% of the world market in the LNG business. It's an integrated value chain. Of course, we look to production and liquefaction. We will produce 20 million ton LNG per year. You, we will see that we have projects to continue to grow to 30 million ton per year of LNG. Ichthys and Yamal are ramping up. Trading and shipping, I just mentioned. We are number 2 in the world. Regasification is important for the Engie acquisition. We are controlling. We are clearly number 1 European player, which is important in this business because Europe is a clear liquid market. To have an easy access to this market is helping us to manage the global portfolio. Integration is going downstream to gas and power marketing. I will come back on it.
Patrick and we announced that in February, but after the acquisition of Engie, we're intending to report differently on the financial results of the group. Patrick just mentioned it. We will create from 2019, and we will report on what we call iGRP, Integrated Gas, Renewables & Power. In fact, the idea behind it is that you will see, and this will be the combination of the existing gas, renewable, and power branch results, plus all the LNG upstream and midstream assets which are today in E&P. The logic behind it is these are the, I would say, the core businesses in which we invest, part of them are either LNG or low-carbon electricity, and we want to identify in our reporting this segment as being the one which will grow.
I think it was a request for many years, we heard that from our investors, to have a better visibility and transparency of what this active gas energy can deliver. You will have this from the beginning of 2019. Yes, we feed our project energy expansion. I would say, I've seen that Philippe has used a nice expression in Barcelona last week about the golden triangle of where we can produce energy. I don't know if it's a golden triangle or a golden square, in fact. Because we have 70% of the LNG worldwide will be concentrated in 4 key regions. The Middle East and Oceania, Australia, and Pacific, and then the U.S. and Russia. Total, in fact, as we have built some positions and we are very well positioned in all these key areas to build for the next wave of LNG projects.
The next wave of project for Total will also be characterized for part of it, quite a lot of it, a number of them, as low cost and brownfield projects. What I mean brownfield projects is building, being able to develop some additional trains based on the existing infrastructure. It will be the case, of course, in the U.S. with Engie gave us a share of Cameron LNG, which will be put on stream next year. We intent with Sempra, and we are in full agreement with Sempra to expand quickly these Cameron LNG operations. There are two trains which could be mobilized. It's, of course valorizing low-cost U.S. shale gas. It's monetizing the existing infrastructures. In the U.S., we are also shareholder of Tellurian. We consider this opportunity for the future in light of the Cameron also expansions.
In Russia, we'll come back later on that. We have signed, we are very happy of what is the Yamal momentum. You've seen that we signed an agreement, which is not only the entry of TotalEnergies in Arctic-2. By the way, we are shareholder of Novatek at 19.4%. I can announce today that last week we reached the historic agreement, was we will reach one day 19.4%, we reached that level last week. This, by the way, is an interesting story. We spent EUR 6.8 billion to acquire this position in Novatek. We receive, in the meantime, around EUR 800 million, EUR 900 million. So EUR 6 billion. The value of this participation today is EUR 9.3 billion. So in terms of value creation, I know that people consider there is a risk on Russia. TotalEnergies has been able to identify almost 10 years ago, one of a player.
I know that people were some doubts. This player is growing quickly. The last agreement we signed in June is not only a position in Arctic-2, it's a position, direct investors in all the projects to come. Novatek is announcing an ambition to be able to produce 56 million tons per year of energy by 2030. This is for us, very important. Of course, we have also going around this square, golden square, we have in Oceania, the new Papua LNG project, which will be developed in synergies with PNG LNG and ExxonMobil. We have also a project in Nigeria, which is a brownfield development. It's 8 million tons per year project. It's not only one train, in fact, it's more or less two trains on which we work together with our partners. Last but not least, this will be a tender.
Of course, TotalEnergies is very interested, there is no mystery to participate to the future expansion in Qatar, where we have a strong legacy position. It's obvious that in terms of competitiveness, LNG in Qatar with a very conventional offshore gas production, one of the most efficient, combined to a long expertise and some synergies, is delivering one of the best, if not the best competitive LNG for the future. Petrochemicals, a word about it. Bernard will come back on it this afternoon as well, more in detail. We are executing the petrochemical strategy we described last year. I would say there are three components on three levels on which we build the strategy. The first one. I will not describe the project. Bernard will do it this afternoon. First one is to concentrate on projects or investments on the large integrated platforms.
We have six of them. You will see that the three of them, the three large projects which are on which we work today are based on expand on consolidating and developing and synergizing these platforms. The last one being set up in Saudi Arabia, which of course, beyond the refinery project, which is a success, will offer us a capacity to have a large petrochemical expansion. The second level we mentioned to you is access to low-cost feedstock. The chart is interesting because it show you that by 2025, 60%, more than 60% of the petrochemicals production of TotalEnergies will be based on ethane or LPGs advantage feedstock. The last level is that last target we have is to lower exposure to Europe. We were very European-centric in our refining and petrochemical business on more than 60%. By 2025, Europe will represent less than 50%, 45%.
A word as we speak about refining and chemicals, because we know that we have many questions about what could be the impact of the new IMO regulation on Total business and results. I think globally, in fact, the results of the analysis is that we are very well positioned to benefit from it and to enhance our revenues by a few hundred million USD. Why? In fact, this IMO regulation, which I remind you, obliges in the maritime world to use low sulfur bunker fuel, will have some impact on the market. On crude oil first, of course, this will enhance, increase the value of low sulfur crude oil. Total, in its portfolio, we have 60% of low sulfur crude oil compared to an average in the worldwide production of 40%.
We have an advantage there that this 900,000 barrels per day of low sulfur production will have an increased value after the IMO implementation. On the product side, I think it's obvious that this IMO regulation will have two effects. One, it will decrease the value of high sulfur fuel oil because the market will be reduced. At the same time, it should increase the distillate value because it will be one of the ways to fit with the regulation. On high sulfur fuel oil, in fact, we have many actions have been taken. We were producing in 2017, 7 million tons per year. Of course, we need to decrease this production. This chart is showing you that through the Antwerp modernization, the Port Arthur coker, but also because we can segregate better in our refineries the way we produce high sulfur oil or low sulfur.
We can reduce it from 7 to 3 million tons per year, and even we could have some flexibility to go down to 2 million tons per year. In fact, at the end of the day, we will have a very low fuel oil yield, less than 5%. The decrease of high sulfur fuel oil should not hit the results of refining and chemical branch. On the contrary, because we have high distillate output, 50%, we should benefit from the increase of the distillate value. The third consequence of the IMO regulation will be that it should give some impulse to alternative fuel and, in particular, LNG for bunkering. Total has been one of the pioneers on this business, and I think that this afternoon, Momar will come back and Laurent will come back on this activity.
Moving to marketing, I said to you, we have four areas of core competencies. One of them is retail and lubricants. You can see that we continue I know there are questions about the future of M&S, Momar will demonstrate to you that we have plenty of ideas to continue to develop the value of M&S. What we do in particular is we move to growing markets. In fact, there is a split there of the way we create some the EUR 2.2 billion of cash flow, which will be delivered in 2018 by M&S. In terms of what are the legacy businesses with lower growth, European retail, heating oil. It's less true for lubricants because there you can have some growth in lubricant business.
We have, in fact, in the last years, made some M&As to reshape a little the portfolio by divesting some mature assets or low market share retail and to concentrate our investments more in growth areas like the Africa retail or large emerging countries. We have expanded Mexico, Egypt, Pakistan. We are looking to Brazil, to India for the future. We want also, of course, to develop some non-fuel revenues. Momar will come back on that this afternoon and some alternative fuels. The target, which is to deliver more than EUR 2.5 billion per year by 2022 as more than a reasonable way to be delivered by M&S. A word about the U.S. as we are here today in New York. The U.S. finally is, for us, a land of growth because, of course, it's fitting well with our strategy of an abundant low-cost gas resources.
I would also say it's quite a lot of low carbon electricity with a nice development of renewables here. In fact, the U.S. are a land for us of growth in LNG. I spoke about Cameron and future developments through petrochemicals around our Port Arthur platform, also in natural gas for transportation, and we have acquired this year some shares in a company called Clean Energy, which is a leader of natural gas for transportation. It's very interesting to see how this business can be developed in this country. I should not forget, of course, the deepwater, on which we built a position because we want to leverage our deepwater expertise.
At the end of the day, in fact, the U.S. by 2022 will be the number 1 country in terms of capital employed in the portfolio of Total, more or less eight%, nine%, 10%, nine% of the global capital employed group with a generation of $1.5 billion per year of cash flow and $1 billion per year being invested. Last piece of the strategy, building a low carbon electricity business. I mentioned it already. I explained the reason why. What does that mean? That means that, I know that in 2016, we present you a puzzle, which puzzled you. In fact, was not the best way to express you the strategy. Today, in fact, because we have the opportunity to put this puzzle into a right order with the last acquisition we've made of the Direct Energie in France.
I think we can develop in front of you, better explain what we want to do. In fact, what we want to do, again, is a full integrated approach to build a production, trading, and marketing business, producing low carbon electricity. There is, I said, a large growth of it. We've come to capture it. We have today in France and Belgium, around four million customers, residential and professionals. We have a target to increase that to seven million customers. We have a large, nice base of customers, but we don't want only to market. We want also to provide and to produce electricity, and the target being to be able to produce at least a third of the sales, either from natural gas. It's logic, the continuous integrated value chain that we described.
Today, we have various subsidiaries. The idea is to combine all that, to clarify it. Again, when I say it will be sizable, just to convert what we intend to produce by 2022, 2023 into barrels per day, this would represent something like 200,000 barrels per day, equivalent of petrol or oil and gas. It will be a sizable business. We have the chance, while we'll be profitable, is because we have the chance to build this portfolio from a white paper.
On one side, we are acquiring assets, in particular the CCGTs, which in an environment which is quite favorable, we paid a third to a fourth of what would be the new CapEx for a CCGT. On the marketing side, we built that from the pure digital model, Direct Energie , in fact, is managing 3 million customers with 300 staff only. Compared to what are the business model of other utilities, we can be efficient. This is what we intend to develop, the cash flow we expect by 2020 should be around $1 billion, like we said, out of these businesses.
To try to sum up all the strategy we described to you in more figures, we described on this slide what will be on the new scheme of the new segments, what will be the image of the company and the cash flow from the company. The E&P in this new configuration, that means without LNG assets, will represent around 55% of the capital employed of the group. We will invest around $10 billion per year. ROACE at $60 a barrel, about 10% because the LNG assets are quite heavy in capital employed. It's the fact that we eliminate them from this group or this segment is enhancing the profitability, and will represent a production of 2.6 million barrels per day, growing at 3% per year. In fact, most of the growth of the production is linked also to LNG business.
It's Ichthys, it's Yamal, it's all these activities. We will find, again, the cash flow from operation from E&P are, I would say, interesting to see how they will grow, and they will grow quickly. Sorry, I take my paper because I don't want them to make any mistake. They will go from $15 billion in this segment by 2017 to something like $18 billion at $60 per barrel, and around $20.5 billion, $21 billion with the sensitivity, which was mentioned at $70 per barrel by 2020. It's a big increase of cash flow from operation from this segment. The second segment is the new iGRP segment, combining LNG and gas renewables and power. This will grow from around $2 billion of cash flow from operation to almost $4 billion. It will double in three years its contribution to cash flow from operations.
This segment will represent 30% of capital employed, CapEx around EUR 3 billion. Profitability is lower, but this is a segment where we will invest heavily. Of course, this is linked. Again, it's the LNG more than the low carbon electricity businesses, which are putting a weight on the ROACE, but we have the ambition to reach at least 8%, even 9% should be possible. This segment will represent a production of gas production of around 0.5 million barrel of oil per day equivalent, growing at 8% per year and 40 million ton of energy managed. Again, electricity production equivalent of 100 by 2020 to 200,000 barrel per day by 2022, 2023.
The last part, of course, of the group, nonetheless, which is very frugal in capital employed, 15%, we invest EUR 3 billion and ROACE above 20%. As Patrick told you, this year 25% is a downstream refining chemical in businesses. We announced last year that we want to increase by EUR 1.5 billion of cash flow from 2017 to 2022. We are on this roadmap. Of course, it depends on the way the refining margin could be volatile, we are well on this roadmap. Most of the petrochemical projects delivering additional cash flows post 2020. In order to conclude and to come back to how we will deliver the shareholder returns, that we put a framework on the table in February.
Of course, first, this is an important message that I think we have, with Patrick, delivered today, is that we will have an outstanding growth in the next three years from 2018-2020, which give us a very clear view. We have a very clear visibility on the cash flows. The cash flows were at EUR 22 billion last year at EUR 54 per barrel. They will increase this year. They will increase by EUR 7 billion at EUR 60 per barrel by 2020. We said EUR 6 billion, by the way, last year, it's an additional EUR 1 billion that we add on it because of the M&A activity that we have done in the meantime. It's plus EUR 7 billion at EUR 60 per barrel. It's even, of course, more at 70 because we have an additional EUR 3 billion, it's something like EUR 10 billion at EUR 70 per barrel.
There is no figures of 2019, I will give you one just to calibrate it. At EUR 70 per barrel, we should be around EUR 29 billion next year of 29.5. EUR 29 billion of cash flow of DACF next year by 2019. Just to calibrate how we enhance the increase of cash flow of the group. We have a clear visibility because, there again, it's the production startups are, Kaombo has started up, and Ichthys is starting as well in condensate. First delivery of condensate is coming. Egina is on time to be delivered by end of the year. We have a strong cash generation from all this acquisition of Maersk Oil, Brazilian assets, and Abu Dhabi as well. All that, by the way, will lead us to have a return on equity of around 12% at EUR 60 per barrel.
This year we are above 10, reaching probably 11%. This, again, we will come forth. We are able to grow while maintaining a good enhancing profitability of the portfolio of the group. What do we do with all this cash flow? We propose a framework to our investors in February and will not change it today. It would be a surprise to you. First, of course, we have capital investments, a priority of the group, and this is important for the board. Patrick confirmed to you that for the next three years, $15 billion-$17 billion per year. We don't anticipate cost inflation during these next three years. I would say that the volume of CapEx, which is behind this figure, is a right level to continue to develop the group and the ambition of the group. Dividend, of course, is the second priority.
We have announced a 10% increase over three years with no scrip dilution. We buy back all the shares since February. Balance sheet, the third priority, to de-leverage the company, maintaining the gearing under 20%, and both the director attach great importance of grade A of the group. The share buyback is the last element of this cash flow allocation. It is a way to share additional revenues with our investors. In February, we said up to EUR 5 billion because we were still, as a framework, at $60. This time I can confirm that the EUR 5 billion will be bought back under 2018-2020. This program is put into action. We deliver it. We have increased the interim dividend by 3.2% in 2018. We are on the path of the 10%.
The share buyback, we bought back on the first half of the year, I think $600 million. We intend to bought around $800 million-$900 million on the second half of the year because the share, clearly the oil price is higher than $60 per barrel. We'll realize $1.5 billion in 2018 on the top of the $2 billion of scrip shares buybacks that we are executing. This gave us some strong momentum. In fact, there again, in terms of total shareholder return on since, I would say 2014, on the four-year period through this cycle, we are at the top of our peers with a 20% total shareholder return since 2014, despite the downturn.
Again, a clear visibility on our cash flows, a clear framework of shareholder return policy and an execution as we do it in all the segments of our activities in order to deliver best-in-class TSR. As a conclusion to this strategy and look presentation, I think there are three messages today. I would say three key messages to our investors. First is, yes, Total has a good and strong track record of execution. We deliver our objectives. For the next three years, our investors will benefit of an outstanding production growth, of a CapEx discipline, on which we are fully committed. On the downstream, which is one of the best-in-class downstream, which is consistently delivering $7 billion per year or even a little more.
The second message is that, this give us very strong confidence and very strong visibility on the cash flow growth to 2020. I mentioned EUR 7 billion of additional cash flow between at $60 per barrel, EUR 10 billion at $70, and at $80 it's even more than that. I don't want to give you bad ideas. There is a clear roadmap for shareholder returns on which we are committed. The last message is that, beyond 2020, we have in our hand a very attractive portfolio on short-term opportunities. We've seen that we are able to deliver EUR 2 billion or EUR 1.5 billion added value just because to mobilize 400 million barrels of short-term opportunities. We have a nice portfolio of attractive large projects to be sanctioned by 2020.
We have established a very strong position in the LNG business, which is one of the booming business in our industry and at the right time. We also think that we can build an attractive low-carbon electricity business in the coming years. With that being said, I hope that, again, commitment is consistently deliver added value for the benefit of our shareholders. Thank you for your attention. Linda.
We'll move to the Q&A now. We have a few Q&A sessions throughout the day, one this morning and three sessions this afternoon. Please be patient with me, I know you'll have lots of questions to ask. I'll try my best to get through every one. Please give your name before you ask a question and try and keep it to one question. I know I'm pushing it when I say that, try your best. We start with John Rigby.
[Foreign language] It's there.
Morning. It's John Rigby from UBS. I was going to ask two, I'll keep it to one, for good order. The thing that seems missing in this is, because it's a strategy event, is the sort of back end of the cash flow. If my basic arithmetic is correct, you look like you'll be generating something like about EUR 10 billion of excess cash flow at EUR 80 a barrel and probably 7 or 8, maybe 7 at EUR 70 a barrel. You haven't updated on buyback, you've made a subtle adjustment on your intention for debt.
While I don't want to see you commit to a target, can you provide some strategic thinking around the disposition of excess capital at the higher point in the cycle so we have some kind of idea about what your intention would be if oil prices stay at these current levels? That's it. Thanks.
First, maybe we are prudent, the price of oil is today at EUR 80. I don't know where it will be one year. We don't want to modify the framework you gave to our shareholders only a few months ago, on which we are committed. By the way, I know that when we announced in February, when I discussed with some shareholders that we announced 3 years in advance an increase of dividends, some people told us that we are quite bold to do that. Having said that, what we will do if we have more cash because if the price is established more durably at a high level like EUR 80. We have, for me, it's quite clear. First, continuing to deleverage the company is a priority.
If you have a high price, you will see one day or the other, the low cycle coming back. I would say part of the cash will be allocated to low leverage a company, and we set a target under 20. We are today at 15% or 16%, why not going down. I remind you that some of our peers, a few years ago, were even at 0% of gearing. That's one of priority. The second part will be, of course, this is why we introduced a share buyback concept in the February framework. That obviously if we have more cash, we'll share part of it with our shareholders through some increasing share buybacks. I don't want to give you today any figures, it's the second allocation of it's the logic of it.
The logic of it is to use the share buybacks rather than the dividend because the dividend we want, I remind you that we have a constant policy of never cutting it back, but to use a share buyback as a way to return value to the shareholders. The third part that I can say is that, as I mentioned during my speech, in terms of capital investment I consider that the volume that we're investing is fine and is enough to be able to help to allow us to grow the company. We have also to manage the portfolio, and we have some ideas to sell some assets. Of course, it's a price. In your scenario, John Rigby, it's a price remain at $80 a barrel. One day or the other, we'll see some inflation in the cost. The volume should remain the same.
