This yr Patrick Pouyanné, chief government of TotalEnergies, was en path to Mozambique when he stopped off within the tiny central African nation of Rwanda.
Rwanda has no oil and fuel reserves and a small home market of 13mn folks. But Pouyanné and Rwanda’s president Paul Kagame signed a co-operation settlement anyway, agreeing to discover alternatives to develop renewable vitality tasks.
The proposal was of little business worth to the French oil main. However within the previous months Rwanda had made itself invaluable to Whole by deploying 1,000 troops to Mozambique to quell an Islamist insurgency that had halted the corporate’s plans for a mammoth fuel mission.
The pit cease in Kigali was typical of Pouyanné, an oil and fuel government famend within the business for a capability to leverage diplomatic relations in service of Whole’s business targets.
“You must discover allies to grasp issues,” Pouyanné tells the Monetary Occasions, when requested in regards to the assembly. “It’s a small, sympathetic nation. It has a president who has affect effectively exterior Rwanda, within the African Union. And we’re attempting to maneuver into east Africa. That’s new for us.”
In the present day, Mozambique continues to be too unstable for Whole to renew building. However the mission is only one of a sequence of complicated oil and fuel developments in difficult components of the world that Pouyanné is aiming to ship simply as environmental strain on the business to stop such exercise is peaking.
Whereas European rivals BP and Shell have develop into more and more cautious about creating oil and fuel tasks in beforehand unexploited areas, Pouyanné has pushed on and most shareholders have backed him up to now.
“I don’t assume I’ve ever seen [shareholder] belief ranges be so excessive for an built-in oil chief government as I at the moment do with Patrick,” says Bernstein analyst Oswald Clint, who has been overlaying the oil business for 20 years. “There may be conviction that he can handle the geopolitical danger.”
Consequently, since Pouyanné’s rise to the highest in 2014, Whole has develop into one of many starkest exemplars of an vitality business in flux and beset by the paradox of continuous demand for fossil gas merchandise at the same time as governments and the general public clamour for his or her elimination.
Pouyanné appears decided to play each side of this paradox. The group he oversees is pursuing a number of the business’s most contentious developments, like its $20bn liquefied pure fuel play in Mozambique and a $10bn oil mission and pipeline in Uganda, which has develop into a lightning rod for local weather activists and significant traders.
But on the identical time the corporate, renamed TotalEnergies final yr to indicate its diversifying pursuits, is investing billions of {dollars} in clear vitality tasks from wind farms within the UK’s North Sea to photo voltaic vegetation in Iraq, to hydrogen installations spanning the US to India. Funding financial institution RBC Capital Markets values Whole’s low-carbon enterprise at $35bn, making it far bigger than that of any of its huge rivals.
Pouyanné could also be attempting to have it each methods, however the method has introduced rewards: Whole’s share worth is up about 10 per cent since his appointment, whereas most of its rivals are down. The group’s complete shareholder returns are the very best over the interval of any of the six tremendous majors. Rivals akin to BP, which has made the most important step away from fossil fuels, pledging to chop oil manufacturing by 40 per cent by 2030, have fared a lot worse.
However unsure long-term demand for oil and fuel makes any important fossil gas funding an more and more dangerous guess, significantly because the pool of banks and insurers prepared to help such tasks shrinks yearly.
“We would like a fast transformation of their mannequin ,” says Nicolas Théry, chair of French mutual financial institution Crédit Mutuel, which was among the many 11 per cent of shareholders that voted in opposition to Whole’s local weather plan this yr, partially as a result of they’re nonetheless investing in oil tasks. “Our benchmark just isn’t evaluating them to rivals, it’s local weather change.”
Pouyanné has stated Whole will proceed to develop new fossil gas basins, significantly fuel, for at the least the following decade whereas automobiles will nonetheless want petrol and Whole’s renewable vitality investments will want financing.
He thinks his critics have oversimplified the vitality transition. “The difficulty with the entire matter round local weather and vitality is that the world of vitality is a really complicated one, with many connecting components,” he says. “Simply take a look at the best way some politicians have solely simply found that the worth of electrical energy is linked to the worth of fuel in Europe.”
Within the oil business, he’s seen as an individual of conviction, unafraid to confront the fact of a world by which oil and fuel continues to be wanted, even whereas pushing into lower-carbon merchandise. Most of Whole’s shareholders belief him to pursue huge tasks, regardless of the rising dangers, as a result of up to now he has delivered rewards. The problem, for Pouyanné, could be recognising when to cease.
