TotalEnergies Warns on 2024 Results Amid Lower Oil Prices
Lower Refining Margins Impact TotalEnergies’ 2024 Outlook
TotalEnergies issued a warning about the potential impact of weak refining margins on its 2024 results. This caution follows a 31% decline in adjusted income for the fourth quarter of 2023, influenced by lower oil prices driving a 31% decline in the company’s adjusted income for the same period.
Oil Majors Experience Significant Profit Decrease
Oil majors witnessed a substantial decrease in profits of about a third from record levels in 2022, attributable to the pressure on oil and gas prices due to their retreat after the Russian invasion of Ukraine.
TotalEnergies’ Financial Performance and CEO’s Comments
The French group’s net adjusted income dropped to $5.2 billion from $7.6 billion in the same quarter a year earlier, slightly below analysts’ forecasts. CEO Patrick Pouyanne stated that the group expected a 10% return on its integrated power sector for 2024 and revealed that a third of investments for that year would be dedicated to new petrol and gas projects.
Shareholder Rewards and Planned Investments
TotalEnergies plans to increase interim dividends and buy back shares in the first quarter of 2024. Furthermore, it proposes a dividend for 2023, up 7.1% from the previous year. The company also expects net investments of $17-18 billion for 2024, with a significant portion dedicated to its integrated power section.
Quarterly Earnings, Production, and Industry Outlook
The oil and gas group recorded quarterly adjusted core earnings (EBITDA) of $11.7 billion, down 27% year-on-year, and a decrease in production to 2.483 million barrels per day. It foresees LNG markets remaining affected by limited capacity additions and growing demand in 2024, with sales of over 40 million metric tons expected.
Future Developments and Prospects
Pouyanne expressed hope for the Rio Grande Project in the United States, despite certain U.S. LNG installations being affected by pending approvals. The company also aims to develop its first project in Namibia and allocate a third of its budget for exploration projects in the country.
