Matt Lofting

Matt Lofting asked for the outlook on Shell's trading and optimization businesses for Q3 and beyond, and inquired about the key drivers behind the sustained outperformance in the Upstream business.

Answer

CEO Wael Sawan attributed Upstream's success to a focus on "brilliant basics," operational reliability, and cost discipline. CFO Sinead Gorman detailed the trading environment, describing LNG trading as being at a "new norm" with lower volatility, while the crude trading business took a prudent, risk-off approach due to a disconnect between market volatility and fundamentals.

Matt Lofting followed up on the refining portfolio, noting the 80-84% utilization guidance for Q4 2025 is at the lower end of the historical range, and asked if there has been any deterioration in the normalized throughput level for 2026 compared to two or three years ago.

Answer

Patrick Pouyanné, Chairman and CEO, attributed the Q4 utilization to planned turnarounds at Antwerp and Satorp, which will be compensated by better margins from other assets. He projected a normalized utilization range of 84-86% for 2026, with fewer turnarounds and enhanced margins from completed projects like Port Arthur and the new Donges unit, suggesting potential for even greater capture if refining margins remain strong.

Matt Lofting asked about TotalEnergies' refining portfolio utilization, specifically the Q4 guidance compared to historical ranges, and the expected normalized throughput for 2026.

Answer

Patrick Pouyanné, Chairman and CEO, explained that Q4 2025 refining utilization guidance (80-84%) reflects planned turnarounds at Antwerp and Satorp. For 2026, he anticipates a normalized range of 84-86% with fewer turnarounds and enhanced margins from units like Donges coming online, expecting a better year if refining margins remain strong.

Matt Lofting from JPMorgan Chase & Co. requested more color on the revised year-end gearing target, which moved from 12-13% to 14-15%, and asked for the specific sources of the cash flow miss in the Downstream segment.

Answer

Patrick Pouyanné, Chairman & CEO, attributed the downstream cash flow shortfall to several factors: poor operational performance at the Port Arthur and Donges refineries costing nearly $200 million, a crushed margin in the European biofuels (SAF) market due to oversupply from imports, and continued pressure on polymer margins from a global glut of new capacity, particularly from China and the U.S.

Matt Lofting from JPMorgan Chase & Co. asked for key milestones to de-risk the strong second-half production ramp-up. He also requested details on the main drivers of the increased cash initiatives and whether they are underlying or transitory.

Answer

Guido Brusco, COO of Global Natural Resources, highlighted the imminent start-up of a major FPSO in Angola and the second Congo FLNG by year-end as key drivers for the back-loaded production profile. CFO Francesco Gattei clarified that the cash initiatives are mainly related to working capital management and cost efficiencies, separate from cash flow from operations.

Matt Lofting of JPMorgan Chase & Co. asked for the outlook for the Marketing, Midstream & Processing (MMP) segment in the second half of the year, and whether the business can adapt if the current challenging trading environment persists.

Answer

EVP & CFO Torgrim Reitan acknowledged that the trading environment is challenging, with a risk-off sentiment on trades exposed to geopolitical events. However, he stated that value can still be captured through asset-backed physical trading and geographical arbitrage, such as selling more gas to higher-priced Eastern European markets. He indicated the business is adapting to this different type of volatility.

Matt Lofting from JPMorgan Chase & Co. asked for the outlook on the MMP (Marketing, Midstream & Processing) segment, inquiring how the trading business sees the environment for the second half of the year and if it can adapt to the current challenges.

Answer

EVP & CFO Torgrim Reitan explained that while geopolitical uncertainty makes some trades challenging, value is still being captured through asset-backed physical trading and geographical arbitrage, such as selling more gas to Eastern Europe. He noted that while traders are taking less risk on politically exposed trades, the business is adapting by focusing on these more fundamental, back-to-basics trading opportunities.