Michele Della Vigna

Michele Vigna inquired about the bridge between Eni's current CapEx and the EUR 6-7 billion guidance, and the company's FID priorities for 2026 given its strong project pipeline.

Answer

CEO Claudio Descalzi explained that CapEx reduction from EUR 8.5 billion to EUR 7 billion is due to optimization and efficiency, not growth cuts, leveraging exploration near existing facilities. COO Guido Brusco highlighted low unit development costs and longer plateaus for new projects. Key FID priorities for 2026 include Argentina, Ivory Coast, Cyprus, and other African geographies.

Michele Della Vigna inquired about the bridge between the 2025 CapEx of EUR 8.5 billion and the 2026 guidance of EUR 7 billion, and asked about Eni's priorities for Final Investment Decisions (FIDs) in 2026 given its strong project pipeline.

Answer

Claudio Descalzi (CEO, Eni) and Guido Brusco (Chief Operating Officer of Global Natural Resources and General Manager, Eni) attributed CapEx reduction to increased efficiency, focusing on exploration near existing facilities, and developing projects with low unit development costs and longer plateaus. They identified Argentina, Ivory Coast, Cyprus, and other African geographies as key FID priorities for 2026.

Michele Della Vigna of Goldman Sachs inquired about the expected production timeline for the Cyprus gas development and its potential to revive LNG exports from Egypt. He also asked if the Indonesia-Malaysia asset combination would involve a cash component.

Answer

Executive Guido Brusco stated that a Final Investment Decision (FID) for Cyprus is targeted within the year, with production potentially starting between Q4 2027 and Q1 2028. He noted other factors are also needed for Egypt to resume net exports. Regarding the Asia-Pacific deal, Executive Francesco Gattei explained that such combinations typically create a new financial plan that can leverage assets to generate upfront dividends and cash.

Michele Della Vigna asked for guidance on Eni's volatile tax rate and inquired about the potential to develop its Cyprus gas discoveries to supply Egypt, which is currently facing a gas shortage.

Answer

CFO Francesco Gattei explained that tax rate volatility is due to the seasonal business mix, guiding to a full-year rate of around 50%, which he sees as a top-end for the coming years. Executive Guido Brusco acknowledged Egypt's gas needs and the potential to use it as a hub for Cypriot gas, but cautioned that this is a 'long journey' requiring complex alignment between multiple government and private stakeholders.

Michele Della Vigna from Goldman Sachs inquired about the market appetite for long-term LNG contracts for Eni's new projects and the current pricing slopes. He also suggested that Eni could consider including proceeds from high-margin asset sales in its shareholder return framework.

Answer

Executive Francesco Gattei responded that Eni's distribution policy is linked to operational cash flow rather than one-off portfolio moves, which are for strategic purposes. Guido Brusco, Head of Natural Resources, confirmed strong appetite for long-term LNG contracts, especially from the Far East, driven by expectations of economic growth and coal-to-gas switching.

Michele Della Vigna (The Goldman Sachs Group, Inc.) asked about TotalEnergies' approach to new country opportunities with improved fiscal terms, such as Venezuela, Syria, and Kuwait, and inquired about the expected plateau timeline for the Tilenga project.

Answer

Patrick Pouyanné, Chairman and CEO of TotalEnergies, affirmed continued engagement in Iraq and Libya (North Galle project) and interest in Kuwait's offshore, while expressing skepticism about Syria and prioritizing Venezuela due to high costs and instability. He stated that Tilenga is expected to reach plateau by mid-2027, with the first phase starting in 2026, despite earlier mobilization delays.

Michele Della Vigna inquired about TotalEnergies' strategy regarding opportunities in countries with improving fiscal terms or opening up to international partners, such as Venezuela, Syria, Kuwait, Iraq, and Libya. He also asked for an update on the Tilenga project's startup timeline and expected plateau production for both phases.

