Good morning, good afternoon or good evening wherever you are on the planet, and thank you to attend this New session of our strategy and outlook for TotalEnergies. I am today together with the Executive Committee. I will introduce them To you after a little after, but first I would like to tell you that today's presentation comes at a turning point for the company. It's the first one under our new name, Total Energies and our new colors. Just 1 year ago, we were coping with a deep crisis, Plenty of the subsidies on free France, the oil prices, which have turned around from now.
So global pandemic, which is on its way to be sorted out, Thanks to vaccinations, we hope so, and climate change, which for sure remains at the forefront. A year later, after weathering the storm and emerging stronger, while keeping the trust of our shareholders, we are moving forward towards achieving our sustainable development ambitions for a just energy transition and a carbon neutral future. We have strong conviction. The world is changing at an accelerating rate, and this means that we must evolve and quickly seize opportunities to grow the companies in new area, new energies or we risk being left behind. Energy is indeed reinventing itself and so are we, leveraging our skills and global presence to provide more energy, reduce emissions and be always more sustainable.
Our ambition is to be a leader in the energy transition and to play a positive role for society and the environment, I. E, to produce more energy with less emissions. More energy flowing from natural gas, LNG, which plays a key role in the energy transition as demonstrated this day with the growing demand For LNG, more than 10% per year for the last 7 years and more energy flowing from renewable electricity as power is a form of energy benefiting the most from the fight against climate change. Less emissions as we have The net the ambition to get to net 0 together with society for both our Scope 1 and 2 emissions from our worldwide operating activities, but also for the Scope 3 emissions of our worldwide customers. Our vision is to secure a future for the company By takes us from our first 100 year anniversary coming up in a few years all the way to our 2nd centennial celebration.
All that is a matter of sustainability, key to creating long term value for our shareholders. This vision was supported by 92% of our shareholders as of late of the last general meeting. And this gives us a strong encouragement to execute it. Our strategy is a balanced approach that takes full advantage of the assets and expertise we have accumulated. We are transforming the company to create long term value for stakeholders, but we are transforming while combining energy transition and shareholder return.
We'll not abandon or sacrifice value. And by leveraging our present portfolio, we will generate the significant cash flow needed to achieve our ambitions for the coming year. Yes. For the future, our expertise will turn increasingly to new energies, becoming one of the top 5 renewable power producers in the world by the end of the decade and from there on to biofuels, hydrogen, synthetic fuels. There is enthusiastic support inside TotalEnergies for this profound transformation that we have embarked on.
We are, by the way, rewarded with an environment today that is fast moving and dynamic with economies reopening, oil price is rebounding and notably in Asia and Europe, gas prices hitting record highs. Our oil and gas portfolio is capturing these upsides. The company is firing on all cylinders. The balance sheet is strong and the cash is flowing. We are committed to sharing the surplus of revenues above $60 per barrel with our shareholders.
And considering the current high prices for oil and natural gas, we plan a $1,500,000,000 buyback for the Q4 of 2021. And our outlook for strong sustainable cash flow growth over the coming years supports future increases of the dividend. Our objective today for this presentation is not to revise profoundly our medium long term outlook. But to give you more insights on its execution And to convince you that our transformation to a multi energy company secures for TotalEnergies a lasting role as a leader in the rapidly evolving energy industry for the benefit of all our stakeholders. As you understood, sustainability is at the core of our strategy of our projects and our operations.
We have decided within Total Energies to create a new ritual. Before, each meeting was starting with a safety moment. Now each meeting in the morning is beginning with is starting with a safety moment, but in the afternoon, It's starting with the sustainability moment. And so as we are in the afternoon here in Paris, I will let you will have now the sustainability moment to launch this meeting.
Protecting the environment at SGP is one of the main things we do after safety. We protect the people and we protect the environment.
The Shetland, they're the most remote in the U. K, 140 kilometers below the sea. How we're meeting the environmental challenges is mainly through some of the design of the plant. We've put in a state of the art water treatment system that actually uses bugs, it uses bacteria to break down all the contaminants. Biodiversity in Shetland is incredible.
I think something like 1,000,000 seabirds live on Shetland. And they've also got unique species here that don't occur anywhere else because Shetland's been separated from the mainland for so long. And on our peat stores, it's been transformed over the years because the vegetation has formed over the years because the vegetation has grown back and has provided a real haven for wildlife.
Feed contain that carbon and don't release it to the atmosphere. It's less understood that peat does that. The peat here and elsewhere contributes probably twice to what the carbon storage than 3s and 4s do. So it's vitally important that we manage that as best we can. At Chelten Gas Plant, when they were building the facility, then there was a wide array of land covered in peat.
So the decision was made to store that peat in land banks on-site so that at some time in the future when it comes to decommissioning, That can be then used to remediate the site.
Yes, I think it was a good example combining, by the way, CO2, climate change and biodiversity, these 2 key topics for our planet. So again, I'm happy to welcome you today. I am together with the 7 other members of the executive committees. They are with me. You have I don't know from the right to the left, you have Nicolas Terraz, who is our new E and P President.
You have Helle Kristoffersen, you know well. She changed her position. Now she's President for Strategy and Sustainability. I don't introduce Jean Pierre Boire, our CFO. Then we have Alexis Evocque, that you have know already, President, Marketing and Services.
Namitasha, she has changed also position. She is now President for OneTech. Will have the opportunity to listen to her and supervising also people and social engagement division. Then we have Bernard Pinnatell, our President for Refining and Chemicals. And the last one, but joined recently as well the executive committee, Stephane Michel, President for Gas, Renewables and Power.
So in this presentation, it's not it's a presentation which will be a multi voice one. So you will have the opportunity to hear 6 of the 8 members of the executive committees. Hello, you heard yesterday, and Jean Pierre is not punished, But this time, he has worked hard to prepare all that with his teams. But he will, of course, participate in the Q and A, but he will not introduce he will not describe itself as well, but as you have the opportunity to listen to him quite regularly for the results. So we will I will launch this presentation.
And again, first slide, If this one is combining security safety, sorry, and sustainability because, in fact, these two concepts you understand are going hand and hand. We want to elevate sustainability at the same level of importance in the company. Safety is a value. We consider that Operational excellence, safety, sustainable development go hand in hand. And on these slides, before to speak a little about safety, just to remind you What are the principal actions that we are developing within the TotalEnergies to as a sustainable company?
Of course, So aspects of human rights is a cornerstone of our conduct. We'd have zero tolerance against corruption and fraud in this company. And the last principle of actions, which is quite important, is the rule of conduct in our engagement with society, whatever the subject will be, is transparency. For this presentation, I think we will try to translate what it means transparency by discussing some hot topics, but we are confronted sometimes. Safety, as I said, this is by the way, I never comment on this presentation.
As TotalEnergies is willing to become a multi energy company, a broad energy company, we are not only even if we are classified As an oil and gas company, we will benchmark ourselves. You will see that in 2, 3, 4 different slides, Not only against our peers in oil and gas, our major peers, but also against some of the largest utilities as we think that we want to enter into that field and we will explain how and why we think we can develop some profitable business in the field of electricity, renewable electricity. So on this slide of safety, you can see that, by the way, recalls coming in terms of safety by major oil and gas companies is lower than those the ones of utilities, quite much lower. And that TotalEnergies has embarked in a continuous journey of improvement. We have improved our total record engineering rate by 20% last 3 years.
And the other important information in my eyes on this slide is that we have There are no fatalities within the company for more than 400 days now over the past 12 months, which means that this target of No fatality is possible. I touched on wood. I think it will be many, many, many, many other days without any fatalities, but I think It's important to underline it because life of our people is our most precious assets. So After that, let's see, as I said in my introduction, and this is, I think, the fundamental reason why we move from Total to Total Energies with these new colors and these new logo. Energy is reinventing itself because of climate change, because of technology, because we want to change the world system to decarbonize it and so are we as well.
And I would say the plan, the program we propose to our shareholders, to our stakeholders is fundamentally articulated about the 3 main which is more energy, growing population, populations needs more energy. And total energies as an energy producers wants to supply more energy, But less emissions, less carbon, so that means that at the same time, decarbonizing with energy. And Because it's part of the journey to make a just transition, we need to put it in a framework of sustainability, so always more sustainable. And I will now explain you the 3 key, I would say, messages around these 3 thematics. But before, just to tell you more concretely what it means, and I will not describe you the full menu, But it means that, in fact, we are building a multi energy company to benefit all our stakeholders through Developing in 7 different energies, there are 7 symbols: oil, natural gas, renewable electricity, biomass, Hydrogen.
My colleagues will give you the details of the menu. Nicolas, Bernard and Alexis will come back on all and the new energies that they could develop. Stefan will come back on natural gas and as well hydrogen, myogas. I will come back myself on the Renewable and Electricity at the end of the presentation. So I will not detail the strategy.
We'll have all the details within these slides. Just to remind you that this strategy of being a major player in the energy transition As we've supported by our shareholders at the last general meeting for general assembly of shareholders by more than 92% through resolutions, which was proposed by the Board, which was the ambition for sustainability and climate and I think the key importance. So thank you for this support. And I think, of course, for us, it is a road map that we want now to execute. So the more energy first can be described in 2v scale To these slides, we already shared with you these objectives.
So again, today, we will more dig in the details, but I think it's important to repeat. Next decade, the target is to increase our production of energies by 30%, mainly driven by 2 pillars: LNG on one side and electricity on the other side. I know there are some debates about the role of the gas in the energy transition, but we have this strong conviction that gas has a key role in the energy transition. I would say that what is happening this year is even reinforcing my conviction. Stephane will come back on it.
So We intend to grow this production of LNG by 30% in the next 5 years, double it in the next 10 years. Electricity Renewables is the other pillars. For the oil, in fact, our intent is to follow, in fact, I would say the evolution of all markets. The oil production from TotalEnergies will peak during the decade and then begin to decline slowly going through the markets. So that's, I would say, the key message of this slide.
But again, our strategy is fundamentally a growth to sustainably grow It's not at all to decrease. The second one is to the sales. On the sales side, at the same time, We'll have gas and electricity sales, which will continue to grow, going with our production, by the way, together. But On the liquid part, on the oil products, there we will have will, I would say, have a more proactive strategy, which is to adapt to anticipate on the market decrease for all products, which will come Because we are 1st, and you know it, quite exposed to Europe and Europe is probably the primary market where a primary continent where energy Transition will take place, IC ban by 2,035, etcetera. But also because within Total and Werner and will remind you all that.
We today sell more and we sell refined more than what we produce. And so what we intend to do is to realign our sales of oil products and refining capacities on our production of oil during the decade. So that's true, but when we speak about transformation, I think it's symbolized by the 4 figures, which are on the right of the slides. At the end of the decays, our intent, our strategy is to fundamentally change the sales mix of TotalEnergies. Today, It's predominantly oil products.
Tomorrow, it will be 30% oil, 50% gas, 15% electricity and 5% biomass Hydrogen. To execute this strategy, and I think it's probably one of the most simple but most important Slide of the presentation. We need, of course, to invest. And this slide describes the capital investment strategy, which will this energy transition for TotalEnergies. We will invest for the next 5 years $13,000,000,000 $15,000,000,000 per year Because it's a planning which is well supported by, I would say, a price of $50 per barrel And with which we are comfortable not only to maintain on one part the assets that we have in hydrocarbons but also to grow on both pillars that I described, renewable electricity and LNG.
So you can just to have in mind $13,000,000,000 $15,000,000,000 as an average, 50% of it is dedicated to what we need to maintain, I would say, the assets and the production, mainly the oil assets. It's through Upstream and Downstream. And the other 50% globally is for growth, growing by 30% of production as I described it. Half of this growth, so 25%, let's say, dollars 3,000,000,000 per year is for renewables and electricity and the other half is for LNG, hydrogen, biomass, etcetera. So that's the picture and the way.
And I think when you think we think about when people ask us, are you aligned towards your ambition to get to net 0, I think this is the answer. We allocate a 4th of our investments to, I would say, 0 carbon energies. And we put another 4th on what we consider as key to make this transition possible, which is natural gas. This slide is introduction we selected to put it here is about Iraq because Iraq, that is a project that we announced a few weeks ago, beginning of the month, is in fact the proof that this transformation is possible, But we can move from an oil company to a multi energy company and that there are some competitive advantages, some But we can leverage in order to put into action this concept for moving from an oil and gas company to a broad energy company. Iraq It's at the core of a region where we have a clear large footprint, number 1, among the IOCs.
This is the Middle East. Of course, you could think that when we go to Iraq, we think to oil. And in fact, what we've done in Iraq is to go to discuss there with the authorities about Fundamentally, the main, I would say, issue, which is today to provide electricity to their citizens. It's a country with plenty of resources And there is a lack of electricity. And for any people who experience some days in Iraq, it's a reality for everybody.
So what we propose then is first to gather some gas, which today is flared, which is a Wasted energy in order to, I would say, process it and to recover it and to feed some gas fired power plants, which are available. By the way, by doing that, we will eliminate 100,000,000 tonne of CO2 over the next emissions of the next 25 years. So first project, gas To power. Power means also being able to develop solar renewables. There is a it's a Very flatlands, very a lot of space in Iraq.
Finding the grid, we identify it. So 1 gigawatt of solar energy, another way to produce electricity. Of course, it's also a matter and we looked To how can we produce more gas, so we went to the Ratawy field, which is an oil field on which we can enhance the gas production And the oil production, let's be clear. But this hydrocarbon development fits perfectly well with our objectives. As Nicolas will explain you, A very low level of emissions per barrel, 9 kilo per CO2 per barrel, very low cost of hydrocarbons.
So that's the 3 pillars. And there is a 4th one, which is, as you know, in Iraq, there is a it's an area which is under water stress. There is a lack Water, in particular for maintaining pressure in the fields of oil fields. So we will build a seawater intake In order, a large one, 5,000,000,000 barrels water per day, which will be transferred into Basrahol Company in order to bring some water to the country which is looking for. So all that makes, I would say, a clear sustainable multi energy model.
And I think it's a proof that we can use our strength to deploy this model. Of course, you ask what about the profitability of all that? I would like to say first that, of course, if we make this move, which represent a global investment of $10,000,000,000 I know that there is a $27,000,000,000 which has been reported by certain agencies, but it was it is a sum of CapEx and OpEx about on 25 years. So keep in mind, dollars 10,000,000,000 It's already quite a large stake. We have Do it.
Of course, it's not it will not be done under the technical service contract, but by the way, TotalEnergies did not really except in 2008, 2010. So we have been able with the authorities to develop a win win framework through what they call a development and production contract, Round 5, DPC. I think that somewhere, if you look to When Max said that it has a flavor of PSC, but it's a DPC We've, I will say, royalty, cost recovery, profit sharing with revenues coming from all gas condensate NGLs. And so it's a very, I would say, it's a contract with whom we are very comfortable to invest And of course, which will be a win win project, which means also for the Vibraki for Vibraki and for TotalEnergies. What we intend to do, by the way, another characteristic of the frameworks is that we will be paid in all liftings for all these revenues, including for the electricity sales.
We intend to keep 40% to 50% interest. We are
on the
way to identify and some partners, when we'll be ready, we'll come back to you. So planning for this project is to be able to fight to sanction it before year end fully. Now that we have the contractual the contract in place, we are working to go to the next steps. So that was more energy and we have a nice example of broadening our scope of energies. Now of course, the second aspect is less emissions.
Again, I'm coming back to what we have submitted to our shareholders, which is to get to net 0 at a worldwide basis by 2,050 together with society. Two ambitions there. So the first one is to get to net 0 on our operated activities, Scope 1 and 2. And the second one is to get to net 0 For indirect emissions, the emission of our customers, the Scope 3. In front of these two ambitions by 2,050, We put some clear objectives by 2,030.
And our commitment, I can say commitment, is to reach these objectives and this is what we will work hard with the Executive Committee along the next year, so it takes 10 years. So first one is on the Scope 1 and 2 to reduce by 40% these emissions. The second one for Scope 3 is to have lower Scope 3 by 2,030 than 2,015. I remind you that we will increase our sales by 15%. All that will be possible because fundamentally, we shift the content of our sales and the carbon intensity of our sales by and we'll reduce it by more than 20%.
So I will not enter into all the details of these slides because it's also for Being able to discuss it during our future discussions with you. Just to let you know that this program of reducing Scope 1 and 2 Since last year, well taken into is well on board by all our teams. We have developed in the last years Strong, I would say, low carbon culture with our CO2 fighter squad. They are tracking CO2 all around the operations. Of course, we reduced relentlessly methane.
