TotalEnergies SE
Q4 2017 Earnings Call Transcript

Published: 9 Feb 2018

[Patrick Pouyanné:]

Good morning. Good morning again here in the podcast for this presentation of our Full Year 2017 Results. I’m here today with all the Executive Committee team

[Patrick de La Chevardière:]

Good morning everyone. I think I checked in with most of you this morning. My job today is to present our strong 2017 results and some ambitious 2018 objectives. Basically, what is obvious today is that Total is leading the pack in many ways. We have seen the benefit of our efforts to drive down our costs; to deliver our growth; and basically at the end, in the Upstream, to reduce over breakeven. And that Upstream division result, combined with the Downstream continuous good result, put us in a very strong position with growing free cash flow. Cost has fallen significantly. We have the lowest debt-to-equity ratio. Our organic predividend breakeven is below $30 per barrel. And we have derisked the near-term production profile. In 2017, and I hope I will be able to demonstrate that, we have reached a turning point, and for 2018, we are excited about the opportunities ahead. And we will show you the 2018 objective. Let’s start with the result. Our adjusted net income for 2017 was $10.6 billion, basically 28% higher than in 2016. The main driver was a 86% increase in Upstream from a 23% increase in Brent. This demonstrate the strong upside leverage we have created by reducing the breakeven. Downstream also generate close to $6 billion. Such a beauty of the integrated model. We have steadily increased our sensitivity to Brent, and we are capturing the benefit of the oil price recovery. In 2017, refining and chemical results are slightly down, notably because of the sale of Atotech which is not anymore in our perimeter; and to the effect of Hurricane Harvey. Marketing and service, continuing growth by close to 10%. So all in all, we have very good result. Gas and renewable and power is still in its early day, but it’s improving its result to reach $500 million. Putting all parts together, Total reported return on equity based on adjusted net result of slightly more than 10%, the highest return among the major. Cash flow is our primary metrics. And basically, from 2014 to today, we reset the company to a progressively lower cash breakeven year after year. We increased operating cash flow by 24% to more than $20 billion. This is to say $22 billion of debt-adjusted cash flow minus $1 billion of interests. Mainly, we do that by cutting costs, increasing production. We also generate $4 billion of asset sales, mainly Atotech. Our organic CapEx was in our range at $14.4 billion. And we significantly reduced our debt. Moving to the right, you can see the speed of the recovery in term of organic free cash flow. Between 2015 and 2017, we nearly, with the same Brent price, $52, $54 we increased our organic free cash flow by $10 billion. Production. Our situation is improving year after year, in large part because is continuing to deliver the strongest production growth. Since 2014, our production has increased by 20%. In 2017, we increased the production by close to 5%. In 2018, we target 6% growth, in line with our objective to grow production by 5% per year on average on the period in 2016, 2022. And in the annex of your booklet you have the 14 major start-ups that we intend to deliver. We are managing the normal decline rate at 3%, which is low. We have been adding a lot of new start-ups to the portfolio that are not yet declining because we increased the share of long plateau projects close to 50%; and also that, when you start a project, you are not late yet in the declining part of the production. Our reserve replacement rate is at 95%, above 100% on average on five years. As Patrick will show you later, we have taken advantage of the low end of the commodity price and cycle to acquire new reserve, namely Maersk, Petrobras deal, these will be included in 2018. These are not booked in 2017, so we are very confident about our reserve replacement. To finish, a quick comment about the quality of the production. We are adding cash flow accretive barrels. You see that in our cash flow from Upstream division. We are targeting low-cost barrel. And this is reducing, all in all, the cash flow breakeven. We were the first in 2014 to launch a cost reduction program, and we have maintained this advantage over our peers. We have been able to reduce our costs significantly, while the production is increasing by 20%. We set an objective of $3.5 billion for 2017. We achieved $3.7 billion. We are confident to deliver more than $4 billion saving, in comparison to 2014, this year in 2018. And the target by 2020 is $5 billion. And because of potential inflation, we shall continue and maintain a strong cost-cutting program. In term of production cost, the competitive advantage, you’ll see that on the right-hand side of the slide, is obvious. And we maintain it. Total is a low-cost producer. And including Maersk, we target $5.5 OpEx cost in 2018. CapEx. Our CapEx were at $14.4 billion in 2017, well in the guidance of $14 billion to $15 billion. For 2018, we remain at the same level roughly at $14 billion. This is organic, excluding acquisition. This is a sustainable CapEx level well below the level of the operating cash flow last year, $21 billion. And this is really enough to maintain integrity and to provide future growth. We are confident that we can continue to fund growth with organic CapEx in the $13 billion to $15 billion range. On the right you see some detail, including $2 billion of acquisition, $2 billion net. Slightly half of the CapEx is committed to renewing and developing resources, on the right side of the circle. We maintain – maintaining existing production requires about 20%. Downstream requires also 20%. And note that we allocate about $1 billion to gas, renewable and power, including $500 million non-organic. We sanctioned five project in 2017. We expect to have launched more than 10 new project altogether by end of this year. We are showing on the right side the IRR of these project at $60 per barrel. So you can see that all of them are very profitable. As a group of project, this represent about 400,000 barrel per day net to Total. CapEx is about $8 per Boe. And as you can see, we are the operator on most of these project, which give us some comfort. Some projects worth noting. The first is our 150,000 size FPSO in the giant which is now name Mero and not anymore Libra on the northwest panel. That was launched late last year. Lake Albert in Uganda is progressing well. The Mero 2 on the Libra field will follow later this year, after the sanction of Mero 1 last year. And the second phase of the giant Johan Sverdrup field, which is coming from Maersk, should also be sanctioned this year. A few words on exploration. Renewal of resources through the cycle is key to maintaining an inventory of projects. In 2015 a new exploration team in place. Their strategy is starting to deliver. The budget for 2018 is set at $1.2 billion. Honestly, in the current environment we can do more for less. In 2017, the team has some notable wins

[Patrick Pouyanné:]

