TotalEnergies SE (TTE) 2017 Q4 法說會逐字稿

Good morning.

Good morning again here in (inaudible) for this presentation of our full year 2017 results.

I'm here today with all the Executive Committee team: Patrick, our CFO; with Namita as well, in-charge of our people and social responsibility and Total Global Services.

I think Arnaud Breuillac that you know well (inaudible) in the room; as well as Momar Nguer, for Marketing & Services; Bernard Pinatel, I don't know where is Bernard -- there, for Refining & Chemicals; and Philippe Sauquet, for Gas, Renewables & Power.

And we together will answer to your questions after the presentation.

1 year ago, when I described the -- here in this room, the 2017 year, I told you that it was a year where we will turn the corner, build on our strengths and prepare the future while maintaining the discipline and resilience we demonstrated in 2016 and which allow us to outperform [over the] years.

I told you in my introduction 1 year ago that we'll reduce the breakeven, derisk the production growth and fill the post-2020 pipeline and that will move from defense to offense.

Today, in front of you, I think I can say that we have executed pretty well this program.

And not only we successfully reset the company for the cycle, and the 2017 results, which will be presented to you by Patrick, demonstrating it, but we also managed to took advantage -- to take advantage of the cycle and to prepare the future and give you and to all our investors a visibility up to 2022 and clearly up to 2020.

And it was the scope of the September presentation, strategy and outlook, with some clear, big deals that we've done on -- with Petrobras, Maersk Oil, ENGIE, Total Eren; and also some FIDs which have been taken.

The fourth quarter results of 2017, which have -- which happened in a better [procurement] price, top of our strong performance of the year.

We've -- and Patrick will come back on it.

E&P is in the bright spot, an increase of net operating result of 86%.

Free cash flow -- cash flow from operations up 38%, while the Brent was only up by 24%.

And a higher leverage to oil price, which has been demonstrated there again.

Solid Downstream sales, $7 billion of cash flow from operation despite the fact that, since the last 3 years, we have sold $7 billion of assets in the Downstream.

Free cash flow at $6.7 billion, very steady across the quarter, again leveraging the oil price and the growth of the production.

And last but not least, a balance sheet which should be stronger than ever at gearing under 15%.

Today, we will open and we want to open with you a new chapter, which is to increase the return to shareholders.

The Board of Directors has worked on that matter for a few sessions.

And of course, a priority of the board, and I reiterate it as the Chairman of the Board, is to maintain our ambitious growth strategy because the board is very confident with the capacity, ability of the Total teams to seize adding-value opportunities in order to better enhance the value for shareholders, as we demonstrated it in 2017.

But in the same time, because the group offers strong visibility to the growing cash flow and for the coming years, the board decided to provide to our investors a clear framework on cash flow allocation and shareholder return for next 3 years.

So presentation will be done, first, by Patrick, who will come back on the results from 2017 and the objective for 2018.

Then I will come back in my capacity of CEO to give you visibility on the growth strategy and the cash flow growth for the coming years.

And in my capacity of Chairman of the Board, the third part, I will come back on the shareholder return that we want to increase and (inaudible) increase it.

Before, some few, 4 slides about the macro environment.

The first one is safety.

Safety is a firm -- is a value in the company, at the heart of the operational excellence and economic performance.

What is interesting for me this year and what we have wanted to highlight like through the video is what we've done with our contractors on safety.

We speak a lot about corporate social responsibility.

And it's a debate as a commitment of global company like Total when it comes to corporate social responsibility.

Of course, this means, first, responsibility vis-à-vis your own staff but also with your contractors.

And there was a certain company speech, which was, okay, the recordable injury rate is lower for staff than for contractors.

"It's normal." I don't know what is normal.

It's not normal.

It's not normal because, when you look precisely on our sites in the oil and gas industry, we could have more people from the contractors than from our own staff on an industrial site.

And so we have embarked in a program.

And it's quite remarkable to observe that, in 5 years, when you declare it's a value, but not only for the staff but for all people working on Total operations, we have managed to divide by 2 the rate, injury rate, of contractors, and to bring it at the same level than for our staff, which is quite a low level, 0.9, under 1. We are there in the same -- among the best in the industry.

And I'm quite proud of it because for me this real what means corporate social responsibility, taking care of all the people, whether they are coming from on our operations -- it's not a good idea, sorry.

In terms of corporate social responsibility, the other aspects, of course, is a matter of not only the people but the planet.

I know in Sustainable Development Goals framework of the U.N. we speak about profits, people and planet.

The planet means -- it's, of course, important.

It's the environment because for an energy company the climate change challenge is, of course, essential.

And we have to bring a responsible answer to that.

In 2016, we built collectively in the company an ambition for the next 20 year, which is to become the responsible energy major.

And we build that on 2 key principles for me, which is one, first, transparency.

And the second is engagement in collective action.

Transparency means -- and is very important.

And on the climate change, we have been the first company to issue an annual report of -- on the climate and the strategy integrating climate into our strategy.

We will publish a new one by September '18, in which we are working on being able to propose an indicator of all -- of how the intensity of -- CO2 intensity of our mix of products will decrease steadily, in line with our commitment to be a proactive player for the climate change challenge.

We have also supported this year the initiative led by Michael Bloomberg, which is his matter of -- it's called the transparency.

But I will say that, when I met Michael Bloomberg, I told him as well, well, we strongly believe that it's up to the companies like Total to decide exactly what to present to best explain to all stakeholders what the potential impacts are as we look for other risks, by the way, and as we've done in our climate report.

So we will disclose in our reference document by March 17 the -- on the basis of the TCFD requirements in order to be committed to this transparency which is requested.

Collective action is also important.

We think that we are better together than alone on these matters.

And so we participate actively in many initiatives, in particular the oil and gas climate initiatives.

We've turned over large companies, oil and gas companies.

We found, we created a climates investment fund of $1 billion.

We are also active in promoting the UN SDGs.

And I've been 1 -- I'm 1 of the 10 pioneers for this year in promoting these principles.

And also working with other oil and gas companies on methane emissions.

And it's important as gas is more and more the core strategy.

When we think about climate, of course, and it's a link, we speak about the strategy.

And just I want to remind you what is the global framework of the strategy of the company because climate is a matter of the energy market, in fact.

So it's why it's important for us, because all this challenge could lead to evolution of the markets.

You have here again, like we done it, a scenario, which is a scenario of the International Energy Agency's, a sustainable development scenario which is 1 -- 2 degree.

And we don't know if the world will be able to drive towards this scenario, but it's important to look to what would have been in such a scenario because 195 countries committed to it, at least on the paper.

And so what we observe, and we rank it in a different way, but traditionally, is that, first, you have an increase of natural gas.

And these explain why we want to explain -- to expand along the gas value chain, but these natural gas increase require that we are able to enhance the demand for gas.

That's why it's important to work not only on gas production but along the full value chain to lower the cost of this value chain and integrating also the downstream parts.

On oil, in such a scenario you would have less oil produced in 2040 than in 2018.

I don't know if it will happen, but it's possible, so what we have decided is to give priority in our projects, in particular long-term projects, on low-breakeven oil projects.

And this is part of the upgrade of the portfolio we've done, which by the way is a right answer also to the volatility of commodities price.

And last but not least, we want to grow a profitable low-carbon business.

The Total has expanded, we have expanded in 2017 to 3 new, I will say, assets: Total Eren, to produce power from renewables; Greenflex in the energy efficiency field; and Total Spring in the B2C business, along with SunPower and Saft.

And the last macro slide I want to use, of course, which is important, it is more short-term view, is about the oil and gas markets.

Again, even if today I could celebrate the oil price recovery -- and I just remind to myself [momently], but in August '17, it was only 6 months ago, the price was at $44 per barrel beginning of August; today, $66, just an increase of 50%, which prove that there is volatility.

We will be wrong if we believe that suddenly we'll see a floor.

Or I don't know why.

None of us, I think, in this room was betting on $70 2 months ago.

So let's be -- let's keep that in mind, not to avoid to make -- or to overreact.

We will continue to manage the company with $50 per barrel in mind, but of course, as we have a better leverage to oil price, we would also be happy to see what we do with the upside, the price upside.

And what of the decision of the board is to share this price upside with our shareholders through buyback.

I will come back on it.

Why do we have this recovery?

Clearly because, first, we have a strong demand, strong growth demand, 5 billion barrel of oil per day in 3 years, twice quicker than the previous 3 years.

It's a little contradictory to just what I said about the 2-degree scenario, by the way, as you know.

We have a trend of accelerating oil demand growth, and you'll see in 20 years a decrease.

So this is why it's a difficult matter.

So let's be clear: We are not able to tell you exactly what will happen in 20 years, but we have this -- on demand these [2 trajectory].

And it's why we have that in the short term, because the price is low.

When prices are low, it's led a lot of emerging countries to have a strong demand.

The second factor, of course, the -- on the supply side has been the OPEC, NOPEC policy, and the alliance between Saudi Arabia and Russia.

They are really committed to play in the market, to have a weight on the market.

And even last week, they were engaging in discussions to prolong their agreements in 2019.

So I think it has an impact.

On the same time, the stocks are still a -- decrease, but are still above the 5-year average.

And I'm sure that the U.S. independents will again invest hard to benefit from $60 per barrel and to produce more oil and shale oil.

So we'll have volatility in this market, but it's better, of course, to have this type of price at $60 per barrel than at $40.

I will say there is something fundamental in the market which supports a higher price on the coming years.

It is a fact that we -- our industry, globally speaking, did not invest much in the last 3 years, 400 million -- $400 billion instead of $750 billion previously.

So this type of slowing investments will have an impact for 5 years after the decisions.

And so this is a fundamental surprise, [support] of the oil price.

On the gas price, again the same story, a little more surprisingly, I think.

Or everybody was a little more pessimistic about the gas price because we saw a lot of LNG new projects coming into the market, but there again, same mechanism.

A low gas price has led to a big increase of demand.

And a 10% increase of demand of LNG is quite big.

We were planning on 5% as an average, and we will consider that as optimistic.

It was 7% increase in 2016, 10% in 2017.

So this market -- and it can be supported by countries like India, but in 2017, you have seen other countries, Pakistan, Bangladesh, open to LNG projects, and China.

And [clearly is a high key], the last one is coming from China.

There was a fundamental speech by President Xi at the central congress committee about beautiful China, and it specifically said that gas must find a stronger place in the China energy mix.

5% today, more or less, could go to 15%.

Of course, it has a huge impact on the market.

And when the Chinese machine is working well, it's efficient, like Total.

We are not Chinese.

But so that's the macro environment.

And I think it's supporting, of course, the strategy of the group.

So after this consideration, initial consideration, I will leave the floor to Patrick, which will come back on the results and outlook for '18.

Good morning, everyone.

