TotalEnergies SE (TTE) 2008 Q1 法說會逐字稿

Ladies and gentlemen, welcome to Total's first-quarter 2008 conference call.

I now hand over to Mr.

Robert Castaigne, Chief Financial Officer.

Sir, please go ahead.

Thank you.

Hello and thank you for calling in.

I met with most of you a few months ago in February.

And since then, it has been a very busy and interesting time.

The evolution of the macroenvironment has been noteworthy, this is quite an understatement.

Operationally many of you may have noticed the acceleration of activity around our major company-operated gross projects.

With Dalia and Rosa on stream, Block 17 in Angola is producing more than 530,000 barrels per day.

Dolphin has reached its plateau of 2 billion cubic feet per day or 500,000 barrels of oil equivalent per day including the liquids at the end of March, a few months ahead of schedule.

Moho-Bilondo has started up one month ahead of schedule and we expect to Jura to start up on time within a few weeks.

In terms of our (inaudible) project management we have been very successful.

It is of course frustrating that we had a technical shutdown on Elgin-Franklin that has obscured some of this performance.

Clearly we are very focused on delivering our projects in line with targets.

In addition to the operational news, I'm sure that you have seen our first-quarter results.

We had yet another very good quarter.

Compared to the first year last year to the first quarter last year, adjusted net income increased by 24% to $4.9 billion, adjusted EPS set a new record at $2.16 per share, an increase of 26% and the business segment achieved of the past twelve months was very strong at 28%.

In terms of cash flow compared to last year, adjusted cash flow increased by 20% to $6.5 billion while net investment was $3.7 billion in the first quarter 2008.

These results show that the upstream is well leveraged to hide crude oil prices particularly due to the strong underlying growth and the quality of the portfolio.

Cyclical weakness in the downstream in chemicals had a moderate impact since mainly to the resilience of our marketing and specialties businesses.

It is important to keep in mind the order of magnitude of the segments.

The adjusted net operating income from the upstream segment increased by $1.5 billion year-on-year and this far outweighs the $0.5 billion decrease in the downstream segment and the $0.1 billion decrease in the chemicals.

Now I will briefly comment this segment of activity.

In the upstream, the most important story here is the level of activity and the implications for future growth.

I already mentioned Dolphin, Moho-Bilondo and Jura.

The (inaudible) are both on track to start up in the coming winter.

In terms of future projects, we made the final investment decision to launch two giant company-operated offshore feeds over the past few months, Pazflor in Angola and Usan in Nigeria.

We launched the redevelopment of Anguille in bon Gabon.

We have launched the feed for Shtokman and for the upgrader in Canada and we are studying several very substantial developments on the (inaudible) permit as Moho-Bilondo goes more north.

In addition, we launched a targeted acquisition in Canada to strengthen our position among the key players in the heavy oil business.

This is a place of (inaudible) productivity that is unmatched by our peers.

Now looking at the quarter, production was 2.43 million barrels of oil equivalent per day which is comparable to a year ago.

The first quarter 2008 was affected by an unscheduled shutdown on the Elgin-Franklin that lasted for close to one month in February and had an impact of about 35,000 barrels of oil equivalent per day.

There were also elements that affected our reported production mainly [the price] effect had an impact of about -2% and this demonstrates that as the oil price increases, the sensitivity of our [PSC] volumes decreases.

This price affect was mostly offset by the absence of OPEC reductions.

And there were also some changes in the portfolio (inaudible) determination of the concession in Dubai and the asset swap in Angola.

Adjusting for these items, the (inaudible) growth was close to 3% year-over-year driven mainly by a higher production that started up in 2007.

On the subject of Sincor.

This is now in mixed company mixed company called PetroCedeno.

Our 47-person in service in Sincor was deconsolidated at the end of 2007 and our 30.3% share of PetroCedeno has been treated as an equity affiliate since January 1.

As a compensation for the 17% dilution, we have recorded receivable and we received additional production to offset the receivable.

Depending on oil prices, we expect to receive this addition in production for all of 2009 and part of 2009.

Overall, as we had indicated in the past, the net impact on the first quarter production was more or less neutral with the compensation received in kind offsetting the impact of the 17% dilution.

As a general comment on production, our major projects are performing globally as expected.

In the second quarter, we should enjoy the benefits of Dolphin at Plateau, the start up of Moho-Bilondo, and the first production from Jura.

Maintenance and technical shutdowns are expected to be comparable to last year including the impact of the (inaudible) shutdown in Libya.