No, no, but it was for you. In fact, it was lined up for me. So like Patrick said, we have clearly another slide like last year on several items, and the benchmarks were after they’re award [ph] to us. And I think one of the things that you could remark is that they are – in fact that, quarter after quarter, maybe we have a more stable way to deliver our results and less impacts of the volatile environment, including the Downstream. And I think it’s all part of what has been done in terms of upgrading the portfolio and getting rid of some weak assets which were very volatile in the past and having a base of assets which are able to go through this volatile market. So it’s true in terms of Upstream net income per barrel, ROE, ROACE or net debt-to-capital, but in fact the slide I wanted to use myself was this one, which was in fact on a three-year basis just set what I said in my introduction. We managed to reset this company for the cycle; and with quite interesting, I would say remarkable, results of 20% more of production, 45% less in production costs, an organic free cash flow which grew by $8.5 billion and net debt-to-equity which was reduced by 17 points. All that, of course, has been the results, I could say. And I can give tribute to all the teams of the company today, who worked very hard to reach this performance. They can be proud of what they have achieved, and myself and the Board of Director is very proud of them. So this, of course, is the results, but we have also, as I said in my introduction, take advantage of cycle to prepare the future. And in fact, in this second part I want to – not to redo the presentation we’ve done in September, so we’ll not go through, read all that, but just I would like to emphasize on some segments on which we have decided to – which we are creating more value. We, I said that the strategy, the company, will be to play to our strengths in order to create more value for shareholders before to return it to them. Of course, we have there some few indicators which I think are summarizing the September presentation and the objective that we have and the assets that we have managed to put in our portfolio in order to achieve these objectives

[Lucas Herrmann:]

Thanks very much. I’m Lucas Herrmann from Deutsche Bank. I don’t know whether it’s an honor to start or a danger start. But look, first thing, I think you have cleared a lot of things that we were somewhat confused about and much is very precise. Couple of questions, if I might, on return and then one on businesses. The first is just in terms of the return policy. If I think about buyback up to $5 billion, it’s effectively buyback 3% to 4% of your equity at today’s price. If I then think to growth in dividend per share, the question really is one of am I double accounting if I start thinking about the dividend per share is going to grow by 10%, but at the same time, I’m hoping that share count will decline by 3% to 4% from buyback. Just whether you could comment on whether the intent is to – I think you understand what I’m asking. The second question, you’ve done something quite exceptional today, you’ve actually given us cash flow from operation estimates for each year precisely at two different oil prices out to 2020. And what surprises me slightly as I look at 2018, in particular is, you have the benefit of Brazil coming through, you have the benefit of Maersk coming through, you have the benefit of start-ups coming through. So I just want to understand, in part, given the cash flow that I think we – I think you’ve indicated in the past come through from those, the growth seems a little modest. How conservative whatever might you be being? And the third one is, I just wanted to ask a question of Saft. One year on, what have you learned? Where is it taking you? How are you feeling about it?

[Guy Maurice:]

Okay. The first question is what is the combination of share – buyback shares and the influence in terms of cash return, global return to shareholders. The point is that if you make some math, you will find that – and it’s not a rule, but executing the program we propose will lead to all the return to shareholders of the CFFO at $60, around 40% in three years, which is higher than today, let be clear. So an increase of return to shareholder from 30% to 40%. So in fact, it’s because the impact that you described is the buyback will be done year – after a year, so you don’t have the full impact of the $5 billion. When is a question, but don’t ask me what we will do beyond 2020, please. We already made today something quite innovative with the board to frame an objective – not only objective, to say your commitment on the dividend. Of course, that means that it’s a commitment, but don’t ask me to describe what will happen after, because we good answer – question is good, but it has more an influence on what will happen after. So again, we are on a growing cash flow trajectory, and I think it’s clear. On 2018, are we conservative, Patrick?

[Patrick Pouyanné:]

I don’t think so. A little like always.

[Guy Maurice:]

But there’s always things happening. We But we like to deliver. And I think, let be clear, the 2018 figure was a result of bottom-up approach by the budget sessions. We cannot – we don’t – we have always, like you said, some good news behind there, we capture our issues. I know it’s not a beginning of the year. So I’m confident that we’ll do a little more than what is written on the paper. But it’s also some fundamental. We have the assumption of when do we really close Maersk is not neutral on the overall performance. And that is not fully in my hand – in our hands even if already we have secured all the approval but one. But it has some influence considering the magnitude of these operations on the global vision, so there might be some. I will tell you, in our assumptions, we are – Bernard would say that we are optimistic. Not optimistic because $35 per ton is what we can see today on the screen. We are always a little pessimistic on the petrochemical sides, we are holding to the good news. So – but this is a figure we disclose to you. So you can use it for your math and for – but I think, more importantly, for our shareholders is a commitment about the return. And you will see, and Patrick will deliver, quarter-after-quarter how we implement what we have program we just described to you. It will be the proof. I think the best proof is by the acts. Saft. Saft, it’s for Philippe. What did you learn?

[Philippe Sauquet:]

We learned a lot, I can tell you. Well, first, when we acquired Saft, Saft we were convinced was one of the company active in the battery field with the best technology. And this was confirmed after one year, be it in – for telecom, for space, for different. They are really benefited from very good technology to generate profit, which are very significant profit. And in 2017, Saft increased its result compared to what was in 2016. But beyond what we started with Saft is to open we’re ambition more on mobility and energy storage segment, segment on which we had percent already. But clearly, with Total as a shareholder – Total being also shareholder of companies that want to grow with solar activity, very clearly a nice fit. And we are working heavily on that and increasing development and developing also R&D program in order to develop new project that will suit better this energy storage segment.

[Patrick Pouyanné:]

What I learned from Saft, personally, is that China is moving very, very, very quickly in this field of new energies. You have debate in Europe and U.S., do we have 1 giga factory? They have 50. So I think when you look to this, and it’s very – no but it’s – let make some thinkings about the positioning of the group on all these new businesses, because you have giant players. And we experience that for SunPower everyday, but we can see for Saft as well. So it lets to us to also how do we position ourselves vis-à-vis this world. And for the future of the group, I think it’s will plenty of lesson. But again, like it was said by Philippe, they are improving their results. We give some of the CapEx. We have injected our good return. So when is a question for us, as I always said, it’s not always a question – the question is more up to which we can – we grow them, at which pace? But we have to take into account the competition. We are not alone. But obviously, no regret at all to have invested $1 billion in Saft, considering the evolution of the battery business or all these new technologies.

[Mike Sangster:]

Thanks. Michele had a question as well. Microphone.

[Michele Della Vigna:]

Thank you for the presentation. Two questions. The first one is related to your inorganic acquisitions in the last couple of years. You’ve taken advantage of the bottom of the cycle to upgrade and increase the pipeline of new projects. Does it become more difficult from here to still find good profitable resources on the inorganic route? And then does their full exploration become a more important avenue for you to continue to increase the pipeline of future projects? And secondly, you hired at the end of last year a high-profile CTO for your company. And what are your priorities here in terms of what to achieve from it? And which part of your business E&P, LNG, Downstream, can be most impacted from technological advancements?

