(Adds share buy back figure, quote from CEO)
PARIS, July 29 (Reuters) - France's TotalEnergies
said on Thursday it would use part of its cash flow for share
buybacks worth at least $800 million, as rising oil and gas
prices boosted profit, offsetting the hit from selling out of
one of its Venezuelan ventures.
TotalEnergies has been investing heavily in clean energy
projects and electricity production so it can eventually rely
less on oil and gas, mirroring moves by European rivals.
On Thursday it announced a collaboration with Amazon
, through which it will supply the online retail giant
with renewable electricity, and it has been multiplying new
investments, including in areas such as electric vehicle
Surging oil and gas prices are boosting the industry for
now, however, lifting earnings and feeding into investment
budgets. Royal Dutch Shell and Norway's Equinor also
announced share buyback schemes on Thursday, sparking a share
TotalEnergies shares were up 2.4% at 1500 GMT.
The group said it expected to generate more than $25 billion
in cash flow this year, based on current high oil price
forecasts, and would invest in more new projects and return
surplus amounts to shareholders if oil prices remained high.
"The board of directors decided to allocate up to 40% of the
additional cash flow generated above $60 per barrel to share
buybacks," TotalEnergies said in a statement.
Chief Executive Patrick Pouyanne told an analyst call that
it would mean share buybacks of $800 million in 2021.
"And if the average price is going up to $68 (a barrel), for
example we are not far it could go up to one billion
dollars," he said.
The group said it would also pay a second interim dividend
of 0.66 euros per share for 2021, stable from the first quarter.
TotalEnergies' adjusted net income progressed further in the
April to June period, reaching $3.5 billion, compared to an
adjusted net income of $126 million a year ago at the start of
the COVID-19 pandemic.
But the group also disclosed it was impacted by a $1.38
billion loss on the sale of its 30.3% stake in Petrocedeno,
which produces extra-heavy crude oil from Venezuela's Orinoco
Belt and transforms it into light crude oil.
Total said Venezuela's state-run oil company PDVSA would
become Petrocedeno's 100% owner as Norway's Equinor
also agreed to exit its 9.7% stake.
TotalEnergies, which still has a majority stake in
Venezuela's Yucal Placer gas field among assets in the country,
said the Petrocedeno development was not in line with the low
carbon intensity projects it wants to focus on as part of any
new oil investments.
The company slightly lowered its hydrocarbon production
forecast to 2.85 million of barrels of oil equivalent per day
(Mboe/d) in 2021 due to OPEC+ quotas in the second half of 2021.
It had previously forecast that production would be stable
versus 2020's 2.87 Mboe/d.
It said net investments would reach between $12 and $13
billion in 2021, with half of that earmarked for growth
projects, including a major chunk in renewable energy and
Like its rivals, TotalEnergies has come under pressure from
climate campaigners and some shareholders to speed up the shift
from fossil fuels to cleaner sources of energy. It has a plan to
reach carbon neutrality by 2050, with staggered targets to 2030.
It also faces the challenge of catching up with renewable
energy leaders such as Spanish wind power group Iberdrola and
Italy's Enel, which have been positioning themselves for years
in the segment.
(Reporting by Sarah White, Benjamin Mallet and Sudip Kar-Gupta,
Editing by David Evans, Barbara Lewis and Emelia