KEY POINTS
- TotalEnergies hikes dividends by 5% for next year.
- Buybacks to reach $8 billion in 2024, $2 billion quarterly.
- Company targets 4% production growth annually through 2030.
TotalEnergies announced Wednesday it will narrow its focus to cheaper upstream output while increasing its dividend by 5% per share next year, alongside $2 billion in quarterly stock buybacks.
TotalEnergies shifts strategy to focus on upstream growth
In its Strategy and Outlook presentation, the French oil major emphasized “more energy, fewer emissions, more free cash flow” as it “advances its balanced and profitable multi-energy strategy.”
According to a report by Oilprice, TotalEnergies aims for 4% annual production growth from 2024 to 2030, with over $10 billion in underlying free cash flow growth. For 2024, the company expects $8 billion in share buybacks, with an additional $2 billion per quarter planned for next year.
“Our dividend breakeven is under $50 per barrel … and we can sustain buybacks under $70 per barrel,” CEO Patrick Pouyanne said during the presentation.
The announcement comes as oil and gas companies face the possibility of slower dividend payouts and share buybacks after Brent crude fell below $70 per barrel in September, only to rebound this week amid increasing tensions in the Middle East.
TotalEnergies is targeting upstream output costs of around $5 per barrel for 2024. Earlier this week, the company approved a $10.5 billion development project for Block 58, an offshore oil and gas field in Suriname, in partnership with APA Corp. Production is expected in the first half of 2028.
Buybacks and dividend hikes amid market volatility
“Oil and gas production will grow an average of about 3% per year through 2030, led by LNG, driven by the launch of six major projects in 2024 (two in Brazil, Suriname, Angola, Oman, Nigeria), which will de-risk, high-grade, and extend guidance from 2028 to 2030,” TotalEnergies said. It added that over the next two years, growth will exceed 3% annually due to the startup of high-margin projects in the U.S. Gulf of Mexico, Brazil, Iraq, Uganda, Argentina, Malaysia, and Qatar.
“In 2024, the company has also de-risked its LNG exposure to spot gas prices by signing long-term LNG sales contracts mainly indexed to Brent and by expanding its upstream gas production in the U.S. through two low-cost acquisitions,” TotalEnergies said. Pouyanne warned there will be 50 million tons of new LNG supply per year, representing 10% more than the market can absorb.