I will come back on it. There is a management of portfolio, which could help as well to contribute to this reduction and last but not least for residual emissions only because the priority is, of course, to avoid and to reduce. Once we have reduced, then residual emissions, we can use carbon sinks. So we are on the way to reach our target, and we will report to you year after year about it. Just a word about carbon sinks.
It's quite a heavy slide, but it's just to show you that It's there are 2 parts there. There are the carbon storage, I would say, developing carbon storage. We have in particular, in the North Sea, We are partner of 3 projects: Northern Lights, Aramis, which has been announced recently in the Netherlands, together with Shell and Dutch Partners And we are also partner in the Northern Endurance Partnership in the U. K. As an heritage, I would say, of an initiative of the OGCI.
So we are working on these projects to develop, I would say, at least 5,000,000 tonnes of CO2 per year of storage capacity in total energy share. The other aspects of our work, it's about nature based solutions. I think you have the opportunity to listen to our colleague, Adrien Rui, La Saburi. So I will not be long on it. We are progressing.
We have gave you an example of Congo. And there again, our objective is to get to have a sustainable basis of high standard carbon credits by 2,030 of at least 5,000,000 tonnes per year. Sustainable means But during the next 10 years, we'll accumulate these carbon credits, step after sale projects, private projects, Being sure that they are at high standards and we are very keen on it, in order of them to be able to offset part of the emissions on the long term vision. These activities, by the way, a comment, are now under the responsibility of Nicolas because we wanted that each division, business division of the company must have its share of the, I would say, the carbon journey and road map. And obviously, when we speak about carbon storage, E and P is well positioned.
And for nature based solutions, it may be less obvious to you. But in fact, the reality, there is a lot of synergy because it's to leverage our worldwide present in many countries like in Sub Saharan Africa or elsewhere in the planet where we want not only to produce oil and gas reserves, but we have opportunities also to create some natural based carbon sinks. Scope 3 now is the other part of the ambition of customers' indirect emissions. Of course, for that, we'll have to work hand in hand with customers. Just this scheme explain you, in fact, the basics.
The basics is that On one side, we continue to grow our energy pollution, so our sales will grow 15%. So in fact, 400,000,000 tons of CO2 emissions CO2 emissions CO3 to 2015, if they were only, I would say, hydrocarbons would be at something like 500 1,000,000 tons. But at the same time, because we are broadening the scope of our energies, we decarbonize ourselves by at least Carbon intensity will lower by more than 20% on the decade. And so that results that will be of we will manage to have lower emissions in 2030 2015. But again, in fact, what we didn't put on this slide is the fact that we are eliminating.
So we're avoiding for the same amount of Energy being sold to customers, we are avoiding 100,000,000 tonnes of CO2, in fact, which is in fact the message that we must keep in mind as well. To do that, I said it will be done with proactive actions with our customers. And I think it's a strong message. It's not waiting for. We are in a position where we consider because energy transition, as I always repeat, is a first fundamentally not only a matter of supply, a matter of demand.
We'll manage this transition if we can change the demand for energies of our customers, their behaviors. That means that converting them to renewables and for that it helps by the way by selling them corporate PPAs will come back on it to give decarbonize energy to our customers, but also to convince them to substitute from all products to overall alternatives like we do and you know that we are committed not to sell any more fuel oil to produce electricity. And then, of course, there is a For us, there is a key segment, which is transportation. Alexis will come back on that. But for us, this is a part where we are selling most of our products And working hard, and you've seen yesterday that we have announced a strategic alliance with Safran with the aviation industry, with the shipping industry, The car manufacturing industry is very important in order to be able to deliver to them the new energy that will require to decarbonize their own road map.
Last word about Europe. I don't know why people think that our commitment or ambition is only on Europe. No, it's not true. Not true at all. It's a worldwide ambition there again.
But for Europe, we consider that we are in a specific position. 1st, we are a European company. Europe has engaged in the Green Deal. Clearly, this continent will be at the forefront of the transition. We see that as a big very huge opportunity for us because it obliges us to move quicker than elsewhere.
And so to, in fact, have our teams be more agile, investing in our continent, in our framework that we know better, by the way, In New Energy, so we support, let's be clear, Total Energy, we welcome the Fit for 55 package. We think that the commission is right to promote the generalization of carbon price, to promote the massive development of renewables, to promote strong infrastructure development required for charging points, hydrogen, hydrogen networks and also, of course, to promote fuel mandates, low carbon renewable ones if we want to accelerate the transport Carbonization. So all these tools are there. So we will work with them positively as an opportunities. And it's why we have said to ourselves because we want to be to contribute directly to the green deal and to this target to specify, but between 2015 and 2030, we will reduce our emissions in Europe of 5%, 30%.
So it's an additional, I would say, contribution of Total to Europe. The last part of the program, so more energy, less emission, always more sustainable. It's probably new to you. I spoke a lot about sustainability. It's because, in fact, when we think with our Board about what is fundamental vision of Total Energy was not only about tackling the climate change, but also to embed that in what we call A more global approach, a sustainable approach, a just transition, I would say.
And that led us to develop and we will do it in the company, as I said, through the Sustainability Moment, to develop a more comprehensive approach to sustainability and to, in particular, think and this is what we deploy in the coming years, again, to elevate sustainability at the same level of safety in the company And to integrate the SDGs into our strategy, projects operations. Of course, obviously, providing sustainable and affordable energy is just fundamental. We just committed this week to the UN for an energy compact, but part of this energy will be dedicated to countries among our ambition. But it's also not only the planet, planet for energy, planet for environmental performance where we need to be to take care of uses of scarce natural resource. It's also planet and people.
And I think when we think the transition, we must have these 2 key elements in mind: planet and people, people Our colleagues or employees obviously as a responsible employer and operator, but the people around us, the communities with whom we work as well. And in fact, it's creating value for and sharing prosperity for with our communities in our host region. So all that is a program, which is what we call committed to adjust energy transition. And I think the debate that we can observe today with the hike of the energy price We'll put again the spotlights on this concept, which I think is just fundamental. We cannot change the system, the energy system of the planet against the people.
Even if it's major, it's absolutely fundamental for the planet, for survival planet. We need to put everybody on board and taking care of everybody everywhere. So when we go to where from sustainability, of course, when we speak to financial investors, we speak about ESG. I must say that among the IOC peers, TotalEnergies is recognized as one of the leader. There are different classifications on this slide.
You can see that we are, I think, 5 out of 4 times we are number 1 and we are among the top 3. But there again, we want to progress. And to progress, I said on safety that we have better record than utilities. On this one, utilities, when we look to the results, are a little above us, which is good. It's a challenge.
So we on this chart, we not only put the Total Energies, but the average cost of utilities. And I see that as a way to continue to progress on these matters. And so this is for me the real benchmark for tomorrow to consider that we can be at the same level in recognize ESG at the same level in terms of ESG performance that this peers. All that is going for transparency. We have decided that It's important that our investors or stakeholders, by the way, more largely, knows what happens within Total.
It's a very large company. So We contribute to different we report through different frameworks. There are a lot of them. Maybe one day some people will think to unify all that, but It's not our issue. We don't wait for unification.
We prefer to disclose the datas and so that people can evaluate our performance. And for me, by the way, this reporting is also a way to progress internally because when you have new question to ask, people could say, okay, it's a burden to answer. The other way to look at it is, 1st, why do we have the question? 2nd, can we be better on it? And for example, we have just decided, We had recently, we have some question marks about do we have are you do you have a decent wage or decent living wage?
Can you ensure that within your whole company, you have a decent living wage? This question came in some of his reporting. We just took the decision by the end of 2022. This will be the case in all the company. We will take care, but everywhere in the company, All our employees will have what we call a decent living wage wherever they are.
So that's the type of fleets which help. Okay. But everything is not perfect. When you speak about sustainability, I'm very clear. We are Total Energies.
We are involved in many operations. And so what I will do now maybe is not so is quite original. I will speak about and I will not enter into all the details, What we have decided to put on the table because I think it's part of this idea of sustainable company and transparency, all the topics that we are facing. And I would like to have less, but I have hot topics around the planet. That's the reality of a company.
And so just And I think it will be good also to have all these presentations to support the discussion we'll have with our investors and stakeholders. So first one, of course, came in 2021 is the case of Myanmar. Again, I will not give you all the detail, but let's be very clear But this is, of course, taken very, very seriously. We condemn clearly all the human rights abuse, which could have been have taken place In Myanmar since the military coup, we have taken immediately all the decision we could take easily to stop, I would say investing for the future in the country, but we were facing a clear dilemma because we are producing gas. And the dilemma was can we deprive millions of people of electricity.
Can we take the risk that some of our people there could be forced exposed to forced labor or to criminal charges if we don't pay taxes. Honestly, you can answer yes easily in our share in Paris. It's more complex on the ground. So we took some decisions. There are maybe not shared, but we took some, I would say, brave decision, including the fact that we are depriving ourselves from any dividend cash distribution From the pipeline, so that there is no cash coming from this pipeline to the national company of Myanmar.
We also said that for the rest, we need to pay our taxes because we consider that respect of contract is just a fundamental ethics behavior. But when we pay a taxes, the taxation to the government will pay the same amount to NGOs working in Myanmar. This will be fully transparent from 3rd quarter results. We'll publish every quarter what we pay to government as taxes and what we'll pay as donation as well. So that's what I can say.
We'll not be longer on it. 2nd topic is our project in Uganda. It's a major project, the Lake Albert integrated project. It's a major project because when you see the size of it, in particular, the significant in country value To Uganda and Tanzania, it will create. We should never forget that.
We don't do that just for ourselves. Most of the value of such a project is going to the countries, Not only for taxes, but also for jobs. More than 60,000 jobs will be created during the works, more than 3,000 Jobs when we'll be in operations, development skills, attracting also other investments in the country. This project, as you know, is well on track. We signed fundamental agreements with both governments for the pipeline in April.
Now the 2 parliaments are Enacting the laws, transforming this agreement into, I would say, regulatory framework and fiscal frameworks, this will be done before the end. We have given conditional awards of contract to all the contractors so that we can execute once all this paperwork will be done. And our Chinese partner, Cinook, is doing the same on Kingfisher and we work hand in hand. Of course, we know But there are some 2 I would say there are some challenges. Onshore projects, land acquisition is a challenge and biodiversity is a challenge in such a nice environment.
We took that, of course, very seriously. People have some doubts. I invite everybody to come and visit our operations. We have Of course, we are applying the highest standards, IFC standards when we speak about land acquisition under supervision of third parties. We have published all the studies about it, taking on board all recommendation from NGOs.
We have finalized the land acquisition for the upstream Tilenga Facilities and we are on the way to do it for the pipeline. On the biodiversity side, there again, first, let's avoid and reduce. So the first decision we have taken at the executive committee and the Board level is to minimize the footprint of the projects within the Merchants of Forest National Park. We were the footprint of the license was 10% of the park. We have relinquished 90% of it, keeping a footprint less than 1% of the park.
The second part is that we are working as well with some experts, and I thank the IUCN experts to work with us, by the way, On chimpanzees and we have intent also to work to reintroduce the Black Rhino, Syros Black Rhino in Uganda and also to improve the development of the park resources. So at the end, the commitment is to be net positive. So that's real action. And I think that this project, Lake Albert integrated project will be again a demonstration of the capacity to put sustainability at the heart of our projects. Biodiversity, I just changed.
I will not remind I would just like to remind you that last year, we took a certain number of commitments. We look think seriously to that. So this is a program. We have some areas of exclusion. We have some commitments to be net positive on special areas.
We are reviewing not only the new projects, but the existing sites. So you can share that, but it's a comprehensive approach, which is promoted and within the company. Again, we understand perfectly that biodiversity is also a major threat for our planet, and we want to take that into account in the way we work, which does not mean that we renounced to make project. It means that we have to embed sustainability biodiversity immediately when we begin a project and to look to all the challenges. About biodiversity, one of the hot topics of controversy we faced was about Pine oil, that's true.
We studied that very carefully. We managed to develop alternative feedstock From palm oil for biorefinery, so we announced a strong decision that from 2023, we will not use any more palm oil in any of the facilities of Total Energies. I'm happy to see that some of our companies involved in biofuels I've also announced the same type of commitment by 2023. All that obliged to be innovative, But the teams of Bernard, and he will come back on it, have been in order again to find alternative feedstock. And there is positive momentum to develop this type of biofuels.
Our conviction is that we need to get out of the 1 gs and to look more to waste and residues for the future if we want to develop this business. Another case for biodiversity is the Arctic. It's gaining momentum. So you know we are involved. Novatek is the operator in projects in Arctic, Arctic 2 in particular.
We'll publish this week all Vergen Principle of Transparency. We'll publish all the studies We have done the plans and program we are in place. I would like to say to everybody that, in fact, all that has been possible and we have cleanly elevate The level of all these studies and programs, in particular, thanks to the close cooperation with export credit agencies and lenders. All these financial institutions are willing also to be at the forefront of biodiversity. So it's a close cooperation.
And the fact that we can have around the table some Western Financial Institution is, in my view, very important because, again, It helped us to upgrade the level of commitment we take for such a project. I will not detail all the actions which are on the slide, But it's taken very seriously, by the way, because for Russians, contrary to what some people think, the Arctic is also a preserved area. We are very proud of it. And when they think to invest there, they are taking care of the biodiversity, including of the people and the communities who are living there. Another case when you speak about ESG, of course, is methane, but it's more linked to the There are debates about methane.
What I can tell you is that we took that within Total Energies as the top of our priority. We have already minimized and I'm not sure we can measure less than that, but the carbon the methane intensity in our operating gas assets is less than 0.1%. We have reduced by 50% our emissions. Our plan is to reduce it again by 20% in the next 5 years. Our emissions at 64,000 tonnes of methane.
You have some examples of projects on it and some actions that we can take. So this is a matter which can be done. And the last case I would like to because when we speak about CG, we speak about the planet, as I said. I speak about communities, but the people are important. I said our employees are important.
And of course, for me, diversity is just fundamental. It's a matter of collective intelligence. That's who that in our, I will say, Oil and Gas Company, traditionally, I would say, the share of the women within the management was not as high as it should have been within the company. There was an imbalance. I recognize it.
Look, the figures in 2014, we have progressed from, I would say, an average of 16% to 25%. We are not yet there because we have 35 let's onethree of the exams are in the company are women, so I want to reach that level at least. And so the next target is 30% by 2030 to 'twenty five. I think it's important. And speaking about people, it gave me the opportunity to leave the to leave the floor to Namita, not only because she's in charge of people and social engagement, also President of Wenteq, and she will explain you because this transformation we want to do can be done only together with our people.
So Namita, the floor is yours.
Thank you, Patrick. So indeed, we cannot close out this first chapter of the presentation without talking about our people. Building a sustainable multi energy company is an incredible opportunity for all the women and men who are working on our sites and our offices across the world. And this transformation we will be doing with our people. What that means is that we will be putting in place a program, which is going to enable a just transition for our employees.
It begins of course with listening, listening by many different means possible to the hopes and the aspirations and the opportunities of our employees and what they see in a multi energy company also listening to their doubts and ensuring that we provide the support that they need at every step of this transformation, at every level of the organization, whether they are managers or operational staff on the ground. It is going to be especially important that our employees are informed and that we have informed employees. It means that the employees must be able In order to participate in a multi energy company, what all these new energies mean, what it means to have projects that are taking into account the energy transition, What it means to be a sustainable company and what our climate ambition is. It is via concrete projects and discussion and presentations and information at all levels From peer to peer, from meeting, from talking and explaining energies which are not within the business unit of the place where our employees work today that they will be able to develop the culture of a sustainable and multi energy company and also to develop themselves their careers within this transformation.
We will be putting in place an enhanced learning program. Each employee will have the ability to gain knowledge in an energy in which they do not have a core competency today. And our objective is to be able to redeploy the engineering and the technical staff that we have today to accompany the growth of this sustainable multi energy company. This has already started. It has started because on the 1st September, we put in place an organization called OneTech, of which I am the President, where we pulled together over 3,300 engineers, researchers and technicians from the different business units as you know them from the Exploration and Production branch from the refining and chemicals, from marketing services, from gas, Renewables and Power under the OneTech umbrella.
This OneTech organization is the heart. It's the engine of the transformation of the company. It is going to enable us to adapt to the new company industrial activities. It is going to help us help our employees better develop their competencies in this new context and therefore to retain them and of course to attract new talents, Combining people who come from so many different experiences and backgrounds and putting together our research and development teams with Our industrial operations on the ground helps to both foster and accelerate innovation, which is going to be vital for our progress in some of the new energies that we are looking at. This will also give us the ability to mobilize our human resources, our technical resources, as we do with our financial resources, to mobilize these resources to work on the most strategic and the value added topics that we need at the time at every point in time.