Rise of an oil man
From the day he set foot in 1997 in what was then France’s Elf, earlier than its absorption three years later by TotalFina, Pouyanné solid a profession as a dyed-in-the-wool oil man.
His first posting in his early 30s took him to Angola, then within the grip of a civil warfare. A transfer shortly afterwards to Qatar positioned him on the helm of one in all Whole’s most essential markets, the place he caught the attention of the corporate’s then chief government Christophe de Margerie. That triggered a fast ascent into senior jobs within the exploration and manufacturing and refining components of the enterprise.
It was additionally a primary alternative to construct ties which have proved related in the present day. In June, Whole was named as the primary international companion in a coveted $29bn growth of a Qatari liquefied pure fuel mission, forward of European rivals and Qatar’s historically closest companion, ExxonMobil.
“Pouyanné’s relationship with the likes of Qatar return 20 years,” an individual on the group says. “It’s the kind of longevity a politician would by no means have.”
Born to a customs director father and a mom who labored for the French postal service, Pouyanné spent a part of his youth within the southwestern Basque area. His early steps might have taken him in a special route. A expertise for maths earned him a spot at France’s most elite engineering college, Polytechnique. That propelled Pouyanné initially into advisory and chief of employees jobs within the French authorities earlier than Elf got here calling.
College classmates recall a number of the traits Pouyanné is understood for nonetheless: a fast thoughts; a lumbering 1.91-metre body and awkward gait; and a prickliness when criticised or informed to do issues a sure approach.
“He’s of that French education the place you might be taught to motive and use the facility of the thoughts. His method is ‘I’ve thought this out, I’m proper and that is the view I’m going to impose on everybody’,” says one acquaintance.
This angle has made him a profitable chief government however has additionally brought on him grief, they proceed. “The factor with Patrick Pouyanné is that he’s all the time proper, however typically he must not say every part so bluntly or out loud.”
At occasions, that bluntness has flared up into impatience and anger. His “volcanic eruptions” have typically had colleagues trembling, a number of former Whole workers say, and have contributed to a top-down ambiance on the group, regardless of his work with a coach to rein in his mood.
Even Pouyanné, a tennis fan, concedes that he might have “one thing in widespread” together with his favorite participant, the hot-headed John McEnroe.
‘Pouyanné Petroleum’
In 2014 Pouyanné was propelled into the highest job in dramatic style. One night time in October, De Margerie’s enterprise jet crashed right into a snowplough 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.
Whole’s board put in Pouyanné, one in all two folks De Margerie had been grooming as potential successors, as chief government, preferring him over a rival answerable for extra nascent renewable vitality operations. By the tip of 2016 he had been named chairman too.
Pouyanné has acted since then as TotalEnergies’ dealmaker-in-chief, wielding tight management over each huge transfer. “He runs TotalEnergies as if it had been Pouyanné Petroleum,” jokes one French businessman, likening his method to that of France’s most profitable family-controlled corporations akin to luxurious items conglomerate LVMH.
He has tended to shun hiring cadres of advisers, together with for acquisitions, in favour of trusting his personal instincts. “He doesn’t become involved in public auctions. He doesn’t do it via bankers. He does it himself, that’s the distinguishing attribute,” says Irene Himona, managing director for oil and fuel at Société Générale, who has adopted Whole for 25 years.
Jacques Veyrat, an vitality entrepreneur and former classmate from Polytechnique who offered a controlling stake in French electrical energy group Direct Energie to TotalEnergies in 2018, says Pouyanné was concerned within the negotiations all through.
“There have been legal professionals on the contracts after all. However a number of occasions he referred to as me as much as say ‘have you ever seen this clause, it’s no good’,” Veyrat says. “He reads completely every part.”
Colleagues and enterprise companions famous different telling modifications from the De Margerie period. Out went the drinks cupboard in a CEO’s workplace arrange for entertaining; in got here cupboards crammed with recordsdata as a substitute. Banks of secretaries and assistants made approach for the corporate’s mergers and acquisitions staff, which was moved on to his ground.
