TotalEnergies SE (TTE) Q2 2026 Earnings Report, Transcript and Summary

Thank you, Patrick. So I will start by commenting on the price environment in the second quarter '26 versus the first quarter. We captured high commodity prices, although gradually decreasing over the quarter. Brent averaged $104 per barrel during the second quarter versus $81 per barrel in the first quarter, meaning plus $23 per barrel, more than 25%. While average liquid price was up by $18 per barrel due to widened differentials and a lifting schedule weighted towards the end of the quarter in the crude market, which softened in June in the context of the ceasefire in the Middle East. TTF averaged $15.6 per MMBtu versus $13.7 MMBtu and our average LNG price increased by 20% at $10.2 per MMBtu. Oil prices started to impact LNG prices with 1 to 2 months of lag effects according to LNG pricing formulas. Finally, the European refining margins increased by $13.5 per barrel on average over the quarter. In this price environment, the company reported very strong financial results, increasing by almost 15% compared to the first quarter with second quarter '26 cash flow of $9.8 billion and adjusted net income increasing to $6 billion. These results were possible because of the strong operational performance of all businesses, demonstrating the company's ability to fully capture the environment upsides. Upstream delivered an underlying accretive production growth of over 4% year-on-year, which is above the annual 3% guidance and partially offsetting the production loss in the Middle East. Downstream: a very good operational performance as explained by Patrick from our refineries, which has been deliberately geared towards maximizing distillate production, diesel, jet fuel, to capture higher refining margins. And Integrated Power cash flow generation increased by 25% over the quarter, supported by contribution of EPH assets in line with expectation since the closing of the transaction at the end of April. TotalEnergies generated these very strong results, the highest since the end of '22, despite 2 challenges. Although oil production from the Middle East was higher than originally expected, a significant portion of this production could not be lifted during the quarter and recognized in E&P results based on the crude price from June, meaning less than $70 per barrel. Our gas trading underperformed after an overperformance in the first quarter because of the decline in gas price for the quarter as explained by Patrick. TotalEnergies has delivered strong profitability this quarter with return on equity at 15.9% and ROACE close to 14%. Now moving to the business segment, starting with hydrocarbons. On production on a year-on-year basis, excluding the impact of the Middle East conflict, second quarter hydrocarbons production increased by more than 4% above the guidance provided of 3% for '26, benefiting from the ramp-up of the projects started since the beginning of '25 and from improved operational facility availability. The impact of the conflict in the Middle East is around 210,000 barrels of oil equivalent per day over the quarter, below the guidance communicated last quarter of 360,000 barrels due to the company's production ramp-up in the offshore United Arab Emirates and the restart of production in the other countries in the region during June. Although physical lifting turned out to be in line with the guidance with an impact of 350,000 barrels of oil equivalent per day. Looking forward, we expect to maintain a strong momentum with oil and gas production as in the first quarter, excluding the Middle East impact, expected to grow around 3% compared to the third quarter of '25 in line with the annual growth guidance. Turning to the quarterly results and starting with E&P, the segment generated an adjusted net operating income of $3.2 billion this quarter, up by 25% quarter-to-quarter, capturing the increase in average liquid price of $17.90 per barrel over the quarter and demonstrating the accretive new projects contributing this quarter to the yearly production growth. Similarly, cash flow reached $5.8 billion, up 27% quarter-to-quarter. On the cost side, very important as well, once again, we maintained our leadership with an average OpEx per barrel equivalent below $5 in the second quarter. On Integrated LNG, the LNG production decreased by 10% quarter-to-quarter mainly due to shut-in production in Qatar related to the Middle East conflict. In contrast to the outperformance in the first quarter, this quarter, the second quarter was impacted by the underperformance of gas trading activities in an overall flat or even bearish European market, reflecting the significantly decreased adjusted net operating income and the cash flow of the segment quarter-to-quarter of $0.8 billion. Given the evolution of oil and gas prices in recent months and the lag effect on pricing formula, the company anticipates an average LNG selling price of above $11.5 per MMBtu for the third quarter of '26. As we execute our consistent strategy in LNG, the main milestone of the quarter was the startup of Energía Costa Azul LNG plant on the Pacific Coast of Mexico, strengthening the diversification of the LNG portfolio of the company towards the Asian markets. TotalEnergies loaded the first cargo at ECA LNG and shifted it to the Asian market where the company pursued its strategy of signing long-term oil index LNG contracts with new clients in China or in Japan. Turning now to Integrated Power. Net power generation increased to 14.8 terawatt-hour, up 28% year-on-year, driven by an increase of nearly 15% in generation from renewable sources, reflecting growth in installed capacity and a 2 terawatt-hour increase in production from flexible gas-fired capacity resulting notably from the completion of the transaction with EPH end of April. TotalEnergies is on track to reach its annual objective in integrated power, in particular to generate more than 60 terawatt-hours over the year. Cash flow from operation was above $700 million, supported by the contribution again of EPH assets, in line with expectation since the closing of the transaction. And this quarter again, we provide more granularity in the Integrated Power financial performance with a split in cash flow between what we call production assets, meaning renewables and gas-fired power plants and sales activity, B2B, B2C, and trading. The former contributed 60% of the cash flow and the latter contributed 40%. TTEP, the new venture with EPH, will continue providing its growing contribution to the company's results throughout the year in line with expectation. As TTEP has started contributing in the second quarter, we said in the first quarter that integrated power should benefit in 2026 from 10 terawatt-hour of net power production, in line with the 15 terawatt-hour guidance given for a full year, and more than $500 million contribution to available cash flow. Moving to downstream. During the second quarter, Refining and Chemicals was able to fully capture the increase in refining and petrochemical margins, notably adapting the refinery run to produce more distillates. Overall, for Refining and Chemicals, adjusted net operating income was up by $200 million quarter-to-quarter to $1.8 billion, and cash flow reached $2 billion. Marketing and Services delivered outstanding results, the best in at least 10 years, driven by the positive impact of the seasonality in Europe and the higher unit margin, as noted by Patrick, notably on lubricants. Adjusted net operating income was up 21% year-on-year at $500 million and cash flow close to $850 million, up 19% year-on-year. Moving to the company level and starting with working capital. The working capital decreased by $1.2 billion during the second quarter, largely driven by the reversal of the first quarter buildup with the lower hydrocarbon prices at the end of the second quarter compared to the end of the first quarter. The company has kept the course for capital expenditure with net investments amounting to $3.4 billion in the second quarter with a contribution of net disposal to $1.2 billion. This as explained by Patrick, comfort our guidance for full year '26 net investment level of $15 billion. As a result, the gearing has improved by more than 2 points to reach 13.1% at the end of the quarter, reflecting a reduction in net debt of $3.3 billion. To conclude, once again this quarter, the integrated model of TotalEnergies demonstrated its ability to capture higher prices and higher margins with a growing cash flow to support the deleveraging of the company, our shareholder distribution with a clear priority to the dividend and the CapEx to deliver our growth. I think now we can open the line for questions.

The first question is from Martijn Rats, Morgan Stanley.