I think I checked in with most of you this morning.

My job today is to present our strong 2017 results and some ambitious 2018 objectives.

Basically, what is obvious today is that Total is leading the pack in many ways.

We have seen the benefit of our efforts to drive down our costs; to deliver our growth; and basically at the end, in the Upstream, to reduce over breakeven.

And that Upstream division result, combined with the Downstream continuous good result, put us in a very strong position with growing free cash flow.

Cost has fallen significantly.

We have the lowest debt-to-equity ratio.

Our organic predividend breakeven is below $30 per barrel.

And we have derisked the near-term production profile.

In 2017, and I hope I will be able to demonstrate that, we have reached a turning point.

And for 2018, we are excited about the opportunities ahead.

And we will show you the 2018 objective.

Let's start with the result.

Our adjusted net income for 2017 was $10.6 billion, basically 28% higher than in 2016.

The main driver was an 86% increase in Upstream from a 23% increase in Brent.

This demonstrate the strong upside leverage we have created by reducing the breakeven.

Downstream also generate close to [$6 billion].

That's the beauty of the integrated model.

We have steadily increased our sensitivity to Brent, and we are capturing the benefit of the oil price recovery.

In 2017, Refining & Chemicals results are slightly down, notably because of the sale of Atotech, which is not anymore in our perimeter; and to the effect of Hurricane Harvey.

Marketing & Services, continuing growth by close to 10%.

So all in all, we have very good result.

Gas, Renewables & Power is still in its early day, but it's improving its result to reach $500 million.

Putting all parts together, Total reported return on equity based on adjusted net result of slightly more than 10%, the highest return among the major.

Cash flow is our primary metrics.

And basically, from 2014 to today, we reset the company to a progressively lower cash breakeven, year after year.

We increased operating cash flow by 24% to more than $20 billion.

This is to say $22 billion of debt-adjusted cash flow minus $1 billion of interests.

Mainly, we do that by cutting costs, increasing production.

We also generate $4 billion of asset sales, mainly Atotech.

Our organic CapEx was in our range at $14.4 billion.

And we significantly reduced our debt.

Moving to the right, you can see the speed of the recovery in term of organic free cash flow.

Between 2015 and 2017, we nearly -- with the same Brent price, $52, $54, we increased our organic free cash flow by $10 billion.

Production.

Our situation is improving year after year, in large part because it is continuing to deliver the strongest production growth.

Since 2014, our production has increased by 20%.

In 2017, we increased the production by close to 5%.

In 2018, we target 6% growth, in line with our objective to grow production by 5% per year on average on the period in 2016, 2022.

And in the annex of your booklet you have the 14 major start-ups that we intend to deliver.

We are managing the normal decline rate at 3%, which is low.

We have been adding a lot of new start-ups to the portfolio that are not yet declining because we increased the share of long-plateau projects close to 50%; and also that when you start a project, you are not late yet in the declining part of the production.

Our reserve replacement rate is at 95%, above 100% on average on 5 years.

As Patrick will show you later, we have taken advantage of the low end of the commodity price and cycle to acquire new reserve, namely Maersk, Petrobras deal, which were -- these will be included in 2018.

These are not booked in 2017, so we are very confident about our reserve replacement.

To finish, a quick comment about the quality of the production.

We are adding cash-flow-accretive barrels.

You see that in our cash flow from Upstream division.

We are targeting low-cost barrel.

And this is reducing, all in all, the cash flow breakeven.

We were the first in 2014 to launch a cost reduction program, and we have maintained this advantage over our peers.

We have been able to reduce our costs significantly, while the production is increasing by 20%.

We set an objective of $3.5 billion for 2017.

We achieved $3.7 billion.

We are confident to deliver more than $4 billion saving in comparison to 2014, this year, in 2018.

And the target by 2020 is $5 billion.

And because of potential inflation, we shall continue and maintain a strong cost-cutting program.

In term of production cost, the competitive advantage, you'll see that on the right-hand side of the slide, is obvious.

And we maintain it.

Total is a low-cost producer.

And including Maersk, we target $5.5 OpEx cost in 2018.

CapEx.

Our CapEx were at $14.4 billion in 2017, well in the guidance of $14 billion to $15 billion.

For 2018, we remain at the same level, roughly, at $14 billion.

This is organic, excluding acquisition.

This is a sustainable CapEx level, well below the level of the operating cash flow last year, $21 billion.

And this is really enough to maintain integrity and to provide future growth.

We are confident that we can continue to fund growth with organic CapEx in the $13 billion to $15 billion range.

On the right you see some detail, including $2 billion of acquisition, $2 billion net.

We -- slightly half of the CapEx is committed to renewing and developing resources, on the right side of the circle.

We maintain -- maintaining existing production requires about 20%.

Downstream requires also 20%.

And note that we allocate about $1 billion to Gas, Renewables & Power, including $500 million non-organic.

We sanctioned 5 project in 2017.

We expect to have launched more than 10 new project altogether by end of this year.

We are showing on the right side the IRR of these project at 50 -- $60 per barrel so you can see that all of them are very profitable.

As a group of project, this represent about 400,000 barrel per day net to Total.

CapEx is about $8 per boe.

And as you can see, we are the operator on most of these project, which give us some comfort.

Some projects worth noting.

The first is our 150,000 size FPSO in the giant, which is now name Mero and not anymore Libra, on the northwest panel.

That was launched late last year.

Lake Albert in Uganda is progressing well.

The Mero 2 on the Libra field will follow later this year, after the sanction of Mero 1 last year.

And the second phase of the giant Johan Sverdrup field, which is coming from Maersk, should also be sanctioned this year.

A few words on exploration.

Renewal of resources through the cycle is key to maintaining an inventory of projects.

In 2015, we put a new exploration team in place.

Their strategy is starting to deliver.

The budget for 2018 is set at $1.2 billion.

Honestly, in the current environment we can do more for less.

In 2017, the team has some notable wins: the discovery of Ballymore in the Gulf of Mexico, which was announced last week; in Nigeria, the commerciality of Preowei was proved and will move to FID; and in Argentina, we confirm the oil and gas window in the Vaca Muerta.

These are earlier successes to follow up and new acreage to evaluate.

And you can see also some high-potential acreage we have bought recently in Senegal, Mauritania and Guyana.

Guyana was announced at the end of last week.

Downstream.

You know that we have the best-in-class downstream among the major.

Our Downstream was fully restructured before the collapse of the oil price.

It provide a $7 billion operating cash flow contribution.

And despite -- we deliver this $7 billion despite about $7 billion of Downstream asset sale last 3 years.

On the left, we are showing the recent history and an estimate for 2018.

Note that we have included sensitivity at $25.

Currently, the refining margin is between $30 and $35.

And the sensitivity for $10 per ton represents about $600 million impact on cash flow.

On the right, you see that definitely the ROACE of our Downstream is much higher than the one of our peers.

Balance sheet.

One of the most challenging aspect of the oil price collapse, for Total, was that we entered this period with gearing at 31%.

One of the most significant achievement in term of financial, for me, over the past few years has been reducing the gearing.

We ended 2017 with a 14% net debt-to-equity gearing.

With Petrobras, which is complete today, it would have been 16%.

Starting 2018, we will change our gearing definition to be in line with what is used by our competitors, and we will use a debt-to-capital ratio.

And using this debt-to-capital ratio, we reduce the gearing by 2 point.

This is not the objective, the objective being to be in line with what is used by our competitors.

So the net debt-to-capital will be 12% by end of 2017.

And then the check -- we check the box mostly everywhere.

It was the same in 2015, the same in 2016.

We have established a solid track record.

CapEx is well under control.

Costs are coming down quicker than expected.

Cash-accretive production is growing as expected.

The Downstream continues to deliver year after year.

Finally, I would say we can wrap up all those datas by one data, which is that our predividend breakeven is now well below $30 per barrel.

And now I leave the floor to Patrick because those are the best performance we can show you.

No, no, but it was for you.

In fact, it was [lined up] for me.

So like Patrick said, we have clearly another slide like last year on several items, and the benchmarks [we offer their award] to us.

And I think one of the things that you could remark is that they are -- in fact that, quarter after quarter, maybe we have a more stable way to deliver our results and less impacts of the volatile environment, including the Downstream.

And I think it's all part of what has been done in terms of upgrading the portfolio and getting rid of some weak assets which were very volatile in the past and having a base of assets which are able to go through this volatile market.

So it's true in terms of Upstream net income per barrel, ROE, ROACE, our net debt-to-capital, but in fact the slide I wanted to use myself was this one, which was -- in fact, on a 3-year basis, just said what I said in my introduction.

We managed to reset this company for the cycle, and with quite interesting, I would say remarkable results of 20% more of production, 45% less in production costs, an organic free cash flow which grew by $8.5 billion and a debt -- net debt-to-equity which was reduced by 17 points.

All that, of course, has been the results, I could say.

And I can give tribute to all the teams of the company today, who worked very hard to reach this performance.

They can be proud of what they have achieved, and myself and the Board of Director is very proud of them.

So this, of course, is the results, but we have also, as I said in my introduction, take advantage of cycle to prepare the future.

And in fact, in this second part I want to -- not to redo the presentation we've done in September, so we'll not go through, [read all that], but just I would like to emphasize on some segments on which we have decided to -- which we are creating more value.

We -- I said that the strategy of the company will be to play to our strengths in order to create more value for shareholders before to return it to them.

Of course, we have there some few indicators which I think are summarizing the September presentation and the objective that we have and the assets that we have managed to put in our portfolio in order to achieve these objectives: a production growth with an average of 5% for the next 5 years; a double of or more than doubling LNG growth from 16 million tons management per year to more than 40 million tons, of course thanks to the ENGIE deal.

We have also, as I will say, an increase, and this is a target of $6 billion, of Upstream cash flow from operations.

And the Downstream as well is targeting to increase its free cash flow by 30%.

So this is, in figures, what we intend to do.

And how do we do that?

And we do it in particular because -- for all of the actions we have taken to upgrade the portfolio by playing to our strengths.

And I think this is interesting, to look to the chart on the right side.

In the last 3 years, in fact, we sold for more or less $12 billion of assets.

We acquired for $17 billion of assets, part of it being Maersk Oil in shares and debt, not in cash, but more fundamentally what is behind these figures is that on the sales side we divested what I will say from noncore assets.

Three type of assets were divested: first, in the Upstream, some high-cost field, oil sands, Fort Hills; Martin Linge, Gina Krog in Norway.

Second, some midstream asset and pipeline, FUKA, SPMR, Géosel.

And third, in line with strategy, some specialty chemicals, Atotech and Bostik.

And we reinvested this money, I will say, in more accretive, potentially, assets, or creating assets -- assets that will create more value, in particular on the Upstream side on Abu Dhabi, on Brazil, on Maersk Oil obviously; and some assets to prepare evolutions to new business like, of course, the ENGIE deal or Saft or Total Eren.

