Total SA (TOT) Patrick Pouyanné On Q4 2015 Results - Earnings Call Transcript

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Total SA (NYSE:TOT)

Q4 2015 Earnings Call

February 11, 2016 9:30 am ET

Executives

Patrick Pouyanné - Chairman & Chief Executive Officer

Patrick de la Chevardière - Chief Financial Officer

Mike Sangster - Senior Vice President-Investor Relations

Laurent Vivier - President-Gas Division

Arnaud Breuillac - President-Exploration & Production Division

Philippe Sauquet - President-Refining & Chemicals Segment

Analysts

Irene Himona - Société Générale SA (Broker)

Theepan Jothilingam - Nomura International Plc

Oswald Clint - Sanford C. Bernstein Ltd.

Jon Rigby - UBS Ltd. (Broker)

Iain S. Reid - Macquarie Group

Thomas Y. Adolff - Credit Suisse Securities (Europe) Ltd.

Anish Kapadia - Tudor, Pickering, Holt & Co. International LLP

Neill W. Morton - Investec Bank Plc (Broker)

Aneek Haq - Exane Ltd.

Marc B. Kofler - Jefferies International Ltd.

Christopher Kuplent - Bank of America Merrill Lynch

Lucas O. Herrmann - Deutsche Bank AG (Broker UK)

Kim Anne-Laure Fustier - HSBC Bank Plc (Broker)

Patrick Pouyanné - Chairman & Chief Executive Officer

So, good afternoon, everybody. It's a pleasure to welcome in the same room here in London in September. We love traditions in Total. By the way, if the tradition is bad, you have to tell that to Mike. So, if you don't hear us well, please tell us at the end of the meeting.

I would like to start this meeting by saying first that, as you know, we have a change of governance in the company and to say thank you to Thierry Desmarest for his long and outstanding service to Total including this past year as Chairman advising the young CEO. In line with the rules of the age limit, Thierry Desmarest stepped down as Chairman in December 2015. And consistent with Total history and with the idea that in oil and gas business, it's good to have one – number one in front of head of states of producing countries.

So, board has directed to recombine the roles of Chairman and CEO. And on my proposal, Lead Independent Director, Mrs. Patricia Barbizet has been elected. And, of course, I can tell you that I'm proud to follow in the footsteps of Thierry Desmarest and Christophe de Margerie and try to do as well as they have done in the last 15 years.

Since I started the job, this challenge has been staying the course despite the oil price collapse. As I told you in September, we are in the commodity business and volatility is inherent to this business. So, even if we meet every six months, you don't have to expect today to have huge news. We'll not change every six months all the guidelines that we give you. And in fact, what we intend to do today as we partake [ph] is, of course, to comment to you the results of 2015, and then to give you some guidelines for next year 2016 but keeping what we say to you for the medium term as a basis. And I think it's, by the way, a good philosophy not to go up and down according to the price of oil but to try to keep a stable strategy, and this is what we will try to do, a sustainable and a stable strategy for the medium term.

The second message is that one year ago, in February, I told you and again September, in front of such volatility, there is one target which means – which has to be at the top of our table which is to look carefully or we can lower our cash flow breakeven. And to do that, we have to be excellent on what we control. What we control is safety, is our capacity to deliver operational excellence, project execution. We control our costs to be disciplined on OpEx, to be disciplined on CapEx. We control our technology and I should add also today, we control also, even if the word control is maybe not the best, we control also our people.

We train them. We select them. We motivate them. And if I have one lesson over the last year within Total is about the strength of the people of Total and the capacity to execute the message, the directive of the management is absolutely astonishing. And if we are today very pleased to present you of course and I'm quite proud to present the results of 2015, being the most resilient among the majors, the first reason is the quality of the work of all teams of Total.

It's also the result of decisions which we've taken before in the past. We were a first mover on CapEx and OpEx reduction with timely restructures of downstream. We, of course, benefited from a portfolio of major projects starting up now and fueling growth, plus again, a strong emphasis on the operational performance across all segments.

So, as a CEO, I'm satisfied with the good progress we've done and, in fact, I'm satisfied also because we took some commitments last year in February and we delivered today on this commitment which, I think, is the best way we put to ourselves some aggressive but realistic targets. I remember our discussion with some of you in February. At the end of the day, I'm pleased to see that we have been able to reach this target and Patrick will comment about that to you.

Then, in the introduction, of course, I will commend safety. The small video that you've seen is an example of what you should not do, but unfortunately, it happened like that. It happened like that in all our life, but it should not happen like that in a company like Total.

We had the tradition to tell you safety is a first priority. Safety is no more the first priority. Since January 1, I declared safety in the company as a core value, which is much more than a priority. It's a permanent, constant priority. We'll not discuss it. It has to be embedded in the company as a core value. And if you understand that, that means that there is no question about compromising about costs, it is above everything else. And this is a way we want to approach safety, not only and we are pleased with the results of improving again by 12% per year the Total recordable injury rate, but to go beyond that is a question of culture. A new central HSC organization will be put in place in Total by September 1 and all central teams of all divisions will be put together in a single cental organization with one objective, which is to develop across the board of the whole company the same safety culture. And this is one of the answers that we will bring on the core value which is developing the same safety culture across the company.

Safety is important, of course, because it's a way to protect people and assets. It's also important because, as you can see on the right-hand side of the slide, safety and operational performance go hand in hand. Safety is the cornerstone of operational efficiency. And Refining & Chemicals division, last year, our results demonstrate that statement, in which I'm a strong believer, we can see our Refining & Chemicals TRIR has dropped while the availability of the plants have improved, and this has been translated into less accidents and better reserves, and Patrick will present that to you.

And the last point on which I insist on safety, I told you that in September, is that safety is a question, is a matter of human resources and basically of leadership. And to face such volatility, you need some leadership. It is true that in 2015, we have been resilient, if I have to use one word. Last February, I described to you the program with four keywords which were safety, delivery, costs and cash, which again are the translation of what we control, what I believe we need to focus, by the way whatever the price is and not to – because this is in our hand.

And in 2015, we had three reasons why our performance was resilient. The first one is that because we benefit from the integrated model. With all the strategy of the group since last 15 years and before has been to keep, to maintain in the company, the full value chain on oil and gas from exploring, producing, transforming, distributing, and this model which sometimes was discussed is proving today its full efficiency because, of course, part of the value which are lost in the Upstream has been recovered in the downstream business. As the main figure which illustrates that is the downstream cash generation in 2015 has been $8 billion, which is quite an improvement compared to the $3 billion that downstream was delivering in 2011.

And the second engine of this resilience was production growth. We have invested heavily in intensive CapEx program, 15 major projects. 2015 was the first year to start some of them, nine of them had been started, and we will continue to ramp up in 2016 and new other projects will come. And so, we have this production growth with very high level, a historical record I think for a major company in the last 15 years, 9.4% of growth. And this, of course, is gathering additional cash flows.

And the third engine of the resilience has been our programs of cost reductions of targets. We have spent on CapEx and more importantly for me, on OpEx, we have exceeded the targets which were again, aggressive but realistic, they were realistic because the teams have been able to do more than that. And, of course, this is part of the recipe of 2015. And the story today will tell you that we will just continue the recipe in 2016, because I don't have another magic wand.

So, then, Patrick will deliver to you and explain you more precisely the 2015 results.

Patrick de la Chevardière - Chief Financial Officer

Good afternoon, everyone. Let's move first to the macro. I'm pretty sure that you are fully aware of that but what you see basically is the collapse on the oil price, which basically fell by half of its value. This is not the first collapse we are facing and maybe not the last one but this one is important. We are just over one year in the cycle. Brent fell by exactly 47% to $52 per barrel. Our liquid realization also fell by 47%. On the same part of the slide, you see that the refining margin in blue increased by a factor of more than 2.5 to $48 per ton.

On the right side, you see the evolution of the gas price on the three main markets. Total average gas realization is minus 33%. You see that Henry Hub dropped dramatically between $2 and $2.50 per Mbtu currently. L&G prices dropped less than the oil price because of lag effect on one side and also on the S-curve type of price formula. Honestly, we have quite a bit – have little exposure to the U.S. gas market at the moment.

So, 2015 was a rough year for commodities because of the oversupply. For Total, strong refining and petrochemical margin offered some mitigation, and the same as Patrick mentioned to you more broadly, costs have been coming down across the industry and specifically within Total. We were actually extremely resilient in 2015. If you compare us on the right side to our peers where they have the results going down by 48% to 64% when the Brent go down by 47%, Total net result decreased by only, I may say, 18%. We generate $10.5 billion of adjusted net income, downstream increased by close to 80% to $6.6 billion mainly due to the high availability of our installations. Upstream contribution obviously decreased by 55% but still contributed $4.8 billion. We suffered less actually because we had a resilient portfolio because of production growth and of cost-cutting.

In this environment, we are more focused on cash. Cash is our main objective and we focus very much on it. On the right side, again, you see that we compare very favorably to our peers by cash flow from operations going down by 22%; by far the most resilient performance among the majors. In absolute terms, and I think this is important, we generate more cash flow from operation than either BP or Chevron. Clearly, we have benefited from more stronger downstream that increased its cash contribution by 30% to almost $8 billion in 2015.

This reflects, of course, the good margin we enjoy, but also reflects years of improving the underlying business mainly the main criteria being the reliability of our plants and the lower cash breakeven we have in our installations. Net asset sales that I will cover later on added $2.6 billion. In aggregate, we generated $22.6 billion in comparison to organic investment of $23 billion at the lower end of our initial target, which was $23 billion, $24 billion. Honestly, we are very satisfied we post extremely robust set of numbers.

