Total SA (TOT) Q4 2022 Earnings Call Transcript

Total SA (NYSE: TOT) Q4 2022 earnings call dated Feb. 08, 2023

Corporate Participants:

Patrick Pouyanne — Chairman and Chief Executive Officer

Thierry Pflimlin — President, Marketing and Services

Jean Pierre Sbraire — Chief Financial Officer

Analysts:

Oswald Clint — Bernstein — Analyst

Christyan Malek — JPMorgan — Analyst

Irene Himona — Societe Generale — Analyst

Christopher Kuplent — Bank of America — Analyst

Lydia Rainforth — Barclays — Analyst

Michele della Vigna — Goldman Sachs — Analyst

Bertrand Hodee — Kepler Cheuvreux — Analyst

Amy Wong — Credit Suisse — Analyst

Jason Gabelman — Cowen and Company — Analyst

Lucas Herrmann — Exane BNP Paribas — Analyst

Paul Cheng — Scotiabank — Analyst

Alessandro Pozzi — Mediobanca — Analyst

Henri Patricot — UBS — Analyst

Presentation:

Operator

Good morning, welcome and thank you for joining the TotalEnergies 2022 results and 2022 objectives webcast. At this time, I would like to turn the conference over to Mr. Patrick Pouyanne, TotalEnergies Chairman and Chief Executive Officer and Jean Pierre Sbraire, TotalEnergies’s Chief Financial Officer. Please go ahead, sir.

Patrick Pouyanne — Chairman and Chief Executive Officer

Good morning or good afternoon wherever you are. Welcome to TotalEnergies’s 2022 results and 2023 objectives. We are presenting from Paris in all virtual mode. Our program today, we will start with a safety moment with Thierry Pflimlin, our President, Marketing and Services and then Patrick and Jean-Pierre will drive us through the results of last year and the objectives set for 2023. And then we’ll have a Q&A session.

But for now, safety moment with Pierre.

Thierry Pflimlin — President, Marketing and Services

Good morning. I’ve chosen a safety moment to speak about the fatal accident which happened during rebranding work at service station in [Indecipherable] last year. But let’s start with the description of this sad accident.

On April 27th seen our service station in [Indecipherable], two operators from a contracted company move the mobile scaffolding between the Totem and the station Canopy in proximity to 15,000 volts overhead powerline. The third operator who was the sole victim helped them but his leg hit the security barrier at the same time and he became a conductor of the current when the electrical arcs occurred. This third operator collapsed due to electrocution. He died on the spot despite the cardiac messages performed. Kader was 26 years old. The in-depth inquiry made the following. This dramatic accident showed that the world procedure was respected before the start of the work, including pre-visit and risk analysis pointing on the nearby presence of overhead power lines and the need to move the scaffolding and in the mounted position. On the day of the accident, the specific work permit has been signed.

So, what went wrong? The investigation of the accident identified two key non-compliances, with the work statement. An inappropriate decision by the operator, to reduce the height of the scaffolding rather than dismantling it in order to go safely under the power line, and failing supervision at the moment of the accident because the person in charge of this supervision was distracted in the phone conversation.

How did we react? We immediately suspended rebranding work worldwide on the sites with presence of overhead power lines. A written experience was issued unexplained to define conditions for restarting the works with four main points. First, the obligation to always consider as a priority installation by electrical network company. So, there is a guarantee of minimum lateral safety distances with specific surveillance; second, the strict control with competent supervisors. And the last one which most probably the most important one, no scaffolding, under live power lines.

However, this fatal accident showed that we must push further the preparation in the field of our safety rules and programs and this has to be applied to our teams and to our partner companies. I’m convinced that we must pursue in this way to improve our safety culture. Thank you for your attention.

Patrick Pouyanne — Chairman and Chief Executive Officer

Thank you. Thank you, Thierry, for this safety moment. I will come back obviously on safety. But before just to introduce this presentation to this morning about our results in 2022 and the objectives for ’23, I just would like to underline, in fact, this year 2022, as demonstrated once again, consistency of the multi-energy strategy, that we are following, consistently we’ve been TotalEnergies for many years.

On oil we continue to invest in all-in order to maintain our production to capture opportunities like the one in Brazil. We are of course driven by the fundament objectives for many years to keep our breakeven under $25 per barrel towards $24 and at $1 other per barrel like it was the price of oil price last year where we had the full benefit. On LNG and gas, we embarked in a bold strategy to become a very large player. We have base away in 2022 to manage 48 million ton of LNG, which is more than 10% of the market, which was 400 million tonnes, 12% exactly. We have strong positions in Europe and this strategy is delivering, of course, this integrated strategy — is integrated of course, results exceptionally high gas price environment, which was around $200 per barrel. Integration is about also refining, we $1 per ton exceptional refining margins, but the high utilization rate 82% and the benefit is there.

And last but not least, electricity, which have demonstrated with room for price increase in these markets as well, in which we are investing for the future. Consistency, resiliency, integrations are the key of our strategy, and today to continue to demonstrate it with transparency and with profitability we want to deliver to auto investors we have announcing that you will have from this beginning of 23, clear transparency on two segments which are the pillars of our growth integrated on one-side and integrated power on the other side. I would like to underline also this introduction via — I would say, superior results that TotalEnergies is delivering. We’ll come back on it, but you will notice that we have the strongest net cash-flow per share increase among imagine majors and by far and we have the strongest return on average capital employed of more than 28% which demonstrates that we can combine profitability — strong profitability and transition to new energies.

I would also say where this year is getting us, we will come back on it, but a strong guarantee for the future by the deleveraging of the balance sheet, which allows us to express a very clear framework of return to shareholders in last September, which is a clear framework of return to shareholders [Indecipherable]. We announced 35%, 40%, we delivered 37% percent of cash payout to shareholders in 2022. Thanks to a policy which is clear and that which we Board of Directors have decided to even reinforce.

First support to the ordinary dividend through the cycle, thanks to the buybacks we execute but also to the underlying cash-flow growth, and we have announced that we will increased by more than by 7.5%. The residual — the final dividend in the next quarterly dividends in ’23. But also continuing our buyback program with $2 billion as previously quarter no decreased despite a lower environment. And finally, last but not least, room for special dividend like we’ve done in ’22, if we are super [Phonetic] I would say extra super profits like before said. So, no zigzag in our strategy consistency and that’s the key for I would say is the future results and profitability and this is what we will demonstrate today together with Jean-Pierre.

So, if I move over first on safety after a safety moment. Of course, at TotalEnergy’s we repeat this message, very often. Safety is a core value and comes first, because safety requires discipline and discipline is at the core of operational excellence. So [Indecipherable] that we insist on. I would say that on the one-hand, we can be proud of implementing for the company a safety culture, which has led to a significant decrease in the accident rate as measured and shown hear by the — what we call the Total Recordable Injury Rate and we have today managed in the last decade to become what among the best in the major, if not the best, but, there is a big but however on the other end, we’ll report we’ve deep regrets, that there were three fatalities in 2022, which I consider unacceptable and that the sign — and we see that as a sign that we must do more to strengthen our safety culture.

But to be sure, but this culture is really embedded or world in all our operations wherever they are, whatever they are. We purposely showed on the slides the details of the free facilities as well as the steps we are taking on a continuous basis to address and mitigate these represent risks [Phonetic]. We’ll talk today about those home [Phonetic] 2022 reserves. It’s a fact, but understand that we carry the knowledge of this facility like a weight on our shoulders, and therefore, we as a company and I as the leader cannot be satisfied but we were as successful last year as we should have been.

2022 is definitely a year where we have managed to get the most out of our assets in different businesses, of course, first this year was a year of LNG. I would say, which become a star and many — around the world, because suddenly because of the invasion of Ukraine and Russia and the impact on the European gas, we European market needs more gas. We are in a very strong position. The first U.S. exporter, the first Europe regas order we and we have used a lot of these regasification capacities in Europe 86% and we have increased our LNG sales by 15%, 14% [Indecipherable].

Integrated, the other success as I said, is a very strong utilization rate of our refining system. More than 80%, 82% in a market which was really quite high with things in particular to distillates. We managed to capture of AI refining margin and our downstream business, of which are record cash-flow generation. But we have also been able to consolidate these assets through some smart M&A, like the one we’ve done in Brazil at the end of ’21 where in a year-after it generated more than $700 million of cash-flow. The ’22 success is also to prepare for future in all these operations. Preparing for future, is yes of course, and you will not see in this presentation to Russia. Russia is behind us, but we have a heavy neighbor to build the future in LNG, who the successes of becoming the largest international player in Eastern Qatar projects. We also obviously underlines the success that we had in exploration, oil exploration. We will come back on it in Namibia and Suriname, so that’s also part of the future and future profits.

And last, but not least, smart M&A to consolidate on integrity. Our integrated power business. Whereas with smart M&A, because both are characterized by the fact that it’s direct negotiations to obtain in attractive conditions strong position in the U.S. on the one-side we have Clearway Energy, and in Brazil, Casa Dos Vontos. All the success is about growing our production, growing of energies, is also we keep in mind, but we have at the same time to lower our emissions and you will see the results knowing that will come back end of March. We’ve also Climate Report deeply in details of all, I would say, net 0 ambition.

So, at the end this is a slide we introduced in September, but which is from me the reserves and give me again, the strong comfort for the future is that, yes, we had a record cash generation. But what is important to me is that when you compare the 2022 cash generation to 20 — 10 years ago 2012 with even a higher oil price we have all more — we have increased our cash generation by more than 50%. Thanks to the strong decrease of the breakeven and the challenge now is to maintain this breakeven and the $25 per barrel by the selection of assets by the action on costs, despite some inflationary environment and we’ll manage it and of course, thanks to these cash flows we allocate quite a lot like [Indecipherable] to deleverage the company and that’s the best guarantee for the future.

I will then give the floor to Jean Pierre to describe in detail these ’22 results.

Jean Pierre Sbraire — Chief Financial Officer

Thank you, Patrick. So I will concentrate my comments on 2022. The year when we established new quotes, thanks to perfect match between on one-side our well-positioned assets and with no surprise will talk about gas [Indecipherable] and on the other side very favorable markets which sets new records in 2022. The 2022 environment provided favorable tailwinds for all our activities. Normally, there is a mixed of positive and negative, it was not obviously the case in 2022, and so we were able to fully leverage the strength of our global integrated portfolio. Patrick will cover the macro environment [Phonetic] so I will now come back on the rationale.

Our oil price sensitivities is sometimes underestimated, but clearly in 2022 we benefited strongly for the rise in oil prices, thanks to our low breakeven low cost portfolio, which allowed us to capture this price increase. Please note, as Patrick already mentioned that in 2022, we had a strongest increased of net cash-flow per shares among major [Phonetic] and I will show you the data later on. Refining margins are linked to oil, but we saw in 2022, massive supply disruption, particularly affecting middle distillates, quality [Phonetic] to sanction in Russia and more recently to the European on both crude and oil products. For gas and LNG, it is a similar story. The Russia-Ukraine war drove gas and LNG prices to never before seen levels. As Europe scrambled to cut predictable from Russia and buy gas by importing, additional 50 million tons of LNG last year. This represents more than 10% of the markets.

