Lucas Herrmann: Yes, it’s [indiscernible] modernization of the old model as well, Patrick. So that’s a lot of work, but there we go.
Patrick Pouyanne: Thank you, Lucas.
Operator: The next question is from Kim Fustier of HSBC.
Kim Fustier: Firstly, I wondered if you could talk about the 3.5 million tonne SPA with Qatar Energy on LNG volumes? Some people have noticed the 27-year duration, it seems like other offtakers have signed shorter-term contracts. And it also takes you well beyond 2050. So I just wondered whether this was a requirement from Qatar Energy? And also the LNG will be delivered in France, I believe. Can you say whether there was a destination cause or whether you can redirect the volumes? Secondly, I wanted to ask a broader question on climate. I wondered if you could share your expectations of what Total and the broader oil industry could potentially announce at COP 28 next month? You’ve already got a target of reducing leasing emissions by 80% by the end of this decade, and that’s Paris on mind. So could the ambition be to share your best practices on leasing monitoring and emission reductions and encourage other oil companies to do the same?
Patrick Pouyanne: Good question. Thank you, Kim. The first one, no, we are not alone. The 27-year duration, in fact, it’s for all the LNG offtake all the partners of Northern East and Northeast South, which were the last new ventures, were asked to take their share of offtake on the 27 years. So we are not the only one, all my colleagues. And you will see, by the way, I think they issued over press release to other European companies. It’s only the German companies, which are not part of the ventures of the developments which have decided to elect for 15 or 20 years. So that’s a clear. By the way, honestly, 2026 plus 27, it makes 2053, not so far beyond 2050. And by the way, in our portfolio, and in the net zero company that we described in our last sustainable and climate report that TotalEnergies in 2050, you still see in the mix in our portfolio, we can need some LNG being there, even quite a large share of LNG.
It’s a gas is there in the transition. So we have no problem. Will it go at the end to France or to Europe? I think, yes. I think I don’t see if you could manage again a complex power electricity markets in Europe with a lot of renewables without having flexible assets. So on that, I’m quite clear. So it’s not France, by the way, we committed. It’s TotalEnergies. So we are comfortable. And if we need to redirect part of these LNG to over a country, I think Qatar and ourself, if it’s our interest, we will do it. So no — in fact, these 27 years is a line on the duration of the concession in which we enter on an NFS. It’s just a pure alignment between we invest, we take 3 years to invest, and then we have 27 years remaining. It covers, in fact, the full concession, which is, I think, a 30-year concession.
And I can tell you, we are very happy with the conditions in which we have joined this NFS venture in Qatar. So there, that’s where — so can we redirect? Yes, if it is the interest of both parties, we will have in the agreement, we can redirect with Qatar agreement and might be the case. Climate. Climate [indiscernible], yes, we have strong targets. So we are leading, it would say, recently. I can just confirm to you that we have entered into — we make our job what [indiscernible] would like to do in Cop2more COP 28, it was more national companies, in fact, joining the IOCs. Because TotalEnergies and the others, all I would say, the OGCI companies, we added to forefront of this fight. We have already set the target. On methane, my motto is near 0 methane by 2030.
In fact, between stop flaring, stop vending and in particular, using technologies to detect fugitive emissions with roads, which we do in all our assets. And we are just in the way to share these technologies with some national companies, and we are signing some agreements which will be disclosed before COP. So we have signed 1 or 2 already, but we have to respect the will of the countries to announce them. So it will be done. So we are on TotalEnergies committed in order to propose these technologies, measuring with, again, not only excess 5, but we’ve directed emissions to cover assets, and not only from Total but larger assets from national companies. So we promote this technology. We do our job, and we’ll be able, I think, to announce, I’m sure to announce some of these — in some countries where we have also — obviously, we are operating and we have good relationship with national companies.
We will offer them and deploy this strategy. So we are doing our job on this perspective. And I think it’s very important for the oil and gas industry to engage more national companies in these efforts.
