BP p.l.c. (NYSE:BP) Q4 2022 Earnings Call Transcript

BP p.l.c. (NYSE:BP) Q4 2022 Earnings Call Transcript February 7, 2023

Craig Marshall: Good morning, everyone, and welcome to today’s presentation. This morning, we’re going to cover BP’s fourth quarter and full year ’22 results. We’ll also provide an update on strategic progress. Before we begin today, let me draw your attention to our usual cautionary statement. During today’s presentation, we will make forward-looking statements, including those that refer to our estimates, plans and expectations. Actual results and outcomes could differ materially due to the factors we note on this slide and in our U.K. and SEC filings. Please refer to our annual report, stock exchange announcement and SEC filings for more details. These documents are available on our website. On that, let me now hand over to Bernard.

Bernard Looney: Well, thanks, Craig, and good morning, everyone. It’s great to have those of you on the call join us. And obviously, it’s great to see people here in London this morning. Before we begin, after yesterday’s terrible earthquakes in Turkey and Syria, our thoughts obviously go out to colleagues and everyone with friends and family in the region. All our colleagues are accounted for, and we have a team set up to support them. But of course, many, many more people were affected thousands of people have died and we’ll do what we can to support. There will be operational matters to attend to in time. But in our — in the first instance, our focus is obviously on people. I’m here today with Murray, who is standing ready to take over here in a few minutes, poised.

And I’ll be joined in a bit for Q&A by Carol Howle, Gordon Birrell, Emma Delaney and Anja Dotzenrath. The rest of the BP leadership team are also around Giulia Chierchia, Eric Nitcher, Lean Russell. So you’ll get a chance to meet them as well. Three years ago, we announced a significant strategic change for BP pivoting from, at that time, a 110-year history of being an international oil company, or IOC, to becoming an integrated energy company, or IEC. I’m personally in all of what the BP team has delivered since then. And all during the most volatile and the most uncertain times that many of us, I think, have ever experienced. When we updated the market this time last year, I said to you all that our direction was set. Our change was done and we were now 100% focused on delivery, and that is exactly what we have been doing.

With that backdrop, there are 3 things that you’ll hear from us today. The first, and important is that BP is performing. Our businesses are running well. Our costs are being controlled. We are reducing emissions. We are growing value. We feel and believe our strategy is working, and we are more confident than ever that what we laid out in 2020 as a strategy is the right one. And as we’ve said and your Board of it consistently that we are performing while we are transforming. Second, we are leaning further into our strategy. We’re planning to invest more into our transition growth engines and not or, and at the same time, investing more into today’s oil and gas system. A plan that we expect will materially increase EBITDA by 25% and by 2030.

And third, crucially, we are delivering for shareholders. In 2022, we have grown distributions through an increase in our resilient dividend and delivery of a material share buyback program. So let’s start it off if it’s okay with a little video that shows — it’s 2 to 3 minutes, so it won’t be too long. That shows some of the delivery by the team at BP over the last 3 years. So we’re going to play the video. So thanks for — it’s as much for our own teams that would be showing them later today as anything else. But I might be a bit biased. I am probably a bit biased. But I think that’s pretty brilliant, and I’m really proud of the people at BP for their part in delivering that. Turning now to focus on delivery in 2022. First, reflecting, as we said, in the video on safety.

At BP, safety comes first. It’s core to the way that we live our purpose. We have seen our combined Tier 1 and Tier 2 process safety events continue to improve in 2022 compared to 2021. However, we do know from incidents during the year that there’s always more that we can and must do and we will do that and safety remains and is foundational obviously, to everything that we do. Turning secondly, to our businesses where our focus on operational reliability and cost performance underpinned strong financial delivery. Adjusted EBITDA for 2022 was $60.7 billion; operating cash flow was $40.9 billion, including a working capital build of $6.9 billion. Net debt reduced for the 11th quarter in a row to reach $21.4 billion, the lowest level in almost a decade, and return on average capital employed was 30.5%.

