TotalEnergies empowering oil & gas and renewables arsenal with up to $90 billion by 2030 as LNG remains crown jewel of its multi-energy mission

France’s energy giant TotalEnergies is continuing to push forward its multi-energy strategy as it works on balancing the transition to low-carbon and green sources of supply and the attempts to fortify energy security scales. To this end, the French player has earmarked $80-$90 billion over the next five years to lift this two-pillar transition strategy to new heights, as it pursues oil and gas with LNG at its heart on one side and electricity growth on the other. The firm will pour around 27.8% or $25 billion of the total planned investment from 2025 to 2030 on low-carbon energies.

After setting its cap on diversifying its portfolio, slashing greenhouse gas (GHG) emissions footprint, and achieving low-carbon and net-zero aspirations, TotalEnergies has been actively working on its multi-energy strategy that includes oil, gas, and LNG as a centerpiece along with electricity, as it took steps to secure more clean and renewable energy to get “more energy, less emissions, more free cash-flow,” and advance what it describes as its “balanced and profitable” multi-energy strategy.

As a result of this quest, the firm expects to see energy – oil, gas, electricity, and bioenergy – production growth of 4% per year during 2024-2030 along with a $10 billion underlying free cash flow growth. Simultaneously, the company expects to drastically lower the emissions from its operations by 40% for Scope 1 and 2 net in 2030 compared to the 2015 baseline and 80% on methane in 2030 from a 2020 baseline.

Thanks to this transition strategy, the French player’s average carbon content of energy sales is anticipated to be 25% lower in 2030 compared to 2015. To turn its plans into reality, TotalEnergies has confirmed net investments between $16 billion and $18 billion per year or $80-90 billion in total during 2025-2030, of which around $5 billion a year or $25 billion in total will be dedicated to low-carbon energies.

While explaining that it retains the flexibility to reduce its net investments by $2 billion in case of a sharp drop in prices, the French energy giant explained: “Thanks to this clear and disciplined investment policy and the perspective for +$10 billion of free cash flow growth by 2030 (versus 2024 at same price deck), the Board of Directors has confirmed a shareholder return of over 40% of cash flow through cycles.”

Furthermore, TotalEnergies has decided to execute $8 billion in share buybacks, corresponding to approximately 5% of its capital with anticipated shareholder return above 45% of 2024 cash flow. The firm intends to continue share buybacks of $2 billion per quarter next year, assuming reasonable market conditions, and increase the dividend per share by at least 5% based on the 2024 share buybacks.

According to TotalEnergies, its growth and profitability perspectives have been de-risked in several ways since its last outlook in September 2023, including oil and gas production average growth of around 3% per year to 2030, led by LNG, thanks to the launch of six major projects in 2024 – two in Brazil and one in Suriname, Angola, Oman, and Nigeria, respectively.

The French firm is adamant that these de-risk, high-grade, and extend guidance from 2028 to 2030 while over the next two years, in 2025 and 2026, growth is estimated to exceed 3% per year due to the start-up of several high-margin projects the U.S. Gulf of Mexico (GoM), Brazil, Iraq, Uganda, Argentina, Malaysia, and Qatar, which are accretive in net income per barrel and cash-flow per barrel.

The company claims that it also de-risked its LNG exposure in 2024 to spot gas prices by signing long-term LNG sales contracts, mainly indexed on Brent, and developing its upstream gas production in the U.S. through two low-cost acquisitions.

Since it plans to keep developing projects with low liquefaction costs, deemed as top-tier in the merit curve, the French player is set on limiting exposure to spot gas prices by transforming Henry Hub LNG supply into oil-indexed sales in Asia and reducing exposure to Henry Hub purchases through upstream gas integration.

Moreover, TotalEnergies has confirmed that natural gas is at the core of its transition strategy, as an LNG growth of more than 50% over 2024-2030 and a gas-to-power integration is supporting its “profitable integrated power strategy to complement the intermittent renewables.” The company emphasizes the need to invest in “both oil & gas and low-carbon.”

Regarding the second pillar of its multi-energy strategy, the French giant reaffirms its dedication to growing electricity generation to reach more than 100 TWh in 2030, of which 70% will be renewable and 30% flexible-based, representing nearly 20% of the firm’s global energy production.

“By actively completing in 2024 its integrated model in key targeted deregulated markets, Integrated Power is making progress on its main levers to achieve at least 12% ROACE by 2028-2030 and will be net cash positive by 2028,” underlined TotalEnergies.

The firm intends to continue pursuing hydrocarbon exploration opportunities in Namibia while progressing its Venus development. The exploration drilling is slated to resume in the fourth quarter of 2024, targeting the Tamboti prospect north of the Venus discovery.

Additional prospectivity has also been identified south of Venus, as confirmed by the 2024 3D seismic program, putting potential wells, including South Africa licenses, on the company’s agenda for 2025. TotalEnergies plans to adapt structure costs to production in mature affiliates, such as those in the North Sea and West Africa to maintain competitive advantage on Opex in an inflationary environment.

Last but not least, TotalEnergies will continue with its portfolio optimization. While farm-downs in 2024 represent 1.4 GW, the firm will target a 2 GW per year farm-down run rate. The company has spotlighted Asia as the heart of energy markets’ growth, elaborating that the continent offers “major opportunities” for a global multi-energy company.

In light of this, the French player emphasizes the importance of reconciling the need for more energy and the commitment to fewer emissions in line with the growing population, higher living standards, and net-zero pledges made by the largest countries.

The company sees an opportunity for the growth of renewables to cover rising power demand with LNG playing the role of transition fuel to substitute coal in power generation. With approximately 70% of global LNG market demand coming from Asia, TotalEnergies expects the continent to be key in absorbing the coming supply wave.

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