So what is the change we have done?

But the fundamental common points of this acquisition is in fact to fundamentally leverage our expertise to create a competitive advantage, leverage our expertise to create added value, not to try to fill the gaps but to build toward strength.

And the strengths are described in this chart through geographic regions which are the core of our activity, which is Middle East and North Africa; North Sea; and Africa, Sub-Saharan Africa.

The Middle East and Africa is not only for Upstream.

It's also true for Refining & Chemicals for Middle East and for Africa, also for Marketing & Services.

And the 2 technologies for Upstream which -- on which we built on, which are deep offshore and LNG.

I will add -- I will come back on these 5 core areas of our strategy to show you what -- and to give us visibility, to reproduce the visibility and the belief we have and the confidence we have in the growing of cash flows by 2020.

I will add 2 other segments which are not there.

It's petrochemicals, which is another, I will say, field of expertise on the company.

And also come back on Marketing & Services, in particular retail and lubricants.

So let's look one after one.

First, Middle East and North Africa.

This is a legacy position and in which clearly we are able to maneuver and to have access to find some growth.

It is true that the margins per barrel in this region are lower than in other parts of the world.

But it's also very true that the cost of access is generally quite low and the cost of production is very low.

And so as I said in some interviews, the last oil of -- if there is a last drop of oil, it will come from this region because these are, by far, the low-cost producer, which represent for us $3 billion of cash flow from operation by 2020 at $60 per barrel and good profitability.

And I must insist on that.

I read too often that it's not profitable.

It is profitable when you are able to negotiate the right contracts.

And the profitability of this portfolio, of this 800,000 barrel per day of production, above 20%.

We have enlarged our footprint in the region in the last years, renewing ADNOC.

With SONATRACH, we've reestablished a strong partnership.

We're renegotiating the fiscal terms on Timimoun.

We -- in Algeria, we will enter, thanks to Maersk Oil, in some assets, attractive assets in the Berkine basin.

We are discussing about with SONATRACH as well a new venture in the gas business as well as extending of TFT assets for 20 years.

We have launched Halfaya 3, entered Al-Shaheen.

And we have other projects in these regions which will be -- I hope, come in the coming months and which we will build on this legacy position.

And it's important to understand that all that is linked.

And this strong presence give us a leverage from one country to the other country because we are considered as the company, which is part of understanding with the way we work in this region.

The second region, which is of history garden, part of the history garden, is the North Sea.

Of course, I come back there on the Maersk Oil acquisition but not only on that because, as you've seen, we have been quite active.

Not only we announced in August the Maersk Oil acquisitions, but very quickly after, we begin to divest some assets in order to rejuvenate, globally speaking, our portfolio.

It's not only bringing in some profitable assets like Culzean, like Johan Sverdrup, or the redevelopment of the Tyra field in Denmark.

It also gave us the opportunity to divest some of the high-cost assets, in particular Martin Linge and Gina Krog.

We will have economy of scale, large economies of scale in U.K.; and synergies, more than $400 million synergies.

I can't say more today because we have work.

We are beginning to work and not only on the cost side but on the other side of synergies.

We are looking, we are seeing more on the $400 million.

We will come back to you later in the year, when the integration will be done.

Where are we in terms of closing of the deal today?

We have obtained all the authorization around the world from antitrust and approvals by governments but one, which is Denmark.

The Danish government was willing to look, if we were -- get all the approvals, it will come in coming weeks.

And we intend to close the deal by end of Q1, as expected.

So this is for us, of course, and I just want to remind you, but of course, this deal was negotiated at low points in 2017.

It's accretive at $50 per barrel, more than $1.3 billion of cash flow.

And there is a substantial [up-stride] to the price of the Maersk portfolio because its cash flow per barrel is around $30 per barrel at $60.

So this will put us in a good position.

And the 500,000 barrel per day of production in the North Sea by 2020 will deliver $3.5 billion of free cash flow at $60 per barrel.

Then Africa.

It's more a question of Sub-Saharan Africa.

We separate -- North Africa is more linked, surely, and -- in our organization to the north -- to the Middle East, but there we have a unique presence across the continent with a strong portfolio in Upstream but also in Marketing & Services.

And I must say that in 2017 we have demonstrated we can leverage both.

If we have been able to grab some licenses in Senegal, in Mauritania, and the position we are establishing today in the East Africa with the Kenya assets coming from Maersk Oil, I can tell you that Momar Nguer, executive committee member for Marketing & Services, is helping us also to leverage all our presence there and to be stronger in Africa.

This would represent 750,000 barrel per day.

And it will deliver, globally speaking, between E&P, M&S, more than $9 billion of cash flow by 2020.

And we've eyed good, excellent assets.

We started Moho Nord.

We'll, in 2018, start up Egina and Kaombo.

We have more to come with sanctioning Uganda, Zinia 2 in Angola.

We have renegotiated the fiscal terms successfully in December on Zinia 2, Ikike in Nigeria.

And we have also, like Patrick said, appraised positively Preowei.

It will be a satellite development to Egina, adding more value, around 200 million barrel of oil, I think, in Preowei, which will be sanctioned, we hope, beginning of 2019.

And so -- and new high-quality resource.

So it's a strong position we can leverage [and did] for the benefit of the company, and we will continue to develop our presence there.

The other area, deepwater, I said, is Brazil.

We applied it.

We were a little pioneer by beginning of this year by making this direct agreement, direct negotiation with Petrobras.

I've seen that our competitors were following us for bidding rounds to take some positions there at some higher costs, by the way.

So this deal has been closed.

And today, we have established in these -- with these deals, and together with Libra, a good portfolio of assets, more than $1 billion of cash flow by 2022, more than 100,000 barrel per day.

It's a matter of development, all that.

We are the first IOC to have an operating position in the pre-salt on Lapa, and it's -- quite proud of it.

And I'm -- hope the teams will do the best to demonstrate all the technology we can bring to Brazil for this operatorship.

Of course, we have sanctioned Mero 1 on Libra field, like it was said by Patrick.

And Iara is to start up by end of the year.

So this is a new core area, but we're developing, we leverage our expertise in deepwater.

Then the other field of expertise is LNG.

And it gives me the opportunity to come back on the ENGIE LNG acquisition, but we'd not comment beyond the press release by [Batam].

It's really gave us -- it was a unique opportunity to make a step change.

And we have a strong belief that this LNG market will increasingly become a commoditized market.

And size is of -- and flexibility is of essence.

And size or flexibility, in fact, is illustrated by this chart, where you can see that we will be -- we will have position in all the main regions of supply, including the U.S. I will come back on it.

We have a well-balanced mix of equity, liquefaction and third-party supply.

And we will have also customers in all main regions.

A large portfolio of Asian customers in traditional markets like Japan; Korea; Taiwan, including Taiwan, this new ENGIE brings to the portfolio to us; and also in China, obviously, where we have moved some positions.

And so that's important because all these LNG business is also a matter, if we want to grow it, of optimizing the full value chain in terms of cost.

And you know, when you take LNG from Norway to send it to Asia, that you pay $2.55 per million Btu of transportation costs if you use only one vessel.

You have room for optimization there.

And I think this is part of what we think we will be able to leverage, thanks to the size and the flexibility that we have -- which is given to us with merging these 2 portfolio.

So we are becoming clearly #2 of the market with more than 40 million tons of portfolio, 10% of market share.

So it's a very interesting position.

I will add that in the portfolio of ENGIE there was another asset of interest for us, which was Cameron LNG position, because with combining that with the Barnett shale gas production that we took 1 year before -- in fact, today we have a production which is integrated between Barnett -- economically integrated between the Barnett domestic gas, which in fact become an export gas, thanks to this Cameron LNG position.

And we know that Cameron LNG should start by 2019.

There are plans to expand it, and Total will be obviously fully supportive of expanding this position because the U.S. gas is for us a source of huge resources at a low price.

We are a strong believer that the area will stay low for long, considering all the size of resource and the shale oil productions, which even bring more gas into the markets.

Another point which is important is that when we look to this integrated LNG business, it represent $3 billion per year of cash flow from operation by 2020.

And we have decided, by -- after the closing of ENGIE and in fact, beginning of January '19, we will report differently our results by like some of our peers or one of our peer at least, which is to combine integrated Gas, Renewables & Power because this is where we -- as we've seen the strategy, we have all these new strategy put in place.

And we think it makes a lot of sense to be able to put -- to give to the market some visibility of -- on this integrated gas business, which are assets with long-term assets, with long plateau.

And it's part -- and we tested the idea in September presentation.

We obtained some good feedbacks from our investors.

So we'll change our reporting by beginning of '19.

After the deal of ENGIE, it makes a lot of sense with the step change that we will do in this business.

Petrochemicals is the sixth focus I want to do because [we see big] growth engine for Refining & Chemicals.

Why again?

Because we have a growing market.

Polymer market is growing by 3% to 4% per year.

And you know the polymer price is linked to oil price, but there is another way to produce polymer, which is from gas.

And if you manage to have access to cheap gas feedstock, ethane or LPGs, then you will have a profitable project.

So it's a matter of chasing the right feedstock.

You can find them in the U.S. So this year, we have added a new cracker in the U.S. within a very interesting JV that Bernard is building with Borealis and Nova, which will make -- this JV will become #3 on the polyethylene U.S. market, which is a very large market.

And we will invest in new polyethylene unit on differentiated technologies.

Both are technology from Borealis.

We have done that also in Korea, expanding the cracker on LPG; propane, U.S. propane, which will be -- allow us to make a profitable expansion, including expanding our polyethylene activity and by more than 50%, with the Chinese bucket being just at the door of Korea.

And we are chasing other projects, in particular in Saudi Arabia, around SATORP.

And Saudi Aramco and Total have the same strategy, which is to expand in petrochemicals, and so we have built together a huge refining platform.

It makes a lot of sense to enlarge it to petrochemicals.

We are working together, well aligned, to be able, we hope, to announce a project in Saudi Arabia in the coming months, and to gain -- to have access to the feedstock that we need to develop this large platform.

So this, I just described the other part of the strategy, which is to build on the large integrated platform, Port Arthur, Korea, SATORP.

This is a common point because we strongly believe that it is a way to continue to deliver value integration.

It's just unlocking step by step additional synergies in refining and petrochemicals.

And the last part where we invest is on Marketing & Services business, which is a noncyclical business, so we like that.

It's a -- or in particular, we have a lot of volatility.

It's diversified in terms of geography.

We have sold some assets in order to get rid of the markets with no growth, I will say, like the mature markets in some European countries where we had not enough market share.

And the same time, we are investing in large, fast-growing markets.

You have seen that we have been -- decided to build in an innovative framework, by the way, a new retail station network in Mexico.

