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Energy Sector · Geopolitics · Oil Production · TotalEnergies
TotalEnergies (TTE) is strategically reducing its exposure to the Middle East, shutting down or in the process of shutting down production in Qatar, Iraq, and UAE offshore.
This move, prompted by shareholder requests and regional conflict, impacts approximately 15% of the company's total output. However, TotalEnergies emphasizes that these specific Middle East barrels contribute only 10% to its Upstream cash flow from operations (CFFO) due to higher taxation, making them less accretive than the portfolio average.
The company projects that future growth will overwhelmingly originate outside the Middle East by 2026. Crucially, TotalEnergies states that a modest $8 per barrel increase in Brent crude price is sufficient to offset the expected 2026 CFFO loss from these divested assets, assuming a $60/b baseline.
Onshore UAE production, exported via the Fujairah terminal, remains unaffected. This indicates a calculated de-risking strategy with a manageable financial impact.
