TotalEnergies SE (TTE) 2013 Q1 法說會逐字稿

Welcome to the Total first-quarter 2013 results conference call.

I'll now hand over to Mr. Patrick de la Chevardiere, Chief Financial Officer.

Sir, please go ahead.

Hello, this is Patrick de la Chevardiere speaking.

I will make some comments on the results and then go to Q&A.

As you know, the first quarter environment was globally in line with the fourth quarter.

Looking at the results, adjusted net income was $3.8 billion compared to $4 billion in the fourth quarter.

Adjusted earnings per share for the first quarter, in dollars, was $1.67.

In the Upstream, Brent was well above $100 per barrel in the first quarter.

Adjusted net operating income for the segment was $3.3 billion compared to $3.5 billion in the fourth quarter.

This reflects mainly the impact of higher effective tax rate of 63% for the first quarter.

I remind you that year-end 2012 adjustments reduced the effective tax rate for the fourth quarter, so we are returning to our normalized rate of about 60%.

In the first quarter, the Upstream tax rate was higher, in particular, due to exploration charges in countries where the Group has no revenue.

Production in the first quarter was 2.32 million barrels per day.

This is up slightly compared to the previous quarter, thanks mainly to the ramp-up of new projects like South Mahakam and to a very good production level at Yemen LNG.

Overall, operations are running well.

We successfully restarted Elgin.

It is currently producing around 30,000 barrels per day net to Total, and this production will be reflected in the second quarter.

In exploration, we have very good results in the Vaca Muerta, our shale play in Argentina, with four rigs running.

For Total this is a very significant unconventional play and on the same scale as our Utica shale play.

On our Ivory Cost prospect, we discover oil-bearing zones that demonstrate the existence of hydrocarbon system, and we are completing additional studies to design an appreciation program and to further explore the block.

Wells are in progress on our prospects in pre-salt Gabon, Australia, Kurdistan and in the Gulf of Mexico.

We are optimistic about the wells to come in pre-salt Brazil and Angola.

Keep in mind more than 80% of our exploration potential for this year is yet to be drilled.

In development operations, we remain focused on delivering our portfolio of more than 20 high-quality projects on-time and in-budget.

We are looking forward to the startup of Angola LNG and Kashagan.

We are on track with Ekofisk, CLOV, and Laggan Tormore.

With the FID of Moho Nord in Congo, we further increased visibility on production through 2017.

And the FID for Egina should come very soon because the project has been approved by an NNPC and by us, as operator.

Note that we have been actively managing our future investment profile in a disciplined manner.

In Canada, with sale of Voyager, we have rationalized our position there and are now concentrating on a redesigned Fort Hills project.

In Russia, we are focused on Yamal, and we expect this to be one of the lowest-cost LNG projects in the industry.

In Uganda, we are making progress with the authorities and are now speaking in terms of a much smaller refinery project.

Shifting to the downstream.

Adjusted net operating income of the Refining & Chemicals segment was $506 million, stable compared to the previous quarter, despite a 21% drop in European refining margins.

So you can see that our performance is improving thanks in part to the restructuring program.

Keep in mind also that the Normandy platform was done for much of January while we completed the modernization project.

It will be fully operational for the second quarter.

The annualized ROACE for Refining & Chemicals was 9%, so we are on track to achieve our 2015 profitability targets.

The Marketing & Services segment posted adjusted net operating income of $350 million for the quarter, again delivering consistent and impressive results.

The annualized ROACE for Marketing & Services remained a very competitive 15%.

And finally, on the Corporate side.

The Company is in strong financial health.

Adjusted cash flow for the quarter was about $7 billion.

Organic investments were $6.4 billion, in line with our 2013 budget.

The asset sale program for 2012-2014 is going well.

We have announced more than $5 billion in asset sales so far this year, including TIGF, and we are on track to achieve our target for 2013.

As you know, we have a substantial organic investment program for 2013-2014, but the asset sales program allows us to manage the net outflow at a reasonable and affordable level.

Given the recent volatility in the price of Brent, it is appropriate to remind you that as we start up a series of major projects like Kashagan, Angola LNG, and CLOV, the associated CapEx winds down.

Our gearing was 26% at the end of the first quarter.

This remains within our target range, but should decrease as we receive more than $5 billion in proceeds from the announced asset sales.