[Patrick Pouyanné:]

Okay. The first question about, is it more complex? I will answer you no for the time being, because I have in mind some few things which will come soon, which will demonstrate that we continue to able to have access to low cost visit – or low cost of access. But I don’t want to disclose it, it’s not finalized. It should become more complex, obviously, because the market will move from negotiating at $50 to negotiating at $60, $65. It’s – the time – it’s why I was advocating last year to be able because we – and to the work done in 2015 and 2016. And I said, no, let’s go to offensive, because I was afraid to see one day, I was expecting not – I was hoping not to have it in 2018, to be honest. It’s a little early from my point of view, because we are strong. But from that, it was – it’s demonstration that we are right to move quickly last year. And – but I think you still have today in the market some pressure. Let be clear, at $60, $65 on two categories of players, so small, the medium and independent players, which still are not very active and depth is still where they are very prudent, and also some national companies, because this is where we have been successful. That’s why I insist on the Middle East and Algeria and other countries. And at $60, it’s better, but it’s not yet superior, I would say, for them. So that is the market. Having said that, we – so we will continue to be active on this field. And then exploration. I cannot plan for exploration. I can – we can support them, and I’m very happy that the teams have done that. I think it’s also psychological positive element, a big discovery and by the new team. I hope there will be more to come. But it’s more difficult to plan for me. So as we have also to prepare the future, let’s continue on both feet, but keeping in mind the discipline. And honestly, the fact, like Patrick said, that we have put into the portfolio 5 billion of barrels at $2.5, we have some barrels in advance. So I’m not desperate to make deals today to feed the pipeline. We have fed the pipeline, but we have some opportunities on which we’ll come back soon and which we can materialize, we will announce them. The CTO, our young, our new – she is not young, but she is very experienced and high-skilled CTO, Marie-Noelle Semeria. I think she’s working on different segments, digital being one of them. But may be Philippe, you want to comment on the R&D strategy?

[Philippe Sauquet:]

Yes, as you’re all aware, Total, as an oil and gas company, has been always very highly technological company. And R&D, of course, is part of what is needed to ensure the challenge that we have to face in any branch of the company. But if I have to stress what is making today a big shift on what we do is clearly that uses of digital and data science in order to help us to reduce our cost, better manage out industrial operation, is opening really new horizon for us. And when you see as potential in decrease of cost what we have. LNG, of course, is one example. But clearly, we are stressing a lot on using new tools in order to better manage and reduce our cost. And another program that we started when we decided about our new ambition to be the responsible energy major, we decided to step up our level also R&D for CO2 capture and storage, because we consider that we need the tool to step up on this field. As you might have been aware, we’ve partnered this year with Statoil and Shell in Norway in a very big project that will store CO2 in the North Sea. So this also is part of what we are bringing as a new horizon in our R&D.

[Patrick Pouyanné:]

So role of the CTO is, in particular, to open R&D to high-skilled networks in the world. On CO2, we have put in place a large program with Stanford University. And role of the CTO for us is we have people, a lot of people, working but to open the eyes and to have access to new areas and to right teams in order to partner between Total and some high-skilled teams in the world. But I take your point, and maybe in September, we’ll organize a workshop around R&D front, technology. It would be of interest for some of you. I have some question sometimes, and we could invite her to make that presentation. Okay.

[Mike Sangster:]

Theepan has a question.

[Theepan Jothilingam:]

Yes. Hi, good morning. Theepan Jothilingam from Exane BNP. I just wanted to come back to the buyback, just – you talked about the EUR5 billion is subject to oil prices. More a point of clarity, but you’ve talked about a free cash flow outlook at $50 and $60 oil. I just wanted to clarify, the $5 billion buyback would be delivered in that high case of $60 that you’ve executed? The second point, I think the market has focused very much on growth projects at Total. I noticed you reiterated a 3% managed decline rate, so perhaps could you give us a little bit of color in terms of what is being done to manage that base? And what value is actually created from the base? Thank you.

[Guy Maurice:]

The board, it’s up to $5 billion. There is no secret formula. Again, I told you at $65, $66 per barrel and $55 per share, we will buy back some shares. It’s a combination of oil price upside and share price as well. Let it be clear, I will pilot it. At $60, obviously, yes, there is some buyback, which will be done. At $50, there is much less. Let be clear. It’s just a question of I think having the cash, our cash allocation. So that’s why we put oil price recovery, okay? And then the second question is about 3% decline rate, what is being done to manage it, long-term plateau? But Arnaud, you want to comment it, maybe?

[Arnaud Breuillac:]

Yes. In fact, I can comment in two ways. The first reason for this low, low decline is the fact that we have a lot of new projects coming on-stream. And clearly, when you start a new production, you have a plateau phase, so that is contributing to maintaining low decline rate. And the other thing is that we are getting more and more of our projects like Yemen LNG who are long-term plateau, projects that are inherently more stable in terms of production decline. And that is why we see that our portfolio is requiring less investment to have this decline.

[Guy Maurice:]

We invest $3 billion in the base, $3 billion in the base to maintain it. I would say as well, but I should have commented that, by the way. Maybe – and just to clarify, we don’t have any more in the figures, Indonesia, that we presented to you, which was 100,000 barrels per day, declining at 15%. We replaced that somewhere by Maersk 150,000 per day growing in full picture. And let be clear, on Indonesia, there was some cash flow from operations which was mainly a lot of old cost to recoup, but the margins was very small. So there are still discussions, but discussions are clearly difficult to conclude because of value which is seen by Indonesians and by us. We have overall opportunities to allocate our capital. And I know it’s a long story of Total, but don’t mix emotion and capital allocation. So that’s why we have also – this is the type of elements which change a picture.

[Mike Sangster:]

Some questions over on the left of Martin and Thomas.

[Martijn Rats:]

Hi, hello. It’s Martijn Rats of Morgan Stanley. I just wanted to echo Lucas’ comments. I felt the whole presentation and, in particularly, the financial framework was crystal clear, so I have no questions about that. But instead, I wanted to ask Bernard a question or two about refining. Because it seems to me that the product market is particularly susceptible to two major forces over the next couple of years. One being the IMO. And secondly, being U.S. exports. And I wanted to ask you about each of those. In terms of the IMO, over the last couple of months, we’ve seen a real blowout in the spread between high sulfur fuel oil and low sulfur fuel oil for CAL 20, and I wanted to ask if you can update on your thinking, how that might impact the Total’s refining business? And to what extent there might be upside to earnings as this scenario plays out? And secondly, I wanted to ask you with regards to the U.S. exports. If you are in a position to take some of those barrels into your being refining system and what would be the attractions or disadvantages of that? Thank you.

