Key facts
- TotalEnergies expects higher second-quarter profits driven by strong refining and oil trading.
- Cash flows from oil production are projected to increase significantly.
- Refining and petrochemical margins are expected to improve.
- Oil trading results are anticipated to remain strong.
- The company lowered its Q2 production impact estimate from the Middle East conflict.
- Exploration & Production cash flows are expected to be approximately $1 billion higher than Q1.
- Integrated LNG division results are forecast to decrease due to underperformance in gas trading.
TotalEnergies anticipates a notable increase in its second-quarter profits, bolstered by strong performance in its refining operations and oil trading activities, alongside higher cash flows from its oil production segment. The company's earnings preview indicated that downstream results and cash flow are expected to rise sharply compared to the first quarter, supported by improved refining and petrochemical margins and sustained strong oil trading results.
The French energy giant also revised its assessment of the Middle East conflict's impact on its second-quarter production, lowering the guidance to approximately 210,000 barrels of oil equivalent per day (boe/d), down from the 360,000 boe/d previously communicated. This adjustment is attributed to the ramp-up of production in the United Arab Emirates and the restart of operations in other regional countries during June.
However, TotalEnergies noted that a significant portion of this production could not be lifted during the quarter and will be recognized in Exploration & Production results based on the crude price from end-June, which was below $70 per barrel. Despite this accounting effect, cash flows in the Exploration & Production division are projected to be about $1 billion higher than in the first quarter.
Conversely, the company expects cash flow and results in its Integrated LNG division to decrease significantly, primarily due to underperformance in gas trading activities amid a stable to declining European market. This follows a period of outperformance in the first quarter.
TotalEnergies' positive outlook for its refining and oil trading segments aligns with similar signals from competitors Shell and BP, who have also indicated strong results in these areas.