Two questions, if I may. I know there's an awful lot of attention, of course, on the Middle East, but I wanted to ask you a quick one about Namibia. It's still very important for Total. Where do you stand on, sort of, the FID of Venus versus the completion of the transaction with Galp on Mopane? I was hoping you could say a few words about that. And then secondly, I wanted to ask you about the payout ratio for this year because the guidance was more than 40%. I think we're sort of tracking below that so far. Of course, you see volatile macro environment is perhaps no surprise. But the, sort of, the payout guidance, over which period should we expect that to be realized? Would you still expect to have more than 40% payout sort of over the year? Or should that become a longer-term target? Patrick Pouyanné : Thank you, Martijn, for the first question. So I will be more precise, on the Galp transaction related to Mopane versus Venus, we have received end of last week, the approval, official approval of the Ministry of Energy of Namibia. And so we are just, in fact, finalizing the last papers to close the deal potentially tonight or tomorrow. So we are just -- your question came at the right time. So that's important, of course, because this is the fact that we will be on both developments as operator has a strong value for us in order to engage with the first FID. On the FID of Venus, I would say there are intense discussions as well. We have a joint target between the government of Namibia and the consortium to sanction it by end of July. There are discussions progressing. We'll see if we can conclude in July or if we need to have a little more time. Technically, I think we have selected all contractors. So we are ready to take the FID subject to finalizing discussions with the government of Namibia. There have been some progress, but there's still some progress to be done. So again, generally, it's when the last minute we can conclude, but we'll see if we can do it. Otherwise, we'll wait. But I'm, I would say, reasonably optimistic that all the parties, there is a joint interest clearly and in particular, the Namibian authorities are fundamentally supportive to have a strong operator being able to capitalize on synergies between the projects. I remind you that now that the Mopane will be approved and will be closed, the next step is to engage in the second half to appraise Mopane. We have 3 wells in '27 and the FID will be taken in '28. So all that as we engage in a strong momentum. And clearly, for us, Namibia will and is becoming a very important hub for future growth, not only to 2030 but beyond 2030. But then on the other topics, no, yes, we are clear. We are targeting 40% of payout. We have increased buyback level and the dividend level between the first quarter and the second quarter. I don't know where we'll go. To be honest, you could say we have been -- there was a little cautiousness in the fact that we have raised from $750 million to $1.5 billion. We maintained the $1.5 billion for the next quarter because I can tell that we were quite impressed also when the MOU was signed in June by the quick drop of the crude oil price down to $70 per barrel. So it's difficult, honestly, to anticipate what will be the cash flow for the second half of the year. Of course, we will be globally above the guidance we gave. I even gave to you end of April, I think I mentioned the cash flow guidance at $80 per barrel, $7 per barrel refining margin of $32 billion. Obviously, we'll be higher than that. Where will it land between $35 billion, $40 billion? I mean, I don't know. It's difficult to guess. So we can make the math like you. If we were at $35 billion, there is a miss -- I mean, a miss, not a miss. There is a question of $1 billion, a little more than one, around $1 billion to increase in the return to shareholders, $1 billion in the last quarter, we'll see, and there will be a debate at the Board at the different ways we could imagine to execute it. But I think, again, my message to you is, first, it's a good topic because that means that we are generating more cash flow than compared to the guidance we gave you in February. So it's a matter of, I would say, rich company. It's a good topic. But the idea that we will get to 40% is really on the yearly basis. I remind you, by the way, that we are quite in advance if you want to make it in a multiyear case, as you suggested in your question, I think the last year, we were at 55% the previous year around 50% or 53%. So if I make it multiyear, which is not the case, by the way, because we are simple guys. But we are quite in advance compared to 40%. So again, consider that 40% guidance is guiding the Board. And again, the Board is also, as I was explaining you last quarter, looking, thanks to your support and your strong guidance last year in the same period of the year to the gearing ratio. And going down to 10% is quite also an objective for the company, and we might achieve it this year. So that's the equation of the capital distribution, I would say, for the Board. And I think we will manage that as we've done that regularly and respecting our different, I would say, stakeholders.

The next question is from Michele Della Vigna, Goldman Sachs.

I wanted to ask 2 questions. The first one is if you have an update on the 2 giant oil developments you're operating in Uganda and Suriname? The second one is more of a macro question. I was wondering if you had a view on China demand. We've seen a drop of about 5 million barrels per day in import since the beginning of the conflict. It's very difficult to unpick what is destocking, demand substitution, demand destruction? I was just wondering if you had any view of how to think about it. Patrick Pouyanné : Okay. First question, on Uganda, okay, we are, I would say, in the last 6 months of development. I would say we expect the crude oil production to start before the end of the year. I would say '27 will be the year where we reach the plateau. We have 2 developments. We have Tilenga on one side and the other one, the offshore Kingfisher, I think it is ready to start up by September. If my information is good, the pipeline is also ready by, I would say, September. So we might start, in fact, in the next quarter the production at a rate which is, I think Kingfisher was around 60,000 barrels per day. And then Tilenga will come ramping up, I would say, on the first half of '27. So full plateau for me is by mid-'27. So this is where we are. And by the way, it's an opportunity for me, and we will follow that carefully. Of course, Uganda is affected today by a disease Ebola. But if it was not the case, we think that we might organize -- if it stops, we might organize a field trip with some of you, the ones who are brave to go to Uganda in 1 year in September 2027. So Uganda, for me, now it's a matter of finalizing and turning the wells on. On Suriname, things are moving very well, I would say. We confirm that the production will start up by first half '28. That's where we are according to planning I have. It was our first quarter, maybe second quarter, but we are in first half '28 and the news of the construction, it has already progressed by 40%. We are at 40% advancement, with the FPSO in the yard is building correctly. And so no, I would say, this is more classical. It's more complex to execute an onshore project than an offshore one. So we are in Suriname, we are in a project which for TotalEnergies is a deepwater project. We know how to execute them. Then China is very interesting demand. Of course, we have all been surprised when we discovered the statistics of May and June, I would say, where, in fact, you are right. The refinery runs went down from 15.5 million barrels of oil per day in February to 12.5 million barrels per day in June. So clearly, with the policy, which was, firstly, I remind you that the Chinese authorities have decided very quickly to stop exporting products out of China. And they reduced the run rate of the refineries in China by 10%, down to 90%, I would say, voluntary reduction of Chinese. So it was more affecting the exports. The domestic demand, it's difficult to say that it's a domestic demand disruption. So I would not say that. It's also true probably that -- so that's what we're sure is that we observe it. It seems that there is some, I would say, turnaround on Chinese refineries in July, August and summertime. So we don't expect, in fact, much increase of this demand from China. It's true that when you look at that, you can consider that the system in China has quite an impact on the oil market. And probably we are commenting in April, the fact that the Strait of Hormuz blockade was representing 10 million to 12 million barrels of oil per day of the market. The Chinese by themselves with their policy have, I would say, absorbed 4 million barrels of oil per day. If you add on that, that the U.S. has released almost 2 million barrels per day of the SPR. They have solved the 2 countries, I would say, have solved almost 60% of the problem. That's probably why, by the way, the price of oil went up to $120, but not so high. So for the coming months, Michele, you can observe like me that we are back to the blockade today. There are no vessels, no tankers are crossing the Strait at all. So we are back to the situation. I know that the Chinese have announced that they will allow again some few refineries to export some few products. It was during, I would say, the quiet period at Hormuz. Today, we can imagine that again, it might not be the case again with these events. So that's what I can comment. So for sure, less exports, domestic demand disruption? Difficult to have data on this one.