[Patrick Pouyanné:]

Okay. So on the IMO, it’s – of course, we have anticipated the change in regulation, and we’ve already, in the past few years, taken some actions to adapt our refining system. The latest investments we’ve made in the – is in Belgium, in Antwerp, where we have just, by the way, started up new equipment to reduce our length in fuel oils and produce more distillate – fuel central distillates and we have more to come, we’ve large investments we are about to do in Dorsch [ph]. It’s $400 million of investment, also to cope with the fuel content in the fuel oil and distillate. So I would say, to some extent, as long as Total is concerned, we don’t see any big issues with IMO change. And as I said last time we met, we don’t even factored any big CapEx in the years to come to cope with this regulation change. It’s clear that recently we’ve seen the fuel oil spread improving, which is, I think, a very good thing short term for industry. Is it going to last post 2020? Of course, that’s a good question. But at the same time, we think that the distillate – the fuel marine distillates, diesel, which is going to be an alternative to the low sulfur fuel oil, is going to improve in term of spread. So what we might lose on one hand, we’ve spread the high sulfur fuel oil, will be gained on the diesel’s part. So from that standpoint, once again it’s a market condition we have anticipated. We take it into account, but I don’t see any big impact for Total as long as Total is concerned. And of course, on the flip side this is an opportunity for the rest of the group when it comes to LNG and all the gas for marine. So I don’t think it’s – at least, for the refining, at that stage, a bit surprised. Regarding the U.S., I don’t see much. I mean, you know there are some diesel coming from the U.S. to Europe, this is a normal flow. There is nothing new on that. As long as the U.S. is concerned, I don’t see again any big disruption in terms of refinery – refined product coming back to Europe as it is today.

[Guy Maurice:]

The question was more on the U.S. crude export. Basically, all – the European system has been designed historically for light crude. So they export light crude. So it – we could take some advantage to export some light crude from the U.S. in the European system fundamentally. Do we do it? I think I’ve seen some papers that we have begin to purchase some of the light crude so – and then we resend the products to the Northeast because today, as you know, it’s more – it’s strange, but it’s more efficient to take U.S. light crude to Europe to refine it and to send the products to New York then going to use the U.S. ships. But America first, so it’s good for us. And we can take benefit of that. And U.S. ships, which are more expensive, to bring products from the U.S. Gulf Coast to New York [indiscernible] French but the global world, I would say. So that’s the point. Less important, and maybe Momar should say something, but we have been very active on the LNG becoming a marine fuel. You’ve seen that we have a large company called CMA CGM, which is one of the top three. They have decided to take a fleet of, I don’t know, 10 large containers between Rotterdam and Europe and Asia. And we have signed a contract of 12-year – 10 or 12-year contract to provide the LNG. It’s not – it’s quite sizable at the end. We’ll invest in the barge. So maybe you can comment. And then we want to do more. We want to be the leader of this business of large container and promoting LNG as a fuel for marine. Momar, maybe a word.

[Momar Nguer:]

As you know, with regard to the IMO, the three options are

[Patrick Pouyanné:]

Technically, they will fill the LNG in Europe and be able to fleet – the container would be able to go to China to come back without any refilling – refueling. So investing in one big barge, we’ll have the largest barge in – on Rotterdam. We’ll be able to sustain that, and we have more room for new customers. So they will be active. And again, all what we do on LNG is helping us to have all this flexibility. It’s part of – it’s a game we want to enter. Then Thomas?

[Thomas Adolff:]

Thomas Adolff from Credit Suisse. I have three question. The last one is quite random. Firstly, on digitalization or the implementation of it across the organization. Do you create a separate entity with its own KPIs? Or do you – or will it be part of each division? Is there a right approach to attract the talent into the organization, unless you already have that talent? Secondly, on your production growth target for 2018 of 6% year-on-year. I’m assuming Arkema is included. And if that is included, presumably that’s also reflected in your net CapEx?

[Patrick Pouyanné:]

You were also at conference of Abu Dhabi?

[Thomas Adolff:]

And the final question, this is a question I asked BP and Shell as well and it’s the wow factor. If there is a key takeaway from 2017 where you said, wow, I didn’t know, what would it be? Thank you.

[Patrick Pouyanné:]

Digitalization, I think we are organized. We have a group of – there’s a small group which is impacting the rest of the company, we have a Chief Digital Officer, we have a – but basically, we have implemented that in the divisions, each of them having some groups of digital people. And we increased the level of competence. But we don’t have the same issues. In fact, we split that in two parts or three parts. One is, I would say, the commercial business, which is between these two guys, they have the group of people working for both on what is commercial markets. And then you have some projects between – which is assurance on transfer of competence between marketing because Bernard as well is marketing polymers, and between Momar. And then you have to same between these two – between Bernard and Arnaud on the manufacturing side. One of the big challenge for digitalization in our business is that as a difference to manufacturing business like cars or others, we are a continuous flow, which makes things more complex, in fact, to influence. So – but we have a group there. And we have decided to implement a group – quite a large group in India to work on what will be a digital refinery, Refinery 4.0 to be very creative. So we will build skills on a specific big topic. And there is some transfer between – because at the end, they are the same type of issue. So we are taking that seriously but not as an independent group of the company in any way. Otherwise, could be rejected by the top professionals. And then we have in your firm, Namita Shah, and on that maybe you want to say – about how we can use the digitation to change the way we work because it’s also part of the interest for people.

[Namita Shah:]

Yes. So we have projects across all the different back office organizations in terms of data and how to better exploit data. One of that digital offices whose based out of the Exploration & Production branches, somebody who looks a lot at data along – because it’s linked a lot also with our exploration and seismic. But we can use our capacity in how to manage that data for other things as well, which are pretty basic like our contracts and procurements teams and how to manage all the data flow that comes from that or all our HR data and how that comes from that. So we have a lot of cross-fertilization. I think what Patrick showed was that our digital officers work across branches where we find common themes rather than saying that we’re going to have one team that’s going to be working all across the group.