And last but not least, it is going to be able to accelerate our capacity to deliver the carbon footprint reduction solutions that we need to put in place to meet our climate ambition. Everything that I am saying to you is not a pipe dream. And this slide is really to show to you that it is a reality that the talents and the competencies that we have in our organization today Our talents and competencies that we will be able to use to create the energy company, the multi energy company that we want to put in place for tomorrow. Already, experts coming from the exploration and production Projects in floating structures, in Metoshan data specialists are working on developing and managing our new Offshore Wind Projects. Our engineers from Refining and Chemicals on Process and Chemical Processes working on building an e fuel roadmap.
Our LNG experts in Cyrogenics are teaming up with our engineers from Refining and Chemicals to work on hydrogen and hydrogen options. Geologists and drillers who have been working in the exploration area are now looking at how to use their competencies to help us build and grow our carbon capture and storage businesses. So all this is a reality. We have started. The teams are together.
The teams understand what it means to be able to leverage their skills, to be able to build this multi energy company. And as you all know last and not least, we do have a world class expertise in project management, which we can now use to deploy across the development of the solar portfolio that we have built over these past years and our upcoming offshore wind portfolios as well. And talking about world class expertise in project management, I will now hand the floor over To Nicolas.
Let me now present to you how oil is contributing to our multi Energy Company. I will start with a brief snapshot of the oil demand and supply. This was presented by Helo yesterday. We see the liquid demand reach a peak in the decade. And you see the chart here.
We forecast the oil demand to continue growing to the mid of the decade before starting to decline. What's important is on the supply side is the conventional oil decline is approximately 4% per year. And now if we take into account the brownfield developments and the existing facilities, so all these workovers, infill oil tieback developments, The decline of the conventional oil capacity or production base can be reduced to 2% per year. Still 2% per year is 2,000,000 barrels per year of capacity and is 10,000,000 barrels per year after 5 years of reduction in capacity. So taking in talk on this decline, today we estimate that 3,000,000 to 5,000,000 barrel per day of The new greenfield conventional capacity needs to be sanctioned by the end of 2022 to meet the 25% demand.
So the range 3% to 5% is basically depending on the shale gas growth, which is quite dependent on the oil price assumption. So 3,000,000 to 5,000,000 barrels per day is a lot of When we compare it to the weekly average of new greenfield capacity sanctioned over the past 5 years, It was since 2015 about 1,500,000 barrel per day every year. So what we see here is that meeting the liquids demand in the coming years requires quite a lot of investment. Now turning to Total Energy's Upstream production. And Patrick has touched on this, but what we expect is we expect growth in our upstream production of 3% per year between 20212026.
So in this growth, we see here 1st oil, which is the red part. And we see our oil production growing to 2025 before reaching a peak on plateauing and this is in line with the demand situation. But more fundamentally, the growth of our upstream production will be driven by growth in gas and particularly in LNG. And we forecast the growth in our LNG production of 6% per year in the next 5 years. And Stephane will give more details in the presentation on this.
This forecast of Upstream production in 2026 includes Mozambique LNG production only in 2026. And this is relies on the assumption that the project Activity will resume in 2022. So next year, if there was a further delay in Mozambique LNG project, The growth rate would be reduced by 0.5. So from 3% to 2.5% per year to 2026. Now in order to deliver this production on the right part of the upstream production curve, We are targeting specific investments, which are in line with the company ambition.
And in line with the company ambition means low cost, low emission projects. So low cost in practice, the has defined precise criteria. Low cost means CapEx plus OpEx below $20 per barrel equivalent or an after tax breakeven below $30 per barrel for all our new projects. That's low cost. Low emissions in practice, it means that all the new projects are being screened and need to contribute to a reduction of the greenhouse gas emission intensity of our portfolio.
So all the new projects basically need to have an emission intensity below the average of the portfolio currently or at the time of the sanction. So here you see on the slide 3 projects which are illustrative of these investments Generating strong cash flow for the company, but also in line with the ambition. Mero in Brazil, Lecalbert development in Uganda On ratawi in Iraq. So just a few words on each of the 3. Mero in Brazil is illustrative of these deepwater projects with very large resources, very high productivity.
We see here that on Mero, we'll reach 600,000 barrels per day of production. For FPSOs, the last one actually was sanctioned just a couple of months ago. First oil pretty much 1 FPSO per year between 2022 2025. And you see CapEx plus OpEx in line with the criteria. Greenhouse gas at a very good level, 15 kilograms of CO2 equivalent per BOE compared to about 20 last year for our EP portfolio.
Now our Lake Albert development in New Gourna. Patrick has talked about it. Again, onshore development, large resources, over 1,000,000,000 barrels to be developed, a project that's Expected to start in 2025 with a production of 260 kilobytes D. You see again the CapEx and OpEx below 20 dollars per barrel. The GAG emissions in intensity of this project is very low.
The reason why it's very low is because a lot of work has been done to include in the design of this Uganda project a number of units that allow to get greenhouse gas intensity at a very good level. I will just mention 2. The first one is extraction of LPGs In the upstream part, to be able to use very lean gas as fuel gas. And the second one is the solarization of the pipeline to supply part of the power requirements for the pumping station and the heat tracing. Iraq, Ratawi, again Patrick talked about it.
What we see here is a project with a very low technical cost OpEx On CapEx below $10 per barrel or about half of CapEx, half of OpEx. On greenhouse gas emission at an excellent level, 9 kilograms per CO2 per barrel in addition to the greenhouse gas emissions that will be avoided by the valorization of the gas that is currently flared on other fields. So what is common to all these projects is that they deliver very strong cash flows between $800,000,000 year on $1,000,000,000 per year for each of them from their first oil with a significant upside at high prices. And of course, these projects, what is also a common feature to them is that they will be implemented and they are implemented In a responsible manner, so in a manner that takes into account the best environmental standards and also A lot of attention to the in country value and the benefit to the local communities. Now high grading our portfolio is, of course, focusing on low cost, low emissions projects for our new investment, but it's also the management of the portfolio.
You see on the map here the 2020, 2021 divestment activity. So if you count, you have 12 projects, divestment projects over 2 years. So it's about a project Every 2 months, to make it simple, on those divestments, they are focusing in line with the strategy on assets With high technical cost, high emission intensity, you have the figures on the slide. On average, These divestments, they represent $29 per barrel of technical cost and close to 50 kilogram of CO2 kilogram per barrel for the divested assets. This divestment program generates $2,000,000,000 of proceeds and contributes to improving the portfolio in terms of cost and emissions.
On one point that we are continuing to focus on is to maintain Very competitive OpEx per barrel, targeting 5 OpEx per barrel for our entire portfolio in the next year, which is to maintain, in fact, the level where we are today. So let me now turn to cash On what you see here on the chart is cash flow from operations of the EP segment over the next 5 years, 2022, 26, on the net investment of IP. So the result is that we expect a free Current oil price leverage, you see it on the chart. And also with the ability to protect this cash flow in case of low price, Thanks to the flexibility on CapEx that the company has demonstrated several times and lastly in 2020. Just to give an illustration, in 2020, during the COVID pandemic, we went from 30 operated rigs to 20 operated rigs in just 2 months.
Now in fact, we are rather in a phase where we are remobilizing some rigs to take advantage of the context. For those cash flows, a key lever is a short cycle project, which gives a lot of upside and also a lot So the short cycle project is basically those investments that can be decided on where first oil will occur in less than 2 years after the investment decision. Today, we have 1,000,000,000 barrels of reserves as short cycle CapEx that can be sanctioned. Those projects, they represent very low technical cost, very low cost, dollars 4 per barrel of CapEx on average. They are also low emissions because they don't require the construction of new processing facility.
So they are well in line with the ambition and they will contribute to the strong cash flow of EP. Well, I wanted to conclude by this showing that EP is a cash engine. And I will now hand over to Bernard for the Downstream part of Iqbal. [SPEAKER JEAN FRANCOIS
VAN BOXMEER:]
Thank you, Nicolas. So let's turn now to Down TRIM, as Patrick explained earlier in this presentation, our oil product sales will be lower by 30% in 2,030 compared to 2019, reflecting a lower market demand notably in Europe. So it's obvious we have to anticipate and to adapt. What does that mean? First, it means that we have to adapt our integrated value chain, notably in Europe, where we have most of our refining capacity.
As you see on the chart today, we sell more oil product than what we refined and our refining capacity is larger than our Oil production. With sales getting lower, we will have to adapt obviously our refining capacity So that by 2,030 sales and refining capacity will match our oil production level. But adaptation means also that we have to work on our portfolio mix. We review ourselves to arbitrate the lowest margin ones, and Alexis will give you more details in a few minutes about that. It also means But we will promote our low carbon sales, notably growing the biofuels, and I will come back to this in a couple of minutes.
Adapting to a lower demand will obviously translate into reduction of our scope 3 emissions, But that will not be at the expense of net cash flow generation as the adaptation will mainly target the highest breakeven point assets and of course, as I explained, the low margin oil product sales. So what I would like to do now is maybe to give you a little bit more detail on how we will adapt Our refining capacity.
Over the
past few years, the European demand has been eroding and this trend is going to accelerate with a Feed455 package. And of course, we expect the oil demand the oil product demand to drop by 30% in the next decade in Europe. So we have been constantly adapting our refining capacity. As you see, We managed to reduce this capacity by 700,000 barrels a day over the last 10 years. And our most recent moves have been the reconversion of Grand Prix into a 0 crude platform in 2020 and the sale of our Lincey Oil Refinery in 2020 So we are doing the job as you know, as you see and we will keep doing it.
So adapting our footprint is a key challenge, but there is a second key challenge For downstream that we need to address, which is to redeploy, to size new growth opportunities because we are not in a declining mode. And what I would like to know to do now is to illustrate this point in the next few slides. So let's start first with biofuels, which is a great business opportunity. Biofuels today emit less than 50% of CO2 compared to their fossil fuels. So it's a readily available solution to decarbonize Road transportation today and aviation very soon.
Therefore, biofuels benefit, of course, from Very favorable regulatory support, and we expect this market to double in the next 10 years. In the biofuels market, we have identified a very attractive segment, the renewable diesel. It's an attractive one because it's Premium grade commanding high margins, so a profitable one. We have entered into this market 3 years ago in 2019 with the conversion of Lamed into a biorefinery and the next step is going to be Grand Prix in 2024 with this new biorefinery aimed at producing biojets. Of course, we have more project in the pipe.
Our target is by 2025 to produce 2,000,000 to 3,000,000 tonnes of renewable diesel and biojet. We also see synthetic fuels as an attractive business opportunity. It was discussed yesterday during the total energy outlook at length I know, But it's a great opportunity combining green hydrogen and CO2 to provide sensitive fuels is the next market for renewable fuels and we intend to be active in this field as well. So I was mentioning hydrogen. Hydrogen is, of course, a key opportunity for refiners because as you know, refiners are large consumers of hydrogen, The so called gray hydrogen, hydrogen made from natural gas.
The issue there is that when you produce 1 tonne of gray hydrogen, you emit 10 tonnes of CO2. So decarbonizing this hydrogen, of course, is critical for refiners. The EU Green deal creates a favorable framework to do it. And of course, we want to leverage it. Our target is to decarbonize the 300,000 tonnes of hydrogen we use in our refineries to have it clean by 2,030 and that would represent 3,000,000 tonne of CO2 reduction.
As you see on the left hand side, I'm not going to detail all of this, but we have projects. All our refineries in Europe have a project to Move from gray to blue or green hydrogen. Last but not least, as we become a player in the field of Blue and green hydrogen, we also intend to size the business opportunities linked to new hydrogen application created by the Green Deal.
Now I
would like to move to the last business opportunity, which is a great one for downstream, Petrochemicals, it's a growing market. You know it, it's growing by more than 3% a year. It relies on sounds basic, the demographics, emerging middle class, megatrends around the energy efficiency, Polymers being lightweight materials, they help reduce the CO2 emission of transportation. And of course, we see now more and more around the circular economy and the recycling plastic recycling, which gives an additional business opportunity. As you see on the left hand side, we have been investigating and investing in this market very significantly over the last few years, always relying on a very few key principle to secure profitable business cases.
We leverage our integrated platforms. We leverage cheap feedstocks such as ethane or propane. Ethane in the case of our JV in the U. S. Or propane In South Korea, we import U.
S. Propane or in Nigeria, our cheap gas in Saudi Arabia. And for all these projects, We also stick to a key principle, which is to keep the balance in terms of integration between monomers and polymers. We also see the dynamics around the circular economy as an attractive growth opportunity. And you see on the chart Our two most recent projects, the one in Grand Prix where we will have by 2023 our very first advanced recycling unit in France and of course, our leading position in the field of biopolymer Made out of sugar.
We have made the first move in Thailand in 2018 through a joint venture with our partner Corbillon. And we are now moving to the next step with a new capacity. We doubled the capacity with a new unit in Grand Prix as well in France. Our target is to have 30% of recycled polymer by 2,030. And as you see on the chart, petchem will bring a very significant cash contribution to the company with initial cash contribution of close to $100,000,000 by 2026 when all these projects will have started up.
So I'm going to stop here now, and I would like to leave the floor to Alexis, who will tell you more now in the field of Transportation and Mobility.
Thank you, Bernard. The transport sector represents approximately 1 quarter of worldwide CO2 emissions. So decarbonizing transport is key to fight climate change and meet our target of reducing Scope 3 emission of our customers worldwide. Each transport segment is very different and requires a variety of solutions, and I will briefly present them to you now. First, we are increasing biofuel sales.
For our clients, using biofuels mean a decrease of their CO2 emissions without having to replace the vehicles. Our first commitment then is to make biofuels more available. One example of this is that we have become, for example, the leader in France with more than 800 station offering E85, which is a gasoline with up to 85 percent of bio components. More generally, by 2025, in line with the growth of our renewable diesel production, ambition is to sell 7,000,000 to 8,000,000 tonne of biofuels per year worldwide, which means that we will actually double our sales compared to 2019. 2nd, we are working hard to ease the customer journey and the energy transition for those clients switching to electric vehicles by providing them with the infrastructure they need.
For that, we aim to operate 150,000 charge points by 2025. This will be a mix of different type of installation, but it includes 500 stations or dedicated charging hubs with superfast chargers. With these chargers located in urban areas and along main road corridors, we offer a solution for both long distance trips and for intensive urban users such as taxis the last mile delivery vehicles. For heavy duty vehicles, we provide electric or hydrogen solution in particular for captive fleets. And here, we are partnering with truck manufacturers to develop them.
We also propose gas mobility solutions with an infrastructure of 400 natural gas service station in Europe, in addition to the €500,000,000 we have in the U. S. Through our stake in Clean Energy. Important to note that we'll increase the share of biomethane in these networks to further decrease the carbon intensity of gas for mobility. For the marine sector, we are developing our sales of marine LNG, meaning our customers can immediately reduce their greenhouse gases by up to 23% and at the same time improving air quality.
We are extending our supply network to have a worldwide presence adapted to our client needs. After Rotterdam in 2020, Marseille by the end of this year, We will operate bunker vessel in Singapore next year. Major companies like CMA, CGM or MSC have partnered with us, And you should see us sell more than 1,000,000 tonne of bunker LNG by 2025. Finally, regarding aviation, We will be producing and selling Biojet primarily from our Grand Prix platform. Our ambition here is to produce and sell At least 200,000 tonnes of biodegrad per year from 2024 until before E fuel come to maturity.
And here, 2 partnerships like the one we have signed with Safran are key to these developments. This plan will contribute to decarbonizing the transport sector and accompanying our customers in the energy transition, they represent a commitment of $1,500,000,000 over the next 5 years, and through substitution, They will contribute to avoid 13,000,000 tonne of CO2 per year. So decarbonizing the energy mix of our customers will significantly contribute to meeting of reducing Scope 3 emission in Europe by 30% in absolute term between 2015 2,030. But to go further, we will be selective concerning the sales of the remaining oil products. We have reviewed our portfolio, identifying sales with low margins, high CO2 emissions and the lower carbon fuel alternatives.
With this criteria in mind, we have already made significant decisions. First, we will favor direct client relationship with tailor made solution and aim to eliminate low margin sales to reseller where our performance as a responsible energy company is not a strong competitive advantage. 2nd, In aviation, for example, we'll focus on high value airport locations while preserving worldwide coverage. And 3rd, from 2025, We'll stop selling heavy fuel oil for power generation because alternative exists, such as natural gas, biofuels or renewables, and we will accompany our customers towards this. And maybe as a reminder, we have already stopped selling high sulfur fuel oil for shipping for 2 years.
