TotalEnergies Electricity and Gaz France propose measures in favor of VSEs – 01/06/2023, 16:08

(AOF) – With the observed drop in electricity prices at the beginning of 2023, TotalEnergies Electricity and Gaz France will publish on Monday an update of the Horizon Electricity price list, which will take into account the latest drop in electricity prices, to 320 euros. excluding tax per megawatt hour (MWh). In addition, TotalEnergies Electricity and Gaz France are ready to start tariff changes with VSEs (companies with an annual turnover or balance sheet of less than 2 million euros and less than 10 employees) who signed the Horizon agreement between August 1 and November 30, 2022. .

TotalEnergies Electricity and Gaz France propose to reduce these contracts to an average annual price of €320 per MWh including VAT, taking into account the amortization mechanism introduced by public authorities in favor of VSEs.

Hence, these VSEs will benefit from a rate equivalent to the Horizon rate offered from January 2023. The relevant VSEs who request it will benefit from these new tariffs with retroactive effect from the date of implementation of the contracts.

In order to implement these proposals, TotalEnergies Electricity and Gaz France are ready to engage in a constructive dialogue with public authorities to identify mechanisms that allow them to respond to the requests of both VSEs and integrated or non-integrated electricity suppliers. their activity on production and distribution of electricity under economically favorable conditions.

AOF – DETAILS

Key points

– Integrated energy group, world number 3 in solar energy with 3rd world oil company, 2nd gas company and Sun Power;

– USD 141 billion activity is organized in 4 branches: 45% marketing and services (distribution networks, etc.), 40% processing and chemicals, 11% renewable energy, gas and electricity, then exploration and production;

– An economic model of becoming a multi-energy group producing oil and LNG (liquefied natural gas), renewable energy, electricity, hydrogen and biomass within ten years;

– Open capital (6.4% owned by employees), 12-member Board of Directors is also chaired by Chief Executive Officer Patrick Pouyanne;

– On a solid balance sheet, the debt ratio of 4% at the end of September is well below the target of 20%.

Challenges

– 2020-2030 strategy + energy, – emissions:

– 30% increase in energy production, 50% renewable electricity, 50% LNG, the share of oil decreases from 55% to 30%,

– change in distribution of sales – 30% oil products, 50% gas, 15% electricity and 5% biomass and hydrogen;

– discipline in investments – 13-15 billion dollars per year during 2022-2025, 50% of which is allocated to renewable energy and electricity, and 50% to natural gas;

– Innovation strategy led by One Tech, $850 million allocated for 18 R&D centers:

– 3 centers: industry, development and support,

– 5 programs: production, CO2 and sustainability, upstream, downstream and operational efficiency of polymers, fuels and lubricants,

– Digital factory that will save 1.5 billion dollars by 2025;

– Environmental Strategy 2050:

– carbon neutrality for the group’s operations and products sold in Europe, a 60% or more reduction in the carbon intensity of products used outside Europe;

– 4 axes: growth in gas value chains (natural, biogas and hydrogen), low carbon electricity (annual budget 1.5-2 billion dollars), low harmful oil, biofuels, activities contributing to carbon neutrality (natural wells), forests and etc.),

– solar and renewable energy: production capacity 25 Gw by 2025,

– Carbon fund invested in the amount of USD 400 million until 2025;

– A capacity portfolio of 35 GW by 2025, including +20 GW secured by long-term purchase agreements, in renewable energy and electricity;

– Acceleration of energy transition with equity investments in 2 Qatari and Indian projects (solar energy, LNG and hydrogen) and 5th American Clearway in the field of renewable energy…;

– Industrial excellence in oil production with a break-even point of -20 $/b with numerous projects ongoing (Nigeria) or launched (discovery in Angola, Argentina and Cyprus).

Challenges

– Sensitivity to the price of a barrel of oil and the dollar, an increase of 10 dollars per barrel had a 2.7 billion dollar impact on operating profit; A $10 drop affected him by $100 million;

– geopolitical risks in Africa (30% of the group’s production);

– Russia-Ukraine war: provision of 10.7 billion euros for investments in Russia (Arctic LNG project, Novatek, Yamal and Terneftegaz);

– From 16 GW for 2022 due to higher selling prices, renewables and special investments of $3.5 after a 69% increase in net income and free cash flow of $24.1 billion at the end of September 2022 prospects for higher hydrocarbon production with much electricity. billion (a quarter of total investments), downstream contribution of 6 billion euros to free cash flow (petrochemicals, biofuels and electric mobility);

– 3rd interim dividend for 2022, EUR 0.69 paid in April, exceptional dividend of EUR 1 paid in December and maintenance of share buyback of USD 2 billion in Q3, 40% of cash flow generated by hydrocarbon prices constitutes above 60 dollars per barrel.

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