The value could have some impacts. That would be the markets. I don't consider this will happen before 2020. Again, if we are really in a scenario of a high price during three, four years, your question is the right question, we'll have to update, or say, the global strategy. Again, you have the fundamentals. Lowering the gearing, share buyback increase. In terms of CapEx, the volume should be the same, facing maybe some inflation. I told you one day that I don't anticipate that. I don't think that going beyond $20 billion would be a very good idea for the fundamentals of the group.
Okay, there's a couple more questions at this side, then we can move to the other side. It'll be Theepan Jothilingam, then Oswald Clint.
Thank you. It's Theepan Jothilingam from Exane BNP. I had a question actually on the comment you made around an attractive portfolio in hand, the 700,000 barrels per day. Could you talk a little bit about what the break evens are, what the IRRs that are expected? In the same vein, is the message really beyond 2022 to grow at the same rate in terms of volumes going forward to, let's say, the middle of the decade? Is that the strategic intention here, that Total remains a growth stock?
Patrick do mention to you that the 6%-7% combined with the 5%, 70, 72 imply 3%-4% from post-2020. I think being able to grow around about 23% should be feasible. The answer to this question is not so easy today because we don't have in our hand today all the portfolio we'll have in 2023 or 2025. When we made some long-term plan exercise in the group, we are developing all the assets we know. We know that things will move, will not be asleep during five years. We will have access to new resources there and in some places around the world. I would say that it's possible that we can grow at this level. Again, we have demonstrated, I think, in the last three, four years.
I strongly believe that it's better to be reasonable if the price are high, but to take benefit when the price are low of some opportunities like we've done in the last years. In terms of IRR, it'd be clear, attractive. I don't know, it was not written. We continue to sanction the projects at EUR 50 per barrel, and we target IRR around 15%. I think in February you had the split by IRRs about the portfolio. We didn't show it there, but this could be described to you. There is no change of strategy, no change of policy. I think the only way to maintain a low break even, all that is consistent. If suddenly you decide to change the way you sanction the project by using EUR 60 per barrel, of course your low break even will go up. We don't want.
We have enough resources in the portfolio to be able to have this type of objectives when we sanction projects.
Thank you very much. Oswald Clint here from Bernstein. Could I ask about your LNG slide, your LNG outlook? It's constructive, it's supportive of a good market. You're investing heavily in this market. You also mentioned a 60 million ton or 56 million tons of Russian expansion coming from Novatek. That's quite a big number, and if we add it all together to the other regions, again, maybe five years down the line, we have another supply wave of LNG coming through. Is that something you think about, another risk on the supply side? Or like this particular cycle, demand comes through still growing potentially more stronger and there isn't this sudden period five years down the line when everyone's talking about weak LNG demand, just as you're investing heavily in it once again. Thank you.
Perhaps just linked to that, maybe just expand on your strategic initiatives to penetrate China a little bit more with your LNG portfolio. From our advantage or vantage point, it feels very much Africa and perhaps South America, even countries like Cuba more recently. I'm curious to know how Total can push deeper with LNG into China. Thank you.
Of course. As I said, I think the demand for LNG is mainly driven by Asia and by China in particular policy. There is today a strong statement by the Chinese government that they want to really increase the share of the gas in their energy mix from multiplied by two or more than two from 6% to 15%. This gave a strong momentum to LNG demand. I think they are very serious about it because mainly of air quality and other issues which are very important for them and for the global stability of their society. This is one of the main driver, we observe that also in Korea, which is shifting also more and more to LNG. With an assumption of 5% per year. If you take, by the way, the last three, four years, it's even a low assumption. Okay.
We moderated it in the future. I think it's not being over-optimistic. When we said that, the question is where this LNG will come from, and that's true that Novatek target is very ambitious but in fact, it's just the idea that beyond Yamal, which represents 16 million tons per year, you will have another project called Arctic II of 20 and another one by 2025 and another one by 2030 of 20 million tons. In fact, it's three projects. The resource base is incredible. There you have. It's not a question of size of resources, it's more a question of being able to execute the projects. One of the real interest of this position in Yamal Peninsula is the fact that the Russians are investing in opening permanently the North Sea Route, the north route to Japan and to China.
The Russian government has decided to invest in some nuclear icebreaker in order to have to open this route permanently. If it is the case, that means that Yamal is the best. It's only 15 days, I think, from China and Japan. Even if we have to transship the LNG in Kamchatka, all that is super efficient. By the way, this is in terms of potential of adding value to Yamal and the Yamal investments. Today, the ships are going around the world for transshipments in Northwest Europe. Once we will have managed to optimize all the logistics, this will enhance the value of Yamal on Arctic II and the future projects. Yes, we have Novatek and Total. We have opened. There is a real profitable province for LNG with a huge potential.
It's a question of managing the projects, which is not so easy in this type of environment. I strongly believe that the Chinese policy is a strong support to the expansion of the LNG market for the 10, 15 years to come.
Okay. There's a couple of questions on this side. Maybe Jason, then Irene.
Thank you. It's Jason Gammel with Jefferies. Obviously, on the acquisition side, did a lot of transformative deals that you've done over the last four years and been highly successful in acquiring assets. Now that we've seen a big move in the oil price to the upside, are you starting to see the market developing into more of a seller's market? I'm not expecting any change to the guidance of EUR 2 billion net per year on A&D, but would you expect that you're going to be more active on the divestiture side of the business if prices remain where they're at today?
There is a logic. I have to be consistent. I said that we have to be countercyclical. It's true that Patrick told you that we managed to sell EUR 10 billion of assets in the last three years, but it was not a lot of upstream assets because it was difficult to sell them. Today, it's no more the case. Today, it's clearly more seller assets. Yes, that's true that we have identified during these periods in our portfolio some assets which were not very resilient to a low price, and it's time to try to market them. We've put some mature asset, not only mature asset, by the way, it's not true. A bunch of assets in U.K., North Sea that we have acquired from Maersk Oil. To try to clean the portfolio to be more efficient.
We have other ideas in our mind of assets to this. Again, we are not driven by volumes, even if we have to show you that we are growing. We are more driven by value creation. There are some barrels in the portfolio of Total, which represents our volume, but which are not really generating a lot of cash flows even at $70 per barrel. These ones are for sale. Yes, you could see Total active on this side as well in the coming years if the price remains at this level.
Okay. I think maybe Irene, then Thomas had questions.
Thank you. Irene Himona, Société Générale. Thank you for the presentation. By 2040, you aspire for low carbon electricity to be 15%-20% of your sales. Why 20%? What proportion of assets or CapEx will that represent? How quickly do you aspire to get there? Does it remain Eurocentric? What sort of returns compared to traditional oil and gas? Thank you.
Again, it's a scenario which is consistent with the idea that we'll reduce our carbon intensity by 25% by 2040. Just to give you some value scenarios which have been elaborated by the teams. Yes, the idea is mainly to develop that in Europe. Let's be clear. It's a European strategy. In fact, if we were behind it, I cannot describe all the figures, but it's achievable. Of course, we've been required some other acquisition in this segment if we want to do that. We have time. It's between, we are in 2018, we speak about 2040. We have time to do that. We want first to demonstrate and to comfort the profitability of what we've just done in France and Belgium. We think really that we can organically in these two markets reach 15% of market share.
Direct Energie is acquiring 500,000 new customers per year. Total Spring is just acquiring around 300,000. The combination of both Even being more efficient because we are able to synergize the back office, et cetera, will give us a good momentum. This activity, we are targeting on this one more than 10% of profitability of capital employed. In this type of scenario where, I don't know if it will happen, but if by 2040, really demand for oil is stagnating, that means that the price of oil should not be very high. I remind you that at $50, $60 per barrel, portfolio of company like Total is giving a return of 8%, 9%. It's a question of combining different assets. How much we invest?
We plan to invest in this business around $1.5 billion per year, $1.5 billion-$2 billion per year. With this pace of investments, we can reach the target that we mentioned to you of 15%-20%. Again, we know it's a diversification. We have made a big step by acquiring Direct Energie because it gave us the size so we can look more, I would say, clearly to how we can leverage the profitability of this business. We have a confidence in the figures we deliver to you.
Hi, Patrick. Thomas from Credit Suisse over here. Last quarter, I asked you a question and you didn't want to answer it, and you said you will answer it today, so I'm going to try it again. Integration and scale has its benefits, but also being small and nimble can have its advantages. Total is now a very big company and you're growing fast, but you're growing in a fairly concentrated manner in key hubs. You're integrated, but not as integrated as you'd like to be, and in more recent year, you've added more OECD barrels. In essence, the question is, how would you define the sweet spot of risk and value? That was the question last quarter. Quickly, a second question just on LNG, if I may. You've highlighted four projects and possibly a fifth one, Tellurian.
Everyone wants to develop LNG projects at the time. If we are all going at the same time, isn't that a recipe for disaster just like last cycle? What are we going to do differently this time? Thank you.
First, in terms of LNG projects, I think one of the character, if we look to what we propose to develop, they are mainly except Arctic 2 some projects which are in fact building, expanding existing projects other than greenfield projects. Which put us in a good position in terms of, I would say, cost of delivering the energy compared to some competition. I think the interest of the portfolio we have is that we can expand some of LNG platforms which we have in the portfolio in, I would say, in an efficient way. I still did not understand fully your first question because you start off big against small, and then I'm not sure to have captured what you want with this.
Sometimes you get too big
I think we try to describe through this presentation that we have some focus areas, one of them being LNG clearly, and we strongly believe that there the combination of our capacities in upstream part, but also in trading and marketing under Laurent leadership is strong and that we can This market is being more and more commoditized. Laurent will come back on that this afternoon. That we can build. We have one big sweet spot in which we think that we have built years after year position. This is one. We spoke to you about deepwater. It's another part. I think we identified through the presentation the key areas of competencies on which we want to invest for the future of the growing the company. Maybe it was not clear enough, but we try to give you some answer to your questions.
What are the risks? The risks are of many natures, in particular the market trends. We are in an evolving energy market. We have many trends. Everything is not clear. On one side, we try to put ourselves on the safe side, in particular on the oil business, but we continue to grow our oil activity. We want to be safe in terms of positioning the portfolio. On the same time, we can be bold by trying to prepare the future of the company, to build the future of the company by positioning ourself as well on this low carbon electricity business. These are the risks that you can take.
It's a question of what is to come back on your question, what is the right combination between the various businesses that you put in your portfolio? There is no magic number. There is more question of opportunities and to permanently monitor the strategy according to the evolution of the markets.
Maybe come back over here now. Thank you all for your patience. Maybe you can go to Lydia, then Chris.
Thanks. Hi, Patrick. One question just around the delivery and the focus on what you've delivered in the last three years, which has been impressive. Is there anything that has disappointed you over that period?
Sure
Also then looking forward, the idea of where do you see the most upside in terms of the delivery? Is it on the digitization? Is it on the LNG side? Just where you think the risks are for the upside from that side?
Patrick?
I am not disappointed by nature. I am quite an optimistic guy. I think that among our projects, and everybody knows, there is one project which was not perfect, which is Ichthys. There is some disappointment there. On the other side, you have plenty of beautiful projects, developed in time and within or below budget, which balance dramatically in favor of Total, our view on the project. In terms of what is the most exciting things for the future, I think let me ask first a question raised by Oswald Clint, what we made differently, which is part of your answer also. What we made differently this time in this cycle. First, we deliberately act counter-cyclically. Second, while we were growing the company, we are working to simplify our processes, and we should not minimize the time of the management in our willingness to simplify our processes.
One Total means something in the company. Marie-Noëlle will explain you, give you a few examples of what new technology can bring to our organization and our future. I am quite enthusiastic by that, even if we are in a heavy industry. You will see some examples of things that are astonishing, I would say. You want to add something, Patrick?
I think, again, that's true that we had some hiccups in the project execution, to be honest. In fact, even if they were delayed, it is better to start a project when the price is EUR 75 than EUR 50. That's the reality. In fact, we were nervous about having that late because we were looking to lack of cash flows, and we were counting all our cash. In fact, it is better to start Kaombo at EUR 75-EUR 80 rather than EUR 50, I can tell you. It helps a lot. Even this part, which honestly, it was disappointing because it was for me, a very strong area of excellence. At the same time, Yamal LNG, it was the most impossible project which was launched in the industry, and this is the only one which is under budget and even which is in advance compared to the timing.
I think the third train of Yamal LNG will even start before the end of this year, probably compared to what we had in mind. It is a mixed feeling. Of course, as you know, there was some good news that we have announced, building up our capacity to renew the exploration strategy is taking time, but I am not disappointed. I am more patient on that, and I am happy to see that we have good results which can deliver some value. Frankly, there is no disappointment. I am even more and more surprised quarter after quarter by the capacity of the company to deliver. It gives us a strong confidence as a CEO of the company, and we spend a lot of time on the short-term issues, and now we are able to speak to you more on the long term, which translates this confidence.
Confidence is shared by the board of director. I think this, of course, give, I would say, it's a virtuous circle, a good momentum inside the company as well. One of the thing which you don't realize, but today, in fact, this discipline, even sometimes we face a situation where people in the company are really this culture of discipline in terms of management is deeply rooted in the company. That's one of the success. That's the point. Of course, at the same time, we have been bold in some part of the M&A activities. Again, in LNG, we have made a big step forward by buying this portfolio. We have a huge responsibility today to deliver value, and I think there is a lot of value there, but it's strong move.
We are bold also by entering into a big way, being the first oil and gas company to enter into this low carbon electricity business in a big way, that I'm sure we'll be followed by others there. It's the route. I think for me, for the board of director, let's be clear, I should have answered that also to Irene. It's a way to give, to describe what could be the future of an oil and gas company. We know that some investors, not a specialist one, but some investors, when I met some general investor, they put monies in Apple or Facebook, I don't know why, in all the digital technologies. They see oil and gas segment sector as something maybe of the past, because when you open the newspapers, you see some articles about we will not need oil in 2030, which is fully wrong.
We all know that in the industry. I think this is also for me a way to that. There is a bright future for these companies because we will be able to use all our engineering capacities or management capacities or financial capacities to build a new energy, a model for energy company, and this is the ambition we have.
Okay, I think I'm going to go to Chris and then to Henry.
Thank you. It's Chris Cooper from Bank of America Merrill Lynch. In the very same vein, Patrick, you started your presentation today by saying you wouldn't expect an update of the strategy every year. Indeed, we don't, and you've stuck to your 2020 timeframe. Essentially, I'm asking a question capital allocation beyond 2020. I suppose some of your peers have already chosen to give us a little more visibility of where they expect to be in the mid-2020s. I wonder whether when you look at your EUR 10 billion annual CapEx budget for E&P relative to the EUR 3 billion and EUR 3 billion for Downstream and Integrated Gas, Renewables & Power, how you envisage that to change into, let's say, 2025 and beyond.
I suppose a little mini question attached to that is, if you're already spending now EUR 1 billion to EUR 2 billion on Renewables & Power, you've only got left EUR 1 billion and EUR 2 billion to spend on Nigeria LNG, Arctic LNG 2, and lots of other potential LNG projects. Should we assume that you continue to use project finance also on top of that EUR 3 billion in this division to expand further? Thank you.
The answer is yes. Yes, we use project finance. We consider it a good way to leverage our equity in these businesses. No problem with that. If you want my feeling, again, to explain 10 years in advance would be done, it's not so. I think you could see probably CapEx allocation to this iGRP segment growing. Should be logic with what I described. Betting more on natural gas and also expanding this one. The EUR 3 billion could become EUR 4 billion, let's say. I don't think it will go up to huge amount. Again, because part of it being linked to the project financing that you just mentioned. There is a link. We could probably one day to update you. We look at it, by the way, in terms of how do we allocate capital expenditure.
It's some of proportional vision, which means what is the real amount. It shifted a little. It's adding EUR 1 billion of this segment, in fact, not much more. This is probably things we could do. I don't think Refining Chemicals, Petrochemicals and Marketing should change a lot, neither going down or going very high. Because we need EUR 3 billion to maintain this activity. There is a lot of industrial maintenance. Again, it's more a question of being able to find the opportunities to invest. This also is project finance, generally. It doesn't capture most of it. Then Upstream, the EUR 10 billion, again, it's linked to what could be the oil price environment. If we want to grow by 3%, you can demonstrate from a base of 3.2 million-3.3 million barrel oil per day, you find EUR 10 billion-EUR 11 billion, I think.
These are more or less the way it could be distorted.
Okay.
If today we gave you last year some figures, 2022. You have some figures in this presentation as well. My colleagues will come back this afternoon on figures which gave you some. It's because we wanted just to highlight to our investors that we will benefit in Total, people who are buying shares today, for the next three years of a real outstanding growth and which will be translating in additional cash flows and return to shareholders. It was also, I would say, the parti pris of this presentation today to highlight what will happen, what we will deliver. Based on the track record delivery, this was, I think, the main axis of the presentation.
Hi, it's Henry Tarr from Berenberg. Just a quick question on the short cycle developments that you highlight. How flexible are investments here? With the current oil price, are you pulling forward some infill drilling in some of the projects, et cetera? Are all of these ones that you would have pushed ahead with anyway in your 50-60 environment?
I know we'll come back on it this afternoon, the idea that the instruction given to the teams is to be flexible. It's a question of what type of drilling rig contracts you sign, in fact. It's to be able to mobilize or to demobilize the rigs. From this perspective, the fact that as we show you, the markets, the deepwater rigs market is favorable. You have today unused capacity around 30%-40%, gives us, of course, some capacity to adapt this contractual framework. Flexibility is required to be able to qualify this type of infills or tiebacks of short-term cycles investments.
Maybe one more question at the side from Blake.
Thanks. It's Blake Fernandez with Piper Jaffray Simmons. I realize we're late in the hour, I'll just ask a quick question on decline rate. I know you said it's down to about 3%, and part of that was underpinned by long cycle projects. I presume some of that is also short cycle infill drilling, which is probably shorter term in nature. Can you give us a sense of what you think the medium-term decline rate is and when we might start to see that? Thanks.
Well, the 3%.
The 3% is very simple to explain. 50% of our production has no decline. That's zero decline. The other 50%, which are more shorter plateau type like in Nigeria, in Angola, in Congo, leaving aside the LNG project, of course, has a 6% decline rate, which is in line with what you can find in the industry between 6% and 7% in general. Nothing special. The infill drilling, yes, they may have some higher decline rate, but this is part of the 6% I told you.
The short cycle I mentioned to you that we are mobilizing, which will represent 100,000 barrels per day. In fact, it's helping to lower the decline rate of the base of production. By doing this work, the 3%, honestly, it's not 3 to 4, it's 3% and for quite a lot of years, many years, in fact. You can consider it.
I think there was a question at the back on the left. Christyan.
