I am the moderator Nobuo Tanaka, former executive director of the iea, International

Germany and Austria. And so, you know, to improve the security of supply of Western Europe and 

France – but we have customers in many European countries – the development of infrastructure 

connecting Russian resources of natural gas and Western Europe are very important. I would like also to 

mention that it is absolutely necessary to see differently natural gas in the future. Sometimes, and 

especially, in the perspective of the CAP21 agreement in Paris, where all the countries in order to support 

an important higher carbon price – and we also have internal carbon price at Engie, it is in fact occurred 

starting below 40 euros now but going much higher in the future in 2025-2030 – around 50. We consider 

that we have to make a difference within the fossil fuels, fossil energy, and to consider natural gas as 

having specifities. Natural gas is clean energy, natural gas emits half of the CO2 than coal, it does not 

emit any particles, and it is in fact complementary to the renewable. We have not and we do not consider 

at Engie a competition between renewable and natural gas – they are in fact complementary – renewable 

are developing, renewables are wind, and solar, biomass, geothermal. But most of the renewables are 

intermittent – we have power if we have wind and sun which is not the case during every 24 hours. And 

so, natural gas by its flexibility hold the capacity to be exact leader, the perfect complement to the 

renewables. And we most see the future of natural gas as positive, and we have a positive view on the 

future of natural gas in complement to renewables. Natural gas is the friend of renewables, we must see it 

like that. Thank you. 

Nobuo Tanaka: Thank you. Gérard? I ask again the question – what is your internal carbon price? 

Gérard Mestrallet: We have no fixed internal carbon price, we have a curve which is growing starting 

below 40 euros – in fact, around 30 – that growing above 40 in 2025 and even to 50 in 2030. But I would 

like to mention that a friend of mine asked me to report on carbon pricing, and some of my colleagues, 

we are proposing a corridor in Europe, we don’t know if it will be accepted or not, a corridor means flow 

price for carbon rising during the period, and also a ceiling price, top price, rising also. You know, to 

give visibility to the investors, you know, if we want an acceptable shift from the current energy system 

to a more cleaner energy system, more low-carbon energy system, the investors, corporations need to 

have visibility. Today we have no visibility on carbon price, and internal carbon price cannot replace the 

true price, and so we need to have such visibility, and we’re saying that the corridor of carbon price at the 

level of delivery of Europe could be the right tool. Thank you. 

Nobuo Tanaka: Thank you. Let’s move to Patrick Pouyanné of Total. Patrick, certainly you have 

invested in Russia, so you have the strong prospect in this country, I’m sure, but also as a whole, there’s a 

gap in investments because as IEA said and Mr Sechin also mentioned that investment in upstream has 

been declining in these years. But in Total, what is your strategy of future investment, and how can you 

use some kind of financial instruments to restore the investment activity? 

Patrick Pouyanné: Clear. So, first of all, thank you Igor for inviting me to this panel. I’m honored to be 

here again, like last year. And I would like first to say that yes, I’m fully agree with most of the 

comments which were already said, so I won’t repeat them. But yes, we are deeply involved in Russia. 

You know that we are investing in our joint projects in Artic and the Yamal peninsula, $ 40-billion 

projects. We are just close to financing of these projects despite of sanctions with Russian banks and 

Chinese banks. It’s not so easy, I can tell you. But you can find euro in many places in the world. And so 

we’re deeply committed for simple reason. As Igor said: in fact in Russia you can find low cost 

resources, among the lower costs resources in the world. So we will be able to produce this gas in Yamal 

peninsula on shore for few dollars per barrel, and even if transportation to the main markets is a little 

more expensive, because we need ice ranker and energy tanker. At the end of the day it's very 

competitive to compare to other energy sources. So, this is a main driver for us.  

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In fact, this is for me a main lesson for future strategy is if you want to face the volatility of commodities 

because I know that some of my colleagues and people speak about equity on price, but I don't think we 

ever be on equity on price. That would be volatility. The lesson for me is that I learned: the position of 

our company on cost-competitive assets in Russia is clearly offering some opportunities in that 

prospective like over reagent for example.  

The second part of your question is about investment in the industry. It’s clear. That I think, the industry 

is facing such a strong volatility: you know, when the bound is going from $1 to $30 in 18 months, It's 

absolutely urged for all the companies. In Total we have lost in 18 months around $12 or $13 bln of cash. 

When you invest $20-25 bln, you just have a big gap to fill. And of course, if there was a storm, it is 

better to be major company like most of my peers at this round table, because we have the balance sheet, 

to cope with the storm. We have reduced our investments. The industry is dramatically reducing its 

investments: $700 billion in 2014, $400 billion this year. It's clearly not enough to replace the natural 

decline. Natural decline is around, let's say, 5%. But I can tell you, and by the way when the price is low, 

demand is also accelerated.  

Like we can see today. Look India is becoming number three country in terms of oil demand in last 

months because of low price. So, we have a gap, if you just look in 3-4 years, what we have in oil shale 

field in the United States or in other OPEC countries we'll have a lack of supply, because we do not 

invest enough. We do not sanction anymore any new oil project. And of course, we need to do our best, 

and the best is of course to be able to lower costs globally, I know that we can use maybe digital matters. 

But I think, it's mostly about that. If we want to sanction on projects, and we have excellent projects in 

our portfolio in Brazil, for example. It's a question of being able to lower costs globally in the industry. It 

is really taking a good decision, and then to start again in order to be able to produce this oil. Today it's 

still difficulties, so we have to be patient, but my message is clear: we will have a lack of supply for 3-4 

year in this world, because we will not be able to accelerate investments. Within this way, it's a 3-4 year 

investment cycle, it's not a 1-2 year. It's not true.  

Can we be out of financing or no, today financing, you know, is very low, even too low, if I can say. For 

our company it is question of being able to select the right assets and again to lower costs of projects to 

be able to launch again new projects.  

A large word, maybe, about the strategy. I fully agree with said by Gerard, not because he is owning gas 

company, and I own gas company, or because we are French together, by the way, you see, the French 

people are complex, they don't have one price, simple price. But because just if we look to the future of 

energy mix, question of markets for me. When I look to the future of the markets, I observe and we are 

convinced, all the experts are convinced about some 2, 2.5, or 3 degree scenario, that gas are a bright 

future, good news for Russia. And we need to invest more in gas. Like you said, Gerard, gas is the 

cleanest hydrocarbon. But as people want an energy which is secure, affordable and clean, secure is also 

important. We cannot just have renewables, and the gas, right mix could be power at least gas and renew 

resource, in our strategy we link both of these energy sources. That was my comments just to answer 

your questions. 

Nobuo Tanaka: Thank you, Patrick. Do you see that in your portfolio you still put that Russia has a very 

high priority?  

Patrick Pouyanné: Yes, for sure. No problem. You know, I'm committed, I have more than 10 billion of 

assets in Russia. So if I'm not committed, I don't know what I can do more than that to demonstrate it.  

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