Hello, everybody. Good afternoon or good morning, wherever you are. It's the third quarter result, not the first one, just to begin. So it's a live intervention, live speech. As Ampere will show you in a moment, TotalEnergies has demonstrated once again in this quarter its capacity to achieve an outstanding operational performance and to deliver a very strong set of results and cash flow, clearly reflecting the ability of the company to fully capture high prices. I would say all is green, not only the different market indicators, but also the operational performance, and I must praise all our teams around the world. And I could add that oil is green as well, not only for the third quarter, but also for the first month of this fourth quarter, and probably for the rest of the year. Market conditions have been indeed very supportive for all commodities that we are selling. The oil prices started the quarter at $80 per barrel on the hopes of a lasting ceasefire sign between the U.S. and Iran. The MOU signed between the U.S.-Iran, and finally rose again at levels above $110 per barrel, and the dated brand being today at $121 per barrel, as a result of the broadening of the conflict to Pamela Mandev's rate of Saudi Arabia and reflecting the persistent volatility of the situation in the region. The petroleum product prices, diesel, gasoline, have increased in a larger and unprecedented way as a consequence of massive disruption to the refined product logistic chain, figured not only by the conflict in the Middle East but also by the unavailability of some Russian refining capacities due to the efficiency of the Ukrainian attacks. And so refining margins have reached historical records in Europe and in the rest of the world. Gas and energy prices in Europe and Asia started to rally this quarter as countries have started replenishing their inventories in view of winter consumption. This rally consequently pushed electricity prices up in some European countries, where gas reflects the marginal cost of production of electricity. But beyond these favorable market conditions, these strong sets of results highlight the strategic strength of TotalEnergies, the integration, and the geographical diversification of the company. I explained during our last CMD in New York that these two differentiating factors, together with our leading position being a low-cost producer, make TotalEnergies' best position to capture value from market disruptions. First, this quarter, we were able to fully leverage our integrated business model to capture margins. In the oil value chain, integration has never been so relevant. We have been able to capture oil prices from our growing upstream activities. We are while taking full advantage of our midstream and trading capabilities to bring crude oil into our refineries and capture record-high refining margins, this reflects highly valuable integration. The downstream have delivered the best quarter ever through an exceptional combination of record-high margin and a strong throughput increase as all our refineries are running up at full speed and the startup is now back at nominal capacity since the end of the third quarter. And we anticipate, of course, the same level of running treatment in the fourth quarter. In the gas and energy value chain, our energy and gas traders were able to this quarter to capture benefits of their long position on gas, which is now proving to be a winning position as gas prices have been rallying during the first quarter. With Europe attracting more LNG volumes right now, and the TTF currently at around or above $30 per million BTU, LNG is still going up, and we anticipate strong results as well for gas trading in Q4. And not only for gas trading, for LNG trading more globally. Second, our geographic diversification allowed us to mitigate the impacts of the Middle East crisis on our productions. The impact of the crisis in the Middle East on total energy overall production was reduced to around 5% over the quarter on average, which was in the low range of the guidance provided last quarter. Still, the company was able to grow oil and gas production by more than 3% quarter to quarter, supported by the ramp-up of projects launched in 2025, located mainly outside the Middle East. Excluding medallity impact, the production growth even exceeds 4% year-on-year, clearly affecting our diversification in upstream growth. By the way, importantly as well, as we explained during the last CMD, during this quarter, we took a certain number of final investment decisions, Kronos in Cyprus, IMA in Nigeria, Umshahit Gaskap in Abu Dhabi, and Absheron Phase II in Azerbaijan. And now all the projects contributing to achieving the extreme production growth target of more than 3% per year by 2030 are in execution phase. In integrated energy, with geographic diversification, we are producing energy in 11 countries, And as well, the length of our LNG portfolio allowed us this quarter to compensate the effects of cater volumes lost and not declare any false measure to our LNG customers, which today is making total energies very popular in Asia. At gas stake, Asian buyers were lining up at our booth to negotiate long-term contracts. By the way, this was also possible because we had a large LNG fleet tanker available at a cheap cost, which means that this, I would say, no force majeure, had no impact, in fact, on our costs, on our global costs, and we delivered that very efficiently to our customers. We also achieved some key milestones this quarter, establishing our LNG marketing GV with Kumul Petroleum, the national oil company in P&G, for 2.4 million tons per year and the signature of an uptake LNG agreement of 1.5 million tons per year, strengthening the diversification of our LNG portfolio towards fast-growing Asian markets. So, I would say that this geographic diversification that some were considering some times ago as a weakness, because being deemed to be too exposed globally is considered today as a strength by our customers, and a strong edge against geopolitical risks. Finally, and very importantly, our operational performance across all business areas has been excellent again this quarter, I would say once again. The refining of refineries at full capacity, optimizing utilization, resulted in an increase of nearly 10% of refining throughput this quarter, enabling the company to fully capture record high refining margins in Europe, but also in the U.S. and in the rest of the world, in particular Saudi Arabia. The company, once again, demonstrating its leadership to control costs, with operating costs of $4.7 per barrel, anchored strongly below $5 per barrel. By the way, this is the result of the cash-saving program we launched in 2025 in view of a bearish year 26, but the program is still live today and delivering. The power business also saw an increase of more than 20% in net production this quarter, thinking of, of course, full benefits from the integration of the assets from OGV with EPH. Integrated power is, again, well on track and will be net cash positive in 2017. Given the company's strong operational and financial results delivered by its business segment this quarter, Given the sustained high prices, the full year 2026 cash flow is now expected to be above $42 billion and maybe around even reaching $43 billion, supporting dividend growth while anchoring gearing below 10%. It's already 9%, but will be lower by the end of the year. In this context, and in line with the objective and the commitment of returning 40% of cash flow to shareholders, the Board of Directors has taken the following decisions. First, we confirmed the third interim dividend, a 90 cents of euro per share, up 5.9%, 9% compared to 25. Second, with the Board authorized share buybacks of $2.5 billion in the fourth quarter and also $2.5 billion share buybacks in the first quarter, the Board finally asked me to tell you that it reiterates its commitment to return 40% of cash flow to shareholders and that, if necessary, it might adjust upwards of the final dividend to meet the 40% return. I will now hand over to Jean-Pierre to go through the details of the third quarter financials.
