Bernard Looney: Could we Stay in the building?
Martijn Rats: Yes, and in this building — because I thought you were to move out. No. I was wondering if you…
Bernard Looney: Great. I’m fascinated how you connect that to the investment thesis. But it is a nice building. I like it. We can follow up on that, Martin. But Great. Gordon will ask you to say about the assets you’re keeping longer. I mean in terms of the production thing, it’s really an output of the work that we’ve been doing. And I would say it’s driven by 2 things. And in fact, the whole strategy leaning in today is driven by 2 things, Martin. First is we’ve been at this for 3 years. We have done a lot. The organization has done a lot. I think it’s fair to say that we can all say there’s a real track record of delivery. And that has brought with it our increased confidence in the business. And in doing that, the business has improved.
I’m delighted that we’ve had the best operating reliability on record in BP and the records go back 15 or 20 years. I’m delighted that we have the lowest production cost since 2006. So our ability to add value to the assets that we have, have improved — has improved over the last 3 years. That’s a very important part. And then the external macro part isn’t about prices. It’s about is what is needed. We must solve the energy trilemma. Yes, we need lower carbon energy, but we also need secure energy, and we need affordable energy and that’s what governments and society around the world are asking. And they’re asking it publicly. They’re asking it in the United States, invest in today’s energy system. They’re very every country in Europe, but many countries in Europe going around the world searching for energy supplies.
So we’re being asked by governments and society. We have improved our business. We have more confidence. And we think in doing this, we can help solve the energy trilemma for society, which feels a worthwhile thing to do, and we feel we can create shareholder value. And that’s what we’re trying to do. That’s what we have to do. That’s our job. So that’s a little bit of the backdrop. Gordon?
Gordon Birrell: Yes, in terms of the assets that we now plan to keep, I’d say there’s 3 characteristics. The first one is an improved view of the commerciality around these assets. And I gave the example of Azul and Aker BP, London Energy and there are others. So the commercial opportunity around owning these assets, we’ve got an enhanced view of. The operating performance, and Bernard just mentioned it, that we have seen an improvement, and we can see more improvement going forward in these assets. And that all leads, of course, to the third characteristic, which is returns. It’s all returns driven. Our returns criteria and it fits with our — how we look at returns going forward.
Bernard Looney: And we are going to move from at some stage, but it would be an a year or 2. So this year lady here, please?
Unidentified Analyst: It’s Kim from HSBC. On the incremental dollars going into hydrocarbons, I suppose you mentioned BPX and the U.S. Gulf of Mexico, but you did mention LNG. And when it comes to the energy security concerns that Bernard alluded to, you would have thought LNG would be front and center of those. So I just wondered if you had any plans to invest incremental CapEx into LNG or maybe use a more capital-light strategy, such as, for example, contracting third-party LNG from other companies. My second question is on the impact of the U.S. inflation Reduction Act. I wondered if you could offer any thoughts on what that does to the economics of your existing low-carbon projects such as hydrogen and CCS and bioenergy and whether as a result of the RA, it might attract more of your own investment dollars going forward into the U.S.
Bernard Looney: Great, Kim. Thank you very much. I’ll ask Anja to take on the impact on the IRA. Carol can add anything on biogas in the area she wishes. And Carol LNG, I mean, just the growth that we have in LNG over the next 3 years, maybe just spell that out a little bit and how we think about it.
Carol Howle: Yes. No, absolutely. So 90 million tonnes per annum in 2022, grow to 25 in 2025; and 30 in 2030. It’s a mix of merchant and equity, but we will see the balance going to more merchants in the future. We have a contracting strategy we have done for a number of years. And as Bernard mentioned before, we’ve been able to time those purchases well in terms of actually avoiding buying in the peaks and selling in the troughs. So we’ve got a good process around that, and we’ll continue to look for opportunities as they go forward. And then, of course, we’ve got on the upstream gas side. We work very closely with Anja and the team there and with Gordon in terms of selling and trading the equity from BP’s positions.
Bernard Looney: Great. Okay. And anything…
Murray Auchincloss: On the equity side, I suppose we have some choices ahead of us. We’ve got some choices in Australia. We’ve got choices and West Africa, we’ve got choices in the Middle East to continue to think about expanding equity investment in LNG as well, and those are decisions that we’ll be making over time.
Bernard Looney: Great. Anja, in the United States?
Unidentified Company Representative: Game changer very, very clearly that underpins really a lot of the projects we have been working on not only in my space but equally so in MS space. I think — and as a consequence of IAA, we clearly have prioritized projects in the U.S. versus other regions around the world. I think it’s fair to say that Europe is catching up and some very good announcement or promising announcement last week, but it is — the beauty of the RIA is the simplicity. And I think this is where I think Europe, let’s say, needs to catch up a little bit with kind of you have to — kind of bit your projects into is, et cetera, et cetera. So very clearly, a strong focus on the U.S. as a consequence of — and then strong focus, as Bernard explained on our refinery project because these are natural things for the hydrogen. So I think we feel comfortable about the delivery.
Bernard Looney: Good. Great. Anja, , thank you. We’ll take 1 more question in the room. I’m just going to take Jason Kenney from Santander. Jason, I think your second question has been addressed. Carol. Good job on delivery by BP in 2022.
Bernard Looney: Yes, we haven’t had our performance appraisal later today. If trading has added 4% to race over the last 3 years, what should we expect in the next, you can thank Murray. What should we expect in the next 3 years? I’m assuming He is assuming through cycle, but how much is excessive volatility and how much is average conditions?
Carol Howle: So I know with my learned colleague on the left here, he would say no guidance. So what I can say is that we do have — strongly believe that we do have a differentiated trading platform. Global scale, experience, multiple markets, multiple commodities, multiple customers. We have benefited from the inherit increase in volatility over the past few years. But we’ve also seen growth in that portfolio. We also see further growth going forward, whether that’s across biogas, biofuels or LNG or even then into the newer commodities, hydrogen and their derivatives. I believe we’ve got strong capability, risk management, trading, optimization analytics. We would like to say world-class. And I think subject to volatility and retaining our competitive advantage, as Murray said, we would like to continue to deliver for BP going forward.
Bernard Looney: Sounds good. Good job. Great. Last question in the room who wants to take the last question. We don’t have any more questions. Lydia, go on, and then we’ll let you and then I need to wrap.
