XML 516 R23.htm IDEA: XBRL DOCUMENT v3.25.1
Financial instruments related to commodity contracts
 12 Months Ended
Dec. 31, 2024
Financial instruments related to commodity contracts  
Financial instruments related to commodity contracts

Note 16 Financial instruments related to commodity contracts

​

16.1 FINANCIAL INSTRUMENTS RELATED TO COMMODITY CONTRACTS

​

​

​

​

Accounting principles

Financial instruments related to commodity contracts, including crude oil, petroleum products, gas, and power purchase/sales contracts within the trading activities, together with the commodity contract derivative instruments and freight rate swaps, are used to adjust TotalEnergies’ exposure to price fluctuations within global trading limits. According to the industry practice, these instruments are considered as held for trading. Changes in fair value are recorded in the income statement. The fair value of these instruments is recorded in “Other current assets” or “Other creditors and accrued liabilities” depending on whether they are assets or liabilities.

The valuation methodology is to mark-to-market all open positions for both physical and paper transactions. The valuations are determined on a daily basis using observable market data based on organized and over the counter (OTC) markets. In specific cases when market data is not directly available, the valuations are derived from observable data such as arbitrages, freight or spreads and market corroboration. For valuation of risks which are the result of a calculation, such as options for example, commonly known models are used to compute the fair value.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

  

​

  

​

  

​

  

​

  

Net balance

  

​

  

​

  

​

As of December 31, 2024

​

Gross value

​

Amounts

​

sheet value

​

Other

​

​

​

​

(M$)

​

before offsetting

​

offset

​

presented

​

amounts not

​

Net carrying

​

Fair

Assets / (Liabilities)

  

assets

  

liabilities

  

assets(c)

  

liabilities(c)

  

assets

  

liabilities

  

offset

  

amount

  

value(b)

Gas & Power activities

 

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Swaps

 

117

 

(129)

 

(7)

 

7

 

110

 

(122)

 

–

 

(12)

 

(12)

Forwards(a)

 

8,060

 

(6,595)

 

(79)

 

79

 

7,981

 

(6,516)

 

–

 

1,465

 

1,465

Options

 

277

 

–

 

–

 

–

 

277

 

–

 

–

 

277

 

277

Futures

 

–

 

–

 

–

 

–

 

–

 

–

 

–

 

–

 

–

Other/Collateral

 

–

 

–

 

–

 

–

 

–

 

–

 

403

 

403

 

403

Total Gas & Power

 

8,454

 

(6,724)

 

(86)

 

86

 

8,368

 

(6,638)

 

403

 

2,133

 

2,133

Crude oil, petroleum products and freight rates activities

 

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Petroleum products, crude oil and freight rate swaps

 

85

 

(46)

 

(44)

 

44

 

41

 

(2)

 

–

 

39

 

39

Forwards(a)

 

656

 

(1,012)

 

(14)

 

14

 

642

 

(998)

 

–

 

(356)

 

(356)

Options

 

70

 

(102)

 

(60)

 

60

 

10

 

(42)

 

–

 

(32)

 

(32)

Futures

 

–

​

–

​

–

​

–

​

–

​

–

​

–

​

–

​

–

Options on futures

​

66

​

(55)

​

(55)

​

55

​

11

​

–

​

–

​

11

​

11

Other/Collateral

 

–

 

–

 

–

 

–

 

–

 

–

 

–

​

–

 

–

Total crude oil, petroleum products and freight rates

 

877

 

(1,215)

 

(173)

 

173

 

704

 

(1,042)

 

–

 

(338)

 

(338)

TOTAL

 

9,331

 

(7,939)

 

(259)

 

259

 

9,072

 

(7,680)

 

403

 

1,795

 

1,795

Total of fair value non recognized in the balance sheet

 

​

 

​

 

​

 

​

 

​

 

​

 

​

 

​

 

–

(a)

Forwards: contracts resulting in physical delivery are accounted for as derivative commodity contracts and included in the amounts shown.

(b)

When the fair value of derivatives listed on an organized exchange market (futures, options on futures and swaps) is offset with the margin call received or paid in the balance sheet, this fair value is set to zero.