Thank you, Patrick. So I will start by commenting on the price environment for the third quarter, 26, versus the second quarter. We capture high prices across most commodities. Brent and liquid price remain elevated and increase throughout the quarter with the prolonged impact of the Middle East conflicts. Brands averaged $97 per barrel during the third quarter versus $104 per barrel in the second quarter, down $7 per barrel, while the average liquid price was $87 per barrel. Liquid selling price continued to reflect an elevated threat cost and decreased by $4.5 per barrel compared to the second quarter. TTF averaged $21.5 per million BTU, up 38% since last quarter average price of $15.6 per million BTU, driven by low inventories and the upcoming winter season demands. Our average energy price increased by 20% to $12.3 per million BTU, reflecting the lag effect embedded in our contract pricing formulas and the increase in spot gas prices. But, also, the European refining margin, which includes costs of natural gas, CO2, and threat costs, increased to an historically high level of $33 per barrel on average over the quarter, 2.5 times higher than the last quarter, supported by an unprecedented combination of unavability of Russian refining capacity, the disruption of the supply from the Middle East, and global inventories at historical lows. In this high-price environment, Total Energy leveraged its integrated business model and geographical diversification to deliver very strong financial results underpinned by the upcoming operational performance of all businesses and the company's ability to capture value upside in disruptions. We reported, indeed, adjusting net income of $9.1 billion in the third quarter, increasing by more than 50% compared to the second quarter, and cash flow of $12.3 billion. Total Energy has delivered strong profitability this quarter, with return on equity at 19.6% and ROH at 17.4%. Let me now highlight four takeaways from the quarter. Upstream delivered production growth up more than 3% quarter to quarter, notably due to the lower impact from the Middle East conflicts. Downstream achieved record high quarterly results, with cash flow increasing by almost $2 billion compared with the previous quarter, underpinned by all our well-functioning refineries. This allowed the company to fully capture historical high refining margins in Europe and worldwide. Oil trading activities also outperformed at a level comparable with the two previous quarters. Integrated LNG delivered very strong results, more than doubling, compared to the previous quarter, Reflecting the 20% increase in average energy price and the outperformance of energy and gas trading activities in the bull markets. Integrated power cash flow generation continue to increase this quarter, supported by full quarter contribution from TTP, our joint venture with EPH. Let's now dive into each of the business segments, starting with hydrocarbons. Third quarter hydrocarbons production was 2.47 million barrels of oil equivalent per day. On a year-on-year basis, excluding the impact of the Middle East conflicts, production would be up by more than 4%, supported by the startups and ramp-ups of the project launched since the beginning of 2025, and benefiting from gradual return to normal oil operation in the Middle East. Over the quarter, the impact on production from the conflict in the Middle East is limited to around 5%, which is in the low range of the guidance given last quarter, the guidance being 5% to 10%. Looking forward, we expect to maintain strong momentum with hydrocarbons production in the fourth quarter, excluding the Middle East impact, expected to grow by more than 3% year on year in line with the annual guidance. At present, we observe the impact of the Middle East below 5%, mostly coming from limited export from LNG volumes through the Strait of Hormuz. But we know that the situation remains volatile. Turning now to quarterly results for E&P, the segment generated an adjusted net operating income of $3.2 billion in this quarter and a cash flow of $5.4 billion, reflecting production growth and sensitivity to declining oil price and rising gas prices quarter to quarter. On the cost side, as mentioned by Patrick, we continue to lead low-cost operation with an average effects per barrel of 4.7, below our guidance of less than $5 per barrel of oil equivalents. On integrated LNG, so the production, the LNG production decreased by 7% quarter to quarter, mainly due to plant maintenance, notably on Angola LNG and Ictis LNG. Adjusting net operating income was $1.9 billion, and CFFO was $1.7 billion, underpinned by a 20% increase of average LNG prices, This is, and in contrast with the second quarter, positively impacted by the performance of LNG and gas trading activities in the bull market, given the ongoing conflict in the spread of hormones and seasonality of the month. Given the evolution of oil and gas prices in recent months and the lag effect on pricing formula, the company anticipates an average LNG selling price above $14 per million BTU for the first quarter, 26. Turning now to integrated power. Over the first nine months of 26, net power generation increased to 44.3 terawatt-hour, a 25% year-on-year, driven by the growth of integrated power generation portfolio, notably the commissioning of new renewable capacities and the contribution of TTP's assets in line with expectations. Total Energy is therefore on track to reach its annual objective in integrated power business to generate more than 60 terawater over the year, and cash flow from operation was up 7% quarter to quarter at nearly $0.8 billion, supported by the contribution from TTEPSS over a full quarter. Moving to downstream, during the third quarter, refining and chemicals achieved record results driven by refinery throughputs of nearly 10% over the quarter, underpinned by all refineries well-functioning in Europe and in the United States, for Arthur, and the progressive return of the set-up refinery in Saudi Arabia to its nominal capacity successfully reached at the end of the quarter. Thank you. $0.7 billion in the third quarter, reflecting higher unit margins that more than upsets lower volumes. Let me re-emphasize the strong CFFO generated by the company over the quarter of $12.3 billion, up 25% compared to last quarter. Net investment remained disciplined at $3.3 billion in the third quarter, in line with the annual guidance of a full-year 26 net investment of $15 billion. The company delivered an attractive shareholder return this quarter, totaling $3.7 billion, including dividends of $2.2 billion and share buyback of $1.5 billion. At the same time, the company reduced its net debt underpinned by a free cash flow after payment of dividends of more than $6 billion and a positive working cap contribution of $3.1 billion during the third quarter. This reduction of the working gap, notably driven by the increase in tax reliability related to higher prices and an increase in suppliers' payables related to the increased shipping costs. As a result, the gearing improved by four percentage points to reach 9.1%, already below the 10% level we guide at CMD for N26. To conclude, the integrated model and geographical diversification of total energy continues to demonstrate the company's exceptional ability to produce and deliver reliable energy and to capture higher prices and higher margin with a growing cash flow that supports growing the dividend, leveraging the company, investing to deliver accretive growth by 2030 and beyond, and increasing share buybacks for our shareholders to, for instance, Thank you, ladies and gentlemen.
Operator
We will now begin the question and answer session. As a reminder, if you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. Please, kindly mute any audio resources while asking a question. If you wish to cancel your request, please press the star 2. Once again, please press star 1 if you wish to ask a question. The first question is from Lydia Rainworth from Berkeley. Please, go ahead.
Thank you, and good afternoon to both of you, and I really appreciate the quarter. Two questions, if I could. Firstly, just coming back to, Patrick, what you said on the potential for the final dividend to be adjusted upwards. Are you thinking special dividend on that one? And then secondly, I know it's only a month since we had the Capital Markets Day, but I did want to come back to the upstream growth ambitions to 2035 because there has been a lot of discussions about the resources that need to be added. And I know the ability to add resources at a competitive cost has always been a strength of TotalEnergies, and you've given us a lot of visibility on the plans for 2035, but the gap that you have, is that an unusual gap this far out, or are you better positioned than you would expect, or slightly weaker? I just want to get a sense of the urgency in which you might want to add resources, or whether it's something that you're relaxed about.