The next question is from Biraj Borkhataria, RBC.

Just 2 on your LNG business. In June, there were reports around Russian decree to authorize the sale of 10% of Arctic LNG 2, I think, related to the European sanctions. So I don't believe you have commented, but are you aware and are you planning to exit there? And related to that, are you any clearer on the, sort of, legal language around EU sanctions and what it means for Yamal at this point? I know I asked at the full-year results, and it wasn't quite clear exactly what it would mean and there's been some conflicting reports. So any color there would be helpful. Patrick Pouyanné : Thank you, Biraj, for your questions. I know that you have specific interest for Russian matters for good reasons, by the way. So Arctic LNG 2, as you know, I remind you that we decided in 2022. It was very early in March in the accounts of March 31, 2022, shortly after the war. We recorded an impairment of $4.1 billion, which was, in fact, concerning notably Arctic LNG 2, full write-off. Secondly, that Arctic LNG 2 has been placed under sanctions by U.S. authority on the 2nd of November '23. And as a result, immediately, we suspended procedures in accordance with existing contracts. And in consequence, in fact, our rights and obligations under these contracts related to Arctic LNG 2 have been suspended since November '23. In such a context, Novatek approached us, indeed, and initiated discussions for the transfer of our 10% in Arctic LNG 2 to one of their own subsidiaries, Nordline. And this has been publicly authorized, as you noticed, by a special decision of the Russian presidency in June. In fact, given this context of Arctic LNG 2, we, on our side, consider that it's in the joint interest of TotalEnergies and Novatek to dispose of our Arctic LNG 2 shares, which again were fully impaired in '22. We have notified our partners and lenders, and we expect the transfer process initiated by Novatek to be completed in the near term. The Arctic LNG 2 chapter will be over for TotalEnergies in such a context. The second question, I would love to be able to answer you, but we are waiting to see what is the legal language precisely. So as you have seen -- there was some press news this morning that there was intense discussion about the new sanctions package at Brussels. And among these different topics, and we are not part of everything, even if we try to understand, we are not in the room, there was a debate which came from, I would say, the Greek authorities, which were claiming that the Greek LNG tankers should be allowed to transport some LNG from Russia if it was to be offloaded outside of the EU. So that's the case. And it says that there is a legal language, but again, which could, in fact, have an impact on Yamal LNG, according to what we've heard. And which could, in fact, allow, I would say, some transfer and purchase of Yamal LNG if we were using EU LNG tankers outside of EU, again. So a specific case. So it's a little complex story. But that might have, yes, an impact on, in fact, if it is the case, that means that TotalEnergies could not use a force majeure to say like it was until now because until now, we could, in fact, with the regulations which were in place, which were banning the LNG exports to the EU, but there was a question mark. I made that comment, I think, in April to all of you or in February, I remember that we were questioning whether there was a different interpretation of the European sanctions, but that even an EU company could not purchase any of Russian LNG either for EU or outside of EU. So it seems that the new language could, in fact, clarify it in a way that it could be done outside of the EU if we use some EU LNG tankers in fact. Which, in fact, would mean that the interest of EU companies would be somehow preserved independently of this, if it's outside of the EU. So again, I'm just commenting some verbal information. We have been in contact with different, I think the final resolution will be delivered probably tonight or tomorrow morning. They are drafting the last ones, and we'll see what will be the outcome. Of course, we need to analyze it because we have a policy where we don't want to take any risk with sanctions. But My comment is that if that is the case, again, I think the interest of EU companies will be preserved because honestly, to let the Russian LNG being sold outside of the EU, not by EU companies, but only by our competitors was a little odd to all the EU companies involved. So let's see. That's what I can tell you. And we'll keep you aware, obviously, because it has some impact on our own business. And we'll keep you aware of the situation.

The next question is from Doug Leggate of Wolfe Research.

Patrick, I wonder if I could pick up on Martijn's prior question about cash returns and the 40% and so on. I think we would all agree probably this is a bit of a windfall environment and maybe formulaic returns of capital. One could be forgiven if there was some flexibility there. My question is specifically around the hybrid bonds as opposed to the net debt target and whether you would consider these windfalls as an opportunity to perhaps address some of that longer-term financing as part of your capital structure? That's my first question. I've got a follow-up on exploration, please. Patrick Pouyanné : I should give that to Jean-Pierre, but I know that I'm still -- to be honest, the hybrid bond is -- for me, it's a debt. It's a debt, but it's not a debt. It's quasi-debt with a low interest rate compared to what we can issue bonds. So I don't make a lot of difference between the different bonds that we have issued. So I would say we -- it's around EUR 11 billion of 3% coupon. So it's quite a cheap debt. So is it a priority unwind all that? My answer will be clear, it's no. And it's no, and we have made some partial reimbursement, but it's not a priority. And again, we are more looking at, I would say, as the CEO, I'm more looking to the global cost of different bonds rather than the specific one. Maybe Jean-Pierre will say, right?

It's highly dependent on the market. So if you could consider it cheap debt, there is no reason not to keep the hybrids in our portfolio. But of course, it's highly dependent on the conditions as Patrick explained, what is important for us is, globally the cost of global debt, senior bonds plus hybrids.

Yes. My follow-up, Patrick, is very specific on exploration. So you hired Nicola out of Eni and you have Mopane and Venus in Namibia. Back in 2016, Total drilled the only deepwater well in Uruguay. And Eni, late last year farmed into Uruguay. It seems that activity there is picking up a bit. So my question is, when you roll all that together, does Total have any ambitions to move into Uruguay? Patrick Pouyanné : Okay. I mean, Doug, you will need to ask a question to Nicola. To be honest, Nicola did not come to my office to tell me, we need absolutely to come back to Uruguay, so to be clear. Our own experience in Uruguay has been quite average, to be honest. And in fact, it's a whole basin because this basin, which was the Pelotas basin, if I remember well, in fact, we drilled in Uruguay. We also drilled in the other side in Brazil, which was not, as well, quite a success. So we made 2 drillings in this deepwater basin, which was honestly not very encouraging. So I have noticed that there were some companies last year, which went back. Nicola is quite excited by Namibia by coming back on Suriname with [indiscernible]. So he has some other ideas or other African countries. But again, I discussed with him through your intermediary, Doug, if he wants to come back to Uruguay. As the CEO, the policy is quite clear. We allocate $1 billion per year to exploration and appraisal. This is my commitment to Nicola when we are in. And I told him it's up to you to decide where we'll put the money. You have to share with you your convictions. But if it's your idea, we know we follow that. By the way, when I was looking to potentially not buy it down, but the Venus case, looking to the department, Venus development might generate quite a nice cash flow paying many years of like Suriname, the GranMorgu development will pay many years of exploration. So that we need to keep in mind, but it's in terms of cash generation of added value, exploration for me is a good nice engine. But again, I trust Nicola that he will bring to us ideas. I don't know if it's Uruguay or not. But until now, it's not Uruguay.

