Net profits at TotalEnergies trebled in the first quarter
TotalEnergies said April 28 that its net profit in the first quarter soared three-fold to $9bn, as tighter markets due to the war in Ukraine lifted its realised oil and gas price to cyclical highs.
The French major benefited from oil prices of above $100/barrel and gas prices that topped $30/mn Btu in key European and Asian markets. It confirmed a $4.1bn write-down on its Russian activities, following its announcement on March 1 that it will gradually cease operations in the country and halt new investments in light of the Ukraine war. In addition, TotalEnergies expects new sanctions on LNG technology exports to Russian businesses to affect its 10% stake in the Novatek-operated Arctic LNG 2 project.
LNG sales are factored into TotalEnergies' integrated division for the low-carbon fuel alongside renewables and electricity generation. Operating profit in this sector climbed to $3.1bn, up 11% quarter/quarter, as TotalEnergies pressed home the effectiveness of its midstream LNG supply chain, servicing "record" spot purchases of 4.7mn metric tons.
LNG highlights included TotalEnergies entering into a strategic alliance to expand Mexico's Vista Pacifico LNG terminal in partnership with Sempra. TotalEnergies also confirmed the heads of agreement for the fourth train expansion of the 13mn metric tons/year Cameron LNG plant in Louisiana, where it again has aligned with Sempra.
Cameron LNG will reach 20.9mn mt/yr production capacity once the expansion is completed in 2023, subject to a final investment decision. The Louisiana location should provide easy access to European markets, giving TotalEnergies' portfolio a further boost as the energy transition takes hold.
In upstream oil and gas, TotalEnergies posted a net operating profit of $5bn for the upstream segment with cash flows accruing $7.3bn over the quarter. Gas production dipped, but only by 2% quarter/quarter, to 7.2bn ft3/day, with around half coming from Europe and Central Asia.
TotalEnergies made a "significant" light oil and associated discovery at Namibia's offshore Venus prospect in February. CEO Patrick Poyanne described the find as "promising", and said the upstream segment had thrived as a whole, thanks to stable output and fuel prices.
TotalEnergies invested $900mn in renewables and electricity projects in the first quarter, in line with its annual $3.5bn target. The capital expenditure includes new concessions to deliver 5,000 MW of offshore wind capacity across the US and Scotland.