Quarter 2018 Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Patrick Dela Chevalier, CEO. Please go ahead.
Hello, Patrick Dela Chevalier here. We reported a strong set of 2nd quarter results. On a quarter to quarter basis, adjusted net income improved by 23 percent to $3,600,000,000 or $1.39 per share. Debt adjusted cash flow, DSTS, was $6,800,000,000 an increase of $1,100,000,000 compared to the Q3. And net cash flow was very strong at $3,900,000,000 Thanks to major project ramp ups and recent acquisitions, we are well positioned to capture the higher brand price with strong production growth and an organic pre dividend by dividend of less than $25 per barrel.
Going straight to the segments. E and P is in great shape with adjusted net operating income of $2,700,000,000 in the 2nd quarter, an increase of 23% compared to the Q1. By comparison, brands increased by 11% to $74 per 1,000,000 per Conscription was 2,720,000 barrels of equivalent per day in the 2nd quarter, A slight increase from the Q1 with the full quarter of March more than compensating for higher maintenance in the second quarter, mainly in the North Sea. It is indeed quite unusual to increase production from the first to the second quarter. 2nd quarter production increased by 9% compared to the same quarter last year.
We now anticipate that 2018 production growth should be above 7%. So we are continuing to deliver industry leading production growth. Looking at this in more detail, Maersk is fully on board now and we have Cascagun, Fortis and Yamal LNG continuing to ramp up. The start up of 50s, Kaombo, Temparosa and Aegina will show growth in the second half and these are good cash and relatively new balance. And next year, growth will be driven by ramp up of these projects and the next wave of manager startup into the Iara, Culian and Johan Verdot.
So the momentum is strong and it is welcome with high prices. During the Q2, we sanctioned Vigna to In Angola. After reengineering the project and taking advantage of the lower cost environment, we succeeded in cutting the investment amount by more than half. In addition to the EMEA-two, we have recently restarted in field drilling program on major fields in our core areas and we took a 5 days on the Arctic Gas field at GLNG and the new phase of drilling for Alkaline. The gas Renewable Power segment generated about $200,000,000 of adjusted net operating income in the 2nd quarter.
Reflecting better results from gas trading and new energy. Earlier this month, we closed the LNG LNG acquisition and this position Total as the 2nd largest player in the fast growing LNG business. Also in LNG, we announced in May that we are taking the direct 10% stake in Arctic 2 in Russia, further expanding the LNG portfolio. In July, we closed the acquisition of 73% of Giret Energy. We have total representatives on the Board and worker period to acquire the remaining shares has been launched.
We are committed to growing along the Jager in our 2 largest markets for electricity distribution, France and Belgium. Turning to Downstream. Refining and Chemicals contributed $821,000,000 of adjusted net operating income in the 2nd quarter, an increase of 14% compared to the previous quarter. The European refining margin indicator recovered from a seasonally weak Q1 and averaged $35 per tonne in the Q2. Second, price increase remains strong with rising net asset stock cost affected margin to Europe.
We completed some maintenance programs in the 2nd quarter, the most important being Antwerp and normal repeat can. So we can expect better margin capture going forward. RMC generated $1,000,000,000 of cash flow in the 2nd quarter, bringing year to date contribution to $1,900,000,000 For the future growth in RMC, we are concentrating investment on capital chemicals and targeting opportunities to take advantage of low cost. We have 2 ongoing expansion projects in the U. S.
And Korea. We've also launched 2 studies recently, a project in Saudi Arabia with Saudi Aramco to strengthen the integrated set of and capture premium deals plus another project in Nigeria with Sonafrac. And in France, we are converting LaMed to a bio refinery and we'll be producing renewable biodiesel later this year. From Marketing and Services, the main message is that we are continuing to grow this high return business, demonstrated best by a 11% increase in refined product sales outside Europe in the 2nd quarter. Adjusted net operating income from market inventories was €478,000,000 an increase of 30% compared to the Q3.
