BAKU, Azerbaijan, Apr.30
By Leman Zeynalova – Trend:
Nearly 50 percent of French Total’s growth investments will be allocated to renewables and electricity in 2021, Trend reports citing the company.
Total anticipates that the increase in the oil price observed in the first quarter will have a positive impact on its average LNG selling price over the next six months, given the lag effect on pricing formulas. Given the high level of distillate inventories, European refining margins remain fragile. Faced with uncertainties in the environment, the Group maintains spending discipline with an operating cost savings target of $0.5 billion in 2021 and production costs close to $5/boe.
Net investments are expected to be between $12-13 billion in 2021, half to maintain the Group's activities and half for growth. Nearly 50 percent of these growth investments will be allocated to renewables and electricity. The Group's teams are fully committed to the four priorities of HSE including the objectives in terms of CO2 emission reductions, operational excellence, cost reduction and cash flow generation.
In a 2021 hydrocarbon price environment maintained at the level of the first quarter (Brent at $60/b, European gas at $6/Mbtu), and with European refining margins at $10-15/t, the Group would expect to generate cash flow (DACF) on the order of $24 billion and a return on capital employed of close to 10%.
The Group confirms its priorities in terms of cash flow allocation: investing in profitable projects to implement its strategy to transform the Group into a broad-energy company, supporting the dividend through economic cycles, and maintaining a solid balance sheet with a minimum long-term “A” rating, by deleveraging to anchor the net debt-to-capital ratio sustainably below 20 percent.
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