Portfolio management is definitely part of our strategy. The target for the three-years, 2015-2017, is to sell $10 billion of assets. In 2015, we announced the signing of $4 billion. For 2016, our objective is also to sign for an additional $4 billion of asset sale. This figures of $4 billion achieved in 2015 demonstrate our ability to find strategic buyer and to realize good value. This strategy is also very helpful in optimizing the portfolio by monetizing non-core assets. And I give you a few example, two of them, Fort Hills and Gina Krog that we sold in 2015 and therefore we saved CapEx by about $1 billion. I think you know the asset we sold in 2015. You have FUKA, the pipeline network in the North Sea, the UK North Sea. You have Schwedt, a stake we have in a refinery in Europe, in Germany; and we have also sold our network in Turkey.

You don't see on this list, Usan. We were unable to obtain a reasonable price for this asset. And therefore, we decided not to sell it. So far, within this year, we already started our program by selling stake in our field in Russia, Kharyaga.

These are replacements, rate was 107%. It is our way to secure our future. We have more than 11 billion barrel of proved reserve. On a 2P basis, we have more than 20 years of production. Reserve replacement is vital to support our long-term growth, of course, we were helped by the ADCO license renewal by the way with better in proved terms. We also benefited as the other – but maybe, to a larger extent, because we have more production sharing contracts than the other. We also benefited from the positive price effect. Our three-year average replacement rate increased to 118%.

Our financial strategy is to maintain a strong balance sheet for the cycle. And I have to say that as a CFO, I'm quite happy to show you that we, actually, in 2015 reduced our giving (19:14) from 31% end of 2014 to 28% end of 2015. Each point of giving (19:24) is about $1 billion of debt. We have plenty access to the financial market. You know that we at present we have guaranteed about more than $15 billion of cash. We have more than $10 billion of credit lines, and we believe this is enough to get through a very difficult period, if any, if it go up to two years or more. This is not our scenario, but we are prepared to face it if it comes.

As a last point, we recognize $5.4 billion of impairment, coming basically from GLNG in Australia, our LNG asset; impairment made on Fort Hills in Canada; also the effect of the reclassification of Usan in Nigeria; some exploration discovery has been right enough or so because we don't see how to develop in this new environment; and we impaired for obvious security reason, Libya and Yemen.

Can you switch the slide, please? (21:06) an exercise I'm also quite happy to do. We, on this slide, are comparing our performance to the commitments we made previously. We knew that responding to the weaker environment will require a very disciplined approach to cash management. We had a target for CapEx of $23 billion, $24 billion, we realized $23 billion of CapEx in 2015. OpEx savings target was increased at $1.2 billion, we realized $1.5 billion. Exploration budget was reduced by one-third to $1.9 billion, we did it. On asset sale, we missed the target by – for just the sale signed in 2015 by roughly $1 billion; this is Usan. Production growth, we delivered a production much higher than the initial target of 8%, we delivered 9.4%. And for reserve additions, we added more than 2 billion barrel for about $2 per boe.

We are satisfied by those realization. However, given the very difficult environment that we are in, we recognize that there is still a lot to do. You may think that we have selected the KPI where we are good at. Honestly, all of them are on this slide.

Although Brent went down by 47%, our adjusted net income go down by 18% only. Cash flow from operation, minus 22%. I know that you are all very creative to explain those figures, but I think the main reason is that the biggest difference was careful preparation. We were the first to move on CapEx reduction. We started in 2013. We were the first to say that OpEx must be controlled and you see the achievement we made last year. When you look at our 2015 results, it is clear that the strong performance of the downstream plays a major role but keep in mind that we completely restructured this downstream business starting in 2012. Production growth was one of the key to reducing our cash flow breakeven. And for 2015 and the year-end, this is the result of project launch in the past.

I will leave the floor to Patrick and I think Total is well-prepared to perform competitively in any environment.

Patrick Pouyanné - Chairman & Chief Executive Officer

Thank you, Patrick. Just to comment this slide. I love the slide obviously and I think it will be popular in the whole company quickly to motivate if we have any justification that we are going in the right direction.

Again, we set ourselves aggressive but realistic targets. We have delivered them and we are outperforming our peers which is of course a way to differentiate yourself because in fact what we want to deliver to our shareholders is to be able to differentiate Total from our main competitors. I just – we would like before to enter in 2016 outlook, remember what I told you in September as well. We are transitioning from an intensive investment phase and so the level of committed CapEx is falling off. We are delivering our production, growing production. And so, all that is giving us increasing financial flexibility. It's not fully the case in 2016 and you will see that we are still engaged in many projects, even if we manage to adapt ourselves to the new environment of $30 per barrel, but it will be more and more the case in 2017 and beyond. And if we turn on top of that, transitioning from very intensive investment phase, production growing, we had OpEx savings across the board and we'll continue that, we understand why we are continuing to lower the breakeven.

For 2016, of course, compared to September meeting where the price was around $50, $60 per barrel, we are facing a $30 environment. So, we had to adapt ourselves to strengthen some returns. At the same time, we were on track and we didn't want to derail from what we think is the right way to maneuver. So, you will see that we are still on the asset sales that we have made some allocation on CapEx, (26:41) on OpEx savings as well. But again, the main strategy there is to keep on the track, to stay the course compared to we were then.

We have also in mind that we need to maintain and to preserve the long-term competiveness of the group despite this environment. This is very important. And one of the reserves because we speak about reducing CapEx, we speak about asset sales, but as you've seen, we are also able at the same time to renew our reserves by taking bold decisions and we will continue to keep that in mind. It's not only a question to reduce the size of the company. In my mind, I still want Total to continue to grow and I think, and I will come back to that, that we'll have opportunities in the coming months and years.

So first, again, like in September, strong discipline on CapEx. On CapEx, as you know, we have lowered the CapEx from $26 billion to $23 billion. We are transitioning again from this investment phase. We'll go down to, in 2016, to $19 billion. $19 billion is under the guidance that we gave you, which was the only guidance for 2016. I'm not sure we gave you any more guidance in September for the year after because there, we are going down to $19 billion compared to $20 billion, $21 billion we gave you. In fact, you have to link this $19 billion to the other guidance we gave you in September, which is that we think a sustainable level of CapEx, if we want to preserve the long-term competitiveness of the group, is between $17 billion and $19 billion. So, we are at the top end of this guidance as soon as 2016.

To go down, there are many effects. One part of it is coming obviously from the market because the market is reacting to the low price, in the $30 rather than the $50 obviously. But the reality that Arnaud Breuillac and his team are just – actually are also acting to activate this reduction. But there is also some choices on mature assets because on mature assets again, we have a policy to invest if we have two-year payout time at $30 it's the same at $50.

And so, these are the reasons, there's no miracle again why we are at around $19 billion for 2016. As you can see, we'll invest $3 billion in the downstream. The rest of it with more than $10 billion being dedicated to Upstream assets and the development and $4 billion through Upstream-producing assets.

Just again on OpEx, of course. So, there again, as Patrick told you with initial target for 2015 was $800 million, we increased it beginning of last year to $1.2 billion, more than $1.2 billion, we told you. (29:46) towards mainly on the Upstream because most of the efforts, in fact every divisions were concerned, but the increase of OpEx saving has been delivered by Upstream which is obviously the division which is the most understressed because of the low oil price. They managed to deliver savings around more than $1 billion.

It was the initial program for three years. So, in one year, they have been able to deliver more than what we were promising for three years. So, it's a question of willingness and the priority and the mobilization and motivation of the team. And downstream has, of course, delivered what was planned, which means around $500 million – or $400 million to $500 million of savings.

In September, I told you that the target for 2017 of the full year cost saving program was improved or increased from $2 billion to $3 billion. I will not change it today. We are just adding about $3 billion. You will see next time what could be mean above. But today, we have concentrated what we could deliver in 2016. And what is the target for 2016? As you can see, it's more than halfway between 2015 and 2017. It's $2.4 billion.

I read some statements from some of you in September that you – we were wondering if we could reach the $3 billion. I hope that today you are convinced. I can tell you I'm fully convinced that we'll do more than $3 billion. And the teams are mobilized on $2.4 billion, again, the main increase being on the upstream. Arnaud Breuillac described it to you how he was managing this cost-saving program in September, so I will not repeat over – he gave you details to show you – to give you the – some notion that we organized some operations – it looks like a design of wealth.

What I can tell you is, contrary to some other companies, we don't make headlines with staff reductions. I learned something when I was refining and chemicals. If you want really people to be motivated of improving their operational performance, on delivering your cost-saving program and if they are afraid for their own job, you'll obtain nothing. So, you just have to know what is your priority. And our priority today, and we are delivering it, is to increase the operational efficiency and to deliver the cost-saving program.

So, I don't – we don't have to be afraid them and by the way they are doing the good job, which is the best answer they can give us. What we have put in place is a policy where we are recruiting less people, which is through back on the perimeter of upstream refining petrochemicals in the holding. We have recruited only worldwide 400 people compared to 2,000 one year before, which has an effect at the end of the day on the head count. But again, it's not a target per se.

The objective is to keep the motivation, and there is another argument toward this policy because, today, maybe the price is low, but tomorrow the price will rebound. I will not tell you when is tomorrow, and I will need – we will need all these people. So, this is a policy and I'm quite convinced that this is the best way to continue to maneuvering the company, and our teams are delivering this savings program.

This saving program, I don't know, nothing is moving. Yes. Just to focus on which is important, in fact, for the upstream division, but the exploration and production OpEx per barrel. You know there are some metrics and I will comment some of them. The operating costs and there's a new – there's a rule – SEC rule, ASC 932, which has in fact consolidated affiliates up to (33:28) without taking into account evacuation and transportation costs. We are at $9.90 per barrel in 2014 and went down by $2.50 per barrel, which is quite an effort in one year. I (33:40) is coming just as the translation of the saving program.