So clearly across all our business in 2022 markets were favorable. Here you see the list of key metrics, demonstrating that for 2022 we talk the talk, we walk the walk. The slight miss on production, mainly due to security issues in Niger, Delta, some delays in project and the price effect on RPC’s. Better-than-expected performance for refining, you see, 82% which is a different rate in 2022. LNG sales before medium-term targets — 4 million ton, those targets because of intense LNG spot business in Europe and we maximize the value of our regas capacities and of course in the oil as well. While at the same time meeting our scope, one plus two emissions reductions despite our utilization of CCGTs in Europe.

And as announced in July investment came in above ’22 objective at $16.3 billion. This reflects increased short-cycle activity to benefit from the strong price environment, higher net acquisitions, mainly for Brazil [Phonetic] and renewable in the U.S., but no meaningful impact from inflation. And I think a great bottom line for shareholders, a plus $1 billion, [Indecipherable] growth the key element, as you know, to [Indecipherable] dividend growth and $47 billion of debt, as you see as cash flow in 2022.

So let’s move to iGRP results. So iGRP adjusted net operating income was $12 billion in 2022 almost double compare to 2021. Thanks again to fully-integrated LNG, which positioned us to maximize the capture the high-price environment, but also thanks to strong growth in integrated power generation. Cash-flow globally at the level of iGRP was $11 billion, up 76% year-on-year. You have your very important message on the slides. To provide a better understanding of the growth strategies of LNG on one-side and electricity renewables on the other side, the goal is decided to split iGRP into two new segments, from the first-quarter ’23. That means that from the date we will report separately integrated LNG and integrated, power. So integrated LNG is comprised of our LNG assets Gas and Energy Trading, plus biofuels, bio-gas and hydrogen. And integrated power is comprised of renewal and flexible power generation, power trading, plus power and gas marketing.

We provide you here with some metrics for these two segments ’22 versus ’21. For iLNG sales were up 15% to 48 million ton in 2022, thanks to our number-one position in European regas which allowed increased spot purchases and sales in the context of record LNG demand in Europe. Cash-flow increased to $10 billion nearly 80% and adjusted net operating income was $11 million, doubling the contribution compared to ’21. I-Power generated $1 billion of cash flow and earnings over 2022, projected share 33 terawatts hour, at 57%, thanks to IoT recession rate or CCGTs in Europe and the 53% increase in power generation from renewables.

At year-end 2022, we had 17 gigawatts of renewable capacity installed. A lot of you have been asking for these splits, to better understand our two fastest-growing activity LNG and integrated power. We’re happy to do it from 2023. In nearly every way 2022 was a record-setting year for TotalEnergies. Benefiting from the favorable environment, the increase LNG sales plus 15% and thanks to our unique position in Europe, TotalEnergies generated very positive adjusted income at $36.2 billion in 2022. Including nearly $15 billion of impairment related to our Russian upstream assets our reported IFRS net income was $20.5 billion in 2022. Return-on-equity was 32% and return-on-capital employed, 28% in 2022. This demonstrating again the quality of our portfolio. And the capacity of TotalEnergies to benefit from price increase.

Along with recorded earnings TotalEnergies generated $46 billion of cash-flow in 2022, all-time high shown on the left side of the slide, split by segments. All segments made stronger cash-flow contribution in 2022. $26 billion from E&P up 39% on higher oil and gas prices. And despite the U.K. windfall tax profit which would present in which has represented in 2022, $1 billion. $10 billion from LNG, a record high. That we covered on the previous slides. $10 billion from downstream, driven by the contribution from refining of close to $8 billion more than 2.5 times contribution in 2021. Thanks to higher refining utilization rates that all of us to capture high margins. And $1 billion, an important milestone for integrated power.

On the right, we show the cash-flow allocations, which was pretty evenly divided among shareholders, investments, and debt reduction. $17 billion return to shareholders representing 37.2% payouts, delivering on our 35% to 40% commitments comprised of $7.3 billion for the ordinary dividends plus $7 billion-dollar of buybacks and $2.7 billion of special dividends that was paid-in December. $16.3 billion for investments, but I will cover that in the next slides. And $14.5 billion of net-debt reduction, which gets our giving [Phonetic] by more than half 7% end of 2022, compared to 15.3% end of 2021. The 2022 environment allowed us — for all our segments to demonstrate we have strong underlying potential. Typically, we have an integrated model, we count on strength in one activity to set possible market challenges in an era [Phonetic] but in 2022, each segment had the chance to shine.

Capital investments came in at $16.3 billion in 2022 above the guidance $14 billion to $15 billion, mainly due to acceleration of short-cycle project in West African countries, but also in the North Sea in order to benefit in 2023, 2024, from a good environment, and $5.9 billion of smart acquisition notably in Brazil for oil and in the U.S. for integrated power. Also included here, are divestments for $1.4 billion, mainly from ongoing funding activities which is — to the profitability of integrated power. For example, in that figure, you have to count-down of 50% of 230 MW portfolio of renewable in-house but also fuel sales of CCGT in [Indecipherable] also France.

In that figure you have also the sales of some E&P mature assets notably, our interest in Brookfield team in Angola, but also the satellite field in Iraq. Important to note that inflation did not have a meaningful impact on 2022 increase in capex. We remain disciplined on capital, with strict criteria for sanctioning projects. I will give you more about that on the next slides. But important to say that we did online [Phonetic] last year particularly in light of the rapid strengthening of our balance sheets that’s passing on the opportunities noted here, that we will not share of our shareholders’ best interests. To the right, we split 2022 investments by type of activity. Oil generated most of our cash-flow and we allocated about 60% of capex to it. With a split between 60% and 40% between maintenance and old [Phonetic]. And a big piece, $2.8 billion of that growth was for [Indecipherable] the deep offshore field in Brazil. Integrated power and low-carbon energy including of course new acquisitions was $4 billion representing 25% globally the capex in 2022. Integrated LNG, represented the balance of roughly $2 billion reflecting the timing of [Indecipherable] get our NFS was not regarding 2022, it will be the case in the first-quarter of 2023.

When prices increase cost might follow, however, 2022 cost inflation was not so severe in our key regions and activities. Except, of course, energy costs, but we benefited of price increases. There are some upward pressure shown on the right, in the slides, but we effectively controlled it in 2022. Using IC9032 OpEx as a benchmark TotalEnergies continues to be the low-cost — the lowest-cost producer among the major at about 5.5 Doropo barrel [Phonetic] equivalent. On an ongoing basis, we benefit from a high-quality global portfolio that allow us to leverage on purchases power, to negotiate favorable contracts with suppliers and service companies. On deep offshore day rates, we signed medium-duration contracts, that largely easily takes us from inflation in 2022, but nearly all of our rates are set at about the same level for 2023, with option of taking us into ’24 at good prices.

For new projects, we adhere to strict selection criteria, shown on the right to maintain the high-quality of the portfolio in terms of average costs but also in terms of emission per well as well. Important to note that our criteria on emission per well will be more similar in the future as the portfolio average as real-world 19 kilograms CO2 per barrel equivalent. In terms of the constant progress of the high-grading the portfolio for examples adding low cost [Indecipherable] Brazil last year at the FSRU [Phonetic], implementing the spin-off of our E&P subsidiaries in Canada, we have higher costs barrels this year, we will reduce our overall cost, probably in the future.

To conclude the 2022 result presentation, you have here the benchmark of performance of TotalEnergies that is used over four CPR measures. In terms of growing net cash-flow per share, you see here the data, we were the strongest by far. Doubling into almost $13 per share. Similarly, TotalEnergies was best-in class for profitability with 28% return on capital. For the three years return to shareholders, we outperform our European peers, by maintaining the dividend in 2020, in 2020, we haven’t got the dividend in the middle of the ’20 crisis ended-up trailing our U.S. peers. And to conclude based on [Indecipherable] shrinking TotalEnergies has the highest EEG rating among the super majors [Phonetic]. We consider that this continues to be an important factor, in terms of VAG leadership through this period of growth and transformation.

In summary, an historic year for the company, a big step-up in terms of financial strength and flexibility. In large part due to the strategies that position us to fully benefit from the 2022 favorable market environment. And with that, I leave the floor to Patrick. Thank you.

Patrick Pouyanne — Chairman and Chief Executive Officer

Yeah, and this slide demonstrates, what you can really deliver at the same time. Superior results and sustainability as there is no position between both of us. So is the strategy of course will be the motto for 2023. And just some words about the environment, of course, the price today of oil is no more than $100, but more around $80, but I would say, when we looked at the trends of the old markets. For me, there are — there is some uncertainty on the demand, in particular, because there is feeling, even this feeling, maybe this is appearing little risk of what we call a recession, global economy slowed down, but again this feeling today is a little raised, because of what we observe in China and of course, on the energy markets, on the auto gas.

The Chinese recovery — economic recovery will be fundamental by easing of lockdown restrictions. What is clear by the way, and I know that in our world of oil and gas there is a Bible which is a net 0 scenario of EIA, which is supposed to decrease the demand every year, so [Indecipherable] supply is that for 2023 all experts including the IA [Phonetic] are announcing an higher demand for oil — two million-barrel per day, which will be a record year. So the reality of our world is where the oil demand continues to grows and that we need to face in [Phonetic] faster supply.

On the supply-side, we don’t see a lot of margin. We see we are enjoying into this year with very low inventories of products in particular are very low competitive over the last 10 years, we have the impact of the sanctions on Russian crude and refined products — the crude oil Russian crude oil easily finding its place in the market, China, India, but the refined products of Russia, it’s less of use whereas the diesel will go to Africa, South America, [Indecipherable] and by the way, we have also of course the supply-side is clearly supported by the OPEC discipline we look at [Indecipherable] and OPEC countries wants to maintain the oil above $80 per barrel. We will take actions and we could have expected more supply from the U.S. share, but as it was the case previous COVID, but it’s no more the case. The U.S. orders want some returns, and today they are more speaking about returns and growth.

So that means that when you look to this landscape. I think for our perspective, there is more support to I would say, higher price than $80 and the low one and so looking will not be surprised to see $100 or above coming back. By the way, the old market and this is very important to understand is, also for me — today, there is no more a world old markets. In fact, and that’s for a big lesson of what’s happening, we are splitting the market between Europe, which we have bonds. There are some cap on the prices. So we have today similar to old markets which does not hit obviously to ease the price and I think we did not see the odds or the consequences of the growing green markets, and the supply of oil.

On the gas side, this slide is a little complex, but just today, we can have a better vision, better view and maybe even draw some lessons for what could happen in 2023. In Europe, obviously, the European gas is driving LNG and power markets for Europe. So you have on this slide what happened in ’22 compared to ’21 first. Production in ’21 and supply-demand was 380 million tonnes, it rose to 400 million tons by end ’22 surplus 20 million tonnes. But at the same time, the European demand for LNG has grown by $50 million. You can see on the graph on the right bottom corner, that’s the demand of gas, and we have all translated in this slide in million tons of LNG. So demand for 2021 for gas in Europe was via equivalent of 170 million tonnes. In fact, 100 million tonnes was delivered by pipe gas, it is a famous [Indecipherable] from Russia, but we had already importing 70 million — 67 million ’21.

For 22, so gas has been divided by more than two. We received the equivalent of 44 million tonnes of LNG and so we add — to add-on it one more LNG and there is an increase of up to one of the 115 million tonnes of LNG. You can see by the way, above ’22 is a little lower but above ’21 because there was a decrease of demand around 15% because of the high prices. So to do that we have done it at the expense of other regions. I would say — as you can see there was a sort of supply gaps. So to attract 50 million tonnes in Europe we had, in fact, taken out 50 million tons, 60 exactly from China. China, probably because of the there was a slowdown in the Chinese economy, which went down from 80 million tons to 65, more or less, but also from other countries like Bangladesh [Phonetic] so in fact the surprise of Europe has been possible because we took all the LNG out of other countries, which by the way, actually need [Phonetic] to call.