(c)

Amounts offset in accordance with IAS 32.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

  

​

  

​

  

​

  

​

  

Net balance

  

​

  

​

  

​

As of December 31, 2023

​

Gross value

​

Amounts

​

sheet value

​

Other

​

​

​

​

(M$)

​

before offsetting

​

offset

​

presented

​

amounts not

​

Net carrying

​

Fair

Assets / (Liabilities)

  

assets

  

liabilities

  

assets(c)

  

liabilities(c)

  

 assets

  

liabilities

  

 offset

  

amount

  

value(b)

Gas & Power activities

 

​

 

​

 

​

 

​

 

​

 

​

 

​

 

​

 

​

Swaps

 

116

 

(125)

 

(27)

 

27

 

89

 

(98)

 

–

 

(9)

 

(9)

Forwards(a)

 

5,875

 

(6,369)

 

(253)

 

253

 

5,622

 

(6,116)

 

–

 

(494)

 

(494)

Options

 

540

 

–

 

–

 

–

 

540

 

–

 

–

 

540

 

540

Futures

 

2

 

–

 

–

 

–

 

2

 

–

 

–

 

2

 

2

Other/Collateral

 

–

 

–

 

–

 

–

 

–

 

–

 

109

 

109

 

109

Total Gas & Power

 

6,533

 

(6,494)

 

(280)

 

280

 

6,253

 

(6,214)

 

109

 

148

 

148

Crude oil, petroleum products and freight rates activities

 

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Petroleum products, crude oil and freight rate swaps

 

66

 

(50)

 

(28)

 

28

 

38

 

(22)

 

–

 

16

 

16

Forwards(a)

 

655

 

(1,348)

 

(13)

 

13

 

642

 

(1,335)

 

–

 

(693)

 

(693)

Options

 

23

 

(97)

 

(23)

 

23

 

–

 

(74)

 

–

 

(74)

 

(74)

Futures

 

1

 

–

 

—

 

–

 

1

 

–

 

–

 

1

 

1

Options on futures

 

287

 

(214)

 

(209)

 

209

 

78

 

(5)

 

–

 

73

 

73

Other/Collateral

 

–

 

–

 

–

 

–

 

–

 

–

 

–

 

–

 

–

Total crude oil, petroleum products and freight rates

 

1,032

 

(1,709)

 

(273)

 

273

 

759

 

(1,436)

 

–

 

(677)

 

(677)

TOTAL

 

7,565

 

(8,203)

 

(553)

 

553

 

7,012

 

(7,650)

 

109

 

(529)

 

(529)

Total of fair value non recognized in the balance sheet

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

–

​

(a)

Forwards: contracts resulting in physical delivery are accounted for as derivative commodity contracts and included in the amounts shown.

(b)

When the fair value of derivatives listed on an organized exchange market (futures, options on futures and swaps) is offset with the margin call received or paid in the balance sheet, this fair value is set to zero.

(c)

Amounts offset in accordance with IAS 32.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

  

​

  

​

  

​

  

​

  

Net balance

  

​

  

​

  

​

As of December 31, 2022

​

Gross value

​

Amounts

​

sheet value

​

Other

​

​

​

​

(M$)

​

before offsetting

​

offset

​

presented

​

amounts not

​

Net carrying

​

Fair

Assets / (Liabilities)

  

assets

  

liabilities

  

assets(c)

  

liabilities(c)

  

assets

  

 liabilities

  

offset

  

amount

  

value(b)

Gas & Power activities

 

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Swaps

 

1,268

 

(449)

 

(18)

 

18

 

1,250

 

(431)

 

–

 

819

 

819

Forwards(a)

 

18,014

 

(18,638)

 

(1,994)

 

1,994

 

16,020

 

(16,644)

 

–

 

(624)

 

(624)

Options

 

2,143

 

(1)

 

(1)

 

1

 

2,142

 

–

 

–

 

2,142

 

2,142

Futures

 

13

 

(3)

 

–

 

–

 

13

 

(3)

 

–

 

10

 

10

Other/Collateral

 

–

 

–

 

–

 

–

 

–

 

–

 

(406)

 

(406)

 

(406)

Total Gas & Power

 

21,438

 

(19,091)

 

(2,013)

 

2,013

 

19,425

 

(17,078)

 

(406)

 

1,941

 

1,941

Crude oil, petroleum products and freight rates activities

 

​

 

​

 

​

 

​

 

​

 

​

 

​

 

​

 

​

Petroleum products, crude oil and freight rate swaps

 

122

 

(114)

 

(58)

 

58

 

64

 

(56)

 

–

 

8

 

8

Forwards(a)

 

631

 

(1,489)

 

(7)

 

7

 

624

 

(1,482)

 

–

 

(858)

 

(858)

Options

 

76

 

(227)

 

(69)

 

69

 

7

 

(158)

 

–

 

(151)

 

(151)

Futures

 

–

 

–

 

–

 

–

 

–

 

–

 

–

 

–

 

–

Options on futures

 

113

 

(13)

 

(13)

 

13

 

100

 

–

 

–

 

100

 

100

Other/Collateral

 

–

 

–

 

–

 

–

 

–

 

–

 

–

 

–

 

–

Total crude oil, petroleum products and freight rates

 

942

 

(1,843)

 

(147)

 

147

 

795

 

(1,696)

 

–

 

(901)

 

(901)

TOTAL

 

22,380

 

(20,934)

 

(2,160)

 

2,160

 

20,220

 

(18,774)

 

(406)

 

1,040

 

1,040

Total of fair value non recognized in the balance sheet

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

–

(a)

Forwards: contracts resulting in physical delivery are accounted for as derivative commodity contracts and included in the amounts shown.