Answer

Chairman and CEO Patrick Pouyanné expressed satisfaction with progress in Iraq and Libya, noting strong partnerships and potential for increased production from existing fields like Waha. He mentioned interest in Kuwait's announced offshore development but emphasized a focus on risk-reward. Pouyanné stated that Venezuela and Syria are not current priorities due to cost, stakes, and stability concerns. For Tilenga, he confirmed a startup by year-end 2026, with plateau production expected by mid-2027, acknowledging construction delays primarily due to contractor mobilization issues.

Michele Della Vigna inquired about TotalEnergies' ability to capture extraordinary refining margins, the progress of Port Arthur and Donges refineries, and the impact of Russian volume disruptions on the physical market and trading divisions.

Answer

Patrick Pouyanné, Chairman and CEO, confirmed TotalEnergies is capturing high refining margins, noting October margins around $75/ton, potentially higher due to Russian sanctions. He stated Port Arthur is fully back online and Donges is running, with Q4 turnarounds planned. He also mentioned TotalEnergies ceased trading Russian oil by the end of 2022.

Michele Della Vigna inquired about TotalEnergies' ability to capture current extraordinary refining margins, the progress of improvements at Port Arthur and Donges refineries, and the observed disruptions in Russian oil volumes following recent sanctions, including any impact on the physical market through trading divisions.

Answer

Patrick Pouyanné, Chairman and CEO, stated that refining margins were higher than initially guided, potentially reaching $100 per ton, driven by the real impact of Russian sanctions rerouting volumes and increasing costs. He confirmed TotalEnergies ceased trading Russian oil in late 2022 and noted that turnarounds at Port Arthur and Donges were completed or progressing, allowing the company to capture these higher margins effectively.

Michele Della Vigna of Goldman Sachs inquired about the LNG market, asking when it might become difficult to sign new long-term contracts due to potential oversupply and how U.S. tariffs are impacting the cost of new LNG plant construction.

Answer

Patrick Pouyanné, Chairman & CEO, acknowledged a coming increase in LNG supply around 2027 but noted that customers still seek long-term contracts for security. He explained that for a portfolio company like TotalEnergies, these contracts offer value beyond just the price formula. Regarding U.S. tariffs, he stated that the impact on the Rio Grande LNG project was less than 10%, which he described as 'very reasonable,' and that other areas like batteries or U.S. shale steel would be more affected.

Michele Della Vigna inquired about the potential impact of U.S. tariffs on oil and gas projects and Chinese-built LNG vessels, and also asked for a view on recent power system issues in Iberia and the structural implications for renewable energy integration.

Answer

CEO Patrick Pouyanné stated that while new projects like Rio Grande LNG Train 4 and 5 could be affected by tariffs, existing projects are secure. He expressed confidence that a solution for Chinese-built LNG vessels would be found, as they are critical for U.S. export capacity. Regarding power systems, Pouyanné used the example of a windless week in Germany to highlight the instability of grids with over 30% renewables, reinforcing TotalEnergies' strategy of integrating gas-fired power plants with renewables for grid stability.

Michele Della Vigna of Goldman Sachs asked about the demand appetite for new LNG volumes from projects like Ruwais and Marsa, and the company's comfort level with adding more spot exposure.

Answer

CEO Patrick Pouyanné confirmed strong appetite from Asian buyers for new long-term, Brent-linked LNG contracts, driven by a desire for price stability after the volatility of 2022-23. He stated the company is actively signing new deals and is comfortable with its strategy. He plans to detail how the company will manage its exposure to a potentially softer market in the late 2020s at the upcoming Investor Day, emphasizing the transformation to Brent-linked pricing.

Michele Della Vigna from Goldman Sachs asked which other projects besides P&G might be delayed due to cost inflation, specifically mentioning Mozambique. He also inquired if a U.S. primary listing could lead to inclusion in the S&P 500 index.

Answer

CEO Patrick Pouyanné clarified that for Mozambique LNG, the primary issue is security, not cost, as they have realigned with contractors. A decision to lift force majeure depends on the government. Regarding the U.S. listing, he confirmed that S&P 500 inclusion is not possible without a U.S. headquarters, which is not planned. The goal of the listing is purely to provide easier access for U.S. investors.