And third, we delivered for shareholders. Executing against our clear, consistent and disciplined financial framework and delivering what we believe are sector-leading distributions. Today, we have announced a 10% increase in our dividend per ordinary share for the fourth quarter, underpinned by our strong underlying performance and supported by our plans to lean into our strategy and deliver further growth in EBITDA. Including this increase, our dividend per ordinary share for the fourth quarter is 21% higher than a year ago. and very importantly, fully accommodated within our resilient $40 per barrel balance point. And since commencing the share buyback program in 2021, and we have reduced our issued share capital by 11%. I’ll say more about our plan to lean further into our strategy in a moment, but let me first hand over to Murray to run through our results in more detail.

Murray?

Murray Auchincloss: Great. Thanks, Bernard, and good morning, everyone. It’s so nice to see you in the room and online. As usual, I’ll start with the macro environment. During the fourth quarter, Brent fell by 12% relative to the third quarter to average $89 per barrel. This reflected increased uncertainty over the economic outlook and relatively high production from Russia and OPEC. In the first quarter, we expect prices to remain supported by recovering Chinese demand, ongoing uncertainty around the level of Russian exports and low inventory levels. Turning to natural gas. During the fourth quarter, we saw a sharp decline in both spot and futures prices. The quarter average TTF price fell by 51% as warm start to winter allowed Europe to maintain inventory levels.

In the U.S., Henry Hub declined as storage levels recovered towards seasonal norms. The outlook for the first quarter remains dependent on weather in the Northern Hemisphere and the pace of Chinese demand recovery. Moving to Refining. Consistent with trends in seasonal demand, global margins decreased modestly to average $32.20 per barrel during the quarter. We expect industry refining margins to remain elevated in the first quarter due to sanctioning of Russian crude and product. Moving to our long-term price assumptions. Last week, we presented the BP 2023 Energy outlook. And in line with our annual cycle, we’ve reviewed our price assumptions used for investment appraisal and accounting. To summarize, the continuing impact of the war in Ukraine and the resulting energy shortages, together with changes in the structure of energy markets post-COVID, means we now expect oil and gas prices and refining margins to remain higher throughout much of this decade.

Further out, we continue to expect prices to fall as the energy transition gathers pace. The charts on this slide show our old new assumptions for Brent Henry Hub and the refining marker margin. In addition, reflecting current market conditions, we’ve raised our international gas price assumptions through the middle of the decade. In the second half of the decade, we assumed the prices return towards historical levels. These changes have no impact on our cash balance point at $40 Brent; $11, RMM and $3, Henry Hub. Turning to results. In the fourth quarter, we reported a profit of $10.8 billion, allowing for post-tax adjusting items of $7.1 billion and an inventory holding loss of $1.1 billion. Our underlying replacement cost profit was $4.8 billion compared to $8.2 billion in the third quarter.

Turning to business group performance compared to the third quarter. In gas and low carbon energy, the results reflect a below average gas marketing and trading performance compared to an exceptional result in the third quarter lower gas realizations and lower production. In oil, P&L, production and operations, the result reflects lower liquids and gas realizations. And in customers and products, the products result reflects a higher level of turnaround and maintenance activity. The customer’s result reflects lower marketing margins and seasonably lower volumes. In the fourth quarter, our underlying effective tax rate was 40%, bringing the rate for the full year to 34%. And finally, our trading business had an exceptional year. And with consistent strong delivery has now contributed an average uplift of 4% to Groupe over the past 3 years.

Moving to cash flow. Operating cash flow was $13.6 billion in the fourth quarter. This included a working capital release of $4.2 billion after adjusting for inventory holding losses, fair value accounting effects and other adjusting items. Capital expenditure was $7.4 billion in the fourth quarter and $16.3 billion for the full year. For the fourth quarter, inorganic expenditure was $3.5 billion, including $3 billion for Arc Energy net of adjustments, and $500 million for the earlier-than-expected completion of the acquisition of EDF Energy Services. During the quarter, BP repurchased 3.2 billion of shares. Reflecting strong cash generation, net debt fell for the 11th consecutive quarter to reach $21.4 billion. And with surplus cash flow, $5.1 billion in the quarter, BP intends to execute a further $2.75 billion buyback prior to announcing first quarter 2023 results.