So yes, the security of supply of Europe has been secured, but at the expense somewhere of the emissions of other countries. Of course, we have done that we a higher price in order to attract this energy. So what is the perspective of ’23. Might be wrong, but there are some fundamentals. First fundamental is that the we expect to Russian gas to be lower in ’23, than in ’22, because in fact we have been supplied by Russian gas in North Stream [Phonetic] pipelines until the middle of the year in ’22, and these pipelines are down today. So we expect [Indecipherable] maybe up to 20 this year hold mainly by the Ukrainian pipeline. And so even if there is a potential again disruption of demand, we expect more LNG be required by Europe, than in ’23 from ’22, 15 to 25 million tons are expectation depending on demand.

The increase of supply in ’23 compared to ’22 is only 10 million tonnes, 410, so this 15% to 25%, we see it’s more then what will be supplied worldwide and we could expect as well, again the same question mark recovery by China and an acceleration of the economy of China recovering part or whole of the 15 million tonnes, which we acquired last week — we disrupted from China. So it’s the supply gap is very young. And so it’s while we think there will be some tension of course, on the gas, there is one element, which is different, which is more note at the bottom-right corner, which is so storage level. So the storage level we are at 54% last year-by end of January, today we have 85% in Europe. We cannot store more, because there is a limited capacity of storage in Europe, that is why prices are lower, but again we will consume this gas. And so we think that some tensions will appear by middle of the year between the different markets LNG.

So, 23, our activity in front of this environment we’ll continue to deploy our strategy, we have already announced of course, on the LNG side, I think some gas capacity in Europe, the one in Germany has been opened and is operational, we have put that in [Indecipherable], which is the point where the North Stream is landing, which is a perfect access to the German markets. So our LNG traders are up quite happy with this infrastructure, we have booked out for the infrastructure for our own business. We are adding another one in France, where we intend also to book out of it. So that’s LNG and we continue of course to chase opportunities in LNG as you know, we have ambition in the U.S. and we’ll come back to you later.

The second part of the pruning our strategy and it’s important in refining and chemicals, where we have Bernard and its team of worked out during years to consolidate these Dubai oil platforms, the set-top platforms, you know, our strategy is expanding the fundamentally in an integrated way. We have been happy to make to take the FID of the Amiral project, which is a 11 billion-dollar World-class petrochemical integrated complex, which will come on-stream in ‘2027. It will consolidate the profitability of our Integrated Downstream business.

And last but not least, integrated power which is the other pillar of the growth will benefit in ’23 from the acquisition of 70% remaining shares of totally read, we are of exercise of options. It was, as you know, a transaction with a negotiation took place in 2016 at a time where we [Indecipherable] were on renewable assets were reasonable. So that’s already there, so it will give some work to our teams, but with more to come. Of course, we will not just sleep during the year, but we’ll continue to find smart developments in other projects. We’ve lowering of course emissions. It is always — our motto is more energy, less emissions. So growing our energies, for sure. And our delivery for Nigeria, wherein emissions, in particular, we have announced in September that we have launched worldwide energy-saving plan in the company. The teams have been super reactive. So the $1 billion has been distributed at an average price-cost of $50 per ton. It will it begins to be spent in ’23 for $400 million spread over the two years and it will allow us by the way, to lower our targets on Scope one and two emissions by 2 million tons for 2025. We will come back on that in March.

Second point of ’23, and I think it’s important for investors is our cash allocation priorities, there is a scheme now that has been put in-place. Remind you that we want to deliver 35% to 40% of cash payout for the cycles, 37.2% in ’22. So we have taken some first decisions with a Board of Directors on this first the dividend, but we begin to quarter ordinary dividend to differentiated from the special dividend. We wanted to be sustainable and this, of course, the increase of 7.25%, we have announced yesterday for the ’22 final dividend and the ’23 interim dividends, is about $74 per share. It’s supported by both. So, share buybacks, which we have done last year which were representing almost 5% of capital. So, of course, this 5% is a return to shareholders, or if we translate, but in an increase of dividend, which will do and we do more. We go up because there is also an increase of rendering cash flow. So this is the reason why we’ve done this increase which is a larger one, that’s the one we have decided for the full-year 2022, 6.5, I would like to remind you all of you the difference of some of the peers, we did we didn’t cut the dividend in 2020, and so we have — maybe we have less room to increase this year, but we increased so dividend for the year ’22, 6.5% so basis was more than 7% in ’23 and so that’s our commitment.

So capex, I will come back on it, we gave you range of 14, 18 in September, it will be 16, 18 in the high part [Phonetic], of course, $5 billion in low-carbon energies. So balance sheet difficult to express. The target for the gearing is down to 7%, so it will be strange for you to say, minus [Indecipherable] so we express ambition in another way, which is to continue to strengthen the balance sheet, because it’s a guarantee for the future. We — today we are A-plus. I think we want to target AA credit rating. It’s an ambition for — it is the objective of my CFO, so he told me Jean Pierre, it is an year objective for you and your team. So, and I think — it’s is because, again, for me that is the best answer to ensure you that all our strategy in capex and return to shareholders will be delivered through the cycles.

As this surplus cash flows are of course allocated part of its first to buybacks. And last year we were at an average of — we were less than $2 billion it was $1.75 billion-dollar, we increased it to $2 billion and in the last quarter for these 2023 in an environment of $80, which is lower than the one of last year $100 per barrel. So I think it’s a commitment to this buyback and special dividend is only in case of super profits. We will come back on it, even if as I will explain you. There will be the shareholders of TotalEnergies will be rewarded with special dividend in-kind as we will organize the spinoff of Canada upstream assets. I will come back on it.

So. I think this is a full program, which demonstrates the way we think to the future. When you look to in fact the column, one and four are for the shareholders and column two and three are for the company and we think of that. Of course, we have to — and we’ll come back to the other stakeholders. So it’s the capital investment of ’23 will support the transition $16 to $18 billion-dollar at which, out of which $5 billion for low carbon energies, let’s say, quarter-four, for integrated power and more than before the new molecules [Phonetic] because we grow our ambition in the value segments were in particular, in carbon capture and storage, we have been awarded new projects in Denmark. So we are in, Norway, Denmark, Netherlands. So we built, I would say our position in this business. Also included in this, but is all energy-saving or negative emissions, that we can do.

And you can see that we have also new projects of course coming into our hydrocarbon businesses or in gas. In gas, it’s growing because it’s [Indecipherable] projects. There is no Russian LNG, no anymore — spending, but which was of course, it was less investments in ’22, but to look our projects out there, we’ll have the Cameron projects, we have the PNG projects. PNG targeting FID by the end of year, Cameron targeting FID by September. So there is a lot of work on LNG, but of course, on oil as well because we have some new projects on which we work, like in particular, in Brazil, where we have a Mero 2 will come on-stream, we’d have Atapu 2 and Sepia 2 to sanction this year. We have also Uganda. So we have new projects coming. You can see advisory, we have as much new projects on both sides, with less hydrocarbons and low-carbon energies.

And we have the rest of the capex is maintenance. So we need to invest more or less $70 billion-dollar each year to maintain, I would say the old system. So the ’23 production will grow more energy, will grow mainly coming from LNG again. There is no new projects coming on-stream as last year, we had some — I just say not a full utilization of [Indecipherable] which came back on-stream by middle of the year. And from equities because there we have some big overhaul in equities, so 9% more production of LNG and by gas to Europe. Oil will benefit from the full-year of Brazil, plus 5%, so it’s good in this environment so production will go only by 2%, because at the same time, we have some perimeter effect on domestic gas. We have exited from Myanmar. We have exited from [Indecipherable], we have — and we will exit from Thailand. Honestly, we saw domestic gas. We don’t have — there is no, why did we differentiated them for the rest of the gas is, but there is no upside on this type of gas limited upside linked to the gas price, international gas price or international oil price. So in terms of economic impacts, we don’t have the volume the upside is more limited. So that’s the end. So what is more important for me, what we do in LNG and piped gas to Europe, because there you see the upside of its market plus the oil. Startups in Oman Block 10, have started mill to Brazilian mid of the year and there are two Brazilian projects in the mid of the year and — in Azerbaijan for gas.

Just to mention that we are quite in our company. We don’t speak about decrease award or decrease of gas, which feels good but stabilizing growing continuing to supply the market being a key player in the energy supply and taking a whole, even if we are not a very large player, but we do our oil, which means that we continue to focus [Indecipherable] replacement. You can see by the ’22 reserve replacement ratio and the year are quite good, 108% at the same price, 85%, with a price effect of 100%. They’re not so major companies which had been able to in the last years to maintain replacement rate at 100% and we are one of them. We work for show [Phonetic] which was of course always the source of reserves, but we can do it. We voted it as it has been done in 2022.

So let’s continue. We integrated LNG portfolio. We ambitioned as I just mentioned, more production. So it will help our colleagues of the downstream LNG to sell more. Of course, there is a spot uncertainty, but our position, as I said before is strong in regards, in Europe. We are increasing of regas capacity in Europe things to the Lonmin and the [Indecipherable] use. So we have more than 20 million ton of LNG regas capacity, which is — which is good, which is strong. It will help us to continue to monetize these capacities. As you can see the split on this slide, which is important we split it I would say into three buckets, according to the margin. There is a bucket of I would say long-term, Asia, Latin-America, portfolio, which is fundamentally giving us results and cash, it’s a difference between brand and the cost of production, that’s the original idea [Phonetic]. Then we have the European and flexible markets where we, in fact, we supply the Andrea gas [Phonetic] LNG from the U.S. to the spot index so there profit will be I would say spot minus and [Indecipherable]. So today, it’s $20 more or less per million BTU minus free or the total one free. So you can see the margin and then you have the spot once where it’s fact some sense of margins, but this activity.

Of course, to budget, we absorbed the cost of the re-gas and to contribute to security of supply. We have put the top Yamal [Phonetic], because there is always a today, Yamal [Phonetic], by the way, will be clear. We have only — we have stopped. We have all the volumes — 4 million tonnes of volume of the long-term contract on which we are committed, but we are strictly only with volumes as all the activity which was linked to spot XY volumes, we don’t take them anymore as per our commitment vis a vis the Russia business.

Integrated power will continue to grow clear because — of course the gigawatts of capacity as it was said by Jean Pierre we have managed more than the 16 year by end of ’22 capacity, host capacity we are at 16.877 tons[Phonetic]. By the way, I would like to tell you there are not so many companies able to grow the renewable business by 7 gigawatts in the year. You can look around, we are among the top. So again, when we do things in Total, we are consistent. We do it seriously and we intend to deliver not only growth, but value because this is — and this is a fundamental reason why we have decided to anticipate a split of iGRP into two reporting segments. By the way, there is no split of organizations. [Indecipherable] is leading the world businesses, just to be clear, it is the reporting, we have done it, because I think now it’s time, not only to is not only to speak about volume but value and the best way to deliver value so we report the reserves that to show it as we will improve it.

Of course, we have quite a lot of capital unemployed today, but it will come on stream year after year. So we target an increase of production by around 30%, mainly from renewables. The benefit to date is high-rate of user utilization rate of the gas-fired power plants in Europe, but there are also some capture of special taxes in Europe on these gas-fired power plant. Having said that we expect an increase of — or integrated cash-flow from one billion to, let’s say plus 30% to 40% percent we’ll see, but these capacities will move and we are — we have — we will have to deliver this growth.