Thank you for taking my question. This is Christyan Malek from JP Morgan. First question, when you look at the ambitions to reduce your carbon footprint through low carbon electricity as well as gas, et cetera, into the next decade, do you think your CapEx guidance has been appropriately recalibrated to stay within that $15 billion-$17 billion beyond 2020? I'm just trying to triangulate how you keep spending to grow your bread and butter business, assuming growth remains a priority as well as transitioning your sales mix towards low carbon while staying disciplined within the CapEx. Secondly, coming back to shareholder return, with your gearing now well below your target to stay under 20% and strong cash generation over the next few years, what is stopping you from committing to more aggressive shareholder return strategy that runs concurrently with lower debt?
I mean, pivoting around debt reduction when you already have a healthy pipeline of projects to sanction suggests that you're prioritizing excess cash for acquisitions to keep growing as opposed to returning it. Thank you.
Okay, Christyan. Basically, the EUR 15 billion to EUR 17 billion CapEx, if we are facing no inflation, that what we are not facing any inflation today in our business, meaning deep offshore and LNG. This is valid post 2020. If there is inflation coming by 2021, 2022, because the oil price is at 100, we will see. As Patrick told you, we commit in volume the volume of works we want to do. Under our current pricing, it is EUR 15 billion to EUR 17 billion. Another question on the gearing. We can be as low as single digit if we go in a high turn of the cycle. I used to say that in one and one, while entering in the past downturn, when we had a 30% gearing, that was not comfortable. We deliberately want to lower our gearing when we are in the high range of the cycle.
Single digit, why not?
I remember the first half of 2016, there was very little capacity to move, and there was plenty of opportunities to market. We would have had a gearing of less than 10% beginning of 2016. I can tell you we have been much more active, and we could have taken other opportunities. I think, again, this is driven by this fundamental belief that cycles will come. Maybe we are entering a new high cycle, but downside will come back. I would have loved to have entered into it, to have in 2016 a 5% or 10% gearing. We'd have been more active in some areas that we weren't enabled to do that by that time. We were focused on strengthening the balance sheet. Then we done it in 2017 because we were done the work. I think this is a lesson first.
Why not committing to a buyback? I answer the question because let's, again, we were at EUR 42 per barrel one year ago. We are today at EUR 75 or EUR 80. I don't know where we'll be in one year. I'm not so optimistic by end of late 2019 if the U.S. shale oil is coming back into the market. You could see this world is plenty of surprise. First. Second, what I said, I answer clearly, we introduced this buyback in order to share with our shareholders part of the additional revenues. We will do it. This was my answer to, as a second priority to John. To give you today a figure six months after we put a framework on the table would be for me not so I don't want to modify the figure every year.
What I want to do, by the way, there again, I know that some of my peers announced some buybacks. We announced one, we execute it. Not all of them have executed it. Maybe it's less ambitious. Maybe we are prudent. We are delivering what we say. Of course, again, I'm committed to do that. I consider that in a commodity business compared to a 50, as soon as we announce to you that we manage a company at $50, $60, it's logic. If we have $80, we have additional revenues, part of it should go back to the shareholders, either through increase of dividends or buyback. To give you figures, it's premature today. I will be happy to come back on this topic in the near future. That means that the price remain at the high side.
Any more questions before lunch? There's one here from Lucas.
Thank you. Patrick, sorry, it's staying with buyback, it's asked in a different vein. As the oil and gas industry moves to a different stage in its cycle, volatility increases, future growth becomes more or less certain. What point do you start to think of an organization as a per share company rather than absolute? That's really directed at dividend. The question is, when do you start thinking more per share rather than absolute?
Okay. Obviously, I can't be happy.
You're always happy.
We were much more than that, and you know that, and we are working towards pleasing our shareholders so that we can attract new ones and increase the share price. That's basically what we are doing.
Sorry, that's not what I meant, Patrick. What I meant was that the pull on cash flow from dividend is.
Substantial. At what point do you think more about yourselves as a company that looks to grow per share rather than grow absolute in the context of?
We basically gave a target of a 50% payout towards the shareholders. That's basically what we have. We have the dividend, and on top of that, we can play with the share buyback to achieve it.
Thank you.
Maybe time for one last question before we break for lunch. Martin?
[Non-English content]
Yeah, hi, Martijn Rats, Morgan Stanley. I was wondering if you can talk a bit about fiscal terms. Of course, you've done a lot about your own costs, one of the main components of IRRs of deepwater energy projects is what the government allows you to make. Now that basically we've had this big oil price downturn and looks like we've sort of started an upturn, any movement in fiscal terms that you're seeing?
No. Nothing. I mean, again, I think it's premature. I think the whole ecosystem is still prudent today, I think it's too early. No, I don't see that. In fact, no, there is honestly no discussion on which could be detrimental to us. I think we have been even able, in some few cases, to enhance the fiscal terms in order to launch some marginal phase, like in Angola, which have been confirmed by the new president. I think it's still you have many of these producing countries which are willing to see more activities, which have suffered a lot, in fact, from the downturn. They are still offering some possibilities to enhance the terms. We didn't see any of that. No, to be clear, nothing.
Thank you.
Okay. If that's the end of the questions, maybe we could break for lunch now. If you'd like to join us for lunch, we just have to go up the stairs to the seventh floor, we have a buffet lunch available there. I'm planning to be back in the room at 1:30 to start the focus sessions. As Patrick said this morning, the afternoon, we have a series of focus sessions on different parts of the business, our plan is to run them two presentations at a time, back to back, then followed by a Q&A for one hour for each of the three sessions.
The first one this afternoon is by Arnaud Breuillac, who's the President of Exploration & Production on Deep Water, which is a profitable source of growth, then followed by Laurent Vivier, who's the Senior Vice President of Gas, which is growing an integrated LNG value chain. Pass the floor over to Arnaud and Laurent.
Good afternoon. It's always a challenge to be the first speaker after lunch. I hope that my presentation and maybe even more my French accent will keep you awake. My presentation will focus on our deepwater operations and assets, which will contribute significantly to the profitable growth of TotalEnergies business in the next few years. Here, you see a picture of Kaombo Norte, which is our latest FPSO in deep offshore Angola, which started at the end of July of this year with a capacity of 115,000 barrel per day. This is actually our tenth operated FPSO in the world. Deepwater is one of the strengths of Total, and we are leveraging this expertise to add profitable and cash accretive resources to our portfolio.
Our production will increase to more than half a million barrel of oil per day by 2020, with cash flow from operation over $30 per barrel at $60 per barrel. Deepwater is approximately 15% of the group production, but will contribute to more than 35% of the cash flow from operations in the coming years. Like for the rest of our production, we have very low OpEx, amongst the lowest in deepwater. By 2020, we'll have three main zones of production: Africa, Brazil, and the U.S. Gulf. Africa. This is where we developed our expertise, pioneering developments in Angola, and then we have developed successfully giant projects in Angola, in Nigeria, and in Congo. This year, in addition to Kaombo Norte, we will start production on Egina FPSO in Nigeria on the same block as our Akpo-operated FPSO.
We have two axes of development. Short cycle infill opportunities, usually tied back to existing infrastructures, and larger size projects like Owo in Nigeria. In Africa, we'll produce 400,000 barrel per day in the coming five years. Second, in Brazil, we are growing our portfolio with already producing assets like our operated Lapa FPSO or Libra and Iara through early production facilities. It should be noted that we are the first IOC to operate a field in the prolific Brazilian pre-salt polygon, and this is with Lapa. On Libra, the first FPSO renamed Mero-1 , has already been sanctioned together with two FPSOs on the Iara giant block, and we have a new wave of projects coming up for sanction. Our Brazilian production is expected to exceed 100,000 barrel per day by 2022 and continue to grow afterwards.
Finally, in the U.S. GOM, we already have a solid cash generation from our assets of Tahiti and Jack, and we are preparing the next wave of deepwater projects following our discoveries on Ballymore and North Platte, and our acquisition of Anchor with a target to reach 100,000 barrel per day. In addition, you will see that we have a high potential exploration portfolio. The cash generation from deepwater startups will be growing significantly in the next three years, and this is supported by three already started projects or in very advanced state of completion. You have Moho Nord in Congo, Kaombo Norte in Angola, and Egina in Nigeria. Egina FPSO is already on location and has been anchored successfully and is now in commissioning, preparing for startup before the end of the year, and Kaombo Sul is in the final phase of construction and should start up mid-2019.
The cash flow from operation at $60 from those three projects will grow from $1 billion to $4 billion by 2020. These FPSOs will represent 200,000 barrels per day or 7% from our production, but equivalent to 20% from our cash flow from operation. With this additional production, TotalEnergies will consolidate its position of number 1 in Africa. Indeed, our deepwater expertise was developed in Africa, where we obtained several industry awards from the OTC for world first. I could mention the first hybrid riser tower on Girassol, the integration of gas lift and heating systems in production risers on Dalia. Akpo was the first all-electrical FPSO, and on Pazflor, we installed deepwater subsea gas liquid separation. We now operate 10 FPSOs, more than 600 deepwater wells, and we deliver a very robust 95% operational efficiency thanks to operational excellence and continuous improvement of maintenance and logistics.
We have also reduced development costs. For example, the number of days required to drill and complete a deepwater well in West Africa has been reduced by 35% from 2015 to 2017 thanks to optimized and standardized well design, removing some casings, by lower non-productive time, this is all of the preparation of the drilling campaign and the training of the crews, and also by the use of digital with a remote monitoring 24/7 from our expert center in Pau. As was mentioned this morning by Patrick, in Africa, we have many short-cycle development opportunities, which actually went to the back burner when we put the brake on investment in 2015.
Now, with much more favorable rig market and optimized design to reduce costs, we're able to launch these small projects, which are mostly infill wells tied back to existing infrastructures, and the associated commitment are short terms and flexible, and incremental production is coming very quickly from within a few months to up to two years. In Angola, we're progressing with a sanction of approximately 100 million barrels by the end of 2019, and these barrels provide high cash margin greater than $35 per barrel at $60 per barrel environment, and are very profitable with internal rate of return greater than 15% at $50 per barrel. Thanks to our effort, unit costs have been cut by half since 2014. In Nigeria, we have more than 100 million barrels to sanction before the end of 2019 with high cash margins and strong profitability even at $50 per barrel.
Like in Angola, we have simplified design and optimized the use of existing infrastructure. We're also working on the next phase of larger projects, and here are three examples in Nigeria prolific deepwater domain, where our target is to take FID before 2020. First, Owo on OML 138 with 1 billion barrels that we intend to tie back to Usan FPSO. As a result, the technical costs are very competitive for this development. Bonga Southwest on OML 118 with more than 600 million barrels developed from a standalone new FPSO with a capacity of 150,000 barrels per day. Finally, Preowei, our discovery on OML 130 with more than 100 million barrels that will be tied back to Egina FPSO.
As you can see, for most of these developments, we're trying to make maximum use of existing infrastructures to lower technical costs and to improve the profitability and lower the break even of these projects. Let's go to Brazil. Brazil is a growth area for Total with many world-class deepwater assets, which have been added to our portfolio at very competitive price as we were early movers. It started with our entry in Libra in 2013 and the signing of a strategic alliance with Petrobras in 2016. This alliance gave us access to Lapa field as operator and to the giant Iara block. Brazil pre-salt deepwater domain benefit from a fantastic geology, providing low development costs. Reserves per well are five to eight times higher than in most other deepwater basins.
Our resource are now adding to more than 1 billion barrel with about half of these barrels already sanctioned or under production. We have a pipeline of projects, as can be seen on the slide, with four FPSOs on Libra, Mero-1 , two, three, and four, each with a capacity of 150,000 barrel per day. The first one has already been sanctioned. Libra giant field with more than 3 billion barrel of oil on the same structure with excellent reservoir properties and the same oil quality, is providing a unique opportunity to design one FPSO and build several. On Iara block, we will have three FPSOs, two of which are already under construction, and the recent well on the Sururu structure in the central part of the block has uncovered an oil column of 530 meter of net pay.
This is the largest ever found in Brazil, a very promising block indeed. We are working on the next phase of development on Lapa field to be sanctioned in 2019 next year. All together, we shall be producing more than 100,000 barrel per day by 2022 with CFFO greater than $30 per barrel. The U.S. GOM, where we have recently grown our portfolio to get a new wave of development of deepwater developments. The current production from our equity interest in Tahiti and Jack fields is already contributing to $400 million of CFFO per year at $60 per barrel over the period 2018 to 2022. With our discoveries on Ballymore and North Platte and a high potential exploration portfolio, we have about 100 leases in the U.S. GOM with good prospect in the Norphlet and the Wilcox plays.
Not to mention our entry in Mexico, where we have seven licenses, three of which on which we're operator. We feel confident to reach a material production of more than 100,000 barrel per day. I would like to zoom on two discoveries to illustrate our strategy in the U.S. GOM. The most recent and promising discovery of Ballymore in the Eastern GOM on the Norphlet play with resource estimated between 500 million barrels and up to 1 billion barrel. Two appraisal well will be drilled later this year to firm up this potential of this major discovery, potentially one of the largest in the U.S. GOM for nearly 20 years. This discovery can be developed very quickly with an early production scheme through available capacity in the nearby Blind Faith infrastructure.
This will provide both an opportunity to reduce the time to market, but also to de-risk and optimize the full field development of Ballymore. We have also captured, as is illustrated on the slide, a number of blocks of exploration acreage with many prospect that could be tied back to Ballymore development. Second, North Platte, and you see the map on the right side of the slide. Operated discovery in the Central GOM, which is on the Wilcox play. We have fully appraised this discovery by seven penetration, which has confirmed its potential for a standalone development with a 75,000 barrel per day semi-sub facility tied back to nearby export systems. We are in the progress now of optimizing the well and topside design with the objective to take FID in 2020. Also, like for Ballymore, we have nearby several ready-to-drill prospect in the vicinity of North Platte.
To finish, I would like to look at our deepwater exploration potential in emerging areas. First, Guyana, where we've been able to capture several high potential blocks on trend with recent discoveries, including our latest entry in the Orinduik block just after Exxon's recent Hammerhead discovery. Second, Mauritania and Senegal, where we have now a significant acreage in the deep offshore exploration domain. We've already shot 3D seismic over most of these blocks, and we have several ready-to-drill prospects, which we'll start to drill later this year and in the beginning of next year. Finally, South Africa and Namibia. We will drill at the end of the year, the Brulpadda, very promising oil prospects in Block 11B, 12B, with a semi-sub rig, specially designed to operate in the demanding weather condition offshore South Africa.
We have also captured high potential acreage in the emerging Orange Basin in Namibia, and where we will drill the Venus prospect in the second half of 2019. Of course, I take the opportunity to mention what was mentioned in Patrick's presentation this morning about our discovery on Myanmar, which is also deep water, and which will be a nice in fact, usage filler of the Yadana facility. Altogether, we have a strong deep water exploration portfolio with numerous drillable targets in emerging areas, targeting significant resources to be drilled in the next two to three years. As a conclusion, a few takeaways. Thanks to our deep water expertise built over several years, we are able to optimize developments to reduce breakeven costs. As a result, deep water is today for us, a growing and very profitable part of the portfolio.
We have a strong position in Africa with several major projects, significantly contributing to cash flow generation in the next three years. We are at the same time leveraging existing infrastructure to develop short-cycle projects. As an early mover, we have been able to capture at low cost, a very sizable position in Brazil with a pipeline of projects on world-class deep water assets. All these developments have low technical costs. Finally, we are building a material position in the Gulf of Mexico. We are capturing high potential acreage in the deep water exploration domain to capitalize on our deep water expertise with the objective to find large resources with low breakeven. Thank you. I think, Laurent, now the floor is yours.
Thank you, Arnaud. Good afternoon to you all. I would like to present to you today not only how we are growing on this integrated LNG chain, but moreover, how we are capturing value and trying to monetize the flexibility and the changes which have been occurring on this LNG market. As Patrick noted earlier, the LNG markets are continually defying expectations. A few of us would have predicted that China would become the second-largest importer last year. The combination of competitive LNG pricing and the benefit of cost reduction across the chain from liquefaction to shipping and to regasification, coupled with favorable government policies to promote clean gas over alternatives, have led to a voracious LNG appetite with the number of LNG importing countries now exceeding 40. China LNG consumption could reach close to 100 million ton per annum in 2025, but it's no means limited to China.
For instance, demand from emerging Southeast Asian importers, and the list is long, Indonesia, Malaysia, Philippines, Myanmar, Singapore, Thailand, Vietnam, could increase fourfold from now to 2025, reaching 50 million ton per annum. The so-called LNG glut, which some predicted, has not materialized. Asian spot forward prices remain very high today at an equivalent of around 15.6% of Brent for the coming winter and 12.5% Brent for the coming summer in 2019. As we can see on the right-hand side of the graph, the world will face LNG shortage by the mid-'20s without new liquefaction projects being launched. As you will see later in this presentation, Total is preparing to take FIDs on a series of very competitive projects on all the major production basins. Gas markets are not only evolving rapidly in scope, they're also changing in maturity and moving toward being a commodity.
A market is generally considered to be liquid when the churn rate, the ratio of traded commodity to throughput, exceeds 10. As we can see on the left-hand side of the graph, the Atlantic Basin has already reached a very high level of liquidity with lengthy tenors. The churn rate for the U.S. benchmark Henry Hub stands at 50, while the combined rate for the two key European markets, the National Balancing Point in the U.K. and the Dutch TTF, has reached 37. In Asia, there is still a long way to go before they can be deemed to be a liquid market with paper trade well below physical volumes, but it is nevertheless growing exponentially. It is expected that 30 million will be traded on the JKM, the benchmark price for spot cargos delivered into Japan and Korea, a tenfold increase over two years ago.
Total has played a major role in the growth of the JKM trading and adding liquidity, accounting for around 16% of the volumes traded this year. We expect this liquidity to continue developing rapidly. Let us turn now to our portfolio. We have succeeded in building an integrated portfolio strategically positioned in all major basins. Our recent acquisition of Engie's LNG asset complemented our existing portfolio by adding participating interest in liquefaction in the U.S. and in Egypt, long-term LNG sales and purchase agreements, an LNG tanker fleet, as well as access to regasification capacities in Europe, which supports our significant position in marketing. We are a major LNG producer with 20 million tonnes per year by 2020 on all the major production hubs. We have a fleet of LNG carriers which will grow to 18 by 2020, providing us with significant shipping flexibility.
We have strong relationships and a portfolio of long-term clients in Asia and parts of Latin America. We hold the largest regasification capacity in Europe, which as a result of integration, allows us to supply our growing portfolio of around 6 million customers in Europe and the gas-fired power plants that we just recently acquired. Outside of Europe, we are also pursuing integration by progressing projects in Asia, the Middle East, Africa, Latin America to develop floating regasification terminals and gas-fired power projects, thereby opening up new outlets. In short, we have all the ingredients and the global reach necessary to maximize value across the integrated chain. As you can see also on the map, we have a pipeline of liquefaction projects very well positioned on the merit curve and strategically placed in each of the key production basins: Russia, Pacific Basin, Middle East and Africa, and the U.S.A.
