TotalEnergies is prioritizing the resilience of its oil and gas projects and maintaining investment flexibility to navigate global uncertainties. The company's strategy is a direct response to what it views as inherent industry uncertainty, driven by volatile commodity prices, shifting regulations, and structural challenges to long-term planning.

Guiding Principles: Resilience and Flexibility

The core of the company's approach is built on two principles. First, resilience is defined as the resilience of its projects. To achieve this, TotalEnergies now only sanctions new oil and gas developments with a technical cost below $20 per barrel. This low-cost threshold is designed to ensure projects remain sustainable through market cycles and any shifts in the energy transition, thereby safeguarding long-term value and competitiveness.

Second, flexibility in investment is considered critical for managing demand uncertainty, policy changes, and geopolitical risks. This involves positioning the company's portfolio to adapt to an evolving global energy system.

The Central Uncertainty and Market Outlook

The pace of the energy transition is identified as the largest uncertainty. The primary challenge is not the transition itself, but understanding the underlying reasons for how energy needs evolve. The company observes that the global energy system is currently in a phase of expansion across multiple sources, with simultaneous growth in demand for oil, gas, coal, and electricity, rather than a straightforward substitution of one energy source for another.