TotalEnergies believes the time is right to make acquisitions in the liquefied natural gas, electricity and renewables sectors, although it has no specific targets in mind.
The French supermajor is flush with cash from the current oil and gas bull market. While also returning cash to shareholders, it is looking at ways to boost its exposure to fast-growing sectors of the energy market.
Chief executive Patrick Pouyanne told analysts last week: “We consider that this might be an opportunity to accelerate the transition by accessing to some counter-cyclical businesses.”
He said, “If we move, it will be primarily in either the LNG fields and/or electricity and renewables (markets)", but he warned against a very big acquisition and called for patience from the investment community.
“Will it be large scale? I’m not a big fan of very large-scale M&A (because) integration is important,” Pouyanne said, highlighting what the supermajor achieved over the last seven years in terms of integrating its $8 billion to $10 billion acquisitions of Maersk Oil and Anadarko Petroleum’s Mozambique assets.
“There will be more to come in the coming months — be patient,” he said, while also pointing out that “we will have, maybe in two weeks, some other news to explain how we will ensure the growth of LNG in our portfolio.”
Speaking during the company’s first quarter results webcast, Pouyanne said: “There is nothing specific in our mind, let’s be clear — just the will from the board to use part of these exceptional cash flows to accelerate our strategy in line with what we said before.”
However, he noted that any deal must add value for TotalEnergies, highlighting that “particularly in renewables, there is a big bubble” now.