So you will see a decrease in our all product sales, especially in Europe, but this will happen with minimum impact on our net free cash flows. Arbitration will be done on low margin sales, while CapEx will be directed to growth activities and new energies. Mobility is moving fast towards electricity, and the company has positioned itself along its value chain with the production of batteries and Secondly, by developing an EV charging infrastructure. On batteries, 1 year ago, we announced the creation of ACC, joint venture with Stellantis for the development of high performance battery modules. A year later, we've just announced that Mercedes Benz is joining ACC As an equal partner and that the 2,030 capacity target will be raised from 48 to 120 gigawatt hour, This is equivalent to 2,500,000 electric vehicles per year, allowing ACC to reach 10% market share in Europe.
In China, Saft partnered with Tianan in 2019 in order to develop the production of lithium ion batteries with a focus on 2 wheelers, increasing the footprint in the market, which should represent 40% of the global demand in 2025. As for charge points, we intend to operate 150,000 by 2025. Some will be obviously at our service station. When they are on the move, EV drivers have the same expectation as drivers of conventional vehicles: reliability, availability and speed. Hence, the 500 sites I mentioned earlier equipped with fast and superfast chargers as time to charge will be a determining factor.
They will also be at our B2B customer locations, but also on the streets through public concession. And here, there is a definite focus on major cities. Over the last 18 months, TotalEnergies have already secured 30,000 charge points through concession with Emblematic Cities. In Europe, we are now Present in and around Amsterdam as well as in Paris, London or Antwerp. And in Asia, we have secured recently A strong position in Singapore.
And though not a public concession, we have announced this morning the setting up of a JV with China's Three Gorges to develop more than 11,000 fast charging points in Roubaix. Last, along the value chain, the ability to offer 100% Renewable electricity, along with our expertise in mobility, gives us a strong advantage to succeed as a major player in electric mobility. The marketing and services strategy is clearly to maximize value while we transition towards low carbon energies. It relies on 4 strong pillars. In the retail network, our assets and our leadership position in Western Europe and Africa, our strong base to develop true one stop shops to generate substantial nonfuel revenues.
Regardless of what type of vehicles they drive, Drivers need services, even more so for EV drivers who will have to stay a bit longer to recharge their car. By 2025, We predict retail non fuel activities will represent more than 40% of our cash flow from operations in Europe compared to 1 third today. In the B2B, we will capitalize on our asset of 1,000,000 strong customer base. Indeed, Our customers have also energy transition concern. So by offering them multi energy solutions and innovative mobility products, We are and we remain the partner of reference in the transition.
Lubricants remains a strong pillar of our strategy, And we grow value through premium product in the automotive, including EV Fluids and also in the industry sector where we target niche markets. And as for the 4th pillar, I have developed it in a while delivering a strong performance. And I will now hand over to Stephane, who will develop our strategy on gas.
So after the oil part, I will lead you through the gas part or The energy of the transition. As Helene Christopersson has shown yesterday, we are indeed convinced that gas has a major role to play in this transition because it's twice less emissive that call for power generation and it's the most efficient way to manage mitigate intermittency of renewable. So it's an obvious choice for fast growing economy like China to address the challenge of more energy and less emission. In this context, it's not a surprise to see that the LNG market has grown At a 10% rate, so very fast in the last 5 years from 250,000,000 tonne to 350,000,000 tonne in 20 '20, and we are convinced that growth is going to continue to at least 5% to 7% per year in the next 5 years. This growth is coming from Asia, notably China, where it's quite impressive.
Despite the COVID in 2020, the consumption was higher than in 2019. And if we look Since the start of the year, the growth between 2019 2021 is an impressive 35%, And it's taking place both in residential and commercial for our generation and industry. So we are convinced that the entrant We'll go on for the next 5 to 10 years. And it's going to be followed by other countries in Asia. In front of this demand, you have additional hopefully, you have additional supply coming from notably the U.
S. And Russia in the next 5 years. But we see in the chart that those volumes will find easily their place in the market. And so we are quite positive on the balance between supply and demand on the LNG market. In this context of green market, Total Energy wants to grow.
First, we can base this growth on a very strong portfolio of assets fully integrated along the value chain. An equity production of around 20,000,000 tonnes, well diversified between Middle East, Russia, Asia and the U. S. On one side. Fleet of 20 vessels Chartered in the long term, 20,000,000 tonnes of regasification in Europe and some long term sales, notably in Asia and Latin America.
This strong portfolio allow us to size all the opportunities of arbitrage, and We see them currently in the market because we can either going send our LNG to Europe or to Asia. We can optimize the freight and we can as well integrate all those flow with our pipe presence in Europe and our presence on the gas and electricity market. So as you usually say, Patrick, we want to build on our strengths and LNG is a strength and that's why we want to grow that business. And as you can see, we want to do that by increasing our portfolio by 30% between 2020 2025 to reach 50,000,000 tonnes. How to do that?
On one side by raising production, on the other side by raising sales. So on production, it was mentioned by Nicolas before. We have today a portfolio of rough bit lower than 20,000,000 tonne of production. And that production is going Grow, thanks to the project that have already been sanctioned. Obviously, Arctic LNG 2 in Russia, But as well, Costa Azul, our Mexican project, the De Bottlenecking of the Train 7 in Nigeria and obviously Mozambique.
So we are confident that production of our own portfolio will grow to roughly 23,000,000 tonne in 2025 And more with Mausernbecoming upstream, as mentioned by Nicolas. So strong growth for the next 5 years. But as well, some resources that have already been identified and on which we will be able to build our growth beyond 2026 and those reserves being either in Russia or in Mozambique. And as well to mention our project with Papua LNG in Papua New Guinea, but as well, for example, the debottlenecking of our plant with Sempra in the U. S, Cameron.
So a strong growth of our own production. On the sales part, On the sales part, beyond our traditional contract with the usual buyer in Japan in Korea or in China, we want as well to broaden our base of customer and to diversify our outlet. And we have worked a lot in the previous months To do that, 1st in India by the JV we have with Adani where we are going to supply The JV with Adani to develop gas sales in India, so up to 3,000,000 tonne of LNG to fuel 20 or so city gas distribution and the network of CNG station. In China, where we partner with Shinergy, the electricity and gas distribution company of the region of Shanghai, where we are going to supply LNG and as well support the development of LNG distribution by truck in the region and in Brazil, where with Compass, we are supporting the development of a new import terminal in Sao Paulo and support the development of sales. And definitely, we want to grow that business and to extend it both in terms of size and in terms of geography.
Another aspect of our effort to develop LNG is what we do on bunkering, where we have now several customers, the First one being same as Sejm that we supply with bunker LNG, notably in France, in France in Dankirk and Marseille and in Rotterdam. And we see that as a growing market on which we want to extend our presence internationally. So to summarize, that should allow us to increase our sales from 38,000,000 tonne in 2020, above 14,000,000 in 2021 to the 50,000,000 tonne I mentioned in 20 25%. With a part of our production and so our integration along the value chain increasing over time, as you can see, that the supply from 3rd party will remain pretty much Constant. In terms of cash, that should allow us to increase the cash flow generation by around 30% to reach those €4,000,000,000 level, plus or minus, depending on the level of oil price taken.
And that increase is going to come obviously from new volume, new asset and an improvement of the supply contract we have as well. Obviously, that portfolio will be sensitive to gas price. And we have shown on that chart the sensitivity of the cash flow to a $5 increase on both NBP and GKM. The sensitivity is coming from 2 sides, 1 which is linked to our production assets, which obviously are sensitive to gas price. And on the other side, the part coming from our trading portfolio where it's basically allow normally to capture the difference between The NBP GKM and the NREAB assuming in that case because it depends of our Aging policy that all the curve move
as a spot.
Obviously, all that wouldn't be possible if we are not exemplary in terms of CO2 emission. And that's why we want as well to work on the decarbonization of the LNG chain. 1, priority on the methane emission reduction along the value chain. 2nd, on our LNG plant, where we want to raise energy efficiency, where we want to develop project of sequestration of the native CO2. And it's going to take place because our project that we are currently studying in Russia, in Qatar, in the U.
S. And as well by increasing the electrification of those plants, where electricity will be generated by renewable energy, both solar and wind. And the last part of our action is to renew our long term fleet because we see that new vessel today issuing 40% less CO2 than all vessels. And so we want to renew that fleet so as to improve its efficiency. All in all, all those actions should help us to reduce the full chain intensity by 20% by 2,030.
Beyond natural gas, we want as well to develop our sale of biogas. So we have started that this year by the acquisition of Fonroche in France, and we want now to scale up that activity In Europe, to reach 1.3 terawatt of sales, so that remained limited, but still. And in the U. S, with our JV, with clean energy, where we want to invest in renewable production To supply the network of 550 station where clean energy, of which we are shareholder, is supplying renewable bio CNG and bio LNG to trucks. And in Europe, beyond France, to try to develop additional project based on the expertise of French.
Finally, and that will be my conclusion, a word on hydrogen. As you know, there is a lot announcement, pilot project and interest for the various authorities on hydrogen. And on that subject, our ambition is clearly to be a pioneer in mass production of clean hydrogen With 2 ideas in mind. The first one, as mentioned by Bernard, is first to be able to cover our own demand on refining. And so we have project of green Hydrogen production for our own consumption of hydrogen in Europe, where we will be providing for sure the green electron coming from wind and solar and selectively invest on some of those projects.
Beyond that, we are convinced that if hydrojet develop, You will have to produce massively hydrogen, and it will be done in country where Those hydrogen can be competitive. And so we are looking at project of either blue hydrogen and ammonia where you have very Cost competitive gas and huge capacity of CO2 storage. And one Perfect example is clearly Russia where we could be partnering with Novatek. That's one. And the second aspect is green hydrogen where you need to find countries where you can have a huge production of both solar and wind to ensure a good load factor of fuel electrolyzer.
And so that's what we are as well looking for with the idea that green hydrogen will mean A lot of renewable energy. And you see, obviously, the synergy of that part of our business for us that I leave the floor now to Patrick as Patrick will present you our ambition in this domain.
Okay. Thank you, Stefan. I will speak about Renewable and Electricity, not because Stefan is not able to do it, but just Because we consider that this is a really new part of our new business And the part where we really broaden and we built this sustainable company we want to build, it's important that I'm trying to share with you our ambition in it. The renewables and it's probably the part where you have Most of the questions will come also. So the idea is, as you know, to scale a profitable global business on renewables and electricity.
1st, it's a big market, huge market. And I'm always smiling when people ask me, but you have many competitors. In fact, the reality is that If really we are all serious about climate change and we all know and it's repeated in each report of the United Nations to mass investments in renewable is required, so everywhere. So there is an anticipation in the momentum scenario at least an increase of 3,000 gigawatts Capacity in the next decade of solar, onshore wind, offshore wind, momentum that has not reached, I remember you, 1.7 degrees, 2.2, 2.4, so it's more than that. And when Total speak about 100 gigawatts by the decade coming from 10% to that means that we are targeting 3% of this increase, which, of course, is ambitious, but we are serious about we want to be in this renewable field as a major company as we are today in oil and gas.
So first point. 2nd point, renewables It's a reality now in the company. I would say 3 years ago, we had less than 1 gigawatt. This year, we'll end by more than 10 gigawatts, Maybe next to 11 even. So it's a reality.
Many countries, it's no more only Projections figures, Excel files, we have many projects. So we begin small one large ones as well, we begin to be confronted like Namita said to the execution of these large Projects are like in Qatar. We learn and we will learn more and more because we have many of them. And also in offshore wind, we have a project in Scotland, one in Taiwan. So it's a reality.
And in fact, the reality is not only on what we are building now and producing, but also on the portfolio. The portfolio we announced last year an objective of 35 gigawatts by 2025. In fact, we have already a little more in our hand, but we stick to this project because I know that And this is a main task for Stephane and his teams to execute, to develop, to build this project. And you know in renewables, at the end, executing, building, you face also communities and you have some of stakeholders. So that's the point.
So if we have the portfolio, it's largely disreased More than 65% of this portfolio is already covered by PPAs. Some projects will be developed partly with So merchant risk, by the way, not all of it. And so what we plan after having grown this year by at least 3 gigawatts from next year, It will be a regular increase of building up 6 gigawatt per year. So that's the way we see the growing from 10 to 35, 3, 4 times 6 gigawatts. And again, this is in our end up to us now to develop it.
Then beyond it, we speak about 100 gigawatts. So what do we how do we intend? Some people say it's very ambitious. Again, yes, it's 3% of the increase of capacity worldwide, which is being planned. But in fact, we think that we have now we have built the engine to develop 6 gigawatt per year.
So if we continue, it's an additional 30 gigawatts of the following 5 years. And then we will leverage some of our strengths. And we have 2 strengths on which we want to lever our 3th 1. The first one is building on the Total Energy's global footprint. I will come back on it to address new markets for renewables and new countries.
The second one is building on foreign wind. Amit, I mentioned some expertise. And we when we work today, This project have a longer time of development that will come between 2,005 and 2,030. And the 3rd pillar will be to continue to be very selective on M and A. I'll remind everybody that this year, we have invested $2,000,000,000 in Aladdin Green in India, and they are worth $5,000,000,000 today.
So we can if we are patient, smart and selective, we can find a nice way to create value through M and As. Again, Not more building, more looking to developers rather than existing assets, obviously. So if I'm going back on these three pillars, First one, worldwide presence. We have launched an initiative. We need we are building we are recruiting, in fact, A network of what we call renewable explorers.
We will not look for sorry, Nicola, for oil and gas, this one, but we're relocating the same Offices, it's leveraging on our presence of our knowledge of countries. So we have already recruited 50% or 60% of them, Locating people in different geographies. You see Africa, South America, Asia, where we have maybe less competition, but there is a potential for renewables. And that is, I think, quite unique to do that compared to some of our competitors in the utility fields, which are more focused on less geographies, Atlantic Basins. So that's a way not only to develop to grow, but also to grow profitably because what we have observed as the last discussion In Iraq, is that when you come smart, you have the capacity, you are well known by the authorities, they trust you, and you can leverage it to grow Also in Renewables and Power in a profitable way.
So that's the first one. The second one, again, is offshore wind. That's true that we are late in this business. I must recognize it's a little strange, but you know that's the history. Having said that, in the last 18 months, we already built a portfolio of 6 gigawatts of projects in Europe, Asia mainly.
We are taken now seriously by many players. So we begin to have some Tier 1 players who are coming to us and that's good because we are willing we think that offshore wind, considering the large CapEx Involved requires partnerships. Sharing risk is just important. So we'll partner within Denmark with Berdrola in the U. S.
On the East Coast, we e and Bed BW. And so we are fine to these partnerships, which will accelerate our growth. We have clearly there some competitive advantage to, I would say, to bring to the market, our floating technologies expertise, Our capacity of managing large projects in the supply chain and also the offshore logistics and, of course, financial capacities. The third pillar to develop, and I think it's an activity which We grow and I think it's one of the success of 2021 is to become more active on the corporate PPAs. I mean, now that we have a large portfolio, it's much easier to us To leverage again our global footprint, we're going to our suppliers, our customers, by the way, as well to sell them Some renewable electricity or green electricity.
We've done it first for ourselves between the Renewable division of So, Stefan, in the Refining and Chemicals, we've large PPAs. It obliged everybody in the company, including the trading arm, to think about it, to structure it. And now we can this model can be developed and we have already announced some corporate PPAs with companies like Amazon, Microsoft, Merck, Air Liquide, Orange. And by the way, it's a nice way for even for our suppliers to tell them, okay, you supply us services, but now we'll supply to you electricity. So it's balanced more ship.
The target is to sell at least 20 terawatt hour of this type of PPA, which will represents something like, I think, 10 gigawatts, if we can do that. So the key question then. So growth, how do we grow? You have the answer, leveraging of different strengths. The second part is Do you the second question we have is why is it profitable?
You tell us it's profitable. We have some doubts. In fact, to be clear, we tell you and we stick to that that we want to develop a portfolio of renewables with Equity, an objective or return on equity above 10%. And in fact, the more we dig into, the more we are convinced we can do that. We are facing 2 different, I think, markets.
We are facing what we call the deregulated markets, the U. S, for example, where there is a lot of competition, Whereas the market is moving more to merchant markets, where it's true that the returns, even post farm downs, could be lower than 10%. We recognize that. But it's also a market where you can leverage the integration, I think, more easily. And that's why One of the mission that Stephane is developing today is growing its trading teams in Europe, in the U.
