“Confident in the strong fundamentals of the Company, the Board of Directors confirmed a shareholder return policy for 2024 targeting a >40% CFFO payout.”
At the start of 2024, Brent prices are hovering around $80/barrel in an uncertain economic environment. Oil markets are facing both geopolitical tensions in the Middle East and non-OPEC production growth balanced by OPEC+ policy. According to the IEA(1), global oil demand is anticipated to grow by 1.2 Mb/d in 2024, which is in line with the average annual demand growth rate during 2000-2023 of 1.2%/year.
LNG markets should remain in tension due to very limited LNG capacity additions expected in 2024 (2%) and growing demand thanks to lower LNG prices. TotalEnergies expects LNG sales above 40 Mt over the year. Given the evolution of oil and gas prices in recent months and the lag effect on price formulas, TotalEnergies anticipates that its average LNG selling price should be stable around $10/MBtu in the first quarter 2024.
First quarter 2024 expected hydrocarbon production should be above 2.4 Mboe/d due to the start-up of Mero 2 in Brazil and the disposals of Canadian upstream assets, effective during fourth quarter 2023. For 2024, TotalEnergies anticipates hydrocarbon production will grow 2% compared to 2023 excluding Canada. Production will benefit from several additional project start-ups, including Tyra in Denmark and Anchor in the U.S.
The full-year refining utilization rate is expected to increase to above 85% in 2024 with no major turnarounds planned.
Momentum continues in Integrated Power growth in 2024 with cash flow before working capital (CFFO) forecast to increase to between $2.5 and $3 billion. The increase is supported by a net electricity generation increase to more than 45 TWh in the context of renewables gross installed capacity increasing by around 6 GW to 28 GW.
In 2024, TotalEnergies expects net investments of $17-18 billion, including $5 billion dedicated to Integrated Power.
Confident in the strong fundamentals of the Company, which celebrates its 100 year anniversary in 2024, the Board of Directors confirmed a shareholder return policy for 2024 targeting a >40% CFFO payout, which will combine an increase in interim dividends of 6.8% to €0.79/share and $2 billion of share buybacks in the first quarter of 2024, in line with the following cash flow allocation priorities:
- A sustainable ordinary dividend through cycles, that was not cut during the Covid crisis, and whose increase is supported by underlying cash flow growth.
- Investments in support of a strategy balanced between the various energies.
- Maintaining a strong balance sheet.
- Buybacks to share surplus cash flow generated at high prices.