TotalEnergies chief executive Patrick Pouyanné says disruption in global energy markets is creating opportunities for the French oil major, even as roughly 15% of its oil and gas production sits exposed to the Middle East conflict. He credits the company's integrated model, spanning production, refining and trading, with letting it profit from the turmoil, pointing to first-half profit that rose 47% to $11.4 billion.
Patrick Pouyanné told the Energy Intelligence Forum in London on Monday that disruption in the energy world gives TotalEnergies more ways to make money. According to the Financial Times: "I prefer the world of disruption to the peaceful world." He added that more opportunities exist in turmoil, but a company needs the right assets to capture them.
Middle East exposure meets record profit
TotalEnergies is one of the oil companies most affected by the Middle East conflict, with about 15% of its global oil and gas production exposed to the fighting in the region. Despite that exposure, the company has still posted a year of bumper profits. First-half profit rose 47% to $11.4 billion. Total recently said it would increase share buybacks to $2.5 billion in the final three months of the year.
Pouyanné pointed to Total's integrated structure, which covers production, refining and trading, as the reason the company performs well in a crisis. He said refineries in Europe that once looked like liabilities are now turning into goldmines because of that integration.
Gas supply and future production plans
Pouyanné also said he had stopped his teams from declaring force majeure and halting liquefied natural gas shipments to customers. Instead, the company calculated it could absorb roughly a 10% hit to its gas volumes and use reliable supply as a selling point to customers during the global crisis.
TotalEnergies last week laid out plans to grow production to 3 million barrels a day of oil equivalent by 2030. Pouyanné said investors tend to reward the companies with the largest production, arguing that scale drives the premium investors assign to a company in the sector.
Source: Markets
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