(AOF) – In connection with the sale by TotalEnergies to Suncor Energy Inc. of all the shares of TotalEnergies EP Canada Ltd, announced on April 27, 2023, ConocoPhillips notified TotalEnergies on May 26, 2023 of the exercise of its pre-emption for the acquisition of the 50% interest in the Surmont asset held by TotalEnergies EP Canada Ltd. TotalEnergies will receive from ConocoPhillips a cash payment at closing of C$4.03 billion (approximately US$3 billion).
TotalEnergies will also receive from ConocoPhillips additional payments of up to a maximum of C$440 million (approximately US$325 million) under certain conditions, for its unoperated 50% interest in the Surmont asset and certain associated logistics obligations. .
The closing of this transaction, subject to obtaining the required authorizations from the public authorities, is expected in the third quarter of 2023.
As previously announced, the transaction with Suncor on all of TEPCA’s shares was subject to the non-exercise of the right of first refusal by its partner ConocoPhillips.
Following the exercise by ConocoPhillips of its right of pre-emption, TotalEnergies is open to finalizing a transaction with Suncor relating to the sale of the shares of TEPCA, including the interest in Fort Hills, at the value agreed in the agreement of initial sale.
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Key points
– Integrated energy group, 3rd world oil company, 2nd gas company and world number in solar energy with Sun Power;
– Activity of $141 billion organized into 4 branches: 45% for marketing & services (distribution networks, etc.), 40% in refining & chemicals, 11% in renewables, gas and electricity, then exploration- production ;
– Economic model of transformation in ten years into a multi-energy group, producer of oil & LNG (liquefied natural gas), renewable energies & electricity and hydrogen & biomass;
– Open capital (6.4% held by employees), the 12-member Board of Directors being chaired by Patrick Pouyanné, also Chief Executive Officer;
– Solid balance sheet: debt ratio of 7% and return on equity of 32%.
Challenges
– 2020-2030 strategy + energy, – emissions:
– change in the distribution of sales -30% petroleum products, 50% gas, 15% electricity and 5% biomass and hydrogen,
– discipline in investments -$13 to $15 billion per year over 2022-2025, of which 50% allocated to renewables and electricity and 50% to natural gas;
– Innovation strategy led by One Tech, endowed with $850 million for 18 R&D centers:
– 3 hubs: industrial, development and support,
– 5 programs: production, CO2 and sustainability, operational efficiency of upstream, downstream & polymers, fuel and lubricants,
– a digital factory to generate $1.5 billion in savings by 2025;
– Environmental Strategy 2050:
– carbon neutrality for the group’s operations and products sold in Europe, reduction of 60% or more in the carbon intensity of products used outside Europe;
– 4 axes: growth in the gas value chains (natural, biogas and hydrogen), in low-carbon electricity (annual budget of $1.5 to 2 billion), in low breakeven oil, in biofuels , in activities contributing to carbon neutrality (natural wells, forests, etc.),
– solar and renewables: production capacity of 25 Gw by 2025,
– carbon fund endowed with $400 million to be invested by 2025;
– In renewables & electricity, capacity portfolio of 35 GW by 2025, including +20 GW secured by long-term purchase contracts;
– Acceleration of the energy transition with equity investments in 2 Qatari and Indian projects (solar, LNG and hydrogen) and in Clearway, 5th American in renewables, 29% of industrial investments going to low-carbon energies;
– Industrial excellence in oil production with a breakeven point of -20 $/b, with numerous projects in progress (Nigeria) and 4 discoveries (Brazil, Cyprus, Namidia and Surinam).
Challenges
– Sensitivity to the price of a barrel of oil and to the dollar, a variation of $0.1 having an impact of $100 million on operating profit, a variation of $10 per barrel having an impact of $2.7 billion;
– Russia-Ukraine war: impairment of €4.1 billion on the stake in the Russian company Novatek;
– Prospects for 2023 of a 2% increase in hydrocarbon production, driven by the start-up of the Omani, Brazilian and Azerbaijani fields, by advances in LNG (2 new terminals in Europe) and by a 30% increase in the production of renewable electricity, all supported by $16 to $18 billion in investments;
– Total dividend for 2022 of €2.81, i.e. a payment of €0.74 for the last installment, forecast of 3 installments in 2023 for an amount of €0.74 and confirmation of share buybacks for $2 billion at 1st quarter, triggered according to the formula 40% of the cash flow generated by hydrocarbon prices above $60 per barrel.
Find out more about the “oil and para-petroleum” sector
Biogas to green activities
Obtained through the decomposition of waste, it falls into the category of green energy. It is part of the strategy of many countries, particularly in Europe, to reduce their dependence on hydrocarbon imports. The oil groups have strong ambitions in the field, as revealed by two recent operations. The British BP took over the American Archaea Energy for 4.1 billion dollars. Then, the Anglo-Dutch, Shell, announced the acquisition of the Danish Nature Energy for 2 billion dollars. These transactions show high valuation levels, underlining the strong potential of the sector. TotalEnergies had already taken a stake in the American Clean Energy Fuels Corp in 2018, of which it now holds 19%. It recently joined forces with Veolia to recover biomethane from waste treatment facilities.