The year 2023, coming back on oil and I think it’s important to tell you, that we have decided to mobilize almost 50% of our exploration budget on Namibia. We have made this in TotalEnergies and I hope it’s true and I don’t forget but on the plastic year [Phonetic], it’s — it’s really may be at the end of — it’s clearly according to by the way [Indecipherable] McKenzie it is the largest discovery, which has been done in 2022. We are maybe at the helm of a new golden block, so we decided to mobilize two rigs and $300 million in TotalEnergies share to I would say, a there is a tale [Phonetic] returns of cards, we want to free rigs plus tests and to have dynamic test, when we really know what we are in and with the idea that we use it to accelerate the time-to-market, not to apprise everything and to be a — I would say, to know everything, but if we have the chance to really confirm the volumes, which seems to have been discovered there would be room to make fast-track developments like we’ve done on Block 17, 25 years ago and so this is from my perspective, very important, because this could be a new chapter of the oil business in the company. So we mobilize the teams and the E&P teams and there is supervision of Nikola and also we tech teams on these important projects.

But at the same time, we will divest of oil the expensive oil we know, we have clearly set two years ago, we made some improvements, which we — not only Canadian assets are not in-line with our climate strategy but fundamentally they are high opex assets. And we are not speaking with old strategy and old portfolio. So we look to value assumptions and we confirm today, that we consider what is the best way is to maximize value for shareholders is to introduce this independent Canadian company in the market. The idea is to do it — the objectives of the project is to list it on the Toronto Stock Exchange, basically in the second-half of the year. By the way, you can see the metrics of these independent company of 2022. It was a company which produced one of the 10,000 barrel per day which delivered more than $1.5 billion of cash-flow and from operations and almost $1.3 billion of free-cash-flow. So it’s quite interesting metrics. We have appointed a leadership team from Canadian lady, which was — she was working in the company and will be become CEO of this company and Chairman as well by ex-executive of the company who knows very well, Canada.

The idea after that is that in order to manage, I would say it is back through into these type of the listing operation will maintain more or less 40%, more. It will be for some years in order to stabilize the company. But fundamentally, the idea is it will not be a company controlled by TotalEnergies, not at all. We think we’ll have take maybe one director out of it, but it has to be it will be managed as an independent company. While the business is a reason why we just pre-empted for this company and not for TotalEnergies, I would say for SpinCo [Phonetic] 6% of 40%, there was a transactions between SpinCo [Phonetic] and we considered, but if we were in-charge of these independent company, obviously, because this we are attractive conditions, we would have to preempt. So we’ve done it in order to strengthen the company before its listing. So for shareholders of TotalEnergies, we’d have to approve these spin-off at the AGM of 2023 in May and they would receive distribution in kind, so a special dividend in kind of these new SpinCo company [Phonetic]. We will report to you of course along the coming months on the progress of this project.

Coming back to 2023 objective, which is important is the cash-flow generation. I’m happy to tell you, we’ve with the support of the growth in integrated LNG and in integrated power, but also on the oil production, the underlying cash-flow growth will grow by another $1 billion. I know we have announced $1 billion per year, it is the case. This billion is feeding the goal for the dividend, you can see that we gave you this chart, I would say an indication of what could be the cash-flow from operation expected at $80, and $100 per barrel. We are navigating it in both. And you can compare to ’22 at $100 per barrel the same condition we expect $1billion more, if $80 per barrel you have the sensitivity on the right. It’s $3 billion extra cash for $10 per brand. It’s a little lower than last year at 3.2, because of the impact of the U.K. taxation. And also because we have deconsolidated I would say Novatek and Yamal Condensate and because Yamal is linked to Brent. So all we keep are shares in Yamal but we have deconsolidated of our accounts or the share of Novatek and Yamal. So, but why the sensitivity is a little lower.

So, $0.4 billion for $2 per million BTU is also lower than last year because of the U.K. taxation fundamentally and for the margin sensitivity on the refining margin, I would say it is a challenge. Just to show — to remind you with and I would like to insist, is what there is obviously for the TotalEnergies sales quite a good potential for stock rerating. Free-cash flow yield in ’22 was a 19.4% and we have an Enterprise value or DACF ratio of only less than 4, which is less than 4. So this we are expecting. We hope that these strong results will be translating — translated in the value of the company.

Finally, I would like to tell you that, of course, the company, I’ve seen I’ve shown you before, that we are allocating our cash flows to the company by cap investments and debt reduction in a large way, but also to the shareholders by way of ordinary dividends, special dividends, buybacks. We are also thinking to [Indecipherable]. There is one security missing on this slide, which is which are the states. The states are benefiting a lot from the oil and gas profits you know and people are complaining sometime or at times, but for TotalEnergies we have doubled — more than doubled the taxes and, we have paid two states, around the world, $16 billion in 2022 to $33 billion in 2023. Of course, they are mainly paid to producing countries, but the countries like U.K., it’s $7 billion, Norway is $7 billion and not as the consuming countries. That’s clear. But this is a strong contribution I think to — I would say probably good for the taxes we deliver.

We are also thinking to our customers and to our employees. Our employees are of course enjoying, all these results. We should never forget, so the strategy what is 100,000 worldwide employees which are delivering the strategy. We awarded them with a special one-month salary bonus. We are taking into account the inflation in each country, to increase the salaries. So we share the value with those salaries which are also by the way, shareholders for which 7% of the capital is the property of our employees. So they are also receiving the part of the dividend.

For the customers, we have been probably following a different route, fund some of these. We have decided to make proactively, so I’m showing profit with our customers in order to I would say take part of paying of his high prices, high energy prices. As we know, 2022 was in many of our countries a debate of energy which was dominated by security of supply, but of course affordability. So we have put in-place some fuel rebate program a massive one, more than EUR500 million for benefit of customers in France. We have to in ’23, we had to face a more so of your energy projects, like the SMEs customers or SME customers suffering a very-high electricity prices, which were contracts because of the increase of electricity surprise to the sky in Europe. Second-half of 2022, so we take actions and we continue to take actions because we consider, that it’s part of our social responsibility to take of all our stakeholders, of course, the shareholders of the company, the employees, the states and also our customers. So I will stop there and thank you for your intention, we’d be happy to answer to your question.

Questions and Answers:

Patrick Pouyanne — Chairman and Chief Executive Officer

[Operator Instructions] The first question is from Oswald Clint of Bernstein. Please go ahead.

Oswald Clint — Bernstein — Analyst

Good morning, thank you very much. Could I ask please Patrick, just on the dividend again. I mean 7.25% increase you said you couldn’t do more, that’s understandable. It’s helped by the buyback. We understand that too, but in the context of last — the long-term what you’ve done, let’s say, 5% or 6% growth for last one, two, three decades is if we can sustain the dividend and the commodity view cooperates as you seem to indicate could 6% to 7% or 7% to 8% becoming new trend-line, at least for the ordinary dividend is the first question.

And then just thinking about future profits and Namibia, interesting slides you have so. Do you think we could get some proper resource numbers in 2023? And when you talk about fast-tracking, if successful, what does that mean in terms of time and on a linked question obviously Shell’s Janker well has come in, which might give you confidence on an easterly extension of Venus, but there’s also post some unitization risks further down the line that actually could delay things. Thank you.

Patrick Pouyanne — Chairman and Chief Executive Officer

Okay. On the dividend, we didn’t tell you we could do more. We have decided to do it at 7.5%, which is, yes, you are right, the change of the past trends but I think, again, for me, it’s also the translation of the fact that we have increased the buyback. So as we have bought back almost 5%, it gives some comfort. I think when people — when people speak about return to shareholders for buybacks, if we don’t translated in higher increase of dividend, I don’t understand why it’s a return to shareholders? It’s saving for the Company or dividend for sure.

So, so but I think, it is very logic that we gradually declare the Board is logic, and as long as we can allocate some cash to these buybacks, because we have more cash flows and we are again, we continue, we did not decrease of buyback rate we maintained it, despite the lower environment. And I’ve seen some of those some of our peers who have decrease of buyback program for the first-quarter. We don’t do that. We maintain it and that’s proved. So we answer to you maintaining this buyback program. Yes, it will help us to support a new normal or which might be 7% to 8% and in the future, if so that’s in the future years. But again, there are two [Phonetic] trying to fit the increase of the dividend. On one-side it is buybacks, on the other side, it is the underlying cash-flow growth, and I am annoucing it again that we target to $1 billion.

By the way, I serve at the Board and amongst the new criteria for the variable pay of the CEO is to yet decided to introduce the underwriting cash-flow growth and also it’s we walk the talk in the company. And so that’s — that’s what I can answer to you. And again, don’t forget. And unlike you can compare it to companies who have increased by 10%, but these companies are divided by two or more in 2020, which will give more room to maneuver — to increase. We didn’t decrease at all. So we are also starting from a much higher point from this perspective.

You spoke about Namibia and let’s skip Namibia we have a problem [Phonetic]. I will just tell you, we have one well. People are super-excited. They speak to me about billions of barrels, but we don’t have the data, we have no dynamic data. And we all know, that as long as we don’t have tests and dynamic tests, maybe there is no good permeability, it could be complex. So let’s — we are excited still as we mobilize. And we have decided to mobilize a lot of our exploration resource this year to Namibia because we want to know what we have and if it’s true, when we have this type of size of resource, obviously, there will be a lot of room to develop.

Honestly, unitization we did not do, if we speak about billions. We can make up first project on that side, we weren’t making complex stories. Having said that, I can tell you of these projects specifically, there is a very good cooperation between the Shell and TotalEnergies teams, we cannot show the data as we have agreement. So, we will discuss together, but the idea of basically big is not to be a super, super optimization to appraise all the discoveries or [Indecipherable] like we’ve done in Angola, let’s see if there is a first development, then we’ll have time to optimize. I also remind you, that there is the same partner on both sides of the license, which is TotalEnergies [Phonetic], we’re happy to do it, so. Let’s see, it’s premature to speak of a size. What I hope is that when we have the real hold of this program, and which has been organized in order to have three wells and free test, in fact, we have two rigs then we would have a better clarity and we can speak to you, about [Indecipherable]. Today it’s premature, let’s do the job and we’ll come back to you, but I can tell you as the CEO of the company, we are quite excited, like we were when I entered the company. I was lucky, I was assigned in Angola Block 17, so. I hope we’ll have the same in hand for the next four to five years. Okay, the next question.

Operator

The next question is from Malek Christyan of JPMorgan. Please go ahead.

Christyan Malek — JPMorgan — Analyst

Good morning, it is Christyan Malek from JPMorgan. Two questions, Patrick. First I know that we share fairly similar view on sort of super-cycle prospects in oil, over the coming years and you positioned for that in the context of your portfolio. So can you walk us through where you see your growth prospects in the three to five-year view? I mean coming back when you had the best-in-class growth rate from four-well up until we are 5% to 6%. Do you see business situation where you could lead into that growth and sanction projects that are you moving to short-cycle is one of the basis of your increase in capex, but if you can provide us with, what would be the upside risk of your volume growth if you were to choose to sanction more projects take a longer-term view around investing in FIDs turn, I think it’s become quite rare in this industry.