Okay. The second question is not related to a third quarter result of CMD. But just to clarify, we have no urgency at all, to be clear. I think what we told you at the CMD is that we have already, in 2026, until 2035, we see a plateau of 3 million barrels per day. It's quite unusual for an oil and gas company to have zero decline during five years. And we gave you the list of the projects which are already there. So from this strong basis, announcing potential growth for 2% to 3% is not, I would say, there is nothing spectacular. Of course, 2% would be easier than 3%. It's just a normal, I would say, and we have demonstration or demonstrating our ability in the last 10 years, either through exploration or through access to DROs, to, I would say, deliver this growth. So it's just a continuity. So we have no urgency. And secondly, I would say, just wait, maybe Monday morning, you will have a beginning of the answer to that. We'll make some announcements about access to DROs. You will see that we continue to be active on this matter. It's a permanent, I would say. I think it's a strength for Total Energy. Since 2015, we have consistently looked to, I would say, book reserves, either 1P, 2P, and I think it's a strength of the company, so that's just a question of trust. So we are very good. Yes, and I would say, are you in a better position than usually? The answer is yes, because we have already a visibility of zero decline until 2035, from 2030 to 2035. So thank you, Elia, for the question. I hope I clarified. Maybe my English is not good enough. The question I just mentioned to you, look, we committed to 40%, okay? If you take $42 billion, 40%, with $8 billion of buyback plus $8.6 billion dividend, it's okay. If we are not at 42 billion, but we are at 43 billion, and I mentioned that figure during my speech, then there is a lack somewhere of, let's say, 400 million dollars, let's say 500. So the question for the board is just what I told you, the board asked me to tell you that in that case, when we will decide the final dividend in February, in fact, we have a normal final dividend, We will consider, I would say, an uplift of the final dividend, and $400 or $500 million represents $0.420 per share, in fact. We have 2.5 billion shares. We might consider, in order to meet the commitment, to put, I would say, I don't know if you call it special, an uplift dividend on the final dividend, not making it, and we'll pay it together with the final dividend. That's the way that we want to respect the commitment. Honestly, we will all be happy if we reach 43 billion rather than 42. But that's, I would say, what I'm adding today. So first, some of you told us we are conservative on the 40 billion at the CMD. I'm not sure. Honestly, we learn month after month. But today, maybe we are less. We say 42 and maybe even 43. And then we are committed to 40 percent. That's what you need to understand. Amazing. Thank you. Thank you.
Operator
The question is from Biray Porkartaria from RBC. Please, go ahead.
Hi. Thanks for taking my questions. Just two, please. The first one is on integrated gas. You had a really strong result, and obviously you flagged the long gas position with the CMB and the commentary around that. But I was wondering how we should think about the flow through into the fourth quarter and sort of the exceptional element and the reversal of the third quarter and how we should think about the earnings, you know, sustaining at this level into the fourth quarter. And then the second question is just on Uganda. Can you get a quick update ahead of the startup and sort of commissioning activities and where we are now and risk factors and so on? Thank you.
And so on the energy, I told you during my speech, I think I gave you a good indication of what we anticipate on the fourth quarter. In fact, our position, you know, you've seen that TTF continues to go up. It's at $33 per million BTU. And so we anticipate, I would say I was looking to exactly what I just told you a few minutes ago. I just told you that With Europe attracting more energy volume right now, and TTI is currently around or about $30 from the NBQ, energy is still going up, and we anticipate strong results, as well as for gas trading in Q4, which means you should expect a performance in the same range for Q4. That's part of why, when I'm trying to anticipate, or I would say, the global cash flow for the year, there is today a range of 42, 43. I would add as well that we put in the forecast, we announced that the energy price would be above $14 per million BDU. In fact, it was based on an assumption on TTF, I think, around 25 or 27. At 33, we are more next to 15 than 14, I would say. So there are, I see only potentially, I would say, some upsides on the LNG business in the fourth quarter. That's what I could comment on this one. On Uganda, I think there are two different things. You know, we have, of course, IACOP, the pipeline, which is progressing well, because the intent is to start up Kingfisher, the offshore production, this year. And so that is, of course, to start up Kingfisher, we need IACOP to be fully commissioned. So we are up to 95%, I think, or something like that. And, as I said, during the CMB on Tilenga, we expect the startups during the first half, I think, of 2027 because, as I explained, we had some delays on some equipments coming through the Strait of Hormuz, so we have, let's say, a six-month delay, but all the teams are today working hard in order to deliver this production by first half. That's what I can tell you on your two topics.
Operator
The question is from Jason Gableman from TD Cowan. Please go ahead.
Yeah, hey, thanks for taking my questions. Patrick, you commented at the CMD a month ago about potential appetite for U.S. shale acquisitions, and we've had investors asking about those comments since then. And prior to the event, you previously said you were interested in shale gas rather than shale oil. So I was hoping you could clarify if you want to grow your oil business in the United States and if it involves shale. And I'll ask my second question now as well. You know, the other focus from investors that we've heard is on the uncertainty in France. I was hoping you could talk through Total's earnings exposure directly to France, potential risks.
Okay, thank you for the two questions, which will help me to clarify the first one. Let me be clear, our M&A is counter-cyclical. I'm not sure that acquiring any oil production in the world today would be a lot. There will be a counter-cyclical when you see the price of oil, so no panic. And secondly, we always said in the U.S. that our priority is on gas, natural gas. You know, we have a big energy position. We want to integrate the value chain. By the way, today, natural gas is quite low, and it's more quantitatively. Today, it's $3, I would say. But there are also some liquids with gas. That's all my comments, you know. So I like gas. I like the liquids as well. There is no position of the liquid. So that's a priority today. We said that we are targeting something like one BCFD. We want to continue to grow in the LNG in the U.S., so one 1.52 BCFD would be, for us, a good target. So keep that in mind. My comments have been, I feel, extrapolated. I just continue to think that liquid is good as well as gas. That's all. And the U.S. is a good area of investment for total energies. We are, I would say, compared to OP, not weaker, or less exposed to the U.S., if I can expect back exposure. We have a larger buy base of U.S. investors, so the board is pushing, is supportive of move in the U.S., if we have the opportunity. But again, as I said also today, we have a strong base of growth today. So it's not to grow, it's more to another position to be aged. So it's a question of finding reasonable access to resource. We have done already three GVs, natural gas. We continue to work as well on this mode of continuing to develop the gas position. We'll have some news in a few months on that. France, good question. So first, I repeat to all of you, the French state is not a shareholder of TotalEnergies. I spent my whole choice to re-explaining that to all our investors, so maybe you could help me, all of us, all of you, by explaining that there is no direct interest of French state in TotalEnergies. There is no golden share. There is no sale. We are a public and estate company which is managed independently. First comment. Second comment, we are a global company, largely an international company. I think our results of cash flow, let's say, and capital employees around 7% is located in France. To give you a round figure, I don't know if it's 6, 7, 8, it depends on the year. So it's not a French company. It's a headquarters in France, and we are proud of that, you know, like all the French people. We have grown on that basis. I think it's even sometimes a strong advantage in some part of the world. Geopolitically, we are the only non-Anglo-Saxon major oil and gas company, so it has some value as well. So I would say that's the second point. Third, on taxation, if you had learned, if you had listened yesterday to the debate at the Parliament, it was a lot about taxation of total energies. The government has pushed back all the amendments. None of them has been adopted. And because why? Because, again, I repeat, you know, we took this initiative We have been very clear with all the authorities that if they were taxing us, then we will, of course, give up this ceiling. And I think today, the government, rightly, I think, I saw, consider that what we bring as protection to the customers is largely worth, I would say, politically, the initial, what would be a taxation. By the way, you probably noticed that France did not sign the letter to the EU Commission to ask for a special taxation of an oil and gas company. So, of course, politics is politics, but that's the situation, and I'm convinced that our direct action to customers in France was the right move that we've done. Of course, I know it's evolved, it's innovative, but it's a way to preserve, and by the way, we have the benefit of it in terms of image with our customers. I'm sure you have asked questions. The cost of this protection is, of course, more expensive today because with the diesel and gasoline going up, it costs us a little more. It's around, I would say, by end of October, around $500 billion, more or less. And we anticipate that this. But I remind you that in 2022, we paid more taxes. By the way, for French people and French auditors, the good news is that because we have good French business this year, we're finding in France are running well. We should pay around 500 million euros of corporate tax. So if I'm adding both, it's an exceptional contribution to the country of 1 billion, I would say, euros, which I think is quite sizable with a direct impact to customers. So that's my comments. Again, we don't control politics, but we do our best in order to explain that today, and I think it's more and more perceived by total energy as an asset for the country and should be as well considered by that, by the different leaderships.