The combined downstream segment, Refining and Technical plus Marketing and Services generated cash flow of $1,700,000,000 in the 2nd quarter, in line with our guidance for the full year. For the first half twenty eighteen, downstream generated cash flow of $3,000,000,000 and the royalty of growth to 28%. Moving to the group numbers, we generated 6 $800,000,000 of debt adjusted cash flow in the Q2. And for the first half, the group generated a robust debt adjusted cash flow of $12,500,000,000 Although oil price are above $70 per barrel, we have a relentless in our demand for BTP money investment and OpEx, including the rapid capture of synergies from new assets. For the group, we have increased our cost addition target for 2018 from $4,000,000,000 to $4,200,000,000 Net capital investment, which include organic investments with acquisition and divestments was $2,500,000,000 in the Q2.
For the first half, net capital investment was $6,700,000,000 including $1,300,000,000 of net acquisitions. Note that net investment in the Q3 will include about $3,000,000,000 for MG, LNG and DRAC Energy. We confirm the full year 2018 guidance at $16,000,000,000 $17,000,000,000 So again, we are delivering on the commitment we have made in February. We view strong growth in cash flows and discipline on spend. Net cash flow was $3,900,000,000 for the quarter and $5,100,000,000 for the first half.
Profitability is also continuing to improve. Return on equity increased to 10.9% for the 12 months ended June 13, 2018. And the watch here of the group is now back above 10% for the first time since the oil price crash. We are committed to maintain a strong balance sheet and at the end of the second quarter, our net debt to capital ratio was 16.5%. This is a small increase from the Q1 due to the timing of the AGM we made 2 dividend payments in the 2nd quarter.
So we made 3 dividend payments in the first half and the cash out impacted our net debt. We bought back 19,000,000 shares in the 2nd quarter, arranging the total to 28,000,000 shares for first half. The 28,000,000 shares include 18,000,000 shares to eliminate dilution from the script. We bought back an additional 10,000,000 shares for about $600,000,000 as part of the $5,000,000,000 buyback announced in February. So in addition to increasing the interim dividend by 3.2%, we are believing on our commitment to share real price upside with our shareholders through the buyback.
This result the most crisis that we are taking advantage of the favorable environment. Production growth is providing strong momentum for cash flow going forward. Our countercyclical strategy, acquiring NERSCOLE and Petrobras assets, clearly the water base in the environment. We are confident that we can continue to successfully implement our strategy and deliver on our commitment to shareholders. We look forward to providing you with more detail in September at our Investor Day presentation at the New York Stock Exchange.
And now we can start the
We will take our first question from Oswald Clint from Bernstein. Please go ahead.
Patrick, hi, good afternoon. Thank you. I wanted to ask about the Onji LNG deal, which is closed this month. When I mean, obviously, we should expect some earnings contribution 3Q, 4Q, but is there like optimization or kind of I guess optimization is the word. So optimization Total can do with this portfolio through changing some of the contracts and the destinations to enhance the profitability kind of the larger LNG portfolio with Total.
Is that something that's possible? And if so, is it possible in the short term or it'll take a couple of years to actually go through those contracts? And second question, please, was on your CapEx, the $16,000,000,000 to $17,000,000,000 for the year being reiterated. You did make a comment there around increasing infill drilling within your core basin. So that's been included within your your CapEx guidance.
Does that mean something is moving out of your CapEx guidance for this year? Or the cost of that infill drilling is just particularly low? Thank you.
Thank you, Oswald. And prior answering your question, I'd like to repeat that we at Total are able to refer to shareholder an increasing growth while maintaining discipline. We increased our OpEx savings target to $4,200,000,000 We delivered an organic pre dividend breakeven even below $25 per barrel. And our profitability is more than double digit with ROE at 11%. So your first question about NGLNG Optimization.
It's a business which you can play well when you have a portfolio, a large portfolio. The ENGIE deal was closed mid of July 13. We are building on a group competitive advantage with strong technological and commercial expertise. It is in line with our strategy to expand along the gas value chain. We are doubling our LNG portfolio to consolidate our position as world number 2.