Operator: The next question comes from Alastair Syme of Citi.
Alastair Syme: Any updates on Namibia you want to share? I know you updated at the recent Capital Markets Day, but you’re right in the middle of your assessment and I guess, how is the production test to be one are you looking? And then secondly, can you just — the question of debt, can you just remind us on the hybrids. I mean they are perpetual. But I think as they start to be callable, the coupons change. So can you just talk a little bit about that mechanic, please?
Patrick Pouyanne: Okay. Jean-Pierre will come back on this hybrid to explain you, give you all the details. What I know is that the cost of the hybrid is quite interesting, right? So — but Jean-Pierre will give you some details in this world of a higher interest rate. On the other side, in Namibia, no, we don’t have any update and I can tell you that we started the [indiscernible], which is a discovery in the exploration well, so it’ not a discovery situation. So, well, drilling has started seventh of October, I think, beginning of the month. So it’s on its way. So no, nothing to report today. It takes 2, 3 months to drill. And the test the second well on , just started — the test will start these days, so this week. So sorry, but it’s not — our drilling operations did not follow our quarterly calls.
So you will have to wait for more use. But again, as I said recently, to be clear, we will develop the Vinis discovery. There is a development. So it’s a matter for us now to try to assess the full size of it and then to find the right scheme of development considering that there is quite a good ICGL. But again, it’s optimizing the development that we are looking for the oil development again on business. So we’ll come back with you, I think, probably in February, when we will have the annual results, we’ll be able to disclose more information about it. They will have the results on both these wells and to have more clarity on Vinis expansion. We plan to do a third well after in the north, but we’ll have a lot of data.
Jean-Pierre Sbraire: Okay. Hybrid, yes, that’s true. We benefit from very competitive hybrid bond portfolio because on average, the coupon is 2.3%. So very low, very, I would say, cheap equity. The problem now is that as mentioned by Patrick, the refinancing has become more expensive, 6% more less for a maturity of 7 years. So we use the flexibility offered by S&P to be able to reduce by 10% the global portfolio without losing the equity treatments. We use this flexibility because in the second quarter, we have 1 tranche maturing. And so we decided not to refinance this one. So now we have to see in the future how we can continue to lower the portfolio — hybrid portfolio without losing the equity treatment. So it’s — yes, [indiscernible] at the end that for the coming months.
Patrick Pouyanne: Fundamentally, we will use the 10% flexibility quarter after quarter or year after year in order to at the end, I would say, to eliminate or respect, of course, the rules, but I will do it year after year considering…
Alastair Syme: So just to be clear, the bit that’s callable, does the coupon change on that element? Or does it stay the same?
Patrick Pouyanne: No, it is stable.
Operator: The next question is from Henri Patricot of UBS.
Henri Patricot: Two questions from my side. The first one, on the outlook for oil demand and refining margins because we’ve seen quite a sharp drop in refining margins at the past month, obviously, from a very high level. Just wondering if you’re getting a bit more concern about the outlook for oil demand and refining margins at the moment? And secondly, I wanted to ask you about wind and some more on the European wind industry, we’ve seen the commission this week setting up more actions to support the European industry. I wonder if you have your initial assessments of these actions and what will you see potentially better dynamics for European wind acceleration in wind over here?
Patrick Pouyanne: Two general question, complex one. Oil demand, the oil demand in ’23 is strong, an increase of almost 2 million barrels per day, mainly coming from China. By the way, more than 2/3, 70% more from petrochemicals on 1 side and from as well kerosene, jet fuel, the payment airline activity is back almost normal, not fully. So you still have, in fact, in ’24, some demand from the airlines in the world to come back. So we are not yet fully to be a level quick of it on the jet fuel demand. So I don’t see what it would stop, to be honest, because it’s — there is a call for move in this planet. And secondly, I think the IEA has announced an additional 1 million-barrel of oil per day increase for next year. So I take this point.
