Summary of Key Points from the Conference Call Industry Overview - The focus is on the upcoming 4Q25 earnings season for Europe's Big Oils, starting with Equinor on February 4th, 2026, and the guidance for 2026 is expected to be a key topic [1][9] - The preference ranking for investment is Oil Services > Big Oils > Exploration & Production (E&Ps), with TotalEnergies (TTE) highlighted as the top pick among Big Oils [1] Core Insights and Arguments - The $60/bbl Brent price assumption is challenging for Europe's Big Oils, leading to a projected decline in refining margins by 35% compared to 4Q25 [2] - Capital expenditure (capex) budgets are expected to remain flat, with an average buyback cut of approximately 25% across the sector, except for TTE [2] - TTE and Galp are noted for their organically falling breakeven Brent prices, with TTE's Integrated Power business transitioning from a drag to a contributor to free cash flow (FCF) [3][11] - TTE's recent trading update has positively influenced consensus estimates, contrasting with downgrades from peers like BP and Shell [4] Financial Projections - The aggregate organic cash flow from major companies is projected to show a $16 billion deficit post distributions, which decreases to approximately $5.5 billion after accounting for inorganic cash flows [13] - TTE is expected to have the lowest organic breakeven price in the peer group at around $60/bbl for 2026, with projections of it dropping below $55/bbl by 2027 [14][16] - TTE's capex is anticipated to decline by over 10% year-on-year in 2026, with a significant reduction expected by 2028 [17][20] Balance Sheet and Debt Analysis - The analysis indicates that all Big Oils will reduce shareholder distributions in 2026 compared to 2025, with Equinor expected to see the most significant declines [22] - BP is projected to maintain the highest gearing in the peer group at around 40%, while TTE and Galp are expected to decrease their net debt year-on-year [31][36] Market Sentiment and Consensus - The consensus estimates for 4Q25 earnings have been revised down by 8% year-to-date, with TTE showing a rare positive update that has led to flat revisions compared to an average 8% downgrade across peers [49] - The overall sentiment indicates a cautious outlook for cash flows, with aggregate payouts expected to exceed 140% of organic FCF at the $60/bbl Brent price [10] Upcoming Catalysts - Key upcoming earnings reports include Galp and Equinor on February 4th, followed by several other companies throughout February [62] Additional Insights - The report emphasizes the importance of cash flow cushions and balance sheet strength, particularly for TTE and Equinor, as they navigate the challenging oil price environment [10][11] - The analysis suggests that the market may have already priced in the expected cuts to buybacks, indicating a potential for volatility in stock performance as earnings reports are released [65] This summary encapsulates the critical insights and projections regarding the oil industry and specific companies, particularly focusing on TotalEnergies and its competitive positioning within the sector.

Core Insights - Danish energy trader InCommodites has appointed John Dimech, a former Shell executive, as CEO of InCommodities APAC [1] Company Developments - The appointment of John Dimech is part of InCommodites' strategy to strengthen its leadership in the Asia-Pacific region [1] - InCommodites is backed by Goldman Sachs, indicating strong financial support and confidence in its operations [1]

Group 1 - The Royal Bank of Canada (RBC) has downgraded Shell's rating from "Outperform" to "In Line" with the market performance [1] - RBC has reduced the target price for Shell from 3600 pence to 3200 pence [1]

Core Viewpoint - Shell (SHEL) is exploring the development of a large oil field project named Bonga South West in Nigeria, which could attract approximately $20 billion in foreign direct investment if a final investment decision is reached with partners [1][1]. Group 1 - Shell's stock rose by 1.8% on Friday following the CEO's announcement regarding the Bonga South West project [1][1]. - The CEO emphasized the potential for significant foreign direct investment contingent on the final investment decision [1].

Core Viewpoint - The Attorney General of Michigan, Dana Nessel, has filed an antitrust lawsuit against four major oil companies, accusing them of colluding for decades to hinder competition in the renewable energy sector, including electric vehicles [1][2]. Group 1: Lawsuit Details - The defendants in the lawsuit include BP, Chevron, ExxonMobil, Shell, and the American Petroleum Institute [1][2]. - The lawsuit claims that these companies operate in a cartel-like manner, agreeing to reduce the production and distribution of renewable electricity and suppress the rise of electric vehicles and renewable energy technologies in the U.S. market [1][2].

Core Viewpoint - Nigerian President Bola Tinubu has approved targeted, investment-linked incentives for Shell's Bonga South West deepwater oil project, indicating government support for the oil sector and potential growth opportunities for Shell in Nigeria [1] Group 1: Government Support - The approval of incentives is a strategic move to enhance investment in the oil sector, particularly for Shell's deepwater projects [1] - This decision follows a meeting between President Tinubu and Shell's chief executive, highlighting the importance of collaboration between the government and oil companies [1] Group 2: Shell's Bonga South West Project - The Bonga South West project is a significant deepwater oil initiative that is expected to contribute to Nigeria's oil production capacity [1] - The targeted incentives are designed to attract further investment into the project, which could lead to increased production and economic benefits for the region [1]

Core Viewpoint - Shell is exploring the sale of its assets in Argentina's Vaca Muerta shale play and has initiated discussions with potential buyers to assess their interest [1] Group 1: Company Actions - Shell has approached potential buyers in recent weeks regarding the sale of its assets [1]

Group 1 - Shell plc (NYSE:SHEL) is perceived as an average oil company, which has led to concerns about its long-term performance, as it has been "stuck in the mud" for over a decade [1] - The company is involved in extracting and processing oil and natural gas, producing fuels, lubricants, and chemicals, while also managing electric vehicle charging and generating power from renewable sources [2] - Piper Sandler raised the price target for Shell's stock to $92 from $90, maintaining an Overweight rating, indicating a positive outlook despite the overall sector's bearish crude expectations [2][3] Group 2 - The 2026 outlook for the oil sector is expected to be similar to the previous year, with bearish crude expectations potentially limiting market outperformance, although the refining side is anticipated to perform better [3] - There is a belief that certain AI stocks may offer greater upside potential compared to Shell, suggesting a shift in investment focus towards technology rather than traditional oil companies [4]

Shell plc (NYSE:SHEL) is included among the 11 Best Energy Stocks to Buy for Dividends in 2026. Shell Expects Uptick in Upstream Production in Q4 2025 Shell plc (NYSE:SHEL) is an integrated energy company with operations spanning exploration, production, refining, marketing, and chemical manufacturing, alongside growing investments in biofuels and hydrogen. Shell plc (NYSE:SHEL) announced on January 8 that it expects upstream production to come in at about 1.84 mboed to 1.94 mboed in Q4 2025, reflecting ...

Shell plc is cutting the size of its Executive Committee as part of a broader effort to simplify its corporate structure and embed technical expertise more directly within its operating businesses. The company said on Tuesday that Robin Mooldijk, President of Projects and Technology, will step down at the end of February after 35 years with the group. His departure will reduce Shell’s Executive Committee from nine members to eight. The move follows progress on Shell’s previously announced plan to disman ...