S. Because there, there will be some imbalances And you need to be able to tackle to have, of course, some assets, to have some storage assets as well and to take to aggregate different assets. So There is some value to derive from integration for trading, and it has to be added on the top of what the projects will return to us. It's also markets where you could leverage corporate PPA opportunities. And then you have the other markets, the ones that our renewable explorers will look for, which has what I call the regulated market, where in fact it's fundamentally more a matter of finding the projects, then you will have some PPA with counterpart.
Of course, You have a risk on the counterpart, but you don't need this is you don't have to be fully integrated. These type of markets, if you are smart, you come As an early player, give you more than 15%, I would say. So the mix at the end of our portfolio is above 10%, and we stick to this target. And this is what we have today in our end. I remind you that our business model, And we also stick to it because we think it's a matter of risk management is, of course, to identify the project, to develop the project.
We put some depth on the project. And then when the project is developed, we farm down 50%. Not only it enhance the return on it, but more than that, it also derisked partly the projects. So that's a business model we will develop. So at the end, when we say we'll have developed And we have financed developed 100 gigawatts of growth capacity that we will do.
In net production, we'll have the results of 50 gigawatts in terms of net production in our figures. So I'm just it's a little complex slide. We try to develop the strategy, what means integration, which proves that we evolved, by the way. It's also the very thing. But in fact, it shows you the way we see us along the value chain.
From producing electricity, trading aggregation, we could have added storage, by the way, to developing customer portfolio. I think when you look to Europe, Clearly, we want to be along the full value chain because it's a way we think that in Europe, even if today renewables are developed in many countries through PPAs, It begins to be like in the Netherlands, like in Germany, more through merchant markets. And you need to have the capacity to optimize these assets. And that's good to be along the full value chain like, by the way, we've done in Oil and Gas. So U.
S. Is another regulated market. We are new to it. So there, We approach it mainly through the 3 elements. We'll see in the future if we need to develop on both part of the chain.
In the other markets, the regulated ones, like I described, when you go to India, when you go to Iraq, you can Maintain you can concentrate on producing from renewables. You could use maybe your portfolio if you want to go together with some large global companies to sell them some corporate PPAs. So this is the way we intend to develop And to integrate renewables and electricity, mainly on the regulated market with integration, not on the other ones. So what does it give in terms of figures just because all that are good words? You have the growth, you have the profitability index.
So at least on the next 5 years, we intend, in fact, to grow our production up to more than 50 terawatt hour, which represents more or less equivalent of 200,000 barrels per day, Just to give you a magnitude. To do that, this will deliver, by the way, it's more important to you, cash flow from operation of around €2,000,000,000 by 20 net operating income of €1,500,000,000 Proportionate EBITDA, which means we've because all that will be partly in SMEs of 3 point €5,000,000,000 so to give you the magnitude. And we'll have invested in the period around $15,000,000,000 of net investments. With the leverage, it represents gross investments of around $35,000,000,000 So this means that by 25, Investing €3,000,000,000 cash flow from operation 2, there is still a deficit, but when we invest in oil and gas in a new country, generally it takes years before to see exploration, appraisal, development and payback. So what we target, and clearly in our model it works, is to be net cash positive by 2,030, maybe a little before, but let's say by 2,030, growing to 100 gigawatt.
Now I'm taking the combination of all what we said. And thank you to all of you, Nicolas, to Bernard, Alexis, Stephane and Amita to have described all the assets, so I will make the sum up with one message today. We, In Total Energy, aiming clearly to combine the energy transition, which we think are certainly necessary to contribute and to participate ensure the sustainability in the company and the shareholder return. And I think we have demonstrated last year in 2020 In the worst possible crisis that we have known, that we were able to maintain the dividend and at the same time, I would say to continue to invest in this renewable and power in a large way. We maintain the CapEx.
This is what we intend to do for the future. Why are we able to do that despite the strong competition, which is a question we have? This benchmark show you In terms of EBITDA generation, cash flow generation and in terms of balance sheet, so gearing, what is total energies compared to major Oil and Gas Companies, but also major utilities. And what you can just see with the size of the bars, we will dig into the details, Clearly, a company like TotalEnergies is number 3 in terms of cash flow generation, so a strong cash machine And is also among the best the 2 best in terms of low gearing, so a very strong balance sheet. And you can see that, by the way, Most of the oil and gas companies are above on both segments than the utility.
So we It gives me the conviction, strong conviction that even if we are newcomer in this field, we have In fundamentally, we are well armed to be able to be the leading player amongst the leading players of the energy transition in the coming 10 years. So we will invest, but we will invest with discipline. We don't want it's not volume over value, let's be clear. We have also From the last 6 years as CEO, with the volatility we face, we think it's better to plan our CapEx, Frankly, on something which is quite stable, we took $50 per barrel as a way to measure it, dollars 13,000,000,000 $15,000,000,000 I described you the capital investment strategy, 50% in maintenance, 50% in growth. With $3,000,000,000 in renewables and electricity, We have enough to make this growth as we proposed to you.
And so this is what we employ. You can see the impact, by the way, of the capital strategy I described to you on the capital employed on the various segments of the company. Of course, Total Energy is not a small company. It's a huge one. We have $140,000,000,000 of capital employed.
But what is interesting in this chart is a trend. And you can see that the trend is in line with our move. When we say that we transition, we transition. You see the red line, which is E and P outside of energy is declining. You see the LNG continuing to grow.
And at the end, the renewable electricity, the green line, is almost by in 5 years, at the level of capital employed by the whole downstream of the company. So we are, I think, putting the money according to the ambition and that we have to be again to become a sustainable company and coping with our ambition to drive to date 0. The discipline also is on OpEx. I must say that maybe it seems odd to you when the barrel is at $80 per barrel, but again, it's a lesson learned. Last year, everybody was speaking about costs and savings.
So we should not forget, even in February when we made the presentation, we were more in that mood. Things are changing quickly. The teams are mobilized. We will deliver the $1,600,000,000 That's also true that today we hear about more inflation with logistics, etcetera. But it's important because these savings are supported by some fundamental actions on the digital The one tech organization, upgrading the portfolio, which was we didn't make too much noise during 2 years.
But in fact, you have seen that Asset by asset, we have worked. Hardly, we have worked because selling 12 assets is as much complex to sell, would say a big one, but it's down. So this is, I would say, and I encourage the teams in TotalEnergies to continue To work on it because this is a fundamental part of our business, we need to be disciplined on the cost. Then CapEx, the cash flow. We confirm today with 1 year delay, I will be very honest, But we will be able to deliver the $5,000,000,000 underlying cash flow growth from 2021 to 26.
So 1 year delay It's obviously linked to the delay on Mozambique. I will be even more transparent to you is that if Mozambique does not restart by 2022 And you know that we do not control all the situation, the security situation in Cabo del Gallo. This would impact the 'twenty six target by $500,000,000 which does not change the fundamental message there. In fact, And that the growth is coming, like you can see, not only for it's coming from Renewables and Power for $1,500,000,000 from LNG, 1,000,000 to 1.5 depending on Mozambique. Also from the downstream between Alexis and Bernard explain you that they plan to go by €1,000,000,000 And then we have Some oil projects, Uganda, plus Iraq, plus Peru, Brazil, which will compensate partly the natural decline to provide another €1,000,000,000 So these are all these projects.
Most of them are sanctioned. We need to execute all that. And that will of course, This underlying cash flow growth will support the future increase of dividend, as I said in July. Another message here. We are raising, thanks to the quality of the portfolio and the works, by the way, which is done In terms of high grading this portfolio, divesting some assets to upgrade the return on capital, We were mentioning in our previous presentation more than 10%.
We have with all the assets we have, We can reach more than 12% at $50 from 2025 despite the famous renewables, which are supposed to decrease the profitability. So it's a proof that our model is from this there is a virtue in this model. Another message there. You see the impact of $10 per barrel, dollars 3,200,000,000 no change for capturing the upside. We are more and more exposed to positively, I would say, to the gas spot prices.
If For NBP and GKM, both of them increased by $1 This will represent an increase of cash flows from $600,000,000 If you align, by the way, $10 per barrel is more or less $1,500,000 per 1,000,000 BTU, that means $1,000,000,000 would come. So this is also a message, important message But growing in LNG with more of our, I would say, portfolio being exposed to this spot index represent a potential upside as well in our portfolio. So having said all that, we go to What is important? When I say combining energy transition return on shareholders, this is a way of cash flow allocation priorities, I would say. CapEx, it's a priority, but within a disciplined framework, dollars 13,000,000,000, dollars 15,000,000,000 not more.
Renewables power We will guarantee them, I would say, dollars 3,000,000,000 per year. So that's the first part. And this is okay to make this transition. The second is dividend. You know that we have supported it through the cycle.
I just mentioned to you that definitely, our aim is to deliver in coming years Some long term cash flow growth, and that will support future increase for dividend. The balance sheet, we have been always keen To give a certain priority to maintain, of course, a Grade A credit rating. Again, it's an advantage in the competition When we go to electricity compared to peers, so we want to keep this advantage gearing into 30%. And last but not least, We announced end of July that we are willing to share surplus revenues with our shareholders above $60 Today, I know that you have made some math, most of you. We said it's maybe €900,000,000,000 €1,200,000,000 What I announced to you, it will be €1,500,000,000 not because I changed the 30%, but just because natural gas prices are rocketing.
And so we have obviously some additional revenues from gas. And so when we and as I need to give instruction to my CFO, I will not keep So moving target during week after week, the decision has been taken to give him a target to buyback $1,500,000,000 of shares for the last quarter and then we'll see if what will be the momentum on the hydrocarbon prices through next year. So I would like to conclude this presentation, which has been very colorful, can see like the colors of the logo. I hope you like the modernization of the slide by this slide. In fact, the Total Energy Investment case, what we propose to you, I think on the left side, clearly, I think we I've demonstrated in the last 5, 6 years for different up and downs in the hydrocarbon process, we are quite resilient.
We have a strong balance sheet with low cost of debt. We have a strong and reliable cash generation. We are supporting the dividend through the cycle. The resilience is demonstrated. We are also, and I would like to insist today, able to capture the upside of higher energy prices.
We are a low cost producer. We have a production growth in our portfolio. And again, we have an increased leverage to gas markets. So as of that, I would say, The part, the hydrocarbon patch, which is fundamental because it's feeding, in fact, the cash flows, the engine to make this transformation possible. On the other side, I think the business model and we have described it to you to build a sustainable model Business model, we are really engaged in this transformation with clear targets, already established portfolio, and we will deliver on renewable and Recognized in this field as an ESG leader.
We think clearly that we have some competitive advantage to prosper In the electricity world, I mentioned that to you again, in particular, our global footprint giving us access to new geographies with less competition and also the management of large scale projects. And this investment case, of course, supports attractive returns to shareholders. We have a high dividend yield, maybe a little high, but we will be patient to see the rerating of the share. We have again a long term underlying growth, which will support future dividend increase. And we have a policy which is put in place in order to share surplus from hydrocarbside through buybacks.
So that concludes my presentation. But before to go to the Q and A session, and thank you for your patience, but I mean, we have been through many voices, but in a dynamic way. I would like also to thank again all the people who contributed to this presentation under the leadership of Jean Pierre, In particular, Ladislas, who is our IRR President. I say Ladislas a word to Ladislas because it's the end of his assignment. He came Twice in his position.
Thank you, Ladislas. He will be assigned our representative in Washington to reward him from his dedication to the company. Renaud Lyon, because of COVID, maybe not all you know him will take his seat. Renaud is already there the last 3, 4 months, so he's learning a lot. And I've also thought to thank all the team who worked with them, both of them, Afraid I will forget one.
So Bertrand, Edouard, Frederic, Benoit and Olivier. So thank you for all that. I know it's tough to support all the executive committee to make such presentation, so thank you and again for the quality of it. So now we will listen to your question for the Q and A.
Thank you. Ladies and gentlemen, we will now begin the question and answer session. The first question comes from the line of Michele Della Vigna From Goldman Sachs, please ask your question.
Perfect. Thank you very much for the very thorough and interesting I had two questions, if I may. The first one is on your CapEx guidance. You've Reduced the top end of that guidance from $16,000,000,000 to $15,000,000,000 while increasing the spend on renewables and the energy transition. That certainly is a strong sign of discipline.
But I was wondering if you could perhaps shed some light into some of the moving parts in that and where perhaps less capital we go into the coming years and what you were thinking 1 year ago? And then my second question is about cash return to shareholders. It's certainly very good news to see $1,500,000,000 of buyback in the Q4 at this level of share price, it's certainly hugely accretive. But I was wondering how should we think about the framework for next The macro is uncertain, but seems to be going into a very good direction. You have effectively a free cash flow breakeven at $50 per barrel and you have Huge exposure to gas prices, which are increasing substantially above your $5 per Mcfmbp price.
Shall we continue to think that longer term you want to distribute about 4% sorry, 40% of your cash flow to shareholders between dividends and buy Bex, you will think about the right balance between those 2? Or how should we start thinking about next year for that? Thank you.
What is good with you, Michele, is that when you announce something, you want the future. So no, I think first on the first one, let me clear. In fact, I've said everything in the presentation. When we were speaking 13, 16, so $16,000,000,000 to be honest, You need $60 per barrel to support in when I'm looking to the financial model. And again, it's maybe a lesson of what we have experienced last year, But we prefer to plan our CapEx to be sustainable at $50 rather than $60 So 13th, maybe it's only €1,000,000,000 Okay.
It's obliged us to think. But by the way, if we want to be consistent with the ambition What we have announced and in particular when we speak about the downstream, and that means that We have made our CapEx consistent with, for example, when we say we'll reduce Oil product sales, that means that I need to invest less or to be more selective exactly in the way we approach the development of networks. One example. We will continue to invest in some networks, but not necessarily in all the geographies as we were planning that 1 year ago. So that's one example.
There is obviously and so I mean, it's some choices, which and at the end of the day, there is a consistency between the trajectory On the scope 1, 2 and 3 and the CapEx for the hydrocarbons part. So if we are spending more, that will create an inconsistency. So Financially and we think ourselves, but again, let me be clear. The way we manage that, and I think it has been very well explained to you by Bernard and Alexis, We make choices which have a little minimizing the impact on the net cash flow because, in fact, These are also CapEx, which were allocated to assets. When you look to the net generation of cash, it was not So big.
So what is more important, by the way, for you as a shareholder is not only the amount of investment, but the net cash generated by this investment. So that's the explanation. And again, we have made some few choices, but these choices are consistent with our trajectory. The second one, I think I said everything. You know that we told you that the dividend And the yield of the dividend today is around 7%, quite high.
We said and we repeat today that it will be Any increase will be support will have to be supported by, I would say, some long term sustainable cash flow growth. We'll have some next year. We'll see the weight. We will plan that. We'll come back to you beginning of next year on it.
We also said in July But in terms of return of surplus, we use a 40% objective, up to 40%. So the combination of all that It's between 30% 40% when you make the math. You will have no more insights to that. But Again, what I can say to your customers to want to convince investors is that first, Total Energy did never decrease this dividend during 30 years. And on the top of it, as you said, because we and I think we gave you some indications, We have more we are more exposed to others than others to upsides from the gas sides.
If we have more revenues, Then we'll return more to our shareholders. And I think the signal through the $1,500,000,000 is in that direction considering the upside on the gas price that we experienced this year.
Thank you. The next question comes from the line of Christian Malek from JPMorgan. Please ask your question.
Hi, this is Christian Malek. And look, thank you and congratulations on an extremely comprehensive outlook. And Patrick, it's clear to see the strategy is to be everything to everybody in your sale of energy to customers. But it does seem your upstream outlook and specifically oil seems to mirror your view on peak oil demand through the decade. So while clearly we're biased towards our own views in an oil super cycle, if that scenario were to play out Through a much delayed peak, is there a danger that your cash return may become less competitive compared to those that have planned for an increased quantum of oil barrels to reflect the peak in oil demand post 2,030, sort of more in line with OPEC's thinking today.
My second question relates to plans to potentially harvest or carve out the renewables business. I noticed a number of comparisons in Utility sector, which I think is absolutely right. But the reality is that The Clean Energy businesses sit within a large conglomerate. And if the equity market decides for whatever reason it's not willing to value a hybrid business model reflect the rich evaluations of the low carbon business. At what point would you consider carving out a small portion of that business in the form of a listing Or would farm downs be a potential route to harvest value?
Thank you.
No. But I think if you observe, Christian, I think the way we approach this transition is also I didn't plan the CapEx for 10 years. We planned the CapEx for 5 years, let's be clear. And obviously, we will monitor that Precisely. I think we have demonstrated and again, look, the last projects, it's a global project in Iraq, But we are able to move on electricity, gas and oil.