The point is not to be number 2. The point is to have a large portfolio and managing this portfolio of €40,000,000 tonne a year in 2020 will represent 10% of the market. So we can make many, many arbitrage. Total is positioning by this transaction itself to capture strong market growth, 10% in 2017. I remind you that was a big growth.
And the LNG acquisition is financially extremely attractive with a growing cash flow from operational impact over time. At $60 per barrel for 2019, we expect $100,000,000 to $200,000,000 a year with strong upside and we have an NPV for our synergies above $100,000,000 maybe $150,000,000 That's about ENGIE. The main thinking you should have on ENGIE is the portfolio effect. So your second question was about CapEx. Yes, the infill drilling are included in our $16,000,000,000 $17,000,000,000 guidance.
We expect our CapEx to pick up second half of this year as we sanction new projects like Johan Sverdrup, IKK of some short cycle in North Sea in Qatar. And in addition, traditionally, down Spring spends more in the 2nd part of the year. On the other hand, we are citing a period of heavy investment as project start up. And the new project we are launching are less capital intensive. We as I said it starting my answer to you, we remain disciplined and keep our guidance for capital investment at $16,000,000,000 to $17,000,000,000 this year and $15,000,000,000 to 17,000,000 for year 2019 2020.
And I remind you this is a mix between organic CapEx and net acquisition. Thank you, Oswald.
Thank you. Thank you.
We will now take our next question from John Rigby from UBS. Please go ahead.
Hi, Patrick. A couple of questions. One actually picking up on where you just left off is with the closing of a couple of big deals in 3Q and your comments around the success of acting countercyclically, can we expect the pace of disposals, I guess, out of E and P to pick up over the next 6 to 12 months as you begin to sort of play the other side of that transaction of that deal? And does the production guidance that you provide for this year include or exclude any effects of planned disposals? And then just a second question is, I guess, oil prices are exceeding the levels that you expected in your planning or your budgeting.
You're obviously buying back stock, but you're also generating free cash flow. You have an existing buyback target or indication. At the margin, if you're exceeding expectations in free cash flow generation, where are you likely to put that excess cash? Is it likely to supplement the buyback? Or is it to reduce your net debt?
Thank you.
Okay, John. Thank you for your question. As you said, we are countercyclical. It's time for us to sell. There is no emergency.
We face no difficulty. We just need to get the highest price for the asset we have put in place. And you may wait maybe 6, 12 months to see the result of this new trend on us to stop it and try to monetize asset as we did for Martin Linde, for instance, last quarter. The next question was what to do with our excess cash. If you remember our slide with the allocation of cash flow from operation.
We wanted to reduce our debt, maintain our gearing below 20% and then increase share buyback. Increasing meaning increasing the speed at which we make it. And this is what we are doing basically now. We will with the $3,000,000,000 acquisition, you notice NG, NNG and Direct Energy, we have a $3,000,000,000 cash out next quarter. We need to repatriate cash flow from ops in our balance sheet to maintain our gearing, and we will, I think, slightly increase the base at which we will buy back share.
Thank you, John.
Thank you.
We will now take our next question from Christian Malek from JPMorgan. Please go ahead.
Hi, good afternoon. Thanks for taking my questions. Just 2, if I may, Patrick. First of all, just sort of follow on. I mean, so key factors aside from oil price in terms of phasing of buyback and sort of scoped increase beyond the target of $5,000,000,000 So sort of assuming you do accelerate the pace of it, where does the excess cash go?
Is it going to lowering the gearing or versus sort of actually raising that target beyond $5,000,000,000 And if it's the former, would that imply or suggest that you're actually looking to do future M and A over the medium term? The second question in terms of cash breakevens. You've had a fantastic show for the quarter in terms of managing lower to sort of the low-50s. But in terms of thinking about the medium term CapEx guidance, you talked about $50,000,000 to $17,000,000 Is that something we should assume as sort of as a base case in terms of thinking about the equilibrium around cash breakevens of the medium term? Or should we still be thinking about the lower end of the range?