[Patrick Pouyanné:]

So Anna, you know our commitment to Abu Dhabi, but I will not comment on competition. Okay. And then the last question, which I’m not sure if I captured because your wow, there is many wow, I would say, but I didn’t know. I think, again the expansion of China is much stronger than we believe. And we would be wrong to believe that China want to just stay within its border. Going quickly through Middle East, Asia and even to Europe, these are fundamental change I think we need to take into account.

[Mike Sangster:]

Okay, next question from Irene, and then maybe from Robert in front.

[Irene Himona:]

Irene Himona, Societe Generale. I have two questions, please. I think, Patrick, you mentioned that as of next year, you will merge for reporting purposes LNG with Gas, Power, Renewables. And you have currently, I believe, a 2020 target for gas, power and renewables cash flow of $1 billion. Obviously, when it’s merged with LNG, we kind of lose that visibility. Will you keep the target internally? My second question, I think I saw you say today that you’ve started rehiring staff after a three year freeze. I was just curious to find out if there’s any specific skill shortage that you hit upon after three years or if it’s just a general, across the company, statement? Thank you.

[Patrick Pouyanné:]

I think, no, we don’t have skill shortage. We have too many people, to be honest. So we let people go away. And we imported a lot of skills. One of the advantage of the Maersk Oil transaction is that we will put in the company 3,000 people, high-skilled already trained people, and over the last six months demonstrated to us that they are high-skilled people, and we will. Objective is to keep most of them, in particular, on the technical side. And we will implement a technical center in Copenhagen, not only for legacy reason but because we’ve – they have some value. So I would say on that frame if we let people go and we have lost some people, I know, because they retire, we’ve not replaced them, but we will inject very quickly the Maersk Oil people in the company, and then it’s a question of managing the merger. But I’m convinced that Arnaud and his team will do that. I mean, I’m sure that if – instead of me, you would have the – our leader in technology, he would tell you we have lost a lot, but it’s not fulgent – macro is not true. Having said that, this type of policy we can apply for years, but we cannot – we know what is dangerous because then, you lose some, which begs the question of transmission because the people will leave and the young ones, so you need to organize that. And again, I have no regret to have done it like that because we maintained a strong, mature support filling the company and which delivered very well, so not to make layoff plans I think was the right decision. And today, we have endeavor, so that’s the point. I’m afraid you understood, but you will lose some guidance on GRP as it is today if we integrate LNG. But I think it makes more sense for you to globally look towards a future of what is the new integrated LNG, Renewables and Power. It is a strategic logic of it, let it be clear. When we decide, for example, to go to Myanmar, to build to as I say you to invest in the power plant, it is led with the idea that we supply LNG. So there is a strong logic to see these LNG to power business together. Then, of course, we have the renewable business. I will tell you we’ll see – I mean, I – we don’t – did not decide yet to answer your question. But what I hope is that GRP will do – the new GRP report will do more than $1 billion of CFFO. Last time, we discussed it, Andrew told me it’s too small. We have difficulty to anticipate. When we’ll be larger, it would be more predictable, I think, for you.

[Rob West:]

It’s Rob West from Redburn. The first question I wanted to ask you – and thank you very much for the presentation and progressive dividend policy. Why a cap on the buyback? Why cap it at $5 billion? And is that a factor of having other things you want to do with the cash flow at that point or not wanting to buy the shares back when they’re very expensive, so that’s the first one. The second is going into the Middle East and North Africa, which was in your presentation as a emerging area of opportunity. And in the release, this morning as well, better production than I think you had in – and can you talk a bit about whether you’re seeing a trend there of stabilization that you can extrapolate out to this year in terms of the production in, say, Libya and Nigeria and whether the investment terms are now getting attractive for you? I think that’s an area that we have trouble quantifying on our sides as analysts and so if you could speak a bit about that, that would be great.

[Patrick Pouyanné:]

Okay. Cap, I think if you would have just say buyback, you would’ve asked how much. So first, let’s consider that, again, we try to frame an answer, link to the upside. But because I want to will complement my answer. So I think, let’s say, up to $5 billion, maybe it’s a first step. Let’s do it, and we’ll see other price. But it’s the idea again fundamentally more to tell to you, our investors, we – when we met you, when we meet our investor, there’s this fear, when the oil price will go up all companies will again increase the CapEx and take all the upside to reinject in CapEx. I heard that from all of you so by stating we’ll use part of the upside for share buyback, it’s a commitment. And to gain magnitude for the next three years, I think it’s a way for us as well to tell the market, no, we have a clear framework allocation of capital, and we’ll stick to that. And so let’s took it like that. But Patrick, you wanted to also – I know you insisted on the idea that we should define a volume.

[Patrick de La Chevardière:]

The point is that you would not have to trust me or Patrick if we said $10 billion. So we give you a magnitude of what we are able to do, under the current environment. Another interesting view is that we want to protect our rating. And it is good to provide the rating agencies some view of what’s the size of our buyback program.

[Patrick Pouyanné:]

But I think my answer to Theepan gave you some indication of that. The second question was about how do we do money in the Middle East and North Africa?

[Rob West:]

Are you seeing a trend there of stabilization there that gives you more confidence to invest?

[Patrick Pouyanné:]

For stabilization, I don’t know why you see Middle East stabilizing. I mean, but we see the vitamin. Let me clear, it’s when you have some covers that you cover opportunities to take some results. It’s true. Today, clearly, you have not just same, I would say, way to look to investing in this region according to the various players. If we have all the same ideas at the same time to go in the same place, then you have a huge competition like in the port of Brazil, but we escaped thanks to God but I’ve seen some of my competitors spending huge amount of money, but I don’t understand, because everybody has the same idea. If you begin to accept because it’s part of your legacy, it’s part of the way you can do. To do it differently, like exactly Maersk Oil, where we surprised the market by going to North Sea. I know people want to understand why we’ve done that. So I think it’s a way to also look to these countries. And of course, there is, for example, Libya today, it’s not yet stabilizing. But let’s hope it will stabilize. So if there are opportunities in Libya at the right price and maybe its price today is lower because if you wait Libya to be stabilized, I’m afraid we’d be more expensive. So it’s a matter of accepting the risk, the geopolitical risk to do – to move early enough and to be bold enough to take that on your board. And of course, a company like us with a large – it’s the advantage of the size for me is that I think $150 billion of assets, if one of the country collapse, it will not impede it. So we can take a step off it but it’s a crucial question of having the right relationships, and the right understanding of these region. But we’ve – Algeria, we rebuilt in the last year it’s part of the success of the company all the relationships with Sonatrach. We are today a good – very good strong communication, and you know Algeria for us will be not only, frankly, to us more Timimoun and TFT, but we’ll have the bargain asset for Maersk. We are discussing today with them another develop – gas development projects in direct negotiation. We will have the NG deal, which is bringing us a huge LNG – Algeria LNG portfolio, because we’d be in charge of that. And so – and on the top of it, Bernard is beginning to discuss about the petrochemical project with Algeria. So this is a type of things that I see a virtuous circle when you begin to engage with this country. And frankly, all that has been very possible as well because we have decided to come back there at a time when – it was not an easy time and not so stable, I would say so. So that’s part of the point. What else do we have? Who else do we have?

