French giant TotalEnergies raises dividend by 5% for 2025

It’s a big news week for French oil major TotalEnergies this week, with investors told on Wednesday that the company will focus on cheaper upstream production and raise its dividend by 5% per share for next year, combined with quarterly buybacks of 2 billions of dollars.

In it Strategy & Outlook presentation On Wednesday, TotalEnergies emphasized “more energy, less emissions, more free cash-flow” as it “advances its balanced and profitable multi-energy strategy.”

The French oil giant targets production growth of 4% a year from 2024 to 2030, with more than $10 billion in increased free cash flow.

For 2024, the company expects buybacks to reach $8 billion, with another $2 billion per quarter for next year.

“Our dividend yield is below $50 per barrel … and we can support buybacks below $70 per barrel,” TotalEnergies CEO Patrick Pouyanne said in the presentation.

The announcement comes as oil and gas companies grapple with the prospect of a possible slowdown in dividend payouts and share buybacks after Brent fell below $70 in September, retracing its path this week as tensions escalated in Middle east.

TotalEnergies is targeting upstream production costs of around $5 a barrel by 2024. Earlier this week, the company green-lighted a $10.5 billion development project for offshore oil and gas in Suriname. Block 58with APA Corporation, with production expected in the first half of 2028.

“Average oil and gas production growth of ~3% per year until 2030led by LNG, thanks to the launch of six major projects in 2024 (two in Brazil, Suriname, Angola, Oman, Nigeria) that reduce risks, high grade and extend guidance from 2028 to 2030,” TotalEnergies said in its presentation. , adding that in the next two years, growth will exceed 3% annually due to the start of high-margin projects in the US Gulf of Mexico, Brazil, Iraq, Uganda, Argentina, Malaysia and Qatar.

“In 2024, the company also reduced its LNG exposure to spot gas prices by signing long-term LNG sales contracts indexed primarily to Brent and by developing its upstream gas production in the US through two bargain buys,” Total said. , with Pouyanne warning that there will be 50 million tonnes of new LNG supply per year, representing 10% more than the market can handle.

By Charles Kennedy for Oilprice.com

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