Christian, thank you for your The first question about cash allocation. We and I haven't and we do maintain I haven't increased the overall $5,000,000,000 target for share buyback. And I precisely said that I maintain this target and we may speed up the process of bringing back share. What we will start, I think, this Q3. Thereafter, I remind you that maintaining the gearing below 20% is important for us.
So we will allocate most of the cash this quarter, the excess cash to gearing maintaining the gearing and increasing maybe slightly the pace at which we buy back shares. The cash flow and the breakeven. I will comment the organic cash breakeven, which is as planned in February 2018. We generate $6,400,000,000 cash flow this quarter before working capital, and the working capital for total this quarter was basically stable. Our organic CapEx were $2,800,000,000 We generated $3,600,000,000 of organic free cash flow at oil price in average at 74 dollars per barrel.
And using our sensitivity of $2,800,000,000 of cash flow for $10 the pre dividend organic breakeven was exactly $23 per barrel. Using a full cash dividend, our breakeven post dividend was below 50 percent, dollars 50 per barrel, down year on year and Q2Q as we carry on improving the overall performance of the business. It is not only because the oil price has increased that we changed our strategy here. We do not change our strategy. We remain firmly focused on the efficiency program, including the cost cutting program and the CapEx maintenance.
Thank you.
Thank
you. We will now take our next question from Martin Ratz from Morgan Stanley. Please go ahead.
Hi, hello. I had a few sort of practical questions. I wanted to ask you about Kaombo, first of all. The Angola loading program is showing a pretty decent sort of rebound in September. And I was wondering if this is basically driven by Colombo coming on around that time.
The other thing I wanted to ask
you about is Yemen LNG. It's a project
that has been multiple already for quite some time. There's no particular sort of reason to ask you about it now. But I just wanted to ask, is there any prospect that this could come back? A lot of companies are talking about doing LNG FIDs again, and this would be easy to go it could come back relatively quickly if the security situation allowed it, and that would change, of course, somewhat of the supply demand balance. And then finally, like one question about working capital.
Flat working capital in a quarter where the oil price changed so much, how did you do it?
Okay. Thank you, Martin. Kaombo North startup is a matter of days. So when you read the both allocation and ongoing rebounding, I think your intuition is right. 0.
The M and LNG is cocooned at the moment. If we were to face a stable environment in Yemen, we could restart this resume again with operations, but that's not the case today. And I'm not expecting the Yemen starting again soon. Working cap. You remember 2 years ago, we had difficulty in managing our working cap.
And it's difficult to manage a working cap actually. So we have put in place a group of people and we review the working cap, not at any management committee meeting, but every quarter. We review the working cap every quarter with all the management of the branches, Patrick, Pouyen and myself. And we try and understand why the working capital is deteriorating or getting better depending on the quarter. And we give some guidance to the people so that they reduce their inventory, so that they speed up their payment.
So very basic decision, which improves the working gap. I have to say that by year end this year, assuming a stable oil price environment as it is today, we would like to recover between $1,000,000,000 $2,000,000,000 of working cap, more than what we had spend this year. Beginning of this year to today, we spent basically $3,500,000,000 and we would like to recover $1,000,000,000 to $2,000,000,000 of this working cap.
Wonderful. Thank you.
We will now take our next question from Irene Himona from Societe Generale. Please go ahead.
Good afternoon, Patrick. My first question concerns divisional tax rates. If I'm right, both E&P and R and C had reduced tax rates in the quarter sequentially. I wonder if you can discuss the drivers and important to give us some guidance for full year expected sort of tax rates. My second question on Gas and Renewables.
You had a EUR 424,000,000 special charge in the quarter. I wanted to find out what you impaired. And finally, OpEx, you're increasing the target. Can you talk a little bit about the sources of the cost reduction? So what new things are you doing?
Or is it the same old things that you're able to extract more efficiencies from? Thank you.