It's a low-cost approach, but it's the second-largest market in Latin America, so it's of interest.

We continue to also develop our lubricant business, in particular in Asia, China, Vietnam and other countries.

And year after year, Marketing & Services is adding $100 million per year of additional cash flow; [2.2], I think, in 2017.

Momar is a little in advance on this program, but this is a new base, so it's [2.5] then in 2020.

So 2020.

Through these 7 segments, I just described to you $24 billion, when you make the maths, $23 billion, $24 billion, because there is double accounting somewhere, of cash flow from operation by 2020.

It's more around the $22 billion, $21 billion from this year.

And in fact, what we'll see in the next slide is $27 billion.

So through these 7 segments I just described, you have in your -- the visibility, a strong visibility, on 85% of the cash flow of Total.

And these are the strengths, and this is where we will continue to build on and to develop the strategy for coming years.

And this is a nice [interway] to introduce the last part, but of course, I'm more comfortable to come again today with this part because otherwise I will have plenty of questions.

That's true that you will have plenty of questions, but of course, I hope that you will find some answers in this part.

If I come today just to explain to you, but here I am Chairman of the Board hat, it's a process, shareholder return, in which the board has been deeply involved.

It's a matter of confidence of the board.

And I think this is a strong message through the announcement of this morning.

The board is confident today that we will deliver the growing cash flows and that we can embark in a more ambitious -- we can increase the return to shareholder.

One of you asked me, "Why didn't you do that in September?" The board does not work because we have a presentation to the -- to you every 6 months.

We work according to some calendar, which is let's build the confidence.

Let's demonstrate what we are able to deliver.

And the delivery of 2017, in particular the capacity to capture the leverage in the oil price, the capacity for the third year in a row to deliver the production growth, has built a strong confidence in the board.

That's why I'm able to speak to you this morning.

It's also because we have decided to make, if I say, a follow study to listen to our investors.

I spent some time during my roadshows in September to ask questions some of investors in order to be able to frame the best answer how do we organize the return to shareholders.

And I think what we present to you today has been -- is a result of this process.

So first, of course, the story begins by the visibility on a growing cash flow.

And we view this chart in debt adjusted cash flow like some markets are using these indicators.

It's a cash flow from operation plus debt interest.

For Total it's $1 billion more or less, so it's $22.2 billion in '17.

And we will add at $60, $6 billion in the next 3 years.

Because we have cash-accretive production growth.

And you have some -- just key example, Maersk and Brazil will give us something like $2 billion.

These acquisition we've done in '17, Ichthys, Egina and Kaombo, the 3 big start-ups of 2018.

It's a matter of $2.5 billion of additional cash flow.

And again, the major start-ups, like Patrick said, is above $30 per BOE.

The second element is that we have an increasing leverage to oil price.

It was $2.5 billion, the sensitivity we gave you last year for 2017.

It's $2.8 billion we give you today for '18.

And next year will be $3.3 billion.

Where does it come from?

It comes from many factors.

But in particular, as a fact, that we have a lot of production sharing contracts, and we have a lot of cash to recoup from past investments, and of course, this is sensitive to the oil price.

So this is important in the business case of Total.

In '17, we have demonstrated to us that the $2.5 billion sensitive, yes, was the reality of the cash we put in the company.

And last but not least, on visibility and the confidence of the board, is the balance sheet.

So 12% net debt-to-capital or 14% net debt-to-equity by end '17, obviously, give us a strong confidence that we have margins to maneuver.

We decided to lower the objective to gearing under 20%, because one of the lesson over the last 3 years, and Patrick just told you what was one of the main challenge we had to get there by end of '14 is what -- in face of the volatility of the market, maintaining a low gearing is part of the business model of a commodity company like Total.

So we set the objective, but we have flexibility, because even if I add on 12% the 2% of Petrobras and Maersk, I think we'd be at 15%.

So this give us this confidence and visibility.

So how did we decide to organize the return to shareholder?

We made a combination, like you've seen, on increase of dividend and buyback.

We have two questions.

What is the base of the growing cash flows?

And what do we return on this base of growing cash flows to shareholders?

And then there is oil price upside.

And of course, we don't want -- because we have a policy that we don't want to lower the dividend at any point.

So we say, okay, dividend will come to reward, to return to shareholders the benefit of all these investments which have been done during several years.

They have been patient, now we need to return it, part of it.

And to capture the price upside, let's use some buyback.

So this is a philosophy we elaborate with the board -- in the board.

And so increasing the dividend, yes, it is true, but the free cash flow per share of Total, the yield will be more 8%, 8.5% at $60 per barrel in 2020 compared to a dividend yield of 5%.

So there is there clearly some headroom to maneuver and to increase the dividend.

We decided at the board level to give you visibility to investors and to announce that we are committed to increase by 10% over the next 3 years this dividend from EUR 2.48 per share in 2017 for the full year 2017 to EUR 2.72 per share by 2020.

So first interim dividend for 2018 will be increased by 3.2% from EUR 0.62 per share to EUR 0.64 per share.

And there was, of course, a debate about this famous scrip dividend.

Can we -- do we keep it?

Do we cancel it?

It was a debate.

We decided to listen to some of our shareholders who appreciate the scrip dividend.

But at the same time, it would make no sense, obviously, to announce today a growing dividend and diluting you with scrip share dividend.

It's a matter of consistency.

So this, to be clear, we maintain the scrip because some of shareholders -- and by the way, they exist.

The last scrip dividend option, 21% of take-up at the time with no discount, at the time where the exercise option for the scrip was the same, but in the -- with the share price on the markets.

So we had some shareholders who would like that.

But we don't want to dilute anymore our shareholders, so we will issue shares -- scrip shares only -- obviously, with no discount and buy back all new scrip shares.

This will be implemented from January 1, which means that the -- I think it's 7 million shares which have been issued in January for the scrip, $400 million will be buy back by Patrick and his team from tomorrow or today, I think.

We have the right to act now.

And we will implement that policy.

Then the second question, we wanted that -- second proposal by the board has decided to do is how do we share with our shareholders the benefit from oil price upside.

We cannot, first, do it by increasing dividend, so let's introduce the share buyback and in order to share this oil price recovery.

So it's, we said, up to $5 billion share buyback over 2018, 2020.

It will come on the top of -- obviously, of the scrip shares buyback.

And of course, it's linked to the oil price recovery, because it's part of sharing the oil price upside.

Don't ask me a question about the specific mechanism.

Let's first see it.

I can just tell you, but -- and it's also a matter to pilot it.

But at $66 per barrel of crude price and a $55 per share, which is undervalued price, I think, we will begin tomorrow as well to think to that seriously.

And more -- I think this slide is fundamental, because in fact, the discussion of the board was organized about -- around this slide, which is, let's define our clear priorities in terms of cash flow allocations for the coming years.

We have clearly, I would say, a growth strategy, oil, gas, a new low-carbon business.

How do we allocate the cash flow?

And what is the right priority?

So this is the results of our discussions.

And I think the first -- I must say, that the board insists again that priority is given to our capital investment program.

We are comfortable with $15 billion, $17 billion per year.

Like Patrick told you, it's a matter of $13 billion, $15 billion of organic CapEx and $2 billion net acquisition, $1 billion for E&P and the others for Downstream and new Gas, Renewables & Power.

Then the dividend.

The dividend commitment, 10% increase over 3 year.

No scrip dilution is the second priority, and it's independent of this commitment of the oil price.

The third priority is to maintain gearing under 20%.

The board attached a certain important to maintain, of course, a grade A credit rating, and so that's in the way to allocate your cash.

And then the upside to the oil price, we have said, subject to oil price recovery, it's linked to the oil price upside.

In fact, it's share buybacks, so we introduced up to $5 billion over 2018, 2020.

So I build it along just to explain to you the process, the way we decided to frame the answer and the increase of return to shareholders, but I think it's important for you and for all the investors of the company.

So this leads to my last slide, which is, I would say, a summarize -- a good summarize of all our message today.

We are delivering you growth.

This growth is cash-accretive and generates strong additional cash flow.

This growth is supposed to maintain, let be clear, to be good on what we control, to maintain our cost discipline.

You've seen that despite $65 or $70 per barrel, we maintained the cost-saving program, because we know that there will -- could might be some inflation if the price come in high.

So let's maintain this discipline.

It's important.

We maintain the capital discipline as well.

We are confident that with capital investments, as described, we are able to grow -- we will grow the company at 5% in production into 2022 and deliver additional value, which is more important.

We prepare the future by upgrading the portfolio, launching profitable projects, by strengthening the integrated gas and low-carbon business, to prepare the future by growing our petrochemicals, retail and lubricants, which is, of course, part of the beauty of the integrated business model, which demonstrated strength during the last 3 years.

And I know that you know, as always, in all the slides of Total, the last word are committed to shareholder return.

Sometimes I've seen some smile on some of you.

But today, I can say I have nothing to hide to committed to shareholder return.

I hope you are convinced.

And now, I'm open with Patrick and all the executive committee members to your question.

Thank you.

Okay.

Everyone has got a hand over, just have some patience.

We'll all get through.

(inaudible)

Lucas Herrmann from Deutsche Bank.

But look, first thing, I think you have cleared a lot of things that we were somewhat confused about and much is very precise.

Couple of questions, if I might, on return and then one on businesses.

The first is just in terms of the return policy.

If I think about buyback up to $5 billion, it's effectively buyback 3% to 4% of your equity at today's price.

If I then think to growth in dividend per share, the question really is one of am I double counting if I start thinking about the dividend per share is going to grow by 10%, but at the same time, I'm hoping that share count will decline by 3% to 4% from buyback.

Just whether you could comment on whether the intent is to -- I think you understand what I'm asking.

The second question, you've done something quite exceptional today, you've actually given us cash flow from operation estimates for each year precisely at 2 different oil prices out to 2020.

And what surprises me slightly as I look at 2018, in particular, is you have the benefit of Brazil coming through, you have the benefit of Maersk coming through, you have the benefit of start-ups coming through.

So I just want to understand, in part, given the cash flow that I think we -- I think you've indicated in the past come through from those, the growth seems a little modest.

How conservative, whatever, might you be being?

And the third one is, I just wanted to ask a question of Saft.

One year on, what have you learned?

Where is it taking you?

How are you feeling about it?

Okay.

The first question is what is the combination of share -- buyback shares and the influence in terms of cash return, global return to shareholders.

The point is that if you make some math, you will find that -- and it's not a rule, but executing the program we propose will lead to the return to shareholders of the CFFO at $60, around 40% in 3 years, which is higher than today, let be clear.

So an increase of return to shareholder from 30% to 40%.

So in fact, it's because the impact that you described is the buyback will be done year after a year, so you don't have the full impact of the $5 billion.