So we did not say no to oil. What we said, And I think we have a specific edge in some geographies. We are looking for low cost oil. So my teams in E and P does not have a mandate to stop looking for more oil. They have a mandate to look for oil, which is low cost and low emissions.
The planet can offer opportunities. So within so again, we gave you a sort of trajectory. The reality is that we are quite pragmatic, and we'll see. We'll see at which pace these markets will evolve. Helle explained you different scenarios.
I know that some by the way, Nicolas show a slide, which was at the end, there was a spread against the landing point in 2,030. So we have to monitor that. So we didn't never said that to voluntarily we decrease oil. I never said that. We said that we are pragmatic.
We monitor it. And if we have good projects Like the one we are finding in Iraq, we will develop it. I mean, that's clear. So I mean, I'm not afraid by this Aspect because, again, it's a matter of being selective, but monitoring according to the way the demand will evolve. So the second one, of course, is a traditional question.
You are right to ask the question. I mean, we have to be patient. I think we have embarked in Total energies, we know that we could be perceived as an energy conglomerate. I think but my answer to you is that You should buy the shares today. They are not so high.
In 2025, if really there is no rerating, then A spin off of 35 gigawatts. When you see the valuation of renewables, I think my shareholders will be super happy, yes? And so buy the shares, Keep them. Trust us. And either the conglomerate will be rerated, which when I observe what happened to others, Sometimes to times, it's a matter of disturbance or then, obviously, we'll have to take actions.
But let me be clear, it's not a question mark today Because today, one of the advantage in 2025, there was an important figure. We'll invest €3,000,000,000 We have €2,000,000,000 of cash. That vehicle could work. Today, we invest 3, but we have 0 cash or almost nothing, €300,000,000 But the coal does not work. So why should I go to the market to spin off to have access to have money to the market, but I could just Finance ourselves with quite a low cost.
So we are comfortable and the options will be there on the table. But again, I hope in the meantime, but this idea of the transition and that players can do these different synergies We'll be absorbed and agreed by the market. We'll see.
So, if you were to flex CapEx higher in the context of Stronger order model,
would that be within the $13,000,000,000 to $15,000,000,000 envelope or
would you consider raising it above $15,000,000,000 Sorry to
pull up.
No, because I don't think that you need to plan with $80 per barrel. It's a mistake each time we have done that. I've done it myself, be honest, I've done it in 2017, 2018 where I remember we announced you we have invested 2017, 2018 and then price went down. So I think honestly with the transition, energy transition is somewhere putting more volatility in these markets. There is Because we create interactions between the different energies and it's quite complex to fully see the virus in.
I'm not sure that none of us would have bet 6 months ago, but the natural gas price would be today at $20 per 1,000,000 BTU. So I mean, we need to be humble. And I think I prefer to manage and learn to manage the company by, again, Being disciplined on CapEx, returning shareholders with upside and managing the plan. So no, we do not intend to So the increase of CapEx because we have more money. We'll see.
Let's see. It's difficult. Again, in February, at the beginning of the year, we were more looking $40 or $50 than $70 $80 So I think we need to monitor that carefully rather than changing our mind every 6 months.
Thank you.
Thank you. The next question comes from the line of Pauline Le Cusunois from EIOS at Federated Hermes. Please ask your question. Thank you very much
for this very helpful and informative address today. Yesterday, during the presentation of your latest energy outlook model, you touched on key differences with the IEA net 0 by 2,050 scenario, such as more gas and a different oil trajectory. Also a limitation of Climate changed to 1.7 degrees. And you mentioned the important role your own model plays in your investment decisions. I was curious to know if it will also result in a review of your existing emission reduction targets.
And also, if this model is reflected in the assumptions and estimates used in your financial statements, for example, when estimating The life used in calculating asset retirement obligations? And finally, regarding the oil related investment, Should we deduct that it would also be for oil, that 50% will go to maintenance and 50% to new developments? Thank you very much.
No, I think you will have to Helle will come back to you. In fact, we didn't say 1 7 degree, we presented yesterday what we call the rupture scenario and stating that this one will be the 2 degree was 1 1.7, 1.8, and we made another an alternative, which is called rupture plus and this is the one which makes 1.5 degree, which is the one to be compared to the IEA net 0. So keep look to you have to look to all of what we said. We never said 1.7. We said different scenarios, 2.2, 2.4, 1.7, 1.8 and 1.5.
So that's the first point. 2nd, the role of oil investment and the review of strategy investment. Now what I mean, again, we You know and we said it yesterday, but there is yes, we disagree. There is one point where we do not understand and I would to know, by the way, how VIA managed to reduce the demand for oil in 2,030 to 70,000,000 barrels per day because this is their trajectory. We do not see and if somebody can explain me where it comes from, I would be very happy to listen to it and maybe it will influence our strategy.
What would be the technologies of the change of demand patterns, which could lead to reduce this demand for oil to by 30% in 10 years. I don't see it. The technology we may all mention is Shifting EVs to ICE to EVs, this is 2,035, not before. So again, As long as we do not and again, we in our portfolio, in our scenario, we see a decrease for demand by around 10% but not by 30%. So And if 10%, then that means that we need to continue to invest selectively, like I said, selectively in some oil projects.
And so we'll continue to make selective investments, which will allow us to be on the safe way because, in fact, So safe being to be low cost and lower emissions. That's the way we look at it. The value used in retirement expense, I think we have we've used several papers, but maybe Jean Pierre wants to say something about it.
Yes. So we adjust the scenario After the drop in prices in mid-twenty 20, so we have an increasing price plateau between 2020,520 and afterwards declining till 2015 by 2,040. So That's fully coherent with the vision we have regarding the oil demand over the next decades.
This value has been adjusted last We'll not adjust it every year. But the way, what we made in our statements, if I remember very correctly, we give the sensitivity Of the change of these long term oil price on the potential asset value, and it's quite minimum. So you have all the data. So I think, and by the way, I know that the French stock market authorities I've made the 5 year annual review of our financial statements, in particular, on all these assumptions. And if I understand correctly, the letter I received, they seem to be fine with what we have done, 30 page of exchanges.
So I mean, we are Ready to also to explain you what we do. The last one, I'm not sure to have understood the question, to be honest, on the fifty-fifty maintenance growth.
Yes. It's because in your presentation today, you mentioned 50% in growth and 50% in maintenance. So I wonder if it also applies To oil?
No, no, no, no. No, no, no. Sorry, no, no, no. I said globally, the $13,000,000,000, dollars 15,000,000,000 split, Oil, there is no growth. So if there is no growth, it's mainly maintenance.
The schematic was clear. So what we call maintenance is maintaining It's a company we would not grow anymore. We would keep the Monterey company as it is. No ambition to grow our energy production or energy supplies. We need €7,000,000,000 €8,000,000,000 €7,000,000,000 to maintain it as a plateau.
That was the left part of the cake that I showed you. The other part, and I said clearly, the 50% growth is all for Renewable Electricity, all for natural gas.
If we call it new developments, does it make a difference?
I cannot answer to a question which is today not
Okay. Thank you. Thank you. The next question comes from the line of Oswald Clint from Bernstein, please ask your question.
Thank you very much, everyone. Great new data today and certainly across the new seven New and old businesses. And the good thing over the last year or so is we can use or at least we can use the data, start to work out the free cash flows by business line and Really do long term discounted cash flow modeling and really to get to the value of the company, the value of the shares. And The interesting thing when I do that is we end I seem to be getting a minus 5% decline in terms of a terminal growth rate that's Embedded into your share price, just thinking about cash flow growth beyond 2,030, I'm assuming people trust you For the next 5, 6, 7 years because you've I mean, Total have been very good in terms of guiding in terms of numbers. So I mean, it's clear that Beyond this plan today, which is well laid out, that the market is still worried about some collapse in your free cash flow Beyond that period.
And I just wanted to get your thoughts on that comment or maybe how you would start about convincing us that suddenly Things don't untangle post 2,030, please. And then secondly, a lot of really good data morning on the electricity sales growing threefold by 2,030. I guess my question is here is in terms of a risk. I mean lots of capital into generation. We're recycling the capital.
We're adding new generation. Everybody is. And I wanted to ask about transmission. And my concern is it just can't cope or follow the same pace, especially considering things like permitting, etcetera. So I wanted to get a sense of how critical transmission access is for you to physically deliver your electricity?
Thank you.
Thank you for your comment, Oswald. Positive comments. As always, you asked a question where we do not Honestly, to describe to you the future post 2030, what I would say to the investors is I don't know why they worry because, again, when you look to the way we manage our transition. Yes, on one side, we definitely grow our Renewable and Electricity business. But on the other side, when you look to the hydrocarbon price or hydrocarbon, We continue, I will say, to offer a trajectory, which is growing on the LNG side.
And Stephane mentioned different projects, which are feeding the growth until 2,030. And in fact, there is more to come beyond. We have some positions Like Russia, Mozambique, where we can continue moving on. There will be more projects to come with our partners. So This part, I think, I can at a certain point, planning post-twenty,two thousand and thirty becomes to be a little More in Excel file, but in terms of assets, we continue to look for assets to fit this growth.
And on the oil side, there again, I repeat that we said that we have a peak in the decade. At the end, we are landing more or less to the point where we are today, a little lower. We will continue to look for opportunities like the one in Brazil, like the one in Iraq. So you will see Total active in some oil opportunities to feed the future portfolio for oil and gas. So it's a matter again on oil, we put some selectivity.
And so then we have to be smarter than before to be able to identify the opportunities, but I'm comfortable, and Iraq has demonstrated, and we might participate to Brazil auctions if it fits again With our profitability, our cost per barrel and our emissions targets. Question on the transmission. Maybe I would leave the floor to Stephane on the transmission part.
Yes. On the transmission part, it's a really valid question. And it's something that on each investment we are doing on Renewable, we look closely at. Now the situation is really varying depending on the Country where you invest, I would say that in Europe, globally, it's less of a concern. It can be in some region in the U.
S. Where you have development and where you definitely need to invest on the transmission yourself if you want to that to happen. But it's some region of the U. S, not all the region of the U. S.
And it's a key question. If I look at The Iraqi subject where we are going to develop 1 gigawatt, that's clearly something that we look at seriously. What I would say is that With the growth we plan, I don't see that as a limiting factor for the timing over the next 5, 10 years Apart from some very specific location after, we will see. Then there is another way to answer the question is that if you develop at the same time solar and wind and if you increase, Like we look at on every project, the battery capacity as well, that's a way as well to answer part of the problem.
I think the question you asked was just a general comment is a valid question more globally for all of us, I mean, which is And I know that some of our colleagues in the utility are advocating the fact that at a certain point, We will not be able to grow all the renewables at a scale that some, I don't know, green 55, Fit for 55 is planning because we could face Faculty of transmission system. But from this perspective, I would say it will be the same for all the competitors in Europe. So It might be, I would say, a global issue. Does it is it an issue for us as Total Energies? It's something on which we need to take care.
And again, it depends on geographies. I think it's very different. And the fact that we are looking The way we want to develop and grow in this field looking to a global footprint give us different opportunities. So there is not one answer, But I know that's the situation in India. For example, there are today some discussions about underground transmission lines, etcetera, which Good again, but it will be the same for all competitors.
I think there are to build the 3,000 gigawatts extra capacity we need in the next 10 years. Probably we'll face obstacles after obstacles globally, but TotalEnergies has no reason to be penalized from this point of view. Okay.
Thank you. The next question comes from the line of Lydia Rainforth from Barclays. Please
I do like the colors. Two questions, If I could please. The first one on renewables and the returns there. It does look like the bottom end of that return range has fallen to 4% to 6%, I think from to 6% before and yet the cash flow numbers and the net income numbers actually if anything slightly higher. So I'm just wondering if you can talk us through that.
And then the second part was on the carbon offsets and the idea of basically if I look at it, Based Solutions, you're spending $100,000,000 a year. By 2,030, you're expecting that to be, I think, more than 5,000,000 tonnes per year. And equally on the carbon capture side, it's again $100,000,000 a year, but with 5,000,000 tonnes of CO2 captured the year by 2,030. And I'm just surprised that those two amounts are pretty much exactly the same. So are you not seeing a difference in the pricing between CCS and the Nature based Solutions side?
Thanks.
The second question, no, there are it's really separated. There is $100,000,000 for NBS, and you have an amount which today came out on the $100,000,000 for CCS. So it's $100,000,000 plus $100,000,000 So 2 different topics. Knowing that there are by the way, the objective is not the same. When we develop carbon storages, It might be for us, it might be for others, for some customers.
So we develop a capacity of carbon storage in Norway, in Aramis, in the U. K. Some of it will be used by Bernard maybe To take CO2 out of this H2 production, but and for decarbonizing our refineries, but some of it Might be available as a business offered to our customers, we could imagine. But when we say if we want to go hand in hand with customers, some of them, Steel manufacturers will ask us, okay, do you have some capacities? So that's why we do not integrate the 5,000,000 tons of Carbon storage, in the way when we speak about scope 1 and 2, we did not integrate that.
So it's something additional. It's another business, again, part for us, far for others. The NDS on the contrary is clearly for us only. We will not share that. It's purely dedicated to offset COP 1 and 2 emission.
We did not intend to use these carbon credits, high standard carbon credits for customers because and this is where the people made a mix there, which way I would say voluntary carbon markets, which is another different topic. So I hope I clarify this question. The first one, no, I think you remarked that we put an 8% on the regulated markets and we put also 15% on the other one. So you know and we said the average is above So there is no change in the I10. Why do we have I'm not sure we have much higher cash flow numbers.
Cash flow numbers, again, today, I'm more certain about it with Stefan because, as I said during the presentation, So 35 gigawatts of projects are, I would say, firmed up at 80% or 90% today. So we know what we have put behind. In the meantime, we have invested in Adeligreen. So we have the figures. We know what we are able to deliver.
So we have the model. So I'm To be clear, honest and frank with you, Lydia, I think these figures, since we have been so Able to speak about EBITDA, net result, cash flow is because we have a global confidence In the different projects and the model that the teams are proposing us, we have been able. So I'm consider that what we propose to you As cash flow numbers on renewables and electricity are correct.
The next question comes from the line of Alastair Simon from Citi. Please ask your question.
Thank you and thank you for the presentation. A couple of questions. So Slide 70, I missed apologies what you said on the interpretation of 2025 and 2026. Is all the move in cash flow related to Mozambique? Because I thought you then said that Mozambique was only $500,000,000 of cash flow in 2026.
So apologies if I got that wrong. Secondly, was wondering why you chose or why you are choosing to do partnerships in Renewables. I know partnerships have been a big feature to oil business for years as a derisking tool. Why follow the same model in renewables, but the risk profile is a bit different? I understand where they might come about where you're sort of farming into projects, but many of your bids in, say, the U.
K. And France have the partners included at a grassroots level, including some private equity players? Just interested in perspective on that, please. Thank you.
Okay. First question, no, I think I mean, I just clarify. I just told you that the 2026 figures And Barr, what you have on Slide 70 or 71, by the way, I think 71, includes Mozambique LNG started beginning of the year. So includes $500,000,000 of cash flow from Mozambique LNG. So the plus 5 includes this 500 if Mozambique LAG and this suppose that we are able to remobilize People next year, 2022, 2022 beginning next year.
We'll see. We have some there are some positive evolutions on the ground, but it has to be consolidated. It's a there is a war, so we will not what we will not do on Mozambique is remobilizing to remobilize. That's clear. So if we are not able to remobilize beginning next year, then the delay in Mozambique Legev is $100,000,000 could go to $27,000,000 So I wanted just to make a warning so that things are clear between us.
But again, the conclusion €4,500,000,000 or €5,000,000,000 is not fundamental. It has not changed the profile or the cash flow growth profile. It may be a delay. So that's the other point. The second question is related, I think, to offshore wind, if I understand, because this is where we put some partnerships.
I think, Yes and no, it is true because when you bid to acquire seabed rights In the U. K. Or tomorrow in the U. S, that's not for free, yes, I will tell you. And this model Where you first bid for seabed rights, then you will go to find the electricity price for PPAs, there is a risk.
So I think sharing this risk with somebody another company, I'm comfortable. I prefer honestly, And I understand what you said. Maybe it's better to farm than later. But there is another reason, to be honest, also with you. We are late in this business.
And in offshore wind, what we have observed, not true for floating offshore because it's still early stage. In the fixed bottom competition, it's you have Some players like Macquarie, I must recognize, that's why we have partnered with them. But we made, by the way, an interesting partnership with Macquarie. We went together in the U. K.