Yesterday, the Board authorized an interim dividend for the first quarter of EUR0.59 per share, stable compared to the previous quarter.

As a reminder, our policy is to maintain a payout ratio of 50% on average over time.

We recognize the importance of the dividend to our shareholders, and I'm confident in our ability to maintain this competitive policy and return.

This concludes my comments, and I'm now ready to take your questions.

(Operator Instructions) Robert Kessler, Tudor Pickering Holt.

Hi, Patrick.

I wanted to ask you about Jubail.

You know, now that we have seen Manifa crude starting up and supposedly ramping up to 0.5 million barrels a day by July, I'm curious if you could remind us what the timing is for that feeding into the refinery?

I know you've got a couple of quarters here of phased startup and products not coming out to the market until later in the year, but when will you be introducing crude into the complex?

Okay.

SATORP as we call it now because this is the name of the company as a project has reached 97% completion, and by year end we expect it to reach full operation.

As it is typical with complex integrated refineries, the refinery will undergo a phased startup for all units, both in refining and petrochemical units, to reach full operation by the fourth quarter.

Manifa, which is the oil we will use for this refinery and Manifa, according to Aramco, is ready to fuel the Arabian Heavy Crude network that will supply SATORP.

And the crude tests are now being scheduled to take place between the second and third quarter of this year.

So good progress basically on this project I would say, Robert.

Thanks very much.

And can I just ask for this interim period of phased startup before real profitability commences, is that -- what should happen to the Total financials if anything?

Are you going to have any kind of working capital drains associated with stocking inventories, or is that going to be effectively an off-balance sheet saying for this affiliate company?

Most of it will be off-balance sheet when we start to account for the operation by year-end.

Understood.

Thank you very much.

Thank you very much, Robert.

Bye-bye.

Nitin Sharma, JPMorgan.

Afternoon, Patrick.

Hope you are well.

Two questions if I may.

First one on divestments.

I look at your presentation from February in which you mention divestments of $15 billion that are closed or in progress, of which $6 billion were closed in 2012.

So maybe you could clarify in terms of the planned period how much is closed and what is still in progress in terms of divestments?

And also maybe some indication of timeline for the closure of asset sales deals that are still not closed?

And second one on dividend.

If we assume that oil price value remains close to $100, do you still have room to grow your dividend in 2013?

Thank you.

Thank you, Nitin, and have a good day.

As you mentioned, we already disposed $6 billion of assets in 2012, and we closed about $0.6 billion at the end of this quarter, first quarter of 2013.

We still have to close the sale of Usan, which was announced in October for more than $2 billion.

We still have to close also the sale of TIGF for which a definitive agreement has been signed in February for more than $2 billion net Total.

On top of that, we have the sale of the fertilizers, the sale of Tempa Rossa in Italy, which was announced in March, and the sale of Trinidad & Tobago.

Considering that all these are in progress and honestly you know that between signing and closing between three to six months before you receive the proceeds, we have already achieved something like $13 billion of the $15-$20 billion asset sales target we gave you for the period of 2012-2014.

Therefore, I would say that the asset sales program is going better than expected, I would say, and this will give us additional possibility to increase the return to shareholders while funding an intensive Capex sale for 2012-2014, and that's a good way to start with your second question about the dividend.

I know that you like dividend as many other people in the room.

We increased the dividend by 3.5%, up to EUR0.59 per share in late July, to show basically our confidence in the future growth and the high quality of the projects now in development.

Honestly we remain confident that free cash flow in the coming years will benefit from the contribution of our new startups, our strict capital discipline, and I could comment on what we did in Canada about it, and our ongoing restructuring in downstream.

Increasing the dividend this year will depend mainly on the strength of the balance sheet.

With the Brent price above $100 on average for the year and the proceeds from the asset sales program, we could have room to increase the dividend.

But basically this is a question for the board, and I am not a board member, as you know.

So I think that it could be prudent in the current market environment to having increased the dividend after we have reduced getting down to the lower end of our target range.

That's very clear, Patrick.

Thanks a lot.

Lydia Rainforth, Barclays.

Lydia, go slowly.

Thank you, Patrick.

I will try.

Two questions, if I could.

Firstly, can I ask you to comment on the working capital build for the quarter, what that is related to, and whether you would expect that to reverse as we go through the year?