The next question is from Christopher Kuplent, Bank of America.

Just 2 quick questions for me, Patrick. The info that you've given us on the positioning of your gas traders is very helpful. Can you maybe comment on whether their bullishness has extended into power and your merchant and spark spread position there? And what you expect on that side now that you've got access to the EPH portfolio? And the second question, as ever, I keep trying to get comments out of you on the state of the M&A market. But maybe now we have a specific example that you know more about than we do, which is the Danish deal, which I believe is entirely operated by yourself. What do you think about this environment? You've made use of inorganic before. Is this an environment to sell or to buy? Any comment once again would be appreciated. Patrick Pouyanné : I commented the gas trading, but gas trading has been, again, a lower performance on trading. So just to tell you that now the position is I would say, the winning one. On electricity, honestly, I don't have the visibility on that. Your question, of course, we have -- as you know, the EPH deal is a deal where we are buying the assets, but we transform all assets in a tolling mode in order to have access to the electrons in order to trade ourselves around this electricity. In fact, today, at this stage, all the assets have not been yet -- all the tolling agreements have not yet been signed. So we will -- we are working on it. So I think the full potential of trading around the EPH deal is more for the fourth quarter than immediately, to be honest. But of course, we are expecting from that some additional value. In fact, we have some objective, and we were discussing that, by the way, with our trading electricity team last week during our 5-year business plan. So we have some objective and we expect them to deliver. We are trading on 2 markets. There is the European market, one with which we are also trading in the U.S., which is a little more complex market, to be honest, because our position there is probably today is still limited. So we will need to find ways to increase the position in the U.S. if we want to be, I would say, profitable trading electricity in the U.S. In Europe, we have quite a large portfolio today in different countries. So we have some project expectations. The U.S., I would say, it's still a work being in progress, I would say, on this one. M&A market, yes, I mean, I didn't have the time to analyze the price which was paid by Vår Energi to acquire the BlueNord Energy. So I didn't -- maybe I will receive -- probably I will receive a memo, but I was occupied by matter the last few days. It seems for me the market today is more a seller's market than a buyer's market with the price of crude oil price, which we have today, if you make a deal, or unless you have a earn-out or schemes in which you will try to capture part of the potential upside. It's not a stable market. So before this crisis, I think you could imagine that the deals we have done around to buy around $70 per barrel. Today, to sell at $70. On my side, to be honest, I would not be -- I'm not a seller today on these assets, on your assets because we would not like to lose some upside. So selling is probably better today than buying, yes, it's fine to come back to your deal. But again, I cannot comment the specific situation you mentioned. And maybe we have some preemption right. I don't know. I don't know the situation, obviously. So we'll look at it. But it is our assets and we operate with -- by the way, I'm not surprised because BlueNord was a fund and bought by fund, and it was quite clear to me that I met, by the way, the owner of BlueNord when I was in Denmark a few months ago, and it was quite clear to me that they were willing to sell. For us, as TotalEnergies, we have already quite a big share, I would say, in the Danish underground assets. So it's quite mature assets, to be honest. So I think we are fine with what we have. But again, we'll look to this situation.

The next question is from Mark Wilson, Jefferies.

Regarding European projects, could I ask about the Cyprus project, Cronos Block 6 and what the expectations to move that one forward are, please? And then secondly, on gas trading, yes, I agree with others helpful comments, but you spoke to the European expectations for price moves there that didn't occur. Should we consider your gas trading business to be more of a regional-focused business rather than global? Obviously, oil made material moves up and down and probably that enables that business. But should we think of your gas trading business as being a more European regional focused one? Patrick Pouyanné : No, still not quite clear. No -- I know we have a global gas trading. We are a big LNG, I would say, player. I just mentioned that there are different markets in the U.S., in Asia, of course. I just tried to, in my comment, to tell you where we made the miss and the miss was more on the European anticipation on the TTF, where I think we were around $15, $16 -- end of March, we were around $17. Our teams were thinking it could go up to $19, $20, like it is going, by the way, today and in July because they anticipated the impact on the market, both of the distraction from the Qatari production from the market and the, I would say, as well the fact that the inventory in Europe has to be rebuilt. And in fact, what happened is that the market probably considered that it was too early to anticipate, to grow to have a higher price because expecting maybe the Qatari disruption to stop, which happened in June but came back in July and that there were time to have higher -- to grow the inventories. It's also true that the weather in Europe was quite, in fact, good in the second quarter. So it's just to try to give you the main, I would say, the main -- the major, the one on which we took a position, which appeared, which were, in fact, reversed, which were not the right ones. But it does not mean at all that we are not a global one. I would say on the other markets, I didn't see any specific -- we didn't see any, I would say, underperformance, I would say. We only see it on the European position. That's why I mentioned it. But don't take -- draw this to the conclusion. Cronos, thank you for this question. On Cronos. We are working on many FIDs, in fact, in the end of July. It's -- and the good news, and I think I must pay tribute to Eni, the operator because we are 50%. We have a big share of 50% like the operator of Eni. We work jointly, by the way, in the last 6 months to go to the FID. And the good news is that we have -- I think we are working hard to, again, like on Venus to finalize the FID by the end of July. It's a matter of -- again, there is a lot Cronos for everybody is an interesting development where we produce gas in Cyprus. And then we maximize existing infrastructures in terms of CapEx because it's a subsea development. It will go to Zohr installations in Egypt to make the gas treatment and then to Damietta LNG plant in Egypt. So you can imagine, there was a number of intergovernmental agreements and agreements with third parties to use all these existing installations. But we are -- it's being done, honestly. And I think as we discussed, will be able to [indiscernible] -- probably next -- end of next week to announce that. So -- and it's good. It's an interesting project because at the end, for TotalEnergies, we have access to 1.4 million tons of LNG in Egypt just in front of the European market. So you can imagine that it's an interesting project from gas to LNG. And for Cyprus as well, it's the first gas development in Cyprus. And maybe our scheme will open the door, we open the way to over valorization. So it has been a long journey, but I think we are there, and we'll be happy to invest capital in the Cronos projects.

The next question is from Matt Lofting at JPMorgan.