And the second question linked to that and linked to Canada IPO. Do you think this is a template going-forward is the markets going to recognize the value associated with oil? Whether it’s because of ESG because of net 0, could this be — could this — could this be a rollout of other projects or other regions going-forward where ultimately you [Indecipherable] business in a way that did generate better value for shareholders? Thank you.

Patrick Pouyanne — Chairman and Chief Executive Officer

I can tell you, so if we can sanction projects, we’ll do it and we have in plentiful, three free big projects to sanction in the company. Oil projects, we have the Block 2021 in Angola, [Indecipherable] and we are working on it very hard in order to manage the cost of the projects. That’s the key issue, but we’ll do it. We have in Brazil because of the acquisition we done, we have two projects to sanction. One is Atapu 2 and the other one is Sepia 2. So this will fit the grove and we are looking to opportunities to grow our portfolio. We’ve always had the same motto, it has to be resilient through the cycles are less than $20 per barrel or $30 technical costs or $30 breakeven and less than 19 kilogram per barrel of emissions now as we lowered it because it’s the average of the portfolio. So again we are consistent — consistent and there are opportunities and I hope we’ll be able to announce you smart opportunities in the coming weeks — in the next weeks.

So again, by the way, we have also in our portfolio, Suriname and Namibia. I just described, Namibia, Suriname, as you know, it’s a little more complex, but there was a good news by the end-of-the year, because the [Indecipherable] is positive. So we have, at least the first pool, oil pool of potential projects — is confirmed. We are drilling wells under Craig Baidu and Iran discoveries, two wells. I think they have accelerated as well and I hope, but by middle of the year, we’ll be able to confirm that we have the old pool, that we are looking for in Suriname. So there is also the short-cycle projects. I think this is what has been done in 2020 to accelerate the mobilization of rigs Angola particular is delivering a lots, Nigeria, Congo, so these are the because there we have already some infrastructures FPSOs, we can build — adding wells on the infrastructure. So, that the way we look at it. So the answer is a super-cycle, but what we will not do is investing in expensive oil just because today we in the short-term the price is good, okay.

So we see the second question on Canada, which why we think, by the way that it’s the right time. I don’t know if the market, we fully recognize the value. But I’m sure, but it’s probably the best time to recognize it. So with the figures that we just announced. And so, we have people know that we — we want to divest these assets, they are not fitting with the strategy. We make money every We make money this year, but this could disappear. So we have the ambition to get a good value out of it. The value of the acquisition what we received were not in line with expectations and so we’ll see, but we are optimistic about the capacity of the market which is for us the best way to monetize these assets. And is it a model to hold out the E&P assets? No. No, it’s a specific model because again these assets are high costs, they are not fitting our strategy and we are not the best shareholder. But the reality, there is a potential to grow in these assets. Surmont is very high quality assets, suffered, but could deliver more, but we are not the best ones, because we don’t want to put capex or why should we keep in our portfolio assets on which we are not the best shareholder. But the overall assets which we have in our portfolio, we are very happy shareholders. So in particular, I’m quite happy to have directly access to the cache of all the North Sea assets in TotalEnergies today.

Christyan Malek — JPMorgan — Analyst

Unidentified Participant:

Thank you.

Patrick Pouyanne — Chairman and Chief Executive Officer

Operator:

The next question is from Irene Himona, Societe Generale. Please go ahead.

Irene Himona — Societe Generale — Analyst

Irene Himona, Societe Generale:

Thank you. Good afternoon, Patrick, and congratulations on these results. My first question is on the balance sheet. You obviously enjoy an exceptional balance sheet already with only 7% gearing and you seem to want to strengthen it further with reference to reaching AA credit rating. I wonder what is the real significance of an AA credit rating, please. And then my second question on LNG sales, up very strongly last year, 22% in Q4. You’re still selling Yamal cargoes obviously. Can you let us know, please, how are you getting paid exactly in the middle of these sanctions? Thank you.

Patrick Pouyanne — Chairman and Chief Executive Officer

Okay. Balance sheet, why is this important? I think just I’m trying to fill the gaps with the valuation of some of our peers. So we are quite systematic, we look to the difference. There is one gap which is that our U.S. peers are rated AA, we are not yet rated AA and when I look and I compare the metrics and the reserves of TotalEnergies, we’ve at least one of both. I see very similar metrics, so maybe there is something missing. So I think again, I think it’s also a message because for me, that means that AA would mean that you — our shareholders and new investors could really believe in the future and the guarantee of the future of return to shareholders. So I think it’s a strong signal. Again, it’s the way with the Board we discussed, can we express again a new objective of gearing, it seems to be difficult. Why minus 5? Why minus 10? Keeping the minus 15 would be odd to you today. So we think that there is room to go to another step and then again giving some challenge to Jean-Pierre. But no, I think it’s — again. I think it’s — it would be a translation as a very strong strength of the company. So let’s work. We’ll see if we can convince.

LNG Yamal, first. Yamal, which is the only asset remaining is the source of two cash flows. There is the direct interest in Yamal as an asset, 20%, and this company sell its LNG to different buyers, one of them being TotalEnergies, on Brent basis. It is true that we have received some dividend from Yamal in 2022, but some — it’s a little — it’s becoming more complex. We have, by the way, decided to book the cash flow from Yamal only when we receive really as a dividend. By the way, this is one of the explanation because I’ve seen a question mark coming, why there is — it seems there is a gap on the iGRP cash flow? No, there’s nothing on LNG cash flow, it’s because we don’t book the full reserve we book — we have decided to be prudent, we book in our accounts cash flow from Yamal when we see the dividend in Paris or somewhere in our pockets. We are prudent. But because again there is a strengthening of sanction. So that’s the first part of the Yamal cash.

But there is another part which is this long-term LNG contract which the teams of Stephane and [Indecipherable], they’ve acquired these LNG on a Brent basis and they sell it. But the TTF price when it comes to Europe or the JKM, if you go Swazi. So that’s also quite a large source of cash. And by the way, it’s even better, maybe better. This is a — we don’t hedge any more of this contract because why would we took a decision because we are not sure that sanctions on one side or the other side, by the way, could now derail this volume. So that means that, in fact, most of our LNG volumes are hedged one year in advance but Yamal — and Yamal will really — these volumes or these 4 million tons will reflect in our accounts. The reality of the TTF spot market or the JKM spot markets compared to the brent in the year ’23. So, in fact, Stephane, most of his business is already done. He has hedged a lot when you can optimize around the hedging, but he has these amount of these contracts which could deliver. And this is not Russian money. This is European contract. So these long-term contract and the cash we derive from the Yamal is today in Europe, there is no constraint and is reported in our account like the other long-term contracts which we managed in our portfolio. I hope it’s clear where we are today.

Irene Himona — Societe Generale — Analyst

Thank you very much.

Operator

The next question is from Christopher Kuplent of Bank of America. Please go ahead.

Christopher Kuplent — Bank of America — Analyst

Thank you very much and good afternoon, gentlemen. Two quick ones, please, if I may. Patrick, Jean-Pierre, if you are looking at your capex outlook, can you maybe give us a little more granularity in terms of your assumptions embedded in that ’16 to ’18 number for 2023, particularly looking for your assumptions regarding underlying inflation? Jean-Pierre, you said, there wasn’t really any to report in 2022. Just wondering what you’re assuming for ’23. And if you can, maybe give us a hint, as you usually do, about how much of that you think will be inorganic. And then lastly, on your point, Patrick, regarding the I-Power [Phonetic], the new disclosure, maybe you could give us, if you had, a view on, as you rightly said, a lot of unemployed capital that we will see growing in the next few years. So maybe you could tell us where you see capital employed going for that integrated power business because you’ve got access to that pipeline, you’ve worked hard to achieve. I think that would be probably a more important figure, than your earnings progression into 2023 here. Thank you.

Patrick Pouyanne — Chairman and Chief Executive Officer

Okay. Capex inflation embedded for inflation, honestly, on the short-term is quite low. I think maybe it’s 2% to 5% which has been mentioned by — but on the short-term, there is no real impact on capex. The capex, the inflation for us — take forward to Nicolas and Namita, are more about the new projects because of course the contractors wants to embed higher costs in the new projects and we don’t want. So this is fundamentally the debate for the execution of the projects which are — and most of the capex of the year are more of the old projects which are already sanctioned, and the new ones generally are impacted quite — will impact in next years. And so there is no inflation, I would say, and the rig could be one of them, but as Jean-Pierre explained, for 2023, we are covered by good rates. So, for me there’s a debate about inflation with contractors. It’s more for these new projects we want to sanction that I mentioned to you, but it’s a point on which we need to be all serious, otherwise we’ll wait because we’ll not repeat the mistakes we’ve done in 2010, 2014, which is to sanction whatever the cost is. I will not do that.

So M&A, I think that is net assumptions of inorganic, which is around $1 billion to $2 billion that okay, it’s a matter of buying and selling. And we have some different options in the portfolio to buy and sell in — and so we’ll keep you aware, but this is a — I would say and it’s part why we keep the range because, of course, when we don’t do the range, it’s for me — sometimes you have divestments which are done, but you — for example, Dunga, we will do in one year, but we will receive the proceeds only in ’23 not in ’22. So we might have some time of execution which — in these type of divestments. So that’s the idea. So most of the capex we gave you are organic, in fact, be clear, most of it.

On I-Power, It’s a new onboarding so you will have a full reporting but you have to be a little patient because Jean-Pierre and his teams are working and so from first quarter of 2023, in I-Power, or end of March — sorry, end of April, we’ll deliver to you, not only the quarterly results but the previous years. We will restate three previous years, so you will have some indication. It’s a business where most of the CMO — lots of capital employed of course and productive because — but the cycle is quicker than in oil and gas, because nobody to build onshore solar plant or an onshore wind farm, it’s more two years than five, four years. Four years, I would say, so normally the cycle is quicker. Having said that, we also have offshore wind and offshore wind is more like an exploration cycle, an E&P cycle, on a short-cycle. I mean, an onshore renewable cycle. We have also — as we make some acquisition, we have also some unamortized, I would say, value. I don’t have the precise figures and I don’t want to introduce something wrong, but [Indecipherable] the capital employed of this I-Power is around today $15 billion, I will confirm that to you. This is what I have seen in the — in some of first figures and I think you have maybe probably further which might be unproductive, just round figures. Okay? We’ll — but I think the exercise to oblige yourself to make this new reporting is very important.

I know that there are question marks about the profitability of this business and we have to deliver to you and when you report, you focus on it and you will improve. That’s the lessons that I learned from refining and chemicals. And I said to Stephane you go to [Indecipherable] you ask, have we improved the refining and chemicals profitability from 5% to 20% today or 15%. So, I think focusing is important and is the answer. And we intend clearly to be consistent with the strategy and integrated power, all over the world, are important. It’s not only renewables again. it’s clearly the capacity to deliver value from volatile market and from price which will go upwards, because we need more and more electricity. So that’s my answers.

Christopher Kuplent — Bank of America — Analyst

Chris:

Thank you very much look forward to it.

Operator

The next question is from Lydia Rainforth of Barclays. Please go ahead.

Lydia Rainforth — Barclays — Analyst

Thank you and good morning. Two questions if I could. Patrick, thank you for the very comprehensive update around what you’re seeing on the commodity markets at the moment. Given everything you said, as to the kind of cash payout ratio, do you expect that you’ll be in a position or Total will be in a position to pay a special dividend this year or later on in the year? And then secondly, if I could come back to Adani, and clearly, relatively small amounts of capital employed there, but does it change anything in terms of how you think about your approach to renewables in certain countries or JVs within that? Thank you.