[When] is a question, but don't ask me what we will do beyond 2020, please.

We already made today something quite innovative with the board to frame an objective -- not only objective, to say your commitment on the dividend.

Of course, that means that it's a commitment, but don't ask me to describe what will happen after, because we -- good answer -- question is good, but it has more an influence on what will happen after.

So again, we are on a growing cash flow trajectory, and I think it's clear.

On 2018, are we conservative, Patrick?

Don't think so.

A little, like always.

Yes.

But there's always things happening.

But we like to deliver.

And I think, let's be clear, the 2018 figure was a result of bottom-up approach by the budget sessions.

We cannot -- we don't -- we have always, like you said, some good news behind there, we capture our issues.

I know it's not the beginning of the year.

So I'm confident that we'll do a little more than what is written on the paper.

But it's also some fundamental.

We have the assumption of when do we really close Maersk is not neutral on the overall performance.

And that is not fully in my hand -- in our hands even if already we have secured all the approval but one.

But it has some influence considering the magnitude of these operations on the global vision, so there might be some.

I will tell you, in our assumptions, we are -- Bernard would say that we are optimistic.

Not optimistic because $35 per ton is what we can see today on the screen.

We are always a little pessimistic on the petrochemical side, so we have only the good news.

So -- but this is a figure we disclose to you.

So you can use it for your math and for -- but I think, more importantly, for our shareholders is a commitment about the return.

And you will see, and Patrick will deliver, quarter-after-quarter, how we implement what we have, program we just described to you.

It will be the proof.

I think the best proof is by the acts.

Saft.

Saft, it's for Philippe.

What did you learn?

We learned a lot, I can tell you.

Well, first, when we acquired Saft, Saft we were convinced was one of the company active in the battery field with the best technology.

And this was confirmed after 1 year, be it in -- for telecom, for space, for different.

They are really benefited from very good technology to generate profit, which are very significant profit.

And in 2017, Saft increased its result compared to what was in 2016.

But beyond, what we started with Saft is to open their ambition more on mobility and energy storage segment, segment on which we had presence already.

But clearly, with Total as a shareholder -- Total being also shareholder of companies that want to grow their solar activity, very clearly a nice fit.

And we are working heavily on that and increasing development and developing also R&D program in order to develop new project that will suit better this energy storage segment.

What I learned from Saft, personally, is that China is moving very, very, very quickly in this field of new energies.

You have debate in Europe and U.S., do we have 1 giga factory?

They have 50.

So I think when you look to this, and it's very -- no but it's -- let make some thinkings about the positioning of the group on all these new businesses, because you have giant players.

And we experience that for SunPower every day, but we can see for Saft as well.

So it lets to ask to also how do we position ourselves vis-à-vis this world?

And for the future of the group, I think it's still plenty of lesson.

But again, like it was said by Philippe, they are improving their results.

We give them some of the CapEx.

We have injected our good return.

So when is a question for us, as I always said.

Saft is always a question of -- big question is more up to which we -- can we grow them, at which pace?

But we have to take into account the competition.

We are not alone.

But obviously, no regret at all to have invested $1 billion in Saft, considering the evolution of the battery business or all these new technologies.

Michele had a question as well.

Microphone.

Two questions.

The first one is related to your inorganic acquisitions in the last couple of years.

You've taken advantage of the bottom of the cycle to upgrade and increase the pipeline of new projects.

Does it become more difficult from here to still find good profitable resources on the inorganic route?

And then does their full exploration become a more important avenue for you to continue to increase the pipeline of future projects?

And then secondly, you hired at the end of last year a high-profile CTO for your company.

And what are your priorities here in terms of what to achieve from it?

And which part of your business, E&P, LNG, Downstream, can be most impacted from technological advancements?

Okay.

The first question about, is it more complex?

I will answer you no for the time being, because I have in mind some few things which will come soon, which will demonstrate that we continue to be able to have access to low-cost [visit] -- or low-cost of access.

But I don't want to disclose it, it's not finalized.

It should become more complex, obviously, because the market will move from negotiating at $50 to negotiating at $60, $65.

It's -- the time -- it's why I was advocating last year to be able because we -- and to the work done in '15 and '16.

And I said, no, let's go to offensive, because I was afraid to see one day, I was expecting not -- I was hoping not to have it in '18, to be honest.

It's a little early from my point of view, because we are strong.

But from that, it was -- it's demonstration that we are right to move quickly last year.

And -- but I think you still have today in the market some pressure, let's be clear, at $60, $65 on 2 categories of players, so small, the medium and independent players, which still are not very active.

And [depth] is still there, they are very prudent, and also some national companies, because this is where we have been successful.

That's why I insist on the Middle East and Algeria and other countries.

And at $60, it's better, but it's not yet superior, I would say, for them.

So that is the market.

Having said that, we -- so we will continue to be active on this field.

And then exploration, I cannot plan for exploration.

I can -- we can support them, and I'm very happy that the teams have done that.

I think it's also a psychological positive element, a big discovery and by the new team.

I hope there will be more to come.

But it's more difficult to plan for me.

So as we have also to prepare the future, let's continue on both feet, but keeping in mind the discipline.

And honestly, the fact, like Patrick said, that we have put into the portfolio 5 billion of barrels at $2.5.

We have some barrels in advance.

So I'm not desperate to make deals today to feed the pipeline.

We have fed the pipeline, but we have some opportunities on which we'll come back soon and which we can materialize, we will announce them.

The CTO, our young, our new -- she is not young, but she is very experienced and high-skilled CTO, Marie-Noëlle Semeria.

I think she's working on different segments, digital being one of them.

But may be Philippe, you want to comment on the R&D strategy?

Yes, as you're all aware, Total, as an oil and gas company, has been always very highly technological company.

And R&D, of course, is part of what is needed to ensure the challenge that we have to face in any branch of the company.

But if I have to stress what is making today a big shift on what we do, it's clearly that uses of digital and data science in order to help us to reduce our cost, better manage our industrial operation, is opening really new horizon for us.

And when you see the potential in decrease of cost what we have.

LNG, of course, is one example.

But clearly, we are stressing a lot on using these new tools in order to better manage and reduce our cost.

And another program that we started when we decided about our new ambition to be the responsible energy major, we decided to step up our level also R&D for CO2 capture and storage, because we consider that we need the tool to step up on this field.

As you might have been aware, we've partnered this year with Statoil and Shell in Norway in a very big project that will store CO2 in the North Sea.

So this also is part of what we are bringing as a new horizon in our R&D.

So role of the CTO is, in particular, to open R&D to high-skilled networks in the world.

On CO2, we have put in place a large program with Stanford University.

And role of the CTO for us is we have people, a lot of people, working but to open the eyes and to have access to new areas and to right teams in order to partner between Total and some high-skilled teams in the world.

But I take your point, and maybe in September, we'll organize a workshop around R&D, technology.

It would be of interest for some of you.

I have some question sometimes, and we could invite her to make that presentation.

Okay.

Theepan has a question.

Theepan Jothilingam from Exane BNP.

I just wanted to come back to the buyback, just -- you talked about the EUR 5 billion (sic) [$5 billion] subject to oil prices.

More a point of clarity, but you've talked about a free cash flow outlook at $50 and $60 oil.

I just wanted to clarify, the $5 billion buyback would be delivered in that high case of $60 that you've executed.

The second point, I think the market has focused very much on growth projects at Total.

I noticed you reiterated a 3% managed decline rate, so perhaps could you give us a little bit of color in terms of what is being done to manage that base?

And what value is actually created from the base?

The board, it's up to $5 billion.

There is no secret formula.

Again, I told you at $65, $66 per barrel and $55 per share, we will buy back some shares.

It's a combination of oil price upside and share price as well, let me be clear, and we'll pilot it.

At $60, obviously, yes, there is some buyback which will be done.

At $50, there is much less.

Let be clear.

It's just a question of having the cash, our cash allocation.

So that's why we put oil price recovery, okay?

And then the second question is about 3% decline rate, what is being done to manage it, long-term plateau?

But Arnaud, you want to comment it, maybe?

Yes.

In fact, I can comment in 2 ways.

The first reason for this low, low decline is the fact that we have a lot of new projects coming on-stream.

And clearly, when you start a new production, you have a plateau phase, so that is contributing to maintaining low decline rate.

And the other thing is that we are getting more and more of our projects like Yemen LNG who are long-term plateau, projects that are inherently more stable in terms of production decline.

And that is why we see that our portfolio is requiring less investment to have this decline.

We invest $3 billion in the base, $3 billion in the base to maintain it.

I would say as well, but I should have commented that, by the way.

Maybe -- and just to clarify, we don't have any more in the figures, Indonesia, that we presented to you, which was 100,000 barrels per day, declining at 15%.

We replaced that somewhere by Maersk, 150,000 barrels per day, growing.

That the full picture.

And let be clear, on Indonesia, there was some cash flow from operations which was mainly a lot of old cost to recoup, but the margins was very small.

So there are still discussions, but discussions are clearly difficult to conclude because of value which is seen by Indonesians and by us.

We have overall opportunities to allocate our capital.

And I know it's a long story of Total, but don't mix emotion and capital allocation.

So that's why we have also -- this is the type of elements which change the picture.

Some questions over on the left of Martijn and Thomas.

It's Martijn Rats of Morgan Stanley.

I just wanted to echo Lucas' comments.

I felt the whole presentation and, in particularly, the financial framework was crystal clear, so I have no questions about that.

But instead, I wanted to ask Bernard a question or two about refining.

Because it seems to me that the product market is particularly susceptible to 2 major forces over the next couple of years.

One being the IMO.

And secondly, being U.S. exports.

And I wanted to ask you about each of those.

In terms of the IMO, over the last couple of months, we've seen a real blowout in the spread between high-sulfur fuel oil and low-sulfur fuel oil for Cal 20, and I wanted to ask if you can update on your thinking, how that might impact the Total's refining business?

And to what extent there might be upside to earnings as this scenario plays out?

And secondly, I wanted to ask you with regards to the U.S. exports.

If you are in a position to take some of those barrels into your European refining system and what would be the attractions or disadvantages of that?

Okay.

So on the IMO, it's -- of course, we have anticipated the change in regulation, and we've already, in the past few years, taken some actions to adapt our refining system.

The latest investments we've made in the -- is in Belgium, (inaudible) where we have just, by the way, started up new equipment to reduce our length in fuel oils and produce more distillate -- (inaudible) distillates and we have more to come.

We've large investments we are about to do in (inaudible).

It's $400 million of investment, also to cope with the sulfur content in the fuel oil and distillate.

So I would say, to some extent, as long as Total is concerned, we don't see any big issues with the IMO change.

And as I said last time we met, we don't even factor any big CapEx in the years to come to cope with this regulation change.

It's clear that recently we've seen the fuel oil spread improving, which is, I think, a very good thing short term for industry.