A quarter of it, this reduction is coming from ADCO barrels because they are low-cost barrels and they have some advantage in such an environment. And the last quarter of reduction is coming from foreign exchange. So, we know we are very transparent to give you the explanation.

But we are continuing to work in the savings program. But E&P is putting in play for 2016 to lower this operating cost to $6.50 per barrel, so a decrease of 35% or $1 per barrel in two years.

Another figure which is not written there, which is maybe of – also of interest, I asked Arnaud to get me across all the whole portfolio of barrels that we have production 2.5 million barrels of oil per day that we'd produce in consolidated affiliates and in equity affiliates, taking all-in cash cost, which – OpEx, which means not only production cost but also transportation cost. We have, and it's an important figure for me, all-in operating cost for all these borrowers of the company is under $10 per barrel today, under $10 per barrel. It means, above that, we are making cash.

So, we hope it will not drop down so much. I don't give a message to some markets today, but it's a way to explain why probably we are so resilient compared to our peers because we have a cost base which is lower and breakeven is lower than our peers.

And you can look at it also on the right-hand side of the slide, which is a technical cost, under the same norm of SEC norm which is not only the OpEx per barrel, but you have the DD&A per barrel and also the exploration costs per barrel. And this, today, is going down to $23 per barrel in 2015 compared to more than $28 per barrel in 2014. As you can see on the graph, we are the best among the majors. And I'm sure, with these results, we'll maintain our leadership on this one. It's very important. Of course, it's coming not only for $2.50 per barrel reduction, not coming from OpEx but $1 is coming from exploration because we reduced the efforts. But you will see that we have a (35:50). And part of it also is coming from the DD&A, which is probably more surprising because we are putting on stream some new projects with historical high CapEx, but we are also benefiting from the ADCO barrels there.

Then the growth. (36:10) resilience, the strong production growth. Again, in 2015, we have delivered more than 9%, 9.4%, despite the loss of Yemen LNG since April, which cost us around 3 point of cost in – of production increase – 2 points to 3 points – 3 points exactly in 2015. So, again, performance is there. We have delivered the nine startups which we have promised and this is an achievement.

For 2016, and you will see why we are targeting an increase of 4%, this should use our consolidating both – the guidance we gave you for 2019 of 5% per year from 2014 to 2019. And I can also confirm, even if it's not written there, that from 2014 to 2017, we'll be above 6% as we increase per year as we told you in September. So, this growth will come from new startups again. The first one of the year has been celebrated last Sunday. We are in UK. We have a very controlled organic company. We think, today, we just delivered the startup two days before to please us as we are coming here. So, Laggan-Tormore, even if it's honestly a little delayed – or not too little, it has been delayed compared to our plan is now under production. It's an interesting development, 90,000 barrels per day. We have 60% in being operator with (37:47) with new fields to be connected with (37:48) in coming years.

So, it will be delivered. We have also in 2015 over operated projects, which will start up, Vega Pleyade in Argentina. It's a gas project. And Incahuasi in Bolivia (38:05) Vega Pleyade by first semester, probably by March or April; and Incahuasi by middle of the year.

Then two of the big projects, the non-operated by us are – will start up in 2015. Angola LNG will start. In fact, these two projects will be started. We do not know when we will start. For Angola LNG, the operator announced as April, let's say, by middle of the year. And Kashagan and all the consortium is clear on December 2015. So, I'd just repeat to you what 2016 – sorry, 2015. Nobody really knows. So, 2016.

So, these additional startups press and it's more important in fact, in terms of volume. The ramp up of the nine 2015 starters, but I will not give you again, but we have the chart, will give us an additional production of 7.5%, 180,000 barrels per day. We have a decline of around 3.5%, so you can find back the 4% increase of production.

A word about the exploration because it's also important to prepare the future. As you know, we have refocused the exploration. I would say under the leadership of Kevin McLachlan that you met in September and his team and his new exploration team, it's not only a question of budget. It was, in fact, a question of strategy as well. As Kevin told you, we have no strategy, where we allocate 50% of the budget to core and emerging areas, 25% of the budget to near-field exploration and around operating asset and 25% on high potential (39:54) targets.

I'm pleased today because this policy begins to deliver some results and in particular the last discovery to which we have done in Myanmar on Block A-6, Shwe Yee Htun, if I'm reading correctly this language, is in fact – I'm pleased because it was the first license that we have – in which we farm in under the leadership of Kevin McLachlan and his new team.

So, it was the first one, and it's the first discovery. So, I hope it will continue. So, I encourage them to give us further advice to farm-in in some licenses. It's a new gas province (40:33) Myanmar and there are – we have domains there around, and we are quite excited about it.

We have also discovered gas in Argentina. I just mentioned Vega Pleyade starting up. Leo is a new discovery. It's a fairly conventional gas pit, which could be connected to (40:51) installation like Phoenix. And as Patrick told you, we do not – we decided to stop the sales – the sale of (40:57) for two reasons. First reason that it's true, but we had an offer, which was just diminishing month after month. So, in October, I thought and we decided to stop all that because we don't want to lose value on such a nice asset (41:11) we are not in desperate situation, not at all. The second reason is that, in fact, we are making discoveries around Daesan, Ukot South, Owowo West, so there's a big potential. So, I think all that, in front of this, we decided to stop the sales because we prefer to keep the asset.

Then we have some appraisals which were giving some reserves, and Vaca Muerta in Argentina is a shale gas play. We clearly – we have in our hand quite a big portfolio of shale gas. We have agreed to launch the first phase of development of $500 million. It's linked to the gas pricing policy from the Argentinean government, so we are discussing with the new government and I'm optimistic we could have some good pricing – gas pricing policy, which should allow us to launch the first phase of gas shale in Argentina quickly in 2016.

We have also appraised Libra and Libra Northwest wells are all confirming one after one, but we have just in the Northwest of this license around $3 billion to $4 billion, which means more or less (42:20).

So, it's a key asset and I'm convinced that this type of asset, thanks to this – the low cost, we can obtain to the industry, is an excellent project and we are working out with Petrobras to be able to sanction it, if not by year end 2017, by – but the beginning of – by year-end 2016, maybe by beginning of 2017. So, Libra is confirmed. And then, appraisal in Elk-Antelope in PNG is also positive, confirming the figures on which we acquired the assets.

Then, I will move to the Downstream. Obviously, I can tell you, if four years ago, somebody would have told me that the Downstream process of Total would have a ROACE of 32%, I would not have bet a single penny on it. We were the laggard of the industry. It's clear. It's why in March we decided to restructure, and to ask Philippe and myself and by that time to take this part of the company and to lead it. It's not only our job, it's the job of everybody. But at the end of the day today, we have ROACE of more than 40% in Refining & Chemicals, more than 20% in Marketing & Services. So, it's – and I can tell you that the Downstream team today in Total are very motivated maybe a little too much. We have to cool that down sometime. But it's better than before. And they can compete with the leaders of the Upstream leaders. So, it is very good to have all these two, downstream and upstream divisions, being proud of working in the company and delivering results.

In terms of cash, as you say, as Patrick told you, cash is the most important. It is the blood of the company at the end of the day. They delivered $8 billion. On this chart, on the left side, what is interesting is to compare, we just put the refining – European refining indicator as a basis to compare some years. If you compare 2011, 2013, 2014, which are more or less the same margins 2017, 2018, 2019, you can see that there is an improvement in cash delivery of $2.5 billion. If you compare 2012 of $36 and 2016 no anticipation, $35 with the same margin then again there is $2.5 billion of additional cash.

So, this is not only a question there again linked to – it's not only depending by the margins, of course, better if the margin is good. And then, again, we think that 2016 could stay around $35 per ton. In the previous presentation, we are using a conservative approach of $25 per ton. I don't change my view on the medium and long term, I put $25 per ton. We still keep that assumption to plan of investments in refining. It would be a mistake to change it.

Having said that, on the short term, the gathering spreads remain quite good. And since the beginning of the year, the average is $41 per ton. We'll see – we still have a lot more to say, but we are – with $25 per ton, we will be able to deliver $7 billion. And just to give you an indication, $10 per ton represents $500 million of cash.

So, we are clearly, in the Downstream, able to deliver cash. So, if I speak a little more about these two divisions, first, Refining & Chemicals. We continue to work on Refining & Chemicals on several projects. First of all, this is not because the margin has been good that we stopped our restructuring work. On the contrary, we even accelerate it. And in 2015, we could have the temptation because the margins were good, not to make all these restructuring, but we launched them. We launched it in UK on the Lindsey refinery last February and in France, in South France, in La Mède, where we decided to transform the refinery into bio-refinery.

And this will allow us – we will be implementing in 2016. And this will allow us to reach our target to lower our European capacity by 20% by end 2016 instead of end 2017. So, this is the lesson when it's not because we have good times, but you need to stop your efforts. On the contrary, because this is when you have a good time that you can't repair the lower – the worst time.

And so, we are doing that. We are also in Refining & Chemical, in 2016, we'll deliver the investment in Antwerp with new conversion units and we are also working in Saudi Arabia on the capacity creep of SATORP. SATORP is running perfectly well, 400,000 barrels per day, a very high variability today. It's a brand-new plant. But we are beginning to discuss, and we are more than discussing, we are studying and we'll invest in enhancing the capacity.

So, all these projects will deliver from 2017 an additional $500 million of cash, and we are thinking to the new wave of Refining & Chemical projects, with (47:37) factor in Port Arthur, with debottlenecking of two crackers in Qatar and with upgrading of refinery of Donges, all these projects have (47:52) and will be sanctioned in the coming year.

