By Herta Loka, Associate Director, Corporate Ratings

While the earnings performance was broadly in line with our expectations, the key takeaway is management’s shift toward a tighter financial policy, reflected in more cautious shareholder distributions and a downward revision of medium term investment plans, echoing moves by European peers.

The company’s updated approach to shareholder remuneration provides the clearest signal. For 2026, TotalEnergies maintained its communicated buyback range of USD 3bn–USD 6bn but opted to begin the year with a materially lower USD 750m in Q1 repurchases. This positions buybacks firmly as a price sensitive instrument that will flex with market conditions.

The dividend remains the core payout mechanism, but its preservation hinges on maintaining a balanced capital framework in a lower price world. With the company still aiming to distribute over 40% of CFFO across the cycle, future shareholder returns will increasingly depend on disciplined operating cashflow generation and restrained discretionary spending.

Caution on capex also points to more disciplined financial policy

Forward visibility on capital expenditure also points to greater discipline. For 2026, capex is now guided at USD 15bn which is USD 1bn below the previous outlook and the level executed in 2025. The company had already revised its 2027–2030 investment range to USD 14bn–16bn, down from USD 15bn–USD17bn.

The more modest capex plan underscores a more selective approach to long term project pacing, particularly in integrated power activities, where the planned acquisition of a 50% stake in EPH’s flexible generation assets effectively brings forward EUR 5bn–EUR6bn of investment. This front loading reduces the need for equivalent capex in later years, enhancing medium term balance sheet flexibility.

Prospect of relatively low crude prices clouds outlook

Looking ahead, the challenge for TotalEnergies will be sustaining investment discipline if oil prices remain around USD 60/bbl or lower for longer than expected.

Under such conditions, maintaining spending even at the mid point of the revised guidance would require careful sequencing of projects, prioritisation of cash generative assets, and continued scrutiny of discretionary growth initiatives.

The updated capital framework therefore signals a strategic pivot: growth ambitions are being recalibrated to ensure resilience, cash preservation, and maintained shareholder capacity in a less supportive price environment.