So we are confident of our ability to grow this year and the years ahead.

Now in terms of our prices.

Total was one of the first major oil companies to take the position that energy prices have moved into a structurally higher range and while a certain amount of volatility in either direction would not surprise us, we continue to believe that the supply of oil will remain tight relative to demand.

The Brent price reached about $97 per barrel, an increase of 67% compared to the first quarter 2007.

For the same period, our average realized price on liquids increased by 65% nearly to $91 per barrel.

Our average realized gas price in the first quarter was $6.7 per billion BTU, an increase of 17% which reflects some improvement in the North Sea as well as higher Asian LNG prices.

But in contrast, this also includes the impact of low price gas from Dolphin.

Our average realized hydrocarbon price decreased by 49% in the first quarter.

Adjusted net operating income from the upstream segment increased by 59% to $4.1 billion thanks to the higher realized prices and the underlying production growth.

On the per barrel basis, adjusted net operating income for the upstream segment increased by 58% to close to $19 per barrel.

This is a large increase and it reflects the growing strength and sensitivity of our portfolio.

You may have noticed that the equity affiliate line increased by about $0.2 billion to more than $0.4 billion in the first quarter 2008.

This increase is partly due to the addition of PetroCedeno and also to the growth of our LNG affiliates.

The upstream last year was 58% and continues to be among the highest in the peer group.

By the way, we recently benchmarked Total against the other super major, using the 2007 FAS 69 data.

We found that Total continues to rank as best-in-class for technical cost with a $5 per barrel of oil equivalent competitive advantage compared to the average of our peers in 2007.

So looking ahead to what appears to be an even stronger environment in 2008, we are confident that we are pursuing the right strategy and that we have the best teams to execute it.

Downstream now.

When we look at the evolution of refining margins, it is clear that we began the first quarter at low level and built up from there.

Generally, average about $15 per ton and by March we were up to $52 per ton.

In April, refining margins were quite good and averaged $43 per ton.

At the beginning of the first quarter, on one hand gasoline margins were very low due to the combination of high inventory levels and weak demand in the U.S.

On the other hand, diesel margins increased strongly during the quarter and reached record levels in April.

In fact, the diesel margins have been largely responsible for the recovery in global refining margins.

Refinery throughput in the first quarter was close to 2.4 million barrels per day, [full] refineries were affected by scheduled turnarounds and this also reflects the impact of the Milford Haven refinery sale late last year.

Marketing performed reasonably well.

We saw some signs of weakening at the end of the quarter which could be a demand response to higher prices but it is a bit early, too early to say.

Adjusted net operating income from the downstream were close to $0.4 billion compared to $0.8 billion in the previous quarter.

Some of you may have noticed the very low level of income from equity affiliate this quarter.

This is due to weaker results from our affiliates in Europe and Asia.

The downstream last year was 19% for the past 12 months which is good.

We've been very busy in the downstream for the new developments.

We have approved the $2.2 billion modernization program for the Port Arthur refinery in the Gulf of Mexico which includes the new coker and this work has already started.

Construction is also in progress for the new desulpherisation unit at the Lindsey refinery in the UK and at the Leuna refinery in Germany.

And together with our partner, Saudi Aramco, we expect to approve the refinery project very soon.

Our equity share of the operating cash flow from this [flow] project could reach about $900 million per year in the next decade when they are all operating at full capacity.

In the second quarter, refinery throughput was affected by the completion of two scheduled partial turnarounds at the Normandy and Grandpuits refineries.

In addition, there is a scheduled turnaround at the Leuna refinery starting this month that will last for about seven weeks.

And overall, as I said, for the second quarter we have results to expect the refining margins to be stronger.

In the chemicals now.

Adjusted net operating income from the chemicals segment was about $237 million in the first quarter 2008 compared to $126 million in the first quarter 2007 and $366 million in the first quarter 2007.

More than 60% of the first-quarter result was earned by the specialty chemicals which was essentially flat.

So the improvement comes from base chemicals.

In line with the trend in petrochemicals margins, the base chemicals bounced back from a very poor first quarter but remained well below the level of the first quarter.

Demand level have been less than strong and (inaudible) prices have remained tight with the combined effect being continued pressure on CAGR and polymer margins.

The specialties have shown good resilience in the face of a weakening dollar and slowing economies both in the U.S.

and more recently in Europe.

Given this environment, our chemicals held up relatively well but it is difficult to be very enthusiastic.

Corporate now.

The remaining EUR1.07 per share of the 2007 dividend should be approved at the May 16, (inaudible) and paid out on May 23.

This would represent a return to shareholders of about $3.7 billion.

Our full-year dividend will have increased by about 27% in dollars.

We are expressed a clear preference for dividends over buyback and we believe that increasing the dividend is clearly the strongest signal we can send to show our confidence in the Company's future.

Having said that, through the first four months of this year, we bought back about 10 million shares for close to $0.8 billion.

The [gearing] was at 21% at the end of the first quarter.

This should increase a little after we pay the final dividend in May and we will continue to use the buyback as a tool to further adjust the gearing as needed.

On the investment side, we are in line with our full-year estimate of $19 billion.

Our operating developments are on track and this is a key to our growth profile for the coming years.

So I'm confident that Total will perform very well because of the strong portfolio and also because of the very strong culture that we have here which is evident in the disciplined approach to investment decisions and also in the excellent track record that we have for project management.

As a last word before we go to your questions, I would like to take this opportunity to let all of you know that I will be retiring from Total by the end of May after the shareholder meeting.

The next conference call in August will be managed by Patrick de la Chevardiere, which currently is a Deputy CFO and will become CFO the first of June.

As for myself, it has been an honor to play a role in the transformation of Total into one of the world's largest major oil companies and it has been a pleasure to work with many of you over the years.

Looking ahead, I have a great deal of confidence in the Company and in the new teams that will lead it.

Naturally I plan to remain a large shareholder of the Company at least for someone of my scale, so I plan to follow the stock price very closely and will therefore continue reading your results reports for many years to come.

And with that, let's move to the Q&A.

(OPERATOR INSTRUCTIONS) Neil McMahon.

Hi and good luck Robert.

Thank you, Neil.

Three questions really.

The first is in the refining side in Europe, you did mention that European margins on the (inaudible) [block] especially with your planned turnarounds looked reasonably good in the second quarter.

Is there any specific demand you could highlight in terms of diesel?

I'm looking at the European sales data for both diesel and gasoline, it's not looking that great.

Is there something very specific to diesel demand?

No.

I think traditionally we have an increase seasonable increase of the diesel demand in the second and third quarter of the year in Europe.

And I think that diesel should be a (inaudible) of the recovery of the oil refining margins.

In addition to that, one reason of the relatively low level of the refining margins in Europe for the first quarter was also due to the low level of the gasoline demand in the U.S.

And finally in addition to that, you know that in the refining margin, there is also a convergent element which is correlated which is linked to the level of the oil price which is now higher than it was before.

So I think it is all these three elements that make us relatively confident about a good level of the refining margins for the second quarter.

The second question really in terms off all the companies who have seen significant share price movements associated with exploration wells.

Can you highlight the key exploration wells you see this year that Total is drilling that you would feel could be very influential to the future portfolio of the Company?

It's always difficult to speculate on our future reserves especially as we are still at relatively beginning of the year end of May.

But first I can say that we have a few interesting news in the pipe but we have to wait a little before saying something more.

And as to the (inaudible) we should have interesting results especially I would say as usual Angola and Nigeria but also we shouldn't forget the North Sea and the UK especially.

(multiple speakers) to say that if this could have an impact on the share price, quite frankly I would be more cautious.

But again, as a policy of the Company, as you know, this to continue to be very active in exploration with expenses for 2007 that should amount to $1.7 billion or $1.8 billion.

And just a really last quick one from me, is there an update on Synenco in Canada?

Synenco in Canada, you know that we have launched the takeover on the company.

This is clearly a good prospect for -- a good prospect you no -- it is good reserves for the future.

We think that if we are successful with this operation it should be an interesting way for us to enlarge our reserve base of heavy oil in Canada.

So I think it is for the preparation of the future.

We think that it was good opportunities, a good opportunity to catch or to try to catch.

Great, thank you.

(inaudible) to reasonable price and we have now to wait till the end of the operation.

Jason Kenney, ING.

May I also wish you all the best for your retirement particularly after such a remarkable career.

I've got two short questions.

Firstly, are you able to quantify the compensation in kind from Venezuela in the first quarter?

And then secondly, I'm not sure -- are you able to separate out the return on capital employed for the LNG contribution from the E&P division?

That is all just to give us a steer on how profitable that LNG business is for you.

As to the (inaudible), you know that the compensation global issued amount to a little above $800 million which means that we should receive -- (technical difficulty) Concerning the compensation that we received in kind for the first -- I don't think that it -- it closed early, by the end of the quarter.

(inaudible) speaking, it should be ['08] but I don't think we have had something for the first quarter of 2008.

And second question, LNG activity.

We do not -- this thing we should -- our LNG operation as a separate segment of activity.

I would say that the type of profitability that we have now is more or less comparable average upstream (inaudible) achieve.

Because I think that this LNG project have now a strong advantage as most of them were negotiated before, we have launched when the costs were lower.

So on average our profitabilities of (inaudible) are about the same.

And if I look at the new project that we have launched over the last one or two years, I think the profitability were totally in line with the best of our upstream project.

Okay, thanks and all the best.

Thank you.

Jon Rigby, UBS.

Thank you.

Two questions, one on Canada and one on your downstream.

On Canada on Synenco.

Can you just give us a little bit of color on the timing toward likely completion of that transaction?

And then also maybe a little bit of insight into how you see it fitting into your existing portfolio?

Would you develop it concurrently with jobs in prospect or in line so you are moving people back and forth from the two projects?

And then the second is on the downstream.

It's my impression, you can correct me if I'm wrong, is that I take the points about China and CEPSA is that the downstream earnings were a little light against what your traditional relationship with [CLCV] margin would be?

Is there anything in the businesses that we can't see the business (multiple speakers) sort of been little weaker in the quarter, the trading perhaps?

Yes, trading, the results of the trading was at the first quarter of 2008 a little lower than what it was one year before when we had results of our trading that was particularly good.

In addition to that, a few foreign exchange losses are traditionally in the upstream.

We try to cover everything but we are having said that traditionally a little long in dollars and I speak for the commercial position and we had small foreign exchange losses.

So it is a mixture of several things.

Clearly there's a performance of our Spanish operation.

We're back in China trading and small foreign exchange loss.

As a full element that this has to be mentioned.

We could have imagined to have also a higher performance in some of our refineries but it is life and it's also that we have had some small technical issues but nothing specific to say about that.

Okay.

On the Synenco just some --?

Yes, to answer your question concerning the timing of the closing.

The timing of the closing is 35 to 60 days after the opening of the offer.

And in fact, it is difficult to be more precise because this depends on some administrative approvals.

Having said that, it cannot be over 60 days because I think that over a certain period is time if we have not received the approval, we have to (inaudible) that it is given.

So I think the maximum is 60 days.

The only point that I don't know -- I don't remember when it should open.

In fact, it should open at the end of this week.

Okay.

So take the end of this week and add something between one or two months that would mean between the middle of June, middle of July, something like that more or less.

And the project itself, are you saying you [park] back or do you see very much of the -- an integrated development with your existing (multiple speakers) out there?

This project I think is what is 50 kilometers from (inaudible) not very far.

But I think there will be some infrastructure to set up.

And I think clearly the project that should give a prediction for the end of the next decade.

I think clearly it will come in production at (inaudible)

Thank you very much and good luck.

Theepan Jothilingam, Morgan Stanley.

Good afternoon, Robert.

Just a couple of quick questions on volumes.

If you could just clarify perhaps the impact of any loss of volumes from Nigeria in the quarter.

And then secondly, in terms of Q2, could you just quantify perhaps what you think the relatives or delta will be in terms of maintenance versus Q1?

And finally, I know you've been quite adamant in terms of not giving an explicit number in terms of volume growth for this year, but I wanted to know whether you could perhaps confirm at sort of $100 oil or even today's prices whether you expect absolute growth from the portfolio?

Thank you.

Okay.

Concerning the volumes in Nigeria, if you refer especially to the shutdowns that we had with SPDC, in fact I think that we had a very small recovery, something like a 4000 barrels of oil equivalent for our share that we had in the first-quarter 2008 compared to the first-quarter 2007.

For the second quarter, I think that we continue -- we should to recover part of the production that was shut down, but this is a process which is relatively long, especially to the (inaudible) difficulties that we continue to have in the region.

I think said that, on the political side I understood that some progress were made between the government and the representatives of the region, and we can be presently optimistic.

Having said that, it is still a difficult area.

The second question concerning more specifically the production and the turnarounds that we could have.

Globally speaking, I think that if we take into account in 2008 the shutdown of Elgin-Franklin in [Elgin] that of course we are not scheduled, including the maintenance I think we should have a global effect for 2008 comparable that the one we had in 2007.

And as to the sensitivity of our production to the oil price, I think it is something like it is now relatively small, something between 1000 and 2000 barrels of oil equivalent per day, per dollar per barrel.

And finally, just to give you a flavor of what we think our production should go in 2008, clearly our production should grow even if we remain with the $100, $120 per barrel.