On the Marketing & Services, where again the results this year have been excellent, $1.8 billion of cash flow from operation was delivered, and we are targeting next to $2 billion which was the target that Philippe set to his teams in 2012, if I remember, to be a $2 billion cash flow company, so we will reach that very quickly. It's – the reserves again, you can see our sales, retail network sales have increased by 6% which is more than the 4% we target and the market which is growing by 2% is quite an achievement.

It's linked to a repositioning in Europe, in particular France and Germany. It's also linked to the development of our market share in Africa where in particular in Egypt where we – the acquisition we've done two years ago are beginning to deliver excellent results under our leadership. In lubricant as well, which is representing more or less 1/3 of the results, we have an improvement, an increase of 3%. Philippe is a little disappointed. We targeted 4%, but I told him it's a good result. It's more than market yet again. But so, we have started a new plant in Singapore in lubricants, a big plant, which will allow us to deliver to grow in Asia.

So, then, if I come back to probably the slide, which will be most commented by all of you, about the group cash flow breakeven, which is of course important. Let's begin by the left side of the slide. What do we show you there? We show you the free cash flow, which is a cash flow from operation plus net asset sales minus CapEx. You can see that in 2015 that's $52 per barrel and $49 per ton, we were almost at cash – free cash flow breakeven, minus $300 million, which meant that in a normalized refining environment we gathered a free cash flow breakeven around, at $55 per barrel.

In 2016, we gave you two indications. One at $50 per barrel. It was the first budget, and then we changed it to $40 per barrel. We are adapting ourselves. And you can see that we have an assumption, which is a conservative assumption of net asset sales of $2 billion. So, even if we have an objective of $4 billion of asset sales, what it's important for is the global balance of the cash flow is the net asset sales because we planned to acquire assets. We need to continue to preserve the future there again. The net asset sales and $2 billion is conservative. This year, we made $2.7 billion, and the year before $2.6 billion.

With $2 billion of net asset sales, at $50 per barrel, we would be – we'd have free cash flow positive of $1 billion. It would be negative of $1 billion and $40 per barrel. That means that break-even cash – free cash flow is at $45 per barrel with the assumption on the refining margin of $35 per ton.

For the years after, I'd just remind you, and there is no change there, what we told you in September on the organic free cash flow which means that there is no impact of net asset sales in this aggregate. We told you that, at $60 per barrel in 2017, we will be able, for organic free cash flow, to cover our cash dividend. And if I'm going late beyond that in 2019, it's $45 per barrel, which is organic free cash flow breakeven.

All of these explain you why. As a board of director, he's confident today, first of all, to maintain the dividend but also to maintain the scrip dividend in 2016 as we see this balance of cash flow for the company.

And as I told you as well and in the next slide, at $60 per barrel from 2017 – no, sorry. Something is going – yeah, at $60 per barrel, we will be able to cover 100% – could you – this one. Stop. Thank you. We will be able to cover the dividend in cash at $60 per barrel. The board of directors of Total is comfortable, first of all, because the payout ratio of the company, as you can see, is quite reasonable. It increased from 58% in 2014 to 60% in 2015 despite the collapse of the oil price. So, we are still in the range around 50%. And we are again – we think it's reasonable to maintain the dividend at this level.

The other way that you can see that as a shareholder and the good demonstration why it's good to invest in Total, is the Total shareholder return ranking, we took it on one year, on two years, and on three years.

If you put $1 in Total compared to $1 in our peers, we are number one on one year, we're number two on two years, and number three on one year. We are very honest by the way because we are number two on two years for 0.1% only so you know. So, it's a clear, good investment. And again, we are committed to the shareholder return.

Just giving you two slides on what happens beyond. First of all, the slide of macro. I'm unable to give you the price of oil tomorrow morning. I don't know when the price will rebound, but I'm convinced it will rebound. And I will tell you why. It's quite a simple schematic. We just compare 2015 and 2020. You all know that the average decline in this oil industry is around 5%. And by the way, this decline will not be lower if we continue to invest less (54:19). It will even accelerate the decline.

If you take 5% out of a market of 90 million barrel of oil per day, on five years, that means that the decline represent 20 million of barrel of oil per day of capacity, which will disappear. If you add on the top of that, the fact there's a growth, let's take 1%, 1.2%, which is 1 million barrel of oil per day of (54:41) per year. It's not – it's again conservative. And for this year, in 2015, it was 1.6 million, 1.7 million barrel of oil per day.

So, if you take 1 million barrel of oil per day of additional demand per year, this means that the new capacity to be invested in the next five years for 2015, 2020 is 25 million barrel of oil per day. I asked other teams to look to the database to know exactly what was truly being developed, being invested. It's around between 15 million and 20 million. In fact, the exact figure (55:14) gave me is 17 million, I think. But it means that what is missing in new capacity is 5 million to 10 million barrel of oil per day.

When you look to what we have decided in 2015, the whole industry is almost nothing. It's less than 500,000 barrel of oil per day for one year. So, we are in an industry because of the huge volatility that we are facing. Of course, everybody is exaggerating the reaction. We try to do it in Total in a smooth way, 15% of decrease per year because we're exiting the early investment phase, but there are other players around the world which are even more reactive.

And so, we are under investing in the industry. That means that one way or the other, I don't know if it's 2020 or maybe before, there will be a lack of supply and it's not only a question of shale oil in North America, it's more of a question of conventional oil around the world.

And the news since beginning of 2016 are not going in the right direction from the top or maybe they are going in the right direction for us which we are preparing the rebound. And we will see. So, that's something we (56:31).

The second slide I want to comment for a little longer view is what does it mean, what means the Paris Agreement (56:41) for a company like Total? Well, for me, I'm a strong believer as well and with the board of directors and the executive committee and we signed a declaration we oversee in October but we have to integrate the 2 degrees C roadmap into our strategy. By the way, one the other modification I will do by September is to have a strategy and climate division, to put – to integrate this view – this climate challenge into a strategy and to transform it into an opportunity.

If we just look to what – it's not oil scenario, it's the IEA scenario. They are the experts. I'm not an expert. If you look to what does it mean, the 2 degrees scenario, it means for businesses but first the natural gas will continue to increase. It's sharing the energy mix, so there is growth in the natural gas. The oil production should have a cap somewhere and then will not increase anymore. Coal is declining and renewable and biofuels are also increasing their share in the energy mix.

For us, what does it mean as a guideline? It means, first, that on oil, we need to focus on low break-even projects in order to avoid revenue stranded assets. And by the way, this is the best answer to the volatility of the oil price.

So, economy and ecology will go together and this is the direction we will take. We did also and we have done that in the last years, prioritized some gas projects because there is a better growth. We have exited from coal business. We will fully exit this business by year-end 2016 including in trading. And then. we need to grow steadily, I would add profitably in renewable and biofuels, and this is what we'll try to do to step after step in the coming years.

So, to finally – to conclude this presentation, I think that, again, as I told you in my introduction, we are ramping up our sponsors in 2016 environment. There is no new recipes. So, same recipes, just adopting ourselves and answering – answer to the challenges and things across to reduce the breakeven. Safety is a core value of the company, and I can ensure it's the only matter which can make me not sleeping well the oil prices, that's a point for me. I'm confident that we have the capacity to resist and to continue to deliver to our shareholders value we expect delivering in all segments, reducing our cost and our target of $19 billion of our CapEx will be the lowest to deliver the 5% of production growth by 2019.

We don't think infer the future with such a level of CapEx and over exceeding to continue to be very serious and to deliver the $2.4 billion. I don't promise you more than 2.4% but I'm sure that Arnaud, Philippe and Philippe are ready to do it for me. And then, at the end of the day, again, they permanently manage the cash of the company. And a little bit of message which was important for critics from Patrick. It's very important in my mind as the board of director. But we have looked permanently monitoring a strong balance sheet because a strong balance sheet for us means that we have the capacity to weather the storm and the muddle of major companies like Total. Somewhere is even more adoptive, I would say. To weather the storm once the price are low because we have the capacity to maintain our strategy, to invest in new projects when the cost will be low from 2017. We will have increased financial flexibility and capacities and the strategy will be to relaunch new projects to seize opportunities, which will come in front of on our best in the coming months and if the price remain visible.

Thank you.

Mike Sangster - Senior Vice President-Investor Relations

Thanks very much, Patrick and Patrick. We'd like to open up to questions now. If you could just please wait until the microphone arrives before you ask your question and just introduce yourself please. First one from Irene here perhaps.

Question-and-Answer Session

Irene Himona - Société Générale SA (Broker)

Thank you. Irene Himona, Société Générale. I have two questions please. Firstly, what cost deflation did you actually see in your CapEx in 2015? And then what do you assume in your new guidance for $19 billion in 2015 and 2016?

And then secondly, what proportion of the reserve replacement last year, the 107% was ADCO and the PSC effect respectively? Thank you.

Patrick Pouyanné - Chairman & Chief Executive Officer

Second question, I will not answer it, sorry. ADCO is a business. If ADCO was an investment figure, it would be there. So you can make your math and your assumption. But what is important that at the end of the day, the organic renewal rate is continuing to improve about 100%.

On the first question, it depends what type of CapEx in fact. Clearly, we have some the rig market has been much more reactive to the situation. But of course, other costs. So there are in our portfolio, as you've seen, when you've – I told you whether it's more than $10 billion of new project being invested, part of that has been contracted under EPC contract and there is little room of maneuver. The drilling part of it has been renegotiated. I can't tell you but our new teams have been – done a great job, even cancelling some contracts in order to get new rigs, and what we have been able to obtain is more or less a reduction of 20% if that is implemented.