And Scotland, and they come because they were interested for our floating expertise to develop that in Korea with them. So it was a win win, but we must recognize that it's also true that some Players who have spent 2, 3, 4 years to accumulate data on some specific locations are well better positioned to bid rather but you come late and you don't have the same capacity. So this is why we are looking for partners to be able to cope with the fact that we were late in this business on certain geographies. And that's the reason why. Maybe Stephane wants to add something on this one, no?
No. And in addition to what you Patrick, I think that especially in offshore wind, that still remain an industrial project with some risk on which It's good to be able to partner as well to get the most experience to mitigate them.
Patrick, so can I come back to the first question? I sort of quite understand why the bar in 2026 seems to move up more than $500,000,000 Is there something else that's in there between the 2 years?
That's the question. No, no. But between 2025 and 26, no, but you have other projects coming in 2026. You don't have only Mozambique. In fact, in 'twenty six, you have Ratawi, if you look to the presentation today.
And you have also a project in Angola, which is Block 2021. So you have in fact, there is a yes, there is an increase between 25% and 6, which is, yes, the delay of Mozambique from 25% to 26% compared to last year, but new projects which have been introduced In 'twenty six last year, we're only looking to 'twenty five. So you didn't have any datas, which is in particular Iraq And again, the project in Angola that we have acquired, an offshore project, Block 2021, on which, by the way, we have made a positive appraisal this year. So we'll move on. So in fact, these are the reasons why you have an increase, additional projects as well.
Thank you. The next question comes from the line of Biraj Borkhataria from RBC. Please ask your question.
Hi, thanks for taking my question. A quick question on the upstream. You highlighted some of the short cycle optionality. And one of the slides said you reactivated 6 rigs or plan to reactivate 6 rigs. Could you talk about where you're increasing activity?
And any details around the production impact or payback periods of those investments? I know you don't plan on $80 oil, but given you say sort of $4 per BOE capital intensity on short cycle Project, is there anything more you can do there? And then the second question, just a very quick clarification. Did you buy back any shares in Q3 at all? Thank you.
The second question, I think I answered because I told you I gave instruction for Q4. So that means there was nothing in Q3. And by the way, I think Jean Pierre cannot buy before we are entering into a shadow PI out there, so we cannot buy today. But so as we know, nothing has been done in Q3. So we keep all that for Q4.
Nicolas, the countries where you want to reactivate your rigs, I suppose there is Angola, what else?
Yes. We are the typically in Angola, we went back to 2. We went from 3 to 0 and back to 2. Same in Nigeria, we have 2 rigs working. We just completed Some infill drilling on our ML-one hundred and forty.
Totally different example. For instance, Barnett, we are considering remobilizing rig, But so basically, pretty much in the locations where we have the short cycles available.
No, but just to complement that Biraj, I think we are still under COVID-nineteen in certain countries. So we have also, yes, we can remobilize from a pure, I would say economic analysis, but we have also at the management level in mind that both teams in some geographies are Still under, I would say, sanitary constraints. And so we are permanently monitoring that with the MDs of this subsidiary to ask them, are you sure you can really take into account onboard additional rigs without Putting in jeopardizing the safety. So I think it's why we monitor. But again, We are right.
We have identified these short cycles. If we see the Oil price being maintained, we will continue to activate that. So it's a matter of remobilizing. Like I think Nicolas explained, It's easier to demobilize than to remobilize like always in this type of case. But we'll we clearly think, So we give some signals to our teams that they can think today to be mobilized and they are doing it, but that takes a little time in the convenient environment.
Understood. Thank you.
Thank you. The next question comes from the line of Irene Himona from CCHE Genovale. Please ask your question.
I had two questions, please. Firstly, a question on the OneTech people organization. I realize it's early days yet, but can you perhaps talk a little bit about some of the obstacles perhaps To completely retraining what a very skilled personnel area of expertise and to successfully changing those? And then secondly, a question on 2 of the 7 areas, hydrogen and biofuels. If you can Share with us some of the risks in those areas, in particular green hydrogen.
How do you see The technical risks to scaling up and to making it cost competitive? And then on biofuels, any concerns you have perhaps on risks to feedstock availability needed to meet the regulated levels? Thank you.
Okay. Namita, First one, one take, then I think that Bernard can take the biofuel.
So as far as retraining Professionals is concerned, one of the words that you used, Irene, was completely retraining. And I think that that's something that it's I wouldn't use the word completely retraining. I think we have a couple of things going on. We have to we are in the process of identifying a number of skills that we know that can be used in other businesses and that was the purpose A little bit of my 3rd slide. In the trajectory that has been shown by my colleagues, we're not reducing our activities in oil and gas.
And so there is still a significant amount of work for the colleagues who have those kinds of skills. And as far as our new businesses are concerned, what we have also Looked at is selectively recruiting where we know that we need either to go fast and we will not be able to reskill immediately or where we don't have those competencies at all. But our plan in terms of reskilling and upskilling is to use the time that we have in terms of the trajectory of the businesses to identify gradually what we need to do and to develop that over the next 5 year period to make sure that we give the right opportunities for reskilling. I'd say the biggest should be for a large part quite easily transferable into a large part of our new businesses. And the fact of keeping people together And keeping them informed and exposing them to new businesses gives them a great deal of confidence that they have the wherewithal to transfer their Gills to some of our new businesses.
Yes. I think, honestly, De Behar, one thing, there is another idea, which is that As Renewables and Electricity business was growing, we had a choice either to create a new, I would say, manufacturing division within GRP or not to do that, but to propose to integrate, to use part of the competencies to grow it Gradually, I would say. So there are a lot of synergies in process, technologists and all these guys. It's easy to use them immediately without risk killing them. Of course, when it will come to geologists one day, But we still need we know we have some reservoirs to manage.
We continue to explore. So we need people. Having said that, it's also true, you probably know that we have proposed to some of our colleagues, we have made what we thought of voluntary redundancy plan, Where one of 1100 people have elected, and it's clear that there are some Part of the company like geology, where we don't think we will recruit a lot because we prefer to adapt itself. But again, Your question is right, but it's not so massive because this is the interest for me to preempt to begin early stage so that we can adapt gradually and prepare the future not to be in the world and suddenly to say we have a big problem. It's not the way it's not in the DNA of Total Energies, I would say.
To prefer to make it gradually and to anticipate and to put on board the people. Biofuels obstacle to feedstock for biofuels, that's a good question, Bernard.
So there is of course more and more debate about the so called 1st generation feedstock, which competes with for the application, so the market clearly is moving more and more towards waste and residue, which are used cooking oil or animal fat. So that's the type of resources everybody is looking for. So there is a competition for that type of feedstock, it's clear. The way you mitigate the risk is, of course, to be as flexible as possible to be able to process as many types of waste and residues as And this is what we are in the process of doing because we learned as we entered the market a couple of years ago. We also leverage our trading arm, which which is able to source more and more alternative feedstock.
But it's true that there is a competition for waste and residues. And As we said yesterday, if you remember, we see biofuels more as an intermediary step between oil and tomorrow, synthetic fuels. So, efuels is more towards the new 2,030. By the way, you saw that in Feed for 55 package, the European Commission set The sub mandate for efuels, 0.7% off of my head starting in 2,030. So there will be, I would say, 1st step to this gap that will be around biofuels and Western Residues and then we will come to the efuels.
Well, your question is good, Elena. I think there is a limitation somewhere, but we'll see. And as the policymakers may be There will be, in particular, in contradiction in Europe between no one gs and the increasing targets for biofuels because there is a Question of Western residues and the 2 gs, as you know, the 2 gs technologies for the time being are quite immature, in fact. So We are so this one may be issues. Hydrogen complexity, I think there is a lot of things to say.
The most complex part is that it's expensive, that's clear. So hydrogen is a matter of being able to combine on one side Very low cost source of energy, electricity. So it's a matter of optimizing your Wind and solar production or your nuclear production when you are French I think you are in France. Plus then you have the electrolyzer farm, I would say. Stefan, do you have any hints that you want to say some specific points on the technical risk?
The question for me will be, if we want to scale down the cost, we need to find the customers, which will be able to scale up the project in order to make mass Production. But Stephane?
No, as you mentioned Patrick, the first thing is that you have to scale up the electrolyzer capacity because today you are talking about Tens of Megawatt and a simple project as the one we plan on refining to supply green hydrogen for refining, you are talking 200 Megawatt. That's one order of magnitude. And if you want really want to be at scale, you will need to multiply that by 10. So first, a challenge on electrolyzer. 2nd, as you say, a challenge on the integration between renewable on one side and and electrolyzer on the other side.
You have to work on the good fit because on one side you have something intermittent. And on the other side, you want your electrolyzer to produce 100% of the time? And the last question will be if you end up with land constraint notably in Europe, That means that green hydrogen will have to come from abroad and be produced elsewhere and then You have to work on the logistic cost and chain. And so that's a lot of challenge to be addressed to imagine Full hydrogen industry at scale.
Thank you very much.
Okay. Next question?
Thank you. And the next question comes from the line of Martin Ratz from Morgan Stanley. Please ask your question.
Yes. Hi, hello. Can I first just say that I feel like you've presented a pretty broad set of plans? I mean, you covered all the grounds and given us a little To digest, but it's been pretty comprehensive. I wanted to ask you 2 things.
First of all, it seems to me that expanding into renewables, the biofuels, the hydrogen, everything you talked about is mostly a matter of, well, project management, but perhaps less about technology and innovation. But I still wanted to ask the question. To do all of the things that you talked about today, does TOTAL have all the technologies in house? Or is there still a piece of innovation To be done and parts of the puzzle to be filled in from that perspective? And then secondly, I wanted to ask somewhat of an old school question about the upstream, but I was wondering if you can give us an update On Suriname and the pace of development that we can see could expect there?
And also how Suriname fits into the plan that you presented today?
Sure, Inam. I think we are appraising. As you will, we have, honestly, to be transparent, I have to be because we have made 5 discoveries, I think. For the time being, the appraisal of the discovery is a little challenging. So that means that, in fact, as you know, we are finding a lot of hydrocarbons, But we are looking to develop quickly a pool of oil and without too much gas because we will not flue as a gas obviously, But does not fit at all.
And flaring gas is not possible, but I think neither for total energies nor for Apache. And so that means that if we have tackle the gas, it makes the development more complex because you have to find an outlet for gas. And Suriname, Guiana are not big markets. So we'll that's me. So at this stage, we continue.
Well, we have we still have a lot of things to do. We have at least 2 or 3 very good exploration targets, and we continue to appraise In parallel, 1 rig is exploring, 1 rig is appraising. But for the time being, the pool of oil that we are looking to launch, I would say, A quick development is not identified even if there is there are 2 important, I would say, appraisal wells to come. 2nd, On the first one, which was about project, yes, you're right. Of course, it's a lot of project management.
Hydrogen, I don't see a lot. For me, Big massive hydrogen plant is not so different from a bigger LNG plant, in fact, I mean, fundamentally. There are some piece of innovation, which we do not manage. I mean, like Stefan said, the H2 tanker, I think there is a lot things to be done, if you want to look because of the liquefaction point, the temperature of liquefaction is much lower on energy. So you have some clearly some innovation to be done.
But project management is important. To be also, I just would like to clarify. We have a very clear plan on renewable solar and wind. We have opened over chapters, biogas, biofuels. Biofuels, I think we see a strong synergy between converting the refining plants and growing this business.
It's a way to adapt to convert. So biogas is new to us. And so we have acquired some assets. We look at it and we'll see. It does not mean that everything will grow in the conglomerate at the same pace.
And I consider that we have a clear vision of what we want to do in, for example, renewable power. I'm not too clear today about the size of the business we will develop in biogas or tomorrow in hydrogen. By the way, hydrogen today, We are clear, again, like we said, and about greening or decarbonizing the refining hydrogen, but it's a small point it is. On massive scale project, I think the idea we have is to identify 1 or 2 big large pilot projects, 1 blue hydrogen, 1 green hydrogen in order to be involved and then to learn and then to see what are the obstacles. So a lot of people are thinking to that a little theoretically.
My view or my experience is that let's embark in, let's find the conditions, and we have some ideas, maybe we'll come back to you This will have one later, but when we will have some, I would say, QRIDs on some projects with figures, we will come back to you to answer your questions. But don't consider we'll do everything. On hydrogen, obviously, we'll have to But to find some experts in electrolyzer, running electrolyzers, it's not so complex to find. I mean, there are plenty of nice companies to deliver that. Okay.
Thank you.
Thank you. The next question comes from the line of Christopher Kuplent from Bank of please ask your question.
Thank you very much for the presentation and for taking my questions. I have 3 and I promise they'll be quick. The first one, I just wonder, Patrick, whether you could talk about the dividend payout policy. You've rebranded the company And yet your excess free cash flow is paid out linked to Brent. Now we all appreciate that Brent is still an important cash flow driver.
But I wonder whether you thought there may be another payout ratio concept that you might include going forward to make it a bit more straightforward. Second question on the return on equity that you've highlighted has gone up. But I haven't noticed your cash flow outlook going up you be growing because of the numerator or because of denominator shrinking faster, thanks to your buybacks and higher expected payout levels? And my third question, really just a confirmation. I know your CapEx budget is always including a net of inorganics.
Do you think that will be a wash? Or do you plan for these inorganics to always be positive even after disposal proceeds? Thank you.
The last question, I have the answer. It's minus 1, I think. It's more we intend to sell a little more than what we divest, than what we require. So there is a plus and minus. It's a little negative in terms of so it's a wash in your language, I think.
But again, it's part also of, I would say the trajectory that we have on some assets, as it was mentioned in the old assets, Downstream mainly. The second question, I'll leave it to Jean Pierre. The ROE going up?
It's going to be in line with the Growing net income, of course, because the denominator will remain more or less the same.
So you have the explanation. And dividend payout policy, I did not understand at all the question because I don't think we have never expressed A policy of in terms of dividend linked to Brent. I mean, since I am CEO, I'm even sure I never expressed it. So I'm not sure the only thing we have done for the first time is to express the buyback as a level of the amount of buyback, the sharing of plus revenues beyond $60 per barrel. Obviously, it's because we consider that these upside It's morning for sure to hydrocarbon business, but we have some upside rather than to the other businesses.
So I know where you want me to go with expressing shareholder return payout policy and percentage of, I don't know, of cash flows or results. We didn't, but it's not linked to brands. So it's not the way we manage it. That's all what I can tell you.
Okay. Thank you, Patrick. And Jean Pierre, just a quick confirmation. So your net income expectations have gone up, but your cash flow Expectations into 2025 has largely remained the same compared to last year, yes. So cash conversion is going down from net income to cash flow.
So you have more or less the same trends regarding CFFO and the net income. So that explains the Chris,
I suggest, Chris, that you will call Ladislas and his team, and they will answer more specifically to your question.
Thank
you very much.
Thank you. The next question Comes from the line of Lucas Hermann from Exane. Please ask your question.
Thanks very much. And Patrick, thanks again for a very thorough presentation. A couple, if I might, on gas. Firstly, you've given us an indication of the sensitivity of the overall portfolio Changes in gas prices, you've used $5.6.5 If I look at the forward curve for either NBP or JKM today, and I appreciate it's the forward curve, but let's just say we use that. Current price is around $18 or sort of $13 higher than the assumptions you made.
And if I apply that to your sensitivity, it would say that cash flow next year would be broadly $7,000,000,000 higher Then the numbers that you've guided us towards or towards in this presentation before, why is that calculation not going to work, Leaving aside abstract comments. And secondly, just staying with gas. Do you want to talk at all about markets, what you're seeing, Particularly given the robust view you've got on LNG growth, which is, I would say, pretty hard to reconcile with prices standing where they are today. Richard, your thoughts on the gas market globally, Patrick, and how you see things developing? Thanks very much.
I don't understand your math because I think we gave a sensitivity around $250,000,000 $300,000,000 Per million BTU, if I'm correct, I'm sure. So times 13, it would be 3,000,000,000 not 7. Don't know where the 7 is coming from. By the way, it's a little more complex than that. And Stephane can explain you that in fact, When you manage your gas portfolio, you are hedging part of it.
So it's not so Stephane, can you explain it please?
Yes. As I mentioned in the sensitivity, you had 2 packages and you had the one that was linked to the production asset and which which is increasing with the density mentioned and which will be linked to the price nature. And then you have the trading portfolio aspect, which is age forward. So it's clear that if you want to see the sensitivity, that means that all the forward curve have to move in parallel with the spot price, which we see in the current market is not the case because the spot Price is much higher than the forward curve. That's 1.