And secondly, if I could come back to the Upstream earnings and in particular the liquid realizations, there seem to be a -- they've widened versus the Brent?

Brent oil price versus this quarter and compared to last year, and I was just wondering why they had widened?

Thank you, Lydia.

Your first question was about working capital.

Working capital first quarter of 2013 increased by EUR1.4 billion compared to the end of 2012.

Last quarter of 2012, it was a reduction of the working capital by EUR600 million.

So there is big swing between last quarter of 2012 and the first quarter of 2013.

The increase in first quarter of 2013 is entirely attributable to the downstream.

Both marketing and Refining and Chemicals, including trading, so the receivable amount increased quite significantly at the end of the quarter.

I would say that basically what my view is that most people were making big effort end of last year to reduce our working capital, and then they release it at the beginning of the first quarter.

This is in addition -- sorry, the addition of a lot of variations.

So we think it's difficult to summarize, but my view is what I told you.

We notice, for instance, that an increase in the activity of March, higher than in December, which is putting pressure on receivables at the end of the quarter.

That's maybe also a good reason for that.

But overall, I would say that this is just part of the normal variation in working capital with respect to our overall activity, and we see nothing unusual in those figures.

We're always surprised quarter after quarter with the working capital, but there is nothing special last quarter.

You had a tricky question about the differential between our oil price liquid realization and the Brent price, but we have prepared an answer for you.

The fourth quarter of 2012, the Brent was at $110 with a liquid price at $106.

First quarter of this year, Brent was at $113, and the liquid price was $107.

So differential is widening by $2 per barrel.

There are, I think, several reasons for this.

As you can imagine, temporary mix effect is one.

Also, roughly half of the increase of the differences this quarter comes from Argentina and Indonesia.

In Argentina because we are selling more to the domestic market.

As you know, we are not selling at Brent price in Argentina.

We're selling at about $40 per barrel, if I would remember -- (multiple speakers) or $70.

And in Indonesia, this is the last time for the formulas to apply.

And that's basically the main two reasons I can see technically to explain this widening of $2.00 per barrel.

That's very helpful.

Thank you very much.

Thank you, Lydia.

Theepan Jothilingam, Nomura.

Three questions actually.

Firstly, I was interested in your comments around describing Yamal as perhaps one of the lowest cost LNG projects.

So, I was wondering if you could just flesh that out a bit.

Secondly, in terms of the refinery in Uganda, you mentioned -- I just wanted to get some clarification if you believe that Total is going to participate fully in building that refinery.

And then thirdly, if you could give a status on some of the high impact exploration campaigns.

I know Gabon spudded last week, but I was just wondering when we may see results from Kenya or a result in Indonesia as well.

Thank you.

So you have three questions.

One on Yamal, one on the refinery in Uganda and one about exploration.

Let's start with Yamal.

I have to say that I am quite impressed by the excellent progress on this project on many fronts.

The project is currently completing its FEED stage.

It is a front-end engineering design and the preparatory works to continue onsite.

A consortium, as you may know, made by Technip and JGC has been selected to conduct the open-book tender and start detail engineering with a view of signing an EPC contract before year-end.

So you see, things are moving quite quickly.

This is consistent with our target to make a final investment decision by the end of this year.

Also, these so far show that this 16 million tonnes LNG project should be extremely competitive compared to other LNG projects.

The last thing I could say is about marketing.

Key markets have been identified, and the balance between prices, volumes and major customers are currently under review.

Negotiation with international players are, I have to say, well advanced.

So Yamal, one of the cheapest projects of the industry is something I'm quite confident today.

Second question was about the refinery of Uganda.

You like this refinery.

Negotiations are ongoing with respect to the need and the size of the local refinery.

We are currently talking about a 30,000 barrel per day refinery.

It seems that we agree on the initial size of the refinery, and we have to make sure that we all have the same understanding for the next phases.

As you know, Total is committed with the other partners to study and promote the construction of the domestic refinery in order to satisfy the local demand for refined products, basically the 30,000 barrel per day capacity.

This is I would say normal in this type of mega project to a discussion with authorities before launching the project.

They want to make sure the project will contribute to the local economy, which I fully understand, and we want to make sure feed will be good enough to justify on our investment.

And I think they understand that also.