Thank you, Irene. Tax rate first. It is true that we are monitoring our tax rate very carefully And that sequentially, the tax rate by mainly E and P as a volume of taxes was slightly down. This is basically due to one element of one concession, which has been extended so that we could have the value of our past clauses being a tax asset. Without expansion, there were no possibility to value those backslots.
And with the extension, we have the possibility to use those backslots. So we activate a tax gain there. That's about $100,000,000 The assets we impaired are 2 plants of SunPower for and we impair for about $400,000,000 a little bit less than $400,000,000 if I will remember. That's mainly the impairment. And this is the only impairment we had this quarter.
The last question was about how do we do to increase our OpEx setting target. You know, Irene, I already told you, we were fast. There is still some fast. We are monitoring every month the progress we made in our cost cutting program, reviewing line by line. And this is by managing that and incentivizing the people doing those work that we manage to increase our savings.
Thank you, Ian.
Thank you.
We will now take our next question from Titan Jothian from Exane BNP Paribas. Please go ahead.
Yes. Hi. Good afternoon, Patrick. I've got a couple of questions actually. Firstly, I guess the Maersk oil deal from last year looks increasingly attractive.
So I was just wondering whether you could give us any sort of updates in terms of the contribution to the quarter and in particular sort of what synergies you've been able to extract out of that deal? And secondly, I think Yamal volumes have gone extremely well. I was wondering how much possibilities there are to debottleneck further there. Thank
you. Okay. Let's start with Yamal. A good news is that Train 2 first drop of LNG happened, I think, yesterday or 2 days ago. I can't remember exactly, but very recently.
So Train 2 is starting right at the moment. The Maersk contribution, you know that we revised at our synergies with Maersk and we will do more than $500,000,000 The deal was closed beginning of March. Obviously, the countercyclical timing was excellent. The cash flow for next quarter with an excellent cash margin of about $30 per BOE at $6 per barrel. That is the margin provided by Maersk barrels.
On top of that, we expect the Johan Sverdrup and Culian to start up in 2019. The integration is progressing well. There were some costs provide for this integration in this quarter books of about $100,000,000 And this is why we are extremely confident and very happy of this acquisition. And the same, I have to say that Ape Moller should be very happy with the total share price going up also on their side. So it's basically a win win deal that we have made.
Thank you, Stephen.
We will now take our next question from Thomas Adlach from Credit Suisse. Please go ahead.
Hey,
Patrick. Thomas from Credit Suisse. Two questions for me. Firstly, going back to the
Okay. It appears the participant may have stepped away. We will now take
our next question.
I'm sorry.
I meant you, Anshadro.
Our next question from Christopher Copeland from Bank of America. Please go ahead.
Hello, thank you very much. Just would like to focus on production, Patrick, and whether you could give us a little more color around what made you upgrade guidance now? Which projects have come through faster? What have you derisked ahead of expectations? And perhaps talk us through also your production expectations beyond this year.
As we all know, you've got this 2022 CAGR outlook that was originally, I believe, established with South Pass in mind, whether what you are seeing right now will easily already compensate for the Iranian volumes that you originally expected or whether you've got other external options in mind from what has happened since over the last few months? Thank you.
Thank you. Clearly, we are doing well on production. And the same with cash flow. And the growth this year is very impressive and it will be the same basically next year. I don't know exactly the figures, but the production growth will be strong for some time from now.
For the 1st 6 months, our prediction is up by 9%, if I will remember. And we believe that we can keep this rate with coming start ups such as and both start ups are imminent, Campbell, Ichthys, Tampa Rosa will start up. It's a matter of day, maybe week but not so much. So you will see both started being very imminent that we will continue and grow the production this year and 7% because sorry, the production growth was 7%. 7% is a very high figure already.
Don't ask us to make more than that. We want to create good cash flows and to sanction accretive project, and we are doing so. The new wave of sanction will be Jan Zverdrup, PKK, Mero 2, the new name of Libra, plus some short cycle infill in the North Sea in Qatar that we have previously kept on hold. And that's basically what I can say. We the lose of the volumes from Iran was late in the period and it doesn't change the guidance and that's it basically.
Keep in mind that the Yamal ramp up is fast.