Russia is steadily growing as a global LNG supplier with links to China, and Total's partnership with Novatek is unique among the majors. Yamal LNG has been a resounding success in the industry. It took 4 years from FID to deliver the first LNG cargo last December, ahead of schedule. The second train delivered its first cargo eight months later, once again ahead of schedule, and we are on track to have the third train deliver its first cargo by early 2019, or maybe even as Patrick hinted this morning, by the end of the year. Overall, this means that 16.5 million tonnes per year of capacity was delivered in just above five years within budget, despite the remote Arctic location. During the course of development, 142 modules were delivered over two years, making it the world's biggest modular construction.
Of course, the marketing of the Yamal volumes was also a great success, with 85% of sales committed under long-term contracts indexed on oil. Novatek is now developing a fourth range, just below 1 million tonnes, with a cost target below EUR 500 per tonne, taking advantage of existing facilities and the Yamal reserves. The Yamal success owes much to the strength of the partnership with Novatek. Our track record on Yamal significantly de-risks the next giant project in the vicinity, Arctic LNG 2, which fits perfectly with our strategy of developing LNG on giant low-cost onshore resources. As part of the deal, we acquired 10% of Arctic LNG 2, which will produce 19.8 million tonnes per year of LNG with three trains, and that represents, with direct and indirect interest, a share of 21.5%.
By capitalizing on our Yamal development experience, the target is to reduce construction cost by 30% compared to Yamal by having the LNG trains installed on shallow water gravity-based platforms, avoiding the necessity to construct on permafrost. There are also synergies in shipping the Yamal LNG carriers and facilitating the access and using the northern sea route all year long. Moving to the Pacific Basin, we are pleased to have achieved the milestone of first gas on Ichthys in July, and we expect the lifting of the first condensate cargo by the end of this month. The first LNG cargo is expected in November. Ichthys project unlocks 3 billion BOEs of gas with high liquid content and involve the construction of two floating units, a long pipeline to shore, and a liquefaction plant.
The project is underpinned by solid long-term LNG contracts, all indexed to oil, and together, Yamal and Ichthys will add around 250,000 BOE per day for Total. Moving to Papua LNG, elsewhere in the Pacific Basin, we are progressing with a highly competitive project that benefits from onshore gas with liquid content, synergies with existing liquefaction facilities, and proximity to Asian markets. The LNG plant will be supplied by gas associated with the Elk Antelope fields discovered by Total. The conceptual choice of the downstream is under discussion with our partners in order to maximize the integration with the existing plant, therefore decreasing cost. Nigeria Train 7 is another competitive project with the sizable cost, low cost gas resources in Nigeria and the obvious synergies with the existing facilities. The project consists of debottlenecking the existing plant and the addition of a new train of 7.5 million tonnes per annum.
The feed is ongoing and FID could take place in 2019. Moving to Qatar. Given our long history and close partnership with this country, we're of course interested by the opportunities arising from Qatar's plan to grow its production to 100 million tonnes per year from the existing level of 75 to 80. We have been in Qatar for a long time. We are a strong partner, and the existing facilities are world-class and synergies could be found to optimize the construction of three additional eight million tonne per annum trains. The U.S. is obviously well-positioned to supply low-cost LNG, and we have been actively expanding our exposure there. The Cameron project was a big part of the LNG portfolio that we acquired, and we are quite excited by the opportunity to add two more low-cost trains.
We accessed a tolling agreement enabling full integration in the gas to LNG value chain. The development of Trains 4 and 5 have already been authorized by the U.S. authorities. Both the FERC and the DOE, and developing these trains are a priority for us. We have strong partnership with Sempra and of course the Japanese partners. Tellurian separately, in our acquisition last year of 23% of the shares in Tellurian, allowed us to increase our exposure in the U.S. Tellurian is looking to developing project based on an integrated model, sourcing low-cost shared gas and delivering low-cost LNG through modular trains concept. To conclude, we have a very strong base to build upon. As of today, in fact, we are shareholder in 12 LNG liquefaction plants that currently generate 25% of global LNG output.
Based on our project pipeline, by 2025, we expect to have stakes in 15 plants producing around one-third of global LNG volumes. Together with our liquefaction capacity that I have detailed, we have also purchased quantities from third parties, allowing our portfolio to reach the size of 40 million tonnes per annum. At the same time, we consistently ensure that we maintain a solid physical base in our portfolio with third-party sales and regas capacity supported by our marketing base in Europe. This means we have the comfort of knowing that we always have a physical outlet for our cargos, while in practice, continuously optimizing the flows to capture the highest margins wherever they lie at any one time. This physical balance provides us with a solid base case, a building block from which we maximize value.
As you can see from the chart on the right, our exposure to price reviews is also well managed with less than 10% of our sale contracts open to reviews before 2022, after which the market is expected to tighten. The limited exposure to price reviews was one of the strengths of the NG portfolio. Starting from this building block, which offers us a solid base case, we need now to optimize and generate additional value. In order to do this, you need three elements. The first is portfolio flexibility. We have the contractual ability to place 65% of our volumes in whichever basin offers the highest net back at any one time, either because the contracts have flexible destinations or because we're able to reload them from Europe. Secondly, shipping. We will have a fleet of 18 vessels, which is an important competitive differentiator.
On this graph, you will see the decrease of cost for each cargo which has been chartered under long-term contracts by Total for typical trip from the U.S. Gulf to Asia. The steady development of this fleet allows us now to have some vessels with a travel cost of 60% lower than vessels which were chartered in 2006. Finally, by having access to regasification, we are able to constantly arbitrage between supplying LNG to the European market, where we have a large marketing base, or diverting LNG volumes to market elsewhere that fetch a higher premium and purchasing pipeline gas as a replacement. As you will see on the chart on the far right, we expect to reload 18 cargos from Europe this year to take advantage of attractive Asian prices. I would like to share now some practical examples of how we bring value to this portfolio.
First, on the left, let's look at a practical example of physical optimization. All this will look a bit like plain vanilla to some of you who are a bit familiar with oil trading or oil products trading. This kind of optimization was absolutely unthinkable five or 10 years ago in the LNG market with all contractual constraints that were existing. The starting point is one of our U.S. FOB cargos coming from Sabine Pass. At first, the base case was a delivery to Europe, then in the second stage, we seized an arbitrage opportunity with the aim of diverting the cargo for a spot sale into Japan, thereby adding margin with higher Asian prices. We didn't stop there.
In the third stage, we went for another arbitrage by answering a late call from spot selling to Mexico, thus rediverting the cargo that had just crossed the Panama Canal to capture a further premium above Asian prices. Meanwhile, we are able to secure a cargo from Malaysia on the spot market. This set of spot transaction generated around $2.5 per BTU extra margin for one single cargo and also freed up some shipping capacity. Obviously, we will not be able to do this for each and every cargo, this sort of optimization is nevertheless recurrent. It is the case because we are in a unique position given our portfolio size, flexibility, shipping fleet with reduced cost, and of course, global reach. I must say that not everybody would be in a position to do this kind of things.
You need to have the right building blocks, regas, shipping, long-term contracts, trading, and hedging capabilities. On the right-hand side, we see an example of paper optimization before the cargo loading. The chart shows the period from September to November last year, which was marked by high market volatility. As can be seen on the graph, initially, Europe offered the best netback for U.S. cargo. The tide then shifted to Asia and before going back to Europe and then finally ending up in Asia. By arbitrating between Europe, the NBP, and Asia before the cargo delivery, and by hedging the exposure, we were able to capture an additional margin. Those optimizations, both physical and locking arbitrage between basins, are monitored for each single cargo at any time in our trading offices in Houston, Europe and Singapore.
What is the result of all our efforts to not just grow our LNG business, but also to integrate across the value chain? We have become the world's second-largest LNG player among IOCs. Within the next two years, Total will be managing around 10% of the global LNG market. We are thus confident that integrated gas from well head to the customer will generate EUR 3 billion of cash flow from operations within two years, I have absolutely no doubt that we'll keep growing after that. Thank you very much for your attention.
Thank you. I don't need to ask you a question about that. First question on LNG. Give us some good examples of benefits of scale. If I'm not mistaken, LNG was your domain. The number one player, Shell, is telling us that the length of LNG contracts has increased dramatically. You see it. They are telling us that the credit quality of the buyers [audio distortion] . Can you talk a little bit about what is the average length of your contracts? What portion is actually sold spot? How does that change impact the economic risks of the business? And second quick question on deepwater. If usually it is 40%-50% of the cost of a project is drilling and the rest is subsea and facilities.
Looking at the historic average of costs and given that steel prices have shot up dramatically in the past three years, can you talk about how these costs are evolving? Possibly, how do you see them evolving as you look to launch all these numerous deepwater deals over the coming months?
I will start about the LNG. I think you mentioned the duration of contracts. I think that's not the only change which is in fact happening on those LNG contracts. You have shorter durations, usually more flexibility in order to accommodate some demand from the buyer and more seasonality, for example. I think that's one of the great strengths of being a portfolio player, having some volumes coming from different areas and having a larger portfolio that we are able to accommodate those kind of demands. The tenor of long-term contracts, which used to be 20 years on a traditional basis, now I would say traditional demands are between 7 and 10 years. We are still able to secure for long-term contracts, i.e. usually linked to E&P projects, some 20-year contracts on typically on the projects I was talking about with the traditional price review.
As you've seen, we have limited exposure on this.
On the subject of the deepwater cost, I think my presentation at one objective which was to show that in our portfolio, we are very much looking on how to optimize the different part of the cost for a deepwater development. I explained how we optimize well design, which was clearly in DrillX, one of the important cost for deepwater developments. It's clear that beside the fact that we've been able, if I just take the three countries that I mentioned, West Africa, this is more than 100 wells. We have been really able to optimize the design of each single well to reduce the number of casings.
We've worked a lot on the way in which we prepare campaign, which by the way is something we inherited from our drilling factory in Indonesia, for example. We see that the preparation in the drilling campaign is something that makes a huge difference, which would work independently from the cost of steel or material. That's for the drilling. It's clear also that we see in certain basins, and Brazil is really a best example, fewer wells per development. If we look at the current early production that we have on Libra field, we have a Pioneiro de Libra, the early production scheme, FPSO. We are producing 50,000 barrel with just one well. By comparison, in other deepwater basins, we need 4 to 5 wells to produce this amount. This is clearly an area.
When it comes to FPSOs, we've also Optimize in the last two, three years the design by looking at the complexities that was added by having several levels of process modules, one above another. I used to say that when you have a piece of equipment on shore, you can look at the cost of the equipment with its environment to be multiplied by two. If you go to conventional offshore because of the fact that you're concentrating risk on one platform, you multiply by three or just as a rough figure. On an FPSO, because you are on a, effectively a tank of oil, you have a multiplication by 10. The superposition of layers of equipment on an FPSO is actually a very significant cost driver to the design of FPSO.
We've done a lot of work on this in order to avoid different layers of equipment, one above another. One way, it's as part of the alliance we have with Petrobras, is by making the units more compact so as to avoid the superposition of layers. We've done also a lot of work on FPSO design so that the constructability is much easier. It's clear that, as I mentioned on Libra, when you're able to design one FPSO and to build several, you also have economies of scale. What I'm saying is that overall, we have tried to work, and this has been really an effort in the last two, three years, on all the different aspects of well subsea architecture and FPSO design so as to minimize the cost.
Of course, there may be some inflation on some of the material, the fundamental design change that we've made will mean that the cost reduction we are making these deep offshore developments much more cost effective. We effectively see that we have low technical costs.
Okay, there's a couple of questions over this side. John, then maybe Lucas.
Thanks. Two questions, be quite quick. The first, just to follow up on that answer on the offshore. Is the point that you're making that, effectively through the projects that you're choosing and the way that you're choosing to go about them, you avoid this issue that I think people are finding somewhat difficult, a sort of paradox where the offshore oilfield service industry is saying activity rates are starting to pick up, we think that costs will start to rise, and the operators are saying we can continue to operate actually at a higher rate of activity, but within the envelope of our current CapEx. Is that the answer to that question, that you can raise activity rates but you're comfortable that through your efforts that the CapEx isn't going to rise? The second question on LNG.
What level of portfolio activity in such a large portfolio enables you to have visibility on the longer term, I guess, is to launch, sort of backwards to launch FIDs of projects without selling all of the LNG as you might have done 10 or 20 years ago. What kind of level of pre-sold LNG would you feel comfortable with as a proportion of your equity total to go ahead with a new project? Thanks.
I will start answering the first question. This was really shown this morning in the presentation where you see that today you have about half of the fleet utilization in terms of deep water rig, half of the rig are still stacked waiting for work. It will take considerable amount of projects to be launched to actually get to a level where rigs will be fully utilized. I would like to highlight as well, and this is part of the previous answer, that looking at West Africa, we have reduced the time per well, and this is drilling and completion, by 35%. We believe that we can be more effective. We need less rig, if you prefer, for the same development. Altogether, this is clearly going to help us to manage for quite some time the increase of capacity.
With regard to the yards, you again this morning you show about the fact that the yards, large EPC contractors are still very short of work. There is still a lot of spare capacity around. I should mention that one of the pleasant discovery of Yamal LNG project has been the fact that we obtain extremely high quality and I would say reliability from the Chinese yards. I would say today the competition is much higher from all of these contractors, whereas for FPSOs we considered maybe three, four years ago that there was no possibility to build any FPSO if it was not done in Korea. Now this is not the case. I would say the market is much more open. We believe that we can have some increase of activity without seeing any impact on inflation for now.
For LNG projects, so far, despite this increase in liquidity that we've seen, there hasn't been today an LNG project which has taken FID without 100% of the volume being committed to long-term contracts. It can be in two nature, either selling to third parties or asking some of the shareholders to take their responsibility as the off-taker and offering the security of the balance sheet for the LNG project itself at its own perimeter. That is still the case today. There is no full liquidity in the Asian market allowing an LNG project to be launched just per se and counting on the liquidity of the market. We need the physical balance and the safety of a buyer.
That's what we are doing as Total, sometimes playing a role, not only being in equity, but offering as well the strength of our portfolio trading so that we are a buyer in order to facilitate or accelerate an FID. We are not there in terms of liquidity of market in order to be able to not need long-term LNG contracts from LNG projects.
Okay. I think Lucas had a question in the center.
Thanks very much. Again, sorry, [two, if I might , or about three]. Exploration, it feels as though you're increasing the risk profile of the spend again, i.e., that you're starting to push more back to the frontier. I just wonder whether you could confirm that view and give us an indication as to how the split between near-field and frontier is starting to shift again at Total. Secondly, on LNG. Laurent, on the Engie portfolio, my understanding was that a number of the supply contracts to Engie in Algeria were nearing the end of their life. Can you make any comments as to the longevity of Algerian supply or what you may be doing at the present time, or have indeed done to extend supply, if that observation is correct to start with? Thank you.
I'll start to answer on the exploration portfolio. Actually, we've done exactly the opposite. We've actually rebalanced the portfolio so that we have fewer overall, I would say, high-risk, high-reward, frontier prospects, and rebalancing towards, on the one hand, emerging basins where you have a proven hydrocarbon system that works and when you have evidence of structural closure or stratigraphic trapping that you can demonstrate or validate through a direct hydrocarbon indicator. I would say 50% of our portfolio. We have considered that we need about 35%, and we are about at this level if we look at the next three-year portfolio of mature exploration, which is near-field exploration like Glendronach, where you are drilling on known basins where you know there is a hydrocarbon, you have discoveries and you are really drilling on objects that you've been able to identify in seismic.
I would like to add that from this perspective, all of the progress that we are making in use of digital algorithm for doing fast-tracking of seismic interpretation is unlocking a lot of value. The mature exploration, we believe, is going to be more and more successful with these skills, leaving about 15% for what I would consider to be the high-risk frontier exploration. Maybe I gave you the wrong impression with my slide, but clearly, we are doing exactly the opposite, and we are coming back from a strategy where maybe a few years ago, we were going maybe too much to high-risk targets.
About the Engie portfolio, in particular, the Algeria contract. Yes, you're right in saying that this contract has got an ending date, which is early 20s. It is, of course, strategic importance to continue the discussion with Algeria, not only for political dimension, but as well because it underpins the use of some Fos capacity, regas capacity in the south of France. The discussions have started. I cannot say much, but of course, discussion have started for renewal or extension of this contract.
Laurent, can you just remind us what the volume was or the volume is that comes into Engie's portfolio from Algeria that is subject to extension?
We will see what it will be.
Thank you.
Okay, I think Thomas has a question over on the west.
Thank you. Two quick questions on Brazil, please. You declared commerciality on Mero not too long ago, but you still have an exploration period on the southern and central panel of the Libra field. I wonder if you can give us an update on any activity in those panels. If not, the planned activity. The second one on Iara. If I remember correctly, Berbigão has had appraisal wells drilled in the past and it's proven very heterogeneous and some parts of the reservoir, especially the central part, has actually not flowed very well in the past. I can see here that you've drilled a well and you talk about great net pay, but I wonder if you can give a bit more color on the reservoir characteristics and whether it's finally flowing, because that is a big question mark. Has been in the past.
Final question on LNG, but it might still be for Arnaud. Yamal, excellent project. Ichthys, shocking. What are the lessons learned?
I'll start with a question on Libra. Indeed, you're right. The development, I would say 3 billion-4 billion barrels of oil is a northwest panel where we see now four FPSOs and it's really one of the most remarkable field that we've seen to date in terms of deep offshore in the pre-salt because of the quality of the reservoir and the productivity per well. I mentioned up to 50,000 barrels per day per well, which is quite incredible. The possibility to design one FPSO and build several, which is a dream for a deepwater development. We have indeed done some exploration. In fact, continue the exploration on the central panel and the southeast panel. We have identified some oil column, but also some gas. Today, we are continuing with the appraisal of this field.
Of course, we are concentrating on the development of the best part of the field, but we are still doing the appraisal of the discovered resources on the rest of Libra block. Of course, we will try to see if there is an economical development associated with these discoveries. When it comes to Iara- You have essentially three fields, as well indicated on one of the maps presented this morning. We have the Berbigão High structure, which is being developed together with the southwest part of Sururu, where we have sufficient resources to have one FPSO. We have two FPSOs that will be located on Atapu, which is the field that is the most on the eastern part of the block. We have this huge Sururu structure, where one of the concerns was actually the distribution of the reservoir.
It was a very pleasant surprise to see such a thick reservoir, completely unexpected. Since one of the main concerns on Sururu Central was the density of resource, it's very good news. Now this is the beginning. We need to do the appraisal. We need to look at, of course, deliverability per well, but it is clearly today an upside from what we had seen initially.
I don't know if I'm at the best place, but maybe Arnaud will take over for comparing Yamal and the Ichthys and the lesson learned.
It's two very different projects. It's clear that we are in the process of looking at all of the ingredients that made Yamal LNG such a successful project. I think that we had a very strong supervision throughout the project. We had very good contractors. We were, as I mentioned earlier on, forced to go to China for the yards because the Korean yards at that time were absolutely full. We find out that the performance overall was really much better than average. It was much better than expected by a margin, but on top of that, much better than what we had seen on a lot of other yards. Particularly, what was remarkable is the fact that out of the 148 modules that were delivered in Yamal, there were very few punch lists.