Patrick Pouyanne — Chairman and Chief Executive Officer

First, there will be a special dividend, which is a special dividend in kind with the spinoff of Canada. So and it’s not 0, it’s — when I see the figures, it might represent not far from $1 per share. So, don’t underestimate that value. So it will come for shareholders. Again, the special dividend, we are very clear, we told you priority to buyback. And then if we have, again, an environment like we had last year, we might consider that. But it’s — that’s my answer to you. It’s premature for — by the way, it’s premature because today what we have observed since the beginning of the year, it did a lot of hours, so I don’t see and less than $20 per million BTU. So there is no reason at this type of environment, we will not have a special dividend. We prefer the buybacks, that is why we maintained the $2 billion, we don’t decrease it. If we come back to an environment like last year, we might consider that, but again there will be a special dividend in kind for the Canada spinoff.

Adani, no, it does not change. I think — again, first on Adani, I see a lot of papers and I thank some of you for having trying to count down these markets, we have an exposure, which is quite limited of $3 billion — $3.1 billion. Obviously, the hydrogen projects which was discussed will be put on hold as long as we don’t have a clarity on all that fact. I’m confident in the fact that Adani and Gautam Adani is taking care of his business in a smart way. But at TotalEnergies, of course, we have to form a prudence to understand, we are there, basically all the companies of Adani in which we invest, we looked yesterday to Adani Green, for example, is a very safe company. They generate $1 billion per year of revenues. They have a debt of $5 billion. So it could — [Indecipherable]. Maybe this will — could impair the growth, I’m not sure. But again, at the end, the question is more a strategic one. Do we need to do it by our own or not? Honestly doing by our own renewable business in India or even in Brazil, I think it’s too complex. I think I prefer — again, I think finding the right partners is the right way. We have been pleased, by the way, that Adani has delivered, again Adani Green Energy Limited or Adani Total Gas Limited, are companies which are managed by independent smart PEOs [Phonetic]. We are happy with them and we are happy also with the partnership with Adani and, of course, then it’s Adani to explain what is the way they finance all of that. But again, for me, fundamentally, no. It does not change the approach we have. It’s true that — and again we knew that electricity is already again a renewable — electricity business is more local, so you take more local risks, but maybe it’s also local opportunities. So, I don’t want to — don’t look to the glass are empty or full is better. So again, we will work on this one.

Lydia Rainforth — Barclays — Analyst

Wonderful. Thank you.

Operator

The next question is from Michele della Vigna of Goldman Sachs. Please go ahead.

Michele della Vigna — Goldman Sachs — Analyst

Thank you very much for your insights today. I had two questions, if I may. The first one is on your low-carbon strategy and I was wondering how much the IRA has changed your capital allocation. It feels like the renewable molecules businesses like bioenergy, carbon capture, hydrogen are becoming increasingly attractive while renewable electrons are perhaps lagging a little bit behind, especially in a higher interest-rate environment and I wonder if that is reflected in your green capex allocation as well into the coming years. And then second question. I wanted to come back for a moment on the comments you made about your exposure to spot LNG. It’s very clear, your exposure to spot gas in Europe GTF and [Indecipherable] 200 million for $1 per Mcf. I was wondering if you could give us a sensitivity to spot LNG as well, also including what you’ve actually hedged over the next 12 months. Thank you.

Patrick Pouyanne — Chairman and Chief Executive Officer

Okay. The IRA, it’s good for everybody, yeah, not only for molecules, but also for renewables. So I don’t — maybe you don’t follow VAT [Phonetic] credits carefully but there is some adventures linked to the IRA that we benefit from all. In particular, there was a protection tax credit, which was mainly in favor of wind, which became for the IRA, technology-neutral and which solar will benefit. So solar projects are now eligible to these type of tax credits and so it’s also another adventure. In fact, the IRA is an extensive law or in order to support all green infrastructures, including renewable projects, including, by the way, storage projects. Storage as well is supported and when we speak about — for us it’s very important because it’s renewables, we want to be integrated, so capacity to build some battery storage capacities is important — energy storage capacity. So the IRA is also supportive of it. So it’s been force — in fact, the IRA has given even more value to the Clearway acquisition we have done this year. So it’s nothing new for me, because we have — we didn’t integrate obviously these type of support to the full portfolio of Clearway. And we benefit from it so it’s an upside which will materialize because we have a very large portfolio.

Having said that, coming back to the molecule business. Of course, when you speak about hydrogen today, I was asked by the French Minister of Economy in Abu Dhabi, do you want to invest in hydrogen? I said to him, yes, in the U.S. And he was not so happy with my questions — my answer. But that’s the reality, I mean, you have $3 per kilogram. Having said that, the question is not to make projects, because we have no demand. So the rush to infrastructure is good, but we need to find the demand. And I would like to be sure that the demand will follow beyond what is our views and I think, because you have two types of demand for hydrogen, green hydrogen or blue hydrogen, whatever it is the, I would say, the [Indecipherable] industry, the refining industry, the local industry where we need to make local projects because we have local customers, where there is a market for decarbonization. This one I understand, and we’ll look to that. And we are investing and we have less assets in the U.S., but we could — we are looking with Bernard to see if we could benefit from it for decarbonizing part of it [Phonetic], for example, it’s obvious.

And then you have the export market, so the massive market, which does not exist for the time being. So I would like to see where it is before to speak about it. Having said that, we begin to see or we could leverage the IRA [Phonetic]. For example, we are looking to make sense to make e-methane projects in the U.S. in order to export synthetic methane in the future for liquefaction plants. That could be a nice answer to have these long-term investments, and the U.S. might be the place to make some e-methane, so that type of things that we are working.

We are working out of CCS. There is another point. Makes sense to look if there are some projects. I think the direct capture projects today, obviously, embrace to try to test this technology in the U.S., thanks to the IRA. So it’s part of the technology investments we need to do to coping with our ambition of net zero. What I hope, by the way, is that, Europe instead of complaining should do the same. That’s all. We need to have, if we are serious about global net zero ambition of the world, to make this type of support to invest in green infrastructure all over the world. That’s the answer to do. So I think — so I took it as a comfort to, not only our, I would say, electricity strategy, but also, of course, to develop the new molecules. You’ve seen in our budget, it’s coming upwards. I didn’t mention, of course, the sustainable addition fuel, which is the obvious market that everybody is rushing to, to the point there were too many projects, but — because there is not an infinite demand. The question, honestly is, not only demand is demand not only in volume, but also an affordable demand, accepting to pay more and regulations will be necessary for that.

Exposure to spot LNG, you — we gave you some sensitivity on our — but it’s more the upstream asset. I don’t — I’m not sure you have the LNG sensitivity in the figure we gave. Do you have it?

Jean Pierre Sbraire — Chief Financial Officer

Yes.

Patrick Pouyanne — Chairman and Chief Executive Officer

Okay. So Jean-Pierre will answer to that.

Jean Pierre Sbraire — Chief Financial Officer

The figures we gave for the sensitivity is a global sensitivity. So on an oil portfolio, but the impact on the LNG portfolio as well, the portion that is linked to oil and the same for NBP. So the gas pipe plus the portion of the LNG sold on an [Indecipherable] gas.

Patrick Pouyanne — Chairman and Chief Executive Officer

In another way, what we hedged, let’s keep — you take the 48 billion tons, you deduct mile 4 million ton, you deduct the 13 million ton spot, it makes 30 million ton. So if I’m not wrong, I see Stephane we have hedged more or less this 30 million ton of LNG, which we has a long-term supply either from the assets or from the long-term supply agreements, the contracts in the U.S. The rest is not hedged. So this is why I made a comment on Yamal. Yamal is sensitive to TTF minus Brent.

Operator

The next question is from Bertrand Hodee of Kepler Cheuvreux. Please go ahead.

Bertrand Hodee — Kepler Cheuvreux — Analyst

Yes. Thank you for taking my question. Two questions, if I may. So first is coming back on the cash distribution to shareholders. I understand the 35%, 40% through-the-cycle commitment, that is very clear. But when thinking about 2023, given your balance sheet and if oil price stay where they are, $80-plus strong refining margin, what could refrain the Board to go above 40% cash distribution to shareholders?

And my second question is a follow-up on LNG. You indicated that you generally hedge over a one-year period. Last year, my belief was that you had probably hedged at lower prices than the forward curve. Now, given the recent fall in natural gas spot prices and LNG prices and the forward curve, how should we think of your hedging position over the next 12 months? Thank you.

Patrick Pouyanne — Chairman and Chief Executive Officer

First one, the Board, I’m the Chairman of the Board, so I have to convince myself. And so, just to answer fully, the Board — I’m the Chairman of the Board. So I’m fully consistent with myself, I would say. And, of course, we — no, I think, honestly, don’t be — again, don’t — I mean, we are very consistent through-the-cycle. We did not reduce this dividend at a time where there are many reasons to do it in 2020. More reasons to do it than to maintain it. We do it because we want to demonstrate our consistency and that we are fundamentally resilient. So if you compare the increase of 7% to 8% that we propose today to people who have got the dividend, you say it’s less. Yes, it’s less, but okay, that’s a game that I will not play. I prefer to be consistent through-the-cycle. And again, I think it’s an increase. So you should look to that as it was asked to me by, I think, it was Oswald, the first question, if I remember. Long time, we were more — it’s under 5%. We go in years, and so we recognize it. But again, for me, it’s very important that it has to be supported for cycles, and we don’t want to come to back to [Indecipherable]. The balance sheet, you’re right, give us more to support it. This is why we go up. But again, I think we have also the buybacks to continue to feed this superior — this higher in the future. Let’s see what — it’s difficult to anticipate what will happen fully in ’23. So we have already good news to you and to your shareholders. You’ve seen that last year, we did not hesitate to give a special dividend. We’ll see what will be the price in ’23.

LNG was hedged in ’22 with Total [Phonetic] price. I hope not. Otherwise, I will be super unhappy with Stephane and his team because the price in ’22 were incredibly high. So normally, ’23 will benefit from envisaging or I don’t understand. By the way, today, we are lower — represent the TTF level is lower than the average of last year. So I should have more returns from ’23 from envisaging in ’22. I mean, so I don’t fully understand your question. And we’ll continue. We have a policy, which is not to hedge everything, but we hedge, we want to hedge. So why don’t we hedge everything? Because we experienced in ’22, the Freeport interruption on which we had to cut the — because hedging is fine unless you have a physical issue. So we don’t hedge all the volumes. And in fact, in ’22, we’re quite lucky because we managed to — projection was interrupted, but we had some no hedge on other volume, so we managed to get it. But it’s — so we hedge a certain, I think it’s 90% — 80% to 90%. And when we keep the rest open, but honestly, ’22 with this price is still good, and as I described, the anticipation we have on the LNG market, it’s a little low today. Not low, I mean, I know — like Jean-Pierre, no, it’s not low at all. It’s $20 per barrel. The $20 per million BTU is quite good. In fact, it’s — we would have told that two years or three years ago, I would tell you we’d have signed immediately. We don’t even dream it. So I think it’s a policy that we need to manage these positions. We have long-term contracts. We have exposures to spot markets and we want to manage this exposure, not to keep it fully on our balance sheet because then you have mark-to-market stories and all that, so we prefer to — so we are fine with the policy, and we will continue to implement it. But ’23 will benefit from the hedging of ’22 and ’24 might also benefit from the hedging of 2023.