Is it going to last post 2020?

Of course, that's a good question.

But at the same time, we think that the distillate -- the fuel marine distillates, diesel, which is going to be an alternative to the low-sulfur fuel oil, is going to improve in term of spread.

So what we might lose on one hand with the spread of the high-sulfur fuel oil will be gained on the diesel's part.

So from that standpoint, once again, it's a market condition we have anticipated.

We take it into account, but I don't see any big impact for Total as long as Total is concerned.

And of course, on the flip side, this is an opportunity for the rest of the group when it comes to LNG and all the gas for marine.

So I don't think it's -- at least, for the refining, at that stage, a big surprise.

Regarding the U.S., I don't see much.

I mean, you know there are some diesel coming from the U.S. to Europe, this is a normal flow.

There is nothing new on that.

As long as the U.S. is concerned, I don't see again any big disruption in terms of refinery -- refined product coming back to Europe as it is today.

The question was more on the U.S. crude export.

Basically, all -- the European system has been designed historically for light crude.

So they export light crude.

So it -- we could take some advantage to export some light crude from the U.S. in the European system fundamentally.

Do we do it?

I think I've seen some papers that we have begin to purchase some of the light crude so -- and then we resend the products to the Northeast because today, as you know, it's more -- it's strange, but it's more efficient to take U.S. light crude to Europe to refine it and to send the products to New York then going to use the U.S. ships.

But America first, so it's good for us.

And we can take benefit of that.

And U.S. ships, which are more expensive, to bring products from the U.S. Gulf Coast to New York (inaudible) French, but the global world, I would say.

So that's the point.

Less important, and maybe Momar should say something, but we have been very active on the LNG becoming a marine fuel.

You've seen that we have a large company called CMA CGM, which is one of the top 3. They have decided to take a fleet of, I don't know, 10 large containers between Rotterdam and -- Europe and Asia.

And we have signed a contract a 12-year -- 10- or 12-year contract to provide the LNG.

It's not -- it's quite sizable.

At the end, we'll invest in the barge.

So maybe you can comment.

And then we want to do more.

We want to be the leader of this business of large container and promoting LNG as a fuel for marine.

Momar, maybe a few word?

As you know, with regard to the IMO, the 3 options are: scrubber, 0.5% sulfur or LNG.

And -- okay, you have the low-sulfur diesel.

For the scrubber, up till they sort out the issue of how they are going to treat, the [scrub's] quite sensitive.

Therefore, we decided to support the LNG, and we've been lucky enough to engage CMA CGM, one of the key players.

We have lengthy discussion with them.

They took the option to work with us, and the competition was quite strong, eventually won it.

And ever since, actually, what we are seeing in the market is more and more companies are being interested in LNG because they are the leaders and pairing with Total to get into that LNG (inaudible).

So I'm sure that in the next coming months, we're going to see major things happening on the LNG side for [Dunkirk].

Technically, they will fill the LNG in Europe and be able -- the fleet -- the container would be able to go to China to come back without any refilling -- refueling.

So investing in one big barge, we'll have the largest barge in -- on Rotterdam.

We'll be able to sustain that, and we have more room for new customers.

So they will be active.

And again, all what we do on LNG is helping us to have all this flexibility.

It's part of -- it's a game we want to enter.

Then...

Thomas?

Thomas Adolff from Crédit Suisse.

I have 3 question.

The last one is quite random.

Firstly, on digitalization or the implementation of it across the organization.

Do you create a separate entity with its own KPIs?

Or do you -- or will it be part of each division?

Is there a right approach to attract the talent into the organization, unless you already have that talent?

Secondly, on your production growth target for 2018 of 6% year-on-year.

I'm assuming Arkema is included.

And if that is included, presumably that's also reflected in your net CapEx.

You're at the conference of Abu Dhabi?

And the final question, this is a question I asked BP and Shell as well and it's the wow factor.

If there is a key takeaway from 2017 where you said, "Wow, I didn't know," what would it be?

Digitization, I think we are organized.

We have a group of -- there's a small group which is impacting the rest of the company.

We have a Chief Digital Officer, we have a -- but basically, we have implemented that in the divisions, each of them having some groups of digital people.

And we increased the level of competence.

But we don't have the same issues.

In fact, we split that in 2 parts or 3 parts.

One is, I would say, the commercial business, which is between these 2 guys.

They have the group of people working for both on what is commercial markets.

And then you have some projects between -- which is -- are shared, and so transfer of competence between marketing because Bernard as well is marketing polymers, and between Momar.

And then then you have the same between these 2, between Bernard and Arnaud, on the manufacturing side.

One of the big challenge for digitalization in our business is that as a difference to manufacturing business like cars or others, we are a continuous flow, which makes things more complex, in fact, to influence.

So -- but we have a group there.

And we have decided to implement a group -- quite a large group in India to work on what will be a digital refinery, Refinery 4.0, to be very creative.

So we will build skills on a specific big topic.

And there is some transfer between -- because at the end, they are the same type of issue.

So we are taking that seriously but not as an independent group of the company in any way.

Otherwise, could be rejected by the top professionals.

And then we have in your firm, Namita Shah, and on that maybe you want to say -- about how we can use the digitization to change the way we work because it's also part of the interest for people.

Yes.

So we have projects across all the different back-office organizations in terms of data and how to better exploit data.

One of the digital officers who's based out of the Exploration & Production branches, somebody who looks a lot at data along -- because it's linked a lot also with our exploration and seismic.

But we can use our capacity in how to manage that data for other things as well, which are pretty basic like our contracts and procurements teams and how to manage all the data flow that comes from that or all our HR data and how that comes from that.

So we have a lot of cross-fertilization.

I think what Patrick showed was that our digital officers work across branches where we find common themes rather than saying that we're going to have one team that's going to be working all across the group.

And (inaudible) you know our commitment to Abu Dhabi, but I will not comment on competition.

Okay.

And then the last question, which I'm not sure if I captured because your wow, there is many wow, I would say, but I didn't know.

I think, again the expansion of China is much stronger than we believe.

And we would be wrong to believe that China want to just stay within its border, going quickly through Middle East, Asia and even to Europe.

These are fundamental change I think we need to take into account.

Okay, next question from Irene, and then maybe from Robert in front.

Irene Himona, Societe Generale.

I have two questions, please.

I think, Patrick, you mentioned that as of next year, you will merge, for reporting purposes, LNG with Gas, Power & Renewables.

And you have currently, I believe, a 2020 target for Gas, Power and Renewables cash flow of $1 billion.

Obviously, when it's merged with LNG, we kind of lose that visibility.

Will you keep the target internally?

My second question, I think I saw you say today that you've started rehiring staff after a 3-year freeze.

I was just curious to find out if there's any specific skill shortage that you hit upon after 3 years or if it's just a general, across the company, statement.

I think, no, we don't have skill shortage.

We have too many people, to be honest.

So we let people go away.

And we imported a lot of skills.

One of the advantage of the Maersk Oil transaction is that we will put in the company 3,000 people, high-skilled, already trained people, and over the last 6 months demonstrated to us that they are high-skilled people.

And we will -- our objective is to keep most of them, in particular, on the technical side.

And we will implement a technical center in Copenhagen, not only for legacy reason but because we've -- [they have some] value.

So I would say on that frame if we let people go and we have lost some people, I know, because they retire, we've not replaced them, but we will inject very quickly the Maersk Oil people in the company, and then it's a question of managing the merger.

But I'm convinced that Arnaud and his team will do that.

I mean, I'm sure that if -- instead of me, you would have the -- our leader in technology, he would tell you we have [lost a lot], but it's not -- macro, it's not true.

Having said that, this type of policy we can apply for years, but we cannot -- we know that is dangerous because then, you lose some, which begs the question of transmission because the people will leave and the young ones, so you need to organize that.

And again, I have no regret to have done it like that because we maintained a strong, mature support filling the company and which delivered very well, so not to make layoff plans I think was the right decision.

And today, we (inaudible) so that's the point.

I'm afraid you understood, but you will lose some guidance on GRP as it is today if we integrate LNG.

But I think it makes more sense for you to globally look towards a future of what is the new integrated LNG, Renewables and Power.

It is a strategic logic of it, let it be clear.

When we decide, for example, to go to Myanmar, to build (inaudible), to invest in the power plant, it is led with the idea that we supply LNG.

So there is a strong logic to see these LNG to power business together.

Then, of course, we have the renewable business.

I will tell you we'll see -- I mean, I -- we don't -- did not decide yet, to answer your question.

But what I hope is that GRP will do -- the new GRP [report] will do more than $1 billion of CFFO.

Last time we discussed it, Irene, you told me it's too small.

We have difficulty to anticipate.

When we'll be larger, it would be more predictable, I think, for you.

It's Rob West from Redburn.

The first question I wanted to ask you -- and thank you very much for the presentation and progressive dividend policy.

Why a cap on the buyback?

Why cap it at $5 billion?

And is that a factor of having other things you want to do with the cash flow at that point or not wanting to buy the shares back when they're very expensive?

So that's the first one.

The second is going into the Middle East and North Africa, which was in your presentation as an emerging area of opportunity.

And in the release this morning as well, better production than I think you had in.

And can you talk a bit about whether you're seeing a trend there of stabilization that you can extrapolate out to this year in terms of the production in, say, Libya and Nigeria, and whether the investment terms are now getting attractive for you?

I think that's an area that we have trouble quantifying on our sides as analysts.

And so if you could speak a bit about that, that would be great.

Okay.

Cap, I think if you would have just say buyback, you would've asked how much.

So first, let's consider that, again, we try to frame an answer, link to the upside.

But because I want to, will complement my answer.

So I think, let's say, up to $5 billion, maybe it's a first step.

Let's do it, and we'll see on the price.

But it's the idea again fundamentally more to tell to you, our investors, we -- when we met you, when we meet our investor, there's this fear, when the oil price will go up, all companies will again increase the CapEx and take all the upside to reinject in CapEx.

I heard that from all of you.

So by stating we'll use part of the upside for share buyback, it's a commitment.

And to give magnitude for the next 3 years, I think it's a way for us as well to tell the market, no, we have a clear framework allocation of capital, and we'll stick to that.

And so let's took it like that.

But Patrick, you wanted to also -- I know you insisted on the idea that we should define a volume.

The point is that you would not have to trust me or Patrick if we said $10 billion.

So we give you a magnitude of what we are able to do under the current environment.

Another interesting view is that we want to protect our rating.

And it is good to provide the rating agencies some view of what's the size of our buyback program.

But I think my answer to Theepan gave you some indication of that.

The second question was about how do we [do money] in the Middle East and North Africa?

Are you seeing a trend there of stabilization there that gives you more confidence to invest?

For stabilization, I don't know why you see Middle East stabilizing.