Great. Thanks for the answers, Patrick.
Operator
The question is from Martin Ratsoff, Morgan Stanley. Please go ahead.
Yeah, hi. Hello. Two questions from my side as well. I just wanted to come back to the CFFO figure of 42 to 43 billion, because if you look at where commodity prices are, dated Brent is 120, TTF nearly 100 yesterday, refining margins is pretty darn good. If the comment is also that trading in the fourth quarter will be once again strong, it wouldn't be beyond the wit of man that the fourth quarter would be even higher than that. So, which then raises the question whether the 42 to 43 sort of indication either just embeds some conservatism, because, okay, these prices are on the screen now, but they might change, or whether there might perhaps be some working capital outflow or some payments that we, you know, that might be overlooking that might be sort of a bit unusual in the fourth quarter. I presume it's the former rather than the latter, but I wanted to raise the question nonetheless whether there might be anything in the fourth quarter that we should be aware of from a cash perspective. And the second question I wanted to ask relates to the hybrid. There is about 1.7 billion in the net debt from the 1.5 billion euro hybrid that you called. And I was wondering what your approach to hybrids now is. Would you expect the hybrid to be refinanced with another hybrid? Or is this hybrid now called? And that's sort of the end of it. And can you perhaps give some clarity on that, and also how that is impacting the various line items in the balance sheet? Maybe some detail on that, because that can be quite tricky to figure out.
Hola. Hola. First, no, I think I said cash flow from operation will be above 42, might be around 43. So, with that, honestly, Martin, I don't know if you know, and whoever knows in the planet, what the U.S. president will decide after the midterms in the Middle East. I don't know. Nobody knows, in fact. So, there was an article in the Wall Street Journal, but it could be a short but brutal conflict. I don't know. We'll see. So what will be the impact on the market? You know, honestly, today it's quite, I mean, I'm somewhere amazed. In the spring, everybody and the forward curve was, all the markets were behaving as if the war will end by summertime. I don't know where it was written. The forward were lower. Today, everybody believes, the market believes, the war will stay for long. I don't know. So, honestly, I have, by giving you, I would say, a guidance of about 42 and around 43, I think we are probably right in the ballpark. If it's more, again, the commitment of the board is that if it was 43.5, for example, you will get back the 40% of the additional cash flow from an Placed on the final dividend. That's what I can tell you. There is no way, no, no, second point, when we speak about cash flow from operations, there is no impact on working capital. We don't, honestly, on the fourth quarter, it's true that this quarter is quite unusual. We had, I would say, an inflow, quite a big inflow in the third quarter, generally the fourth quarter. We'll explain to you why. We anticipate, but it's very difficult, to be honest, to anticipate working capital movements because with the price of oil, which has an impact on all the inventories, et cetera, where will the company, where will the price of rent will be end of the year? I don't know. Today, I would say we anticipate a plus one, minus one, I mean, a neutral position on the fourth quarter under the control of Jean-Pierre. And we don't have any unusual cash items that we anticipate for the fourth quarter, so again, I would be happy to have been wrong, but I think we give you a good guidance today, and if we are wrong, because we make more cash flow, that will not be bad for our investors, because again, they will return 40%. The hybrids. The hybrids, it's a typical topic for Jean-Pierre, which is an expert in hybrids. And so I will give you the floor to explain that today, in fact...
Yeah, that's true that we call an hybrid maturing in October in our balance sheet with an impact in our balance sheet end of September for 1.5 billion euros, so 1.7 billion dollars. So year after year, we decrease the hybrid stocks. So we'll see in the future the
strategy that we will follow on that topic. No, but I think it's important. Jean-Pierre is a fan of the hybrid because of the cost of the hybrid. Yes, it's 3%. It's 3%. So the question for us at 3%, you know, today if we issue a bond, it's about 3, 3.5 to 4. Yeah, 4, yes. So why should we get rid of these hybrids at 3%? Of course, the question will be, and it's a good question, linked to what will be the perspective of the interest rate, At which price could we refinance, vis-a-vis or not, but again, and it's linked to, I would say, the low-gearing position. If we continue to have some cash flow, of course, this could impact the way we manage the different source of, I would say, treasury for the company. This is one of them. There are also, you know, some standards, and standards is the right name, discussions regularly with rating agencies. And at which point do we consider that hybrids are equity, and at which point they become a debt? So that's part of the debate. Again, for me, on this topic, I would say to you, what is the most important for me as a CEO is what is the cost of the debt. And this is a cost for me, which is for the company. Because this is the outcash, is it called an hybrid or is it called a bond? I don't see much difference from my office. So that's the policy that we are following on this topic. So to have the detail of the impact on the balance sheet, I think before to explain to you that, Martin, I will need Jean-Pierre and Arnaud to explain that to me.
It takes a little time, you know, so...
Speaker 7
Okay, thank you.
Operator
The question is from Christopher Kuplan from Bank of America. Please go ahead.
