PARIS, Sept. 23 – TotalEnergies, the French energy giant, is set to unveil the potential of its oil discoveries in Namibia during an upcoming investor day as the company continues to bank on oil and gas to bolster its profits while concurrently expanding its low-carbon business ventures.
Earlier this month, the group expressed its contemplation of a $9 billion oil and gas project in Suriname. As a result, industry analysts are now eagerly anticipating more detailed insights into TotalEnergies’ recent exploration endeavours off the coast of Namibia. Currently devoid of oil and gas output, Namibia possesses the potential to rank among the top 15 global oil producers by 2035.
Kepler Cheuvreux analyst Bertrand Hodée speculated, “Namibia could become the largest ever deep-offshore discovery for TotalEnergies, potentially surpassing Block 17 in Angola—the last ‘golden’ block of TotalEnergies.” Hodée estimated that the two new blocks in Namibia, where Shell has also announced offshore oil and gas discoveries, could potentially harbour 4 billion barrels of reserves. This would elevate the total at the Venus field to a staggering 12 billion barrels, translating into a potential value of $4.1 billion for the French conglomerate.
In contrast to competitors like BP and Shell, who aim to either reduce or maintain steady oil production by the end of the decade, TotalEnergies aspires to expand its production by 1.5% by 2027. The company, which achieved a record profit in 2022, has been actively investing in renewables and low-carbon energy, boasting a substantially higher wind and solar power generation capacity compared to its peers.
Nevertheless, TotalEnergies anticipates its absolute emissions to remain at around 400 million metric tons of CO2 equivalent per year by 2030. This projection falls short of the 43% emissions reduction target by 2030 compared to 2019 levels, as outlined in the 2015 Paris Agreement.
TotalEnergies has set an ambitious goal of achieving net-zero emissions by 2050, all while maintaining a daily oil equivalent production of approximately 1 million barrels, with gas accounting for a substantial portion.
On the investor day scheduled for September 27, TotalEnergies is poised to provide an update on its plans for returning money to shareholders. The company has hinted at the possibility of increasing the payout to more than 40% of its cash flow, up from the previous range of 35% to 40%. In 2022, TotalEnergies reported a profit of $36.2 billion.
Since the third quarter of last year, TotalEnergies has been rewarding investors with quarterly share buybacks totalling $2 billion, a practice that is expected to persist. “The longer oil prices stay where they are…the longer they are able to keep distributing at the current level,” noted HSBC analyst Kim Fustier, who also anticipated management’s inclination to indicate an upside above 40% for 2024.
CEO Patrick Pouyanne is also expected to discuss liquefied natural gas (LNG) and oil production growth beyond 2027. Forecasts for LNG sales may experience an upswing following a recent agreement with American NextDecade, as suggested by Jefferies.
Notably, TotalEnergies’ forecasts will continue to exclude Russia, where the company maintains minority holdings in the Yamal and Arctic-2 LNG projects, unlike other Western energy majors that exited the country in response to its invasion of Ukraine.
As TotalEnergies treads the path of balancing traditional energy sources with a commitment to sustainability, its upcoming investor day promises to offer key insights into the company’s strategic direction and priorities in the ever-evolving global energy landscape.
— Namibia Daily News