“We need Total,” the Minister of the Economy declared this Thursday, worried about a possible move of the company’s listing to Wall Street. The oil group argues that European investors are avoiding oil stocks because of the weight of environmental requirements.
The declaration last week by the boss of TotalEnergies, Patrick Pouyanné, on a possible listing of the French oil group mainly on the New York Stock Exchange, had the effect of a small bomb. This Thursday, May 2, the Minister of the Economy Bruno Le Maire spoke out against such a move, whether it concerns the listing or the group’s head office. “I am here to ensure that this does not happen, because I think it is a serious decision, launched the minister on BFMTV/RMC. Is it the supreme interest of the nation to keep Total’s head office in France and Total’s main listing in France? Yes, and so I will fight for that. We need Total. I have had the opportunity on several occasions to say to what extent it is an asset for France to have a large oil company like Total.
Patrick Pouyanné threw this stone into the pond during an interview with Bloomberg, arguing that American shareholders were getting closer to 50% of the group’s capital. “It’s not about emotion. It’s a business question.” added the manager who had however promised that its head office would remain in Paris. For the Paris Stock Exchange, the departure of Total, the second largest market value in the CAC 40, would undoubtedly be very bad news. But beyond the stock market implications, the risk is that Total seeks to free itself from social and environmental obligations, which are less strict in the United States.
“We lost 7% of French shareholders”
Pouyanné’s exit surprised analysts, who were rather expecting such a move from the Anglo-Dutch group Shell, which has already mentioned it. But they emphasize that all European groups are under pressure from the demands of the energy transition, which are much stronger in the EU. If it were listed primarily in New York (for the moment, it has a secondary listing there), Total could thus court American investors who are less constrained by sustainable investment rules than Europeans. “We have lost 7% of French shareholders over the last 4 years. Largely because of the regulations and the pressure put on them”declared Patrick Pouyanné before a Senate committee on Monday April 29.
The boss of Total also criticized the recent change in France to the Socially Responsible Investment (SRI) label, which now excludes companies exploiting coal or unconventional hydrocarbons. “We clearly see more appetite for shares of companies in the energy, oil and gas sectors in North America than in Europe,” said the CEO. “We look at the reality of our market and we realize that European energy companies are very discounted compared to American energy companies.” As a result, a lower valuation: with the same results, the American group Chevron is valued at $300 billion on the stock market, compared to $175 billion for Total.
Before the Senate committee, he did not rule out reconsidering the question if “more European shareholders […] buy TotalEnergies. Between 2012 and 2023, the share of North American institutional shareholders (pension funds, asset managers, insurers, etc.) increased from 33% to 48% (including 47% for the United States) while that of Europe (excluding the UK) fell from 45% to 34%.