Thank you very much. Patrick, I'm going to keep it to one question. on your outlook regarding Europe's gas prices and the market that we now enter into, given we have heating season and you have, I guess, more insight than we have into what's happening at Yamal. Do you think with the reroutings going on in 2027 that Yamal can maintain its utilization? Or do you think there will be a net loss of LNG volumes because it'll It'll be harder to send tankers around the world if Europe's no longer taking it. Thank you.
I think you have the answer in your question. Because, you know, first on the outlook of European gas price, I would say it's quite clear that we are entering in a dangerous period. You know, we have seen the price have reached as anticipated, by the way, 100 euro per megawatt hour. So it becomes to be a political, I would say, a strong signal. It's clear that, unfortunately, winter season is the peak season. Qatar has restarted some energy production and exports, but today, in September, October, I would say you had more or less a round from Qatar or from Abu Dhabi, by the way, because both countries are producing. I think we had only 25% of the normal energy tankers' flow going through the Strait of Hormuz compared to pre-war. You know, so only 25, that means that you have quite a big volume. Knowing a month is more or less 6, 7, 8 million tons, 7 million tons. If you have 25, you have a lack of energy, and this energy would be useful. So that's true, but there is a stress, and today you have, I would say, a competition again between Europe and Asia to get this energy, the remaining energy flowing to Europe, and so Europeans are ready to pay for that. So that's, I would say, Yamal, as you know, first, from January 27, first of January 27, Yamal energy will not come to Europe anymore, to the EU, by the sanction regime. Yamaha was representing, in fact, more or less 15 million tons, I think, to Europe in 26 or 25, 15, 1, 5. The rest of the production of Yamaha, which is around 19 or 20, if I remember, is going to China, to Asia, fundamentally, to China, to China. So, as you also know, there There has been an amendment to the sanctions in July in which there is a Dinagas, which is an EU ship owner of LNG tanker, has been offered to ship some LNG from Yamal outside of the EU. So that means that this fleet is limited, it's a limited LNG fleet. And, of course, there is an impact. Where will the energy go? If it goes to the Mediterranean Sea, it's not much different with the EU. If it has to go to India, of course, it's a longer trip. If it goes to China, it's a longer trip. So, on our side, historically, we have, I don't want to make it, 5 million tons of energy transports with Yamaha. There is 1 million tons, which which is, in fact, not possible because of the sanctions for different reasons, which is not eligible. So we have four. And when we make the math today, we think that we might optate between three, maybe for three, let's say, three million dollars. It will depend again about where this energy will go through. So I just described you for total energies, just to explain to you that I don't have the full picture of Yamaha, to be honest, because We have limited today our interest only on what can be done according to the EU sanctions. But yes, the answer to you is yes, there will be an impact if you have no, we bless. The EU was a natural destination from the L&D tankers just because of optimizing the shipping freight, in fact, and the shipping costs. So the fact that it doesn't come to the EU definitely from January 27th will have an impact on the capacity of the plant to export its full volumes. I don't have a clear vision as well, to be honest, about the relationship today between Yamal and the Chinese of the equation, because this is also the other part of the equation. So that's my comment on this one. Thank you.
Operator
This question is from Michele della Vigna, Covalent Tax. Please go ahead.
Thank you, and congratulations on the strong quarter. Two things I wanted to ask. First, in a quarter of unprecedented freight rates, I was wondering if you could tell us a little bit how you think about your current tanker portfolio, how much is on long-term rates versus spot, and how this impacts your realizations and trading capabilities. And then finally, we've seen a big increase in appetite for long-term LNG contracts with customers trying to diversify away from Hormuz. I was wondering if that is leading to an improvement in the pricing. I would think recently the oiling contracts have been around 12.5% oil slope, if we're seeing an improvement on that. Thank you.
So, two questions there. Thank you. First, freight rates. I think it's a new topic. I never had a question since I'm CEO, but freight rates suddenly become popular. Different comments on this one. First, you probably noticed that our liquid realization, there was a difference between the third quarter and the second quarter of $6 per barrel. The $6 per barrel represents more or less these additional rate costs, which is, in fact, in our portfolio, quite limited. Because our policy, in fact, today we have some long-term, medium and long-term, I would say, what do you call this? Charter, which represents more or less 40% of the equity that we have taken. Why 40% is a good figure? Because, in fact, as you know, our average taxation rate on the stream is around 45%, so 40% that means that we are somewhere trying to neutralize the impacts on equity crude oil of, I would say, variable rates. The second comment is that all charter with medium and long term are really with fixed rates. We don't sign, within Total Energy, charters, which will be linked to, I would say, a spot market. We don't just reserve a capacity. We have a capacity, we have a tanker, plus a freight. And, of course, our traders during this quarter, and I think next quarter, are benefiting today Okay, for having this fleet available, which, of course, is giving some positive results to their value chain, in fact. So that's, I would say, the second strength of the positions. So it's impacting, I would say, positively trading capabilities. And then, of course, trading, by the way, for the rest of their business, they are also negotiating, it's their We have access to third-party, I would say, tankers. One of the successes of the third quarter, which I think will move on to the fourth quarter, is that they have been able to go to have access to some tankers going inside the Strait of Hormuz, of taking, in particular, some Iraqi crude oil, and then exiting, and then making this trade as generating some Some positive results. So that's our philosophy on trading rates. And I think there is a difference between different companies because some competitors have some charters but linked to the spot market for freight, which is not our case. When we charter, we charter on fixed freight. Great. Yes, second question. It's true, but again, as I mentioned during my speech, at GasTech, we had a number of long queue of customers coming to us. Clearly, there is a trend there in Asia, I would say, to try to escape from the volatility of the GKM. You know, GKM is not very popular today. It was the case in 22. They tend to forget in 24.5. Today, again, this volatility clearly for these economies is not good, so they are coming back to ask a link to Brent. And, of course, in such an environment, there is a trend for some of them to move from 12, 12, 20.5. It's not the improvement. It's not as well, I would say. You don't reach today higher than 20.5, I would say. But, again, it's negotiation, so it depends where you are, of course, where the energy is procured. We just, in charge, we are just commercializing the Papua LNG, I would say, for use, 2.4 million times with Kumul, and we have some good results from this perspective, which is the profitability of Papua LNG.
Speaker 7
Thank you, Patrick.
Operator
This question is from Alisa Saim from Citi. Please, go ahead.
Thank you. Hi, Patrick. Just one question. I wanted to get your thoughts about the current environment and downstream and whether that makes you think any differently about investing in that business. I'm really thinking about geographical mix or pushing more into biofuels or mix of assets versus trading. Is there anything on your mind from what we've seen in recent months? Thank you.