Michele Della Vigna from Goldman Sachs asked about the expected reduction in finance costs by 2027, given BP's focus on reducing various sources of debt.

Answer

Kate Thomson, Chief Financial Officer, explained that BP is being transparent about its total financial obligations, emphasizing the imperative to strengthen the balance sheet. She detailed the Deepwater Horizon obligation timeline and the net debt target of $14-$18 billion. The actual reduction in finance costs will depend on how excess cash is deployed, but the goal is to materially change financial obligations to drive higher free cash flow.

Michele Della Vigna from Goldman Sachs inquired about the expected reduction in BP's finance costs by 2027, considering the planned $15 billion reduction in total financial obligations.

Answer

Kate Thomson, Chief Financial Officer, explained that the actual reduction in finance costs by 2027 will depend on the specific choices made in deploying excess cash, but the goal is to materially change total financial obligations to drive higher free cash flow and support unique organic growth options. She noted the Deepwater Horizon obligation is largely settled by the end of 2032, and the net debt target of $14-$18 billion is a priority.

Michele Della Vigna from Goldman Sachs requested guidance on the expected year-end net debt level, assuming flat pricing, given the anticipated working capital reversal. He also asked a broader question about the potential impact of tariffs on BP's business beyond the Kasquita platform.

Answer

Executive Murray Auchincloss stated that tariffs have not had a material impact on the business, as Canadian imports are exempt and steel for the Lower 48 business is sourced domestically. Executive Katherine Thomson addressed net debt, expressing high confidence in the $14-18 billion target by 2027. For 2025, she highlighted a working capital reversal of around $2.5 billion and up to $3.5 billion in divestment proceeds as key drivers, with proceeds from Castrol and Lightsource specifically earmarked for balance sheet strengthening.

Michele Della Vigna of Goldman Sachs Group, Inc. asked if the larger-than-expected net interest cost and minorities in the quarter represented a new run rate or were influenced by one-offs.

Answer

CFO Katherine Thomson attributed higher net interest to increased gross debt from opportunistic issuance and the change in minorities to hybrid bond movements. CEO Murray Auchincloss added that both items would be expected to reverse over time as debt and hybrids are paid down.

Michele Della Vigna questioned Shell's perspective on a potential period of LNG oversupply, including possible U.S. plant shutdowns, and its impact on Shell's portfolio, considering both trading opportunities and spot gas exposure. He also asked about slowing LNG demand growth in China and geopolitical risks affecting U.S. LNG reliance.

Answer

CEO Wael Sawan highlighted a constructive long-term demand outlook for LNG, seeing it as a stabilizing force in energy systems, especially in Europe with record imports. He noted that China and India remain constructive on LNG at specific price points ($8-$10). Sawan emphasized Shell's privileged and diverse supply portfolio, including LNG Canada and U.S. LNG access, with multiple indexations (Brent, TTF, Henry Hub, AECO), allowing value creation from market volatility. He stated that Shell looks through cycles to create long-term shareholder value.

Michele Della Vigna inquired about the potential for LNG market oversupply, including U.S. LNG plant shutdowns, and its impact on Shell's portfolio (trading vs. spot gas exposure). He also asked about slowing LNG demand growth in China and rising geopolitical risks affecting reliance on U.S. production.

Answer

CEO Wael Sawan noted constructive long-term LNG demand, with LNG increasingly stabilizing energy systems, particularly in Europe (record imports, low storage). He observed China and India are constructive on LNG at $8-$10/MMBtu. Sawan highlighted Shell's diverse supply (LNG Canada, US LNG) and demand portfolio, with multiple indexations (Brent, TTF, Henry Hub, AECO), allowing value creation from market volatility. He expressed confidence in Shell's position regardless of short-term market length.

Michele Della Vigna asked about the scale of inorganic investment Shell needs to sustain 1% hydrocarbon production growth into the next decade, and if there are specific areas in its portfolio where it aims to deepen its scale.

