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TotalEnergies to Cut Green Energy Spending After Profit Falls to $15.8B

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TotalEnergies

French oil and gas major TotalEnergies has announced plans to reduce investments in low-carbon energy after net profit declined by 26% in the 2024 financial year.

Profit after tax plunged by $15.8 billion to miss analyst projections by nearly $1 billion as energy prices weakened and refining margins contracted in the period under review.

“The oil and gas landscape was less favourable (in 2024),” TotalEnergies Chief Executive Patrick Poyanne said on Wednesday.

The company said it would cut investments in low-carbon energy, particularly in electricity, by $500 million to bring its allocation down from $5 billion to $4.5 billion.

Profit decline reflects broader trends in the energy sector where lower oil and gas prices and dropping refining margins are impacting earnings.

While TotalEnergies has maintained a commitment to diversifying into renewables, the latest adjustment signals a more cautious approach to low-carbon investments as it responds to financial pressures.

Market analysts suggest that TotalEnergies’ decision to trim green energy investments could be linked to capital discipline amid weaker returns in the renewable energy market.

Industry watchers also note that oil majors are facing a balancing act between traditional fossil fuel operations and energy transition goals with profitability concerns influencing their strategy.

Despite the adjustment in green energy spending, TotalEnergies is expected to continue pursuing selective investments in renewables, particularly in regions where profitability aligns with long-term growth objectives.

Also, TotalEnergies is expected to prioritize high-margin projects while maintaining its core oil and gas business.

The company’s move to moderate its low-carbon investment pace highlights ongoing profitability challenges in renewable markets.

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

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