The amount of work to be done, to be redone during the final commission phase on the modules were very little. We knew for a fact that one of the key success to the Yamal project was going to be the scheduling of all the modules arriving in due time during the weather window on location. Again, all of these logistics worked very well. I think we must say that there was very good cooperation between all of the parties involved. Ichthys is clearly a project which had a much more complex, in a way, architecture because you had two very large offshore platforms in offshore, in fact, an FPSO plus a CPF, a very large floating structure for the processing of the gas, initial processing of the gas. A 900-kilometer pipeline, and then an LNG facilities built on shore in Darwin.
What was surprising is to see that actually the productivity of the workers on Darwin, in what you could consider to be a much more favorable work environment, was about half of the one we had on Yamal LNG in 600 kilometer north of the Arctic Circle. We had to see that the productivity of the workforce on Darwin was much lower than we had anticipated. We suffered clearly on Ichthys of the overcapacity, or not overcapacity, overload of the Korean yards because the two main structures, the CPF and the FPSO, who suffered from quality issues, which was largely due to the level of subcontracting of the Korean yards. There was a lot of rework done offshore in an Australian offshore environment. A lot of delays and overcost resulting from, I would say, average, not to say poor execution of the work on the yards.
Maybe we could try and get one or two more questions before we break. Unless one question per person, please, so we get through as many as we can. I think Chris.
The conclusion is that it's better to work in Russia than in Australia. I can tell you, by far. I don't think Total will lead forth itself to other projects in Australia.
Thank you. Can I ask on when your partner, Novatek, sold or farmed down its stakes in Arctic-2, it published at the time an NPV of EUR 25 billion. Is that a number you recognize? Is that in any way related to an entrance fee for the farm in from Total? I hope that's a quick answer. Therefore, I'm going to squeeze in one more tiny question on U.S. projects. How do they rank compared to others, considering that there isn't necessarily an integration upstream? Thanks.
On the first question, I will not answer the first question. The second one, which is related to.
It's about LNG, I guess.
Yeah.
Okay. I think definitely when you consider the profitability of other projects on the full chain and from the wellhead or the platform down to the delivered price, we are trying to position ourselves on the right side of the merit curve. All the projects I have mentioned are extremely competitive. We are targeting a delivered price for each of those projects Below $5 per BTU delivered into Asia, which we think allows them to be, despite cycles, to be competitive in the long run. U.S. projects add something to this. Firstly, they are dependent on the Henry Hub price. Even if we are now fully integrated, thanks to an equity participation in Cameron, we keep this optionality to leave the gas in Europe and stop lifting LNG.
That is an option which I think has got great value in terms of marketing and in terms of the contractual setup. We benefit from free destination, and I've tried to highlight in my presentation the value that it can bring to being fully in control of the flows. Usually, pure E&P fully integrated projects do not offer this kind of flexibility because the priority is to off take the product.
Maybe for the final question for the session, we have a number of people following the presentation online, and there's a question being submitted by Biraj Borkhataria from RBC. Do you expect project financing for LNG projects to get more difficult as average LNG contract durations get shorter over time, and as the market becomes more liquid?
Well, I can take it. Yes, it is clear that financing may be more difficult as a result of this. Yeah.
I think once again, it is our role as portfolio player to be able to offer this kind of security. Just as a nice statistics, not a single LNG project which has been launched by the group does not have Total as a lifter of part of the quantities. It is now a recurrent scheme that we have in our mind, which is to participate by the lifting of some quantity in a fast track FID and to secure the financing of the project.
Okay. Thanks very much, Arnaud and Laurent. I propose we leave it there, we have a short break, then we will come back for the second session at three o'clock.
Thank you.
We have the same format again as the previous session. We start with Bernard Pinatel, who is president of Refining and Chemicals, talk about expanding petrochemicals, then followed by Momar Nguer, who will talk about Marketing & Services of the future. Again, we have a joint Q&A.
Okay. Thank you, Mike. Good afternoon. You have seen this morning that petrochemicals is one of the core strength of TotalEnergies. This part of the portfolio, maybe in Downstream, is sometimes less known than the rest, but it is a strong contributor to the cash flow. Last year, in 2017, petrochemical delivered EUR 1.8 billion of cash flow from operations and a return on capital employed of 30%. You understand why it makes sense to invest or to expand in petrochemicals. What I intend to do in the next 20 minutes is to tell you how we are going to execute this growth strategy. Let us first look at the market from a demand standpoint. You have on this chart the polymer, PE and PP, which represent 50% of the worldwide demand.
You see that these two polymers, which also are the main polymers of TotalEnergies, enjoy a very nice growth, over 3% a year. It has been the case in the last years. It is going to be the case in the years to come. This good growth is explained by very simple good fundamentals. The first one, of course, are the demographics. New consumers, the emergence of a middle class, as you know. Megatrends as well. We all know that energy efficiency relies very much on substituting heavy materials by lightweight materials, notably in the transportation industry. All of this drives the growth. If you do the math and you translate this more than 3% a year of growth into tons, it is equivalent to 5 million tons a year. The market needs is 5 million tons a year of additional demand that we need to satisfy.
5 million tons a year basically represent 5 world-class crackers. A world-class cracker starts at 1 million ton a year. Every year, the market needs 5 more crackers to cope with the demand. If you do the math again, you look at how many new crackers are coming, sanctioned or in projects in the world, it is close to 4. 4 in the supply, 5 on the demand side. You see that it is pretty well-balanced, which gives an overall good visibility on this market from a supply and demand standpoint. The last comment I would like to make is recycling, because I am sure we have all in mind that recycling is an increasing trend which could take share of polymer production, of course. I will come back on this one at the end of the presentation to show you what we do to address this trend.
Besides recycling, you see on the chart that the virgin part of the demand, the virgin polymer part, is still growing. It is still growing in 2025. It will still grow beyond. That is why we feel that recycling is not a threat, it is more an opportunity complementary to serving the market with a virgin polymer. I will come back on that at the end of the presentation. Overall, a good business to be in terms of growth. What about the profitability? What are the main drivers which explain how to make money, let's say, in petrochemicals? If you had only something to remember from this presentation, that it is all about feedstocks. Feedstocks represent above 60% of a cash cost in petrochemicals. If you enjoy a cost-competitive base in terms of feedstock, you have a winning combination.
You see on the left-hand side that most of the petchem feedstocks are oil-based, more than 60%, as you see. Therefore, the oil-based crackers are the price setter for polymers. Polymer prices are all linked to oil price. On the other hand, when you look at the right-hand side of the slide, you see that ethane, which is one of the main feedstock, is discounted to naphtha. You probably know, of course, why, because it is a by-product from the shale, from gas. It is very abundant and, of course, that commands this discount. That is true also for LPGs, which come either from oil or from gas, where we have also a significant discount compared to naphtha. Last but not least, we should keep in mind also that ethane can be also used as fuel, and a cheap fuel gives an additional upside in terms of energy costs.
Now when you bring the two sides of a slide together, you see that polymer prices driven by oil price, feedstock decoupled from oil price, brings a kind of winning combination, a little bit counterintuitive. The higher the oil price, the Brent, the better off you are when you produce gas-based polymers. How do we intend to grab this opportunity? You saw this slide this morning, I am not going to detail it too much. You see that we are currently conducting 3 large projects in the world, one in the U.S., one in the Middle East, in Saudi Arabia, and one in Korea. I will give you more detail in a few minutes. All these projects basically rely on the two main levers of our strategy in petrochemicals. The first one, of course, is to leverage cheap feedstocks, and each of them does.
The second thing, of course, second lever is to leverage the synergies from our integrated platforms, and you see that these 3 projects all rely on integrated platforms. Once completed, as you see, we will have a very well-balanced profile, with more than 60% of our production derived from these cheap feedstocks, ethane and LPGs, and more than 55% of the production coming out of the U.S.-- out of Europe, sorry. Now let's have a look at the 3 projects. The U.S. first. In the U.S., we have a very large and highly profitable base. You see on this chart that our petrochemical business in the U.S. delivers each year EUR 1 billion of cash flow from operations with EUR 2.5 billion of capital employed. It is very profitable, and why is that? It is because we enjoy a high-quality asset base.
You see on the slide, first, that we have in Port Arthur, Texas, a very large refinery, 200,000 barrels a day, deeply converting, which has been modernized in 2010. This refinery is fully integrated with a cracker in Port Arthur, which we share with BASF. It's a 1 million ton a year cracker, which can crack not only naphtha, but now also ethane and LPGs. We have the U.S. largest polypropylene site with 1.2 million tons of capacity in La Porte, Texas. We also have the largest U.S. styrene, polystyrene facility in Carville, Louisiana, with more than 1 million tons of production capacity. In Bayport, Texas, we are in the process of doubling the site's capacity to build a world-class site for polyethylene, and I will come on this one on the next slide.
Last but not least, I would like also to mention Hutchinson, which is a specialty chemical player, market leader in specialty materials, elastomers for automotive and aerospace. You understand why we are doing so well in the U.S. We are well-positioned all along the value chain, starting from refinery up to crackers, polymers, and specialty chemicals. Let's have a look at our very first large project, the joint venture we have just set up early this year with Borealis and NOVA. With, if I had to summarize in a nutshell, the ambition to build a world-class leader going from low-cost ethane to high-end polyethylene. This joint venture first is about investing in an ethane cracker, a 1 million ton ethane cracker in Port Arthur. It's a $1.7 billion CapEx. It's extremely low. It's one of the cheapest one on the U.S. Gulf Coast.
If you do the math and you divide this $1.7 billion CapEx by the 1 million ton of ethylene which will be produced, it gives you a cost of $1,700 per ton of ethylene, which is the second lowest cost out of the 10 to 12 crackers which are now being built in the U.S. Gulf Coast. Why is that? Just because we leverage the synergies we have with the refinery in Port Arthur. We also have in this joint venture a project which has just been sanctioned. You saw this morning the press release. We have taken the final investment decision. To invest in a new PE line, a Borstar line in Bayport, which will double the site capacity to more than 1 million tons of polyethylene. You see it's fully integrated, 1 million tons of cracker, 1 million tons of polymers.
I like to say that this joint venture, to some extent, is the perfect combination when you see what each of the partner brings to the joint venture. Total clearly brings all the integration upstream, the platforms, the synergies. Borealis is going to bring the Borstar, which is the top technology in the field of polyethylene, and that's going to be a first in the U.S. NOVA brings, of course, the polymer presence, the market presence in the U.S. By combining these three partners, we have a perfect match, which will build one of the top players in the U.S. for polyethylene. The project is well on track, and it's due to start up in 2021. Let's move now to our second large project, which is in Korea.
As you know, in Korea, we have a joint venture with Hanwha, which has been a success story now for many years. The joint venture in Daesan is one of our world-class integrated platform. It's a top asset. I would say it runs like a Swiss clock, even though it's run by Korean. It's perfect. You see that this platform is a pacesetter in energy efficiency. It's a top quartile in terms of availability. It's exactly the kind of asset we like. You see also that in terms of financials, it translates into very significant cash generation, more than close to a little bit above, let's above EUR 1 billion of cash flow from operations. It's a very nice success story, and it's not a surprise that we want to further invest in Daesan.
That's why we have sanctioned a low-cost debottlenecking project to increase our cracking capacity by 30%. What is interesting there is that we increase our capacity to crack propane, so cheap propane coming from the U.S. We have also sanctioned the investment to increase our PE capacity by more than 50%, so which to bring it to 1.1 billion tons a year. What you see very clearly that all these projects, which are to some extent brownfield projects, let's put it this way, are highly profitable with very attractive internal rate of return for TotalEnergies investment, which is going to be in the region of slightly below EUR 800 million of CapEx. Third project, which is the newest one, that's SATORP. As you know, SATORP is our joint venture with Saudi Aramco in Jubail. It's been a good partnership, a strong partnership.
We have there a refinery, which we started up in 2014. It's a 440,000 barrels a day refinery, which has been debottlenecked early this year. You see that it's, again, a very good success story, highly profitable. We generate around EUR 1 billion of cash flow from operations as well. It's very cash generating. It's a top asset, top quartile in terms of availability, fully converting, so there is no fuel oil produced in this refinery. This refinery also generates more than 50% of distillates, which position it, of course, very well for the 2020 IMO regulation to come. Clearly, SATORP is going to be a winner in this new environment post 2020. You will not be surprised that we want to build on this success.
The natural next step, of course, is to leverage this platform to build downstream a giant petrochemical platform complex. It's a EUR 5 billion CapEx. You see that for a EUR 5 billion CapEx, we will invest in a 1.5 million tons cracker, which will crack more than 50% of advantage feedstocks. We will have also some downstream units, one of them being, again, 2 lines to produce polyethylene. The feed will be launched next month in October, and we target the start-up by the end of 2023. This project will deliver, again, a very attractive return with an ARR above 15%. I've talked a lot about polyethylene because it was, of course, polyethylene is the largest polymer in the world, and of course, we want to take benefit of a cheap ethane.
There is another feedstock which we like very much, which is propane, which is abundant and low cost in the U.S. You know, propane is used to do polypropylene, among other things. Polypropylene also is a very attractive polymer. It's a polymer with a high growth. Which you use notably in the car industry. Really driven by the lightweight material trend, once again. That's also a polymer where we enjoy a very strong market position. We are the number three in Europe. We are the number three in the U.S. as well. You understand, it makes a lot of sense, of course, to look at this opportunity.
What we are currently very actively looking at are growth opportunities in the U.S. to expand our presence along all this value chain, the propylene value chain, once again, to take advantage of low-cost propane here in the U.S. I would like also to mention in Algeria, a project which is under study. Algeria is a country which has also plenty of propane, and we feel that there are some opportunities there as well to invest in what we call PP-PDH. It's a unit to convert propane into polypropylene. It's a joint venture with Sonatrach, it's currently under study, and the idea being, of course, there to serve the domestic market and also to serve Europe out of Algeria. Last slide on the polymer. I mentioned at the beginning of a presentation, you remember, recycling as a growing trend within the polymer market.
I could also have mentioned biopolymers, at the end of the day, basically, this is all about participating to the circular economy. I would like to give you two examples on how Total intends to play its part on the circular economy. On the left-hand side, on recycling, I would like to tell you a little bit more about a solution that we have developed. We call it the circular compound. Basically, it's about blending cheap recycled polymer, which have poor properties, with overspecified or over-engineered virgin polymer, which we call booster. By blending them together, we end up with a polymer, which has basically the standard properties of a normal polymer. By doing that, we manage to get the best of both world. We get the cheap stuff of a recycled polymer.
We get the high margin of the boosters, which is a kind of win-win combination, and we manage to recycle in a proportion of 50% recycled polymer. That's, I would say, a smart way to address the recycling demand from our customers. On bioplastics, I would like to mention our joint venture with Corbion, a Dutch company, which is active in lactic acid. Here we intend to develop the market presence in PLA, polylactic acid. Polylactic acid is a polymer derived from sugarcane. It's not only a biopolymer, but it's also biodegradable, which brings many benefits, notably when it comes to use this polymer for single-use plastics. You know there is a huge debate about the ban around the single-use plastic. Using biodegradable polymers is a way to address this challenge. We are just in the startup phase of a new site in Thailand.
It's a 75,000 tons a year site, which will position us as the number 2 in the world. Just for the record, the car you have on the slide there, on the picture, this blue car, the body is made 100% out of PLA. It can be used also for electric vehicles. As a conclusion, you see that much has progressed since last year, since the last Investor Day. SATORP now has been launched. The joint venture in the U.S. in Bayport is operational. The Borstar has been just sanctioned today. You see also that Hanwha Total Chemical in Korea is progressing on schedule with a new project on PE, which has been announced in the meantime. As I was mentioning at the beginning, petrochemicals are doing great today. EUR 1.8 billion of cash flow from operations, 30% return on capital employed.
That's the kind of ratio we like. The strategy is very clear. We leverage cheap feedstock. We leverage synergies through the integrated platform. By 2025, just to remind you, the profile of our business will be completely rebalanced, as you see more than 60% feedstock, cheap feedstocks and more than 55% out of Europe. Our commitment is, of course, to generate by 2022 at constant petchem environment, an additional cash flow generation of 20%. Thank you. Momar?
Thank you, Bernard. On the marketing side, we'll be consistently delivering our EUR 100 million CFFO per year, over the period going to 2022. I'll be talking about our growth activities. For the legacy activities, suffice it just to say two words. First, our retail in Europe, we are consistently outperforming the market in Western Europe. First thing. Second, on lubricants, we are the only major company gaining market share over the last years. On the growth activities- First, we will be building on our existing retail network by increasing our revenues from shop food and services, by continuing to leverage our position in Africa, by expanding into digital solutions. Second, by looking at alternative fuels, mainly in LNG, bunkering, and transport road, and on EV. I'm going to zoom on some of the key areas of growth, the key drivers.
I'll talk about our non-fuel business in Europe, I'll talk about our innovative transport solutions, I'll talk about Africa, and I'll talk about the alternative fuels. First, non-fuel revenues in Europe. In Europe, we have a strong diversified of non-fuel products. These non-fuel products will represent 40% of our CFFO by 2022. 40% in 2022. We will benefit from our strong card business, more than 300 million per year of transactions. We will leverage our 2,400 shops. In the network that we control, what we call company-owned service stations, we have shops in 75% of those sites, just to give you an idea. On the car wash, we have quite developed an expertise in car wash, and I'll tell you more about that later. We've become an expert in car wash. Patrick is laughing. I'll tell you why he's laughing. Car wash.
I love this stuff of car wash because some people may think that I'm just selling water. We are not just selling water. We have a strong concept. We are recognized. Take France, for example. We are a leader in France. We have close to 1,000 car wash sites. The beauty with car wash is that when you think about EV and all those things, electric cars, electric or not, you'll always need to wash your cars. I love this business because this is the business of the future. We enjoy a very good margin in this business because not only are we washing cars, but we are bringing wax and car owners love that thing. Water treatment, they are very sensitive to environment.
We've been so successful in that that we've started developing that now outside our own network of service stations, especially in parkings or at customer sites. We intend to have 2,500 branded TotalWash come 2022, coming from slightly more than 2,000 by now. We'll expand from 40 countries to 50 countries by 2022. The second interesting thing is our AS24 transport concept. We have a network of close to 800 AS24 stations. AS24 is a concept for transport, especially in Europe. There's one market that will continue to grow, whereas the normal market of main fuels will decline in Europe by 0.5%, 0.7% in the coming years. When it comes to fuel for transport, that market will continue to grow because the mileage for transport of goods in Europe will grow by 0.4% in the years going to 2030.
