The oil dealmaker: Total’s Patrick Pouyanné is not backing down

This year Patrick Pouyanné, chief executive of TotalEnergies, was en route to Mozambique when he stopped off in the tiny central African nation of Rwanda.

Rwanda has no oil and gas reserves and a small domestic market of 13mn people. Yet Pouyanné and Rwanda’s president Paul Kagame signed a co-operation agreement anyway, agreeing to explore opportunities to develop renewable energy projects.

The proposal was of little commercial value to the French oil major. But in the preceding months Rwanda had made itself invaluable to Total by deploying 1,000 troops to Mozambique to quell an Islamist insurgency that had halted the company’s plans for a mammoth gas project.

The pit stop in Kigali was typical of Pouyanné, an oil and gas executive renowned in the industry for an ability to leverage diplomatic relations in service of Total’s commercial goals.

“You need to find allies to understand things,” Pouyanné tells the Financial Times, when asked about the meeting. “It’s a small, sympathetic country. It has a president who has influence well outside Rwanda, in the African Union. And we’re trying to move into east Africa. That’s new for us.”

Today, Mozambique is still too unstable for Total to resume construction. But the project is just one of a series of complex oil and gas developments in challenging parts of the world that Pouyanné is aiming to deliver just as environmental pressure on the industry to cease such activity is peaking.

While European rivals BP and Shell have become increasingly cautious about developing oil and gas projects in previously unexploited regions, Pouyanné has pushed on and most shareholders have backed him so far.

“I don’t think I’ve ever seen [shareholder] trust levels be so high for an integrated oil chief executive as I currently do with Patrick,” says Bernstein analyst Oswald Clint, who has been covering the oil industry for 20 years. “There is conviction that he can manage the geopolitical risk.”

As a result, since Pouyanné’s rise to the top in 2014, Total has become one of the starkest exemplars of an energy industry in flux and beset by the paradox of continuing demand for fossil fuel products even as governments and the public clamour for their elimination.

Pouyanné seems determined to play both sides of this paradox. The group he oversees is pursuing some of the industry’s most contentious developments, like its $20bn liquefied natural gas play in Mozambique and a $10bn oil project and pipeline in Uganda, which has become a lightning rod for climate activists and critical investors.

Yet at the same time the company, renamed TotalEnergies last year to signify its diversifying interests, is investing billions of dollars in clean energy projects from wind farms in the UK’s North Sea to solar plants in Iraq, to hydrogen installations spanning the US to India. Investment bank RBC Capital Markets values Total’s low-carbon business at $35bn, making it far larger than that of any of its big competitors.

Pouyanné may be trying to have it both ways, but the approach has brought rewards: Total’s share price is up about 10 per cent since his appointment, while most of its competitors are down. The group’s total shareholder returns are the best over the period of any of the six super majors. Competitors such as BP, which has made the biggest step away from fossil fuels, pledging to cut oil production by 40 per cent by 2030, have fared much worse.

But uncertain long-term demand for oil and gas makes any significant fossil fuel investment an increasingly risky bet, particularly as the pool of banks and insurers willing to support such projects shrinks every year.

“We want a rapid transformation of their model ,” says Nicolas Théry, chair of French mutual bank Crédit Mutuel, which was among the 11 per cent of shareholders that voted against Total’s climate plan this year, in part because they are still investing in oil projects. “Our benchmark is not comparing them to rivals, it’s climate change.”

Pouyanné has said Total will continue to develop new fossil fuel basins, particularly gas, for at least the next decade while cars will still need petrol and Total’s renewable energy investments will need financing.

He thinks his critics have oversimplified the energy transition. “The trouble with the whole topic around climate and energy is that the world of energy is a very complex one, with many connecting parts,” he says. “Just look at the way some politicians have only just discovered that the price of electricity is linked to the price of gas in Europe.”

In the oil industry, he is seen as a person of conviction, unafraid to confront the reality of a world in which oil and gas is still needed, even while pushing into lower-carbon products. Most of Total’s shareholders trust him to pursue big projects, despite the growing risks, because so far he has delivered rewards. The challenge, for Pouyanné, might be recognising when to stop.

Rise of an oil man

From the day he set foot in 1997 in what was then France’s Elf, before its absorption three years later by TotalFina, Pouyanné forged a career as a dyed-in-the-wool oil man.