Two, if I could, please. I wanted to first ask you about full year operating cash flows. I think, Patrick, you said earlier understandably that you'd expect to be probably above the $32 billion for the full year that you mentioned in April. Obviously, the macro scenario is uncertain. So if we were to stick to the sort of the $80, $15 gas, and $7 refining that you used in April, where do you think full year cash flows at that price deck would outturn on an underlying basis versus the $32 billion that you saw 3 months ago? And then secondly, I wanted to ask you about refining and security of supply of feedstock. Is the company able to access the appropriate feedstocks for the system as you look into the coming months? And is there a scenario where additional measures could be required from that perspective, particularly if conflict in the Middle East persists? Patrick Pouyanné : Okay. On the first question, it's quite easy to answer. The $32 billion, because of we know what has been the improvement in the second quarter would be raised to $34.5 billion. That's why I mentioned $35 billion, I think, in my answer to your colleague, the first question that I got. So $34 billion, $35 billion would be in such an environment. I would say you can get it as a guidance. Again, we see if we are at $80 since the beginning of the year, we were a little higher. We are more on an average, I think, around $90.7 -- so since the beginning. And the last 30 days, we were at $76. So that's quite a spread. So between $75 and $90, we'll see where we land. It's interesting. So in the assumptions, [ $40 billion, $34.5 billion ]. And the current forward curve is a moving target. It follows the spot one. So I don't have the figures. But I mentioned to you a range of $35 billion to $38 billion, $39 billion if we are remaining, I think -- if we were having a second half as the first half, you double it, you find $38 billion. So it's more -- it's a higher environment. It's not $80, it's $90. It's $90. It's a refining margin of $15. So it's $90, $15 and TTF at $15 as well, which was the average of the first half. If you replicate such an environment, you could imagine we should deliver around $38 billion instead of $35 billion. So you have a range to where we could land. But I don't know, maybe it will be lower at the end, but that's what I can tell you today. The second question, no, we have no problem of supplying feedstock to our refining system, not at all. We are producing a lot of oil in Brazil, a lot of oil in Africa. And so in fact, our refinery, by the way, independently of Hormuz, in fact, in terms of crude supply, the Atlantic Basin or European refineries, which are on the Atlantic Basin are generally supplied by crude oil coming from the Atlantic Basin. It's true that we like to have some sour crude coming from the Middle East to make more diesel because it's the best crude to produce diesel. There is a limited -- but generally, this Hormuz -- sorry, the sour crude from the Middle East is more going to Asian refineries, in fact, than to European ones. So we have no concern on our side to feed our refining system. The only concern I could have is more around SATORP in Saudi Arabia because first, it has been hit. So I hope it will not be hit again. And so we don't have the full capacity. Secondly, SATORP production is, of course, in the -- stranded in the Gulf. It has been quite well used by the Saudi system during the second quarter for domestic use because they had other refineries which were hit. So from this perspective, we are running it for the domestic market, but we'll see what could happen if it's strong. So that's the situation, but no security of supply for feedstock or system.

The next question is from Lucas Hermann, BNP Paribas.

A little conceptual perhaps, but one of the things that I think most of us or many of us are struggling with medium term at the moment is the fragmentation of fracturing within OPEC. The UAE having departed, Iraq talking about an incremental quota or changing its quota. As you think forward about your own position, the potential for Iranian barrels to come back, more UAE to be available, Iraqi flows perhaps be larger, where does discipline sit with what remains of the rest of OPEC? How does that impact the way you think about allocation of capital to projects? Does it change anything in terms of how you feel about the robustness of oil markets, particularly at the bottom of the cycle? And secondly, if I might, and maybe this is just one that I should leave or we should leave for the strategy day, simply to ask whether in light of the actions you've taken on Mopane around Mopane, the addition of EPH and the environment we're seeing in refining, in particular, at the moment, but may be sustained, whether that's changed and altered your target of $20 billion or so of free cash by 2030 in the $70 world? Patrick Pouyanné : Okay. The first question, it's a good question for the investor presentation outlook in September, Lucas, where we speak more about strategy. But the first one, honestly, in terms of capital discipline, because of all what you described very rightly, it's very good to stick to that discipline to test all our projects at $50 per barrel. Because the answer, yes, you can infer that today, we are in a world of high prices, but we could go in a way where everybody would like to produce more and maybe, by the way, Saudi Arabia like they've done in 2020 could do. Why not myself? I mean, if everybody wants to produce, so we could do it again. If you remember what happened in 2020 when Saudi Arabia decided to close the market, I think some few peeps around them are quick to come back to more discipline. So it's a matter of discipline. For us, honestly, I continue to believe and we are -- but in the company, we are continuing to test the $50. We planned the business plan, the 5-year business plan, we plan it at $60. Yes, we test what happened at $80 or $70 like you mentioned. And -- but keeping the discipline and knowing that we are in a cyclical industry, I think it's just fundamental. So I don't -- all these events that you mentioned, I think are just confirming to me that -- we need to keep that discipline. That's what I would answer to you. And that means as well that you should not be surprised that when we will speak in end of September about, I would say, capital net investments, capital investments, you have figures which are more or less in line, which will be not more or less, which will be in line with what we told you last year. There is no -- we do not suddenly increase our CapEx because we have on the short term, a higher environment. Does it change 2030? Not really, what you said because Mopane first, the production of Mopane beyond 2030. Venus should start in -- by end 2030. So I would say -- so Venus, Mopane for me is 2030, 2035. We are working on it. So there's no impact. EPH somewhere was part of already our long-term plan, 5-year business plan. We told you what we have just anticipated with the EPH some of the CapEx we were willing to allocate to M&A in integrated power. So it has been done, but it was -- in fact, it was modeled even if EPH was not, I would say, the deal which was, in fact, was modeled in our future cash flow by 2030. And balance on refining, frankly, I will not take it as granted. So I'm still -- maybe because I managed that business during 3 years, I'm a little more cautious on it. Today, we have an incredible situation where both markets are positive in the same direction. That's true that on the product market, you have no products coming out of the Strait of Hormuz. So the Russian situations with, I would say, themselves, they stop exporting diesel and so you have a Russian disruption. So you have a lot of impacts, I would say, which are pushing up the product price. I'm not -- I don't think it will -- because if Strait of Hormuz remains on and off, as I read that some authorities said maybe it's a new normal. If it is the case, then we'll not be in the $50 per barrel environment. We'll be elsewhere because there's no real cycle with an on and off Strait of Hormuz production. Of course, we will need to -- we are building and we are willing to -- we are discussing today to invest in some of the pipelines projects, which will allow to circumvent the Strait of Hormuz, but it will take a few years. So the balance on refining, I don't take it for granted for our planning by 2030. So we'll come back to your question more precisely. But for me, in fact, what we have worked since we met last year in September '25, we have confirmed, in fact, and it's more -- and we will come back to tell you fundamentally, all our targets are -- we can confirm even strongly. And so yes, the increase of free cash generation that we announced, which was more than $10 billion, an increase of $10 billion, more than $10 billion will be confirmed, and I'm very -- so far -- this is one of the first messages in September will be the confirmation of that. The second one will be to give you more color on beyond 2030 because, in fact, we are working now beyond 2030. So the company has 2 objectives to deliver all the 2030 additional free cash, and we will do it. I can tell you because -- and we demonstrate why we are super confident and you have some of the projects you mentioned and then working as well to continue the story because the story of TotalEnergies' growth does not stop in 2030.

The next question is Nash Cui, Barclays.