Well, I've been blunt during the CME. I told you, no, I will not invest in new refineries. I maintain that position. I think it's quite exceptional. Of course, it encourages us to maybe consider maintaining these capacities, and that's the whole thought. Biofuels, honestly, it's a complex economy. It's a regulated economy, so there might be some pockets, but we have to be careful about the way that the regulation will evolve. There is, in some countries, a trend to more biofuel, but, you know, in Europe, there is always a debate between food and biofuel, which is continuously impacting the development of a business. So, I'm a little – we have been opportunistic. We will start up the Grand Prix Biorefinery in this quarter. So, we'll have access to more HVO. HVO seems to become a more popular fuel, you know, in Europe. There has been a deal between France and Germany about the new, I think, light vehicles regulation where the French have accepted that a vehicle, an IC vehicle which would be supplied by 100% HVO would be acceptable, so we don't know for which volume because it's a matter of volume, but so there is something happening there. All that is regulated, we need, of course, to be sure that this regulation will change again in a few years. And in our environment today, I would say, by the way, so we have, you know, what we've done fundamentally was to maintain and reduce the European exposure because of the trend, this is a question mark, do we maintain? Outside, we have developed our platforms in Port Arthur, and we have developed it by integration of petrochemicals. We have this big refinery of Amirol, of Satov, which we complement by Amirol. I think it was a right strategy to go where the energy is cheap. In fact, for me, you make refineries, it's better to go where energy is cheap. That's very simple. So that's what I would say. But we will not change our strategy. Our strategy is fundamentally oil and gas upstream. It's integration and maintaining, I would say, downstream as a cash flow. I think today it's a superb cash flow, so that's good for us. And continuing to invest in intelligence power, which has a good momentum, by the way, today in both sides of the Atlantic, U.S. and Europe, with all these AI and activities. So I would say I don't see an inflection on the business. Having said that, the question will be, again, to consider that these mid-stream assets have a value, an opportunistic value. And then taking decisions to shut down might be more tricky than it was before. So that's, I would say, the strategic conclusion that we will review. Maybe my question would be different if I see three years in a row of $20 per barrel of refining margin. For the time being, I'm happy with what happened. I think the refining margin in Europe will remain quite good, quite strong during the first half of 2017 Because we will embark the consequence of the crisis, low inventories. Beyond, it's very difficult to say what will happen. And honestly, that's one of the most complex questions for us, is what assumption do we take on refining margin for 2027 for the budget? So don't ask me, because we will depend on our mood on February, on January, or December, or January.
Speaker 7
Great. Thanks very much.
Operator
This question is from Matt Luffling from GP Morgan. Please go ahead.
Thank you for taking the questions. I'll just ask one on capital allocation. Given the strength of position that this year's cash flow and deleveraging creates for Total Energies, did you see any further opportunities outside of the comments that you just made on refining to accelerate the strategy through incremental organic investment, which can further enhance the business's cash flow leverage to price, whilst also helping France and Europe solve for energy security? And if so, in what areas of the businesses could some of those opportunities sit?
Honestly, I think for us, first, no. I mean, we have a strategy, we have a plan. We will not become to be pro-cyclical because suddenly we have more cash. That's the beginning of the mistake or the short-term mistake. So fundamentally, yes, there is a point. I will say yes on the point that, as I said, during, I think, the CMB. Of course, today, making Enfield Wells to produce more oil in Angola, in Nigeria, there are opportunities. We will review their budget soon. If they're asking $500 million or $300 million, I will not say no stupidly because it's a short-term delivery. So, of course, this is what we see for me, the short-term, the short-cycle capex that we can easily, I would say, arbitrate. I think one of the lessons is that on the question is, of course, we are looking to do we need to have, for example, Where I'm ready to consider to have more, I would say, working capital is maybe more energy charter if we need to be long on the midstream assets, I would say. That's a possibility, you know, chartering, not to be perfectly efficient, but to have some margins in order to be able to capture the volatility. That's one of the lessons. I would say investing in some pipeline in the Middle East because this is part of the security of supply and it's also giving value to our own assets. But I agree. To invest in Europe for energy security in fossil fuels, I will need to see a different Bible at the European Parliament, to be honest. I'm not sure we are still there. So, honestly, let's not jump suddenly in that direction. I just mentioned that we could maintain our business today, and that's true. To grow in four cycles in Europe, we need to hear a different narrative from the European political leaders, and I'm not sure they are still there. But again, we work with them on that. But our investments for total energy, honestly, when we contribute to security of supply of Europe, is more when we invest outside of Europe, investing in U.S. energy, investing in Brazilian oil, investing in Mozambique energy, that's contributive to the security of supply of the continent. I think it's more all DNA. We have been created one of the years ago on this, I think, assumption, and I think this is what we do. That's my comment.
Very good. Very clear. Thank you.
So discipline on capital allocation is a key word. Okay.
Operator
Next question is from Kim Fusse of HSBC. Please, go ahead.
Hi. Good afternoon. Thanks for taking my questions. I have two, please. You've just referred to potentially participating in pipeline routes through Abu Dhabi, Iraq, and Syria. What would you need to see in terms of utilization, tariff, and contractual protection for these investments in new export infrastructure to earn an adequate return, especially if this capacity might be valuable only during periods of disruption? And then secondly, given the very high cost of moving crude long distances, have you sort of changed your crude sourcing or refinery optimization to reduce freight exposure? And does your integrated trading system allow you to protect your realized refining margins better than, say, regional or local refiners can? Thank you.
Discussing, we are discussing today on different schemes. We are participating to two projects. So I cannot today, I would say, I mean, answer precisely. There are negotiations, so I cannot enter into commercial discussions today with you. Again, I think at the end of the day, the right word is that we need to be sure that the upstream revenue is not moving to the midstream one, so it's a question of balancing the position between the upstream and the midstream, and I think that's a question. So, question of protection, again, yes, I know all that, but this is being discussed, and when we'll have a better clarity on it, I will come back to you today. It's premature to comment on that, and I don't want to interfere today with any of the discussions. The second one, it's a permanent, I would say, optimization of the crude slate of refinery is part of the permanent job of what we call refiner optimizer, working very closely with the traders. We have, in fact, an organization in Geneva around the same desk where we have the refining optimizer just next to the food trader, and they permanently look to the different slates, and, you know, when we lost the Russian oil, we had to find other slates for refineries, and today, of course, it's an optimization which integrates, obviously, the cost of shipping. That's part of it, you know, when you raise, before it was, I would say, cost of shipping was 5% of the cost of rent, I would say $2,000 per barrel. Today, we speak about $25 per barrel. So, of course, this is part of the equation to optimize the supply of the refinery. Of course, if you can have access to some barrels from Norway, oil barrels from Norway, it's more efficient than from a longer distance. But this is why, I think, fundamentally, I repeat, our model is very efficient integration. At the end, in our results, as you notice, refining chemicals, this is the reason why we integrate in one segment, refinery and trading, because this is, for me, it's a test to decide what is a price for price. What I want them together is not to have a fight between traders and refineries, But to optimize the supplies of the refineries, which, of course, has a value for our traders. By the way, just to clarify for you, in our European refining margin, but I'm sure you know about it, it's not a pure difference of petroleum products minus crude oil. It integrates in the European refining margin the cost of the freight, the cost of natural gas, and the cost of CO2. That's why when you see $50 in the U.S., where, of course, you have no natural gas is very cheap, energy is cheap. I would say there is no CO2, and the freight is limited to pipelines. Today, Port Arthur is benefiting more from $50 per barrel and not from $25 per barrel. So the indicator is taking into account this long-distance impact, which would have. But again, we optimize and we change the crude slate according to what is the best mix. Of course, we also optimize, considering the slate of the products, if you want to make more diesel, we select crude oil, which are being able to deliver more diesel or jet fuel than gasoline. That's also part of the equation. It's a very interesting job for young people to optimize permanently, refining optimizer. So maybe, Kim, you should be invited by one of them during one day. We'll see what they do. You will have more interest. We will put you to do that. Thank you.