The chief says his hands-on method is solely the quickest technique to get issues carried out. “If I get within the recreation and negotiate the acquisition of Clearway within the US with the boss of [infrastructure fund] GIP, they see the pinnacle of TotalEnergies. They consider in it,” Pouyanné says, after a broadly praised $2.4bn deal in Could to take a 50 per cent stake within the US wind and photo voltaic farm developer. “It’s about shortening the choice circuits, about going quick and appearing like small corporations do.”
Managing the dangers
Pouyanné’s expertise for bilateral relations extends past the company sphere to the usually extra unstable world of politics.
In Uganda, the place Whole is main the event of a 230,000-barrel-a-day oil mission on the nation’s border with the Democratic Republic of Congo, Pouyanné is claimed to have constructed an unrivalled private relationship with the long-serving Uganda president Yoweri Museveni.
“Patrick is the one particular person Museveni would hearken to,” says one senior oil government who spent over a decade engaged on the mission.
In his willingness to do enterprise with leaders akin to Museveni and Rwanda’s Kagame, every accused by human rights teams of suppressing opposition events and silencing critics, he’s not uncommon within the business. However he has been accused of struggling to attract the road.
After Russia invaded Ukraine in February, Whole and Pouyanné got here below hearth from some politicians and campaigners in France and abroad, for stalling for a number of weeks on the way forward for its Russian investments, together with a stake in a $21bn Arctic LNG mission in Siberia that had been as a consequence of begin exporting in 2023. BP and Shell stated inside days they’d exit their Russian tasks.
Whole has since stated it’ll cease all new investments in Russia and divest its tasks when it will probably discover appropriate consumers. It continues to ship fuel to Europe from its Yamal operation in Russia, because it says the French authorities has inspired it to do. Pouyanné had exchanges with Emmanuel Macron over Russia, and the president referred to as for fuel to maintain flowing and was supportive of Whole’s bid to not rush for the exit on day one, folks aware of the discussions stated.
Whereas some shareholders offered out over the Russian backlash, most backed the corporate. “If it was anybody else within the centre, I feel they’d have had a a lot more durable time,” says Biraj Borkhataria, an analyst with RBC Capital Markets. “However as a result of he’s received the massive calls proper, greater than as soon as, there may be a whole lot of good will within the business.”
Whole’s urge for food for brand spanking new oil and fuel developments, nonetheless, has generated little however in poor health will from environmentalists and activists.
“Whole’s actions are killing the planet and are extraordinarily problematic on a human rights stage,” stated Charles de Lacombe, an engineer and activist who was one in all dozens of protesters who blocked the doorway to Whole’s shareholder assembly in Paris in Could. “After all we will’t get out of petrol from at some point to the following. However we shouldn’t be doing new tasks.”
The Ugandan pipeline specifically is topic to a number of court docket instances and has been the main focus of intense protests in opposition to Whole. “It’s clear in the present day that it’s develop into a thorn in our aspect by way of the transformation we’re finishing up,” Pouyanné says.
The group says it has tried to mitigate its environmental impression, together with by lowering the mission’s footprint inside a protected park. Pouyanné argues opposition to the mission, which he acquired for Whole over a decade in the past, is disproportionate to its potential results.
Giving in to opposition on the mission would put Whole’s repute in danger, he provides. “We’ve a dedication in direction of the nations that belief us,” Pouyanné says. “If I say tomorrow I’m going to drop Uganda, there’ll be different states that may lose confidence in us.”
Whole finally plans to whittle down oil and fuel product gross sales by 2050 to 1 / 4 of its present gross sales, a stage virtually according to the Worldwide Power Company’s imaginative and prescient to achieve internet zero emissions, though the pathways to getting there diverge sharply. The IEA stated final yr that no new oil or gasfield developments in new areas had been wanted.
Pouyanné disagrees, and the character of his dominance at Whole means the corporate will shift in direction of cleaner types of vitality on his phrases. Up to now, his document has shielded him from critical opposition internally or from shareholders.
But to a better extent than at different supermajors, a lot hinges on this explicit chief government’s capacity to maintain stacking up the fitting decisions yr after yr. To some inside the firm, an enormous danger is whether or not there are sufficient sturdy voices to name Pouyanné out if his judgment falters.
However who dares inform the person who’s all the time proper that he’s incorrect? Characteristically, Pouyanné says he has his personal system to reply that query, with confidantes exterior TotalEnergies he turns to as a sounding board, in addition to his inside groups.
“You must guarantee that should you’re doing one thing silly, folks will inform you,” he says.
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