And if we take into account the shutdowns that we mentioned with Elgin, with (inaudible).

And in fact, this will be due fundamentally to the (inaudible) of the growth of our production from Dalia, Rosa, Dolphin.

Dolphin, that already reaches a plateau, Moho-Bilondo in Congo has just started up and we are also about to start up the production on the Jura.

So I think globally speaking, our production should grow.

It is difficult to be more specific now given some uncertainty and I must say that as in the past, we have missed some of our targets, we are now extra cautious but I remain optimistic especially with the global trend of our production.

And the target that we have fixed between 2006 and '10 assuming $60 per barrel that is to say 4%.

And if we move from $60 to $100, it should be something of around 3% per year.

Thank you, that is very clear.

Good luck in the future.

Thank you very much.

So next question.

Lucy Haskins, Lehman Brothers.

Robert, good afternoon.

Just a follow-on question perhaps on the volume situation.

You said the sensitivity is becoming less pronounced in a high oil price environment.

What happens to the acceleration perhaps of the cost recovery on things like Dalia and Rosa in a high price environment?

Are we still looking at a 2010 timeline in terms of those step changes in entitlement?

Yes, in fact the point is that (inaudible) for example we have already reached a higher threshold, so even if it moves to $200 per barrel, it will change nothing.

And by the way, this is why as part of our PSA productions are becoming now relatively old compared to some of our peers that we have now a sensitivity which is lower than it is if I understand well for some of our peers.

And what about the other (inaudible) fields within Angola and when do they move up at cost recovery?

Rosa and Dalia, Rosa and Dalia I think we are now in terms of shareholder profit at the highest level so we think it is 80%.

And the reduction of interest in the profit oil will decline very progressively.

And I think that we should move from 80 to 40, 40 that should be reached something in 2010 assuming that we remain with the type of oil price that we have now.

Thanks very much, Robert, and very best wishes for the future.

Thank you very much, Lucy.

Colin Smith, Dresdner Kleinwort.

Good afternoon, Robert.

I've got a couple of questions just on the $900 million you mentioned for I think profits in [Jebel] and Port Arthur, can you just confirm that is what it was?

And whether that is pre or post tax?

And also maybe just comment on where you think Jebel costs have got to so technical prices talking about $12 billion for that unit?

That is the first question.

Second thing was just on the (inaudible) LNG, can you just clarify how the upstream part of that works since as I understand it Total doesn't have an interest position in the acreage from which the gas will come for the feed supply.

And the third question was just on Synenco again.

I just wondered whether the partnership with Sinopec played any role in your desire to become involved in that project in terms of improving a relationship with them perhaps?

I think I will start with the last question.

We have good relationships with Sinopec and I think that if we are successful with the takeover, we should be able to develop together a good and fruitful joint venture.

So I think Sinopec is clearly a way of our [expected] with the production of the oil and also with the upgrading.

And I think I do not anticipate any difficulty with our partner, of our partner, potential partner in this joint venture.

After that you asked a question concerning the origin of the $900 million cash flow after-tax that we expect for the long-term from our project Port Arthur, Jebel, (inaudible) oil refinery HDS in these two refinery.

I think clearly the bulk, especially if we (inaudible) to the level of the CapEx will be -- will come from Port Arthur where we have 100% and from Jebel we have we have 37%.

It's about -- I still believe the breakdown between Port Arthur and Jebel, I think you will accept that I do not enter into too much detail.

And then you asked production, the involvement if I understood well of the supply of gas of Yemen LNG.

May I suggest -- I think that we have taken some participations in exploration permits with a view that seemed to be very attractive for production of gas.

And it is clear that if these successes are confirmed, that this additional productions of course could be good for our Yemen LNG project.

But may I suggest that you call our investor relations team in order to have a bit more detail especially on the position that we have acquired in Yemen to increase our production of gas especially.

Okay, thanks very much and good luck, Robert.

Thank you very much.

Mark Gilman, Benchmark Company.

Robert, good afternoon, congratulations and best wishes on your retirement.

Thank you.

Could you clarify because there was some technical interruption, the comment you made regarding the compensation received in volume terms in the first quarter pursuant to the Sincor divestiture and whether that is included in your equity production number in the quarter?

In the quarter in fact, I think I have the precise figure.

The impact for the first quarter was 18,000 barrels per day.

I mean for the production that we received in kind.

No, no, no, no, the dilution -- the compensation that we received represented 18,000 barrels per day for the first quarter.