Thanks, Patrick.
We will now take our next question from Thomas Adler from Credit Suisse. Please go ahead.
Hello. Can you hear me now? Okay. I'll try again. Two questions for me.
Just going back to working capital. 1 of your competitors earlier on said trading is profitable and it requires working capital. Therefore, it is tough to manage working capital. So I wondered how important trading is to the bottom line for Total since you've done a very good managing the working capital, not just this quarter, but in general? The second question is on LNG.
Not too long ago, you were fairly small. Now you're quite big following the completion of ENGIE. And you have a very young portfolio and a deep hopper to pick from. So I wondered in terms of longer term ambition maybe to 2,030 since you also have a positive view on the LNG market, How should we think about the size of Total in the mid-2020s, late 2020s from €40,000,000 today? Can you be €60,000,000?
Could you be €70,000,000? What is the internal discussion around that? Thank you.
Thank you. Well, I don't know who you referred by when you said that a competitor of us was having difficulty with working cap because of this trading that we are managing trading for both result and financial exposure. So we do manage working capital of the trading itself also. It's part of the whole company working capital exercise. And we are able to control our working cap in trading at a quite low level.
And the trading is providing good result. You know that we do not provide figures on it, but our trading is providing good result to the bottom line. It's less volatile than what you can see from our competitors. I do recognize that. But all in all, it's a very good contribution to the bottom line from trading with the control of their working capital.
LNG mid-twenty 20, that's a big question. I think this will be one of the topics we will cope with in our September presentation. Just remind a few assets we have in our portfolio, NG LNG portfolio, notably Cameron LNG, the Arctic 2 LNG project. We have the PNG in Papua New Guinea. We have the 7th train of Nigeria LNG.
Then we have Tellurian. So we have a lot of low cost projects that we could develop and which can provide value and results because we are not only managing the company for value, but also for results.
Thank you, sir.
Thank you.
We will now take our next question from Bertrand Crotty from Kepler Cheuvreux. Please go ahead.
Yes. Thank you for taking my question. Hello, Patrick. Two questions, if I may. The first one on Inangola.
We've been waiting for some time for Zynia to be sanctioned.
There's been
a lot of restructuring at St. Angus and some fiscal terms being agreed. Is there more project to be sanctioned in terms of tieback, especially on Golden Block 17? And what kind of timing can we expect for those tiebacks? And the second question relates to Aegina.
I think this is one of the few projects coming on stream this year that we did not talk during this conference call. So can you give us an update on when do you expect Aegina to come on stream? Thank you.
Thank you, Bertrand. Many things in Angola. I have to say that Angola is a well run country at the moment. And it is we are very happy to work in this country and to share profit with the state and us. As you said, we have been able to cut the cost of Zynia 2 by more than half and we sanctioned it finally.
There are other projects in the pipeline. I don't know exactly when we will be able to sanction them. But then you have Clove 2, Dalia 3. In Nigeria, you have Atmo, Freeway. So in this Gulf of Guinea region, there are a pipeline of 5 projects, I would say, that could be launched in the forthcoming years.
On Egina, we own 24%. We have the operator. The first oil is expected by December this year. The overall project is above 90%, and the revised project cost is 9% below the initial budget due to CapEx efficiencies and excellent drilling performance. The FPSO arrived in Nigeria in January, and the drilling campaign is progressing ahead of schedule.
Thank you, Bertrand.
Thank you, Patrick.
We will now take our next question from Lydia Rainforth from Barclays. Please go ahead.
Thanks and hello, Patrick. I just have one question actually, and that was around the cost savings number, the idea that you'll be ahead of the target this year. Can you just walk through where that progress is coming from and sort of how much where within that process you think you are?
Yes. We have several initiatives that are drawing down our costs. You remember that we create a central management and operation branch, which name is Total Global Services. And this initiative where we centralize cost, purchasing, accounting and so on is providing some results. 2nd, it is digital.
