TotalEnergies Opens the Cash Tap as Oil Keeps the Lights On

TotalEnergies has decided that restraint is for other people. The French energy group said on Monday in New York that it will step up share buybacks and keep sending more cash to investors, a decision that sits neatly with a market where crude still trades at levels that make oil majors look, once again, rather comfortable.

The board approved buybacks worth $2.5 billion for the final quarter of 2026, followed by a further $2 billion to $2.5 billion in the first quarter of 2027. That is a clear increase from the $1.5 billion authorised for the third quarter of this year. The company also adopted a policy on Sunday to raise its dividend by more than 5% a year between 2026 and 2030, while confirming that at least 40% of cash flow will continue to be returned to shareholders.

The timing is hardly mysterious. TotalEnergies expects its gearing ratio, a measure of debt financing, to fall below 10% by the end of this year, down from 13.1% at the end of June. In other words, the balance sheet is improving just as management is choosing to loosen the purse strings. By Monday afternoon, the shares were up about 2% from Friday’s close.

The company’s confidence rests on a simple fact: oil is still expensive enough to make almost everything else easier. Brent averaged $103.8 a barrel in the second quarter, when TotalEnergies reported adjusted net income of $6 billion. That kind of pricing does not exactly encourage humility in boardrooms. It does, however, pay for buybacks, dividends and the occasional strategic flourish.

TotalEnergies also reaffirmed its wider production plans. It wants energy output across oil, gas and electricity to grow by 4% a year through 2030, with oil and gas production rising by more than 3% annually on average between 2025 and 2030. It expects free cash flow in 2030 to be around $10 billion higher than in 2025, assuming energy prices stay where they are, which would mean more than $4 per share in additional cash flow.

The group said its portfolio of projects in Namibia, Nigeria, Libya, Malaysia, Mozambique and Papua New Guinea, together with existing reserves, should allow it to keep oil and gas output at around 3 million barrels of oil equivalent a day through 2035. It also wants oil and gas production to grow by 2% to 3% a year in the 2030 to 2035 period, drawing on exploration and discovered resources.

Electricity is meant to become a much larger part of the story. Generation is expected to rise by more than 20% a year to reach 100 to 120 terawatt-hours by 2030. The Integrated Power division, which covers renewables and electricity, should break even on free cash flow this year and turn positive in 2027. By 2035, electricity is supposed to account for a quarter of the company’s energy mix.

None of this comes cheaply. TotalEnergies expects net investments of $14 billion to $17 billion a year from 2027 to 2032. It also reaffirmed its goal of halving direct and energy-related emissions from its oil and gas activities by 2030 compared with 2015. For now, though, the message to investors is the one they prefer most: the cash is flowing, and management sees little reason to pretend otherwise.

Written by Christiane Hofreiter christiane.hofreiter@alpineweekly.com