We intend to increase the number of sites from 800 to 1,250% in the coming years on the AS24. When you sell to the AS24 fleet, the customers, you're not only selling fuel to them, you are selling additional services. If I'm a transporter and I'm going from west of Europe to east of Europe, I need to use my car not only to fuel but to pay toll fees and that sort of a thing. That's the thing we are able to provide with our AS24. Another example of what we are doing is our card business. We have close to four million active cards in Europe today, and the volumes in card represent 50% of the volume we are selling in network in Europe. There, too, a card owner is someone who is going to buy in addition to fuel, a number of services.
Basically, you will sell to a card holder with diesel truck or cars, you are going to sell to them AdBlue, that solution that you use to Gas exhaust in diesel cars. You are going to sell to them the usual shop food and services in the service station. We can even, and we are selling more and more that sort of a service collection of VAT, for example, when you have a card and you are traveling into Europe. We made acquisition of some startups. The WayKonect, the company we acquired recently, is a company that will allow a fleet manager to handle the productivity of the drivers from point A to point B to be able to compare the driving behaviors and optimize the transport costs. On that business, our CFFO will grow by 9% between 2018 and 2022, growing to $100 million by 2022.
Africa. In Africa, when you take all the retailers, all sectors, Total is by far the first retailer in Africa, which mean we are the company, take all sectors, with the biggest number of sites in Africa. You have Total, you have the non-fuel retailers. The second one is Shoprite in South Africa, and you see how we rank there. We'll continue to grow by selling traditional fuel because the African market in traditional fuel is growing by 2.8% per year, and there too, we've been consistently outperforming the market. Not only are we going to continue increasing our fuel sales in Africa, but we are going to increase our sales of non-fuel business. There's the upcoming middle class, a growing middle class, to whom we are going to sell more and more services.
Today, for example, we made investments in some companies, in some startups, today, in eight countries in West Africa, you call in a Total service station, you're able to pay your electricity bill or your water bill with a device at the service station. You pay for your TV subscription. Those are the services we are going to continue selling into Africa. That business of non-fuel will grow by 8% in Africa between now and 2022. Natural gas. Laurent talked about natural gas earlier on. We intend to, and we've started some years ago, to invest into natural gas for transportation. In Europe, we made acquisition of a company called PitPoint three years ago. PitPoint is a leader in Netherlands on natural gas for transport. We intend to be the market leader by 2022 because they have the expertise and we have the network.
We are going to deploy natural gas for vehicles in 300 of our service stations in Europe, therefore making us the European leader for NGV. In the U.S., you read that we acquired 25% shareholding in Clean Energy, making us the biggest shareholder of that company. In addition to that, we provide them with a $100 million financing facility to support conversion from diesel to HGV of trucks, that business will continue to grow. That leasing program is quite successful. On LNG bunkering, you all know the IMO rules that will come in force in 2020, where the sulfur content will be reduced to 0.5%. We are leveraging in that, we consider that one of the main alternative for HFO will be LNG. We sign a contract with CMA CGM, which is one of the biggest shipping group in the world.
We are going to supply nine ships starting from 2020, we intend to reach 10% market share on LNG bunkering by 2025. With a hub in Europe, in the ARA zone, hub in Singapore, where we have signed a contract with Pavilion. We have a partnership with Pavilion Energy, whereby we'll be chartering a vessel for bunkering. In addition to that, we are going to have supply arrangement in Singapore, we have another hub in Oman for LNG. In addition to that business of bunkering. We have signed contracts too with Brittany Ferries. It may seem anecdotal, but it's very important that all type of customers get into this business of LNG. On EV charging, if I was to summarize it, I would say we are walking the talk. We want to be a key player in EV charging.
Coming from the car owners, we are able today to provide them with more than 6,000 charging points in Europe. If you are a cardholder of Total, if you are a customer of Total, I give you access to more than 60,000 charging points for your electric vehicles in Europe. In addition to that, if you are one of my industrial customers or if you're a hotel or if you're a municipality, with a recent acquisition we made, we're able to come in your premises and do installation of charging points. We are selling charging points, actually, and we are able to do the maintenance of those charging points, and we are able to assist you in optimizing your system. In our own service station, we have a plan to have 1,000 charging points in our own service station by 2022.
We're looking at how, of course, the technology will evolve, because I think there are yet some technological breakthrough to happen in this domain. We intend today to have one station with fast charging point every 100 miles in Western Europe. Every 100 miles, you should find a Total station where you can do fast charging. The acquisition we made, the charging point operator we acquire, this G2mobility, they command today 25% of business to government in France, and they have 10% market share on the B2B. We are going to build on that to be the market leader there, too. Present all along the entire value chain of electric charging. Before joining Bernard to answer your question, let me just summarize. M&A is a significant source of cash flow for the group. We have a target of EUR 100 million per year.
We are on track to generate EUR 2.5 billion come 2022. Our more mature business will continue to grow and at the same time, most of our cash flow will come from non-fuel in Europe, from alternative fuels, and from our traditional position in Africa. With that, I'm joining Bernard for your questions.
Thanks very much, Momar and Bernard. Who wants to have the first question? I think Blake, on the right-hand side.
Hi. Thanks. I had two questions, if you don't mind. First, on Port Arthur, I realize you're highlighting the integration with the chemicals business, but I'm just curious, with the Gulf of Mexico potentially ramping to 100,000 barrels a day, I didn't know if it was possible to have that integrated into the refinery or if that would just continue to be more of a merchant-type refinery. Secondly, on petrochemicals, if you have return on capital employed around 30%, just curious if there's not some M&A opportunities to expand a little bit more rapidly instead of just continuing to grow organically.
The second question was on M&A, yeah? Your second okay. It's something, of course, we are looking at. It's always a trade-off between the opportunity which are in front of us. Just because you declare we are going to make M&A, that you, of course, find the right target. Knowing that when we look at the opportunity, we have a greenfield on our existing platforms by leveraging, once again, the feedstocks, the integration we have. We have very good projects with very high return. That's what we are currently doing. We are considering both. For the time being, of course, we are executing the large projects we presented to you.
If we have, of course, M&A opportunities, notably in the U.S., which once again, is a very nice country to be in, as you understood from a feedstock, from the energy, from the environment standpoint, of course, that's something we will be happy to look at. Sorry, there was a first question, which has disappeared, on the Gulf of Mexico. Yep. Could you just repeat the question because, once again, I'm not trying to
Sorry. Yes.
No, of course.
For a long time, Port Arthur has been kind of an isolated asset, just a merchant refinery running third-party volumes. I didn't know if, as you begin to ramp production in the Gulf of Mexico, if there's an opportunity to run those volumes through Port Arthur and integrate that as well.
No. Today, our refinery system is completely optimized, I would say, through our trading arm, and we look at the crude, which are, of course, the ones which are the best suited to the refinery. We, for example, treat a lot of crude coming from Canada, which very well-suited as an heavy crude to the conversion profile of Port Arthur, and that's, I would say, one among many others that we will be looking at. No, there is no specific game to further integrate GoM with Port Arthur.
There's a question from Christyan at the back.
Just two questions on the petrochemical outlook, particularly in the Middle East. There's obviously been some new expansion plans, particularly out of the UAE, around petrochemicals, and I wondered what you thought about in terms of the competitive nature of that region and the extent to which everybody's now going into petrochemicals and building out capacity. How do you think of the balance of supply and demand beyond around 2021, 2022? The second question, maybe it's premature, but with the potential Saudi Aramco tie-up with SABIC, how does that affect, if at all, the project economics that you have with SATORP?
Your second question is along SABIC and Saudi Aramco, huh? Okay. I don't really see that as affecting our projects because basically what we do and what Aramco is very keen on doing is to expand on their existing platform into more downstream petrochemicals. What we do in Jubail is something which makes really a lot of sense at the boundary of Jubail with Total and Aramco together because we leverage the synergies. SABIC is more downstream. It's another story. I don't see there any issue. Honestly, I don't see an issue. Your first question was on the expansion in the Emirates or no?
Too much supply.
In, sir?
Too much supply in the region for the next five years.
I'm sure I have a very hard time understanding. I'm sorry.
As everyone's building capacity, how do you think margins are going to trend?
The question is, are there too many projects in the Middle East because Saudi Arabia is building projects, UAE is building projects.
So we-
Qatar is building projects.
We have a very strong base in Qatar, of course, where we have been, as you saw, for more than 80 years, and it's a country rich with gas and ethane, where we already have a very strong position. Certainly, it's something we could think about.
To be clear, as Bernard presented, in petrochemicals, as soon as you can be on advantage feedstock, you have a competitive advantage compared to the naphtha crackers. It's a question and there is debate with some countries building crackers on, like the one who want to build Saudi Arabia or ethane in Qatar, or advantage feedstock in UAE will be competitive. To be honest, I'm more surprised when I see companies building crackers in China on naphtha. I don't see, except the logistics advantage, I don't see where is the competitive advantage of it. To answer your questions, I think you have room to build more, I would say, advantage feedstock crackers in the Middle East. It's not a question of competition. The market is not local. The market is Asia, it's China.
A question from Martin near the front here.
Yeah. Hi, hello. It's Martin from Morgan Stanley. I wanted to ask you two questions sort of related to refining in IMO. Earlier on, there was a slide, which I don't think is in your deck, but earlier in the day, how you bring the fuel oil production from 7 million tons a year to 2 million tons by 2020. I was wondering if you could sort of run us through that bridge in a little bit more detail.
Of course.
That went very fast, it's a very large change. The second question that I wanted to ask sort of relates to this. In some of the upstream sort of slides, there was a slide that referred to Total being well-positioned in the upstream for IMO because of a relatively high share of crude being produced being quite low in sulfur. In the downstream, you're also arguing that Total is well positioned for IMO, given the sort of distillate yield argument. I was wondering, is there a contradiction here? Can you be both positioned well in upstream and in downstream at the same time?
It's really because it's not necessarily the crudes we produce, which are the crudes we process at the end of the day. Let me answer the 2 questions. Maybe the very first one on the going from 7 to 2. 7 million tons of HSFO is what we processed last year. As you know, the end of last year, we started up in Antwerp the OPTARA project, which is a conversion project, which is aimed at reducing the part of the bottom of the barrel, which is transformed into fuel oil, to transform that into distillate. Basically, we have changed the balance in Antwerp from less fuel oil, more distillates, and that eliminate out of close to 3 million tons, if my memory is right. The second thing we do is we have some extra capacity in Port Arthur, in the coker.
It's a 50,000 barrels a day coker. We have today some spare capacity which we could fulfill with more vacuum residues, and therefore also reducing our length in terms of HSFO. The third thing we are doing is we segregate our vacuum residue. Because today, people do not segregate low sulfur and high sulfur because there is no spread difference when it comes to value this stream. Tomorrow with the IMO, people are going to be very willing to buy the low sulfur part of a vacuum residue, and they will put a premium on this, and that's justify, of course, to invest, to segregate in the logistics the part which is low and the part which is high. We have done this investment, and by doing this investment, we are able, here again, to reduce the length in HSFO.
The fourth dimension, if you remember, going from 3 to 2, is just to play exactly what you explained with the crude slate, the flexibility between the high sulfur and the low sulfur part of a crude we process. By doing that, mechanically, even structurally, not mechanically, structurally, we come to 2 million tons of HSFO, which is less than 5% of what we process worldwide.
Okay.
There is no contradiction because in Total, between crude production and refining, you have trading.
Yes.
In fact, only 20% of our production is ongoing in the refining business and only 80%. There is a lot of optimization being done by the trading, which is in charge to get the best value for the crude. We will get the value for the low sulfur crude for trading. Then the trading will look for high sulfur crude, which will be less expensive for refining. It's a world mechanism. The trading is in between. It's why there is no contradiction at all.
I think Irene had a question.
Thank you. Bernard, you mentioned Hutchinson in your presentation. You have sold out of all your other specialty chemicals in recent years, Bostik, Atotech, and so on. You kept Hutchinson. What prevents you from selling it? Is there any sense of the financial contribution of that company to your $1 billion cash flow from operations? Yeah. Thank you.
I'm going to maybe answer on Hutchinson from an approach standpoint, then I will let Patrick maybe answer on the-
No, you can answer.
My answer is no.
The answer is like Arnaud, there is no answer. That's all.
There is no answer.
It's a permanent question, there's no answer.
Yeah.
Permanent answer, no question.
Okay. I know, Irene, you keep asking the question at every session I recognize.
Well, let's be clear. It was giving me the floor on that because these type of decisions, Refining & Chemicals is not in charge.
Exactly. That's why.
The sales of Atotech, the sales of Bostik was done by Patrick and myself.
We consider that as its holding decisions, I would say. Best allocation of cash capacity management of the allocation of capital of the group.
Yeah.
You can answer.
No, Hutchinson-
By the way, it's true that there is a nice contribution to the EUR 1.8 CFFO.
Oh, yeah.
It's a secret, so I'm not supposed to answer as well.
I don't quote any number. I just say it's growing every year. It's really something which is running very well, increasing. It's high-valuated margins, well-positioned downstream, close to customers. A nice business with aerospace growing, the car industry, with this trend on lightweight materials, really. It's really a very successful business, and we are glad to have it.
Irene, you touched the question was right, because, in fact, if today Hutchinson is still in the controller, it's because it's sizable. It's a sizable.
Yes
contribution to these results.
growing.
It's just to enhance the value of Hutchinson for all the ones who want to buy it. It's quite sizable to 1.8-
It's sizable and growing
They can think about it.
Growing.
There's a couple of questions this side from Lydia, then maybe John.
Thank you. Two questions if I could. The first one on the biochemicals and the recycling side. What are the margins on a per ton basis for those, do you think, compared to what the traditional basis would be? Just any indication of profitability. The second one was on the Africa retail side. I appreciate that it's 8% per year growth, do you think that's a business that you could grow quicker if you allocated more capital to it? How do you think about that being the right rate of growth?
It's the same for both of them?
No.
Okay. Sorry, I thought the two. No, on biochemicals and recycling, it depends very much, let's be honest, on the oil price. You know how it works, huh? This business model on recycling works when the oil price is high. As soon as it goes down, the business model is less, let's say, challenging. What I showed you as an example is that there are smart ways to come around, and this compound, what I try to explain, is a way to still make money even by using recycled products, which by definition have poor properties. They are business model. That's why I was saying it's an opportunity. It's a growth opportunity, recycling. We have to be smart to find business models which work. Of course, in high Brent environment, it's even better, but even in low ones. That's true also for bioplastic.
The good thing with bioplastics is that it's also driven. It could be tomorrow driven by regulation. If we come to the plastic ban I was mentioning, people will be able to switch to this biodegradable plastic. Which is an initial lever, which we can activate, but it's different from the
Well, on Africa business, can it grow faster? Today, the market is growing by 2.5%. We are growing by 3.5%. What can make the market grow faster? If you look at Africa today, the bulk of the investments that are going into the continent overall are investments in road and ports and that sort of a thing, on infrastructure in general. That will drive growth in transport in Africa. The key to when you talk to all the specialists of development, they will tell you that one of the drivers for growth in Africa is to increase the transport of goods from point A to point B to allow farmers to put their products into markets, have more and more interregional trade, and that comes with more transport, be it by road or by train or by boats.
That can help probably increase the volumes of fuels being pushed into the market. In addition now to all what you can get out of, again, non-fuel business. Today, in our service stations, the usual convenience store in many African countries now is a Total station. That's a convenience store that is open 24/7. That's where you go for a Coke or for that business will continue to grow with digital because they are more and more being digital in Africa.
Okay. John?
I enjoyed your comment about not wanting to give the finances on a asset that's not for sale just in case it compromises your negotiating position. Can I ask just on the expansion projects in petrochemicals, am I right in saying that the CapEx numbers that you're quoting for those projects don't sit in your CapEx guidance numbers? It looks like they're too large to do that, so I'm guessing that they are funded off balance sheet. Is that correct?
No. They are part of the CapEx.
Within the CapEx guidance that you're giving us, there's a full funding of your share of the investments into the associate companies that you're describing?
No, there will be some project finance as well. What do you mean?
The reason I ask is that some of your peers give a gross and a net figure. I'm just trying to understand the CapEx intensity that you're looking at into the petchem business.
That's the equity part. There will be some project finance. What you see there is the equity part on the joint ventures.
In your CapEx-
In the guidance which we have given this morning, EUR 15 billion-EUR 17 billion a year of CapEx.
Yeah.
These projects are part of this CapEx, and that's the equity part we finance, in the projects. Yes.
There is a portion that sits in JV.
Exactly
An associate company.
Yes. No, there is no It's all square.
Yeah.
Maybe Thomas and then Jason.
Thomas Adolff from Credit Suisse. Two quick questions. On your cracking capacity outside of the U.S., I think you've invested a decent amount in increasing feedstock flexibility. I wondered what the ratio now is between naphtha and propane, 70/30 or 80/20 or whatever it is.
You mean between naphtha and ethane?
Yeah. Propane or ethane or LPG.
We have today 40% of ethane LPG and 60% of naphtha, which is the current split.
Okay.
It's going to be exactly the other way around in 2025.
The capacity between base chemicals and the second derivatives is fairly balanced now in your portfolio.
You mean base chemical and?
Second derivatives, this polyethylene.
Polypropylene. No, it's all integration. We are integrated, there is no length, it's all balanced. Yes.
Okay. Quickly on LNG bunkering, LNG trucks, how big do you think the market will be by 2030?
How big the market will be. We consider that the market for LNG bunkering, that's easier. Because for the road, it has a lot to do with regulations and with incentives government or municipalities can put. On LNG bunkering, the market is supposed, we expect the market to be around 10 million tons, out of which expect to be doing 1 million ton, 10% market share on LNG bunkering. On LNG for road, it's really question of, for example, today in Europe, you don't have that much of fleet for NGV trucks, unlike in the U.S. You need to build a market, probably need to have discussion with EU and the rest.
Jason, I think, had a question.
Yeah. Thanks. This is Jason Gammel with Jefferies. My question was also on LNG as a bunkering fuel. And it seems to be that most of the discussions right now are whether to use marine gas oil or to convert to scrubbers. And I'm supposing that's because the vessel would have to be a new build vessel if it's not an LNG carrier. But it's hard to get people to build new vessels if there aren't supply hubs. So I'm just wondering how you're managing the build-out of supply hubs and whether these negotiations that you have that are being contracted with shipping companies are providing assurance of the supply actually being there.
I think today on that business, all options are on the table. On new builds, you have companies opting, likes of CMA CGM, opting for LNG. You still have companies saying that they will go for scrubbers. The issue with scrubbers, which is yet to be resolved, is the issue of how do you handle. Okay. Of course, it should be dual open loop, closed loop, but the question is how do we handle the waste? The second question is, today we know what the regulations are for 2020. What if after 2020, IMO come with stiffer regulations and then how will they manage that? What we are hearing from the market is that, yes, some are opting for low sulfur diesel, hoping that by then products will be available. Some other are going for LNG.
We have customers today, we are discussing with, who say that definitely they would opt for scrubbers on the new build, or they will revamp the existing fleet with scrubbers, and we are discussing with some of them. All options are on the table. Today, we are not really seeing a straight line on the way forward. I think they are weighing all options. Knowing that, I think the thing behind it that regulation may get stiffer.