Turning to our disciplined financial frame. Our resilient dividend remains our first priority. As Bernard outlined for the fourth quarter, we have announced an increase in the dividend to $0.0661 per ordinary share. This is underpinned by strong underlying performance and supported by the confidence we have in delivering further growth in EBITDA and as a result of our updated investment plans. Second, our strong investment-grade credit rating. During 2022, we reduced net debt by a further $9.2 billion. Third, disciplined investment allocation. Capital expenditure for the year was $16.3 billion, slightly higher than expected due to the phasing of our acquisition of EDF Energy Services. And finally, share buybacks where in 2022, we announced $2.75 billion of buybacks from surplus cash flow.

I’ll now hand back to Bernard.

Bernard Looney: Thanks, Murray, and thanks for your leadership over the last few years, fantastic. So let me turn then if I may, to the update on our strategy. The world is in a very different place today compared to when we began this journey just 3 years ago. The challenges and volatility we have seen make it clear, maybe clearer than ever that the world wants and needs a better and a more balanced energy system, one that can deliver more secure, more affordable as well as lower carbon energy solutions, the so-called energy trilemma. To deliver that better energy system, action is needed. One, to accelerate the energy transition; and two, ensure an orderly transition from today’s predominantly hydrocarbon-based energy system with the emphasis being on orderly to maintain ongoing energy security and affordability.

This means both increased investment in lower carbon solutions that can help society decarbonize faster and not or, something you’ll hear me say a lot, and not or, at the same time, continued investment in hydrocarbons to keep energy flowing with energy security and affordability at a premium. At the same time, our track record of delivery over the last 3 years has given us increased confidence in the strategy that we laid out. An integrated energy company is, we believe, uniquely set up to help deliver energy security and energy affordability today as well as to help accelerate the energy transition. And crucially, we believe we can generate growth and attractive returns in doing so. And it is for these reasons that we see the opportunity to lean further into our strategy, and that is what I will now describe.

We remain focused on transforming to an integrated energy company, our 3-pillar strategy, which includes our 5 transition growth engines, is unchanged, as is the fact that the power of integration, underpins and connects it all. So what does leaning in look like? Well, first, we plan to invest up to $8 billion more this decade in our transition growth engines. On average, $1 billion more each year, investing more into higher-return Bioenergy and Convenience and EV Charging where we have established businesses, strong capabilities and a proven track record. Alongside this, we are focusing our hydrogen and renewables and power strategy. Anja Dotzenrath, here in the front row who I introduced earlier, Anja joined us last year and has brought real clarity to that strategy, while at the same time, building our organizational capability and a pipeline of value-accretive growth options, and I will come back to this shortly.

Second, we plan to invest up to $8 billion more this decade, on average, about $1 billion more each year in today’s energy system, which depends on oil and gas. Targeting shorter cycle, fast payback oil and gas projects and investing in certain oil and gas assets that we now expect to retain for longer. These are investments that we can deliver quickly over the next few years with minimal new infrastructure and that capture any price upside in the near to medium term. As we do both of these, we expect to materially accelerate growth in EBITDA through 2030. In February last year, we laid out plans to generate group EBITDA between $39 billion and $46 billion in 2030 at $60 real in 2020 terms. With the plan we’re announcing today, we now expect to deliver around $3 billion more EBITDA in 2025, rising to a name of $5 billion to $6 billion more in 2030.

We expect our additional investment in transition growth engines to contribute around $1 billion in EBITDA in 2025, and we aim for around $2 billion in 2030. We expect our additional oil and gas investment to contribute around $2 billion additional EBITDA in 2025, and we aim for around $3 billion to $4 billion in 2030. And as Murray previously mentioned, we have raised our price assumptions. Taken together, we now aim to generate group EBITDA of around — of between $51 billion and $56 billion in 2030. Turning to some more detail on our plans for our transition growth engines. We expect to invest around 50% of our CapEx in 2030 in these 5 engines. This includes both organic and inorganic investments. We will continue to allocate capital to transition opportunities with discipline, applying our balanced investment criteria and investing where we can meet our return hurdle rates.