What we have observed in the market and – is that you have – in the Gulf of Mexico, today you can't find a rig of $200,000 per day, as low as $200,000 per day, if you want to make a project. It's not enough to launch a project there, but it is very reactive.

And the assumption, what – the market has more or less, when I look to the indicator, which is delivered by (01:03:34), it's around 20%, 25% in the last year, which is quite reactive, by the way, compared to what happened in 2008 and 2009. So reduction of the cost is going quicker, in particular, again in drilling.

Our assumption for the time being in the figure for the future is still – was around 20%, so was conservative, when we show you that the guidance of $17 billion to $19 billion from 2017. The underlying assumptions were 20%. I'm confident we will get them.

Mike Sangster - Senior Vice President-Investor Relations

We have another question. Theepan, same table.

Theepan Jothilingam - Nomura International Plc

Thank you. Theepan Jothilingam from Nomura. Just two questions, please. Firstly, could you just talk about the value of the credit rating both the tangible and intangible value, and how that may be impacted by a downgrade?

And then secondly, if you could just remind us sort of what your assumption would be in terms of the scrip take up for 2016? Thank you.

Patrick Pouyanné - Chairman & Chief Executive Officer

Patrick will answer you on the tangible value. I will respond to the intangible value. As I told you, we try – we have – and Sir Patrick show you the gearing as a value in the – is a parameter, which is followed by the board of director as representing the strength of the balance sheet. And so we have been pleased to see that we were able to have a gearing under 30%, 28%, which give us some rooms to maneuver for future years. And in particular, this year, at $30 per barrel, again with the cash flow breakeven I gave you, if you make some math at $30 per barrel, you can see that this could lead, in the full year, is at $30 per barrel to a gearing increasing by 5% more or less, which makes board of director and myself comfortable and I think the CFO as well if we'll up to 33% or 34%.

The assumption we use on scrip dividend is 50%, which is what we have observed this year. Again, scrip dividend in fact is an increase of capital dedicated to shareholders with discount. So I encouraging all the shareholders to follow us and to support us. $1 invested in Total is an excellent – is better than $1 invested in other companies. So you should follow more the scrip dividend. But 50% is, again, is not – all the math that you've seen are done with this assumption. But Patrick will answer you on the tangible impact of credit rating and other comments if he wants.

Patrick de la Chevardière - Chief Financial Officer

Credit rating is important for us. You saw I'm sure the new price deck used by Standard & Poor's and Moody's, which are I think for Standard & Poor's $50 per barrel long-term, and for Moody's $43 per barrel long-term. They, Standard & Poor's and Moody's, will follow I think. Standard & Poor's put the whole industry under credit watch. They have already downgraded Shell in Europe, putting them again under credit watch. I'm not expecting anything special. I think we are currently AA-. We may move to A+. And I think the whole industry may move down one notch at least for some of our competitors.

In term of cost of borrowing, I think this is already embedded in the market. We may lose a few basis point but not so much.

Patrick Pouyanné - Chairman & Chief Executive Officer

I don't think we reached another Standard & Poor's auditors to downgrade Total at the end of the week. I hope we will maintain AA- rating. We'll see that. He's pessimistic. I'm optimistic. This is the only difference between both of us.

Theepan Jothilingam - Nomura International Plc

So there is no other range between AA- and A+?

Mike Sangster - Senior Vice President-Investor Relations

Okay. I think Oswald has a question.

Patrick Pouyanné - Chairman & Chief Executive Officer

We'll see if there's a good chance to be right.

Theepan Jothilingam - Nomura International Plc

Yeah, please.

Oswald Clint - Sanford C. Bernstein Ltd.

Yes. Thank you very much. Oswald Clint at Sanford Bernstein. Slightly longer-term question but you mentioned the 2P reserve number and the focus for low breakeven oil projects. Can you say kind of what's in that 2P reserve bucket? What was the general average breakeven on the projects and how is that number falling away as we think about longer-term growth, longer-term competitive of Total?

And second question, you've been signing some LNG contracts, I guess recently in January with Indonesia, China, decent 15 years or so. Can you talk about what that's telling you about LNG demand and also what type of pricing is inherent within those plays? Thank you.

Patrick Pouyanné - Chairman & Chief Executive Officer

Laurent will prepare the answer to the question on the pricing. Laurent Vivier of Gas is in the room I think. So Laurent will give you the answer. First, I would like to say, by the way, and before Laurent is thinking to answer, to the right answer, that we are pleased to be able to expand our customer base in LNG. It's very important because LNG markets is shifting clearly from a producing – from a seller market to a buyer market. And so, for launching new projects like the project that we have in Papua New Guinea, which is a low cost project in terms of and very well positioned, we need to find new customers. And the efforts this is the focus of Laurent team is to identify new customers, to go beyond the traditional buyers in China and in Southeast Asia, and Laurent will give you some indication on the – on this type of market price. Laurent, you don't deliver the contract. You are not obliged to answer fully.

Laurent Vivier - President-Gas Division

Just to say that it's in fact contrary to some expectation in market, which is quite long, but it's still possible to secure those contract. They are very traditional contracts in terms of price formula. It's mostly oil-related at levels maybe slightly above than what has been done just before, and we've been able to put a bit of hurry up into it as well. It's very classical contracts, all related for, which on average for more than 90%.

Patrick Pouyanné - Chairman & Chief Executive Officer

The 2P reserves are more than 22 years of production, so it's quite more than 20 billion barrels. The second question that you asked is complex because, again, what is the breakeven the 2P reserves as the projects – some of them have already been sanctioned, they are 2P. So I told you the cost I gave, which was the technical cost for this reserve is around $23 per barrel. I also told you that the all-in OpEx cash flow was $110 per barrel – cash cost, sorry, all-in OpEx cash cost for all this 2P reserve was under $10 per barrel. With these two figures, I think you can derive what you want as what is a breakeven. It's clearly quite low.

Mike Sangster - Senior Vice President-Investor Relations

Okay. There's a question at the front. Jon?

Jon Rigby - UBS Ltd. (Broker)

Yeah. Thank you. It's Jon Rigby from UBS. Just to follow-up on that last question. Maybe I can ask it a slightly different way. To sort of characterize Total over the last decade or so, I think most people would say that you were early in discussing higher oil prices. To what extent was the portfolio, I guess, it's the 2P and probably even the resource base, reflecting that view?

And to what extent, if any, are you having to relook at that resource base and positioning in the context of perhaps lower or simply more volatile oil prices, and certainly, in the context of the comment that you made about it being very important to position yourself at the low end of the cost curve in this commodity market?

Patrick Pouyanné - Chairman & Chief Executive Officer

I know this comment. Your comment is partly right. Having said that, again, the demonstration we gave you is that people are giving this comment, but in terms of technical cost per barrel, we are today at $23 per barrel and we have the best lowest technical costs. So that's true that we have embarked in some projects and you know I can. You have seen this year when we decide to sell 10% of one project in Canada at a low price, it's clearly because we were considering about allocating additional CapEx to this project was not totally in line with the strategy I just described. Having said that, there is no somebody is wrong, somebody is right. We didn't have the same position that oil buyer in the context of Canada because we are less integrated than them. And so we had – we came to the conclusion that this type of reserves were clearly on the high costs merit curve. And that we want, as I told you, to try to move – to exit from this type of projects with a long-term view.

But the rest of the project, most of the project, again, is low breakeven cost. When I spoke to you about Libra, with the size of the reserve, I have no problem to move forward on Libra. When discussed about Elk-Antelope in PNG, this is the type of projects on which again is one of the best LNG projects in term of cost per million BTU. So this policy will be applied.

The portfolio is what it is, but again, when we entered into ADCO, and I heard or see also you read or see comments on ADCO, it's exactly the same strategy, a very low cost oil production and today at $30 per barrel. By the way, these ADCO barrels are worth more even than before.

So, again, this is the strategy I described to you. There are some assets on which maybe we are. But we don't have so many assets. We should consider as high cost. The one we – what we can do as well, which is what we are doing some time, is to try to see if we can improve them by trying to renegotiate fiscal terms in some states in order to – and end this type of projects when if priced for low oil price.

So we have rooms to maneuver on the portfolio and you will see some decision again, like it was mentioned by Patrick, another one with Gina Krog. We decided to sell because we're not fully convinced that we wanted to allocate. What is in my hand in term of CapEx is CapEx allocation. So we have to be consistent between what we – where we put our money and the strategy we want to deliver.

Mike Sangster - Senior Vice President-Investor Relations

Yeah. There's a question from Iain.

Iain S. Reid - Macquarie Group

Yeah. Iain Reid of Macquarie. Quite a bit surprised that you didn't lower your breakeven or at least – the oil price at which you could cover your dividends $17 billion, $19 billion despite the fact you're talking about high levels of OpEx reduction and greater efficiencies, et cetera in the upstream and the downstream. Is this because you're expecting those reductions to be kind of competed or normalized away or is it sort of natural caution, which you're introducing here?

Patrick Pouyanné - Chairman & Chief Executive Officer

No. It's just a question that I tell you to deliver stable messages. We cannot every six month change or guidance. I didn't want to do that. We focused in September was a strategic presentation. We gave you that guidance, telling you at $60 per barrel, we will be able from 2017 to cover the cash dividend. If I can do better than that, you will have to wait for September 2016 to have a good news.

The last four month, three month, we have focused most of our efforts to understand what will be the answer we will bring to the market on 2016. And we will, again, this is a core of the presentation today. On 2016, as you can see, the free cash flow including net asset sales, breakeven will go down to $45 per barrel.

