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France’s Total planning $2.4 billion in renewable investments in 2021

February 10, 2021

S&P Global Market Intelligence ($):

Like many of its European rivals, Total SE has signaled a major boost in spending on renewable energy in the coming years as part of its strategy to shift to cleaner, lower-carbon fuels. The company plans to hold its oil and gas production flat in 2021, the French energy major said Feb. 9.

“2020 represents a pivoting year for the group’s strategy with the announcement of its ambition to get to Net Zero, together with society,” Total’s CEO Patrick Pouyanne said in a statement. “The group affirms its plan to transform itself into a broad energy company to meet the dual challenge of the energy transition: more energy, less emissions.”

Underlining plans to accelerate its transformation into an integrated energy company, Total said it plans to change its name to TotalEnergies to reflect its ambition to transition to carbon neutrality.

The company, which has said it expects global oil demand to peak in the 2030s, in September 2020 announced plans to grow its overall energy production by a third in the next decade, with half the growth coming from LNG and half from electricity, mainly renewables. With a shift in focus to cleaner, low-carbon energy, it said it expects its oil product sales will be reduced significantly in the same time frame. The company expects its energy sales mix to be 50% gases, 30% oil products, 5% biofuels and 15% electrons by 2030, compared with 55% oil products, 40% gas and 5% electrons in 2019.

In the near term, Total said the global oil market outlook remains “uncertain” and dependent on the recovery of global demand, which is affected by the COVID-19 pandemic. Citing the ongoing market uncertainties, Total said it expects net investments of $12 billion in 2021, down from nearly $13 billion in 2020, but up from previous guidance of “less than” $12 billion. It said a fifth of the spending will go to its renewables and electricity division this year.

Total reported adjusted net earnings of $1.3 billion for the quarter, 59% lower than the year-ago period but up from $848 million in the third quarter helped by stronger oil prices. The fourth-quarter result beat consensus forecasts of $1.13 billion by about 15%, according to S&P Global Market Intelligence. For the year, Total posted an adjusted net income of $4.06 billion, down 66% on 2019, but supported by 26% lower capex, $1.1 billion in cost savings, and an organic cash breakeven of $26/b.

[Robert Perkins]

More ($): ‘More energy, less emissions’: Total continues to pivot energy focus

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