It's difficult to quantify, but obviously, it's providing some results, including now. The good example is Smart Home, for instance, that we are able to implement. And of course, we have our initial cost cutting program that we implement week after week, most after most, and that is dragging down costs. But I'd like to reemphasize also that the Total Global Service branch is now quite effective and efficient.
Thank you.
We will now take our next question from Jean Luc Roman from Centimeters CIC Natural Solutions. Please go ahead.
Good afternoon. Could you give us more color on the value you would assign to the acquisition of the 2 power plants you announced today, would this compare to the value you are saying to the power plants of Direct Energy? Yes. Basically, you can buy on the market today, and I will not give you the figure which is confidential. But basically, you buy today CCGT at less than half price of the new build of a new build CCGT.
And this purchasing of 2 power plant is to complement direct energy so that we could produce roughly 1 third of the electricity we sell from our gas power plant. Thank you very much.
We will now take our next question from Rob West from Redburn. Please go ahead.
Hello. 2 from me. The first one is on FX. There is a debate opening up about how much the strengthening dollar has weakened downstream results in global businesses. I was wondering if you could comment on that.
How much was the dollar headwind for you and your downstream business over the course of the quarter? The second question is on Yamal. Have you received any cash dividends back from Yamal Energy Venture? And if not, when do you expect to receive them? Thank you.
On Yamal, I have not received any dividend. I should be aware of that if we have received 1, but we haven't. When we will receive it, you have to wait by 2020, I think, after the first repayment of the debt. That's something maybe by 2019 because we have an early production. The FX on Downstream, I don't know exactly how much was the impact on Downstream results, but I can give you another metric.
The FX, the stronger dollar this quarter has increased our net debt by 1 point $3,000,000,000 this quarter. And I remind you that our sensitivity so that you can play with the numbers and the sensitivities works perfectly. Dollars 0.10 per dollar is $100,000,000 of rand and much less on operating income and much less on cash. That's very helpful. Thank you.
We'll now take our next question from Luca Herman from Deutsche Bank. Please go ahead.
Hey, Patrick. Thanks very much for the time. Couple, if I might. First one, just going back to LNG and again, you may well want to refer me to September. But I just wondered how much more risk you'd be happy taking into portfolio given the length that exists within the Engie portfolio, I.
E, much of it was there for trading. So when I think about other projects that you might get involved in, the Arctic LNGs of this world, the extent to which you, Total, are willing to contract? And secondly, just going back to refining, you mentioned that the issues at Antwerp and Gonfravilla are resolved. How might we expect those to help performance through the Q3, assuming other things hold up as well? Thank
you. Okay. LNG first. It is true that now having integrated in our portfolio the ENGIE transactions, we are a little bit long. And we are working to reduce this length, and we will manage the portfolio more actively actually than it was done before.
There will be more reloading, Something which is helpful because the market is like this today is that when you reroute LNG tanker from Europe to Asia, there is a gain between $3 $4 per 1,000,000 BTE at the moment and this is very helpful to manage this situation. Antwerp, Antwerp, Antwerp, Antwerp in French, it should improve. The big maintenance is behind
Sorry, Patrick. No sense of how much you've gone through the or how much you've seeded in terms of opportunity through the down through the period that facilities were offline?
It would be very helpful to have Antwerp and Normandy working perfectly. And on top of that, on the refinery side, we are well positioned for the new regulation on fuel oil for tankers.
Patrick, thank you very much.
And the project we have make $150,000,000 a year more.
Thank you.
We have no further questions on the telephone.
Thank you very much. And don't leave your office today. We look forward to seeing you in September in New York for the Investor Day. So book your seat and there will be a very funny dinner at the end of the meeting. The 2nd quarter and 3rd alt result shows that we are gaining momentum and taking advantage of the stronger environment.
The group generated $5,100,000,000 net cash flow so far this year. The production growth is very impressive. The organic pre dividend breakeven below $25 per barrel is impressive also. We have increased the dividend. We are bringing back shares as we committed to do it.
And that's it. Thank you for joining us and enjoy your summer holidays.
That will conclude today's conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect.