TotalEnergies SE (TTE) 2012 Q2 法說會逐字稿

Good afternoon, ladies and gentlemen, and welcome to the earning results Q2 2012 conference call. At this time, all participant are in a listen-only mode until we conduct a question-and-answer session. Instruction will follow at that time.

Just to remind you all, this conference is being recorded. I would now like to hand the call over to the Chairman and CFO Patrick de la Chevardiere. Please begin your meeting, and I will be standing by.

Hello. This is Patrick de la Chevardiere speaking. Before commenting on the second quarter results, I will start with a brief update on Elgin.

The gas leak was stopped on May 15, and the situation is under control. We are preparing the cement job that will permanently plug and abandon the G4 well. And we expect to complete this by mid-September.

The UK authorities have launched a formal inquiry. And of course, we are cooperating fully.

Our target remains a gradual restart before the end of the year. It is challenging, but we are making every effort to restart production as soon as our teams and the authorities agree that it is safe to do so.

Regarding the incidents in Yemen and in Nigeria, Yemen LNG is fully operational now, and we have increased security on the pipeline. In Nigeria, we are restarting gas production on OML58, and we should be back to full capacity by the end of the third quarter. In the meantime, we are diverting gas from other fields to supply Nigeria LNG.

Obviously, because of these events, the second quarter was very difficult for Total, in part because we had some positive momentum when these incidents occurred. However, in my view, the takeaway message is that we were able to respond quickly, effectively, and professionally to multiple events. And I have to say that I am very proud of Total for this.

It is too soon for me to comment on production growth targets. This will have to wait until our Investor Day in London on September 24. But, I would emphasize that these incidents have had only a one-off effect on production.

We are continuing to add new production. So far this year, we have started up four new fields, Usan, Islay, Bongkot South, and Halfaya. And these were delivered on time. Between now and the end of the year, Angola LNG, Sulige, and Kashagan should startup as well.

This week we launched the Tempa Rossa oil project in Italy. Total is the operator with a 75% share, and we can confirm that the project's economics are very good using our $80 per barrel Brent scenario. Tempa Rossa is planned to start up in early 2016.

I will also add that we were successful in increasing our share of Ichthys LNG from 24% to 30%, and as you know, this is an excellent project in a core future growth area for Total.

So, we remain very confident about the progress we are making with our portfolio of major projects.

For exploration, we recently acquired new high-potential exploration acreage, notably in Kenya, Uruguay, and Bulgaria.

And over the next 6-12 months, we will be drilling some of our large deep offshore prospects, notably in the Gulf of Mexico, Ivory Coast, Gabon, and Kenya.

We started the year with positive momentum, and our task is to regain it by year end.

Now, I will comment on our second quarter results. Adjusted cash flow from operations was $6.1 billion in the second quarter. Adjusting earnings per share was $1.62 per share, a decrease of 9% compared to the previous quarter.

Adjusted net operating income from Upstream segment was $3.2 billion in the second quarter, a decrease of 17% compared to the first quarter. The main explanation, of course, is a decrease in the Brent price. In addition, the one-off incidents Elgin, OML58, and Yemen had a negative impact of about $200 million in the second quarter.

From a volume perspective, Upstream production was 2.26 million barrel of oil equivalents per day, a 5% decrease compared to the first quarter.

The new startups had a positive impact of about 40,000 barrels per day compared to first quarter 2012. But, this was offset by seasonal maintenance and normal declines. So, again, we can attribute this decrease essentially to the one-off incidents.

In the downstream, falling crude prices created a more favorable environment. Higher margins for both refined products and petrochemicals combined with higher utilization rates in Europe led to a strong rebound of Refining & Chemicals, increasing net operating income to $491 million. Supply & Marketing was slightly weaker, contributing $309 million in the second quarter.

In the second quarter, net investments were $5.1 billion, in line with budget. This includes acquisition of $0.6 billion, mainly for the additional 1.1% of Novatek and the carry on Utica, and asset sales of $1.1 billion, mainly for sale of Sanofi shares.

Our gearing at the end of the quarter was 21.5%, still at the low end of our target gearing range and essentially unchanged since the end of last year. And our liquidity position is very strong with more than $18 billion of cash and cash equivalents on the balance sheet at the end of the quarter.

One final but very important point, we announced today that we increased the interim dividend by 3.5% to EUR0.59 per share, payable on December 20 this year. This is in line with our policy to maintain a payout ratio of 50% on average over time, and this increase demonstrates both our confidence in the future growth of Total and our commitment to providing sustainable and competitive returns to our shareholders.

This concludes my comments. And I have just a quick reminder that we will be in London on September 24 for our Investor Day presentation, so certain information will have to wait until then. But, having said that, I am now ready to take your questions.

(Operator Instructions). We have a question from Mr. Theepan Jothilingam from Nomura. Sir, please go ahead.

Good afternoon, Patrick. Three questions, please. Could you just first perhaps just give us a little bit of guidance on DD&A for the full year and how you see that progressing through the quarters and particularly relative to last year?

Secondly, also, an update on Usan and the ramp up there and your thoughts.

And then lastly, just on the dividend and the increase today, I just wanted to sort of -- wanted to find out if you could provide a little bit more color on what has changed in your view in terms of providing the confidence through an increase in the dividend today relative to, let's say, the full-year results in February.

Is there anything specific within the project portfolio that has matured, and can you give any numbers around cash generation there? Thank you.

Thank you, Theepan, and for your three questions. First one was about the DD&A. Two main explanations for the increase of DD&A versus second quarter '11, of course, a stronger dollar versus euro, $1.28 per euro versus $1.43 last year, and an increase of our DD&A per barrel in our E&P activities.

Most of this increase of DD&A in the E&P was coming from a ramp up of projects like Pazflor and Usan. And for going forward in the next year, I expect DD&A, of course, to increase a little bit also.

Your second question about Usan. Usan started production on February 24th. Our share of production during second quarter this year was around 20,000 barrels per day. Usan is producing 110,000 barrels per day in July and is expected to reach 140,000 barrels per day by year end with the addition of two more producing wells.

The ramp up is expected to be slower than originally planned, I have to recognize that, due to some well completion issues, which delay availability of wells.

Your last question was about the dividend. It has been more than three years that we have increased our dividend, and we are extremely confident in our future and the future of our cash flow. Therefore, we wanted to return cash to our shareholders.

The EUR0.59 we give to our shareholders this quarter gave a 47% payout for the quarter, which is in line with our policy of a 50% payout in average.

And I'd like to take this opportunity to mention to you that, despite the one-off effect, we had a very strong quarter.

Next question, please?

We have a question from Mr. Robert Kessler from Tudor. Sir, please go ahead.

Hi, Patrick. Just to ask you a little bit more on the dividend, it does pay a very nice yield and a little more so today. And I know, as you just stated, you've got a strategy to maintain that payout ratio. But, I know you've also got a very heavy reinvestment program. And management has, of course, commented in the past that that's funding tomorrow's dividend.

But, in the meantime, you're fairly significantly free cash flow negative after the dividend. And so, that requires the balance sheet, of course, for asset sales.

And so, can you give a little bit more color about how management thinks about free cash flow and cover for the dividend in this interim period, where you're spending quite heavily?

Robert, thank you for calling. I'd like to remind you that cash flow from operation more than cover CapEx and dividends this quarter. On top of that, with our 21.5% gearing, this shows that the balance sheet is strong. On top of that, we are confident that free cash flow in the coming years will continue to benefit from the contribution from our new startups that I remind you are accretive.

And on top of that, we are extremely confident that our strict capital discipline will continue and make both projects more accretive in the future.

I'm sorry. This quarter had the cash flow from operations covering the dividend. That includes the EUR2.8 billion of liquidation of working capital?

That's correct.

Okay. Thanks.

We have a question from Mr. Nitin Sharma from J.P. Morgan. Sir, please go ahead.

Afternoon, Patrick. Thanks for taking my questions. Three questions, if I may. First one on Shtokman, what is the update on this project? I think the agreement between the three partners expired in early July. And update, please?

Second, you recently declared commerciality on Absheron discovery in Azerbaijan. How are you thinking about the exit options for this gas, if possible some thoughts on likely timeline for starting production in this field?

And third, a point of clarification, you've increased your stake in Novatek by 1% in this quarter. Therefore, your stake now is 16% if I'm not mistaken, with an option to buy an additional 3% more within three years. Is that correct? Thanks.

Thank you, Nitin. I hope you are happy with the increase of the dividend.

Very happy.

By the way. Some comment on Shtokman, and honestly, this is not an easy part of your question. You were right. The joint venture agreement for the SDAG joint venture terminated on July 1st. We did not obtain terms that would have made this project profitable for all parties involved.

Shtokman is still in the pre-project phase. The bulk of engineering studies are done. There are still some unresolved issues, including the tax treatment, for instance. We are now discussing a new contractual framework in respect of a redefined Shtokman project based on a 15 million tons per year of LNG.

Total remains interested in playing an active role in this development. It will be up to Gazprom to decide who will be the partners of this new project. But, we wanted to be part of this project.

We cannot, obviously, launch this project or any project until we have a good visibility on all the major issues and we are confident that it meets our financial criteria.

Your second question was on Absheron. It's too early to say what type of exit we will use as a pipeline from -- if it will be the same pipeline or something else or not.

The drilling of the first exploration well started in January. You remember, and of course you -- I'm glad you noticed that we made a major discovery. It was a several-Tcf discovery. A first test has been completed end of March with very satisfactory results. A side track is currently being drilled to reach deeper zones further north.

Field development plan will now be prepared and submitted in the coming years. But, frankly speaking, I'm not able to tell you any potential date for production.

The last question was about Novatek. We own today 15.2% of Novatec and not 16% as you mentioned. It's 15.2%.

We cannot comment on Novatek's results, obviously, because they are not yet released.

Thank you.

We have a question from Mr. Guy Baber from Simmons. Please go ahead.

Guy Baber with Simmons & Company. Thanks for taking my question. Your partner in the oil sands earlier this week made some comments about potential timeline slippage a little to the right on some of your joint venture projects, namely Fort Hills, Joslyn, and Voyageur upgrader as you all attempt to optimize the scope and the economics around those projects.

So, I just wanted to get your perspective there as to how you're thinking about those projects at this point, how you think the returns profile looks like in this whole price environment, and past the sanction just how important those projects are to you strategically. Thanks.

Thank you, Guy, for your question. Aside from Surmont, we have three major projects in Canada in association with Suncor, Fort Hills, the Voyageur upgrader, and Joslyn. And we are currently continuing to work on the engineering for each of them. And this is a critical step leading to an FID.

We are reviewing the scope and design. And we are looking at the profitability of those projects.

Obviously, all aspects are taken into account, including technology, and also the new oil balance in North America.

Fort Hills is fairly well advanced, but there is still room for optimization to reduce dramatically engineering and construction costs.

In the context of our JV with Suncor, we expect to review all three projects individually and as a group mid next year. So, at this stage, I would prefer not to speculate on any potential FID on those projects.

Okay. Thank you. And then I had one follow up. Obviously, you guys strongly prefer the dividend. But, I had a question about share buybacks. So, clearly, the stock here is trading at attractive levels on a valuation perspective. And I assume it's trading well below what you all believe the net asset value to be. You have significant cash reserves, solid balance sheet.

So, my question is, how do you think about buybacks as a management team, and at what point would you consider using excess cash to opportunistically repurchase some shares in light of where the stock's trading?

Honestly, we are happy to be able to return some cash to the shareholder by paying an increased dividend.

About share buybacks, we were, I remind you, very active until 2008. Since then, there have been a couple of times where we did consider share buybacks. But, as a matter of principle, we believe it's better to return cash directly through dividends. But, I will never say never. I don't rule it out. That's it.

Okay. Thank you for your comments.

Thank you.

We have a question from Mr. Oswald Clint from Sanford Bernstein. Sir, please go ahead.

Yes, good afternoon, Patrick. A question on Halfaya in Iraq, if you could just illustrate or tell us about the cash flow recovery or what sort of cash flow we should expect in the next couple of quarters now that that project's started up, I guess recovering the initial CapEx.

And then secondly, the LNG this quarter, a good 30% reduction in sales, it looks like pretty much all of your LNG facilities are suffering some form of maintenance or other. I assume that would be the worst quarter, or at least could I assume that that's the worst case quarter and 3Q, 4Q should see a lot of that volume come back? And yes, that's it. Thank you.

First question on Halfaya, production started mid-June. We need to produce during three months at a rate of 70,000 barrels per day before we get some remuneration. So, we just started a month ago. So, just give us some time to reach the 70,000 and maintain the 70,000 barrels per day minimum production.

Under the term of the contract, yes, that is a 70,000-barrel-per-day minimum production that we have to maintain.

The current production is close to 100,000 barrels per day. So, we are on track.

On Halfaya, just one comment, it will be a minimum impact in SEC production due to the terms in -- of the contract.

On LNG, you must remember that we had security issues on the pipeline fitting the Yemen LNG plant and that we had maintenance in Snohvit. So, Yemen and Snohvit are the main reasons why our LNG contribution was less than in the previous quarter.

Currently, LNG is contributing about 20% of the net operating income of the upstream division.

Okay. That's great. Thank you.

We have a question from Ms. Lydia Rainforth from Barclays. Madam, please go ahead.

Hi, Patrick. I have a couple of questions if I could. Firstly, just picking up on the CapEx number and looking at the organic CapEx number in dollar terms, you've spent about $10.7 billion in the first half. I know the organic run rate was about $24 billion. I'm just wondering, are you still happy that you will reach that level, or is it a case of a few more acquisitions will have set the asset sales to get you to the same sort of net investment number?

And then secondly, if I could just go back to the LNG contribution, I'm sorry if I missed this, but are you able to give what the contribution from the LNG business was for this quarter compared to a year ago and just talk about how the costs have moved in the upstream business because they looked a little bit higher than they did a year ago. Thank you.

Yes, on the LNG contribution, I just mentioned the question before that LNG contributes by 20% to the upstream division net operating income versus 25% usually.

But, the first question you asked about CapEx, our organic CapEx was $10.7 billion first half this year compared to an annual budget of $24 billion. So, we are in line with our budget because last quarter 4Q is normally higher than average.

Okay.

We have a question from Ms. Irene Imona from Societe Generale. Madam, please go ahead.

Good afternoon, Patrick. I had two questions, both on two special charges you show in Q2. So, first of all, there's a $48 million restructuring charge. I wonder if that might refer to the merger of refining and petrochemicals. And in terms of that merger, what can we expect in the future in terms of the synergies, the benefits from that?

And my second question relates to the $338 million special charge shown. What does it include? And specifically, does it include any write-off of previous expenses capitalized on Shtokman, given that the shareholder's agreement was -- has expired? Have you written that off? Thank you.

Your question about the special charge of EUR316 million, this is related to a very old story that we already disclosed in the past in our annual report filing.

In 2004, the SEC and the DOJ started an investigation into the company use of a consultant in securing gas contract in Iran in the '90s. We have cooperated fully with the US authorities in this investigation. And we are currently cooperating with the US authorities.

And while the Company denies any wrongdoing in this matter, there has been discussion with both authorities since 2010 about a settlement, as it is a typical outcome from this kind of proceeding in the US.

In recent weeks, there has been some progress in the negotiation with the US authorities. This is why we took the decision that it was a good timing to provide for this amount corresponding to the best estimate of the potential costs, fine, and disgorgement, as they call it to be taken into account this quarter.

It seems that finally we will put this issue behind us, but I have no other comment on this subject.

The restructuring charge of $48 million is not in refining and chemical. It is related to new energies and mainly SunPower.

We have a question from Mr. Iain Reid from Jefferies. Sir, please go ahead.

Yes, hi, Patrick, couple of questions. You talked about security issues at Yemen. Can you say whether that's over now and whether the plant is back on full production?

Yes, Yemen is back at full production now.

Okay. Secondly, I don't know whether you mentioned this earlier because I got a little bit late on the call, but Elgin, in terms of what's going on there and for the kind of safety inspections or whatever, when do you think it's likely that that field's going to start up now?

As I mentioned in my speech, we Total and the UK authorities are making investigation on what's happened on Elgin.

The question, your main question is when do we expect to start production on Elgin.

Yes.

Production was stopped for obvious safety reason. And the investigation is currently under way. Our teams are working on several scenario, which will take into account the lesson learned. Approval from the relevant authorities will have to be obtained before restarting. It is challenging. But, our target remains a gradual restart before the end of the year.

Okay. And third question on asset sales, there's been some media reports about you selling your pipeline interests in France. Is that correct? And what sort of a value should we be looking at?

There is no process at this stage in respect of these assets. As everybody knows, we have a program to sell assets. And it's normal that you have rumors on the market. And we do not comment on rumors.

Okay. All right. Well, let's wait until it turns into something else. Thanks, Patrick.

Thank you.

We have a question from [Mr. Nicky Chivrestava] from J.P. Morgan. Sir, please go ahead.

Yes, hi. This is Nicky from J.P. Morgan. Thanks for the question. Basically two questions from me. Total UK has recently signed a two-year contract with a prospector offshore for high-spec jack-up rigs. So, the first question is, do you plan to sign more such contracts for high-spec jack-up rigs?

And the second question is, how do you see the supply of such high-spec jack-up rigs in the market? Thanks a lot.

Honestly, you revert to Martin on those types of questions or you ask the question directly to the contractor.

Okay. Thank you.

We have a question from Mr. Blake Fernandez from Howard Weil. Sir, please go ahead.

Patrick, good afternoon. Thanks for taking the question. It's nice to see the improved downstream results. I was wondering if you could give us an update on where you stand with the restructuring efforts and the attempt to improve return on capital employed through 2015.

We started the restructuring a few months ago. The objective is within 2010 economic environment, we expect the return on capital employed to reach 15% by 2015.

We are currently making the internal merger of refining and chemical.

Many action plans are currently implemented. They will deliver value month after month and maybe year after year.

Okay. Do you think it's fair to say that the improved results this quarter are simply a function of the improved benchmarks or macro environment?

Yes, most of the result is coming from the margin we enjoy in refining, of course.

Okay. The second question I had, I was just hoping if you could provide a little bit of an update on your joint ventures in the US, activity in the Utica, the activity in the Barnett, given the weak natural gas environment and here in the US. And then I think you mentioned a Cobalt spud in the Gulf of Mexico.

So, first question about our Chesapeake joint venture on the Barnett due to the low gas price, we, Chesapeake and ourselves, basically reduced the number of drilling rigs operating on this play.

In Utica, we started operation. And we will increase gradually the number of rigs and the number of wells producing on this area.

For the JV we've covered in the Gulf of Mexico, we are currently drilling the North Platte in the deep offshore Gulf of Mexico with Cobalt. I have to say that this is one of the most promising wells in the JV.

I have also to say that Ligurian 2 was disappointing. But, that's the nature of exploration.

As you know, we have already drilled two wells as part of the alliance with Cobalt. And North Platte is a third well.

Okay. Thank you very much.

We have a question from Mr. Jean-Luc Romain from CM-CIC Securities. Sir, please go ahead.

Good afternoon. I have a question on Argentina. My understanding was Total is expected to start drilling for shale in the Vaca Muerta formation. Could you give us more details on that?

Yes, thank you, Jean-Luc, for this question. Currently, we are pursuing an active exploration campaign for shale gas and shale oil in the Neuquen area and basically the Vaca Muerta area.

We have so far drilled four vertical wells in the Vaca Muerta shale. We fracked one well on Aguada Pinchana in April, and the results were encouraging. This well has been successfully connected to the production network. And the flow is exiting 100,000 cubic meter per day.

Overall, we intend to drill 10 wells this year, including some wells targeting liquid-rich gas prospects. We are running two rigs today and expect to run an additional one this year.

Thank you.

We have a question from Mr. Jon Rigby from UBS. Sir, please go ahead.

Yes, thank you. Hi, Patrick. Two questions, the first is just to go back on the dividend. No one's asked a question for a little while. How -- when you -- when the Board considers the dividend and looks at it, how do you look at what the underlying earnings are to come up with the sort of 50% because, clearly, all the segments are pretty volatile at the moment.

And I guess, how do you balance what looks like a rather high or relatively high debt target of 20% to 30% against a relatively high payout ratio, 50%, against actually a fairly ambitious CapEx program?

Would a lower payout ratio be somewhat more conservative I guess is the question I'm asking?

And then the second question is, just on Myanmar, with it becoming -- sort of rejoining the international community slowly, I guess two questions. One is, does that present you with greater opportunities? And second is, are there restrictions or restraints or inhibitions on what you have been doing globally up until now, which will sort of fall away as things normalize for that country? Thank you.

So, thank you, Jon, for your question, which once again give me the opportunity to repeat that we increased the dividend up to EUR0.59 per quarter.

The Board considers it in line with what we've foreseen in the future with the ramp up of our projects, which I remind you are accretive in terms of cash flow and, of course, net income.

It has -- we made always clear to the market that we wanted and we had a policy of a 50% payout in average over a long period of time. We favor dividend in comparison to share buyback, as I mentioned earlier.

When you have a look to the gearing, which is quite low today at 21.5%, obviously, this giving us room to implement our strategy and continue and invest in our Capex program, I remind you also that we can use a long list of assets that we can sell if needed. And we have a commitment for this year in terms of sell-off assets. And we will give more guidance in September during our Investor Day in London.

Your question on Myanmar, obviously, Myanmar offer exploration potential. We are obviously looking at it. Our long-time presence and good image in the country, including among the population, is an asset for us. We will continue and try and develop our activity and look forward to other opportunities in this country.

And sorry, just a follow up, maybe you can't answer this, but were there issues to do with the global operations of Total that were being inhibited by Myanmar was regarded sort of on a black list?

A few years ago, we were prohibited to develop new field in Myanmar. That's correct. In the past, that was correct.

I was thinking more of your activities outside Myanmar that were being inhibited by your presence there.

No.

There's nothing tangible to now fall away.

No things that come to my mind.

Okay. Thank you.

(Operator Instructions). We have a question from Mr. Neill Morton from Berenberg. Sir, please go ahead.

Thank you. Good afternoon. Just with regards to production renewals, I had a question about two licenses which will influence that in the medium term. Could you perhaps update us on the state of negotiations with regarding the Mahakam block, which I think is due to expire in 2017?

And then secondly, little bit shorter term, the ADCO license renewal in Abu Dhabi, what's -- what would be your sort of preferred option for that renewal? Would it be changing partnership, fewer partners, higher fee I guess? And also, perhaps just clarify what assumption you're making for ADCO in your 2015 production target. Thank you.

Both the concession in Abu Dhabi, ADCO, where we own currently 9.5%, and the production-sharing contract, where we own a 50% interest in the Indonesia are under negotiation. And I'm afraid that I can't comment on both negotiations.

That's fine. Could you perhaps indicate what you assume in 2015 for ADCO?

Probability was applied in the long-term plan. But, I won't give it to you.

Okay. So, it's risk. That's fine. Thank you.

Thank you.

Ms. Patry from Cheuvreux, madam, please go ahead.

Yes, hi, good afternoon. Just a usual question on this type of conference call. The taxation in the Upstream division has been quite volatile. So, I don't know if you could be in a position to help us assess what could be the upstream taxation based on, let's say, current oil prices for the remainder of the year.

Then another usual question for this type of conference call, what is the status on Egina?

And finally, a more longer-term question with regard to the cost inflation that currently takes place in Australia, you have two significant projects. And I'm wondering to which extent, especially on GLNG on which you are not the operator, you can truly be in a position maybe to mitigate this cost inflation. Thanks.

So, many question ahead of the Olympic Games. First question about the taxation rate in the Upstream division, the Upstream tax rate decreased by almost four points versus first quarter. This is -- and I am sorry for the answer, but this is true -- this is mainly due to a mix effect on production with decreasing related contribution from countries with higher tax rate, like Nigeria, UK, and Norway.

About -- the second question was about Egina. The field development plan is based on a stand-alone facility, already approved by the authorities. The basic engineering is completed and the call for tender made.

Recommendations are given to NNPC and to the Nigerian Content Development Board and to the partners.

The FID is pending these approvals. But, obviously, ongoing discussion around the new PIB are slowing the FID process.

So, your last question about inflation in Australia and GLNG, where we are not the operator, and I'm pretty sure you know that Santos announced that gross CapEx for GLNG has increased by 16%, up to $18.5 billion. The additional capital will accelerate Upstream field development in the Fairview and Roma areas. And as a result, some field development previously planned post 2015 will now be brought forward, and we now expect to produce more of our feedstock versus the initial view of acquiring a larger portion from third parties.

This last comment is quite important. This is explaining part -- an important part -- of the capital increase.

And maybe just to follow up on your last comment, what are the implications on a net-net basis of the internal rate of return that you were expecting from the project prior and after this increased scope and increased CapEx?

A very small effect.

Okay. Thank you very much.

We have a question from Mr. Lucas Hermann from Deutsche Bank. Sir, please go ahead.

Thanks very much. Patrick, hi, hope you're well. Patrick, three, if I might. Firstly, just around the dividend, treatment of the French tax increase, I presume that the Company will suffer that. It won't be suffered by the shareholders.

And also, on the dividend, I mean, and increases, do you review and think of the dividend now on a quarterly basis, or should we when we think about how the dividend will progress into the future be thinking that -- or be considering upwards movements or flat whatever on an every-other-quarter basis, as was the case, obviously, when you paid dividends on a half-yearly basis?

Secondly, if I could just ask you to give some indication on what you expect maintenance downtime to be like for the Upstream in Q3 relative to a year ago and also relative to the quarter that we've just passed?

And thirdly, Syria, whether you've got any thoughts in terms of how we should be thinking about your production going forwards in that country, I mean, my assumption is just to assume there will be nothing.

Your question about Syria is very simple. We are producing nothing in Syria. And honestly, with the current situation, I cannot foresee any date when we will resume operation in the country, unfortunately for the Syrian population, by the way.

Your question about the French tax on dividend, you were right. The dividend is paid by the Company. It is not a withholding tax. So, when we increase the dividend by 3.5%, you will receive 3.5% more.

When we look at dividend, of course, we are not going to increase the dividend one quarter to reduce it a quarter after. So, we are reviewing it on a long-term basis.

And your last question about maintenance, maintenance was quite low, relatively low second quarter this year compared to second quarter last year.

Remind -- this is a reminder, but last year, in 2011, maintenance was much higher than in average in the past.

Nevertheless, it is likely that third quarter 2012 maintenance will be higher than second quarter this year.

Can you quantify it at all?

No.

Okay. That's fine.

Sorry.

No, it's all right. And just going back to the dividend quarterly, if I think around a company like -- well, I don't want to use an example. But, I don't expect you to cut or reduce the dividend. I expect you to think about it long term.

What I'm trying to get at is, is this something that you are going to be assessing or that we should be thinking about in terms of movement every other quarter, once a year, i.e. the dividend declaration you've made today, is that how you see things progressing for the next four quarters?

Is it next two and then we review it again? I don't actually know how quarterlies will work in the mindset of Total, whereas I did understand how biannual worked.

Being very -- it's a simple answer from my side is that, having four installments of dividends per year, this gives us four opportunities to increase the dividend every year. And that's it.

Okay. Well, we'll just hope for the best then, Patrick.

Have a good Olympic Games.

And to you.

I'm not so sure.

We have no further questions.

No more questions?

No more questions.

Okay. And thank you, all of you, for your time. As a quick conclusion, I'd like to say again that the second quarter was certainly a challenging one for Total, but, these events are, thankfully, largely behind us.

I look forward to seeing many of you in London for our Investor Day presentation, where we will provide you with a detailed overview and an updated outlook. Have a good vacation. Thank you.

Ladies and gentlemen, this concludes the conference call. Thank you, all, for attending. You may now disconnect.