Tired of the lack of appetite of European investors for the oil and gas sectors, the boss of TotalEnergies, Patrick Pouyanné, is tempted by the New York Stock Exchange. Patrice Geoffron explains why the CEO of the French multinational intends to get closer to American investors
Patrick Pouyanné, CEO of TotalEnergies, recently announced a plan to transfer the French major’s main listing to Wall Street. The possibility provoked a strong reaction from Bruno Le Maire, evoking the ” supreme interest of the nation ” and a ” disastrous” political signal. It is not so much the industrial attractiveness of France that is in question (since the group’s activities are very limited in the country and in Europe), than the financial attractiveness of the Paris financial centre. Nothing has been decided at this stage, as the exploratory study is due to be submitted to the board of directors in September. But, one hundred years after the creation of the Compagnie Française des Pétroles, the group’s forerunner, this prospect, of strong symbolic significance, deserves attention.
Patrick Pouyanné highlights the interest of a listing as close as possible to shareholders who have an appetite for TotalEnergies : “We are faced with a situation in which European shareholders either sell their positions or keep them, while American shareholders buy .” And, in fact, the share of American institutional shareholders has increased in ten years from 33% to 48%, while that of Europe has fallen from 45% to 34%. The objective, with this “alignment”, would be to reduce part of the discount from which TotalEnergies suffers, by around 1/3 compared to its American counterparts such as Chevron and ExxonMobil (according to Bank of America Securities).
But, by making this transfer, TotalEnergies will also have to convince people of the relevance of a transition strategy (particularly towards renewables) that consumed 1/3 of its investment capacity in 2023, and which makes the company ” One of the world’s most active solar and wind developers (in the words of the group’s Sustainability & Climate 2024 Progress Report). While these efforts are considered insufficient on our side of the Atlantic (see the ongoing work of the Senate commission of inquiry), they could seem excessive on the other, due to the lower intrinsic profitability of low-carbon projects, compared to fossil fuel projects. This is all the more so since TotalEnergies has an oil portfolio whose production costs are among the lowest among the majors, a guarantee of “resilience” in the face of the yo-yo of the price of a barrel.
Well beyond its sole case, the project under study at TotalEnergies is a piece of the debate on the capital markets union in Europe: Linde (formerly the largest capitalization in Germany) or CHR (Irish giant of building materials) have already crossed the Atlantic, while others are considering it (such as Shell, Heidelberg, Indivior, etc.). In the same spirit, Holcim has even split its North American business to list it in New York.
The unification of the capital markets in Europe is a complex engineering, since the landscape is made up of 35 stock exchanges, 22 stock exchange operators, 18 clearing houses, etc. The stakes are however (euphemism) crucial knowing that the Green Deal, according to the Commission, involves investing an additional €600 billion per year, until 2050. Enrico Letta – President of the Jacques Delors Institute and former President of the Italian Democratic Party – put the issue well by entitleing his report, presented at the extraordinary meeting of the European Council on 17 and 18 April 2024, ” Much more than a market “. Regulatory harmonisation, the creation of a European savings product, a public guarantee to support investment in the ecological transition… The “to do list” is long on the road to unification.
Especially since, as Enrico Letta forcefully indicates, the prerequisite is to convince European citizens that such integration is crucial for the achievement of otherwise unattainable global objectives, such as the ” fair, green and digital transition “. With less than a month to go before the elections in which European issues are marginalised, we can measure the scale of the challenge.