Any more questions? Chris, then maybe Henry.
Question for you, Momar. Can you give us an idea of the cost of upgrading, so to speak, of your retail network? For example, the 1,000 stations that you're planning to equip with charging stations. What part of your CapEx budget is that? I'm just wondering how that budget is broken down. Thank you.
I'm not sure I understand completely the question. The cost of EV charging? Depends on the type of EV charging. If you want to install a slow to normal charging point, you are talking in Europe of a cost between EUR 50,000 and EUR 100,000. If you are talking of fast charging, today, where we are in terms of technology, you are talking of between EUR 300,000 and EUR 500,000. To be honest, today, people do not really see the economics of fast charging, but that market will come. That's where we are today, but I'm sure that there'll be some technological breakthrough, too, into that domain. The other question was on the cost of retail network?
That was all.
No? Okay.
Hi, it's Henry Tarr, Berenberg. Just a quick question. Longer term, ethane obviously looks like an advantage feedstock. Near term, ethane prices have spiked and margins have come a bit lower. What's driving this, and how long do you think it's going to take for this to clear, in terms of the supply that's come on recently?
[non-English content]
Okay. Okay. Sorry. I'm sorry, but I have hard time. I don't know why I'm saying. No, you're right. Ethane price has gone up. It's around, what, $6 to $7 per million BTU currently, coming from, let's say, below three, which has been a real spike. The reason is very simple. There is a bottleneck on the fractioning unit. Today, we are completely saturated. You know it, of course. There is also some bottleneck on the midstream. Whereas all these cracker are starting up. There is a huge demand and a constraint on the supply. What we see basically is when we do all the math is that it's going to be the bottleneck by mid of 2019.
This is what we anticipate, which for us is, of course, a good thing because our cracker is going to start much later on, there is no issue from that standpoint. Mid-2019.
Maybe time for one last question. Lucas?
Sorry, two very briefly. The first one. [Bernard], should we care about La Mède and biodiesel upgrade? I say should we care just in the context of numbers that we end up seeing. The second question was, Patrick, you mentioned about a year ago that maybe this was a sensible time to, should we say, let refining capacity go. I guess the broader question is, are you very comfortable with your refining footprint now, or is this a sensible time to let refining capacity go?
I'm going to answer on La Mède, of course. Yes, you know we have this project in La Mède to produce HVO, which is, let's say, the high grade to produce biodiesel. Why have we done it? Just because the market is growing. There are mandates in Europe. There is a new regulation. It's called RED II, which is now targeting an even higher percentage of incorporation by 2030. What we have done in La Mède made a lot of sense from that standpoint to meet this growing demand. Your second question was refining capacities, Total at the right level? That was your question?
It's the footprint. Are you happy with it? The observation a year ago when refining was, should we say, having more than a renaissance, but very robust, was this may be an appropriate time to consider altering the portfolio, letting assets go.
Are you happy with your footprint?
I would say we have reduced, remember, the capacity by more than 20% over the last five years. It's a very cyclical industry, and we have reduced, let's say, the refinery which we have the weakest one. We don't want to increase, that's true. If we have opportunities to further reduce, because we know that the market once again is going to be cyclical and there will be more to come, of course, we'll consider it.
Okay, thanks very much. Maybe we take a little short break.
Just a last remark to avoid any misunderstanding. We are not seller of Hutchinson.
I think there were some more questions. I'm sure Bernard and Marc can answer your questions during the break, and we should come back here at 4:30 P.M. for the final session. Okay, while everyone's taking their seats, just let me introduce the final two presentations of the day. We have Marie-Noelle Séméria, who's a Chief Technology Officer, who will talk about how we're leveraging new technologies. Philippe Sauquet, who's the President of Gas, Renewables, and Power and Strategy and Innovation, will present on integrating climate into strategy. As for the previous sessions, we'll finish with a Q&A. Thanks, Marie-Noelle.
Okay. Thank you, Mike, and good afternoon, everyone. I am Marie-Noelle Séméria. I'm quite new at Total. I joined the group in November last year after different position in high tech company, start-up, and in public research in high technology. When I arrived at Total, I was very impressed by the high level of technology and by the full commitment of people to deliver. My task is to enable new technologies and new skills to support the different businesses of the group and to prepare the future. There is plenty of innovation here. Today, I will focus my talk on technology, and more specifically on digital technologies, showing how they leverage value for the group and for the shareholders. On your left, you can see the topics I will go through.
On the right, you see the overall R&D budget accounting for EUR 1 billion per year, and the top focus areas that it supports: safety, operational efficiency, low-carbon mix, new services and new products, open innovation, and digital technology. Digital technology accounts for about EUR 300 million this year, We expect to increase that by about 3% per year. TotalEnergies is more and more recognized as a differentiated leader in technology. It's through R&D and digital innovation that TotalEnergies maintains its leadership position, You can see that's its major commitment by the group. I will start with industrial digital. It's to say digital for industrial application. The two main pillars are robotics on the one hand and artificial intelligence. Let us start with robotics. Robotics refer mainly to unmanned autonomous vehicles that perform inspection task and collect data.
We use robots to reduce cost of inspection, to improve safety, especially in harsh environment, to increase the integrity of our installations and collect more data, more reliable data, which is key for the next step related to artificial intelligence. Here are some of our robots, all world first. We estimate their global impact to 20% cost reduction at the average. Let me introduce to you the first one, ARGONAUTS, that some of you know already. This is our inspection robot that we have tested in North Sea last year and that we tested in a real production site at our Shetland Gas Plant last week with success. The autonomous underwater vehicle is also an inspection robot that we have used in the Gulf of Mexico along pipelines.
Another underwater robot is the glider that we used in Angola for subsurface exploration for several weeks, getting rid of any very expensive supervisory ship, replacing it by a simple web interface and satellite communication. On the far right, you have a seismic drone. Picture in your mind a fleet of drones dropping hundreds of thousands of biodegradable seismic sensors that collect and transmit high quality, high density 3D data, saving between 3 to 5 years for final investment data collection for final investment decision. We tested it in Papua New Guinea last year, avoiding sending people into jungle and providing more dense and better data collection. More value for less money More safety, more reliability. This is the message here. We have seen the first pillar. Let's go to the second pillar, artificial intelligence.
Artificial intelligence refers mainly to the way we learn from big data. We develop more and more artificial intelligence to automatize routine, repetitive tasks, and increase productivity. TotalEnergies is a big data company. It's a big industrial data company, Has a huge computing capacity on premises, ranking number 2 in the top 500 of industrial computers. We will increase this capacity for critical algorithms. For artificial intelligence, TotalEnergies is ahead of its peers. We want to reinforce our leadership through the partnership with Google. We are the only oil and gas company that has a joint team of 30 experts based on the Google Cloud campus in California. We are the first company to apply Google Cloud and artificial intelligence on a real data set in geoscience. What is at stake?
Each year, we spend about EUR 400 million for seismic acquisition and interpretation. We have not enough time to explore all the data, and about half of our time is spent on routine analysis. The goal is to develop artificial intelligence as a cognitive assistant so that we can exploit more information and dedicate more human expertise to high-value analysis. Once again, less time for more data and more time for high added-value task. We extend artificial intelligence to downstream. What is at stake? Increased competitiveness of our existing refineries through optimization, real-time maintenance, and performance monitoring. To accelerate digitalization, we decided to partner with Tata in July this year, to create a center of digital innovation in India. We dedicate a joint team of 30 experts in Pune.
Tata Consultancy Services is one of the largest IT consultancies in the world, with 400,000 folks over more than 40 countries, known for their agile methodology and IT experience. The goal is to implement the Refinery 4.0 pilots at our refinery at Donges, in France. We apply artificial intelligence to the entire refinery site, including supply chain, using cloud technology and Internet of Things to create a digital twin and optimize performance and productivity. Total is the first to develop an advanced production management platform that brings all the pieces together in real time, maximizing availability and margin, increasing maintenance and energy efficiency. The message is, real-time data management through artificial intelligence leads to increased competitiveness and margin.
We saw robotics, we saw artificial intelligence, and in between, there are smart rooms, a key element in the digital chain, connecting robots and remote sensors to human expertise and artificial intelligence. We currently have 25 smart rooms across the group, some located near important assets like Angola, Nigeria, U.K., Argentina, concentrated around our technology center in Pau or in Houston. Total differs from its peers by specific smart rooms. For example, for rotating equipment, where smart rooms anticipate major failures, sometimes six months in advance, reducing non-production time. For drilling operations, where smart rooms reduce risk and increase production through real-time monitoring. Metering, where smart rooms save time of FPSO with high-quality data. We have saved tens of millions of EUR thanks to smart room integrated to our digital implementation chain. In short, this is digital cost reduction through better efficiency, safety, and performance.
Moving from industrial application to digital mobility and marketing, we will see that here again, digital creates more value for less money. Imagine Total service stations that automatically recognize your vehicle as you are approaching the station, top off your battery and your fuel tank with a robot, offer personalized services. It has already started with TOTAL Wallet mobile payment deployed in Belgium and now in Germany, that will be extended to 1,000 stations in Europe by this year. More services are to come, like our B2B fleet management strategy or new services based on Internet of Things. Thanks to our customer data management platform, we will be able to propose more personalized services to more customers. More digital for more users and more services. This is the message here. Blockchain is another area of digital technology.
Most of you will already be familiar with the blockchain, which simply said, makes all transactions completely secure, untraceable, and private. The main application for TotalEnergies is the commodity trading business. We are part of a joint initiative with 9 major European players, the initial cost savings could be significant. Using blockchain as a unique and reliable digital identifier has potential applications in many other areas. Starting early to catch more value, that's what is at stake. Another example of how the world around us is going digital, smart electricity. Half of our electricity sales are digital. With just over 300 employees, we can manage about 3 million customers. It takes less than 10 minutes to subscribe to the service online, no paper, it costs less than EUR 70 to get a new customer. Nobody does it better. Digital technology enables this low-cost business model.
We offer other digital services like At Home for real-time monitoring of your power meter through Wi-Fi, On/Off, which is the ability to remotely switch on and off your equipment to manage your power consumption, or Octopus, which is the B2B service to optimize energy consumption globally for various sites and plants. Digital services are fundamentally changing the way that businesses relate with customers. By leveraging these new technologies, we can offer more for less. New technology creates new opportunities. To move quicker and learn larger, we promote high-profile partnerships and commit EUR 150 million a year to universities. CCUS, which refers to carbon capture, usage, and storage, is a good example of partnership ranging from upstream research with universities up to commercial test bench.
TotalEnergies is part of the Northern Lights project in Norway with Equinor and Shell, which is the 1st project at the industrial scale, targeting a storage site designed to receiving CO2 from industrial sources coming from several countries. We also involve in a partnership supported by China and Europe to demonstrate a pilot unit for power and steam production using chemical looping combustion, which isolates a pure stream of CO2 for storage. Finally, we have dedicated about EUR 20 million over 5 years to Stanford and the Lawrence Livermore National Lab for developing a unique simulator of CO2 storage at the gigaton scale. We believe that CCUS is mandatory to achieve carbon neutrality in the second half of the century, we dedicate up to 10% of our R&D budget to that. We are taking position now to be ready tomorrow when CO2 business comes.
Investing in startups is another way to be on the move, scouting technology and new businesses to accelerate innovation. On the right, you can see in green our historical investment in startups, in other colors, the new targets in mobility, digital, climate, and energy management. We invest EUR 200 million in that. We have a new focus on China, which has huge potential in mobility and new energies. We have committed EUR 75 million there. As a conclusion, we are pushing the boundaries without overstating the issue, we are developing new technologies that will change the way TotalEnergies provides a safe, clean, and affordable energy. TotalEnergies has a strong internal commitment to maintain a leadership position on the front of technology and digital.
The overall performance, the ability to relentlessly execute and deliver while cutting costs and increase efficiency are signs that effectively implementing digital technology is creating value for our shareholders. That concludes my remark. Thank you. Now I will give the floor to Philippe Sauquet.
Thank you, Marie-Noëlle, and good afternoon to all. Good news for you is that this presentation is the very last of the day. I hope it will be the very best, but you will decide about that. My purpose will be, in fact, to try to explain to you what we mean when we said some two years ago that we were willing to integrate climate into our strategy. Going a step further, you will see that we have tried also to answer one question, which was, how can we measure the long-term trajectory of our company in term of carbon emission intensity? I will start by a slide that you've already seen with Patrick this morning. I would say this is the most important slide because you have everything on that. You have on the left part, the IEA two degree scenario with clear prevailing trends.
You can discuss, of course, about the figures, but it's difficult to argue about the trends that are showed by any kind of virtuous scenario that will take or that would take into account climate change. What do we see? What do we conclude of that? Threats and opportunities. We see that coal is shrinking. Good news, we've decided to exit already more than four years ago now. We see that oil is slightly declining. Might have a debate once again whether it will be right or wrong, but what is clear is that we must be careful about selecting our project because we could end up in a much more competitive oil environment than the one that we live in today.
Therefore, we are adamant that our future project will be low breakeven, and we have illustrated that in the move that we have been doing over the last two years, including in Middle East and in Abu Dhabi. What we see also is slight increase of natural gas. Again, natural gas is a core business for us. So when we see growth, we shouldn't be ashamed of trying to continue expanding in the gas value chain. Last, what we see also, and this is, for us, a big opportunity, is that a fantastic growth of the renewables. Renewables, of course, are diversification for us. It's diversification, I should say, for every company because it's fundamentally a new business.
What is clear is that there is growth opportunity and as I will try to evidence to you, we think that we might be successful in this diversification. First item, to be, to lead, to walk the talk and to be exemplary, to reduce our carbon footprint, of course, we must improve our operation. This is the very first driver that we use. We optimize the energy that we are consuming in our industrial facilities. We have already reduced by 30% our greenhouse gas emissions since 2010. We have ascribed very clear objective, minus 1% per year from 2010 to 2020. Today, we are ahead of schedule on this objective. We have taken also very clear commitment in E&P routine flaring with zero routine flaring by 2030. Again, we are in advance compared to our commitment.
We are constantly investing on the reducing of the energy consumption. Methane is a new theme for, I wouldn't say for Total. In fact, it's a new theme for the gas industry, which has started to be criticized maybe by our coal friends who have been forgetting that the coal mine are also emitting methane. It's clear that we want to be exemplary also on that front. Methane has a very huge power of greenhouse gas compared to CO2. It's, of course, a requirement for us to be exemplary, and we intend to continue to monitor our emission and to reduce them at the level of the Oil and Gas Climate Initiative, there has been a collective agreement to reduce to 0.25% with methane leaks by 2025.
For Total, we have selected a stricter target of below 0.2% on a sustainable basis, and we are already much below 0.3%. Last but not least, it's important also that we test, we evaluate all our new investment for most stricter environment in term of climate, in term of carbon price. We test, we evaluate every of our investment with a carbon price, which depend on the area, but it's a minimum of EUR 30 per ton and can increase by EUR 40 per ton. Second development, which is, of course, of importance to us, and again, it has been already described. It is the development in the gas value chain. There is growth, clearly, in this business. There are even higher growth in LNG. You've understood that it was a core business and historically we have always been one of the leader of this industry.
I'm sure that Laurent has convinced you that we had unique capabilities to be very competitive on the long term in this business. It's clear for us, we want to go deeper and we want to go stronger. This is why we position ourself as a buyer of the LNG business, giving us this 10% market share that we intend, of course, to keep. We are ideally positioned, I don't know whether it's a golden triangle or golden square. Clearly being Russia, being Middle East, Qatar, and being in U.S., complementing that, this three position by Brownfield project be it in Papua New Guinea or Nigeria. You can be sure that we have a portfolio of new project that will be among the most competitive of the industry. We won't be the only one, of course, willing to develop, we are ideally positioned.
We have started a strategy of opening new LNG markets. We see lot of potential for growing electricity from gas in emerging countries. We are willing to step up, in order to facilitate, and facilitate also our sale of LNG. LNG for transportation, I want to come back on that moment. I described what we are doing. Of course, gas marketing, we want to integrate the gas chain. Gas marketing is not a diversification for us. We have been present in this business since more than 20 years now. We have been leading the B2B U.K. business, which is one of the most competitive, and therefore it's natural for us to continue on the chain. Moving now to low carbon electricity business. Of course, here it's a bit more exotic and for Total. We have to acknowledge that it is a diversification.
As it was said this morning by Patrick, we see in this business, and especially on the business on which we want to focus, the renewables and the gas. The low carbon electricity business, we see fantastic growth opportunity. On this electricity chain, it is a diversification, yes, but we have a tool to succeed. It start by marketing of electricity. It's not widely known, but we have been marketing electricity, we have been trading electricity in Europe since more than 20 years, we have been doing that on the profitable basis. More recently, that is true that we decided to accelerate our position by acquisition. What we decided was to acquire leading companies, new companies that were born with what Marie-Noëlle called smart electricity, born in a world of competition.
When in fact, the incumbents that are still dominant in term of market share, it's obviously the case in France, have a very large market share, but have difficulty with their legacy asset. This is why we think that this diversification might be very successful. We have also ascribed to ourself a reasonable target. We are not foolish, we are not dreaming. We are focusing on Europe and B2C. For the time being, we are even focusing on France and Belgium. When we say we ambition 12%-15% market share in five years, it is only the continuation of the growth of Total Spring and Direct Energie. We are acquiring more or less, a bit less than 1 million customers per year. Having said that, we have this customer base, of course, we want to integrate upstream of the need of our customers.
It's always the case in Total. In the commodity business, we don't want to be trapped in one narrow part of the chain, we want to integrate ourself upstream. We want to generate the electricity, part at least of electricity that we are selling to our customers. It is obviously the case for renewables, one argument to sell electricity today is to sell green electricity. We are developing solar farms, solar assets. We have started also to diversify in wind through Total Eren acquisition, through Direct Energie acquisition. It's natural also for us to complement this renewable position by CCGT, because CCGT are bringing the flexibility that are needed to complement the intermittent renewables. We are today roughly at three gigawatts of capacity, and we intend to be at 10 gigawatts within five years, mainly through organic growth of renewable, but also maybe through some acquisition.
Last, batteries. Batteries are there. We have started to develop a new range of product in Saft, specialized in energy storage system. We have already some sales, but we want to grow this business further, and we are preparing the launch of a new range of product that will be even more competitive than the one that Saft is putting on the market. This market is small today, but it is growing very, very fast. It is double-digit growth. If we see the example of this country, our affiliate, SunPower, today is marketing more or less 30% of its solar system, including battery. Biofuel. Biofuel is also a very important component of our development. As I like to say, biofuel are hydrocarbon best friends. They are liquid products. They can be blended easily in our product. They can be distributed in our retail network without any change.