For 2017 and beyond, please wait for September 2016 to have either confirmation, which should not be so bad of our guidance.

Iain S. Reid - Macquarie Group

Okay. Could I try another quick one then. If I saw here a $30 a barrel or so by September, what sort of actions are you going to have to take in order to satisfy yourself that you can get through that with your current plans for your balance sheet, et cetera?

Patrick Pouyanné - Chairman & Chief Executive Officer

Again, I told you that from 2017 or maybe I don't – there is an important but I think I mentioned it in my speech. Out of the $17 billion, $19 billion of CapEx guidance I gave you, 60% are committed. But 40% are not committed. So we have financial flexibility in case the $30 per barrel was remaining there. But honestly, there is also in my mind and I insisted in my speech a willingness not to impair the future of the company, so not to overreact. But again, if the barrel, price of a barrel remains at $30 or $40 in 2017, then we'll maintain the scrip dividend if we are not able to cover the cash, the dividend in cash.

Patrick de la Chevardière - Chief Financial Officer

I just wanted to add that I give you the numbers of our liquidity, and we can go through a long cycle of a low oil price with that.

Mike Sangster - Senior Vice President-Investor Relations

Question from Thomas here on the left.

Thomas Y. Adolff - Credit Suisse Securities (Europe) Ltd.

Thomas Adolff, Credit Suisse. Two questions. One, actually, linked to Ian's. So you've kind of presented plan B, 60% is committed out of the $17 billion to $19 billion, and you have sufficient liquidity, et cetera. But at some point, if China goes into a hard lending, U.S. is in the recession. You don't have the support from strong downstream earnings. Where does the specialty chemicals business sit, which is non-core, and you can actually monetize and generate a lot of money out of it?

The second question, I guess, is maybe more for iron ore and I wanted to know what sort of discussions you're having on fiscal terms and local content now regarding the former. We're interested in Angola and Nigeria because you do have a big reserve and resource base. And in theory, if the terms are right, you can extend production for a long, long period of time. And regarding the latter, I'm actually more interested in Brazil, because 60% local content requirement in Libra, that's a pretty high number.

Patrick Pouyanné - Chairman & Chief Executive Officer

Okay. Two different question. Specialty chemicals are non-core. I will not change my position on that. Having said that, they are very good quality assets. And in my view, it's not the way – I don't want to sell such asset just to fill some gaps in the balance sheet.

Second question on Angola, Nigeria. I can't speak about Angola because in Angola, maybe you've seen that we have been twice in Angola in the last year in July and then in December and it was mentioned by Sonangol that some agreements were signed. Part of these agreements were clearly to – first of all, I can tell you in this country, a country like Angola, Total represents 50% of the operated production of Angola. So we are very important.

And what I observed in the last year is that in this country, the major company like Total, which are the oil partners are more and more the right partners because the medium-sized company, which we are coming to take some exploration license are just leaving this country. So they recognize the quality of partners. They want us to continue to invest. And so the message has been clear to them, and we are the good projects with Zinia. We tell them, okay, if you want us to invest, we just have to negotiate the terms because with the terms that we have today, not only we need to, on one side, to work on the cost, which is our industrial work, manufacturing work, but we need also to discuss the terms and Angola has been open to discuss the terms. And we have today in our hand some fiscal terms, which allow us to consider project in deepwater in Angola in particular there because you don't have in Angola any more big fields to be developed but you have marginal fields.

And they understood the concept, so we need to adopt that and we have in our hands some terms, which should allow us providing, no, but we have to do our work with the engineering firms to launch projects and to develop this type of marginal resources. So – and where they have been flexible to give us the terms, which would allow us to normally to invest at $40 per barrel, so we are working on that.

Nigeria, as you have seen, there is a new government. It's a little slow in Nigeria. It has always been a little different, the government of countries. So we'll see if we are able to do, but again, I met twice President Buhari and the message was the same. We have also in Nigeria onshore some concern about security issues, to be clear, and we have a lot of things to work.

But we have, you're right, a good portfolio of reserves to be developed, but we have flexibilities in these countries because, again, they want us to continue to invest, and a major company like Total are the best possible partners.

Mike Sangster - Senior Vice President-Investor Relations

Okay. There's one here for – sorry, forgot your name.

Anish Kapadia - Tudor, Pickering, Holt & Co. International LLP

Anish. Hi. It's Anish Kapadia from Tudor Pickering. A couple of questions, please. Firstly, in terms of when you're looking at new investments now in this environment, I was wondering how you balance looking at short cycle investments versus long cycle in terms of replenishing your portfolio. So, for example, you've got relatively small exposure into the U.S. onshore where you could ramp up CapEx quite quickly in a recovering oil price scenario relative to your long cycle exposure. So just thinking about how do you look at maybe getting more exposure to U.S. onshore versus taking on more projects in terms of deepwater?

And then the second one, looking forward to 2017, you haven't said much about the projects that are coming on stream. You got quite a few large projects that you're operating, so the likes of Ichthys, Tempa Rossa Kaombo, Yamal and Egina. I was just wondering if you could highlight how those projects are going and if there's – what are the key risks in terms of delivering those on time? Thank you.

Patrick Pouyanné - Chairman & Chief Executive Officer

Okay. First question, I expressed we're disappoint but I like in my strategy to focus more on my strong points than on my weak points. My strong points is clearly not U.S. shale. As you see in that room, a lot of people of Total, who are experts in shales will you give me the names.

And secondly, I suppose I spend a lot of time on this topic, it's probably the most complicated question. But what I observe is that the objective is not just to make a short-cycle CapEx, it's to deliver cash at the end of the year or the day. My objective is not just to have flexibility in my portfolio and I recognize the flexibility. But the real objective is to make money, is to be profitable and I'm afraid that it's not so easy to be profitable in such U.S. shale. And in particular, when I compare other regions to some of our peers it's because we are not exposed to that. Doesn't mean that they close the door, but again, yes, there are some advantage with short cycle, long cycle, but if you want to deliver value to shareholder, it's better to bet on where I can differentiate myself but to try to be a copycat, a bad copycat of some players which are better than me.

About the projects that you mentioned, so you want information about all the projects of the company. So I'm not sure I will be able to deliver all that. But Arnaud maybe will help me. Ichthys first, we announced that the objective is to start it up by September, I think 2017. There's a slight delay. It's a huge project. It's mainly to (1:25:13) the big CPF, the offshore component, which is being built in Korea, which is on the critical path. The LNG plant is on time even maybe we believe maybe a little earlier than expected but it's good. So it's a key project. It's a very profitable project. So we have lot of – Arnaud went again in Korea last week to visit it and to take care of that. So, no, I can only – I confirm today the target of September 2017.

What are the other projects you mentioned? Yamal, I think we have to end of 2017, which was the target, so end 2017, that means the impact from the production in 2017 will not be – but we are – the project is moving on. We are under way. We will have invested $15 billion by spring in Yamal and project is progressing.

What are the other projects you mentioned? Egina, the target date is around mid-2018 I think. Correct me, Arnaud, if I'm wrong.

Arnaud Breuillac - President-Exploration & Production Division

Yeah, second quarter, mid-2018. I confirm.

Patrick Pouyanné - Chairman & Chief Executive Officer

Okay, mid-2018. There's a difference between the CEO and (01:26:30) but I took note of second quarter and will – I will see him in two years together, where we are together mid-2018 – what I had in mind. And what else do we have? This is all what you want?

Anish Kapadia - Tudor, Pickering, Holt & Co. International LLP

Tempa Rossa and Kaombo.

Patrick Pouyanné - Chairman & Chief Executive Officer

Tempa Rossa is beginning 2018. Beginning 2018, I think. Beginning of 2018. And Kaombo, Kaombo you have two vessels. Remember, Kaombo is in fact is a two project, Kaombo 1 and Kaombo 2, Kaombo North and Kaombo South. And beginning 2018 as well, I think, for Kaombo North for the first one. And 2017, beginning 2018.

Mike Sangster - Senior Vice President-Investor Relations

Okay. Thank you. There's one question at the back. Neill?

Neill W. Morton - Investec Bank Plc (Broker)

Thank you. It's Neill Morton from Investec. I had a question on M&A. I'm well aware that a question in M&A is usually a waste of a question. But I just wanted to clarify some of the messaging you gave out today. I think this morning, Patrick, you too was quoted as saying that the recent pitches from investment bankers didn't make sense economically. And you've also talked about preserving the strength of the company and the balance sheet, et cetera. But Patrick, you also said during your presentation that you, "had to prepare for the oil price rebound". You needed to make bold decisions and that you saw opportunities in the coming months. What did you mean by that?

Patrick Pouyanné - Chairman & Chief Executive Officer

I just tell the truth, I think the strategy for a company like Total. But we are – don't worry, we are fully aligned on that subject. No difference. We are clearly what I think is the best strategy is to invest when you are in the low part of the cycle, because then you can benefit from low cost or for access to new resources at a low cost as well. Having said that, because and the balance sheet can be used to do that.

Having said that, we are not in a hurry, we are patient. So I – this is where we agree together. Today, yes, that's true. But a lot of bankers come toward the offices explaining us that we need to spend the money immediately and quickly. All that is very expensive and too expensive. So we have to be patient. The – as I told you, our model is perfectly fitted with that. From 2017, we have more financial flexibility. It's just a question of patience.

We are studying opportunities, that's our job. But, again, if we move, it's because we'll have the strong belief that it's worth. So I don't take you with that. We will not move, but again, don't believe – this is will be on, again and linked to my answer to Anish, I prefer things that I can control and then which we are good than things that I don't control and where it will be an adventure.