Answer

Shell CEO Wael Sawan emphasized a value-driven approach to inorganic opportunities, prioritizing free cash flow per share accretion and a high bar for M&A, especially against buybacks. He noted an increase in interesting proposals but none yet meeting Shell's criteria. Sawan highlighted the need to fill a 350,000 barrels/day gap for 2035+ organically and inorganically, focusing on deepening existing interests where Shell operates and has competitive advantages. CFO Sinead Gorman added that Shell's healthy balance sheet (gearing below 19%) provides flexibility for both distributions and inorganic investments.

Michele Della Vigna asked about the scale of inorganic investment needed to sustain 1% hydrocarbon production growth into the next decade and specific areas for deepening Shell's portfolio.

Answer

Shell CEO Wael Sawan thanked for the recognition of Shell's successful E&P strategy, noting potential softness in future oil prices creates opportunities for buybacks and inorganic moves, though none have met the high bar yet. He emphasized a value-driven approach, using free cash flow per share accretion as a North Star, and highlighted the need to fill a 350,000 b/d gap for 2035+ liquids organically and inorganically. CFO Sinead Gorman added that Shell's healthy balance sheet (gearing below 19%) provides flexibility for distributions or inorganic investments, expecting net debt to rise in Q4 due to unusual payments and CapEx.

Michele Della Vigna questioned the resilience of Shell's buyback program to a temporary drop in oil prices, such as to $60 per barrel. He also requested more detail on the moving parts for the LNG business over the next two years, including contract expiries, LNG Canada's growth, and market dynamics.

Answer

CFO Sinead Gorman emphasized that buyback decisions are made quarter-by-quarter, looking through short-term volatility to long-term fundamentals, and that the company has levers like OpEx, CapEx, and divestments to ensure predictability. Regarding LNG, she described the current earnings level as a 'new representative of the norm,' reflecting a return to pre-war volatility levels and a changing portfolio mix as new volumes come online and legacy contracts roll off.

Michele Della Vigna asked about the resilience of Shell's buyback program to lower oil prices and requested more detail on the moving parts for the LNG business over the next 1-2 years.

Answer

CFO Sinead Gorman emphasized the strength of the balance sheet and the company's ability to use various levers to maintain its 40-50% CFFO distribution promise. She described the current LNG earnings level as the "new representative of the norm," reflecting a return to pre-war volatility levels and a changing portfolio mix as legacy contracts roll off.

Michele Della Vigna of Goldman Sachs Group, Inc. inquired about the path to profitability for the loss-making Renewable and Energy Solutions business, asking whether it requires portfolio changes, better trading integration, or different market conditions.

Answer

Executive Sinead Gorman explained that the path to profitability involves a multi-faceted approach. While underlying development assets will be loss-making in the near term, the portfolio is being actively high-graded. The overall strategy is shifting to be more trading-led, leveraging flexible assets like batteries and gas plants to capture value, though recent results were impacted by lower market volatility.

Michele Della Vigna from Goldman Sachs asked what factors would lead Shell to increase its share buyback rate above the current $3.5 billion per quarter. He also inquired about the next steps for the Namibia exploration project and the requirements for a final investment decision (FID).

Answer

CFO Sinead Gorman emphasized the importance of consistency and predictability in shareholder returns, stating that any change to the buyback rate would be clearly communicated based on fundamentals. CEO Wael Sawan explained that for Namibia, while volumes are present, the focus is on evaluating the complex subsurface to ensure commercial producibility and returns that meet their investment hurdles before committing capital.

Michele Della Vigna asked if Equinor sees opportunities in other power market areas for capital redeployment, given the current capital efficiency focus and low returns in offshore wind.

Answer

CFO Torgrim Reitan affirmed that Equinor believes there is value in the power segment, having recently established a new 'Power' business area. He stated Equinor would seek opportunities that build on its existing portfolio and customer base, particularly its gas positions in Europe and the U.S. However, he stressed that Equinor has no intention of significantly stepping up investments in this area, maintaining strict capital discipline and requiring significant profitability and returns for any new commitments.

Michele Della Vigna from The Goldman Sachs Group, Inc. referred to Equinor's capital efficiency on offshore wind and asked if there are other areas within the power markets where Equinor sees opportunities to redeploy capital, given the global acceleration in power demand.