On top of that, we are highly, strongly supportive by many countries around the world. On top of that, of course, they allow us to decrease the carbon content of our products. Not a mystery that we are today the leading European biofuel distributor. We have decided to convert our former oil refinery of La Mède in a HVO unit. That will be the first world-class HVO unit in France. Biogas is very expensive today, but we can imagine that incorporating some percentage, reasonable percentage of biogas in the natural gas network would make sense one day. We shouldn't exaggerate the ambition behind that, but there is room to make the natural gas even greener. Of course, there is room also for R&D to prepare the next generation advanced biofuels, and we are doing that with various R&D program. Carbon compensation.
Marie-Noëlle has started, in fact, to disclose a part of what we are doing. The critical point that you have to realize is that even if this carbon compensation can seem a very long-term issue, and this is clearly a long-term issue for the second half of the century where everybody is speaking at the political level of a neutral carbon world. Even for the horizon before 2050, if we want to achieve a two degree scenario, there is clearly no solution that does not include for a part carbon capture and sequestration. We think that the oil and gas companies are the one that have the strong interest to develop this business, to develop the technology. This is what we are doing today. 10% of our R&D program, we have already made a pilot some years ago in Lacq in the south of France.
We are investing, as Marie-Noëlle showed you, in Northern Lights, which is very emblematic project in Norway. Through OGCI, collectively, our industry is investing some $1 billion over 10 years. We are moving slowly, but we are moving in this direction to be ready for the time this technology will make sense business-wise. We don't forget about the forest. That can be also a cheap way of sequestrating carbon, $10 per ton might be possible. We have started also to step up and to move through Total Foundation. Of course, it will be a very progressive move. Having said that, having described to you what are the main business trends that we want to develop based on this integration of the climate change consequences on the energy mix.
We were willing to build an index that would allow us to measure the carbon intensity of our energy sale. How did we do that? First, on the left side, we consider all the sales that result from the business plan that have been developed by the different entities for oil, for gas, for electricity. These are business plan that have been developed on the basis of what we are doing now. Of course, we have tried to extend the horizon all the way up to 2040, don't ask me too much detail about the road fee of Momar Nguer in 2039. It's clearly a path in which we strongly believe that we can develop ourselves. What we are measuring are all the emissions that are generated by the sale of these products on the full life cycle basis.
Which mean that we are not only considering in our index the emission that are released during the production process, but also the emission that are released by our customers. Because clearly, 90% of the CO2 emission are released when the hydrocarbon are burned and when they are transformed in CO2. Our indicator is, at the numerator, we have all this emission, what we call in jargon, Scope 1 plus Scope 2 plus Scope 3. We deduct carbon compensation, carbon sink that we are using. It's not very significant to this horizon, but there is some quantities that are sequestrated, clearly. We divide by the amount of energy that we intend to sell to our customers. After what we show in this chart that Patrick showed you this morning, is this trajectory of this index.
What you see is that with all the business plan that we are developing, it's not a surprise, because we are taking into account, taking opportunity of the growth in the low carbon businesses. The more we go into the future, the more, in fact, we reduce our carbon intensity. We see that we are reducing by 1% per year this carbon intensity index, which lead to a -15% in 2030. Beyond 2030, as Patrick said, of course, it's difficult to know exactly what will be the incentive, what will be the regulation that will be promoted by the different government, that will lead us to consider that certain development are or not economical. Of course, there is a part of this trajectory that cannot be detailed today.
We consider that we should be very comfortable between -25%, which is the extrapolation of the -1% that we observe today and for the coming first 15 years. Of course, depending on the different regulation that will be adopted, it could be as low as -30%, -45%. Our product mix at this horizon, as you see, will still be very heavily biased, very heavily focused on hydrocarbon. Let me be clear. Low carbon electricity will be a significative part, but it will be only 15%-20% of our business, when gas should be more or less at 50%, 50%+. Oil, including the biofuel component that is blended with our products, should be between 30% and 40%.
This is the way we intend to develop and prepare the future of the company, taking, once again, opportunities that are arising from the climate change and environment. Improving, once again, our operation efficiency. Growing natural gas, that would represent more or less 60% of our hydrocarbon production. Developing the low carbon electricity, mainly hydro for the time being, at least, and the foreseeable future. Increasing biofuels, because once again, it's a growing market. Investing in carbon sinks as soon as there will be a business case that will justify to invest in this carbon sinks on a global basis. This is what we were willing to convey to you, and I hope that you're convinced that this move is, once again, not a major change compared to our appetite to develop our historical business.
We think that, yes, there is room for diversification in the low carbon business, and this will ensure, on the long term, the future of the company. Thank you.
Thank you very much, Philippe and Marie-Noëlle. We're going to the final Q&A session of the day. I think the first question will be from Martijn Rats on the left.
Hi. Hello. I had a question about that Exhibit A that you just had up, which is the one that shows the carbon intensity sort of trajectory. I wanted to ask you two questions about it. First of all, I'm still struggling with these Scope 1, 2, 3 things. Does it relate to Scope 1 and 2, or does this all relate to all three scopes? Secondly, I find it quite interesting that you decided to put an actual target of -15% to it, as in there are some of your competitors that talk more about sort of ambitions or aspirations, showing good intentions to reduce it, but not quite willing to put an actual target to it for fear of some legal risk. I was wondering what your thoughts were about that.
On the first question, the easy answer is that our index cover everything. Scope 1 plus 2 plus 3. Once again, the emission that are released by the process of producing this energy and the emission that are released when our customers are burning the fuel. Second question is why putting a
Keep it as an ambition.
Target or objective.
Ambition maybe is better than target. Ambition. It's a nice word. It doesn't change. Okay. It's an Anglo-Saxons, lawyers in the U.S.
Lawyers matter.
I think at the end of the day, the question is always one, is for companies like us, it's more a serious matter, is will you be under pressure or not from the financial communities and elsewhere. You know, the words are important, are not so important. At the end of the day is, are we or not, Can we avoid not to be responsible on these matters? We are convinced that we have to act. Everybody is maybe not convinced, but it's our conviction, and it's shared by the board of directors. The wording to be prudent, let's speak about ambition.
Okay. There's a question from Lydia, then from Chris.
Thank you. I had two questions. The first one on the digital side and on the robotics side, you talk about a 20% reduction in the cost base. Is it the robotics part of the digital change that you see as being the biggest absolute impact? Is that just an example of that coming through? If I can just check that that 20% reduction isn't included in your cost savings target. The second one, just going back onto the carbon side, and I know this is a bit of an unfair question, but are you able to give what the sensitivity of cash flow would be to a EUR 10 ton move in the carbon price?
Start by digital.
Your question is about the part of robotics in the cost reduction? Okay. I discussed with some of you just to explain that robotics or artificial intelligence is part of the solution. Even smartphones, it's just a contribution to the full chain of digital and implementation. We gave the average number of 20%. In some projects, it's more, in other projects, it's less, but the average is roughly 20%.
Your second question on the sensitivity of cash flow, about the carbon price is not an obvious one because on one side you could easily compute, we are more or less emitting some 36 million tons of CO2. If there is an increase of EUR 10 per ton, you could say, "Well, it will cost you EUR 500 million per year." In fact, it's much more complex than that because if all our competitors are paying exactly the same price, of course, the customer will end up paying the bill. This is why your answer is not so straightforward.
Thank you, Philippe, if I may go back to your last slide that you presented and just have two questions to clarify. First, can you give us an idea what you assume in that 2040 outlook? I realize it's quite a long time away, but what do you assume in terms of TotalEnergies's energy sales? How much is it going to grow between now and then? Surely, and that's the second question, the easiest way, I'm just checking whether I get this right, the easiest way to meet your carbon ambitions would be to sign lots of offtake agreements with nuclear power plants around the world and sell it to as many customers as you can. Just checking whether I get the mechanics right. Thanks.
Well, what we've been doing is, in fact, we have based our reasoning in term of market share. For instance, in the oil product business, we know what our market share today. We have taken some hypotheses on the size of the market all the way until 2040. We have taken into consideration that we think that we have the potential to increase slightly our market share on this market. The basis of the reasoning is in term of market share. The same gas, for the LNG, we have 10% of market share. We have extrapolated the growth of LNG market, and we have supposed that we would have this 10% market share all the way down in the future to 2040. In low-carbon electricity, there is growth, we have taken the same kind of hypothesis.
2023, we have told you we are ambition to have 15% of B2C market in France plus Belgium. We have supposed that in 2040, we would have 15% of European market beyond. These are the kind of assumption that we have been taking, this is leading to the trajectory that you saw. Of course, you could say that an easy way, yes, you buy nuclear electricity, and you sell it and there is zero emission. We have not taken this kind of trick into consideration. It's true that, as we said, we just intend to have, let's say, between 30% or 50% maximum of integration on power generation. We know our own mix.
Beyond, we have taken the hypothesis, as it is a European business, that we would be acquiring 50% of the market based on the mix of the whole of Europe, which is not like in France, where it is mainly nuclear. We took into account a mix that is a mix of gas, of renewable, of coal, and of new nuclear. We were cautious on that as well.
Yeah. John? Any questions? I think John has a question here as well.
Sorry to harp onto that last slide, I just had one other question. Given that I think you include Scope 3, if I understand it correctly, does that mean that you had to put an assumption in for the efficiency at which your gasoline and diesel sales are used? Implicitly in that, there's an improvement in the efficiency of internal combustion engines in that.
Yeah.
Thank you. The second is, could you talk a little bit more about where you see the current cost of carbon sequestration, the challenges that you're seeing around the technology, what you need to see in terms of sort of breakthrough capabilities, and where you think, realistically, you can take that cost? I can start to relate that to where the carbon market is as well right now.
In term of cost, do you want to give a figure? Basically, what we have made in term of studies is leading us to a cost more or less of EUR 100 per ton of CO2 to up to EUR 150. The real difficulty is more to find the adequate place where we can store for geological time the CO2. This is the real challenge. This is one reason for us to work with Norway, because North Sea, of course, can offer a potential for the whole of Europe to store CO2. The question is-
All that is linked to the-
Not only cost
The carbon pricing. If you are in a world where we would pay EUR 40 per ton, for a company like TotalEnergies, it would represent several billion EUR. I can tell you that if all the industry would face such a situation, we would accelerate investments in this type of technologies. It's difficult to anticipate what the cost of it. We need to work on it. We need to be much more proactive. We need some subsidies in order to make this framework working. It's a question of scale-up. I'm convinced that it's very difficult to extrapolate from few pilots. You have only 17 projects in the world today of CCUS. 17. It's nothing.
If really we had to store the amounts of CO2, which was in the chart, we see three billion tons or even five billion tons, motivation will be there and the business will be developed, and I'm convinced we could reach under EUR 50 per ton or EUR 40 per ton. The whole history of technology and incentivization by the pricing is why we think a pricing is necessary. It gives me the opportunity to complement the answer to Lydia. In the report that we have on the table, you will find an interesting data, which is we try to evaluate what was the impact of EUR 40 per ton long term on the portfolio value of TotalEnergies. It's 5%. 5% on the NPV, long-term NPV, EUR 40 per ton. Yes, it's 5%. It's not as dramatic as some people would like to say.
It's 5% on EUR 40 per ton. It's written in the book. By the way, this remark led me to another. You've seen that Philippe mentioned natural things like forests. Obviously, today, when you look to that file, it's much more interesting to invest in natural things than in CCUS. Less than EUR 10. You can be even much more efficient. We need to think to that globally speaking, and I know that we share these views with a number of large European companies. I think yesterday, during our session of the OGCI, it was put on the table as one thing which could make sense globally for the world, and even in terms of efficiency of the EUR we invest.
I think Thomas had a question.
Thank you. Thomas Adolff from Credit Suisse. I wondered whether it's because it's too early, hard to say, or it's just going to get competed away in the form of lower energy costs. You also mentioned earlier on that you are ahead of your peers in some areas. Being ahead, is that good enough or is what you do also differentiated? I had this conversation with a CFO of another super major, and he said to preserve the margin, you need to do something differentiated.
The second question is, you've talked about less time for data, more time for high-value tasks. Does that also mean your organization can now be much smaller in terms of headcounts? Thank you.
Okay. There are many questions in your question. First of all, about the issue to evaluate precisely the cost reduction or the value of implementing a digital strategy, digital technology. I will say that today we start to implement. I gave many example of robots and drones. We are first to develop the hardware, then to demonstrate at the pilot site, then to demonstrate in a real situation, and then to extrapolate the deployment in all our sites. Step by step, we are more and more confident in our calculation. When I gave the average number of 20%, we start to calculate it project by project. I'm sure that in the next years we will be more and more specific, giving right numbers depending on the project.
My second comment is that you're right, it's not only a question of technology, it's also a question of organization or how you dedicate your workforce. I gave the example of what we are doing with Google, in the partnership with Google. It's clear that we will automize all the routine repetitive task, and we are able to evaluate the free time that we will spend for more complex issue. Today, we know that we have not enough time to exploit all the information that we are buying. Thanks to artificial intelligence, we will have access to more data. It's not just a question of quantification, it's also a question of learning or, how can I say that? We will learn more because we will have more data. The knowledge will be higher.
In some cases, we don't know exactly what will be the advantage, but we are sure that there is an advantage because we will know more. In some of the cases you are asking about, is it a good thing to be ahead or not? I will say that regarding digital, there is no risk to be ahead. There is just a risk to create more value. We need to be committed. We need to be engaged. It's why we send people working with Google. It's why we send people working with Tata in Pune. It's why we have researchers working with Stanford. We need to be at the front to know more about what is occurring and to keep the skills growing inside Total to be able to catch the value and to make the translation in our business. It's a quite longer-
Just to add, what is the main challenge for us on the cost side is that we need to be able to eliminate more or less the inflation that we face every year. In a commodity business, this is where we are, in fact. Refiners, they know that Because salaries are inflating, but at the end of the day, there is no inflation on margins. All these tools for us that we are trying to develop is new ways to find new efficiencies in order to maintain, to reach this objective, which is to lower the cost permanent base. This is what we are working. Digital clearly is earning. That's the cost part of the industrial digital. On the marketing part, it's more a question of creating value, like on this smart electricity story, where you can add services.
This has potentially, like I would say, also the car fleet management of WayKonect, this has potentially more, we will play on the revenues more than on the costs. This could be some breakthrough. I think the companies, for example, would be the first to be able to robotize their service stations could have an edge compared to the others and could attract more customers. These are more disruptive. They are like what we try to do on the smart energy, smart electricity. To quantify it, to be honest, I read all the papers of my competitors before to make that presentation. I've been amazed by the precision of -15%, et cetera. We could have put plenty of figures. Maybe we are two engineers in Total. I think Marie-Noëlle gave you a hint.
For me, it's more a question of one side to be able to contribute, to maintain, to eliminate the inflation, and the other side is to create added value and added services. We'll have time to come back to you on that. To be honest, the fact that we are now embarked in this smart electricity business in a large way, we invested EUR 2.5 billion in this company. We are now speaking about real figures and real market shares and real results, and we'll be able to show you that in the coming months and quarters. I think it's the best answer to all of that. Last question, please. We don't do that to eliminate workforce in exploration. Clearly, one of the main challenge we have is that we are too slow.
We acquire data and before to go from data acquisition in this industry, data acquisition and putting a well, you have two years or something like that. It's very long, in fact. It's even worse when you take in a reservoir management. In this industry, we make 4D seismic, which means several seismics along the time, along the life of the reservoir. To integrate these data that we acquire into a reservoir model, it takes one year to two years. It's too slow. Where I see that we could improve a lot the industry is to be able to have some algorithms which would help us to update our models and then to be smarter on the way we implement a well. Again, it's a global added value of efficiency there more than cutting.
It's not because we have 200 geologists less that will enhance the returns of the shareholders. It's not at all the target. It's not a massive, the robotization aspect that the finance industry could face. It is not what we are targeting in our industry. It's not at all where. We are not there.
I'm conscious time is moving on. Maybe we can have one last question from Jason.
Thanks. This is Jason Gammel with Jefferies. Just a couple of questions on big data, actually. As you are partnering with other companies, are you retaining sole ownership of your data, including the metadata, or is there some sharing of that data with the partner? Second of all, as more of your data is in places like the cloud, what are you doing about cybersecurity to address the integrity of that data?
I will not detail all the condition of the partnership with Google. I will say that the guidance of the company apply. It means that each partner keep their background. Regarding Total, the background is in our data. Regarding Google, the background is in the cloud solution and, I would say, the core algorithm of artificial intelligence. Regarding the way we will learn from all data, we will learn for us. This will be exploit by Total.
Cybersecurity is a real concern, I'll be clear. These are at this stage are pilots. I mean, R&D businesses. If we have to do that at a larger scale in a routine way, this obviously will be taken into account. I can tell you that we dedicated a session of the board director of Total on the cybersecurity risk. We took that very seriously, including in order of protecting our business interests from globally speaking. It's creating today in companies like us, we are obliged to think differently on the way we organize all IT and IS systems, in fact, in order to protect the company. It's more in particular to avoid any intrusion of any, I would say, attacks on the command system or refineries and et cetera, is really are important for us in terms of security.
All that is taken, this stage it's at a stage of R&D developments. We can isolate them, it's not yet at routine level. This concern of cybersecurity is well taken into account, I think it obliged all the large corporations like Total to think again the way we have structured our whole IT system. When you speak about cloud and things like that, it raises some issues. That's clear.
Okay. I think it's been a very full and busy day. Maybe just before Patrick says a few closing words, you're all invited to dinner tonight at Delmonico's Restaurant, which is just down the road. Unfortunately, I believe it's still raining, there are some umbrellas at reception which you can take with you.
We are a French company, the dinner is very important. Otherwise, if you don't come to the dinner, you will miss the best part of the day. Come to the dinner. We have the opportunity to continue to discuss with us. I would like, first of all, to thank you. I think it was the first time we came here to New York, we had even a larger attendance than in London, to be honest. It's nothing to see with Brexit if we come to New York. I think it's good for us that we alternate between London and New York. Probably we'll come back because, again, we have shoulders on both sides of the Atlantic. You are very important to us, it's good to come as well here. I would like to thank also all the speakers today.
Behind all that, a lot of work has been done by them, also by the IR team. You know that we have taken one of yours to join the team, Brendan Owens. I did not welcome him this morning, I would like to welcome Brendan. Brendan is working with Mike. The idea is to transfer the job of Mike to Brendan. There is one condition. He needs to learn French. Today, all that is in English, before, we speak in French together. Which is maybe, by the way, one of the challenges of the company in order to become even more global. Thanks to our Maersk Oil colleagues, everybody is writing in English now, which is a good step. Thank you to all of you. Again, I hope you appreciate it.
Thank you for your questions, I think it's good to have this long session because I remarked I take few questions of yours which will feed the next presentation of the company. During the questions, during the workshops or the thematic sessions, we are more precise, it helps you probably to go into more details. Don't hesitate, again, during the dinner. We are there to try to do our best, except the secret about what is the value of Arctic 2, what do we do with [ChinSun]. You have some questions, do not ask us. You will see one day. You will see. Don't worry. Thank you. Thank you for the attendance, I hope we'll have a good dinner together. Thank you again.