We expect this investment to accelerate earnings growth from our transition growth engines, increasing EBITDA to $3 billion to $4 billion in 2025, and $10 billion to $12 billion in 2030, up from greater than $10 billion that we announced previously. We continue to expect — to deliver greater than 15% returns in Bioenergy; greater than 15% returns in Convenience and EV Charging combined. We also expect double-digit returns in hydrogen and 6% to 8% unlevered returns in renewables. Now taking each transition growth engine then in turn. In Bioenergy, we are deepening our investment and now expect to deliver around $2 billion EBITDA in 2025 and aim to deliver more than $4 billion in 2030. We have established global biogas and biofuels businesses that are positioned in an increasingly supportive environment of rapidly growing demand with attractive fiscal incentives.

And our trading capabilities enable us to integrate supply volumes to capture enhanced value. We plan to increase Biogas supply volumes by around 6x by 2030 to around 70,000 barrels per day oil equivalent. We completed the acquisition of Archaea in December. And this is a real game changer for us. Rapidly advancing our access to feedstock and scaling our upstream participation in the Biogas value chain, which is a distinct source of competitive advantage. We’re now focused on integrating Archaea into BP and building out the significant development pipeline. We have also identified opportunities to get renewable natural gas projects online faster, and we’re looking at ways to improve landfill gas recovery. This is a business that we are very excited about and one that we believe can deliver significant value faster than what we had thought.

In biofuels, we aim to materially grow biofuel production volumes to around 100,000 barrels a day by 2030, focused on sustainable aviation fuel, or SAF, where we aim to be a sector leader. We already produced more than 7,000 barrels per day of biofuels through co-processing, and we aim to triple this by 2030. We also plan to deliver 5 biofuel projects focused on SAF at our Conana, Rotterdam, Castyon, Lingen and Cherry Point facilities. We expect these projects to produce around 50,000 barrels a day by 2030. And the BP Bunge Bioenergia joint venture in Brazil, one of the largest bioethanol producers in Brazil, aims to produce around 30,000 barrels per day by 2030 net to BP. In Convenience and EV Charging, we plan to deliver EBITDA of more than $1.5 billion in 2025, and we aim to deliver more than $4 billion in 2030.

We’re confident in delivering our strategy. It remains unchanged, and we have, I would say, even deeper conviction in it. First, in the growing Convenience sector, our combination of local strategic partnerships and global reach enables us to deliver leading offers for our customers. Second, we have a proven track record of delivering growth, and we have continued to grow Convenience’s gross margin despite a challenging environment. Third, EV Charging is moving at pace, and we see significant value through our focus on fast charging with customers using our rapid and ultrafast charging points, significantly more than the slower ones. And fourth, major corporations are increasingly demanding decarbonization solutions driving strong momentum in the fleets business.

We’re excited about bringing our capabilities and our reach in Convenience, together with EV Charging, enabling us, over time, to provide customer-focused, lower-carbon transport solutions and our confidence is underpinned by strong strategic momentum in 2022. In Convenience, we now have 2,400 strategic Convenience sites with 250 added in 2022. We grew our highly profitable loyalty customer base by more than 5% versus ’21. And we’re particularly excited about our progress in the United States. For example, has integrated well and delivered a record Convenience gross margin in 2022. In EV Charging, we now have 22,000 charge points and almost all charge points that we roll out now are rapid or ultrafast. We sold 2.5x more electrons year-on-year, supported by increasing power utilization, which is now approaching double digits.

And in fleets, we’re building scale, recently announcing our nationwide collaboration plans with Hertz in the U.S. Moving to Hydrogen and Renewables and Power. This is about establishing this decade, the foundations of a material business for the following decades to come. We expect to invest up to $30 billion by 2030, while remaining flexible in our capital allocation as markets evolve and with a focus on returns. Through this, we aim to deliver EBITDA of $2 billion to $3 billion by 2030, ramping up thereafter in the 2030s and beyond. In Hydrogen, our ambition is to build a leading position globally. While the market is at an early stage of development, we see customer demand growing rapidly and regulatory support gaining momentum, as evidenced by the Inflation Reduction Act in the United States.