[Mike Sangster:]

We’ve got Oswald here and then Christyan Malek.

[Oswald Clint:]

Maybe can I ask a question about LNG, please? You’re about to become the second-biggest player in the market. You also mentioned it’s commoditizing over time. So I just want to talk about this – your contracts, what discussions are having around LNG contracts? Are you still happy with those? If you see the world commoditizing? But also within your $3 billion of cash flow, you spoke about opportunities with short-term distances. Are you including any synergies from shorter transportation distances or any of the winter spot price arbitrage that you’ve mentioned in some of your earlier slides? Or is the $3 billion just safety dollars times your slope, if I think about that number?

[Patrick Pouyanné:]

I think we will come back on that in September. We have – the $3 billion is a result of the asset. It’s the intuition of [indiscernible] (107

[Philippe Sauquet:]

Well, we’ll see. But what we can say is that we have already the experience of the market which is already commoditizing at a very high speed and across the last two years, we managed to generate more than $1 per million Btu of added value just by playing on flexibility, optimizing the destination and the sources of our NG supply. And of course, the bigger our portfolio, the more flexible our portfolio is. And with the acquisition of NG, we are taking a very large position on the European market, which is the second-largest market after Asia but which has a unique feature, is that it bring a lot of flexibility. We can decide to put a LNG ship in Europe. And if we change our mind, three years in advance, two years in advance, six months in advance, even after having delivered and unloaded the cargo, we can decide to ship it in a better market as soon as a customer is needed it. So, yes, we are confident that we will generate lot of additional value for this flexibility, and we are already doing it.

[Patrick Pouyanné:]

We’ll have answer later.

[Christyan Malek:]

Christyan Malek from JPMorgan. Two questions, please. First of all, in September, you highlighted your cash margin per barrel above $25 a barrel for the portfolio, including 2017 start-ups. I noticed the same slide wasn’t in today’s presentation. So just wondering, can you comment on how the overall portfolio, cash flow per barrel is trending? And to what extent you frame targets in terms of your – sort of your financials around your cash flow per barrel? Can you quantify where you think you’re at today, will you want to go back on that slide that you had in September? And the second question, and this may be slightly pedantic, but in the Penda [ph] you’ve given us, you put in the framework, which is very clear around your cash flow priorities, $13 billion to $15 billion and you’re valid on one to two. But in the – the one on the Internet, the one you presented up in the screen, you’ve just put out $15 billion to $17 billion. So I guess, the backdrop to that point is to what extent are you pivoting around that resource renewal. If you don’t spend it, does it come back in the form of gearing or buyback?

[Patrick Pouyanné:]

Now will it be clear. No, no. It’s – sorry for that, but what is our old presentation and the one on the screen, we should have commented that. And it’s just – we’ll be very honest with you. On the one, it was one plus one. was back to the September presentation. In September, we told you, so net acquisition for resource will be one. It’s still one and it’s not unchanged. But on the top of it, in this presentation, we introduced the fact that on – so Downstream, we’re – we are targeting $500 million of acquisition and the same on the renewables, so it makes two. In the past, it was a mistake. It was one plus one, instead of 1.0 – 1.2. So let’s take two. This is a capital investment that we are – we’ll take it – we have onboard, okay, which has been approved by the Board of Directors. So there is no trick. On the first one, I think, so $25 per barrel of CFFO you mentioned is at $50, if I remind it. And today, I think in my speech, and several spoke and Patrick as well, at $50 per barrel load, about $40 – at $60. So you have the range of magnitude of what could be the CFFO per barrel from $50 to $30. But again, it depends of the regions. You don’t have the same CFFO, by the way. With the figures you – we’ve shown you, look, you make the math, you have it. You don’t have the same CFFO per barrel in the Middle East than in some other countries, like in Africa. You don’t have also the same long-term perspective in the Middle East. You don’t have also the same stability of that contract. So all that is a mix of, I think, and, for example, when you speak to, I think, about Abu Dhabi, of course, we have production, but we are also making trading with them. So it’s also – to look to the big picture of what could be the global business with a company like Total can do with a national company and not only keeping on asset by asset. So that’s very important to keep that in mind because – and this is why we have embarked, and I can tell you the team around me, we are working out. And one of the progress I consider we have done within the company is to work like a team also together. And to think of the executive committee level, what can we do together for the group? And as I said in my speech, Momar went to Kenya to explain to – recently that it’s the best company in the world in Upstream is Total. No, he’s an expert in Upstream, but he’s an expert in Kenya, I can tell you. So it works.

[Brendan Warn:]

Thank you. It’s Brendan Warn from BMO Capital Markets. You Incrementally sort of increasing your capital employed to the U.S. So my question just relates to – and I know you’ve been recently rubbing shoulders with Mr. Trump. How attractive are you seeing that region or that country considering U. S. tax reform, the success of Ballymore and just in terms of your overall capital employed? And then my second question, and I expect on just LNG contracting, can you give an update on the Papua LNG project, please? Patrick

[Patrick Pouyanné:]

No, you wait for me to be clear. It’s a very large country, a large market. There is lots of natural resource, huge amount of gas. And I’m not convinced by the domestic gas markets of the U.S., but I’m convinced about this low-cost and low-priced gas can be a feedstock and an energy for Bernard in his refining and petrochemical business or for Philippe in exporting LNG. So this is a type of – so we are fully open. The fact that you are taxed at a lower rate is even better. I know we are open. So for me, the U.S., I said about President Trump, there’s a main risk, there’s legal risk. It’s a country where you can use a lot of money in legal or, like, class actions and things like that. And now European way of thinking is sometime not fully aligned to manage this type of risks. But aside of that, of course, while we have a large base of U.S. shareholders. We have 36% of U.S. shareholders, so open to the U.S. And if – and frankly, for me, today, it’s a land of opportunity on the top of the Upstream side. In the quarter, we have some skills. But for the time being, we are non-operator. But if we can find ways to become, we’ll do it. We’ll want to leverage this expertise. And the deal – and this multi-world deal with Chevron, which delivers big production, this way, is encouraging is. So I think. to be clear, U.S., yes. I think we are investing. We have, more or less, $9 billion of capital employed in the U.S. And we’ll invest $1 billion per year. And when you think petrochemicals, you can look around. But at the end, U.S. is a good place to invest. And I think, Bernard, if he has another project, we’ll be happy to present it to you, so was looking for it. So that’s all. Then the question is PNG. PNG progressing well. You want to say a few words, Arnaud?