Answer

Torgrim Reitan, CFO, affirmed belief in value within the power segment, noting the establishment of a new 'Power' business area. He stated Equinor would seek opportunities building on its existing portfolio and customer base in Europe and the U.S., but emphasized no intention to significantly step up investments, prioritizing capital discipline and significant profitability for any new commitments.

Michele Della Vigna asked where Equinor sees the most attractive returns in carbon capture (U.S. vs. Europe) and, drawing a parallel to the Lundin deal, if there are plans to farm into Orsted's assets.

Answer

Executive Torgrim Reitan highlighted that CCS is progressing well with attractive returns seen in both the U.S. and Europe, noting plans for a 'CO2 highway' pipeline to the Norwegian continental shelf. Regarding Orsted, he reiterated that the current plan is limited to holding the ~10% stake with no further actions contemplated.

Michele Della Vigna of Goldman Sachs asked for an update on the Johan Sverdrup field, specifically when production is expected to begin its decline. He also inquired about any disruptions in the offshore wind supply chain, particularly regarding vessel availability.

Answer

Executive Torgrim Reitan stated that Johan Sverdrup is expected to come off its increased plateau level of 755,000 boe/d towards the end of this year or next year, with drilling and water management progressing as planned. Regarding the supply chain, he acknowledged general issues within the offshore wind industry but affirmed that Equinor's own ongoing projects are well-managed and not facing critical disruptions.

Michele Della Vigna from Goldman Sachs asked for more detail on the metrics Equinor uses to ensure a competitive cash return to shareholders and inquired if the company was involved in the public sale process for assets in Namibia.

Answer

EVP & CFO Torgrim Reitan emphasized that while Equinor does not use a specific formula, it is committed to a competitive total capital distribution. He described the cash dividend as 'bankable' and intended for growth, with share buybacks used as a flexible tool to remain competitive with peers. Regarding Namibia, he declined to comment on specifics but reiterated the company's strategy of focusing its international E&P portfolio, with a priority on deepening its presence in existing areas.

Michele Della Vigna from Goldman Sachs asked for more detail on the metrics used to ensure a 'competitive' cash return to shareholders, noting peers often use an operating cash flow payout. He also asked if Equinor was involved in the public process for Galp's assets in Namibia.

Answer

EVP & CFO Torgrim Reitan emphasized a commitment to a growing cash dividend as a 'bankable' component of returns, with share buybacks used as a flexible tool to remain competitive against peer metrics without a fixed formula. He declined to comment on specific M&A processes like Namibia but reiterated the strategy of focusing the upstream portfolio in core areas.

Michele Della Vigna asked about the potential financial materiality of OMV's circular economy and recycling business, requesting possible EBITDA contributions for 2025 and 2030. He also inquired about OMV's feedstock strategy for renewable diesel and SAF, noting the trend of vertical integration among competitors.

Answer

CEO Alfred Stern detailed the 1.4 million ton circular chemicals target for 2030, comprising mechanical, chemical, and bio-based recycling. While not providing specific EBITDA targets, he stated that these investments are expected to yield double-digit IRRs. For feedstock, he explained OMV's strategy involves a mix of long-term offtake contracts, JVs, and acquisitions, confirming over 80% of feedstock for the new Petrobrazi plant is already secured.

Michele Della Vigna from Goldman Sachs asked about the long-term financial materiality of OMV's circular economy and recycling business, seeking potential EBITDA contributions for 2025 and 2030. He also inquired about OMV's strategy for securing feedstock for its renewable diesel and SAF production, noting competitors' moves toward vertical integration.

Answer

CEO Alfred Stern outlined the goal of 1.4 million tons of circular chemicals by 2030 from mechanical, chemical (ReOil), and bio-based recycling. While not providing specific EBITDA targets, he stated these projects are expected to deliver double-digit IRRs, in line with classic investments. For feedstock, he described a multi-pronged strategy including long-term offtake contracts, JVs, and acquisitions like the Respira Verde stake, confirming over 80% of feedstock for the Petrobrazi plant is already secured.