And then you will materialize that sensitivity when you are going to roll over your So to
be clear and to clarify for everybody because I part of the sensitivity is linked purely To the production, either for Norway, U. K, the fact that we have some pipe gas, which is sold at index price. So obviously, this production is following the curve, okay? We have also part of our LNG portfolio, which is a minor part. It's things like 10%, 15% of our LNG sales, which are linked to this index.
So that represents Half of the sensitivity, so it's a $250,000,000 as mentioned, dollars $550,000,000 this year, next year. It's increasing a little because as we are developing The LNG portfolio in the future, this part will increase. That's it's sort of dynamic. Then there is another part, which is the one which is mentioned by Stephane, which is not only so linked, an absolute value of the increase. It's more the relative values between Henry Hub, The Asia and Europe.
So that's a game on which because we have different positions, and we in fact, we are short and we have been longer on the other one, We can make some optimization, if I understood correctly. So that's why your math does not you cannot just multiply like that Because you have some time effect and some hedging effects. The second one, growth in the global market. Well, I'm 2 comments. 1st, what I observe is that for the next for the last 7 years now in a row, we have more than 10% growth.
Even last year, by the way, when the crisis was there, we had a growth which was not far, by the way. 8, I think, no? But we had strong growth. So I know that everybody Tried to plan. Even my economists and my market analysts, they told me, oh, it's 4% to 5% for the future.
This time, we wrote 5% to 7% because We are always behind. And I think it's on one of the issue. Of course, there are some key countries in front of us. One of them is obviously China. And I was looking carefully, by the way, to the demand which has been announced by Sinopec, CNPC, the increase of Chinese demand for the next 20 years.
They plan an average of 3.5% per year on 20 years. So and domestic production for the time being does not grow a lot. So you still have of course, there is a risk that this could be honestly damaged with high prices. As A strong LNG player. I'm afraid I'm not very much I'm not very happy with what is happening because when you discuss and we are investing in India, example, in LNG, obviously, you don't have a market in India for $15 or $20 LNG.
And that could even We damage the confidence of people to invest for having for using LNG. I think to Pakistan, I think by the way, these are the first countries which reacted very quickly. So that could because beyond China, we need to look to where the Growth for LNG will come from these are the countries. So these countries, obviously, will require probably and I can that the discussion with customers in these countries might become more complex, like, for example, the customers in the bunkering fuel. When people came to shift from fuel oil to LNG and suddenly you see the price going up, that could damage this initiative with, I would say emerging demand.
So that's an element which we'll have to observe. But So for me, yes, there is no I mean by the way, I would like to make another comment, Lucas. If you look carefully to the slides we were Providing to you in 2018, 2019, we were announcing in all sides, you can look at it, all the market was above too much supply by 2025, and we were putting a slide each year where we are showing, but maybe there will be too much in 'twenty five, but not enough '22, 'twenty three. So there is no surprise to me in what is happening today, unfortunately. I mean, 'twenty one is 1 year earlier than expected by us because of the hike of the demand.
But I think it's quite it's easy in fact to look. And 25% is no more 25% because the COVID last year postponed some of the projects. So it's more 26%, 27%. The reality is that as we And the more I observe the market, we are LNG is benefiting and natural gas is one of the Energy transition because we need at the end, even in Europe, look, why we need to explain that. I'm looking to some Comments in newspapers by policymakers, we are quite astonishing.
They do not understand why the price in electricity in Europe is going up. It's just because when you have less wind and less renewables, you need to activate some, what we call, piloted piloted piloted piloted piloted
Manageable.
Manageable source of electricity, which are gas fired power plants. And these ones, obviously, the market price will go to the marginal Cost of producing electricity. So yes, it's true that today the electricity in Europe is driven by The gas fired power plant, because we have to activate it and you have the gas price plus the CO2 price, it increased the cost of electricity. So that's point on LNG growth. So my view is that, yes, there is a robust growth, But let's be careful.
It could be damaged if price remain high.
Thank you, Patrick.
Thank you. The next question comes from the line of Bertrand Hodee from Kepler Cheuvreux. Please ask your question.
Yes. Thank you for the very detailed presentation and some quite inspiring topic, especially on the Just transition. I have two questions, if I may. 1 on natural gas sensitivity coming back on Luca's A question and the second one on shareholder return. So on natural gas sensitivity, So I clearly understand the upstream part.
It's €350,000,000 to €300,000,000 As for the GKM part Or I would say your spot LNG exposure, in a way, we are unable to know your position of hedging in advance. So My question is very simple. I have $7 next year in NBP and 7 point something in GKM or a bit more. If I were to rise by $10 MB2 next year assumption, ballpark is plus €3,000,000,000 okay? And it's not plus €6,000,000,000 Because we have no idea of your trading position except if you have total if you have 100%, I would say of your excess supply contracted that will be exposed to spot.
That is my favorite. The second question is, the buyback rules that you set for 2021 was, In my view, very, very clever. How should we understand 2022. I know you don't want to commit on dividend and this I understand. But is that buyback rule of 40% of excess cash flow at 60%, which is a comfortable environment for TotalEnergies, Can could be applied again in 2022?
Thank you.
The second question is easy. The answer is yes. I think I don't think my so cash allocation table is not dated. We put the rule and we just said Q4 'twenty one is 1.5. And so Second question, the answer is yes.
We intend to continue. And if we face this type of environment, I think we think normal, but We gave we shared the surplus with our shareholders. I think they have been patient. It's part of the model, so I have no problem. So answer is that On the dividend, I just told you that each cash flow growth each cash flow is growing.
Dividend It will be supported. That's all we will be supported by cash flow growth, long term cash flow growth. So the dividend will not follow. Let's be clear. It's not because you have $70 but certainly the dividend will be high.
But what we will analyze, like we've done this year, what is the cash flow which is Linked to $50 to $50 environment to $60 to $60 environment because we have higher growth production because we have new projects coming on stream. You have an increase of the underlying cash flow growth, and this one will be reflected in the dividend. And I think we gave you many indications today and then up to you to guess And then up to the Board, by the way, to decide. And in the same way that last year, So Board of Total Energies did not overreact in the Q2 Q3. I think today, it will not overreact, Obviously, by announcing a new policy just because we look to the screen, we see $80 per barrel.
So I think what the message is very clear. We are on a trajectory that we will continue to increase the sustainable long term cash flow, and that will be translated into growth of our dividend in future years. Buyback, you have the rule which has been proposed. Net gas Sensitivity. I mean, if you have $7 you multiply 7 by $2.50 and did you have the answer?
You have $10 You want to have $10
Instead of $7, so free difference of 3.
3 by $300 makes more or less 1,000,000,000
My question was should we be conservative enough to just apply Your sensitivity given on NBP, which is very straightforward, it's based on your upstream gas production. As for the sensitivity on GKM that you've provided as well, this is more, I would say a question mark because we don't know your hedging position and your real spot exposure, even if we know that your spot LNG exposure is growing. So on paper, you should benefit from that. But It's difficult to model in terms of timing.
So take the surplus and guess that it's positive. That, I mean, let me clear. Today, we gave you everything. Again, from the assets, either the pipe gas in Europe plus The share of the LNG, which is linked to index with sensitivity, take if you want 300, Some people will need $278,000,000 or no, just a figure, nothing. Let's take $300,000,000 okay?
So you have it. Then you will have some extra revenues coming from this capacity to arbitrage. But to obtain a figure from my traders, I I can tell you I will send you in Geneva and you are better than me. So it's what I can tell you, they prefer to Now, but again, it's clear that this type of environment, as Stephane explained you, is quite positive. And I can tell you that you will see in the 3rd quarter results already some positive impacts, Not on the asset side because the asset side is quite clear and we gave you some hints.
But on the trading side, I think that gas renewables and power results for Q3 will be above the historic records that we have observed before. I'm sure about it. It's just now a challenge for Stephane and for the traders.
Many thanks, Patrick. Many thanks.
Thank you. The next question comes from the line of Paul Cheng from Scotiabank. Please ask your question.
Thank you. Good afternoon. Two quick questions and then a request. The first question, Patrick, Have you and the Board ever consider using variable dividend instead of buyback as the alternative vehicle to distribute the excess cash given over the past 12, 18 months in the U. S, a lot of the investor has been warming up to the variable dividend.
So want to see that What do you guys think it may fit into Total's model? Secondly, you have indicate that by 2,030, you're going to reduce your refining capacity to match the production oil production. So do you have a percentage that how much of the debt extra capacity that you're going to reduce It's going to be converted into biorefinery and that and what percentage is going to be shut down And then what percentage is for divestment? And then the request, given you're going to spend about $3,000,000,000 a year In the Renewable Electricity business, and you also gave in your presentation a very Clear our financial objective by 2,030, have the management consider To break out here, renewable and electricity as a stand alone segment to be report. And by doing so that I think that will substantially increase the probability Total, we'll be able to get credit for that operation because that the people can actually see quarter in, quarter out what is the result.
Thank you.
Well, the last question, I understand it. I think we have already every quarter, we disclose a lot of figures. At this stage, same management, I prefer to keep it as it is, but I take the question and I'm not sure we will not wait 2025 to make what you want. It's a matter of growing. I want that to be sizable enough and stable enough, but you have I mean, honestly, we are giving a lot of data Quarter over quarter, and so people who want to evaluate the value of this portfolio have a lot of information.
But So today is premature, but I will keep that in mind. The first question, no, honestly, All that is very fashionable on the other side of the Atlantic. Sometimes it's buybacks, sometimes it's variable dividend. In Europe, we are a little late to think to that. Honestly, no.
Honestly, I mean, we never consider that as a way. We don't want I mean, I don't see a big difference, but today, we've honestly, no, I see a difference. From a pure company point of view, with the level of the share today, so buyback is more efficient. The share is quite from our point of view, the share is quite cheap, so it's better to make buyback today. The third the second question, we cannot enter into all these details.
I mean, If we have to I mean, the model, which is to, as we said, to Transforms of refineries and biorefineries works well. Then as we answered to Irene, it's a matter of finding the feedstocks And the markets, I would say, no? Bernard?
I mean, the model we have FELOT so far has been to convert not to shut down because it's part also of our social responsibility to reposition the assets we have So, new markets, so it's more converting than shutting down. After as we said, we have on the slide we showed on page 28, the few years were 2019. And in the meantime, we have also be active on Grand 3 and Lindsay, which are an additional 200,000 barrels a day. So you mean we are moving into the right direction from that standpoint, but it's more the other thing, then just shutting down and with no repositioning for our people and the assets.
All right. Thank you.
Thank you. The next question comes from the line of James Hubbard from Deutsche Bank. Please Ask the question.
Hi, thank you. Just one question. That's easy. And it's I listened in yesterday, of course, and the momentum scenario makes perfect sense to me, and it clearly drives your strategy. You can draw a line From the conclusions of that to today's presentation.
And in my view, it's probably right. It's probably, At this point in time, the most pragmatic view to take given the NDCs we have and the laws as they are around the world, especially Europe and U. S, But things change. And in case lawmakers do get their act together in the coming few years and enact regulations that cause something close to your rupture scenario or even maybe not net 0,250, maybe that's out of reach, but something between rupture and net 0,250. It seems to me the downsides for a large oil company talking about 2.4 degrees C and flat oil production for another 9 years are Significant.
I'm not thinking about stranded assets. I'm thinking about from society and from investors. So I'm wondering, To what extent, as you prepared this strategy, did you contemplate when it comes to oil production at least, thinking about some scenario Towards rupture rather than momentum and hence talking about an explicit targeted decline in oil production by the end of the decade rather than this It's a flat scenario you'd come up with. Thank you.
But first, The question will be in case you have an acceleration to rupture, again, at which pace We are not Saudi Arabia. I would love to be, but we are not I mean, it's a question we don't have very long reserves in front of us. The average duration of the reserves of Total is 20 years. So this is the answer. I have 20 years in front of me.
I don't have 40 years. So even when we invest in projects by 2,040, if we don't we will it will decline easily. So and the second answer is that, again, we are very strict on the way we invest in oil is these low cost barrels. That means that even if I you go, you have a what I'm sure is that you will continue to Folio is positioned on low cost producer. I think there was an important figure, which is this $5 per barrel of OpEx on which we are keen to maintain and the way we invest Less than $20 per barrel, that means that the portfolio of oil we love will remain, I would say, producible and not stranded.
So By I mean, I think the strategy, I mean, the way we manage the oil investments Some people will tell us you don't invest enough. In case you have more demand, then you will not benefit of it. But on the other case, if you have an acceleration of the lower demand, we could be stranded. So my view is that we try, and that's the most complex part of the equation we have to find the to tune I mean, Find the right balance between continuing to serve our customers and on hand, on the other side, preparing various options. What is true is that when we make some choices in the downstream to reduce the footprint and not to benefit from potentially some market because we decide not to expand as we were planning before, then we lose some opportunities.
In terms of value, it's not the same amount of money. So I'm not afraid with the way we pilot The choice in the new investments, but rupture would happen contrary to if not momentum. We did not express a choice. We just wanted through the presentation to show and by the way, momentum even to happen, Everybody has to be sure that they will execute and this is. So I mean, we are I think we are our strategy on oil is resilient to both scenarios, again, because we as long as we stay stringent on the way we select the old projects.
Okay. Could I ask a follow-up, please?
Yes, yes. Go on.
Yes, sorry.
I guess, putting it another way, if the market derates oil production to, say, 3x forward earnings at some point in the next few years. Would you consider what oil production you actually want in your mix in that
No.
Okay. Thank you.
Thank you. And the final question Comes from the line of Jason Gabelman from Cowen. Please ask your question.
Yes. Thanks for all the materials today. It's Very helpful. I wanted to ask one question on the E and P business and one on renewables. On E and P, if I go to, I think it's Slide 5 or 6, one of the first slides.
It does look like production is moving modestly higher from Slide 6. So it looks like production is moving modestly higher from 2019 to 2025. And I would imagine That's coming online as higher margin because it's lower cost versus the legacy production That's facing natural decline. So I was anticipating some of the cash flow growth from now to 2025 would be from that E and P business, but that doesn't seem to be the case. And I'm wondering if I'm misinterpreting something or if you're layering in some divestments Or if something else is going on?
And then the second question on the Renewable Power business. In February, you provided Some detail on the trends in your PPA contracts and it showed Pressure in those prices as would be expected, just given all the investments more or sorry, declining values in those PPAs. Can you just update us On where those PPA contracts have trended since then? And if they're still moving lower, How do you reconcile that with the increase in cash flow guidance for that business Despite keeping the power generation outlook flat? Thanks.
The PPA prices were declining because the costs are declining. In fact, what you have in our portfolio, you have historic PPAs because we inherited from Quadrant and others when we acquired these companies From historic PPAs, but at that time, the cost of the project was also much higher. So in fact, the question is not absolute PPA price, Is the margin the difference between the PPA price and your cost of the projects? So from this perspective, but by the way, these Elements will be updated. I don't know if we do it that every quarter, every year.
We do it every quarter. So I think the to answer to your question, Jason, I think Bertrand and Alice Sainz and his team will send you the figures because it's updated regularly. We have nothing too high. We think it's good for the market. But honestly, there is no inconsistency and the trend we did not see an acceleration as a decrease in PPAs.
Today, in fact, the reality in the renewable market, you have an inflation. So I will be interested to observe what will be the impact On the inflation, on the future PPAs, at which level people will bid, it might go in the reverse way. No, but it's through E and P. As I said, among the $5,000,000,000 I mentioned, there was $1,000,000,000 coming from E and P. It's also true that I said I answered So to a question, but we are acquiring, we are divesting.
And so part of it will come from E and P, it's clear. So we will continue to aggregate, I would say, or to be selective in the portfolio, in line with the strategy. So you have a natural decline from some oil fields. You will have some also some divestments, we will be down. So at the end of the day, part of the increase is coming from E and P, around €1,000,000,000 But part of that part of the increase coming from new projects, yes, you're right, €3,000,000,000 Easy raise because you have to fight against natural decline, and we have also plan In our the way we think that we might divest some assets.
I understand this is the last question.
Yes, it was. It was the final question for today.
And so thank you very much to all of you. I hope thank you for your attendance. It was a long session. Many I know that the presentation was quite Extasted, but I think it was also the opportunity for us to continue to explain What Total Energy wants to become? I think I didn't have many questions on sustainability part, but I'm sure it will feed a lot of discussion we will have the coming weeks with investors as we have this as we will go around.
Thank you again for your attendance. Thank you for the quality of the questions. And again, thank you to all the team for having put all that together. And thank you to my colleagues of the executive committee for their presentation today. And I hope to see you, all of you, very soon.
Thank you. Goodbye.