Two, please. The first one is on the Middle East. Patrick, we watch some of your recent interviews with French media. I think you talked a lot about the importance of building more export pipelines in the UAE as well as other countries. I wonder if you could elaborate your thinking around the Middle East situation and Total's longer-term strategy in that area, please? And then the second question is on power, power segment. You have built a successful power business and you achieved one of the best quarters, as you mentioned earlier. Strategically, I wonder what's your next ambition for this business? Patrick Pouyanné : Okay. On the Middle East, it's quite obvious to me. We are very well positioned in Abu Dhabi, for example. And we just announced 2 very big projects, by the way, despite maybe despite this war, we have been quite active in Abu Dhabi to reinforce the whole partnership and position of TotalEnergies together with ADNOC or XRG or Masdar. We have announced a JV with Masdar in all these renewable business in Asia. We have announced the Bab Gas Cap concession, which was an old dream for many people in the company to have access to the Bab Gas Cap. So it's done with our partner. By the way, it's interesting to know that when in 2015, we signed the Bab concession onshore, some people were skeptical. 10 years after, we delivered the additional value. And it's because we were in the place together with our partners that we managed to go along with ADNOC. And thank you, by the way, to the trust that the Emirati authorities have given into the existing consortium. And we have also announced the Umm Shaif Gas Cap. We have FID, I would say, yesterday, this week. In fact, we have FID together with ADNOC and we have a 20% share of the Umm Shaif Gas Cap, which is also, by the way, not only gas, it's also liquids. And all the gas cap, by the way, are gas projects, of course, but there are also quite good condensate projects. So it's liquid. Then when you need liquids, you need to have outlets. And so it's clear to me and Abu Dhabi has been very active. ADNOC has been very active, very reacting and we need to double the pipeline to Fujairah in not only to accommodate future growth, but also to connect the offshore production. I think the ADNOC is offering to partners to look at the projects, and we definitely will -- we are looking to that very seriously. So that's one part. The other part of interest for us is Iraq because we have some production in Iraq. Iraq today, we have only one way to export, Hormuz, not a one way, I'm exaggerating, but fundamentally, it's Basra, so it's in the Gulf. So being able to contribute and to see -- there are some projects which are being announced and being studied from Iraq to Syria and TotalEnergies is keen to join the projects if possible or to develop some. So I think -- it's obvious to me that we cannot -- if we want tomorrow to come back to you and to say we want to continue to invest because it's cheap oil, which is true. And there is a lot of oil, we need to diversify our exit route. Otherwise, we will not do a proper business case. So that's why we are unclear. And I think, by the way, all the -- for the countries themselves. So I think it's -- and even I think if the conflicts were coming to an end quickly, we must absolutely keep that in mind and pursue the efforts to have alternative routes for this oil. Integrated power, but the next ambition is to reach the 2030 target. It's not yet done. Today, this year, we will reach 60 terawatt hour. We will reach 100 -- more than 100 terawatt hour. I think the 100 terawatt hour is probably the low assumption for production by 2030. More importantly, we want to generate a net cash flow from this business. I would say next year, it will be net cash flow positive. This year, it might be, but I would like to do it in a normal CapEx environment. And we want to join not only more than 0, but I would say in our famous free cash flow, more than $10 billion free cash flow target by 2030. There was $2 billion coming from integrated power. So the target is to deliver this $2 billion. And then beyond 2030, there are different options. But of course, we might see -- continue to grow the business. The question is at which pace, in fact, and that will depend as well to opportunities. But I think on this topic, the Board is very keen to really see the capacity of the company to deliver on our targets rather than planning being ambitions. And then it's not a matter, I would say, of growth. It's a matter of value as well for the Board. And I think for all our investors, you have been supportive, not always, but today more supportive than before, by the way, to us to invest. I think we are right because one of the lessons of the crisis, as you can observe in many countries, the new world is electrification. It's not green, by the way, it's electricity, electrification, domestic resource. So we are -- and it's also supported, of course, by all the data centers and AI growth. And we are right to be and to continue to invest into this energy, which is a good complement to what we do, in particular on oil and gas, electricity and the gas to power connection is obvious. So that's the ambition to continue to develop it. In some geographies, just to -- again, to frame completely, where we can develop the integrated model, where gas, renewables, customers, trading is possible. That means some few major European countries, the U.S., that will be the core, I would say, of our investments. If you add Brazil and India, I think you have the description. So we are, in fact, today, the next ambition to be stronger in some markets where we can deliver the integration and the profitability.

The next question is from Kim Fustier, HSBC.

I wanted to go back to the Middle East. The production impact came in below your original guidance, thanks to the surprisingly fast ramp-ups in the UAE in June and maybe in Iraq as well. Now with tensions rising again in the past couple of weeks, could that progress reverse? So in other words, if the situation doesn't change from here, how soon could we see production shut-ins once again across the UAE and Iraq? And then just staying with Iraq for a bit, just on the GGIP project. I think that Ratawi Phase 1 was supposed to be starting up sometime this year. Could you give us an update on this project? And obviously, does the renewed regional escalation pose any risks to the timing of the oil ramp-up, but also the other parts of that project, including the associated gas and the seawater project? Patrick Pouyanné : Okay. Thank you. So I mentioned that I gave you some information in my opening comments to tell you that I would say, beginning of July, the production, I would say, was in July until July 8, in fact, until the blockade came back, the production was going up and the impact on our production was even around 5% only. That means the global production from the Middle East, if you consider that our base was around 650,000 barrels per day was by that time 550,000 barrels per day because there was an increase in many assets, in particular, of course, in the, I would say, Abu Dhabi assets were almost back to normal production, which demonstrate, by the way, that I remember the questions that I had during the month before the MoU. Is it quick to go back to the normal level? Yes, it's very quick. It's -- the wells in the Middle East are very easy to reopen and to produce. So Abu Dhabi was back. I would say even Qatar was not fully back, in fact, on the LNG side because there was a sort of ramping up cautiousness on this one. And Iraq, even Ratawi was back to, I would say, half of the production. So Iraqi part was a little more, I would say. But -- so we were minimizing and we are ramping up quickly to come back to a normal level. Since July 8, in fact, because of the situation, when I was looking the situation beginning of this week. Again, the impact is more around the 8% to 9%, I mentioned during my opening speech because, of course, we cannot maintain such production if we cannot offtake. It's not a matter of, it's a matter of offtake. And because, again, when you produce at maximum, your tanks are full and then your system. It's all the logistics, which are constraining the production. So I would say that's, of course. And again, by the way, of course, the LNG plant of Qatargas 2 in Qatar, which was ramping up has been shut down again. So you have some impact. And today, as I told you, that's why to guess today, I would say, to be clear, the guidance I will give you, if we were like in -- we were in the second quarter, we could imagine the production could be with an impact of 10%, but the offtake could be unfortunately higher. And back to our initial guidance when we gave you 15%, it was, in fact, in terms of physical offtake, it has been 15% during the second quarter, third quarter could be the same. But again, the lesson is -- the good news is that if the Strait of Hormuz is open back again, then we'll be able to ramp up quickly. And then, of course, it is a condition to bring tankers and to offtake the production. So all that is going together. That's what we face today. And we had some -- during the few weeks of opening, we managed to get all our tankers out. We managed to have some tankers in and out, by the way, in order to load. I think we managed to load 3 tankers during that period. But again, now we are back to nil because it's not possible. So let's observe. The second question. Ratawi, I think there are different story. There the first phase that we are planning to start up, we were expecting the first half. Of course, we are delaying because there has been some impact. By the way, Ratawi cannot produce fully today, and it has been some impact because some equipment, et cetera, so forth. But -- so today, we are, I would say, targeting end of third quarter. So September will be possible, honestly, we don't have some events under control. And then the other projects are progressing. All the projects have been launched and all the contracts have been awarded. We have people on the ground for the seawater project, for the associated gas project, for the second phase of Ratawi. By the way, we are working as well, and we have good news in terms of productivity of the wells, which we think will be good that we have than the first phase one day. But all that is just being impacted, I would say, in terms of execution because a lot of equipment. In fact, one of the -- because -- first of all everybody spoke about the crude oil transit and products refined product transit, but there are also impact on the equipment either one way or the other way. And we have transported a lot of equipment by road, but for the larger ones, it's not easy to do, and so even it's still not possible. So that's the situation. So we are dedicated to the projects with some impact. And today, it's difficult to give you in terms of -- of course, I could just tell you it's postponed by 3 months, what I just said. Maybe we need to reassess the situation where we'll be back to a normal situation in the Gulf region.