Mike Sangster - Senior Vice President-Investor Relations

A question from Aneek. In the center of the group.

Aneek Haq - Exane Ltd.

Thank you. Aneek Haq from Exane BNP. Two questions actually if you don't mind. The first one is similar to some of the conversations we had earlier. But when you – I don't think it's an unfair statement to say that over the past few years, you've probably given up some of your integration that you had previously. With the chemicals businesses sales, et cetera, but is there a plan potentially given where you are with the lower oil prices today to potentially grow maybe marketing even more aggressively than you have done in the chemicals potentially even more aggressively?

And then the second question on LNG. I think you said two-thirds of the contracts that you had was sort of price review or after 2020 price review in your September presentation. I just wondered if there had been some pressure on those contracts just recently given the oil price fall.

Patrick Pouyanné - Chairman & Chief Executive Officer

Okay. No. First the first question, we didn't – I mean, frankly, I think we were strong on keeping the integration of the group. What we sold, what we have sold as chemicals, our specialty chemicals like the additives, where there was no integration between the additive and the rest of the company like there is no integration between (1:30:50) and the rest of the company. This is why I answered to Thomas that they are non-core.

The integration is what we kept, and when we made the IPO about Arkema for the same idea, what we kept in Total was basically the petrochemical with the crackers and the big polymers, which are linked to, I would say, the downstream of refinery. And when we set together, we put together refining and chemicals as a division. It was exactly the idea to get the most out of that.

Your question is a good question. All the bankers, which group come to my office are only speaking to me about upstream assets. I don't know why. It's a good question. Maybe we can make money as well in the downstream.

I have the impression this is what we demonstrate. So, clearly, in my view and I gave you a signal in September by telling you that we were going to 75/25 spread of CMO of (01:31:49) different from 80/20. And we have made some true acquisitions in marketing. So, for me, at the end of the day, our mission is to deliver value to the shareholders.

And if on my table, the executive committee table came projects with good rate of return in marketing, I'm very happy to support them. Sometimes, I even increasing their bids. They are surprised. So I'm ready to consider my first strategy of the company is clean and integrated strategy remains to be along the full value chain.

So we have businesses. We had, in the past, some debates because where the downstream refining and petrochemicals at the profitable ratio of 5% in 2010 or 2011. Of course, we are most discussing about do we keep this type of businesses. But today we managed, and it was the purpose of what (01:32:44) by restructuring the downstream. We managed to highlight the quality of the asset and to put all these businesses at the same level. By the way, today, what is it? 5% of (01:32:55) ratio unfortunately is (01:32:57).

So let's be – this is why we have this strategy. So we are considering various possibilities, why not in marketing, why not in petrochemicals. In petrochemicals, if we have access to low cost feedstock, we'll look carefully to projects with low cost feedstock because I'm sure it will be competitive compared to naphtha feedstock crackers. So nothing is forbidden in the company. At the end of the day, what is important for us is what is the value we can deliver to our shareholders.

The second question was LNG review, Laurent again.

Laurent Vivier - President-Gas Division

A very short answer. Nothing has changed. We had a roughly two-third of the portfolio which was subject to some price reviews. We were talking about the E&P portfolio, so those are long-term contracts, 20-year contract with partners, which are usually integrated companies and dilution as well to shareholders in the (01:33:58) plants. So, no, nothing has changed since September with no discussion on specific terms.

Patrick Pouyanné - Chairman & Chief Executive Officer

But what we told you in September, remember, it's what one-third review is after 2020. One-third. One-third with no price review. One-third after 2020. And we have one-third before 2020. So maybe on the focus is more on the one-third before 2020 for your answer. Okay.

Mike Sangster - Senior Vice President-Investor Relations

Okay. A question from Marc I think, here at the same table.

Marc B. Kofler - Jefferies International Ltd.

Thanks very much. It's Marc Kofler from Jefferies. Another question on the downstream please. I was just wondering if you could give us an update on the (01:34:38) year-to-date. And then also, just sort of more broadly thinking about refining in 2016 versus last year, if there's any sort of more structural observations you might have on the market, be it around strength in gasoline cracks or perhaps any observations you might have on refinery utilizations as we run through the year? Thanks.

Patrick Pouyanné - Chairman & Chief Executive Officer

Philippe Sauquet will answer to the second question. I can answer the first one. I've done it in my speech, but I wasn't clear. It's $41 per tonne year-to-date since the beginning of the $41 and today, this morning, it was around $36. So $35 per tonne assumption is not so optimistic but Philippe could answer, but as you see, the gasoline market and the various components of the product market.

Philippe Sauquet - President-Refining & Chemicals Segment

Yes, for – as a you know, 2015, we saw in fact a soft increase of gasoline demand especially in the U.S. but also in Nigeria, India and China. So the demand was very high in 2015 and the cracks were very high. 2016, of course, remain to be seen but what we see in the beginning of this year, we are at the – even in the winter some high cracks on gasoline. And what we are seeing at least on the supply side is that a lot of project of new capacities have been delayed, mostly by integrated players. And therefore, even if we are a bit less maybe optimistic on the demand side, 2016, the supply side is much lower but was anticipated and this is what we are not too pessimistic, I would say for 2016 even if 2015 might remain very historical year for refining and especially for gasoline cracks.

Patrick Pouyanné - Chairman & Chief Executive Officer

The utilization rate in 2015 was 88% that are controlled, which is quite high rate. Again, I think you know in this type of position there are people. They will make mistakes because again it's human psychology. The margins are good, so I think some people begins to think to reinvest, to increase capacity, but it's less – it takes two years, three years before the mistakes are there. So I think we are, from my point of view. Another point I would like to enlighten on reserves, the petrochemical margins are very strong. We have made a historical year on the European polymer business for example, and they are still strong. I'm not sure to fully understand why probably because the products price as an absolute terms are following the oil price and the part of the additional margin is captured by the downstream business. This is why we speak about integration. It's not a physical integration. What is interesting is that when you have – the price of oil is going down, you are able not to give to the end customers a full margin around the full chain and you capture part of it in refiner or in petrochemicals.

Mike Sangster - Senior Vice President-Investor Relations

I think there's one from Lydia (1:37:52) right at the back.

Patrick Pouyanné - Chairman & Chief Executive Officer

Lydia (1:37:56) is at the back. That's strange.

Unknown Speaker

Thank you. Two questions, if I could. The first one on the OpEx side, and there have been some very, very impressive improvements in the upstream OpEx of the barrel side. Can you talk about where you think that ultimately can go to. Are we looking at a case of we can go back to 2006, 2007 levels in terms of – if the oil price stays where we are? And if actually is that sort of thing possible?

And the second one, just to come back to that longer-term outlook, you showed two slides on that longer-term outlook, one being on there's a shortfall in supply for the oil side. And so is 2020 by the time we get there. And then the next slides, talking about gas prioritization and towards the 2-degree world, can you just talk about how you're making those decisions in a world where the policy, particularly in carbon pricing is very early on and that we're not actually necessarily have the policy to support that 2-degree world?

Patrick Pouyanné - Chairman & Chief Executive Officer

I think, the OpEx can go as low as where they were in 2005. There is no reason. We are in an industry where the cost, I mean, either the OpEx or the fiscal terms are following the price. Everybody wants us to continue. We want to invest. The full system – those countries want us to invest. The supply chain wants to invest even they have capacities to deliver, which are not used anymore or which will not be used. So it's a question of finding the right balance.

As I said often I usually measure a cake. Okay, the cake is divided not by three but by nine, in fact, the surface of the cake. So the cake is fuller but it's a question of do you share it? And this – and it's a question of cycle. It takes time to find a new balance, in particular, in a landscape where there is a collapse, and you don't know where you are exactly.

And again, when I discuss with the engineering firms, the big firms, when I was meeting them by middle of the year, we were all expecting to see rebound before year end. I don't know where the rebound could have come from. But they were, just because why because they have some work to be done for 2015, 2016. Today, when I meet them, they are beginning to complain because 2017 is empty. So, of course, everybody try to resist. We resist on our side, they resist on this side. The countries also, but we will find the right balance. But honestly, actually, no reason why – by the way, just to give you the answer, I was answering, I was waiting the answer, but there's a screen in front of me, that's why I'm very able to answer you.

The OpEx in 2006 in Total was $4 per barrel. As you know, look, we have been from $9.9 to $7.5. We can target $6.5. So, if the price is staying there, again, I don't believe it will stay there because I think we will see more – we'll see sooner than later. It could remain low but we will see sooner than later something happening in this market. But again, if it stays there, there is no other way but we find the right balance between offset to share a smaller cake in order to be able to continue to invest. And this is what will happen.

Your second question about oil supply. Again, the answer I give you is very clear. If I'm taking – yes, there will be better prices in the future one way or the other. So, we are still an oil and gas company, we still invest in oil and gas, okay? It will be the core of the business, and not only in marketing. Sorry, Philippe, but also in upstream. Arnaud has to be not to be too worried because we keep a long-term vision, and we are not investing for three years. We are investing for 20 years. And it's our mission we'll continue to do that.

Having said that, because we have this broad view of climate change, the answer I bring you – I give you is the best way to answer to that, is to be positioned assets which will be competitive. And which will stay there and produce like ADCO, for example, in Abu Dhabi. Again, I am insisting in 2030 compared to high cost assets which may be – could be stressed in this type of environment.

Mike Sangster - Senior Vice President-Investor Relations

Any more questions? Chris?

Christopher Kuplent - Bank of America Merrill Lynch

Thank you. It's Chris Kuplent from Bank of America Merrill Lynch. Just two questions. The CapEx cut for 2016 going down to $19 billion, can you explain where that cut is coming from compared to your previous assumption of $20 billion, $21 billion. Is it because you're not really – I didn't, I wasn't aware of any major FIDs that are coming up, so I didn't see much that you could delay. So, just some color on where that reduction is coming from?