[Arnaud Breuillac:]

Yes, just to confirm that we completed the appraisal of the field last year. And so now, we are into conceptual design and trying to see where we can optimize the development scheme with existing infrastructure with the partners, – also LNG marketing activities. I’m turning to Philippe as – for LNG project that is usually a condition to sanction.

[Patrick Pouyanné:]

We engage with Exxon quite efficiently, I think. The fight is behind us. We have a joint objective, is to make an efficient project. So I think we share many data. We have a better vision of what we have in our firm, 5, 6 million ton. What they can do on their side, up to them to tell you. And how can we combine or not that to make an efficient skill. We are – the synergies about jetties, energy storages, it will be stupid not the tie for the interest of PNG to take benefit of it. So then it’s a matter of fining agreements, but what they have observed in the – and we had the meeting this last week, so I can tell you is that there is more and more convergence between the teams of what it should be the right scheme. And I think we are all driven by the idea that there is some resource to be better arise, well positioned, not complex to develop, not far from Asian markets. And so we’ll – I’m more and more confident with the Exxon, Oil Search and Total will find the right way to give the best to this resource. So let’s move on. It’s an LNG project, so it’s a big project. So I don’t want to put pressure, but I see more and more alignment. And we have all spent money to acquire it. So let’s develop it. And we see the same – when I met with, it was the same spirit that we have on both sides.

[Mike Sangster:]

A couple of questions in the middle here from Chris and Mark.

[Chris Kuplent:]

Thank you. It’s Chris Kuplent from Bank of America. I have got two questions only remaining on the balance sheet for you, Patrick. Your asset disposal program is behind you. Your gearing is sitting even with Petrobras at below 20%, and you’ve made a good point. You’ve acquired more assets over the last two years than you’ve actually sold. Should we not expect from an anti-cyclical approach that you will enter a period where you actually sell more assets? So just wanted to ask that question relative to your $1 billion to $2 billion net acquisition budget that you’ve highlighted. So net to me suggests you’re still acquiring more than you’re selling. And secondly, a tiny question, but I’m waiting for the annual report with baited breath. So if you forgive my impatience, your net debt is almost half from last year and your cost of net debt has gone up. So just wondered whether you can give us a little bit of preview of the notes that you’ll be publishing in the annual report, what’s driving that?

[Patrick Pouyanné:]

The notes is for Patrick because he’s taking care of all the notes of your report. I did not read them, yet. But on the first, no – net debt you – net means acquisition minus sales, clear. And let be clear, the important point is the $1 billion net on Upstream, where we consider that we could have access – and it was answer to Michele to still I think value opportunities, and we are looking to some of them. But at that same time, I still continue to – and I don’t know who’s in line with me, but the risk of this portfolio, some high-cost assets, we have still them. It’s not a big secret. So I will – we will continue to have this logic. Having said that, why didn’t give you, I would say, a sell program is just because you have the answer in your question. Three years ago, it was for us fundamental, like we said, to lower – to strengthen the balance sheet. It has been quick and unexpected, but – so $10 billion program was for us the fundamental part of the way to weather the storm. So it was announced like that and to commit to that. Today, we don’t have the same magnitude. It will depend on one side and the other side. But maybe, the one could be – will be first three minus two or plus four minus three, but it’s keep the discipline, because, again, it’s not a matter of growing volume per volume, it’s a question of value. But yes, we still have some cleanup to do in the portfolio. We’ve done this, we’ve done part it. And the cleanup on the Upstream is easier when the price are higher than when the price are low. If we have been divested $10 billion of $20 mainly from Downstream or midstream is because we could have lost value on the Upstream. So we will remind it and – but I have – we have yet some targets in our heads. And yes, we will be determined to sell them if the price – if we have the good reward. Even if the price is higher, but we could say, okay, let’s take – let’s keep the cash flow. I think, we’ll not this way we will be. So we’ll stick to what we have done. That’s why we put $1 billion because I’m sure that Arnaud, we think to acquire a little more, but we need to have business. And if it is the right time to continue, we will upgrade all the portfolio. And the rest for the others, for the Downstream, rewards tell you, rewards, we don’t have much to sell. We have more to acquire. And I would say on the side of Bernard and Momar, Momar has the M&As, we have made a big cleanup of, I would say, the assets, which were in the market with very little group. And so we are still substituting because we have a very large portfolio. We discovered every week in U.S. it’s there and there, but it’s more. The most of it have been done. And Bernard, I think, should look also to sending some old to buy some new. It’s also good for that for him. Okay.

[Patrick de La Chevardière:]

Okay, the question about the notes and the way – the weight of our net debt. First of all, our net debt is dollar denominated. It is net with cash euro denominated because this cash would be used to pay for dividend, which is euro denominated and shall be back which is euro denominated. So as of today, unfortunately, you pay interest base on your dollar-denominated debt. And you receive a negative interest on your euro-denominated cash. That’s the reason.

[Patrick Pouyanné:]

Is it okay? You have what you want to see in the notes. He seems okay, so it’s perfect. What else? Another question or – yes?

[Marc Kofler:]

It’s Marc Kofler from Jefferies. I just wanted to ask you a question about Downstream. And it looks like the cash flow around these businesses is now incredibly robust, very resilient. But also there’s been very big structural changes behind the scenes since 2015, 2014. So can you just say a bit more about what gives you confidence in that cash flow holding in 2018? And I appreciate the 25 ending on the slide. If you’ve got the peak number of that, let’s say, in 2015, can you give any sense to what trough cash flow might be in that business?