I mean, but we see (inaudible).

Let me clear, it's when you have some [covers that you cover] opportunities to take some results.

It's true.

Today, clearly, you have not just same, I would say, way to look to investing in this region according to the various players.

If we have all the same ideas at the same time to go in the same place, then you have a huge competition like in the port of Brazil that we escaped, thanks to God, but I've seen some of my competitors spending huge amount of money, but I don't understand, because everybody has the same idea.

If you begin to accept, because it's part of your legacy, it's part of the way you can do, to do it differently like exactly Maersk Oil, where we surprised the market by going to North Sea.

I know people want to understand why we've done that.

So I think it's a way to also look to these countries.

And of course, there is, for example, Libya today.

It's not yet stabilizing.

But let's hope it will stabilize.

So if there are opportunities in Libya at the right price, and maybe its price today is lower, because if you wait Libya to be stabilized, I'm afraid it would be more expensive.

So it's a matter of accepting the risk, the geopolitical risk to do -- to move early enough and to be bold enough to take that on your board.

And of course, a company like us with a large -- it's the advantage of the size for me is that I think $150 billion of assets, if one of the country collapse, it will not impair the -- so we can take a [step off it] but it's a crucial question of having the right relationships and the right understanding of these region.

But we've -- Algeria, we rebuilt in the last year.

It's part of the success of the company, or the relationships with SONOTRACH.

We are today a good -- very good strong communication, and you know Algeria for us will be not only, frankly, to us more Timimoun and TFT, but we'll have the Berkine asset for Maersk.

We are discussing today with them another develop -- gas development projects in direct negotiation.

We will have the Engie deal, which is bringing us a huge LNG -- Algeria LNG portfolio, because we'd be in charge of that.

And so -- and on the top of it, Bernard is beginning to discuss about the petrochemical project with Algeria.

So this is the type of things that I see a virtuous circle when you begin to engage with this country.

And frankly, all that has been very possible as well because we have decided to come back there at a time when it was not an easy time and not so stable, I would say so.

So that's part of the point.

What else do we have?

Who else do we have?

We've got Oswald here and then Christyan Malek.

Maybe can I ask a question about LNG, please?

You're about to become the second-biggest player in the market.

You also mentioned it's commoditizing over time.

So I just want to talk about this -- your contracts, what discussions you're having around LNG contracts?

Are you still happy with those, if you see the world commoditizing?

But also within your $3 billion of cash flow, you spoke about opportunities with shorter distances.

Are you including any synergies from shorter transportation distances or any of the winter spot price arbitrage that you've mentioned in some of your earlier slides?

Or is the $3 billion just $60 times your slope, if I think about that number?

I think we will come back on that in September.

We have -- the $3 billion is a result of the assets.

It's the intuition of (inaudible) it's the intuition of (inaudible), but there is no -- there is some optimization which is done by the teams.

Our trading teams are always very prudent to deliver to the management any targets, but we are convinced.

And but -- Philippe will elaborate on it.

But we will -- the size, we'll do more.

And by the way, among the trend that we observed in 2017 is the fact that the trading houses have strongly entered into that market.

You can see these new players.

And they come, why do they come in this field?

Because they strongly feel that they have some techniques and trading ways be trading in oil which could be transferred to a global commoditized energy and trend.

And we are thinking the same, by the way, to see if we [have developed different synergies] to add value between our oil trading and our LNG trading, which is not today.

When we speak about LNG trading today, it's not so complex.

It's just a matter of arbitration between 2 markets.

You redirect your vessel.

But you can do much more tomorrow when you have a fleet of vessels, 20 vessels, to optimize the logistics.

And if you are smart enough, between big companies, you could save a lot amount of money, which is today just for -- because you have -- your LNG tankers are going around the world in a crazy way.

And you can save a lot.

but Philippe, do you want to elaborate on...

Did you have a figure in mind of synergies?

But your question is good.

I would ask you to deliver that.

And the reason may be the $3 billion.

Well, we'll see.

But what we can say is that we have already the experience of the market which is already commoditizing at a very high speed.

And across the last 2 years, we managed to generate more than $1 per million Btu of added value just by playing on flexibility, optimizing the destination and the sources of our LNG supply.

And of course, the bigger our portfolio, the more flexible our portfolio is.

And with the acquisition of Engie, we are taking a very large position on the European market, which is the second-largest market after Asia, but which has a unique feature, is that it bring a lot of flexibility.

We can decide to put an LNG ship in Europe.

And if we change our mind, 3 years in advance, 2 years in advance, 6 months in advance, even after having delivered and unloaded the cargo, we can decide to ship it in a better market as soon as a customer is needed it.

So, yes, we are confident that we will generate lot of additional value for this flexibility, and we are already doing it.

We'll have a better answer later.

Christyan Malek from JPMorgan.

Two questions, please.

First of all, in September, you highlighted your cash margin per barrel above $25 a barrel for the portfolio, including 2017 start-ups.

I noticed the same slide wasn't in today's presentation.

So just wondering, can you comment on how the overall portfolio cash flow per barrel is trending?

And to what extent you frame targets in terms of your -- sort of your financials around your cash flow per barrel?

Can you quantify where you think you're at today and where you want to go back on that slide that you had in September?

And the second question, and this may be slightly pedantic, but in the handout you've given us, you put in the framework, which is very clear around your cash flow priorities, $13 billion to $15 billion and you've added on the $1 billion to $2 billion.

But in the -- the one on the Internet, the one you presented up in the screen, you've just put out $15 billion to $17 billion.

So I guess, the backdrop to that point is to what extent are you pivoting around that resource renewal?

If you don't spend it, does it come back in the form of gearing or buyback?

No, let me be clear, no, no.

It's -- sorry for that, but what is the real presentation and the one on the screen, we should have commented that.

And it's just -- we'll be very honest with you.

On the one, it was 1 plus 1. And it was back to the September presentation.

In September, we told you, so net acquisition for resource will be $1 billion.

It's still $1 billion and it's not unchanged.

But on the top of it, in this presentation, we introduced the fact that on -- so Downstream, we're -- we are targeting $500 million of acquisition and the same on the renewables, so it makes $2 billion.

In the past, it was a mistake.

It was 1 plus 1, instead of 1 -- 1.2.

So let's take $2 billion.

This is a capital investment that we are -- we'll take it -- we have onboard, okay, which has been approved by the Board of Directors.

So there is no trick.

On the first one, I think, so $25 per barrel of CFFO you mentioned is at $50, if I remind it.

And today, I think in my speech, [and several spoke] and Patrick as well, at $30 per barrel [load], about $30 -- at $60.

So you have the range of magnitude of what could be the CFFO per barrel from $50 to $30.

But again, it depends of the regions.

You don't have the same CFFO -- by the way, with the figures you -- we've shown you, look, you make the math, you have it.

You don't have the same CFFO per barrel in the Middle East than in some other countries, like in Africa.

You don't have also the same long-term perspective in the Middle East.

You don't have also the same stability of the contract.

So all that is a mix of various things.

And, for example, when you speak to, I think, about Abu Dhabi, of course, we have production, but we are also making trading with them.

So it's also -- to look to the big picture of what could be the global business, what a company like Total can do with a national company and not only keeping on asset by asset.

So that's very important to keep that in mind because -- and this is why we have embarked -- and I can tell you the team around me, we are working out.

And one of the progress I consider we have done within the company is to work like a team also together.

And to think of the executive committee level, what can we do together for the group?

And as I said in my speech, Momar went to Kenya to explain to -- recently that it's the best company in the world in Upstream is Total.

No, he's an expert in Upstream, but he's an expert in Kenya, I can tell you.

So it works.

And so, Brendan here.

It's Brendan Warn from BMO Capital Markets.

You're incrementally sort of increasing your capital employed to the U.S. So my question just relates to -- and I know you've been recently rubbing shoulders with Mr. Trump.

How attractive are you seeing that region or that country considering U.S. tax reform, the success of Ballymore and just in terms of your overall capital employed?

And then my second question, and that's back just on LNG contracting, can you give an update on the Papua LNG project, please?

No, U.S., for me, to be clear, it's a very large country, a large market.

There is lots of natural resource, huge amount of gas.

And I'm not convinced by the domestic gas markets of the U.S., but I'm convinced that this low-cost and low-priced gas can be a feedstock and an energy for Bernard in his refining and petrochemical business or for Philippe in exporting LNG.

So this is a type of -- so we are fully open.

The fact that you are taxed at a lower rate is even better.

I know we are open.

So for me, the U.S., I said that to President Trump, the main risk is the legal risk.

It's a country where you can use a lot of money in legal or, like, class actions and things like that.

And our European way of thinking is sometime not fully aligned to manage this type of risks.

But aside of that, of course, while we have a large base of U.S. shareholders.

We have 36% of U.S. shareholders, so open to the U.S. And if -- and frankly, for me, today, it's a land of opportunity on the top, on the Upstream side.

In deepwater, we have some scale.

But for the time being, we are non-operator.

But if we can find ways to become, we'll do it.

We'll want to leverage this deepwater expertise.

And the deal -- and this multi-well deal with Chevron, which delivers big production, [this way], is encouraging us.

So I think, to be clear, U.S., yes.

I think we are investing.

We have, more or less, $9 billion of capital employed in the U.S. And we'll invest $1 billion per year.

And when you think petrochemicals, you can look around.

But at the end, U.S. is a good place to invest.

And I think, Bernard, if he has another project, we'll be happy to present it to you, so he's looking for it.

So that's all.

Then the question is PNG.

PNG progressing well.

You want to say a few words, Arnaud?

Yes, just to confirm that we completed the appraisal of the field last year.

And so now, we are into conceptual design and trying to see how we can optimize the development scheme with existing infrastructure with the partners, (inaudible) also LNG marketing activities.

I'm turning to Philippe as -- for LNG project, that is usually a condition to sanction.

We engage with Exxon quite efficiently, I think.

The fight is behind us.

We have a joint objective, is to make an efficient project.

So I think we share many data.

We have a better vision of what we have in our field, 5 million, 6 million ton.

What they can do on their side, up to them to tell you.

And how can we combine or not that to make an efficient scale.

There are other synergies about [jetties], energy storages, it will be stupid not the tie, for the interest of PNG to take benefit of it.

So then it's a matter of finding agreements, but what I have observed in the -- and we had the meeting this last week, so I can tell you is that there is more and more convergence between the teams of what should be the right scheme.

And I think we are all driven by the idea that there is some resource to be [value-ized], well positioned, not complex to develop, not far from Asian markets.

And so we'll -- I'm more and more confident that between Exxon, Oil Search and Total will find the right way to give the best [value-ization] to this resource.

So let's move on.

It's an LNG project, so it's a big project.

So I don't want to put pressure, but I see more and more alignment.

