TotalEnergies SE (TTE) 2018 Q1 法說會逐字稿

Good day, and welcome to Total's First Quarter 2018 Results Conference Call.

Today's conference is being recorded.

At this time, I would like to turn the conference over to Patrick Pouyanné, CEO.

Please go ahead.

Thank you, and good morning or good afternoon, everybody wherever you are.

I am with Patrick de La Chevardière, our CFO.

I am very pleased to join the call today together with them.

We have been quite busy recently since we met most of you last February and so we thought it was worth a short update by the CEO himself, but as it is a tradition, Patrick, P2 will first review the first quarter results and then I will comment on the recent strategic activity and then we'll go to the Q&A.

Before to leave the floor to Patrick, just and it's important because I would like to make a comment on the shareholder returns policy that we have presented in February.

And -- but we have decided of course to not only to propose, but to implement and we have done what we said, which means that first when we proposed this policy, we announced that we'd increase the dividend by 10% over the next 3 years and yesterday's Board of Directors consistently has raised -- decided to raise the first 2018 interim dividend to EUR 0.64 per share, an increase of 3.2% exactly on the path to the 10% over 3 years.

So it's implementation of the first segment.

Second point is that we announced as well that we'll buy back all the scrip shares that we have been -- which have been issued in order to avoid the dilution.

So we've done it between February and April.

We bought back 7 million shares, which we have issued in January for the scrip dividend payment and as to be clear we have just issued another 50 million scrip shares, which we bought back in the coming quarter.

And on the top of it, we also announced that we will implement buyback plan to buy up to $5 billion in [Rivi ID], which was ready to share part of the oil price upside with all shareholders and this plan has begun.

We bought back an additional 5 million shares for $300 million in the last 2 months between February and March.

And to be clear, and -- more than $70 per barrel, of course we are very pleased with recent share price evolution, increase I would say.

But we'll continue to buy back shares as it was announced in order to continue to share this oil price upside with all shareholders.

So after I made these remarks, which are obviously very important and to -- because we put into action our commitments to our shareholders, I leave the floor to Patrick, our CFO to give you the first quarter results.

Thank you, Patrick.

Honestly, we are off to a good start in 2018, and we are on track to achieve our objective.

First quarter performance is solid.

Adjusted net income was $2.9 billion or $1.09 per share and that adjusted cash flow was $5.7 billion and our organic free cash flow was $2.8 billion.

Looking at the segment, first quarter '18 adjusted net operating income for E&P was $2.2 billion, up 58% compared a year ago, and 21% versus the previous quarter.

Compared to first quarter last year, Brent increased by 24% and our average realized hydrocarbon part increased by 25%.

Production grew to $2.7 million boe/d in the first quarter, an increase of 5% from a year ago and 3% from the previous quarter, despite the end of the Mahakam license in Indonesia.

There is a record level of quarterly production.

The previous eye was 2.66 million bbl/d in 2003.

We benefited from major ramp ups included Moho Nord, Kashagan, Yamal LNG where the first of 3 trains is producing 6.4 million in a year, well above the nameplate capacity of 5.5 million ton a year.

In Qatar, we took over operations under giant Al-Shaheen field last year in July so this made a strong contribution.

First quarter startups include Fort Hills in Canada and Timimoun in Algeria.

The Petrobras alliance and Maersk Oil acquisition made only partial contribution in the first quarter.

Though we are on track to do better than our target of 6% goal for the whole year.

Before turning to cash flow, we note that the differential between Brent and our average realized liquid price increased to $6.5 per barrel in the first quarter '18 from $4.5 a barrel a year ago and $3.7 a barrel in the previous quarter.

This is mainly the impact of growing Canadian volumes at the time when exports are pipeline-bound and netbacks are very weak.

This is an exceptional situation not linked to higher oil prices.

May I remind you that in terms of our oil price sensitivities, the calculation I made using constant differential so in fact it should be used with realized liquid prices.

E&P cash flow before working capital changes was $4.3 billion in the first quarter, an increase of 28% from the same quarter last year, and in line with the previous quarter.

The ramp up in cash flow will accelerate into second quarter, mainly with a full contribution from Maersk and then gain momentum with the cash equity startups.

Recall that in February, we told you that for the full year on plateau Kaombo, Ichthys and Egina would add $2.5 billion of cash flow and Maersk plus Petrobras Alliance would add another $2 billion, all that based on the $60 Brent.

So the way forward is clear.

First organic free cash flow for E&P was $2.2 billion.

E&P organic Capex was $2.1 billion and I would remind you that the first quarter is typically a bit light.

For the Gas, Renewables & Power segment, adjusted net operating income in the first quarter was $115 million compared to $61 million a year ago, and $232 million in the previous quarter, thanks to better results from the solar business.

Moving to the Downstream.

Refining & Chemicals contributed $720 million of adjusted net operating income in the first quarter, compared to $1 billion a year ago and $8,086,000,000 in the previous quarter.

Refining margin was volatile averaging $26 per ton in the first quarter, a decrease of 34% compared to the same quarter last year and 28% versus the previous quarter.

Seasonal weakness was more pronounced this year than last and essentially it has been the inverse impact of the ramp up in crude prices.

Petrochemical margins have remained generally stable at a good level from the past year.

Though we consider Refining & Chemical results are short by about $50 million to $100 million in the quarter, mainly due to operational difficulties at Antwerp and Port Arthur.

And the start of the turnaround season note that we used the first quarter turnaround [at set up] to increase capacity to 440,000 bbl/d.

Refining & Chemical generated cash flow before working cap changes of $0.9 billion in the first quarter, compared to $1 billion a year ago and $1.1 billion in the previous quarter.

Marketing & Services generated adjusted net operating income of $367 million in the first quarter compared to $301 million last year and $436 million in the previous quarter.

Marketing is continuing to grow its retail and lubricant businesses.

Global refined product sales are up 4% year-on-year.

This is comprised of a 17% increase in Africa, Asia that includes the acquisition of GAPCO last year and a 4% decrease in Europe that reflects the sale of TotalErg in Italy.

Marketing & Services is adding $100 million of cash flow per year by expanding in high return, high growth markets.

The combined Downstream segment, Refining & Chemicals plus Marketing & Services, generated cash flow before working cap changes of $1.4 billion in the first quarter compared to $1.5 billion a year ago and $1.8 billion in the previous quarter.

There is some seasonality in this result including the recurring impact of about $100 million in the first quarter for the full year property taxes as per IFRIC 21 rule and the timing of dividends from equity affiliates.

Finally, looking at the corporate numbers, the group's effective tax rate increased to 40% from 31% a year ago and 32% in the previous quarter.

The rates for E&P increased to 48% in the first quarter as a result of higher oil and gas prices and the share of E&P within the group results was much larger as well.

The Downstream tax rate is relatively stable at around 25%, 30%.

The group generated debt-adjusted cash flow of $5.7 billion in the first quarter.

On an organic basis, excluding asset sales and acquisitions, free cash flow was $2.8 billion despite the seasonal weakness in Downstream.

So we are on track with the guidance we provided in February and we are confident that cash flow generation will increase over the year.

Gearing net debt to total capital increased to 15.1% at the end of March from 12% a year-end 2017.

This takes into account closing the acquisition including the Maersk debt.

There was also the working capital impact on cash et al affected the net debt at the end of the quarter.

This will be corrected over the coming quarter.

Nonetheless, the balance sheet is strong and we will maintain gearing below 20%.

To summarize, we have a good start to the year.

We are performing in line with our plans.

The balance sheet is strong and the environment is favorable.

Brent has been about $60 per barrel since early November or nearly 6 consecutive months.

And we have been about $70 per barrel for most of April.

Also product demand is strong.

European refining margin has been volatile in an environment of rapidly rising oil prices.

Petrochem margins have remained fairly stable at high level for more than a year reported by strong underlying demand growth.

At the current oil price level, obviously, we have more cash flow than anticipated and we can execute comfortably our return to shareholder policy and that's what we are doing.

And now back to P1.

Okay, thank you Patrick for this good sets of results and record production and as well as you said the implementation of our return to policy -- shareholder policy.

So just a few comments now about our team's implementation of the strategic framework we described as well in February and we have made some various moves in various directions.

According to what we said there again, I know, we told you that we wanted to take advantage of favorable [context] to invest (inaudible) and acquire some assets to create value.

So what we've executed during these last quarter was in fact deals, which were prepared as a -- in the previous year, I mean when the price of the barrel was lower.

And we told you that we will focus on where we are good, which is to play to our strengths.

In particular, in some forward stream in Middle East, North Sea, Africa, deep offshore, LNG and in Downstream to focus on petrochemicals, retail and lubricants and that -- because in the future we will expand and we are expanding along the integrated gas and power value chain.

So the activity has been quite intense and I would like to review with you what we've done and to explain to you a few of these strategic moves.

First, I would begin maybe by North Sea where we closed Maersk Oil acquisition in March, slightly off schedule and so now we are the second-largest producer in the North Sea.

At the same time, by the way we also closed the sale of Martin Linge.

We have rearranged the portfolio to lower -- the objective to lower the breakeven of our operations in the North Sea so it's down, it's been down.

The integration is going very smoothly since mid-March and, by the way, I can only make a remark, but none of us when we negotiated the deal in spring 2016, we are thinking that the price of the barrel would be at $70 today so vis-à-vis you'll see some upside, which is coming very quickly in the picture.

I would also say that we can speak a little more about synergies and we plan to have $400 million synergies out of which $200 million were coming from OpEx cost.

We reevaluate that today to $300 million from the cost so a global synergy package from Maersk, which should go at $500 million-plus.

So this is for North Sea.

Then the second region where we have been active is Middle East and North Africa.

We have 2 recent moves, one in Abu Dhabi, the other in Libya.

Coming back from Abu Dhabi, we have obtained 2 new 40-year offshore concessions, 20% of Umm Shaif and that's a concession and 5% on the Lower Zakum concession.

It's -- I would say it's an access to $1.5 billion of reserves and production of 80,000 to 90,000 bbl/d so our cost entry cost of around $100 per barrel with fiscal terms, which have been significantly improved compared to the old ADMA concession.

I would like also to make another comment.

You probably noticed that we have quite unusual high stakes 20% on Umm Shaif and that's a concession.

Generally, in Abu Dhabi it's more in 10%, 15% range.

We are very focused on that concession for 2 reasons.

The first one is that is the concession where there is a potential oil increase from 320,000 bbl/d to 450,000 bbl/d, 100% share, 100%.

But and more important than that, there's a very large gas cap, 5 TCF of cap to be developed and there's a change of policy in Abu Dhabi, which we -- in a country we know very well, where Abu Dhabi has decided to really monetize its domestic gas reserves.

And so part of the focus on Umm Shaif because there -- there's a big upside and the fiscal terms on gas are very incentivization, they have been designed to be an incentive to produce this domestic gas.

So there is an upside on Umm Shaif on gas and this is why we focused the share there.

We have taken a smaller share on Lower Zakum concession, 5% because it's a more traditional oil concession, I would say, but part of, I would say, royalty to Abu Dhabi was we were offered to be on both concessions so 5% on one side and 20% on Umm Shaif.

On Libya, we bought 16% in the Waha concession from Marathon.

We closed the deal on March 31st, it represents 500 million barrels of reserve, 50,000 bbl/d.

A deal around -- again around $1 per barrel like in Abu Dhabi.

The deal is closed of course.

You have seen some information, you know the situation in Libya is a little tricky from a political point of view.

Let me be very clear on what we've done, because we are polite and the way we are with Marathon, we have a long relationship with Libya.

We advised Libyan authorities far in advance, but the deal has been settled between Marathon and Total.

We are intending to close it by end of March.

Legally from a strictly goal point of view neither in the Libyan role nor in this oil concession agreement, there is a request for formal approval.

So we are -- we advised them, but there was a target for us at the end of March.

We wrote them again before, there was no objection and so we decided to close and it is done, the shares are today of Marathon and Libya are in Total hands because again it's a share deal.

We, of course have a permanent open dialogue with the Libyan authorities and we will give them all the comfort they are legitimately requiring to reassure them that our willingness would develop the war field in the national interest of Libya.

So this is moving, but again I would say when we close the deal, I said that we are not naive about the political -- tricky political solution there.

So no surprise, but I think we don't give too much -- there are some rumors like always.

It's not really there.

The situation is clear and we have a permanent dialogue with them.

Then, the other segment where we have also -- co-area where we have progressed is deep offshore.

We have in Brazil and the Gulf of Mexico -- in the U.S. Gulf of Mexico.

In Brazil, we have closed the deal that was announced in January.

I would also say -- just recommend that this deal was closed and negotiated early '17.

There again the price was under $50 so there is an upside coming very quickly because we produced already there on Lapa, on Iara and on Libra.

So we have around 80,000 -- 70,000, 80,000 bbl/d producing there, in 100%, so we have a share of it.

So we get some revenues and higher revenues are expected.

I would also comment that when I see the size of the bids, which have been done in recent exploration licensing rounds -- it's explorations rounds, it puts a valuable deal into I think a good perspective.

On the Gulf of Mexico in the U.S., we have made beyond the giant Ballymore discovery, which was announced in January with Chevron.

We have -- you have probably noticed that we have been -- we have acquired some Cobalt assets out of the bankruptcy procedure, which of course has been quite efficient from a cost point of view.

We have increased our interest in North Platte from 40% to 60% and we have there becoming operator of this Wilcox discovery, $350 million, $400 million of reserves there potential with some exploration license around which we own as well.

So we'll partner with Statoil.

We have previously partnership to develop the technology in order to make some profitable development of this Wilcox formation.

And we have also increased our interest in the Anchor discovery done by Chevron and it's very logics because we have -- together with Chevron an exploration program of many wells around Anchor so it's -- having now 32.5% was another move.

All these moves have been done again at a quite efficient cost of access because of this bankruptcy procedure.

I would also praise my CFO because he made a bold move to acquire some second lead bonds at a discount price last spring and we will make there $60 million profits, which will diminish the cost of access to these assets.

So we are innovative in Total and active in many ways when we want to have access to low-cost resources.

Thank you, P2.

And then, having said that, I will move to petrochemicals, which was another active area.

You noticed, but since we met in February, we finalized in the U.S. again our joint venture with Nova and Borealis, both from the cracker and on the polymer side.

So it's a big expansion.

We will together by putting in place, this joint venture will be number 3 in the polyethylene business in the U.S. So among the top 3 sellers of polymers -- polyethylene and polymers, which is quite a good position in terms of marketing and as well we have a very efficient cracker scheme and expansion on the polymer side.

We have also announced recently first step towards large expansion on a setup refinery to [give away] Saudi Aramco, a giant petrochemical expansion, $5 billion for the scheme of cracker and polymers plus some additional units in which we will not participate the value part.

It would be a world-class 1.5 million ton cracker based on advantaged feedstock.

First refinery of gas because there is a strong integration there, but also access to some ethane and LPGs.

So it's a start of a new adventure with our friends of Saudi Aramco and it's very -- fitting very well with the idea that we focus our CapEx in refining and chemicals on the integrated platforms where we spend a lot of money to put all the logistics in place with the refinery.

I know we want to capitalize on that together.

And last but not least, the further -- the fifth segment of focus on which we have also made some strategic move is integrated gas and power.

The ENGIE deal was announced in November, give you some news.

We have obtained all the antitrust authorization from China, Europe, the U.S. and over the world.

The social process is also over.

I know we have some approvals to obtain some commercial agreements on people around the world, but it's progressing well and we target, as announced in November, to close the deal by first quarter mid of the year.

This year in coming 3 months I think.

And then on the top of it, we have announced last week another move in the field of integration gas to power, which is the acquisition of the company called Direct Energie, which is a company, which is in the field of gas and power retail marketing but also a power producer.

This company -- so it's an opportunistic move, which would not surprise you.

We announced that we want to build a business in the low carbon business going downstream the chain of gas, gas to power and that we announced in October that we want to establish ourselves as in a position in the French gas and power retail market, with a brand called Total Spring.

In fact, the things have accelerated because these announcements have created another opportunity, the acquisition of Direct Energie.

After we announced our entry in the French gas and power retail markets in October, we've seen that the share of direct energy has decreased and the main shareholders have decided that there was -- maybe it's the right time, told them to sell.

So we have somewhere shaken the market when we entered and we are gathering the fruits much quicker than expected.

So this fit is excellent for us because it gave us immediately sizable market share.

We are reaching 7% of market share and you know in these retail business like we know well in our Marketing & Services business, market share is of essence because you are [more tiers] or you are advertising your fixed cost on the larger base of customers and so it's a virtual circle.

The intent is to continue to grow in this market.

The Direct Energie was growing by 500,000 new customers per year in the last 2 years.

We are also -- on all side we are beginning to have 2,000 new customers per day so if you combine all of that, the ambition is to reach 6 million to 7 million customers in France, more is 15% of the market share.

At this level this will become quite interesting business, but this Direct Energie gives us again access to midsize and we'll accelerate our development.

In the portfolio, we are -- of Direct Energie where we are over interesting assets, in particular they are some gas fire power plants as they require quite a low cost in 2015, 2016.

So we will have 1.2 gigawatts of power generation there, which will come at the top by the way of the power generation, gas fire power plants we have in our Total portfolio, which is interesting.

Because it's part of the integration between when you make a retail business you don't go only on trading to acquire power, but it's also good to have some physical assets that you produce yourself.

We've a good cost of access, which would be the case with assets.

And they have also renewable business, 500 megawatts, which will grow to 2 gigawatts so this is fitting well as well with our strategy, which -- power strategy.

So at the end, what we want to build in line with what we explained to you and I think for some of you will follow us very precisely, you remember 2 years ago, there was a puzzle to explain the strategy.

So I think the pieces of the puzzles are put in place, one after one so we'll show you a bit of scheme next September, in the strategy meeting, you will see how the puzzle is going together and this is quite logic.

Now we are expanding a lot on the gas business.

We've become #2 in the LNG trade.

There is a logic to sell this gas to customers, so gas to power integration and this go downstream to retail marketing including having in our portfolio some capacity of power production like gas or renewables.

We'll be clear.

We don't have any ambition to become a utility.

We just want to -- we follow the value chain to get out of this gas value chains, a maximum value like we have done that in the oil business with some success during years and years.

This is what we target and obviously, not as a full capacity to produce the power we distribute because we'll buy and trade like we're doing already by the way, some of the power that we will distribute to our customers.

This business, Direct Energie we evaluate that we -- the objective is to which cash flow from operations around EUR 300 million, sorry I should state in dollars about it's a French business, back in mind.

It's more so around $350 million by -- in 5 years, which is a target we have.

There are some synergies by the way, among -- about it, among this -- in this business because obviously by combining both companies means we are small, we will focus on 1 brand and not 2 brands, 1 brand in France, 1 brand in Belgium so if we save some money.

But there was also 2 IT systems.

[Ecole Laval] is a digital low-cost business and we'll keep 1 digital platform too, so we evaluate that to EUR 35 million to EUR 40 million per year.

So this is the idea.

I think by doing these moves again what we want to do is do a enlarge the spectrum of activity of Total and to develop integration, the gas value chain, gas to power and to have access at the end of the day to some areas, which are growing.

There's growth there, potential growth in this market.

And I think that for shareholders, it's a way also to give them access beyond our traditional oil and gas to businesses, which offer higher growth for the future.

To sum up, I would like also because I described many deals and many activities, some of you could be worried about the financial discipline, but I can tell you and you can be comfortable with P1 and P2.

We are 2 managers.

There are very -- keep in mind the discipline.

We announced you a clear framework of allocation of capital: first $15 billion to $17 billion investment, second increase the dividend by 10%, third keeping the gearing under 20%, and fourth share buyback $5 billion to share the upside price.

I confirmed today that we'll be in the range of $15 billion, $17 billion for the next 3 years and that for ATM if I say you $15 billion, you will think it is too low.

It's too conservative.

I have seen some comments this morning, but Total's management is conservative.

So I will not be conservative, it will be $16 billion probably $16 billion-plus.

But we will stay in the range of capital investments which was told you in February and I think it's important to tell you by the way, we have sold already $2.2 billion of assets in the beginning.

It's not just that we acquire, we also sold you.

If you remember, I told you that $2 billion in acquisition could be 3 minus 1, 5 minus 3, 7 minus 5. So we'll be active of course on the sale of assets and I would make one comment that's clearly in this type of environment $70 is easier and could be even good to sell some [atrium] assets today.

We didn't -- we are not so active in the last 2 years because we didn't want to lose value, but at this level of price, there are -- we can be again -- consider to go the other way which is to sell when the price are better.

So this is part of our commitment, it's part, by the way, also for me are the restructuration of the portfolio.

With the permanent objective which is to lower the breakeven of a portfolio and I think it's the last strategic comment I would like to do.

Last one, don't believe also rumors of bankers and Total is not interested by acquiring neither Santos nor Oil Search.

We have enough interest in P&G with 38% or in gas or energy with 27.5%.

So I know people think -- some people are believing rumors, but don't believe all of them.

We have -- we are in line and we'll stay in line with the strategy we have described to you to focus on our core areas.

With that having said, I think it's time to go to the Q&A.

(Operator Instructions) Our first question comes from Jon Rigby of UBS.

Two questions.

Patrick, thank you for running through the strategic initiatives.

The first quarter seems to come very thick and fast, it's good to keep up with more.

But just to reference your last point about the -- this was $2 billion or so of net investment and this is more attractive disposal market potentially for E&P.

Does that mean that we should expect more activity on the sell side across the balance of this year?

And -- or when you think about that figure, do you expect it to be sort of an average over the course of a few years in terms of your disposals?

And the second question, I guess, is to P2, is this working capital build has been emerged as a bit of a feature in the last few first quarters, I just wanted to come back to and say or ask, is it a function of what you're doing in the fourth quarter?

Or a function of something unusual in the first quarter?

And what of each of those is more representative of the working capital that you need to run the business, all things equal?

Okay, I'll take the first question.

Again, the financial framework we gave you at $15 billion, $17 billion of investments organic plus net acquisition.

So $2 billion keep it -- take it as it is -- for the next 3 years, take it as an average of 3 years, but clearly yes, we will be active on the sell side.

We have some assets.

It's not like we've done the previous few years a $10 billion program.

It's done step-by-step but we have some assets, which are being marketed today, without too much noise nor rumors.

So we are active.

And, of course, the question where [about are] you by the average, but they could be -- when you take a year of 360 days, you could have some time last year, but, for example, we closed the Petrobras deal in January, on January 10 and not on December 20, 25 so you know sometimes you could move at the end of the year, go beyond.

But again, globally, you can keep our commitments of $15 billion, $17 billion of net investments as being the right point to model as the future spending of Total in terms of capital investments.

Okay, Jon, for this very simple question about working cap.

Our working cap increased by $3 billion this quarter and honestly, I'm not very happy with that.

Even there is some seasonality in our working cap.

The $3 billion can be explained by $2 billion of seasonality.

Some people say that we managed it poorly.

I don't think this is correct.

But there is obviously some seasonality.

And if you check in the past year, we faced the same difficulty.

So $2 billion coming from that and $1 billion coming from the price effect on our inventories and deliverables.

Another small comment is that stock build for maintenance in Europe is clearly seasonal.

That's part of the explanation.

Volatility is to be expected as you know for working cap, but I can tell you that we will -- and we will tackle this issue and we are committed to improve in the next quarter what we are used to do on working cap.

We are emanating 2 out of the 3 (inaudible)

Can I just follow-up on your first answer on the portfolio.

Is it -- on the disposal side, it's what's evident from some of the acquisitions, they're not just acquisitions of assets.

You're in the process of sort of reshaping the portfolio.

Will you sort of apply the same logic to the sell side as well?

Is that it's not just disposal of assets, you're trying to reshape the portfolio through disposals as well?

The assets that we want to dispose are high-cost assets.

I mean, like we have done with Martin Linge, I think.

So yes, of course, we are trying to -- we will be consistent with the sales towards regarding the strategy and continuing to focus at the end of the day on what is core in the company.

And we will select these assets according to either high breakeven assets or out of the core of the business of the company.

(Operator Instructions) Our next question comes from Michele Della Vigna with Goldman Sachs.

Patrick, I wanted to ask 2 questions if possible.

The first one is relating to the deals that you have very thoroughly run through.

It feels like they mainly come from 2 areas, either financially distressed companies or national oil companies where we see a much more collaborative environment in the last couple of years.

I was wondering if you think there is more to come in the air, in particular in terms of collaboration with national oil companies.

Is that could become in the future, a bigger area of reserve replacement for you?

The second, still staying with acquisitions.

When you compare the financial metrics of deal like, for instance, Maersk on one side, which is clearly immediately accretive to cash flow and still with assets with long longevity; and on the other side, the deal like Direct Energie, which is certainly strategically very important.

It has longevity and high-quality assets but, which is probably dilutive for quite a long time on valuation.

How do you think about doing one deal or the other one?

And how do you compare the key financial metrics in order to choose where to employ your incremental capital?

Okay, first the first one.

You have a perfect analysis of what we have done, yes it's true.

We -- you know the business model of major company like Total because we have a stronger balance sheet, we, of course, somewhere take benefit of that in order to have access to some assets from companies, which were in not so good situation.

So either it was some national companies like Petrobras, I would say or some smaller companies like [there's a deal with Total] Uganda, we have Cobalt in the U.S. and this is clear.

There's also deals like Maersk, which was another ideal ENGIE, which were companies which were willing to exit certain oil and gas, certain business and on which it was easier to negotiate a deal because in fact, we are not starting 2 oil and gas companies negotiating with the same two today.

Too hard to explain to you, but both were winners.

With 2 days, we were targeting 2 different strategies so we are to demonstrate that it was okay and fine for oil and gas business and they were all moving out of that business.

So it is out, of course, good deals.

But so far can we continue on it?

I think one of the DNA of Total and in particular, in the Middle East and North Africa region, is that we have very strong relationship with many national companies in Abu Dhabi and Qatar.

We have development in Algeria as well.

And so we are working on some other deals at this time in these countries.

Of course, I can -- all the concessions in Abu Dhabi are now allocated for 40 years.

And also in 3 years, we have done the job so maybe our successor there will be less there.

In any way, we have some new opportunities coming there and opening some exploration wells there in Abu Dhabi.

So I think what we have observed is that because of the volatility of the oil price, many of these national companies have changed, and also are more open to their strategy.

And so I think there are still some opportunities and one of the, I would say, core strengths of Total is its ability of the teams of the company to deal with these national companies, and there are ways a lot of resource -- and low-cost resource.

The second question is a good question.

It's fundamentally, do you on one side build on a short-term additional cash flows by going to accretive deals like Maersk Oil, which will generate more cash flows at the lowest to increase return to shareholders but also to increase our capital investment or to finance our capital investment program.

We're good there, but at the same time, in the energy field, we need to prepare for the future.

And the future there is that you all know, but oil, I think outside of the oil and gas sectors, there are investors who are asking questions, where does this segment move?

We are all convinced that we will need a lot of oil and gas in 2040 but it is not so shared by everybody here.

And I think global multiple of the sector is not so high.

By injecting in our corporate profile some activities where you have, and it's clear for everybody, higher growth potential, I think the message is yes.

This will deliver more cash flow later.

But we can do it, we can fuel that this more long-term strategy because at the same time, first, we are good and excellent on the short-term reserves.

And I think Patrick, again this quarter showed you that our reserves are very solid and consistent.

And secondly, because we have done some short-term deals to fuel that cash flow.

So this is, so global mechanics and strategic mechanics of the company.

Our next question comes from Oswald Clint from Bernstein.

I'd like to ask firstly about the production, the upstream volumes kind of hitting that 15-year high.

You are looking to grow at 6% this year.

I see this morning you're indicating potentially a chance to do higher than that.

I wonder if you'd venture what that higher number might be.

But fundamentally, you talk about it being -- and the startups coming in better plus integration.

So my question is really, is this a Maersk phenomena or is it really successful ahead-of-schedule startups of your very large list of projects?

I think you have about 14 or so over 2017/2018.

And if so, maybe half of those have started up already.

Does that mean the next half of those through this year into next year should come in ahead of schedule as well?

That's my first question.

Secondly, just on the topic of kind of some of the deals you've done.

I'm specifically interested in Libya and those barrels, the 50,000 barrels coming out of Libya.

Perhaps, just remind us of the profitability of those barrels.

I do remember them being quite highly taxed in past times, perhaps that's changed.

First question I think on the profile, growth profile.

We announced more than 6 this morning because the 5% performance of first quarter is where what we were thinking.

So yes, it is more than 6. I read some comments that we are too conservative.

As you said, we have many startup coming in front of us, Ichthys, Kaombo, Egina, Tempa Rossa in the coming months.

Sometimes this can drive by 1 month or 2. It can be late by 1 month or 2. January is more 1 month late, February 1 month late.

But all that being compensated, that's also true, but deal was not planned in forecast in February.

So it came quicker and we managed to close it.

So globally speaking, I would say that you can take more than 6% as a -- but this already is quite a good performance.

And I would say that it's -- it will be the fourth year in a row that we'll be at 5%-plus, '15, '16, '17, '18.

And we have more to come.

So remind you, our guideline to you is 5%.

It is an average until 2022.

And all what we have announced there and we have all -- accumulated reserves is to be done even if we have also as I answered to Jon previously, we will sell some of production.

Because we are not driven by volume.

We are driven by value there.

But, of course, if we want to grow the cash flows it is also good to have growth in production.

So this is for the production growth.

I think the guideline of more than 6% is a good guideline and we'll see what can be delivered and quarter-after-quarter.

Patrick, you want to answer on Libya?

Yes, barrel in Libya are very profitable actually.

And profitability is at $60 per barrel between 15% and 20%.

I can say that the cost of access to this barrel was quite attractive because of political situation, maybe to aid some move, by the way, there in Libya probably when they discovered the value of the deal, part of the difficulty.

But I would say that when the concession -- the terms of the concession did not change.

I think there it was more the question of probably Total can accept to take this type of Libyan risk in our portfolio more than Martin was willing to keep them.

So this is why we have done the deal, in fact, and it's also part of the geopolitical move, but we can do because of the large, very large portfolio we can take this type of risk on board and get the rewards that we win as part of it.

Our next question comes from Theepan Jothilingam from Exane BNP.

A couple of questions please.

Firstly, on the synergies that you've mentioned about Maersk Oil and Direct Energie.

Could you just talk about the timelines and how quickly the synergies can be realized for both transactions?

The second question Patrick, just comes back to the GRP strategy and I think you mentioned you plan to grow sort of installed capacity on the gas pipelines.

It's around 10 gigawatts, so I was just hoping to understand some of the timelines.

And again, will that be really done inorganically?

And then finally, you mentioned Ichthys and Kaombo, they are highly cash generative.

So I just want to understand where we are in terms of commissioning or delivery of first oil and first LNG?

First the synergies.

So for Maersk Oil, I'm taking a papers, sorry to -- I don't know word by word.

I know that the cost synergies should be fully onboard by 3 years to capture them.

I'm just taking, I'm trying to find.

Yes, it is there.

I think this year, of course, this is not so.

You can say that you will have 60%, 70% to further it by 2019 in our cash flows and 100% by 2020.

This year, you have a small share, but not major share.

I don't think.

This is the first one.

On Direct Energie, you know we need to close the deal, but it will be immediate, in fact, because the decision to keep only one brand will be done before the closing as part of the synergy.

The fact that we will decide to have only one IT platform as we take a little more to implement one year, but I think this is type of synergy, the EUR 35 million I mentioned to you would probably be done by the end of 2019, very quickly at the latest.

Then the second question about growing 10 gigawatts of -- quickly.

It's a 5-year objective.

Sometimes you go quicker, but it's -- let's be clear.

What is the source of the 10 gigawatts?

Part of it is embedded in fact in Direct Energie 2, 2.5 gigawatts because we have [city to be] to be put to be out.

We have a pipeline of wind and solar projects in France.

Part of it is the number 2.2 to 2.3 gigawatt is coming from the deal with Total Eren, which is already also engaged.

Last year we acquired 23% of the company.

So you have there 6 gigawatts plus one 7 gigawatts.

And then on the top of it, it will come from opportunities we could see there and again.

I mean, in particular, the focus for me would be more on the gas-fired power plants that we can have access, but we have time to do it.

The global ID is that if you have 6 million customers, 6 million, 7 million customers you would require more or less 30 gigawatts.

It will not cover all of it because we don't want to be utility, so 2/3 will come.

But we will not have some base for capacity, let's be clear.

And so we'll buy 2/3 of it and produce the other third, which is a good level of integration if we want to develop profitability this business.

So this is consistent with what we just told you.

So don't expect us to rush on buying many capacities so quickly.

We are following INPEX guidance given a few weeks ago with on view on site offshore gas and condensate to start Q2.

So in the coming weeks, I would say or months, there is 2 months left in Q2.

And we are expecting first LNG to have by July something like this.

To be clear, there is a slight delay but the INPEX, we've already explained it and there are some issues to be fixed on one of the offshore components.

So it's being done.

And Certainly on projects, there are some safety issues to be solved but nothing major.

It's being done, it's being repaired on this last platform, I think.

And so production will come quickly.

By the way, it's better to start this project for $75 per barrel than $50.

We'll make more revenues, even for the first condensate.

So sometimes we are a little late but we generate more money with it.

Our next question comes from Lydia Rainforth from Barclays.

Just one question.

Are you seeing any impact in terms of the cost base or any upward pressure there at the moment?

And in particular, if you could just talk about the recent Google cloud JV and especially on the artificial intelligence side?

And what you're looking achieve there?

I like your question on an artificial intelligence with Google.

The idea there is clearly to try to know -- engage not only to make proof of concept but to engage really some development.

So it's about geoscience.

A team of 15 people of engineers of Total will move from [Poole] to California, within the Google offices there and will develop some programs.

During 2, 3 years, we have a program to see how we could apply artificial intelligence to enhance the efficiency of our geoscience processes.

I cannot -- there are some I don't want to disclose everything there because there are some areas of, I would say core competencies.

But it's a commitment.

And I think it's just a start but no, we shifted from few discussions and concepts to putting in place a team and we have some good expectations.

And I'm quite pleased because on the Google site, they also put a team of more, it's equivalent, I think 20, 30 people, which will come together, both teams together and which would bring the artificial intelligence competency.

That's important.

Second point, cost base impact deflation.

Today, I would say we don't see an inflation, I would say.

Deflation normal but stabilized more or less.

The costs have deflated by -- it depends on the segments, 30% to 50% some times.

And we continue to benefit from this low-cost base today.

I would say, in conventional oil and gas, we still have quite not so many projects.

And the rig market is still quiet, in fact.

And so when we make tenders, we have good news today compared to our base, cost base.

We are not, as you know, very involved in conventional in the U.S. even if we are in the balance sheet, producing 600 million (inaudible).

I would say there, in the balance sheet, we have seen some inflation, in particular in some frac jobs and activity in the U.S., more activity [in other parts] -- in the world.

So maybe it's one advantage of our portfolio, but we didn't see today any -- we are still, I would say, at low-cost base for the Capex and OpEx.

And this is by the way you probably noticed, but our OpEx are still this quarter at $5.4 per barrel.

So still maintaining them, but you also remember that we continue to implement the cost saving program for the company despite $70 per barrel.

It's a little more complex accounting for colleagues, but we take care.

We take care.

Our next question comes from Christyan Malek from JP Morgan.

Just 2 if I may.

Firstly back to acquisitions.

When do you think enough is enough?

And how should we think about an upper end of CapEx or resource renewal?

You mentioned $16 billion-plus for the next 3 years.

Should we think about that range potentially moving higher every time?

Or is it really a $17 billion cap to 2020?

Secondly, you've done a fantastic job high-grading fuels and increasing productivity both organically and inorganically.

Could you comment on some of the things you're doing at the operational level to [sort of price] the upside on production?

And at a broader level, Patrick, do you think the industry has more to do to lower project breakevens further outside of the U.S. through technology, Big Data and AI.

I can see that you're leading the way on that.

So I would love to hear your thoughts.

Thank you, Christyan, for your questions.

So I reiterate my strong commitments as a $15 billion, $17 billion for 2018, 2019, '20 for the 3 years that we announced in February fiscal year commitment.

So you can take it as a guideline.

There is no wrong message in anything I said -- I told you.

And my comments on $16 billion-plus were just for 2018.

I could have reiterated $15 billion, $17 billion, but you make some math.

And again, we have been active -- more active than anticipated, which is no [issue at all] because we had opportunities, so we seize them.

So keeping the $15 billion, $17 billion for 2019, 2020 are really the right guidelines for what we want to invest.

And we have the capacity again to make organic investments and inorganic investments, which we think, will fit with our strategy.

Having said that, if the price remains at $70, $75, I suspect the countercyclical strategy will have to make a pause, somewhere.

So the answer is, it is my strategy.

The strategy is to acquire countercyclically or to sell on the other side.

So that's why I can't confirm it to you.

The second question is on production side, what organic improvement can be done?

I'm not sure -- I think we have done a lot already in order to -- but what you probably noticed is that when you look to the decline rates of all base production, when you -- and I think it's commented every quarter, or quarter after quarter in our press release, the average decline rate of the Total portfolio when you eliminate the project start up and -- is more or less 2% to 3%, 2.5%, I think this quarter, again, which is quite low.

And why it is so low is because I think one of the things which had been done during the last 2 to 3 years, which is implemented today in our teams is that we refocus everybody because its start up was very important to lower as breakeven on some KPIs like availability, utilization rates, including not only in downstream but in upstream.

And so the upstream division is working on it, has shared some good practices.

And so this momentum of trying to permanently increase this relativity factor is really embedded to the -- in the company.

So it's part of it.

The second thing I would tell you is that you probably noticed that when we lower the organic CapEx, we have a bunch of [internal works] which are achievable what I call my shorter CapEx.

And obviously at $70, $75 per barrel, which are not huge amount of CapEx, but we can activate part of these resources and short-term spending, which will help to manage as well the decline of our production base.

So I think there are [our sources].

Can we do better?

I think, you know probably that I strongly believe we can always do better.

I know, take the LNG business.

In the LNG business, people were spending $1,000 per ton.

We launched and myself was quite vocal we can do it $500 per ton, maybe we will not fit $500 per ton.

But all the project I'm looking today like, for example, the PNG projects, we are sticking to around $700, $750 per ton.

So we can -- in our industry, I'm convinced that if we focus we can use our capacity of innovation to make to direct the technologies, not to make more volumes but to lower costs and to be more efficient.

And I think, this is the direction we gave to all our teams, development teams.

So we can do better, I'm convinced.

There is still room to be more efficient in our industry and Total and, in particular, again, in the energy business.

And we are working today on Arctic 2. And the objective there, again, will be to be under $1,000 per ton, which means a decrease of more than 30% of costs of LNG tons and be more efficient.

This is fair to say, therefore, decline rate of 2% to 3% would be an exaggeration, say that's sustainable over the medium term?

If you keep surprising ourselves on technology and efficiencies and so on, that effectively you can run still [to stand] at sort of around 2% to 3%.

Is that a fair statement?

Yes, you can.

It's a fair statement.

I think you understand very well our industry and our portfolio, Total portfolio.

Our next question comes from Irene Himona from Societe Generale.

I had first 2 sort of numerical questions on the quarter and then 1 on Direct Energie.

So firstly, your intangibles on the balance sheet obviously withhold the acquisitions you've done.

The intangibles have gone up $10 billion, or 70% versus year-end.

At year-end, the goodwill was about 10% of that.

Can you say whether the sort of goodwill element is similar?

Or if it has increased.

Secondly, corporate and other.

Since about 2015, '16, I think you have had a tax credit in that division every quarter.

And it used to relate to, I think, French downstream taxes.

I wonder if you can just remind us what is in there in that tax credit?

And whether we should expect it to continue going forward?

And my third question on Direct Energie.

Patrick, you mentioned that with the 6 million or 7 - 7 million customers you've got currently and ongoing growth you will eventually increase the market share towards 15%.

And your comment was that 15% is interesting.

I wonder if 15% is interesting from a P&L perspective, in other words, is that the level at which you start making profit basically?

Or whether it relates to something on the power generation side and your ability to perhaps be, I don't know, more flexible there?

Irene, just answering your question about goodwill, this is really simple.

Maersk acquisition added $2.5 billion of goodwill.

Then you have a question on French tax credit in our balance sheet.

We haven't booked all of our tax credit in our balance sheet.

So it's just an assumption of the use of our previous, in time, losses made when the refining was having and facing trouble 7 years ago.

And it was that tax credit we have in front.

P2 was able to answer, but not have been able on both questions.

So we are well complementary together.

I'm not sure I'm perfect.

My 15% market share is more, I would say, it's more the experience we have in retail, retail marketing and national businesses like we are in M&S.

We divested, for example, our business in U.K. in marketing and services because it was 6%, 7%.

And again, the question is when do we reach a size where you can really have a virtuous cycle because you are amortized your fixed cost, your marketing, your advertising costs.

For marketing costs, on the large base enough of customers and so to be at certain point your breakeven is going down, again, and you can make offers to customers, which are even better.

You can rescind part of it.

The profitability of the business as you know, it's a business, I told you the objective is EUR 300 million in 5 years.

So we will be profitable before.

To be clear, the results of Direct Energie are positive.

Not making losses anymore.

We reach a size with 6%, 7% of market share where you already make some profit and some positive cash flows, if anything, invest part of that in some production capacities, which are absorbing some CapEx.

But -- so it's not -- my comment was not linked to a threshold of profitability.

More, I think for Total, if we enter into a market, it has to be sizable compared -- if I want that to be sustainable on the medium and long term.

When we enter into a market, we're not going there just to have, I would say $15 million of reserves.

We need to have something sizeable.

So targeting EUR 300 million of cash flow from operations, [to do this], I think, is the ambition that we have in order to enter it and to make a sustainable business within a group, which is a very large group.

So this is the ambition.

Our next question comes from Blake Fernandez from Scotia Howard Weil.

I realized we're late in the hour.

So just 2 points of clarity here, if I could on production.

For one, going back to Libya.

If I'm not mistaken, I think with the acquisition you should be around 80,000 bbl/d, which is about 3% of your total production.

Obviously, the country has been fairly erratic with regard to volumes.

Is that part of your 6%-plus guidance for the year?

And then the second question is really on the overall kind of longer-term production target.

You've expressed potentially increased appetite to sell upstream assets.

I'm just wondering would that potentially put at risk that longer-term number?

Or were you already contemplating some level of divestitures when you kind of put that number out there in the first place?

First question, yes, it's taken into account, this is 6%-plus.

And we know it's erratic but it's why, by the way, some people think we are conservative, maybe we are not so well.

But it's taken into account.

And if we raise from 6% to 6%-plus because part of it is coming from Brazil.

So we have to recognize it and to put into a figure.

Having said that -- maybe it's erratic but actually more upside but downside.

It's a country today, which produces less than 1 million bbl/d.

It has a potential of 2 million bbl/d.

So when you think to this concession of [war], the potential of increase of production is huge, kind of double the production there.

So yes, it's erratic today but it's erratic in the low tide, I would say.

And there is more an upside potential but, I would say, downside.

Then the second question, no, really I already answered that several times.

When we told you 5%, average 2017, 2022, it was taking into account the fact that we want to divest some upstream assets.

We never add it.

We did not put the figure in terms of billion dollars, but it's part of what we said net acquisitions.

And we have some margins and you know you cannot tell us that we are sometimes too conservative on our production figure and that sometimes we are too optimistic.

We are dealing with you and what we like to do if you wanted to I would sit together, we would like to deliver what we say.

And so you can't state that as a commitment and we have, again -- so it's a matter of translating, in fact, all residuals we have accumulated into some projects.

So that's the next challenge was to sanction the projects and to execute the project and then if we do that, we deliver the 5%.

But we have in our portfolio, the results which are necessary to do that.

And we have also enough to sell what we want to sell.

Our next question comes from Thomas Adolff from Crédit Suisse.

I've got 3 questions as well.

Firstly, on Venezuela.

I'm assuming you still have some experts in the country.

And if so what are the plans there following some worrying news at one of your competitors earlier this week?

And if you take them out, what does it mean to operations?

Secondly, on refining, I know the focus on downstream is on pet-chem.

But I wondered whether you would consider adding more light crude processing capacity at Port Arthur in the U.S.?

And finally, just a question on concentration versus diversity of your portfolio.

Obviously, if you're to concentrate at your ex-post like Repsol in Argentina, to diversify it, you create complex organizational structures.

And I'm aware when it comes to risk, definitions can vary from cash flow to value to capital employed.

But if we stick to cash flow and take your top-10 countries, how much do these represent in terms of percentage of last year's cash flow?

And generally speaking, as we consider the portfolio composition, what is the sweet spot?

Or have we hit the sweet spot in terms of risk and value creation for Total?

The news are not so good.

The first priority for me is, of course, to take care of our people.

So we have a lot of our expatriates hurt and we are limiting the number of people.

We also take care, by the way, of our Venezuelan employees very carefully because it's part of the value of the company.

And there is a limit to what can be done.

One of the difficulties, and I will tell you production, our production there is declining because there is a lack of machines, there is a lack of tools, there is a lack of everything.

So the main concern from our side is to take care of the operator.

We have a degrader operation, which is a big machine.

And there will be a limit to be able to operate the degrader.

And we will take no HSE risk.

And I think, together, we've [off release of stator].

We are very careful about it.

And if we have to tell or explain that, we will take the decision on it.

So yes, it's part of probably, what could be a downside, but limited in terms of cash flows.

We don't make much money to the office from Venezuela.

So it will not damage CFFO of Total.

It will damage, maybe, the volume but not the CFFO because it's not a very strong operation to date.

The second one, refining and capacity.

We are not -- there is just more opportunity.

You probably have insight.

So I would not lie to you.

But it's an opportunity, where you have, what we said, a splitter.

There is a condensate splitter in Port Arthur, which was built to fit the cracker.

Obviously we don't need it.

It could be a way to refine more light crudes.

We are stating that with the ISF.

Of course, the ISF is not a refining company.

So we are trying to see if we could optimize one.

Beyond that, which is I think is a 50,000 bbl/d capacity.

So it's not very big.

Beyond that, there is no plans towards capacity and refining.

We are not a big U.S. refiners, and we left that to the big guys.

We are small guys there.

And then, it comes to risk.

This is a very complex question.

And I'm sorry, but I think you can keep it for September or you call Mike and he will love to answer you because I'm not -- I don't have all the figure in front of me there and you need a specialist on that idea.

Our next question comes from Biraj Borkhataria from Royal Bank of Canada.

Just one question left.

There's obviously quite a lot going on in the portfolio inorganically, but a few months ago, you laid out a fairly long list of projects in the upstream that you could sanction.

So I was wondering if you could just give us an update on some of the upcoming FIDs that we should expect?

And whether given all the deals you have done, you might slow some of these down in order to digest some of the new assets?

Thank you for taking the list.

I'll try to go through Zinia 2 in Angola, it should come in weeks.

We have finalized with the Angolan government, in December, the fiscal terms.

We wait for the decree, but it's coming.

Tenders have been done further there, so coming.

Uganda is going to be a very good project.

We are -- [you very aware it's] good news and since we met in February because now all the partners are aligned.

There was a small dispute between the Chinook and the 2 partners to split the operatorship, it has been done in smooth way.

Total, we operate all the north part of [Uras], Chinook in the south.

It's crossing 1 license.

All that is in line.

We will close the deal and we are all intent.

I spent some time in Beijing 3 weeks ago to try to reach to the target.

Now it's the FID end of this year, beginning of next year and it's moving forward.

So I'm optimistic and I hope the market will give us the right price we're expecting.

But it's -- on the pipeline it seems to be on the good way.

So Uganda, Ikike and Nigeria teams are working hard and FID is expected by Q3.

Fenix in Argentina, technical job is done, should be able to sanction.

Then we have a discussion, like always, in Argentina about the gas price and gas incentives.

Libra 2, we have sanctioned Libra 1. I think we've made a review with Petrobras recently and things are moving on.

Local content issue is being sold, not only for Libra 1, we've 40% threshold, which is acceptable, which will allow us to make a profitable project and so by the end of [for this, have been] efficient there.

And you asked (inaudible) too, I know we are very new there.

But I think Statoil has probably good news for us.

So we're working hard.

I think we are aligned.

So -- and 2018 also FID.

So this is review.

So let be clear.

We're taking benefit, being countercyclical.

Qatar is from this low cycle for me twofold.

One was capacity to replenish resource of Total [deposit for growth] but the other side is taking benefit of the low cost of CapEx, low CapEx base in order to sanction projects and we continue to be active.

Not the same teams in Total buying, acquiring is one we are developing.

We have different objective for the front teams.

Our next question comes from Christopher Kuplent from Bank of America.

Can I just be very brief.

One last question.

Patrick, you gave us a 2018 number for $16 billion-plus.

But actually what I'd like to know is where do you think 2018 will end up on your organic front where you've given us $13 billion to $15 billion range?

I'm guessing not at the upper end.

I think on the lower -- at the lower end.

First, interest rate but again, it takes all that as an average and again for -- to be clear at the end of the day, for the company in terms of financial framework, the real question is how much we spend in CapEx?

We can make a split.

So it maybe, but maybe I'm wrong by giving you such a precise.

So keep the average, keep the range, I'd like to prefer it because again, just before you -- before I answered.

But we are looking the teams with short-term CapEx we could activate.

So this could have an influence, and we are reviewing that with the upstream team to see how we could activate.

So it's not -- we manage the company and prefer to give some range but it's -- it will maybe give a clue to all of you for your model and positive clue, I hope so.

Our next question comes from Jean-Luc Romain from CM-CIC Securities.

My question relates to Direct Energie.

Should I infer from your prepared comments that shareholders of Direct Energie contacted you about their interest to sell?

Second question is, is the cost of acquisition -- what is the cost of acquisition per client at Total [spring] so far?

For the first question, I cannot give you all the secrets of the deal but probably because you're French, thanks to your accent, you probably know that the main shareholder of Direct Energie and myself we have been -- we are quite close together.

We have been in all stories.

So we have permanent interactions over this.

We will not tell you who call who, but again, when the price of the share was declining there was some incentive point to call me.

But I was also looking to that.

Your second question was about the cost of access for Total [spring].

I don't have the answer, sorry for that.

But I suggest that one of my colleagues will call you after the call because I don't have -- I don't want to -- I know but I have one but I don't want to give you a wrong indication, and we will call you after the call.

There are no further questions in the queue.

I'd like to turn the conference back to our speakers for additional or closing remarks.

I would like to all of you thank you for this call.

We were a little earlier than anticipated because I think you have another call with one of my colleagues just right now.

So thank you for all your questions you asked us.

I think it will not become a tradition that the CEO will participate to the quarterly call.

It has been done today because we were active, which is a message for the people.

We think we will continue to be so active as the case.

But I think again the company is moving in the right direction and what they observe is the share price begins to reflect in a better way all the efforts, which have been done by all the teams of Total for the coming years.

And so I hope it will continue and you can count on one side of our financial discipline and the other side, the ambition of the management to continue to develop the company.

Thank you.