[Patrick Pouyanné:]

I mean the strengthening has began in 2011 and 2012, a little earlier. I think – but again, it’s quite strong because we divested $7 billion of assets in this Downstream figure. So we did not calculate, but, in fact, this $7 billion, which seems to be solid is most – is stronger than expected because, in fact, at the same time, we don’t have any more cash flow coming from Total, from Bostik, from some assets, which we have sold on LPG. So example, all these LPG business, we were providing. I would say, $500 million to $1 billion of cash flow, which have been strong. Honestly, I think we have, today, a clear and a strong discipline of the way we allocated cash to the Downstream between all of us. Not dreaming, for example, it’s not because we have high refining margins, but suddenly, we increase the CapEx. We – in the last few years, we don’t do that. I’ve seen some competitors doing that. And for me, it was one of the lesson of the previous golden age of refining. In 2006, 2007, 2008, 2006, we always we’ve done that, investing like – it’s good, we have strong margin, let’s invest, you just keep the next cycle, and it’s a disaster. So we don’t do that. And we are – and in particular, refining, which is, for me, a dangerous business. So if there is one point, but Patrick gave you his sensitivity, it’s not because we don’t believe that $35 per ton could be achieved, but we know – but you can’t – in particular, where is the – when the price is going up, whatever you think, you don’t recoup all that in the products, so – but it’s also – it’s what was, $600 million?

[Mike Sangster:]

$600 million

[Patrick Pouyanné:]

$600 million for $10 per ton. So it’ s not huge. It’s not the magnitude of it. And at the same time, Bernard and Momar are working to increase the cash flows. So I think this volatility is absorbed somewhere by part of the work, which is done. Momar has a chance to work on a noncyclical business, so 100 plus 100 plus 100 if units makes 500 in five years and it compensates. So he will continue to do it. One point, which – but today, we don’t see that in the market, let’s be clear. Everybody thinks that petrochemical, the trees go to sky. I’m not sure it’s true. So one day or the other, but we don’t know when, I think a huge capacity of resident in this market, we will see the cycle going in the other way. So this is why, in petrochemical, we only invest on clear advantaged feedstock projects and no NAFTA projects in Total. That’s NAFTA petrochemical project will not receive any allocation of capital. It’s not a good idea, not at all. So it’s why Total does not invest in petrochemical in China, for example, despite better market is there. But we prefer to keep the advantage of the feedstock and then bring the products.

[Mike Sangster:]

Any more questions?

[Kim Fustier:]

Thank you. It’s Kim Fustier from HSBC. I wanted to ask about unit production costs in Upstream, please, and their trajectory. I see you’re still targeting a 5.5 unit cost per barrel for 2018, so that seems to be stabilizing. I also seem to remember a $5 target by 2019, so is this target still valid? And I don’t see it on the slides. And if not, does it reflect a view that incremental cost efficiencies will be simply offset by returning cost inflation? Or could it be simply an Upstream portfolio mix? Thank you.

[Patrick Pouyanné:]

Just Maersk Oil effect, that’s all. When you integrate the Maersk Oil effect – Maersk Oil is not at $5 per barrel. So let’s just integrate – the Maersk Oil effect is – as an effect, which is not – which is over good effect, which is $5.5 instead of $5, so you keep $5.5 in mind. It’s a portfolio effect. But again, to come back to you on the first idea, which was the inflation, I insist that we maintain the cost saving programs for – to go to five. And in fact, the effort on the Upstream, which I know are more difficult because, yes, there might be a risk of inflation, not immediately, which could come back in two years for year and so we want to keep the discipline. That’s why we – I know about the teams could – I’m sure that my teams are saying, okay, $70 per barrel in saving cost. But let’s keep a discipline, and we are stringent, and we keep in all of the company this a cost saving because we want to be in anticipation on – of return of more inflation.

[Unidentified Analyst:]

Just a quick question on your DD&A. Could you follow up on projection cost? Could you give us an idea on what we should expect in coming years? And a quick one as well on your working capital. I was surprised to see a follow-up movement in the fourth quarter, which is a bit counter-initiative given the steady rise in oil prices we saw. Could you elaborate a little bit on this? Thank you.

[Patrick Pouyanné:]

We have a disciplined company, but we cannot ask them to be disciplined every quarter. You have a certain point of limit. But Patrick will have a right on working capital, which was also a good surprise for us, which is good. DD&A, I think it’s more stabilized around $12, $13 per barrel.

[Patrick de La Chevardière:]

Absolutely. No, it is stabilizer on the $12 to $13 per barrel to which you had $5.4 and you get to $18. Well, just actually below $18 per barrel in 2017, and we want to keep that level next year.

[Patrick Pouyanné:]

So there’s a trend to decrease the DD&A, you need to wait for the next wave of projects. This is a strategy. If we sanction project like we are doing in 2017 and 2018, benefiting from low CapEx, this will have an impact in four years when we’ll come into production. So this is all strategy to try to capture this – the loss cycle on term of cost in order to put in the pipeline some low CapEx, which will be much less intense than the one we had previously. So one, we have developed, we amortize them and we have – know the way to do it. So that’s why it’s important to continue to make verify this during this year 2017, 2018, 2019. So it’s time inference the DD&A. And working capital.

[Patrick de La Chevardière:]

Working capital. I don’t know if you remember that, two years ago, we had difficulties to control our working cap. We put in place in the organization several people in charge of the working cap, including in trading, for instance, where we manage the working cap at end of any quarter, especially at end of the year. And this is a result of the work of. I don’t know, 10, 20 people in group.

[Patrick Pouyanné:]

But then you have some reduction of residuals, I think, in refining in people, Bernard, but you give an example what happened exactly for you.

[Bernard Pinatel:]

They worked also.

[Patrick Pouyanné:]

They worked also. Because waiting is in the responsibility of Patrick, so I know – and should we ask Bernard on working capital?

[Bernard Pinatel:]

It is – in something we’ve started three years ago, the residual to put them outside of the balance sheet. And the more we go, the more idea we find because basically, the portfolio – the customer portfolio web is very sound, not to be on the polymer side. And we manage, therefore, to also reduce the total capital.

[Patrick Pouyanné:]

I would say also that in trading, fundamentally, when the market goes from contango to backwardation, you have less stock and so – because it makes little sense. So that’s linked to the business. And it’s more difficult for them to make money, for sure, to make the results. But fundamentally, you decrease your working capital because in the backwardation market, you don’t have any interest to keep eyes off, so It is one of the reasons, as well, which is more linked to a fundamental of the business. Do we satisfy all your questions? So I noticed that I don’t have many question of allocation of capital at least for six months, I think I hope that I will that is a Board of Directors because it was, I can tell you, a good work for all of them. And we hope that we will convince more and more investors that our business case is the right one in all industry. Thank you for your attention.