Bertrand Hodee — Kepler Cheuvreux — Analyst

Yeah. Thanks.

Operator

The next question is from Amy Wong of Credit Suisse. Please go ahead.

Amy Wong — Credit Suisse — Analyst

Hi there. Good afternoon, and thanks for taking my question. I had a question about your emissions target. Recall in September 2022, you guys increased low-carbon capex and then you teased us with the potential to introduce a Scope 3 worldwide emission reduction target by 2025 and also a revision of the Scope 1, 2, net emission target. Now, Patrick, in your prepared remarks, you did mention a few numbers. And could I push you just to talk a bit more about what those emission targets can look like in 2025? And more importantly, I’d love to hear how you think about returns on that specific capex where it’s going towards reducing emissions? Thank you.

Patrick Pouyanne — Chairman and Chief Executive Officer

What the target look like? What’s the second question? I did not catch your second question?

Amy Wong — Credit Suisse — Analyst

I’d love to think about when your emphasis on your capex is always on the value over volume and very high hurdle rates for your capital investment. So for something like low-carbon capex that goes specifically to reducing CO2. I’d love to hear about how you think about the returns there?

Patrick Pouyanne — Chairman and Chief Executive Officer

Okay. The emission targets. First, when we speak about for ’25, to be clear, the previous target was 40 million ton, Scope 1 and 2. I just mentioned that the plan of energy savings that we have put in place should deliver 2 million tons lower. So that means that the target will be reduced for 40 million to 38 million tons. I mean, I’m anticipating on the Board decision, but I think there is a logic there by ’25. So we’ll improve the target by ’25 by 2 million tons, but we are reviewing not only this one, we are viewing like always year-over-year what is the status on the various intensity in order to monitor that properly. So I don’t want to anticipate the decision will be taken or not. But this is on Scope 1 And 2, I’m quite clear on this criteria.

Look, but let me be clear, but these emission targets that we have today, lowering our emissions today, it’s not a matter of carbon capture by ’25, right? It’s a matter of — a lot of projects, which are just being more efficient, so it take some technology to implement on methane and everything. So we could describe to you at a point the type of projects, maybe it will be a good idea by — in September, we’ll have the strategic day to come back on this topic if you are — if most of you are interested in it. So carbon capture are more for 2030-plus targets where we will need to have implemented.

Return [Phonetic] criteria for carbon capture, it’s just a matter of — price of CO2. That’s why I think in the U.S., you have the IRA, in Europe, you have this $100 per ton price. So when you compare both at the end, it’s more or less it gives another [Phonetic] economy. And from this perspective, as Europe seems to be very serious about CO2 pricing, I think in the long-term, it’s something which is maybe more sustainable, but fiscal incentive, which could — which is sustainable for tonnage, [Indecipherable] afterwards.

The key on CCS will be, of course, the size of the market. We need to — because there is some infrastructure to amortize. So my view is that, you need to reach at least 10 million tons, 50 million tons per year of storage if you want to have a profitable model. That means proposing transport and storage services to cement industry of less than $50 per ton because they capture costs, they could go around $50 per ton. So if you speak about $100 per ton, you need to split it between both. It works, again, if the support for infrastructure is key. If you have enough tons to put in those projects. From this perspective, you know the Denmark project is well located, not far from Germany. It’s shorter to make a pipeline from German industries to Denmark, went from German, so no way. Just looking to a map. So that might be a bit of volumes. The Dutch project is good because you have the Rotterdam and Antwerp larger industrial platforms, which could give some customers to these Dutch projects, Aramis and what we are working on. So that’s the idea.

Return criteria, again, it’s we have to look to — we have to do it because it’s — by the way, for me, for the oil and gas industry, it’s a question of permit to operate, all right? We have to be serious about lowering of Scope 1 and 2 emissions. But I’m not very a big fan of the Scope 3 debate, but of Scope 1 and 2, I’m very serious because it is a duty for us to do it. We have technologies. We have capacity. So it’s a cost. It might become an opportunity if we can commercialize the technology to third parties, and this is one B2B entity is trying to develop that. We have a first project with Holcim in Belgium on these type of things. But again, for me, we will develop first this project because we have to do it for our own emissions. It’s a question of permit to operate. And of the oil and gas industry, this is embedded in the global strategy of the Company. But as I show you, we can be very profitable like we are among the best. And at the same time, having capex for low-carbon energies, carbon capture, we do it in a large way, it’s possible. It’s building the future of the Company.

The $5 billion that we have mentioned for 2023, I think, is a level which we’ll be maintaining for the following three years. We don’t intend to grow it very much higher. I think it’s a good level. If we want now to combine growth and profitability, if we want to do it. So if we want to do it. So I think it’s a good level, and it’s — it obliges us to be selective, but selective in a large way. So we have room for deploying these. Why I say that, because it was — just because we have, in 2022, we have managed our 6 gigawatt per year with this type of amount. So for me, I have enough capex to make my 6 gigawatt per year, which is more or less the objective, which are assigned to the teams of Stephane. So I should not — yes, and the only point is coming back to Michele question is what is the size of the ambition is the new molecules. And for me, the question on hydrogen and all that, it’s more about where is the market, which will drive our expansion of capex.

Amy Wong — Credit Suisse — Analyst

Thanks, Patrick. Thank you.

Operator

The next question is from Jason Gabelman of Cowen. Please go ahead.

Jason Gabelman — Cowen and Company — Analyst

Yeah, hi. This is Jason Gabelman from Cowen. I have a couple of questions. The first is, you press released last week that you had farmed down a position in the renewal power assets at a high multiple, but it was a low overall cash contribution on that. I won’t have guessed it to reach the materiality of press release, it was a few hundred million dollars. And I’m wondering why you decided to press release was given the thought was you have been farming down these assets all along. And if that potentially indicates that given the market environment, you’re possibly accelerating the farm-downs of the developed renewable power business over the next year and what type of cash flow contribution that could bring?

My second question is on the LNG portfolio. You’re obviously undergoing the review in Mozambique, but there’s also been some reporting that you could take a large stake either offtake or equity in a U.S. LNG project. And I’m wondering if your pace of growth in the U.S. LNG market is at all dependent on what happens in Mozambique. And if you still continue to view the U.S. LNG market as one in which you want to grow in? Thanks.

Patrick Pouyanne — Chairman and Chief Executive Officer

Jason, you have complex question, but easy to answer. First, no, there is no acceleration at all. We have been always very clear that to reach the double-digit profitability we want to have — in renewables, we’ll have to integrate farm-downs. It’s part of the business model. That’s why we have some growth capacity objectives, that is 35 gigawatt growth. But at the end, we’ll keep more or less half of it. This is very clear. We stated that three or five years ago when we began the strategy, and we implement it. So there is no acceleration. It came on our desk. There were some assets in France, which were part of [Indecipherable] farm-down, it has been done in a very good way. And thanks to this farm-down, we have, on these assets, more than a double-digit return, much better. We don’t give all the details because there are also a counterpart, but that’s clear. So it’s to be clear. And we have embedded in the strategies a fact, but maybe we develop a 100% project, but when we farm-down. And by the way, I always explain to you several times, it’s not only a matter for me of profitability, it’s a matter of managing the risk. I prefer to have 2 times 50% of two projects, but 1 times 100%. It’s just a matter of things could happen. So that’s yes, I can tell you, by the way, it was 16 times EBITDA if somebody gives me an indication, 16 times EBITDA. So I think 16 times EBITDA, I can tell you, no problem. I can’t continue to develop my renewable business with this type of returns of 50% of my portfolio. And this gives the cash also to recirculate the cash and the risk of project. So I think it’s a smart way and we’ll stick on this strategy.

No, there is no link between Mozambique and the U.S. We like both. We like LNG, okay? We want to continue to grow in a growing business, which is LNG. LNG is good. LNG is international gas. LNG is a way to decarbonize the coal-fired power plants in Asia and elsewhere. So there is no fear about it. Maybe — there may be some cycles. Today, it’s at the top. It could go down, because we are not able in the industries, of course, to plan all the plans very smartly. We invest. But — so we are — we think that the U.S. on the long-term is competitive because you have the U.S. gas price is about the lowest in the world. So $3 to $5, it’s only $5 per million BTU. It will be very, very profitable. So that’s the reason why. So, yes, we have Cameron LNG. Yes, we have ECA in Baja California Phase 1, which is being built and Phase 2 may be in the near future. We are looking to other opportunities in the U.S. and it’s independently of Mozambique.

Mozambique, just to make as you asked question, I spent a day last week, Friday, a day in Cabo Delgado because my [Indecipherable] my company, I said there is no way for me to envisage any restart of Mozambique as not — as you don’t allow me to visit Cabo Delgado and I can travel around with a car, not an army, but road. So we were only three of us, two cars. I want to go there. I want to check. I want, in fact, to go to see what if life is back to normal. I can tell you what I’ve seen from a security point of view is good. Even life is back to normal. Villages, people are back. But it’s one step. There is more steps to be done. The two next steps, if there is and — because there have been some, I would say, controversies about human rights about the project — around the project, not because of us, we inherited that from Anadarko acquisition. So I want to clear you on these human rights issues, which is a salient issue for me. It’s important. I have given a mission to — especially to human rights, a very well-known doctor in France, Mr. Rufin, who has accepted. He’s making his job. So I’m waiting to see his report to understand exactly what is, I would say, these — what are these issues. If there are things to be done, we’ll execute the recommendation. We’ll be transparent on it. We will share obviously with our partners, because it’s a Mozambique LNG decision to restart. It’s not a TotalEnergies decision. All the partners should be onboard.

And there is a third step, which I can use this question to deliver is that, of course, we have to reengage with the contractors. And one key condition to restart will be to maintain the costs that we had. If I see the costs going up and up, we’ll wait. We have to wait, we can continue to wait. And the contractors will wait as well. So I’m not in a hurry in this condition to restart. Don’t — so there are security conditions I think are okay. Human rights and report costs, I will need another report from my teams. We will ask them to reengage. But smoothly, no hurry. Again, I can wait on Mozambique LNG. If costs increase, we will wait and we’ll take the time. So that’s where we are on these projects.

So my message is positive, but it will take time. And it’s not in competition in the U.S. We are ready to finance both. We have the capacity to finance both within our $16 billion, $18 billion. These are two good projects. It did all — but, by the way, on the U.S. projects, we could say the same. What I see when we discuss with some project developers is that, costs are increasing also. So it’s good to rush for volumes. But if you destroy the value because costs are too high, we know what is the impact at the end and we experienced it. So that’s the same, for me, debate. It’s more a question today on — we are very convinced by the U.S. and — by the LNG market, but we need to have cost efficiency in the project.

Jason Gabelman — Cowen and Company — Analyst

Thank you.

Operator

The next question is from Lucas Herrmann of Exane. Please go ahead.

Lucas Herrmann — Exane BNP Paribas — Analyst

Yeah, thanks very much and good afternoon, Patrick, Jean-Pierre. Patrick, simple one for you, I think. Contracting LNG long term, not into portfolio, but out of portfolio. I mean, you’ve waited sometime, I’d say to, for the cycle to turn in terms of oil-linked contracts. Pricing has obviously improved quite significantly. Should we be expecting you to offload an increasing amount of your unhedged — or not unhedged, it’s the wrong word, uncontracted volumes in to customers and give yourselves greater visibility and ways on duration and long-term people and oil linkage into the future? That was it. Thank you.

Patrick Pouyanne — Chairman and Chief Executive Officer

You’re right, Lucas, we can employ you. If you want to manage my LNG business, it’s the right time to contract long term. Of course, for buyers — there is a little more willingness by the way of buyers because suddenly they see some value. Of course, when you contract long term, it’s linked to brand sometimes. So it’s an arbitration between Henry Hub and European [Phonetic] gas spot index and Brent. There is one project on which we want to balance the risk. It’s PNG, Papua LNG. We said — of course, my team today, they would like to keep the volume. So we’ll have the right to keep the volume, but most of the volume will be contracted in the long term, because it’s — again, it makes zero — little sense to contract when you have some 11% or 10%, 11% Brent proposal from customers when you are going up to above 13%, you can consider you are again there. So that’s the right time.

Having said that, I think a philosophy for us is more to keep this balance of 70% long term, 30% spot. We have the balance sheet. We can use our balance sheet to keep part of the risk. Okay, when you keep an exposure to a spot index, you take the risk like in 2020, but you keep your site [Phonetic] like these years. So I think this is, for me, the core of the business model of a company like TotalEnergies. So strong balance sheet must allow us to take these type of risks, spot risks, but the 70-30, okay, it’s not the barrel rate [Phonetic]. It’s more or less we are comfortable with that in terms of management of risk in the Company as we grow. So today, there are some projects on which we’ll use long-term contracts. And again, it’s like, by the way, we can also develop some project being spot, knowing that we can use this window of opportunities to then sign long-term contracts. This is what we say even to our renewable people. You want PPAs, but sometimes you could — we could accept to develop projects not with a PPA, merchant projects, with the idea that, tomorrow, when we’ll have the right opportunities, we will cover part of the exposure with a long-term PPA. So that’s the beauty of the balance sheet.

Lucas Herrmann — Exane BNP Paribas — Analyst

Tell Stephane my CV is in the post. I’d love to work with him.

Operator

The next question is from Paul Cheng of Scotiabank. Please go ahead.

Paul Cheng — Scotiabank — Analyst

All right. Thank you. Good morning. Patrick, both BP and Shell have recently made a pretty large acquisition in the biogas area to jump start their operation and also the growth in that area. Just curious that you did mention that you guys have a largest unit of the biogas in France that you just start out. You also have a venture or joint venture that you manage to developing some biogas project in the U.S. Do you think biogas would be a more important part of your low-carbon energy business going forward? And if so, do you think you need to have a larger platform, maybe through an acquisition there to accelerate the growth there? That’s the first question.

The second question. First, thank you for breaking out the integrated power business starting in the first quarter. Can you tell us what is the return on that business currently that you achieved? Your peers, I think BP and Shell seems to stop questioning the overall return on that business. And just want to see that what’s your view or what you guys have been able to achieve so far? Thank you.

Patrick Pouyanne — Chairman and Chief Executive Officer

Biogas, okay, honestly, M&A is a way to grow if you can deliver the value you pay. And I have difficulty to be convinced to put several billion dollars in biogas, why, because — and we are doing things and we have — we bought a platform in France. We just bought a new platform, it will be announced soon in Poland. Why? Because it’s quite a local business. It’s like renewables. The way you manage this — the technology is not high tech. Okay, you can do larger ones, but there is no rocket science.

So then it’s becoming a question of local development. And I’m sorry to tell you, this is not because you are good in a Nordic country to develop biogas, but you can be good in France, where the agricultural organization, the agricultural ecosystem is quite different. And so at this stage, we have not been convinced and we have studied some of these files, but really, these platforms will give us the edge to grow beyond the core country. So we prefer, maybe we are wrong to go step by step, not making a lot of noise with billion dollars, but we prefer, by the way, to make smart direct negotiation by bidding with banks, which, of course, push price up in order to do that.

There is a country where, obviously, we have more size is the U.S. The U.S. are more attractive for this perspective, because, by the way, the system, all the CFS system and all that is more liquid. So you cannot only produce, but you can imagine to get more value of trading the volumes and mixing the biogas with others. So the systems, the carbon systems in markets in the U.S. give more liquidity to that. In Europe, it’s fragmented. All the regulations are not the same. It’s one of my advocacy when I go to Brussels to tell them that if they want this business to be developed, you could — should have a real unique European market and not the rules are different in all the countries. So it does not help to grow it.

So when you are in the gas, you look to biogas. In particular, that is because there are customers looking for that. They want to — if you have customers, we have made the bet to go to LNG for transportation, which we would love to have bio-LNG. So volume is not there. So there is a good momentum for selling these molecules. Then the question is scalability of all that, to be clear, and that’s a question mark. So we are looking to — we have some options in our portfolio. We grow it more locally. If we do something larger, it will be probably in the U.S. rather than in Europe. But that’s part of it.

On — I mean, I listen to my peers, and again, I respect them, but I think being consistent in the strategy is just fundamental. And we have decided a strategy, which is clear. Again, we are — with the business model I described, we will be able to deliver a double-digit business. And that’s the commitment we took. But there’s no reason for me today to derive from this objective and from the capacity to do it. Of course, we have to build that. We have to be — we make very good projects. Some are not as good, but I don’t see what we should — and I think if we make zigzag on the strategy, we’ll do nothing at the end of the day. So I prefer to keep on my strategy, which is — and again, we are very consistent, by the way.

I think the decision I have proposed to the Board to accelerate this segment, this reporting of the IP power, integrated power business because having discussed with our shareholders after our roadshows in — after the presentation in New York in October and November, it is clear that there is a legitimate request from them. You invest this amount of money in this business, we want you to demonstrate for clarity — giving clarity of these businesses. So I think this is a question. But I’ve been CEO for nine years now, I think it’s — listen is you need to stick on the strategy and not to be otherwise, in this new low carbon business, we will not — never reach the size. And I prefer to reach a size which is consistent.

We will become a key player and again, being able to grow our renewable business by 6 gigawatt per year, 7 gigawatt per year, we are among the largest one compared to the large. And so I think we can — and with mixing that capacity to use the balance sheet to integrate that in a larger platform, trading, etc., will allow us to deliver this profitability. So it’s a commitment. It’s also part, by the way, of our net zero ambition that we have and which we are serious about it. But at the end for me, it’s positioning the Company on the long-term on a profitable business because we are convinced that the world will need more electricity and more electricity means higher prices.

Operator

The next question is from Alessandro Pozzi, Mediobanca. Please go ahead.

Alessandro Pozzi — Mediobanca — Analyst

Hello, thank you for taking my questions. I have two. I think going back to the emissions, I think they came in below target in ’22, but they were still up year-on-year. Part of it, I think, well, most of it was driven by CCGT. And I was wondering if you can give us perhaps a target for 2023, how you see Scope 1 and Scope 2 emission evolving? And also, I’m also seeing that Scope 3 have come down. And I was wondering what are the main drivers for the reduction in Scope 3? That’s the first question.

The second question is on refining. Of course, the EU Bank came into effect on the 5th of February. I was wondering how you see the market for diesel in Europe with the ban? Will we be able to source more diesel from somewhere else or it’s going to be as tight as especially in the second part of last year? And also on, staying on refining, of course, we are seeing protest in France. Is that going to have an impact on Q1 margins? That’s all for me. Thank you.

Patrick Pouyanne — Chairman and Chief Executive Officer

I see, for Q1 margin. Okay. Emission targets for ’23, as I announced that we will lower the ’25 [Phonetic] target to 38 million tons [Phonetic], I think the target for ’23 should be something like under 40 million tons. So we’ll have to repeat at least and lower the same performance made in ’22, and no increase. So we are accelerating the target. There was — the Board has made a linear decrease, I think. So probably 39.8 million tons [Phonetic] exactly, if you want the figure. Jean-Pierre is putting that on the paper.

On finding diesel market, honestly, it’s — the source of the product worldwide is diesel. There is a strange machine, which is organized in the world, which is a little strange. India and China are buying Russian crude and they transform in — they transform it in an Indian and Chinese diesel, which will come to Europe. I’m not sure it’s good for the climate. It’s not good for the cost. It’s not good for the customers, but that will happen. So I’m not worried about finding diesel. It will be just more expensive, but it’s a cost. So question for is, is it real, does it has — does the market, as already anticipated or not disruption of the Russian diesel in the spread of the diesel, which were quite high. But it’s a question mark, I mean, it’s difficult to answer to this. Normally, they anticipate, but there is a cost issue of transportation cost.

The margin for the time being, I don’t know, difficult for me to predict on Q1 ’23. What I have observed since the beginning of the year is that the margin in January were higher than in the last quarter. They came back probably because the market was anticipating again distress. So we see increasing strategy. I think we are today at an average since the beginning of the year above $100 per ton probably. So again, this market is still strong. If it’s weakening, we’ll see, but again, as it’s difficult to understand what the operators in the market are taking into account or not. But this is what I think. Okay.

Alessandro Pozzi — Mediobanca — Analyst

All right. Thank you.

Operator

The next question is from Henri Patricot of UBS. Please go ahead.

Henri Patricot — UBS — Analyst

Yes, hi, everyone. Thank you for the presentation. Just one question left on your comments around the global LNG market and European gas in ’23. When you show European LNG imports potentially up to 25 million tons for this year, can you expand on the assumptions around the European gas demand? It seems like this may imply quite a rebound this year. So where do you see that coming from? Thank you.

Patrick Pouyanne — Chairman and Chief Executive Officer

Okay. I’m not sure I have understood your question. Is the European gas demand — yeah, in 2022, I think what we have observed is more or less minus 15%. I mean, this is a figure that I have in mind. I mean, I’m controlling, Stephane confirms. As a question for me, will it be accelerated in ’23, because we see a trend. It was a shift mainly from gas, by the way, I go to oil. A certain number of manufacturing industries shifted from gas to fuel, which we can understand. The gas was a $200 per barrel and the fuel was probably at $120 per barrel. So there was an arbitration down. Part of it has been to coal, but less than what we were thinking. What will happen in ’23, I think, again, this price still today is $120 per barrel equivalent, $20 per million BTU, it’s still high.

So it could damage it. We gave you, I think in the slide, we are quite clear about what we — our expectation. We think that EU LNG imports will be higher in ’23 than in ’22 by 15 million tons, 25 million tons. Maybe part of the demand destruction will come back. I’m not fully convinced it’s really linked to the price. So that — and again, I think people today, we are entering into a new world in Europe, where energy prices are high, energy costs are high.

For energy consumers, I think the idea that they should be serious about the way they consume energy will be deeper in their mind and they will invest like we do. By the way, I think this is the only advice we can give to them. If you want to lower your energy invoice, you have to consume less. And so to be efficient, like we are doing in TotalEnergies with our energy-saving platform, refineries, etc.

Henri Patricot — UBS — Analyst

Okay, thank you.

Operator

This was the last question. Back to you for the conclusion.

Patrick Pouyanne — Chairman and Chief Executive Officer

Emma, thank you. Thank you to all of you. I’ve seen that we have good attendance to this presentation. So next meeting will be in March, either the 21st or 23rd, we’ll confirm you the date very soon to make this presentation on strategic sustainability and climate based around our sustainability and climate report, like we’ve done last year. It will be live. It will be live in London and no more with Teams, because we like also to have the opportunity to have more discussions, informal discussions with all of you. So thank you for attending this presentation and supporting again the rating of the TotalEnergies shares. Thank you.