French energy major TotalEnergies has signalled a potential reduction in its UK investments in response to the government’s planned increase in windfall taxes and the removal of investment allowances.
The company’s CEO, Patrick Pouyanné, expressed concerns at an investor day in New York, highlighting the challenges posed by the proposed tax changes compared with those in France.
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Pouyanné, as reported by the Financial Times, stated: “I am taking this very seriously because clearly we will be very selective on any capex we spend in the UK and [are] clearly looking seriously at ways to restructure operations.”
He suggested that the UK should consider emulating Norway’s system, which, despite high taxes, offers incentives for investment.
“I am arguing with them, but they should copy [and] paste the Norwegian system, which is maybe high fiscally but also has incentives to invest,” Pouyanné added.
Introduced in 2022 by then chancellor Rishi Sunak following Russia’s invasion of Ukraine, the UK’s temporary energy profits levy is set to extend until 2030.
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By GlobalDataThe Labour Government’s plan includes a three-percentage point increase from November, potentially raising the sector’s overall tax rate to 78%.
The proceeds from the increased levy are intended to support renewable energy investments including wind power, aligning with Labour’s establishment of Great British Energy.
Additionally, Pouyanné confirmed TotalEnergies’ consideration of a secondary listing in New York, which would enable more efficient access to US investors while maintaining its base in Paris.
Despite the uncertain market, TotalEnergies announced a 5% dividend increase for 2025 and maintained its $2bn (€1.81bn) quarterly share buybacks.
This comes amid forecasts of an oversupply in liquefied natural gas (LNG) potentially affecting prices from 2026.
TotalEnergies has committed to net investments of $16–18bn annually through 2025–30, with approximately $5bn earmarked for low-carbon energies.
The company retains the option to reduce investments by $2bn if faced with significant price drops.
The company’s Strategy & Outlook reveals a focus on a balanced and profitable transition strategy, with an emphasis on oil and gas, particularly LNG, and electricity.
TotalEnergies aims to increase global energy production by 4% per year through 2030 while significantly reducing emissions from its operations.
By 2030, the company anticipates a 25% reduction in the carbon content of its energy sales compared with 2015.