His first posting in his early 30s took him to Angola, then in the grip of a civil war. A move shortly afterwards to Qatar placed him at the helm of one of Total’s most important markets, where he caught the eye of the company’s then chief executive Christophe de Margerie. That triggered a rapid ascent into senior jobs in the exploration and production and refining parts of the business.

It was also a first opportunity to build ties that have proved relevant today. In June, Total was named as the first foreign partner in a coveted $29bn expansion of a Qatari liquefied natural gas project, ahead of European rivals and Qatar’s traditionally closest partner, ExxonMobil.

“Pouyanné’s relationship with the likes of Qatar go back 20 years,” a person at the group says. “It’s the type of longevity a politician would never have.”

Born to a customs director father and a mother who worked for the French postal service, Pouyanné spent part of his youth in the southwestern Basque region. His early steps could have taken him in a different direction. A talent for maths earned him a place at France’s most elite engineering university, Polytechnique. That propelled Pouyanné first of all into advisory and chief of staff jobs in the French government before Elf came calling.

University classmates recall some of the characteristics Pouyanné is known for still: a quick mind; a lumbering 1.91-metre frame and awkward gait; and a prickliness when criticised or told to do things a certain way.

“He’s of that French schooling where you are taught to reason and use the power of the mind. His approach is ‘I’ve thought this out, I’m right and this is the view I’m going to impose on everyone’,” says one acquaintance.

This attitude has made him a successful chief executive but has also caused him grief, they continue. “The thing with Patrick Pouyanné is that he is always right, but sometimes he needs to not say everything so bluntly or out loud.”

At times, that bluntness has flared up into impatience and anger. His “volcanic eruptions” have sometimes had colleagues trembling, several former Total employees say, and have contributed to a top-down atmosphere at the group, despite his work with a coach to rein in his temper.

Even Pouyanné, a tennis fan, concedes that he may have “something in common” with his favourite player, the hot-headed John McEnroe.

‘Pouyanné Petroleum’

In 2014 Pouyanné was propelled into the top job in dramatic fashion. One night in October, De Margerie’s business jet crashed into a snow plough on the tarmac in Moscow. The emir of Qatar attended his Paris funeral; Russian president Vladimir Putin was later to pay homage to the businessman, naming an ice-breaking LNG tanker after him in 2017.

French president Emmanuel Macron and UAE president Sheikh Mohammed Bin Zayed look on as Sultan Ahmed al-Jaber, head of the Abu Dhabi National Oil Company, and Patrick Pouyanné sign a deal in Paris © Petit Tesson/Pool/Reuters

Total’s board installed Pouyanné, one of two people De Margerie had been grooming as potential successors, as chief executive, preferring him over a rival in charge of more nascent renewable energy operations. By the end of 2016 he had been named chairman too.

Pouyanné has acted since then as TotalEnergies’ dealmaker-in-chief, wielding tight control over every big move. “He runs TotalEnergies as if it were Pouyanné Petroleum,” jokes one French businessman, likening his approach to that of France’s most successful family-controlled companies such as luxury goods conglomerate LVMH.

He has tended to shun hiring cadres of advisers, including for acquisitions, in favour of trusting his own instincts. “He doesn’t get involved in public auctions. He doesn’t do it through bankers. He does it himself, that’s the distinguishing characteristic,” says Irene Himona, managing director for oil and gas at Société Générale, who has followed Total for 25 years.

Jacques Veyrat, an energy entrepreneur and former classmate from Polytechnique who sold a controlling stake in French electricity group Direct Energie to TotalEnergies in 2018, says Pouyanné was involved in the negotiations throughout.

“There were lawyers on the contracts of course. But several times he called me up to say ‘have you seen this clause, it’s no good’,” Veyrat says. “He reads absolutely everything.”

Colleagues and business partners noted other telling changes from the De Margerie era. Out went the drinks cabinet in a CEO’s office set up for entertaining; in came cabinets filled with files instead. Banks of secretaries and assistants made way for the company’s mergers and acquisitions team, which was moved on to his floor.

Climate protesters block the entrance to Total’s AGM in Paris in May. Some 11% of shareholders voted against Total’s climate plan this year © Denis Meyer/Hans Lucas/Reuters

The executive says his hands-on approach is simply the fastest way to get things done. “If I get in the game and negotiate the acquisition of Clearway in the US with the boss of [infrastructure fund] GIP, they see the head of TotalEnergies. They believe in it,” Pouyanné says, after a widely praised $2.4bn deal in May to take a 50 per cent stake in the US wind and solar farm developer. “It’s about shortening the decision circuits, about going fast and acting like small companies do.”