We have made some good progress in the past few weeks, and there is a clear sign that both the three partners and the authorities want to reach an agreement soon in order to be able to work on the design of an economically viable project that will be beneficial to all the parties, I would say.

So that's my answer on Uganda.

The last question you had was about exploration.

And you're right because we have launched a quite aggressive exploration program.

2013 we have increased our exploration budget to $2.8 billion and plan to drill more than 15 wells on high potential targets and more than 60 wells in aggregate in total.

Big Cats and Elephants, to be drilled in 2013, represent more than 5 billion barrels of unrisked net potential.

Average probability of success you know for these type of targets is below 20%.

So increasing the number of exploration drilling logically leads to more dry wells, and there will be dry wells.

There will be success, but there will be dry wells, and this is not a surprise.

Having said that, we have a promising program, and we will stick to it.

If you remember what's happened in the Gulf of Mexico with Cobalt, the two first wells were dry.

The third well was a success, North Platte.

So far, we have drilled less than 20% of the overall exploration potential that we have planned to drill for the year.

Currently we plan to drill several high-potential prospects, notably the Gulf of Mexico; the Ardennes and Aegean wells.

In the case of Gabon, we just spud the rig now; in Argentina for shale oil and gas; in Australia, near Ichthys; and potentially offshore Egypt and Brazil.

The seismic has been completed on the Kwanza Basin in Angola, and the first wells should be drilled early 2014.

As you can see, we have an active and exciting exploration program.

Of course there will be dry wells, but there will be success.

And this program ahead of us with a lot of potential is quite exciting for me.

I think you mentioned in your press release on Kenya and Indonesia.

Yes in Kenya, we have one well drilled and one more ongoing.

In Indonesia we will spud in the coming days or months -- I don't know; maybe in May.

Just a point of clarification -- when do you see first LNG from Yamal?

And also first oil into the refinery in Uganda please.

I think this is the type of question you should ask Novatek, but I think this is in the range of 2017, something like this.

Okay, and Uganda?

No date for me.

Okay, thanks very much, Patrick.

Alejandro Demichelis, Exane.

A couple of questions from my side.

The first one is the follow-up on the dividend.

You said that the dividend could increase if you were to get the low -- the target range for net debt.

So when exactly do you think that you may get below the target range?

This is not exactly what I said.

What I said exactly is that there was room to increase the dividend.

Yes, that's clear.

So when do you think you can get below the target range on net debt?

This can happen if there are some delays, including some sale of assets for instance.

This is not something I am expecting today, but you never know.

So this is more kind of second half of the year, then, when you are expecting to get there?

Yes.

Okay, that's very clear.

In the second question is on the cash flow generation.

If I look at the operating cash flow and take out the disposals and the working capital, it still looks a bit kind of weak versus what we saw last quarter.

Maybe you can give some kind of indication of what happened during this quarter -- this last quarter?

Okay, Alejandro, let me answer your question this way.

It doesn't work to annualize a quarter in terms of cash flow because the asset sales are uneven.

For example, the asset sales booked in the first quarter were low despite the high level of announcements.

Looking at the year for 2013, our dividend is about $7 billion.

Our net investment including an asset sales program that is essentially done, is about $22 billion net Capex program.

So estimated outflow, $29 billion.

All else equal, at $100 per barrel, we may have to increase our gearing by 1% to 2% to cover the net investment and dividend.

So we should be pretty well balanced this year, I would say.

And then for 2014 onward, production growth should increase.

Cash flow from operations should be stronger.

So we should start decreasing our gearing again.

That's basically what I can tell you.

Okay, that's very clear.

Thank you.

Ian Read, Jefferies.

Could I ask three questions, please?

Following the decline we've seen in the first quarter, what do you think production growth could be for year now?

And, secondly, you mentioned Moho Nord in terms of FID, and also Egina.

And I think the last you need to meet your 2017 target is Kaombo.

So could you give us an update on when you think the FID of that might be approved?

And, thirdly, during your comments at the beginning, you mentioned something about when some of the major projects over the next year or so are completed, obviously the spend on those comes out.

Are you trying to hint that's -- you're seeing a kind of plateau Capex going into next year, or maybe even Capex decline?

Was that what we're supposed to take from that?

Or what exactly did you mean?

Okay, your first question about production growth for 2013 -- for 2013, we target production growth of 2% to 5%.