Operator
Next question is from Doug Legate from World Research. Please go ahead.
Thank you. Good morning, everyone. Patrick, I wonder if I could take two quick ones. First, your gearing is now under 10%. How much lower are you prepared to allow that to go? I assume deploying windfall cash flow to the balance sheet is still a good idea. And then my follow-up is, if you go back to a question from earlier regarding the post-2030 visibility, a really simple question. With what you know today from the portfolio, what's the most likely way to fill the gap to growth? Is it exploration, new project entries, or M&A? Thank you.
The second question is in the last 10 years, it's DROs, in particular, if you are able to make some direct discussions, where we have been quite good at. So that's, I would say, when you look down, exploration is also part of it. I would say it's 25, 75. F&A, it's another topic, it's a different approach, you know, and it's not when we speak, when I mention the 2 to 3 percent, we didn't have big F&A in the head, to be clear with you, just to clarify. You know, the largest M&A we've done in the E&P was Merskoy historically for, say, 8 billion euros or 8 billion dollars. So when I mentioned the 2-2-3, don't interpret that as an announcement of a big M&A. If there was a big M&A, it would be on the top, you know, or the base would be higher. So that's not what we had in mind. It was fundamentally, I would say, 70% deero, There is a point there which is also a quite complex equation because you could look at it from a financial point of view. There is a point today where as long as the interest rate is low and that we deliver a debt of 5%, I don't know why we would go at 0%. You know, there is a point where you could see a financial balance. Then you could also say, which is, in fact, also shared, that's why the board is inclined to be a strong, very strong balance sheet. We have a world of crisis. We don't know where we will go. You know, today it's a crisis which is pushing price up. You could have another crisis like we had in 2020, price would go down. And so to have a very strong balance sheet will allow us to swallow this crisis. To face bad questions, practically, maybe it could come. We'll continue to evaluate the pro and cons and to say where we go, but there is no taboo there. No taboo, but to be pragmatic in the way to, again, manage the cash, the global cash of the company, knowing that I noticed that some of you count the lease, etc., So we need to look at all the equations as well, you know, so some of you have reported that we are not yet under 10, we are at 14, so to be under 10 for some of you, I need to be under 6, if I understand correctly the comments this morning. So maybe my objective is to be under 6, so that I will stop these comments that we are not at 10, but at 14. So I can work on that, maybe it's easier as a first target.
Maybe just for clarification, Patrick, do you see any value in a special dividend?
No, I told you I answered to that. I mean, I've been clear. We tested. There is a value if you announce it in advance. In fact, what we are just doing today by telling you we can put a top-up on the final dividend, which would be 40% of the difference of cash flow to meet the 40%. I gave you an equation today. I told you today that 40% of the cash flow minus $8 billion of buyback, that we have minus $8.6 billion of dividend, will be the base of this, I would say, top-up of the final dividend. That's the way we'll work on it. So, but again, what I will notice when we were clear at the CMD, when we made, and my investor team has done a roadshow with all the investors, that the large majority, not all of them, of course, but I see 80% or 85% were more in favor of delveraging than the special dividend. So, because the special dividend, we need to put a formula, consider that today with the 40% of cash flow, we have a sort of formula. But we could also match it directly with the buyback, so I don't want to... The buyback is a normal way to match the 40% this year because we are, I would say, running because of positive or high results. We'll do it by putting a top-up on the final dividend.
Operator
Next question is from Mark Wilson from Jeffries. Please go ahead.
Okay, thank you. Just two points, Patrick, maybe you could clarify on. You spoke before about some LNG moving out of the Gulf. There has been reports of volumes getting back to pre-war levels in terms of oil from some reports. Could you give us your understanding of movement around the straits today or in the last few weeks? I appreciate it's volatile. That's the first one, and then the second one is the Venus development we continue to wait for, should we be expecting that in the very near future, and the moving parts, any movement on that long license extension agreement. Thank you.
In Namibia, we are starting the drilling of the Ropane wealth this month. That's the good news. Second news, don't listen to contractors, but listen to the operators. And I think I said everything during the last CMD, that we are optimistic to reach the FIB. First point, today where we can say on four moves, in fact, globally, you could say that there were 20 million barrels per day going from the region. The pre-war, you have five, six for Yambou, you have two for Fujaira, and you have 10, 12 for Ormose. So that's the 20 million are going to crude oil, crude oil, crude oil, are going to the market with different routes. So we are around for almost a month, no, 12 million barrel vol per day, which represents six tankers per night, more or less. Thanks to 2 million barrels of oil, the LTC is 2 million. To be honest, it's a new policy. The three NOCs have decided, Aramco, Adnok, Kuwait, but also Qatar for crude oil, have decided that they have their own tankers, old ones. They go through. They have attacks from their attack by Iran, but they have decided that now they have to go through threats of NGOs. On LNG, it's a little more tricky because LNG tankers are a little more sensitive in case of, let's say, attack. Again, I mentioned, I said during my, I think, previous question, but what we have observed today is that you have, let's say, 25% of the move in the last two months compared to pre-war. So around, I would say, 1.52 million a ton compared to 8. I don't know if it will go up or not. I think it's a decision which is more complex because, again, it's more sensitive. You know, an energy tanker is a little – and the value is not exactly the same. So I would say decisions which will be taken by the candidate authorities, and we are following that.
Speaker 7
Thank you. I'll hand it over.
Operator
Yes, the next question is from Henry, Patrick from UBS. Please go ahead.
Yes, hello, everyone. Just one question from my side, speaking to the Middle East and the Ratawe project in Iraq. Can you give us some data on what you expect in terms of the production rampant from the project in the current environment?
