The war in the Middle East has effectively shut in 15% of TotalEnergies’ global oil and gas output, while the now-offline barrels account for about 10% of the supermajor’s upstream cash flow.
Following requests from shareholders and to answer the question about the status of TotalEnergies’ exposure to Middle East, the France-based international major said on Friday that “production has been shut down or is in the process of shutting down in Qatar, Iraq, and UAE offshore, representing approximately 15%” of the group’s total output.
Onshore production in the UAE, of which TotalEnergies has a share of 210,000 barrels per day, is not affected by the conflict.
The cash flow from operations from the Middle East barrels is lower than the company’s portfolio average due to higher taxation. The 15% of the shut-in volumes account for about 10% of Upstream cash flow, TotalEnergies added.
Operations at the Satorp refinery in Saudi Arabia are continuing normally for now and are supplying the Saudi domestic market, said the French firm, which is a partner of majority shareholder Saudi Aramco in the 460,000-bpd refinery in the industrial city of Jubail on the east coast.
TotalEnergies, a major global LNG trader, also says that the impact of LNG production shutdowns in Qatar on its LNG trading activities is limited, with around 2 Mt expected in 2026, as most Qatari LNG is marketed by QatarEnergy.
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In the early hours of the war Qatar announced it is halting LNG production at Ras Laffan, the world’s biggest liquefaction complex and issued force majeure notices to customers, amid drone strikes from Iran and the de facto closure of the Strait of Hormuz—the only way for Qatari and UAE cargoes of LNG to leave the Middle Eastern region.
TotalEnergies also noted that “a higher oil price more than offsets the loss of Middle East production,” as an $8 a barrel increase in the Brent price is enough to offset the expected 2026 CFFO from the Iraq, Qatar, and UAE offshore assets at $60 per barrel.
By Michael Kern for Oilprice.com
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