We should recover most of the production lost in 2012 like Nigeria, Yemen, and about half of Elgin, as I was mentioning in my speech.

Also we are ramping up a new project from last year, Bongkot South; Halfaya; South Mahakam.

So we see, basically, no reason to change our production target, despite the obvious challenges on the Angola LNG and Kashagan.

Second question was about Egina and Kaombo.

Egina has been approved internally and approved by NNPC.

So it has been approved by Total as an operator and by NNPC.

So, I am expecting an FID in the coming weeks, I would say.

For Kaombo, is a little bit more complex.

The detailed engineering is on the way.

As you know, opening up of this took place in December 2012, and the cost cutting exercise on the way at the moment.

We have reviewed both the design to make sure we avoid unnecessary redundancies and backup.

And also we revised the scope of development.

We are working with contractors to make sure we benefit from best prices currently available on the market, and we re-launched some tenders.

And we are also discussing with local authorities at the moment.

So we keep strict discipline on sanctioning projects and we still target an FID this year, of course provided that it matches our own criteria.

The last question was about any Capex plateau or something like this.

Of course, our Capex program is not going to keep this pace forever.

Our target -- and as we mentioned in February, that our target is to increase free cash flow thanks to investment in good projects.

Capex could peak soon and we wanted that nonproducing capital employed to reduce.

That is a key target we have in mind with Christophe, to get there we want nonproducing capital employed to reduce.

Okay, just coming back on Kaombo, do you think given that schedule you have outlined, you'll have that on production by 2017 now?

Yes, honestly; as per plan today, yes.

Okay.

Thank you very much.

Jean-Luc Romain, CIC.

My question is on the Utica shale.

We are seeing several US players selling down their assets there.

My question relates to your performance on the Utica shale.

Are you satisfied so far?

And should we still count on the production growth you were mentioning in your last strategy update in several years?

Thank you, Jean-Luc for the question.

We are really pleased with our Utica asset.

We entered this play at the very beginning of the exploration works.

So we entered this play at a reasonable price.

Production has ramped up to something like 20,000 barrels per day, 100%.

And more than 150 wells have been completed, and production is expected to continue to ramp up when we will connect the wells.

Chesapeake is actively delineating and appraising the play, with actually today, currently, 10 rigs running.

It's difficult to give a number on expected reserve today, because we are still appraising the play.

Based on what we have seen so far, it is very encouraging for the wet gas area where we and Chesapeake have chosen to concentrate on.

Resources are here, and our job is to optimize production now, between high productivity wells with lower liquid content, and lower productivity wells with high liquid content.

So there is a decision to be made, and an optimization works to be done.

Martijn Rats, Morgan Stanley.

Hi, hello.

It's Martijn Rats from Morgan Stanley.

I've got three short ones, to be honest.

You just referred to nonproductive capital employed.

And I was wondering if you have a figure for that?

By your own estimate, how much of the capital employed is for the unproductive?

Secondly, I wanted to ask about the comments and the statement about maintenance in the second quarter in the downstream.

If you could provide some more detail, it's very difficult to estimate broadly what the impact on earnings could be otherwise.

And finally, I was wondering if any of your operations in Nigeria were negatively affected by some of the sort of hiccups we have seen across the board there over the last couple of months?

Currently, the nonproducing capital employed represents about 35% of the Upstream capital employed.

And we will bring that down to something between 20% and 25% by 2017.

Your question about -- the last question was about Nigeria.

We reduced our production, we have been reduced in our production by about 15,000 barrels per day, if I would remember.

In the first-Q 2013, it has been increasing theft in Nigeria -- Niger Delta.

And this caused damage to pipelines.

We lost about 15,000 barrels per day of production, both oil and gas, compared to the first quarter of 2012.

I think, basically, that's what I can say about Nigeria.

And your second question was about downstream maintenance.

The downstream maintenance, that was not very high.

We have Carling and Antwerp in the second quarter coming, being under maintenance.

We complete the job on Normandy, and Normandy is back to 100% production today.

But in the second quarter, how significant is the maintenance in Antwerp in guiding?

Any more details about how many days it will be out, what will be lost production?

Anything you can say about that?

Basically the efficiency of our plants were very good in the first quarter of this year.

And honestly I don't have the figures, the exact figure of the year percentage of maintenance.