We are moving up. We are targeting to move to – we are already producing. We are already producing more than 100,000 parts per day. I think we are starting right now, I think last week, this week, we have started the first gas project, the first what we call GMP25, I think it's 15 million steps per day, or if I remember well, and the full phase one, which is supposed to reach 120,000 parts per day, will be done by November. So, we are really, today, ramping up on the oil side and on the gas. So, the first phase of Ratawi, for me, is done, and then we are working. We have mobilized, I would say, we have 3,000, 4,000 people. I think I was in Iraq recently. 4,000 people in the field to build the full field, which will reach 210,000 oil per day and generally be on stuff per day of gas.
Speaker 7
Yes, thank you.
Operator
Next one. The next question is from Bertram Hody from Capital Chevrolet. Please go ahead.
Yes, hello. Thank you for taking my question. Two quick ones. You had an underlifting position in your UAE offshore production in Q2. We're wondering whether those underlifting positions have increased in Q3, and what was the impact on the NP results and cash flow, and whether you can signal whether this will improve in Q4 or not. And the second question is, you mentioned that Qatar LNG exports is probably back to 25% in October, but I was wondering whether you're trained in Qatar as we started or not.
No, no, the second question is clearly no. The Qataris are doing that. They are commercializing most, in fact, as you know, most of the LNGs, most commercialized by Qatar LNG, in fact, by Qatar, Qatar Energy, I would say, themselves. So, I would say the supply contracts we have are in force majeure, and I think they are in force majeure for long. Today, they prioritize, obviously, their own customers for what they can expose, which is quite limited. So, no, we are continuing to ensure the supply of our own customers without the supply coming from the Gulf, but it's okay.
Yes, there is another lifting offshore UAE, because it was difficult to go in the Gulf. We have done some liftings in the third quarter, but at the same time, the production is back almost to a normal level. So that means that, yes, we are in another lifting position. to give the accounting impacts on an underlifting position. Bertrand, as I'm a little late because I know that well, he wants to speak at 3.30 after me. I will ask you just to go to the experts of the accounting. It's not me. It's Renaud and his team. So, Renaud is not an expert, but he has some people in his team which are good in accounting. Sorry for that. So, yes, we have an underlifting position. We try to minimize it. We do our best. But we are not the only one. I think all the IOC are in this situation, and we'll catch up as quick as we can, but all that is not an easy task. We are not national companies. We have our own tankers to expose. We have to pay insurance costs and all that. Okay, thank you. Thank you.
Operator
The next question is from Fergus Niri from Rothschild & Co. Let's burn. Please go ahead.
Yeah, hi there. Thanks very much for taking my questions. Just a couple of quick ones on iPower, if I might, please. It was good to see another strong cash flow ex-working capital performance from iPower this quarter. I'm just curious what cash generation and asset sale proceeds you envisage in 4Q to finish 2026, free cash flow balanced, and how much of the 2027 positive cash flow target depends on further farm downs. And then, secondly, just on the return on capital employed improvements expected in iPower, when do you think we should expect to start seeing those coming through, given that it's been a little weaker over the last couple of quarters?
Thank you. $1.5 billion of net capex. This will be rich because we'll have, I would say, some proceeds of this found down during the third quarter. It's almost $1.5 billion. The impact on the capex is even a little higher because we spent some money during the year, which would be a recoup. And you have also an impact, a positive impact on the cash flow from operation. I think the target for, in fact, it's around $800 million, I think, for integrated power. We are at almost, no, we were already almost at $800 million this quarter, and we should go up, because I think for the year, the anticipated cash flow from integrated power, so a full year, is around $3 billion, around $3 billion. You know, we told you that we might be balanced this year, and free cash flow, we are more, the net capex would be around $3 billion. I think the cash flow which is expected is $3 billion, so you will see an improvement which is also coming, of course, from the full effect of the GB with the ETH in the accounts. So I would say, yes, we are on the way to, again, $27 will be free cash flow positive, and integrated power will contribute to the dividend of the company.
Operator
Good question. It's from Ahmed Bentalem from Otto BHS. Please, go ahead.
Yeah, hi, thank you. Just one question on the geographical mix. So, you have materially expanded your U.S. offshore accuracy with Chevron over the last 18 months. Is this opportunistic or part of broader strategy to scale up in the U.S. Gulf? And what is your long-term ambition for this basin? Thank you.
Yes, thank you for the question. It's a good question. In fact, you probably noticed that we have done some exploration, I would say, deal with Chevron. In fact, as you know, yes, we have an ambition to continue to grow in the Gulf of Mexico. Today, all our assets are operated by Chevron, Tahiti, Jack, Encore, and we consider they are a very good partner for us there. We had made last year a first deal about exploration. We increased it. By the way, it's not just acquiring some accruages, it's drilling, because we plan to first prospect together in 27. So for me, yes, it is part of the strategy. We like exploration, and honestly, our partnership with Chevron in the Gulf of Mexico is a good fit, and I think I recently had the opportunity to discuss that with Mike, and we both agree that we continue. And on the other side, by the way, you probably noticed that we have announced some GV in exploration with them in Nigeria, for example, in Africa, so where we are strong. So we try to combine our strengths in, I would say, our foundation territories where we are good together in order. And as we have both considering the exploration as an engine for future growth, I think there is a good alignment between both companies. And so if we can do more, we'll continue to do more. So that's the idea. The question, again, is completely there, and the U.S. of America is okay.
Operator
The next question is from Jean-Luc Romain from CIC-CIB. Please go ahead.
Thank you for taking my questions. It's about German flow wind. It looks like Germany is a relaxing instance of a renegotiation of conditions to develop a crutch there. You took large positions two years, two, three years ago, and I was wondering what your willingness is there.
Okay. I mean, honestly, there are contradicting news from Germany about what they want to do, what they don't want to do. It is clear that today the merchant offshore wind in Germany is a challenge, to be honest. We are not the only one to explain that. Maybe we are optimistic, but it's a challenge because, in fact, customers are not completely... Because first, the costs are higher. I would also say that the connections are longer. So the German government, which is at a commitment to deliver some connections to the concession, does not fully fulfill its commitment. So that's a debate between our companies and the government. So we'll see what they mean. On our side, I think we need to – we are evaluating the situation. We have different concessions. We have some which have been acquired with a cheap price on which we intend to continue to work. For the other ones, we'll have to evaluate the impact. At the end, the objective is to make, I would say, some affordable electricity for customers. So if it's not affordable, I don't know why we should invest. So that, I would say, is a condition of an investment by our side. By the way, you will notice in our accounts of the third quarter that you have made some write-off on some of these concessions just to reflect the fact that today, on some of them, we don't see how we could monetize them in a profitable way for us and for the customers. It's not true for all these German concessions, so I will not be more explicit, but that's the way we consider this business. Thank you. Thank you to all of you.
There are no more questions. So in such case, I would like to thank you for listening. I know that you will all rush to the call from a competitor, which is a good friend as well. So I wish you the best. And I think our next meeting will be, in fact, together in February in London, where we'll announce the results for the full year, the fourth quarter, and return to shareholders to meet the 40%. Thank you.
