TotalEnergies SE TTE unveiled its long-term strategy and outlook, reaffirming the need for a balanced multi-energy strategy considering the developments in the oil, gas and electricity markets. Given the ongoing transition in the energy space, the company will generate more clean electricity from renewable sources.

TotalEnergies plans to increase its global energy production by 4% per year over 2024-2030, primarily from LNG, thanks to its rich, low-cost and low-emission upstream portfolio. The new production guidance shows 100 basis point improvement from the prior outlook. TTE will benefit from contributions from new startups and a few high-margin projects in spread across the globe.

TotalEnergies has also de-risked its LNG exposure to spot gas prices by signing long-term LNG sales contracts mainly indexed on Brent and by developing the company’s upstream gas production in the United States through two low-cost acquisitions.

TotalEnergies Clean Energy Focus

TTE expects its electricity generation to reach more than 100 TWh in 2030, of which 70% will be renewable and 30% flexible-based.

TotalEnergies strives to be a net-zero carbon emission company by 2050 and has taken the necessary steps to achieve the target. It has a portfolio of gross installed capacity under construction and is in development of 35 GW by 2025 with more than 20 GW already having long-term power purchase agreements. The company is gradually building a portfolio of low-carbon businesses that could account for 15-20% of sales by 2040.

TotalEnergies’ Capital Expenditures and Free Cash Flow

TTE plans to invest in the range of $16-$18 billion annually in the 2025-2030 period, of which nearly $5 billion will be dedicated to low-carbon energies. The company retains the flexibility to reduce its net investments by $2 billion in case of a sharp drop in commodity prices.

Courtesy of TTE’s systematic capital expenditures, it expects to generate more than $10 billion in free cash flow by 2030.  Management will utilize the free cash flow to increase its shareholders’ value through share buyback and dividend payments.

TTE plans to buy back shares worth $8 billion in 2024 and  repurchase shares worth $2 billion per quarter in the next year, assuming reasonable market conditions. The company has been planning to increase the dividend per share by at least 5% based on the 2024 share buybacks.

Oil and Gas Firms Focused on Emission Reduction

A transition in the energy space is evident with industries now focusing on lowering emissions and planning to use energy generated from clean sources. Energy companies are adding renewable sources to its generation portfolio to reduce carbon footprints.

Oil and gas companies like ExxonMobil Corporation XOM, BP plc BP and Chevron Corporation CVX are also adopting measures to reduce emissions from operations.

ExxonMobil strives to achieve net-zero Scope 1 and 2 greenhouse gas emissions in its operated assets by 2050. The company will achieve its target by electrifying XOM’s operation, using 475 MW of wind power, upgrading equipment and implementing new technology to cut operations.

BP's strategic progress in traditional and renewable energy sectors is evident. The acquisition of the remaining interest in Lightsource BP, a leading developer of utility-scale solar and battery storage assets, underscores BP's commitment to expanding its low-carbon and renewable energy footprint.

CVX is making efforts to lower methane emissions. The company has adopted an upstream methane-intensity target of 2 kg CO2e/boe by 2028, which represents a 57% reduction from its 2016 baseline. It will invest $10 billion between 2023 to 2028 to reduce emissions.

TTE’s Share Price Performance

TotalEnergies shares have gained 11.5% in a year compared with its industry’s growth of 10.4%

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Zacks Rank

TotalEnergies currently carries a Zacks Rank #5 (Strong Sell).

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