But what I can tell you is that the first quarter of 2013, operationally our refining and petrochemical plants were running pretty well.

Great, thank you.

Jon Rigby, UBS.

Two questions, actually.

The first is to revisit the dividend issue again.

You referenced at the start the points about using a payout ratio, but then went on to explain your thoughts around the dividend completely in terms of cash flow.

So I'm just wondering to what degree using a payout ratio is actually irrelevant in the context of the moving parts of the business right now, and whether you could comment on that.

And attached to that, when you talk about a 50% payout ratio, you're talking about the payout ratio rises to that, or that you'd expect it to average that over your cycle.

The second question is about Canada.

Obviously during the quarter you sold the Voyageur upgrade and took a loss for it.

Can you just say whether there's any tax benefit to that going forward should the Fort Hills project go ahead?

And in the context of Fort Hills, what you're now thinking in terms of development options, given that you won't be doing the upgrade.

Maybe you could just talk around that if you could?

Thanks.

Okay, about the dividend; just, first, two figures -- $10 per barrel gives $1.9 billion of net operating -- of cash flow, sorry -- and $1.4 billion of net operating income per year.

So there is a relation between the cash and the net operating income.

The payout ratio we have first quarter is 47%, and then it goes 50%.

So it makes sense, in my view, to continue and link our dividend policy to the payout ratio.

Second, about Canada; yes, we sold Voyageur.

We enjoy a very minor tax benefits, I think it is in the range of CAD100 million.

A word about the status of our Canadian project, maybe.

We are rationalizing our Canadian portfolio and taking some time to improve the design and economics of the of the Joslyn mining project, also.

We have significantly downsized the one-year term investment commitment.

As I was mentioning in my speech, canceling Voyageur for us represents $6 billion of cash savings for the forthcoming five years.

Surmont Phase II is processing as planned, with the startup set for 2015.

Fort Hills is advancing toward an FID, probably later this year; and it could start in 2017, 2018, or something like this.

Of course, we believe that the export issue will eventually be resolved.

And we'll evaluate the project with the idea in mind.

However, more clarity on this issue would be positive.

And we need to clarity on this Keystone pipeline for instance.

Also, to make the FID, we would obviously need to look at our long-term perspective in terms of oil prices; and, more importantly, in terms of bitumen differentials.

That's basically, Jon, what I can tell you about Canada.

Just one point of clarification on your last comment there.

Is the current operating environment, with the current light oil prices in North America, and then the bitumen discounts to that -- is that enough to support the project as it would stand right now?

Or do you need something, probably infrastructure-led, to pull bitumen prices up to make the FID a go?

We need more export routes to export the bitumen.

Currently, the discount is explained by the lack of export routes.

Yes.

Thanks, Patrick.

Bertrand Hodee, Raymond James.

Hello, Patrick.

Two questions, if I may.

One, in Argentina you mentioned very good results on Vaca Muerta.

What kind of incremental volumes do you expect in Argentina in 2013 or in the coming years?

And the second question is a follow-up on Yamal.

So you now target an FID on Yamal by the end of this year.

Do you believe you will also be able to have that would just say secure long-term LNG contract on your hand, and just being able to book some reserves, and probably a big number attached to Yamal for Total?

First question about Argentina -- honestly, it's too soon to tell about volumes.

We are in exploration mode at the moment.

I can't tell you too much about it.

We are currently pursuing an active exploration campaign in the new year.

We are running four rigs at the moment.

We have spudded 12 wells since the start of the exploration campaign; only, I would say, only 12 wells today, two of which have already been connected to the production network, which is a good sign of their productivity.

And those are vertical wells, and not horizontal wells.

So you can see how positive is the field.

In February of this year the first two horizontal wells were spudded.

The initial results are extremely encouraging, and I have concerns that the Vaca Muerta play is one of the most promising shale play outside of the US, mainly due to its extremely large surface are in place hydrocarbon density; and other pressure bridging.

So that you have a combination of facts which is extremely beneficial to the play.

The objective is now to clearly identify the sweet spot, i.e., the dry well gathering area.

So your question about Yamal -- as I mentioned to you, we will -- the target is to FID these projects by year-end.

This is assuming that we get some new regulation in place for the export of LNG.

Excellent progress, technically speaking, and commercially speaking, I would say.