And talking of FIDs and thinking about 2017, which one of those projects that you've highlighted in your speech you are most excited about and you think are the best prospects over the next 18 months to FID, and under what long-term planning assumptions would you be happy to do that? Thank you.

Patrick Pouyanné - Chairman & Chief Executive Officer

I tried to answer in my speech to your first question. The decrease is due to first to, clearly, some market effects, for example, in the rig markets. So, have taken that into account. The negotiation which were led by Arnaud teams were efficient. And so we have taken part of that.

The second point I mentioned as well is that, again, we have a policy on mature fields, in which we invest. We have a two-year payout on that. So, we have reduced part of the CapEx, because at $30 per barrel, you don't have the same payout but on $50 or $60 per barrel. So, we have reduced – $30 or $40, we took $40 more than $30, by the way – we have reduced the level of CapEx allocated to some mature assets, so, some mature assets as well.

So, there is no – these things have been done – by the way, I will tell you, it has been done by the bottom-up figures, and when the division came to the Executive Committee, the addition of all the CapEx required were around $19 billion. It's also probably because the teams in the company are integrating again. The constraints, they have understood.

There was a clear shift in the company in September. In September, when we have looked to the reserves of Total compared to our peers, we have demonstrated to all the teams that we were on the right direction because – and so the people understood that what we were asking them to do since the beginning of the year was the right answer, to focus on the cost, to focus on operational efficiency. And so, in fact, the $19 billion figure was a bottom-up figure which came from the teams requesting to us. So, this is our best answer.

So, all that has been done, I would say, and there is no miracle. But, again, the previous guidelines was coming from the business plans which were prepared in spring. That means that the mindset of the company from all teams are just integrating the new agreement, and which is positive, it's why I'm comfortable.

The various FIDs, for the upstream I think Libra is clearly quite exciting. We have a huge resource in place. So, the resource risk is quite minimal, at least for the first FPSO. We'll probably have to build one, two, three, four FPSO if we want to develop Libra. It's a question of cost. There is – we have some technological issue about CO2 injection but we can cover them. But I'm confident. I was in Brazil with Arnaud last – two weeks ago and we have good discussions. Then, of course, what we could also sanction will be the side cracker, the cracker – ethane cracker in the U.S. And also I hope the Qatar debottlenecking in the downstream.

So, we have various projects on which we are working. And again, strategy will be to be able to sanction projects, which can be benefiting from low costs in the coming month.

Christopher Kuplent - Bank of America Merrill Lynch

Thank you. Just to clarify on your first answer. It does include $1.5 billion of exploration. And I remember in September you said that is not enough for 100% reserve replacement ratio. So, that budget still includes room for external...

Patrick Pouyanné - Chairman & Chief Executive Officer

No, no, no, look, you have all the answer in my answer. If you look carefully to what I told you today, you have all the answers. The $1.5 billion explorations, the CapEx part is around $1 billion more or less – a little less, it's included, as it's shown on the slide, in the $19 billion. Then, I told you something else, that the net asset sales minus purchase is around $2 billion, and we have a plan for $4 billion sales. So, that means that we are targeting to buy assets for $2 billion somewhere.

Christopher Kuplent - Bank of America Merrill Lynch

Understood.

Patrick Pouyanné - Chairman & Chief Executive Officer

Not only in upstream. So, again, yes, we will. The objective of an oil and gas company and of Arnaud teams is to have 100% replacement rates from reserves and we have to ensure the future even if you can have years up and downs. But, again, you've seen the slides shown by Patrick, we have improved year after year, our capacity, to the organic rates of return, so that's the answer.

Mike Sangster - Senior Vice President-Investor Relations

Okay. I think Lucas has a question.

Lucas O. Herrmann - Deutsche Bank AG (Broker UK)

Yeah, thanks very much, Mike. You've done most of the forecasting for me. So, thank you very much. Couple of points of clarity and then one which is slightly conceptual. Points of clarity, just in terms of the growth estimates for this year, I presume that there's no assumption that Yemen comes back in 2016.

Patrick Pouyanné - Chairman & Chief Executive Officer

No assumption. No, we are realistic guys.

Lucas O. Herrmann - Deutsche Bank AG (Broker UK)

Okay.

Patrick Pouyanné - Chairman & Chief Executive Officer

So, you could have a good surprise but I'm afraid this one will be a very good surprise, unfortunately.

Lucas O. Herrmann - Deutsche Bank AG (Broker UK)

Thank you for that. And then just on LNG, a couple of questions. First, whether Laurent might be able to give us some – what the average realized price for your sales was this year. And how much – what proportion of the contracts have collars? So to what extent can I feel secure around pricing in the current year?

Patrick Pouyanné - Chairman & Chief Executive Officer

Yeah. That's a good question, this one. The realized price we gave you from Patrick presentation, 33% on the world gas portfolio. I'm not sure we want to disclose what is the impact on LNG, but it's true, the 33% is less than the 47% on the Brent, there are two effects. One is a lag time in the formula, the second is that on many LNG formulas, you have what we call the – it's a S-curve, so you have what you call a floor somewhere, and which could be hit and sometimes we don't like it on the – we are not liking the S-curve when it was reaching the high prices. We quite like these ones on the low prices today. So it helps to have this gas price being resilient.

Lucas O. Herrmann - Deutsche Bank AG (Broker UK)

But sorry, did I hear a proportion that are – that have built around an S?

Patrick Pouyanné - Chairman & Chief Executive Officer

I think it's more – quite a high proportion, I think. Yeah? No? Laurent?

Laurent Vivier - President-Gas Division

No – but – yes. Most of the LNG deals do have an S-curve. To give an exact point of inflection, it depends on the history of the contract. So it's really a kind of continuum. But the fact that you have those S-curves, the fact you have as well a few constants in the formulas do help in terms of the resilience of the LNG prices.

Patrick Pouyanné - Chairman & Chief Executive Officer

Yeah. You have constants as well which are almost as important as the S-curve.

Lucas O. Herrmann - Deutsche Bank AG (Broker UK)

And then, Patrick, I mean a more conceptual question, the price moves in a cycle, and I don't think that many of us would disagree with you that prices at some point have got to rebound. But structurally, it feels as though we're probably in – maybe this plays to the point on operating cost, we're now into a period where the industry is quite possibly going to face extended period of price deflation, and that the U.S. will help that price deflation along.

So, where does that leave you when you think about investing into things like Papua, whatever duration type projects where the capital upfront is substantial. The breakeven today may be $7, $8 on gas, but in five years' time, the breakeven on that same project will be $5, $6 gas. And the reality – and the danger is that consequently, you find actually, what looks competitive today is taken away from you very quickly tomorrow.

Patrick Pouyanné - Chairman & Chief Executive Officer

But you know, Papua is a good example of a long cycle investment. So, I'm more nervous today on some short plateau on which even if I benefit some low costs, as the price remain low, I will produce most of my reserves during four years, five years at a low price where it's more risky there. But on Papua, Papua's main challenge for me first is to find the customers with good contracts.

But again, if today, I think in 2018 – 2017, 2018 when we'll go to the market to ask for bids to build a new LNG plant, I'm not sure there will be many projects. And the people, the EPC contractors would be very happy to come to us. And so, we'll be in a pricing power position where we could benefit from low costs.

So, if you keep that perspective, I'm confident, but again, we have to be very serious and disciplined on the costs we obtain in order to maintain the low cost base. But Papua is well positioned near the markets. So, transportation costs are minimum. I think it's a good project. We will not rush on it. We have no – I mean we won't rush. We have first to find the customers and second, to stabilize a scheme so we are – but again, I think, in that case, I'm comfortable with investing in long cycle projects.

Mike Sangster - Senior Vice President-Investor Relations

Okay, thank you. After all of Lucas' questions, we have time for one more. Yeah. So Kim, right at the back.

Kim Anne-Laure Fustier - HSBC Bank Plc (Broker)

Yeah. Hi. Kim Fustier of HSBC. Could you please characterize the current environment for asset disposals? Most people would say it's more of a buyers' market, yet you appear to have front-end loaded the disposals target for 2016, or was that rather slippage from last year's target which you didn't quite manage to achieve? Thank you.

Patrick Pouyanné - Chairman & Chief Executive Officer

It's clear that it's not the best time to sell upstream assets. Again, this year we have made some excellent deal in upstream in 2015, I will not mention them because the buyer will not be happy. And we have done some deals like Usan, where we decided to stop.

So, if you want – but in our portfolio, we still have some non-core assets, not the specialty chemicals, Thomas, don't dream. But we have other assets like pipelines, like fertilizers, like things which frankly are not core and that we can try to divest. So, the $4 billion target will – we are looking to see if we could have some good offers from upstream mature fields, for example. You have companies today to try to benefit from the situation, to get some mature fields and maybe it has interest for us to divest some of them. It's a question of, again, of cost base. But again, if we have the right value; if we don't have the right value, we'll keep the asset. So, we have many ideas.

The advantage to have a large company like Total is we have a lot of assets, and we are discovering new assets sometimes that we don't know including an infrastructure. And so, we are pragmatic. And I know it's not the best time for some of the assets, but when you go to the infrastructure market, you find buyers.

Mike Sangster - Senior Vice President-Investor Relations

All right. Thanks very much, everyone, for coming today. Thanks to two Patricks for all the answers. I think all the Executive Committee is here, so if you'd like to join us for some drinks at the back of the room, we can carry over – carry on the discussion over a drink. Thanks very much. Bye.

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