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Governments need to admit that the transition to low-carbon solutions would raise the price of energy globally, TotalEnergies chief executive Patrick Pouyanné told the Financial Times in an interview published on Monday.
“We think that fundamentally this energy transition will mean a higher price of energy,” Pouyanné told FT, noting that policy makers would be essentially mis-selling the transition if they fail to admit it would entail higher costs for consumers.
According to TotalEnergies’s CEO, governments and environmental campaigners have been naïve to believe that the answer to lowering emissions is simply to reduce oil and gas production, especially before alternatives are ready to step up and replace part of the fossil fuels currently used to meet rising global energy demand.
Moreover, the energy transition will vary according to regional specificities.
“We cannot ask African countries just to avoid developing the resources because we have developed their resources for our own comfort for 20 years,” Pouyanné, who has been leading TotalEnergies for a decade now, told FT.
Among the European majors, TotalEnergies has had the most consistent message to investors since the energy transition became a focus of the market. The French supermajor has been insisting for years that its priorities are growing oil and gas, with an emphasis on LNG, and growth in integrated power solutions.
Per data from LSEG analyzed by FT, TotalEnergies has outperformed its competitors in terms of average annual total shareholder returns since 2014 and is ahead of Chevron, Exxon, Shell, and BP.
Last week, TotalEnergies said it was raising its ordinary 2023 dividend by 7.1% from 2022 and that it had completed $9 billion in share buybacks. The board confirmed a shareholder return policy for 2024 targeting a payout of more than 40% of cash flow from operations (CFFO).
New projects in Africa, Brazil, and Iraq will bring much of the new oil and gas production for the French supermajor. TotalEnergies has also made a significant discovery of light oil with associated gas on the Venus prospect in the Orange Basin offshore Namibia. Venus could be a “giant oil and gas discovery,” the company said in an investor presentation in September 2022.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.