Managing the risks

Pouyanné’s talent for bilateral relations extends beyond the corporate sphere to the often more volatile world of politics.

In Uganda, where Total is leading the development of a 230,000-barrel-a-day oil project on the country’s border with the Democratic Republic of Congo, Pouyanné is said to have built an unrivalled personal relationship with the long-serving Uganda president Yoweri Museveni.

“Patrick is the one person Museveni would listen to,” says one senior oil executive who spent over a decade working on the project.

In his willingness to do business with leaders such as Museveni and Rwanda’s Kagame, each accused by human rights groups of suppressing opposition parties and silencing critics, he is not unusual in the industry. But he has been accused of struggling to draw the line.

Climate activists wear masks of Patrick Pouyanné at a protest in Paris. Total’s LNG project in Mozambique and oil project and pipeline in Uganda have become a lightning rod for activists and critical investors © Stephane De Sakutin/AFP/Getty Images

After Russia invaded Ukraine in February, Total and Pouyanné came under fire from some politicians and campaigners in France and overseas, for stalling for several weeks on the future of its Russian investments, including a stake in a $21bn Arctic LNG project in Siberia that had been due to start exporting in 2023. BP and Shell said within days they would exit their Russian projects.

Total has since said it will stop all new investments in Russia and divest its projects when it can find suitable buyers. It continues to ship gas to Europe from its Yamal operation in Russia, as it says the French government has encouraged it to do. Pouyanné had exchanges with Emmanuel Macron over Russia, and the president called for gas to keep flowing and was supportive of Total’s bid not to rush for the exit on day one, people familiar with the discussions said.

While some shareholders sold out over the Russian backlash, most backed the company. “If it was anyone else in the centre, I think they would have had a much harder time,” says Biraj Borkhataria, an analyst with RBC Capital Markets. “But because he’s got the big calls right, more than once, there is a lot of good will in the industry.” 

Total’s appetite for new oil and gas developments, however, has generated little but ill will from environmentalists and activists.

Patrick Pouyanné, second from right, and Angolan government ministers study a model of a Total oil platform off the country. Pouyanné acts as TotalEnergies’ dealmaker-in-chief, wielding tight control over every big move © Rodger Bosch/AFP/Getty Images

“Total’s activities are killing the planet and are extremely problematic on a human rights level,” said Charles de Lacombe, an engineer and activist who was one of dozens of protesters who blocked the entrance to Total’s shareholder meeting in Paris in May. “Of course we can’t get out of petrol from one day to the next. But we shouldn’t be doing new projects.”

The Ugandan pipeline in particular is subject to several court cases and has been the focus of intense protests against Total. “It’s clear today that it’s become a thorn in our side in terms of the transformation we’re carrying out,” Pouyanné says.

The group says it has tried to mitigate its environmental impact, including by reducing the project’s footprint inside a protected park. Pouyanné argues opposition to the project, which he acquired for Total over a decade ago, is disproportionate to its potential effects.

Giving in to opposition on the project would put Total’s reputation at risk, he adds. “We have a commitment towards the countries that trust us,” Pouyanné says. “If I say tomorrow I’m going to drop Uganda, there’ll be other states that will lose confidence in us.”

Total ultimately plans to whittle down oil and gas product sales by 2050 to a quarter of its current sales, a level almost in line with the International Energy Agency’s vision to reach net zero emissions, although the pathways to getting there diverge sharply. The IEA said last year that no new oil or gasfield developments in new areas were needed.

Patrick Pouyanné with Vladimir Putin in Moscow. Total said it will stop all new investments in Russia and divest its projects when it can find suitable buyers © Alexander Nemenov/AFP/Getty Images

Pouyanné disagrees, and the nature of his dominance at Total means the company will shift towards cleaner forms of energy on his terms. So far, his record has shielded him from serious opposition internally or from shareholders.

Yet to a greater extent than at other supermajors, much hinges on this particular chief executive’s ability to keep stacking up the right choices year after year. To some within the company, a big risk is whether there are enough strong voices to call Pouyanné out if his judgment falters and he takes a wrong turn.

Characteristically, Pouyanné says he has his own formula to mitigate that risk, with confidantes outside TotalEnergies he turns to as a sounding board, as well as his internal teams.

“You need to make sure that if you’re doing something stupid people will tell you,” he says.


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