The next question is from Henri Patricot, UBS. Mr. Patricot, we cannot hear you. Maybe line is on mute -- The next question is from Jason Gabelman, TD Cowen.

I wanted to ask the first one on the potential for windfall taxes. And given the recent backup in commodity prices, I'm wondering, Patrick, if your conversations with governments indicate any appetite to reinstitute windfall taxes? Patrick Pouyanné : Honestly, until now, in fact, most of the governments have taken some measures in -- between 2010 and 2015, which are still there in many of our countries. We had one impact, limited, an impact in Brazil, where we have stated an export tax for 4 months, and they are today -- rumors that they could extend it, which has been declared as not constitutional, but it seems to be -- there is a legal fight around the export tax in Brazil. The U.K. scheme has been increased recently, so they cannot take more. Norwegian is okay. And honestly, in most of our PSCs, the reality is that there are some mechanism, which you can observe when you look to the average tax rate of TotalEnergies between an environment at $60 or $50 where we are more or less an average of 40% and an environment at $90 or $80, we are more around 45%, 50%. There are some mechanism within the PSC. In fact, when the price is going up, the governments are taking a bigger stake. And in fact, it's normal because, in fact, the way we negotiate ourselves, we try to protect the low cycle by giving up a little more on the high cycle. That's a balance that we try to institute to propose to the government. So this mechanism exists. And so we didn't face this type of conversation, to be honest, since the beginning of the crisis. So we are not there, and that's what I can tell you. So except Brazil, I don't have today in my head any other situation where we have some in discussion. But again, because the mechanism exists already in many of our PSC.

Great. And my follow-up is I wanted to go back to the Yamal project for a minute and just understand because you have kind of the interest in the liquefaction facility and then you're separately lifting volumes as well. And I'm trying to understand kind of what the cash flow split is between those 2 parts of the business. And also if you've been able to actually get cash distributions out of the Yamal facility itself over the past few years? Patrick Pouyanné : In fact, you are perfectly true. There are 2 different activities. One is the Russian activity, Russian and Russia, I would say the Yamal liquefaction plant, where we are a shareholder for 20%. The cash flows -- some cash flows has been distributed. It's not an easy way to -- because then we respect sanctions. So the question is it distributed in Russia and when does it flow to Europe because, again, the sanctions in Europe have limited the number of capacity to transfer from Russia to Europe. Some cash has come back to TotalEnergies, not the full of that. So this part is not -- I can tell you, it's not -- in fact, in the way we plan, we don't consider that. We just are cautious. It's not coming on a regular basis. So in fact, it's some time to time, we have some opening, but that's not a regular basis. And not -- so some cash is somewhere, I would say, in Russia, we expect -- it's waiting for us. Then we have the other part, which is the lifting -- European lifting. Yes, this one's out of Russia. It's a business where it's our U.K. and Swiss entity or U.K. entity, I think, which is dealing with Russia -- with Russian contracts on which the cash is out. So this one, of course, we have directly access to the cash. The magnitude of this business is around, I would say, an average of $400 million. But again, it's going up and down according to -- depending on the different because it's -- the contracts are linked to the Brent. So it depends on the assumptions that you will take on the Brent, let's say, $300 million, $400 million a year. That's the potential site. So it's a contract as part of the portfolio. It's not a major situation for TotalEnergies.

The next question is from Henri Patricot, UBS.

Just one question. Coming back to capital allocation. Last quarter, you mentioned that we're evaluating options to accelerate short-cycle investments in upstream. Where are you on these options? I mean it sounds like earlier that you might see CapEx unchanged. So are they just not being considered anymore? Patrick Pouyanné : No, no, we have, of course, different subsidiaries have worked on it. There have been some proposal. We have approved some few, I think, $200 million, $300 million this year. So the guidance of $15 billion, maybe it could be at the end, $15.2 billion, but I consider it's part of the global guidance. It's not -- that's not a real impact. And yes, this might have for next year, there is a little more because, of course, these type of actions are not only for immediate actions. I would say probably $500 million of capital allocation acceleration, which could come next year. But again, it does not -- it will not be -- the global guidance we gave you last year, which was, I think, around $15 billion to $17 billion per year of CapEx, then we said $14 billion, $16 billion will stay around in the $15 billion, $16 billion, I would say, range. So yes, we have taken some actions and that will impact a little more '27 than '26.

The next question is from Bertrand Hodee, Kepler Cheuvreux.

I wanted to come back and to try to quantify the underperformance of the LNG trading in Q2. Integrated LNG net income was down $500 million Q-on-Q, while at the same time, contribution from equity affiliates, which is my understanding, mainly liquefaction was up $300 million. That puts a Q-on-Q discrepancy at group level for integrated LNG, excluding affiliate at around $800 million. This is what we should understand as a swing in the trading performance? Patrick Pouyanné : You are very good, Bertrand. We can add nothing to you. We are very transparent. In fact, we mentioned to you that there was an overperformance last quarter of around $500 million, and your $800 million. So you have an underperformance reversed not only from $500 million to less than $300 million compared to a normal situation. So you merit a certain distinction.

And the second question, probably on the -- on your comment that those long positions that did not work out in Q2 was now being in positive territory. Is that a hint that we could be headed for an overperformance LNG trading in Q2 -- in Q3 by the same magnitude? Patrick Pouyanné : Exactly. But maybe we are only in July -- so maybe it could be larger. I don't know, okay, to be clear. Yes, it could be in the same magnitude, be clear. Because the markets, when they are volatile, they are volatile. When you take $5 per MMBtu in 20 or 30 days, 20 days, I can tell you, these types of positions are making. But then the question will be not only the results are not finished on July 22, but on September 30. So we'll come back, but it's possible, yes, but we might come back to you with the good news of the same magnitude.