And if everything continues to go like this and we got the approval for the direct export from Yamal, there is no reason that we do not FID these projects by year-end.

And you think you'll be able to book reserves?

If you FID.

In 2013?

If we book at -- if we sanction it by 2013, the answer is yes.

Okay, thank you.

Jason Kenney, Santander.

Jason has left.

Hi.

Patrick, sorry about that.

No, that's okay -- did you have a drink?

Yes, I was otherwise engaged.

So I've got a question about the unrisked resources that you mentioned, the 5 billion BOE.

And I think in your statement you mentioned that you've got 80% of exploration potential left to drill as of the end of the first quarter.

So am I assuming that you have found 1 billion barrels of unrisked resources, and you can actually de-risk that now?

Unfortunately, Jason, you know the math.

If we had found 1 billion barrels, you would have seen a press release in respect of that, and we haven't.

Okay.

We have had confirmation of discoveries in Bolivia and in Colombia, as well as some positive results in Iraq, for this time in Ivory Coast this quarter.

However, we have not yet found the elephant that we are waiting for.

Okay, that's clear.

Second short question, can you tell me what the net Capex would be in the supply and marketing division this year, specifically out of the $22 billion for Group?

The net Capex for the downstream for 2013, that would be something like $2 billion.

But refer to Martin because I'm not sure of my figure.

But I think it's in the range of $2 billion.

Okay, thanks.

Guy Baber, Simmons & Co.

Hi, Guy Baber with Simmons.

Thanks.

I wanted to go back to exploration, but was just hoping you could provide maybe a little bit more incremental detail around the recent results out of the Ivory Coast?

Just thoughts there, and then also what the exploration plans are from this point in time.

And also, was hoping you could address some of the recent disappointment in French Guyana.

I understand you aren't the operator there.

But in light of the last two unsuccessful appraisals, is there anything you can add there with respect to what the plans are from this point in time, or how your view of potential commerciality there has evolved?

Okay, first question about the Ivory Coast.

The first exploration well has been drilled this quarter on the northwestern part of the block.

The well has encountered about 30 meters of net oil pay.

It means that the well has proven the existence of petroleum systems.

That's the importance of this well.

In addition to that, the oil is of a very good quality, i.e., very light.

What we are doing currently is additional studies and work in order to evaluate this discovery due to the relatively poor quality of the reservoirs encountered.

The rig is now in Gabon, and the future exploration program on this permit will be defined within the coming months, following studies which will integrate, at that time, the result of data from the first well.

This is frontier exploration.

And we will continue to learn from each well to deliver our -- on our promising program.

French Guiana -- so you are right, we are not the operator.

The first well proved the existence of a petroleum system with significant potential.

But both second and third wells confirmed the existence of such a system, but the wells have not encountered significant hydrocarbons.

It is clear that the Cingulata reservoir well is more complex than initially thought, but we continue to believe that it holds potential, and more work needs to be performed.

Beyond this block, you know, it's extremely large -- about 30,000 square kilometers.

And we have many other prospects to drill, starting with two more wells this year with the current rig on-site.

The next well, which we commence immediately, will target to completely independent structure.

And those are Cebus, which lies some 40 kilometers east of the previous well that we just drilled.

Studies are ongoing to determine the potential positioning on the fifth well on this block.

Sorry, I don't know more.

Thanks for the comments, appreciate it.

Matthew Yates, Bank of America.

Hi, good afternoon.

I just wanted to come back to the dividend, briefly.

In your remarks during this call, you've talked about how you and the Board would consider gearing targets; payout ratios; getting the proceeds from your disposals.

Hence add one other element to that, and that is acquisitions.

Recently, we've seen you be linked to possibly quite a large deal in Mozambique.

I don't know if you want to confirm whether you would be interested in that.

But should you go ahead, how would that impact the timing of any possible dividend increases this year?

Thank you.

As you know, Matthew, Total is not really active currently on the acquisition market these days.

And in respect of Mozambique, some time ago we looked at it, as we do from most assets, on, say, as we do in the industry.

But the previous transaction of these assets have set a really high benchmark.

Without contesting the quality of the resource base, we consider that there is too much risk of delay and cost overrun on this project.

And we, therefore, see no interest in bidding for these assets.

Understood.

And just as a quick follow-up, can you just remind me the policy, or your goals now on the Novatek stake and possibly increasing that further?