And we have all spent money to acquire the resource.

So let's develop it.

And we see the same -- when I met with (inaudible), it was the same spirit that we have on both sides.

A couple of questions in the middle here from Chris and Mark.

It's Chris Kuplent from Bank of America.

I've got 2 quick questions only remaining on the balance sheet for you, Patrick.

Your asset disposal program is behind you.

Your gearing is sitting even with Petrobras at below 20%, and you've made a good point.

You've acquired more assets over the last 2 years than you've actually sold.

Should we not expect from an anti-cyclical approach that you will enter a period where you actually sell more assets?

So just wanted to ask that question relative to your $1 billion to $2 billion net acquisition budget that you've highlighted.

So net to me suggests you're still acquiring more than you're selling.

And secondly, a tiny question, but I'm waiting for the annual report with bated breath.

So if you forgive my impatience, your net debt is almost halved from last year and your cost of net debt has gone up.

So just wondered whether you can give us a little bit of a preview of the notes that you'll be publishing in the annual report, what's driving that?

The notes is for Patrick because he's taking care of all the notes of your report.

I did not read them, yet.

But on the first, no -- net, yes, you understood net.

Net means acquisition minus sales, clear.

And let be clear, the important point is the $1 billion net on Upstream, where we consider that we could have access -- and it was answer to Michele -- to still I think value opportunities, and we are looking to some of them.

But at that same time, I still continue to -- and Arnaud is in line with me, but the risk of this portfolio, some high-cost assets, we have still them.

It's not a big secret.

So I will -- we will continue to have this logic.

Having said that, why I didn't give you, I would say, a sell program is just because you have the answer in your question.

3 years ago, it was for us fundamental, like we said, to lower -- to strengthen the balance sheet.

It has been [quick and] unexpected, but -- so $10 billion program was for us the fundamental part of the way to weather the storm.

So it was announced like that and to commit to that.

Today, we don't have the same magnitude.

It will depend on one side and the other side.

But maybe, the one could be -- will be plus 3 minus 2 or plus 4 minus 3. But it's to keep the discipline because, again, it's not a matter of growing volume for volume, it's a question of value.

But yes, we still have some cleanup to do in the portfolio.

We've done this, we've done part of it.

And the cleanup on the Upstream is easier when the price are higher than when the price are low.

If we have divested $10 billion or $12 billion, mainly from Downstream or midstream, it's because we could have lost value on the Upstream.

So we will remind it and -- but I have -- we have yet some targets in our heads.

And yes, we will be determined to sell them if the price -- if we have the good reward, even if the price is higher.

But we could say, "Okay, let's take -- let's keep the cash flow." I think, we'll not (inaudible) we will be.

So we'll stick to what we have done.

That's why we put $1 billion because I'm sure that Arnaud, we think to acquire a little more, but we need to have business.

And it is the right time to continue the upgrade of the portfolio.

And the rest for the others, for the Downstream, (inaudible) [rewards tell you, rewards], we don't have much to sell.

We have more to acquire.

And I would say on the side of Bernard and Momar, Momar has the (inaudible).

We have made a big cleanup of, I would say, the assets, which were in market with very little [groove].

And so we are still substituting because we have a very large portfolio.

We discovered every week in U.S. it's there and there, but it's more.

The most of it have done -- been done.

And Bernard, I think, should look also to sending some old to buy some new.

It's also good for (inaudible).

Okay.

Okay, the question about the notes and the way -- the weight of our net debt.

First of all, our net debt is dollar-denominated.

It is net with cash euro-denominated because this cash will be used to pay for dividend, which is euro-denominated, and share buyback, which is euro-denominated.

So as of today, unfortunately, you pay interest on your dollar-denominated debt.

And you receive a negative interest on your euro-denominated cash.

That's the reason.

Is it okay?

You have what you want to see in the notes.

He seems okay, so it's perfect.

What else?

Another question or -- yes?

It's Marc Kofler from Jefferies.

I just wanted to ask you a question about Downstream.

And it looks like the cash flow around these businesses is now incredibly robust, very resilient.

But I suspect there's been some very big structural changes behind the scenes since 2015, 2014.

So can you just say a bit more about what gives you confidence in that cash flow holding in 2018?

And I appreciate the [25] (inaudible) on the slide.

If you've got a peak number on that, let's say, in 2015, can you give any sense to what trough cash flow might be in that business?

The strengthening has began in 21 -- 2011 and 2012, a little earlier.

I think -- but again, it's quite strong because we divested $7 billion of assets in this Downstream figure.

So we did not calculate, but, in fact, this $7 billion, which seems to be solid, is most -- is stronger than expected because, in fact, at the same time, we don't have any more cash flow coming from Atotech, from Bostik, from some assets which were sold on LPG, for example.

All these LPG business, we were providing.

I would say, $500 million to $1 billion of cash flow, which have been strong.

Honestly, I think we have, today, a clear and a strong discipline of the way we allocated cash to the Downstream between all of us.

Not dreaming, for example, it's not because we have high refining margins that suddenly, we increase the CapEx.

We -- in the last few years, we don't do that.

I've seen some competitors doing that.

And for me, it was one of the lesson of the previous golden age of refining.

In 2006, '07, '08, '09, we've done that, investing like -- it's good, we have strong margin, let's invest.

You just prepare the next cycle, and it's a disaster.

So we don't do that.

And we are -- and in particular, on refining, which is, for me, a dangerous business.

So if there is one point, but Patrick gave you his sensitivity, it's not because we don't believe that $35 per ton could be achieved, but we know that you can't -- in particular, where is the -- when the price is going up, whatever you think, you don't recoup all that in the products, so -- but it's also -- it's what was, $600 million?

$600 million.

$600 million for $10 per ton.

So it's not huge.

It's not the magnitude of it.

And at the same time, Bernard and Momar are working to increase the cash flows.

So I think this volatility is absorbed somewhere by part of the work which is done.

Momar has a chance to work on a noncyclical business, so 100 plus 100 plus 100.

Again, it makes 500 in 5 years.

And it compensates.

So he will continue to do it.

One point which -- but today, we don't see that in the market, let's be clear.

Everybody thinks that petrochemical, the trees go to sky.

I'm not sure it's true.

So one day or the other, but we don't know when, I think a huge capacity (inaudible) in this market, we will see the cycle going in the other way.

So this is why, in petrochemical, we only invest on clear advantaged feedstock projects and no NAFTA projects in Total.

That's -- NAFTA petrochemical project will not receive any allocation of capital.

It's not a good idea, not at all.

So it's why Total does not invest in petrochemical in China, for example, despite better market is there.

But we prefer to keep the advantage of the feedstock and then bring the products.

Any more questions?

Yes, Kim?

It's Kim Fustier from HSBC.

I wanted to ask about unit production costs in Upstream, please, and their trajectory.

I see you're still targeting a $5.5 unit cost per barrel for 2018, so that seems to be stabilizing.

I also seem to remember a $5 target by 2019.

So is this target still valid?

And I don't see it on the slides.

And if not, does it reflect a view that incremental cost efficiencies will be simply offset by returning cost inflation?

Or could it be simply an Upstream portfolio mix effect?

It's just Maersk Oil effect, that's all.

When you integrate the Maersk Oil effect -- Maersk Oil is not at $5 per barrel.

So that's just integrating the Maersk Oil effect is -- as an effect, which is not -- [which is over] good effect, which is $5.5 instead of $5.

So you keep $5.5 in mind.

It's a portfolio effect.

But again, to come back to you on the first idea, which was the inflation, I insist that we maintain the cost-saving programs for -- to go to $5.

And in particular, the effort on the Upstream, which I know are more difficult because, yes, there might be a risk of inflation, not immediately, which could come back in 2 years, 3 years.

And so we want to keep the discipline.

That's why we -- I know that the teams could -- I'm sure that my teams are saying, "Okay, $70 per barrel [and still] saving cost." But let's keep a discipline, and we are stringent, and we keep in all of the KPI of the company this cost saving because we want to be in anticipation on -- of return of more inflation.

Sorry.

Just a quick question on your DD&A.

Could you follow up on production cost?

Could you give us an idea on what we should expect in coming years?

And a quick one as well on your working capital.

I was surprised to see a [forward] movement in the fourth quarter, which is a bit counter-intuitive given the steady rise in oil prices we saw.

Could you elaborate a little bit on this?

We have a disciplined company, but we cannot ask them to be disciplined every quarter.

You have a certain point of limit.

But Patrick will elaborate on working capital, which was also a good surprise for us, which is good.

DD&A, I think it's more stabilized around $12, $13 per barrel.

Stabilized, absolutely.

Now it is stabilized around $12 to $13 per barrel, to which you add your $5.4, and you get to $18.

Well, just actually below $18 per barrel in 2017, and we want to keep that level next year.

So there's a trend.

To decrease the DD&A, you need to wait for the next wave of projects.

This is a strategy.

If we sanction project like we are doing in '17 and '18, benefiting from low CapEx, this will have an impact in 4 years when we'll come into production.

So this is the whole strategy to try to capture this -- the low cycle in term of cost in order to put in the pipeline some low CapEx, which will be much less intense than the one we had previously.

So one, we have developed, we amortize them and we have -- know the way to do it.

So that's why it's important to continue to [make verify] this during this year '17, '18, '20, '19.

So it takes time to influence the DD&A.

And working capital.

I don't know if you remember that, but 2 years ago, we had difficulties to control our working cap.

We put in place in the organization several people in charge of the working cap, including in trading, for instance, where we manage the working cap at end of any quarter, especially at end of the year.

And this is a result of the work of, I don't know, 10, 20 people in the group.

But then you had some reduction of receivables, I think, in Refining & Chemicals, Bernard, but you give an example what happened exactly for you.

Yes.

They work also.

They work also because trading isn't the responsibility of Patrick, so I know -- I'm sure they ask.

Bernard, on working capital?

No, no, Just -- it's something we've started up 3 years ago.

It's to -- about the receivable to put them outside of the balance sheet.

And the more we go, the more idea we find because basically, the portfolio -- the customer portfolio web is very sound, not to be on the polymer side.

And we manage, therefore, to also reduce the [trading] capital.

I would say also that in trading, fundamentally, when the market goes from contango to backwardation, you have less stock and so -- because it makes little sense.

So that's linked to the business.

And it's more difficult for them to make money, for sure, to make good results.

But fundamentally, you decrease your working capital because in the backwardation market, you don't have any interest to keep high stock, so it is one of the reasons, [as well], which is more linked to a fundamental of the business.

Do we satisfy all your questions?

So I noticed that I don't have many question of allocation of capital, at least for 6 months.

I think -- I hope that -- I will say that of the Board of Directors because it was, I can tell you, a good work for all of them.

And we hope that we will convince more and more investors that our business case is the right one in our industry.

Thank you for your attention.