I hope so. Patrick Pouyanné : Thank you for your support.

The next question is from Fergus Neve, Rothschild & Co Redburn.

Just on the LNG growth pipeline, it was positive to see the ECA LNG project start up earlier this month. Could you provide a quick update of where the FID for Papua LNG stands today? And also how the Mozambique project is progressing. And then secondly, just on the refining environment, I was wondering if you could comment at all on how your margin has looked so far in July? Patrick Pouyanné : In July, it looks very well. I can tell you, the average margin on the last 30 days were at $31 per barrel for July. So it looked very well. And I think July is probably around $35 per barrel. And it's reached a historic record for me, which were more than $40, $44. I've seen one day -- so today, it's a little backtracking because again, the crude oil is going up. In fact, I have one observation to make you since the last -- since the Strait of Hormuz was again blocked since July 9. When you make the sum of crude oil and refining margin, we are almost at $130 day after day. I mean, I don't know if there is a trick, but probably. So that's what I mentioned that in my opening comments. So the second one. The first one, on Papua LNG, we are working all together very closely with ExxonMobil with Santos, with the government, of course. The government has just launched the last part of the procedures, the local hearings. The objective is clearly to sanction all that before year-end, November, I think, is the target. But we are aligning the interest of all the partner in the interest of the projects, and we are studying how we can maximize synergies today between Papua, PNG LNG in order to deliver the most efficient project to the government. But again, in close cooperation with the government. So I'm happy to see that the different stakeholders are all the same objective today. And okay, we need to put together some few. It's not an easy one, but I'm optimistic we could reach this sanction, and we are all working for that, and we are very aligned on that. On Mozambique LNG project, okay, it has restarted, as you know, since January. And today, we are in fact, increasing the mobilization of people in the ground. I think we are at 7,000 or 8,000 people. So we are -- project is progressing, let's be clear. We are facing some few difficulties because some of the equipments were, in fact, being built in Dubai and the different yards in the Middle East. So we had to face some tough times to exit all the equipment. I think it's done now. So it has some -- but the progress we are progressing on -- and in fact, today, when we compare to the progress, we are almost 45% of completion. But we have still a lot of things to build on the, I would say, there in Afungi and offshore. So that's on its way with the target being '29 for the first train, and we work on it.

The next question is from Jean-Luc Romain, CIC CIB.

It relates to refining and plan to introduce more green hydrogen in your system. Where are you with this? And are there regulations in Europe, which are not going fast enough to -- for you to progress on that? Patrick Pouyanné : Yes, the French one. No, but we are working on it. Where are we? In fact, we have done the -- no, we have nice offers. We could, as you know, the good news of the quarter is that the German parliament has adopted its own regulation. So today, we are very clear on the German part and positively part. So Leuna will be able to maximize the use of green hydrogen. So that's a good news. There was a bad news on the Netherlands part, which has been adopted, but not in the maximum part. So I think the Zeeland Refinery will be able to take 30% more or less of what we are planning to take to offtake. If there is no fiscal support, we cannot do that. And then we are working today with the last 2 governments, which is a Belgian one, where the draft are not so positive. And the French ones where the drafts are positive, but the problem in the French system is that you need to go to the parliament and to make fiscal reforms in the French parliament is not an easy task for the government. But we are working on it. And I think we'll have -- we'd like to have the definitive scheme and not an interim one, to be honest, because, of course, if we commit for long-term contracts of 10, 15 years, we need to have a scheme which will give us some, I would say, a certain level of comfort. But we have some -- it's a very technical matter. To be honest, it's one of the most complex topic I know because to explain to a political leader, the RED III and what it is to make green hydrogen in Europe, getting some support. It's -- this one is tough, to be honest. But we get some -- we have some momentum. So we are working on that. And not only ourselves, by the way, in France, of course, we are working hand in hand with Air Liquide, which is also interested to get these regulations. So progressing, but still, again, for us to commit on long-term contracts, we need to have all these regulation being enacted. It's a beauty of Europe. You think you've done the work because there is a directive in Brussels and then you take 4 years to implement it in each country. And then, by the way, where I'm afraid that I just discovered that there is a new directive, which could again come back to the definition of green hydrogen, the RED IV based on consultation. So to be honest, when you read that, you begin to be afraid because it's probably is coming from regulation. So it could be difficult, okay?

And the last question is from Ben Salem, ODDO BHF.

In the light of the recent escalation in the Middle East, has your view on geopolitical risk changed? Which region do you see as offering the most attractive risk-adjusted investment opportunities of the coming years? And how might this influence your future capital allocation priorities? I know it's maybe for the CMD, but I think it's important. Patrick Pouyanné : Yes. Thank you, Ahmed. But we continue to consider the Middle East as an investable region. There is no doubt about it. It's a question, of course. And at the end of the day, it's a question of risk and reward. Maybe the reward will be to have a little higher. But when I saw my U.S. competitors rushing to Iraq during the last weekend, if I noticed the number of MoUs signed to develop thousands -- hundreds of thousands of barrels I don't know why the U.S. companies suddenly would like to see lower geopolitical risk and we ourselves, which have more, I would say, DNA in the region would consider it as a higher one. So we think it's a question of risk and reward. It's always policy. Again, it's back also to my comments about having alternative routes to export the oil to go to the market. But having said that, it's clear as well that the policy and the strategy of TotalEnergies has been to diversify the portfolio, and that reinforced my strong belief diversification is of essence in this business. We have done it well in Brazil, in Africa, in new countries in Africa. Of course, the U.S. are also attractive to us, but we are building quite a big position in the U.S. in terms of capital allocation through LNG and through integrated power. So we are fine. And so I understand the question. But at the end, when you make oil and gas, you go where you find it. And if we discover oil and gas in Suriname and in Namibia, we are happy. And that's true that there are -- we don't find oil and gas in Europe to answer to your questions. And by the way, we don't have the right to look for it. So that's where we are. So -- but for me, the answer to your question is fundamentally to maintain our strategy of diversification. And this is what we will present you in September. I think the events that we have faced in the last 4 months have demonstrated that this is the right one, and we have been able, as I answered, to supply feedstock to pickers or to -- not to claim any force majeure for LNG customers, contrary to some competitors because we have diversification -- diversified source of supply of LNG and from this perspective, building a position in Mozambique. But look to the countries we are developing in the last 3 years, Suriname, Malaysia, Namibia. So we are continuing to diversify our stakes because that's the reality of our business. And it's not only in 2026 that we discovered that. It has been the case for companies 1 or 2 years old, and I think it has been the case for long. So that's what I would answer to your question.

Gentlemen, that was the last question. I turn the conference back to you for any closing remarks. Patrick Pouyanné : Yes. Thank you for your attendance today and for your support. I remind all of you that we have a Capital Market Day in New York City on the 28th of September. I think it is a Monday, if I remember right. So Monday, 28th of September, be all ready to attend the TotalEnergies Capital Market Day. With more news to come because we continue to work during summertime. So thank you for your attendance and happy holidays to all of you.