We could technically, by our agreement, increase our stake up to 19%.

Currently we're taking 15.4%.

Okay, thanks very much.

Lucas Herrmann, Deutsche Bank.

Thanks very much; afternoon, Patrick.

Two or three if I might, relatively generic.

First of all, I just wondered whether you'd care to comment on the world as you see it at the present time; give us some idea of how you're seeing development across various economies.

Secondly, whether you could make any comment, Patrick, on North Africa -- and I don't want to use the word hostilities -- but disruptions -- to what extent Algeria, Libya, and Nigeria you find increasingly challenging, threatening, as a consequence of militant activity?

And thirdly, you're saving the better part of $6 billion, I guess, from pulling back from Voyageur.

To what extent should we be thinking about reducing the Capex numbers that we've got penciled in for you, as a consequence of that move?

Or does the fund effectively get rolled into something like Yamal, with Yamal already provided for in your Capex guidance?

Your last question, about CapEx -- Yamal was included in our Capex program.

It's too soon to know what would be our net Capex program, because we would make this size by something like July, and we will see what are the figures.

And we will update you by September, something like this.

But technically speaking, you are right.

They are $6 billion savings that should reduce your goal amount over Capex.

The world -- how is it?

I didn't know that I was famous economist.

No, but you have got fingers in many pies.

More than most.

Thank you, Lucas.

What we see is Europe suffering a lot currently at the moment.

We see unemployment rising everywhere, including in France, and that's not good for the economy.

We see some, as far as I can see from the consumption part of our product, we see consumption going down in Europe by about 2% from year-to-year comparison; where in the US we see some kind of recovery in their economy; some specifically to the low gas price they enjoy there.

I was surprised to see a negative comment on China, where it was mentioned that 7.7% growth rate was low.

Honestly I don't think this is a low figure.

And we are still thinking China is going.

My last comment, if I may, that we should not look at the world economy with Occidental eyes.

There are many places where the economy is good, basically in Asia.

And you know Robert Hammond has some good eyes we need for that.

Okay.

Thank you.

You had one last question about --

It was North Africa; you have exposure to Algeria, to Libya, to Nigeria.

They are all territories where increasingly one hears of Al Qaeda activity, increased militant activity, greater need of security.

You feel quite exposed.

So to what extent you are actually experiencing more challenging conditions, or to what extent you feel that you're having to put down additional security to protect?

What I can tell you -- and I cannot elaborate too much on it -- is that we are increasing the safety measures which apply to our people on the ground; both local people and ex-pats.

Okay.

Patrick, thanks very much.

Have a great weekend.

Thank you, Lucas.

Kim Fustier, Credit Suisse.

Two questions, if I may.

Firstly, on the asset sales program, I wondered if you could give us some color on the remaining $2 billion of asset sales; whether you've already identified these assets.

Are you are targeting more upstream or downstream, more producing or nonproducing assets?

My second question is on Australia, if I could.

I've seen some proposals in Queensland, some more stringent rules on coal seam gas well permits.

And it seems to me that you need more approvals for the wells to fill train two.

I am conscious that you are not the operator on GLNG, but give any thoughts on the startup start up and ramp up that would be very helpful.

Thank you.

On the asset sales program, as I was mentioning to you, we already announced $13 billion for our $15 billion to $20 billion asset sales program.

So if I may say so, there are $2 billion not yet announced.

And I am sorry, but I do not comment on negotiations ongoing.

And I won't tell you which assets we are currently negotiating.

In Australia -- it's a difficult question, your question, by the way.

The project is on track for first LNG by 2015.

The pace of drilling has been less than planned to date, due mainly to adverse weather over the past two years.

So we need to accelerate today the way we drill the field.

This is honestly the only answer I can tell you.

I recognize that it is not extremely good for your question, but I have no more to say.

That's great.

Thank you.

We have no more questions.

Okay.

Thank you for your time today.

And just to summarize, the balance sheet remains strong.

Our asset sales program is obviously a success.

And now we are well-positioned to accelerate the profitable growth of the Company.

That is it for today, have a nice weekend.

The weather is horrible in Paris, and I hope you don't have the same where you are.

Bye-bye now.

Ladies and gentlemen, this concludes the conference call.

Thank you for all for attending.

You may now disconnect.