(b)

When the fair value of derivatives listed on an organized exchange market (futures, options on futures and swaps) is offset with the margin call received or paid in the balance sheet, this fair value is set to zero.

(c)

Amounts offset in accordance with IAS 32.

​

Commitments on crude oil and refined products have, for the most part, a short-term maturity (less than one year).

The changes in fair value of financial instruments related to commodity contracts are detailed as follows:

​

​

​

​

​

​

​

​

​

​

​

​

For the year ended December 31,

    

Fair value 

    

Impact on

    

Settled

    

​

    

Fair value as of

(M$)

​

as of January 1,

​

income

​

contracts

​

Other

​

December 31,

Gas & Power activities

 

​

 

​

 

​

 

​

 

​

2024

 

39

 

(345)

 

2,000

 

36

​

1,730

2023

 

2,347

 

(5,792)

 

3,681

 

(197)

​

39

2022

 

6,383

 

11,406

 

(15,628)

 

186

 

2,347

Crude oil, petroleum products and freight rates activities

 

  

 

  

 

  

 

  

 

  

2024

 

(677)

 

10,118

 

(9,779)

 

–

 

(338)

2023

 

(901)

 

11,033

 

(10,812)

 

3

 

(677)

2022

 

(137)

 

5,891

 

(6,655)

 

–

 

(901)

​

The fair value hierarchy for financial instruments related to commodity contracts is as follows:

​

​

​

​

​

​

​

​

​

​

​

Quoted prices

​

​

​

​

​

​

​

​

in active markets for

​

Prices based on

​

Prices based on

​

​

As of December 31, 2024

​

identical

​

observable data

​

non observable

​

​

(M$)

    

assets (level 1)

    

(level 2)

    

data (level 3)

    

Total

Gas & Power activities

 

(78)

 

(38)

 

1,846

 

1,730

Crude oil, petroleum products and freight rates activities

 

13

 

(351)

 

–

 

(338)

TOTAL

 

(65)

 

(389)

 

1,846

 

1,392

​

​

​

​

​

​

​

​

​

​

​

​

Quoted prices

​

​

​

​

​

​

​

​

in active markets for

​

Prices based on

​

Prices based on

​

​

As of December 31, 2023

​

identical

​

observable data

​

non observable

​

​

(M$)

    

assets (level 1)

    

(level 2)

    

data (level 3)

    

Total

Gas & Power activities

 

1,054

 

1,677

 

(2,692)

 

39

Crude oil, petroleum products and freight rates activities

 

73

 

(750)

 

–

 

(677)

TOTAL

 

1,127

 

927

 

(2,692)

 

(638)

​

​

​

​

​

​

​

​

​

​

​

​

Quoted prices

​

​

​

​

​

​

​

​

in active markets for

​

Prices based on

​

Prices based on

​

​

As of December 31, 2022

​

identical

​

observable data

​

non observable

​

​

(M$)

    

assets (level 1)

    

(level 2)

    

data (level 3)

    

Total

Gas & Power activities

 

1,034

 

1,678

 

(365)

 

2,347

Crude oil, petroleum products and freight rates activities

​

98

 

(999)

 

–

 

(901)

TOTAL

 

1,132

 

679

 

(365)

 

1,446

​

Financial instruments classified as level 3 are mainly composed of long-term liquefied natural gas purchase and sale contracts which relate to the trading activity.

The management of positions is carried out on the basis of a net value of LNG purchase and sale commitments; the valuation of contracts is based on observable market data, such as commodity forward prices, but it also takes into account unobservable data on contract performance (assumptions on the variable terms of the contracts, on the availability of infrastructures, on the performance of counterparties…).

The valuation of LNG contracts is sensitive to changes in oil and natural gas prices on North American, Asian and European markets, as well as to these assumptions on contract performance.

TotalEnergies’ management horizon is 12 months in 2024 (as in 2023 and 2022), and includes the full annual delivery program of LNG cargoes for the following year.