So I said that it was extremely low though it is in fact 18,000 barrels per day.

And that is included in your equity production?

Absolutely, it is included in the production.

Okay.

Could I possibly ask you about your arrangement with the Sabine [passed] LNG regasification facility and whether or not you have supply lined up for that facility?

And whether there is a take or pay obligation associated with it?

No, it just -- we have reserved capacity and it is deliver or (inaudible) obligations that we have for ten years.

And we have not given any additional support.

And this obligation represent about one billion cubic feet per day approximately and [once that is over], we have not given any additional support.

And we think that we shouldn't have any difficulty to separate this commitment that we have taken for the long time.

Robert, could I ask you about a comment in the release regarding a loss in the Chinese refinery.

I'm curious as to whether or not you have the capability to export product from that refinery or whether you are required to allocate some or all of the supply to the domestic Chinese market?

In fact, part of the production is exported I think it should be about one-third, and two-thirds are for the domestic market.

You were required to allocate two-thirds to the domestic market?

This is an issue and we have some discussions in order to see how we could have access to part of this reduction especially in order to supply our networks.

My final question relates to Indonesia.

I believe that you have recently made a commitment to increase your production and feed to the Bontang facility there.

I wonder if you could quantify the extent to which your supply will be increasing as a result of recent decisions?

No, I don't see what you mean.

What I can say that is true that in the past we have had the possibility to supply the Bontang plant in addition to our own (inaudible) share in order to offset part of the volumes that our partners were not able to supply to the plant.

But I think that is all.

I don't think that we have taken as far as we are concerned additional commitments for the future.

What I can say for the future is that we are totally comfortable to take our share of the different packages that we'll have for the coming years.

But I think that the issue is not for our supply, it is more for the part of the supply of the plant that should come from some other company.

So in the past, not only we are comfortable but we were able to supply both our own share but for the future we are comfortable for our own share to supply more I think that we will have to see.

But I don't think that we have taken any additional obligation recently.

Robert, thank you.

And good luck.

Thank you.

Irene Himona, Exane BNP Paribas.

Good afternoon, Robert.

I have a number of questions.

First of all on E&P affiliates, obviously the profit is up very substantially over 100 million year on a year.

As this is the first quarter of deconsolidating Sincor, could you give us an idea of how much of that increase was (multiple speakers)?

You are right.

In fact, the increase is due first to Sincor which is now an equity affiliate.

And then to the increase of our share especially in our LNG project in Nigeria and (inaudible) what is breakdown in the increase I wouldn't want to enter into too much detail.

But for the [moment], this is the explanation.

Okay.

My second question concerns corporate charges, the corporate operating charge in the quarter, 142 million it's up 40% year on year which seems unusual.

Was there something unusual in that number this quarter?

Corporate charges, quite frankly no.

I don't know -- the absolute figure for the increase is --

The charge was 142 million and it is up over 40% year-on-year.

(multiple speakers) Actually if I ask my next question --

Yes, could you ask your last question?

It's the working capital you released obviously (multiple speakers)

I think the main explanation for the difference is insurance in fact.

Okay.

Thank you.

So my question on working capital, you released over 600 million of working capital which seems a bit counterintuitive in a rising price environment.

Could you perhaps clarify how that happened?

This is probably the most difficult question.

I should have the answer somewhere because I have to explain that to the audit committee and also to the Board.

Quite frankly, I wouldn't want to lose too much time because it is extremely difficult especially -- I lost my paper -- especially the decrease --.

This reduction comes for the first quarter 2008 essentially from an increase in fiscal debt that was pretty high and that was partly compensated by the increase of payable due to higher prices.

Okay, thank you.

When -- it is clear that when there is an increase in the oil price, usually there is also an increase of the debt that we have.

On average, it varies a lot from one quarter to another to the tax authorities.

But in front of that of course, the payable of our customers increases also.

And the net of that explains the working capital decrease by EUR600 million in the first quarter 2008.

What is also difficult is part of the working capital is due to the CapEx and especially last year, we had strong reduction of the working capital that was linked to the strong increase of the CapEx in E&P.

So I think if we want -- it's a bit difficult to give all the detail.

But globally speaking for the first quarter, keep in mind that this is a result of the increase of fiscal debt minus the impact of higher prices with our customers.

Thank you very much and best wishes.

Thank you very much, Irene.

We have no further questions.

Okay, so I would like to thank you very much for being with us today.

Goodbye.

Ladies and gentlemen, thank you all for attending.

You may now disconnect.