The analysis of the fair value of the LNG portfolio over the period beyond 12 months carried out by the Company, allows to verify that there is no material asset or liability to be recognized in its accounts for that period. This analysis, which takes into account the specific characteristics of LNG contracts and of the gas market, including its liquidity, incorporates valuation parameters that are unobservable over this period, in particular Company internal assumptions on the long-term evolution of hydrocarbon prices, the execution of contracts and the performance of counterparties, the renegotiation of price terms in contracts or the exercise of their contractual flexibilities.

The description of each fair value level is presented in Note 15 to the Consolidated Financial Statements.

Cash Flow hedge

The impact on the income statement and other comprehensive income of the hedging instruments related to commodity contracts and qualified as cash flow hedges is detailed as follows:

​

​

​

​

​

​

​

​

As of December 31

    

​

    

​

    

​

(M$)

​

2024

    

2023

    

2022

Profit (Loss) recorded in other comprehensive income of the period

 

2,670

 

2,770

 

(5,524)

Recycled amount from other comprehensive income to the income statement of the period

 

(2,671)

 

117

 

1,317

​

These financial instruments are mainly European gas, power and CO2 emission rights derivatives.

As of December 31, 2024, the ineffective portion of these financial instruments is $127 million (the ineffective portion of the financial instruments was $124 million in 2023 and $132 million in 2022).

16.2 Oil, Gas and Power markets related risks management

Due to the nature of its business, TotalEnergies has significant oil and gas trading activities as part of its day-to-day operations in order to optimize revenues from its oil and gas production and to obtain favorable pricing to supply its refineries.

In its international oil trading business, TotalEnergies usually follows a policy of not selling its future production. However, in connection with this trading business, TotalEnergies, like most other oil companies, uses energy derivative instruments to adjust its exposure to price fluctuations of crude oil, refined products, natural gas, and power. TotalEnergies also uses freight rate derivative contracts in its shipping business to adjust its exposure to freight-rate fluctuations. To hedge against this risk, TotalEnergies uses various instruments such as futures, forwards, swaps and options on organized markets or over-the-counter markets. The list of the different derivatives held by TotalEnergies in these markets is detailed in Note 16.1 to the Consolidated Financial Statements.

As part of its gas and power trading activity, TotalEnergies also uses derivative instruments such as futures, forwards, swaps and options in both organized and over-the-counter markets. In general, the transactions are settled at maturity date through physical delivery. TotalEnergies measures its market risk exposure, i.e. potential loss in fair values, on its trading business using a “value-at-risk” technique. This technique is based on a historical model and makes an assessment of the market risk arising from possible future changes in market values over a one-day period. The calculation of the range of potential changes in fair values takes into account a snapshot of the end-of-day exposures and the set of historical price movements for the past two years for all instruments and maturities in the global trading business.

Gas & Power division trading: “value-at-risk” with a 97.5% probability

​

​

​

​

​

​

​

​

​

​

As of December 31,

    

​

    

​

    

​

    

​

(M$)

​

High

​

Low

​

Average

​

Year end

2024

 

139

​

19

​

54

​

77

2023

 

111

​

16

​

54

​

54

2022

 

119

​

15

​

53

​

92

​

The Trading & Shipping division measures its market risk exposure, i.e. potential loss in fair values, on its crude oil, refined products and freight rates trading activities using a “value-at-risk” technique. This technique is based on a historical model and makes an assessment of the market risk arising from possible future changes in market values over a 24-hour period. The calculation of the range of potential changes in fair values is based on the end-of-day exposures and historical price movements of the last 400 business days for all traded instruments and maturities. Options are systematically re-evaluated using appropriate models.

The “value-at-risk” represents the most unfavorable movement in fair value obtained with a 97.5% confidence level. This means that TotalEnergies’ portfolio result is likely to exceed the value-at-risk loss measure once over 40 business days if the portfolio exposures were left unchanged.

Trading & Shipping: “value-at-risk with” a 97.5% probability

​

​

​

​

​

​

​

​

​

​

As of December 31,

    

​

    

​

    

​

    

​

(M$)

​

High

​

Low

​

Average

​

Year end

2024

 

53

 

8

 

24

 

16

2023

 

74

 

17

 

37

 

28

2022

 

48

 

9

 

22

 

27

​

TotalEnergies has implemented strict policies and procedures to manage and monitor these market risks. These are based on the separation of control and front-office functions and on an integrated information system that enables real-time monitoring of trading activities.

Limits on trading positions are approved by TotalEnergies’ Executive Committee and are monitored daily. To increase flexibility and encourage liquidity, hedging operations are performed with numerous independent operators, including other oil companies, major energy producers or consumers and financial institutions. TotalEnergies has established counterparty limits and monitors outstanding amounts with each counterparty on an ongoing basis.