We plan to use our refineries as demand anchors for hydrogen and to scale these up into regional hubs. These hubs will then provide low carbon energy solutions for customers, particularly in hard-to-abate sectors such as steel. In parallel, as markets evolve, we expect to invest to build global export hubs for hydrogen and hydrogen derivatives. These are in advantaged geographies where we have an established presence. Across all of these focus areas, we will leverage our again, our distinctive trading and shipping capabilities. By 2030, we aim to produce between 0.5 million and 0.7 million tonnes per annum are primarily green hydrogen, while selectively pursuing blue hydrogen opportunities where there is regulatory support and CCS access. Turning to Renewables & Power.

Here, we are focusing our investment in renewables on opportunities where we can create integration value and enhance returns. We aim to participate in 2 ways. First, focused investment to build out a renewables portfolio in service of green hydrogen, green and e-fuels, EV Charging and power trading, including low carbon flexible generation. As part of this, we are building a global position in offshore wind, enabled by our capabilities in large-scale complex offshore projects. Second, we continue to progress a solar development and sell model with Lightsource BP, which is self-funding and capable of delivering renewable power rapidly at scale. Taken together, we remain on track to deliver our 50 gigawatts net developed through FID aim by 2030.

Of this, we aim to have around 10 gigawatts net installed capacity largely operated in offshore wind, solar and onshore wind. We also expect to have assets under construction and for Lightsource BP to contribute materially. And finally, we have brought power trading into the renewables growth engine. This reflects our focus on creating value through integration across our own portfolio as well as the opportunity to help customers decarbonize their power needs as grids and our own supply decarbonizes. And we’re in action. Looking back over the past 12 months, we have made significant progress in hydrogen and renewables. We now have a pipeline of hydrogen projects in concept development totaling 1.8 million tonnes per annum net to BP and we would expect to double that by the end of this year.

We’re also progressing customer acquisition and have an unrisked customer hopper of around 10 million tonnes per annum. Our renewables pipeline increased by 14 gigawatts in 2022 to 37 gigawatts through offshore wind, Lightsource BP and hydrogen-linked renewables in Australia. As this slide shows, our portfolio is global. It’s focused in 4 regions with cost-advantaged renewable resources, policy or government support, where we have an established presence and where we can leverage again our distinctive trading and shipping and integration capabilities. To summarize, we are excited about the portfolio we are building. We have distinctive capabilities to succeed, we believe, and we see huge opportunity to enhance returns by integrating across renewables, hydrogen, e-fuels and e-mobility.

Turning now to our oil, gas and refining portfolio. Let me start with where our oil and gas production is today. It is around 40% lower versus 2019, including the decision by BP’s Board to exit Russia. We remain actively engaged in marketing our Rosneft shareholding, and we will update the market as appropriate. But as you have heard me say before and Murray, our oil and gas strategy is about value, not only volume, and our focus remains on maximizing returns and cash flow, reducing emissions and is underpinned by a deep and high-quality resource base that allows us to choose the best investments. Our of resource options enables us to allocate more capital, particularly to short-cycle opportunities to maximize value, including investing more into BPX and more into the Gulf of Mexico.

Having grown production in 2022, we plan to grow underlying production to 2025, adding around 200,000 barrels per day of oil equivalent of high-margin production from 9 major project start-ups by continuing to manage base decline to between 3% and 5%, by increasing BPX production by 30% to 40% and retaining some assets for longer than previously planned. And our resource base has the potential to sustain underlying production broadly flat to 2030 relative to 2022. A great example is in the Gulf of Mexico, where we expect production to increase to around 400,000 barrels a day by the middle of the decade, and average 350,000 barrels per day through the end of the decade. In the second half of the decade, we also have options to progress new hub opportunities, including in offshore Canada, in Brazil, in Mauritania and Senegal in Australia, the Gulf of Mexico and Indonesia.

We also remain focused on high-grading our portfolio and aim to divest around 200,000 barrels a day of oil equivalent of lower-margin assets by 2030, less than previously assumed given the strong progress we have made improving operational reliability and commerciality across our portfolio over the past few years. As a result, our 2030 production aim is now around 2 million barrels a day of oil equivalent after divestments. And to maximize value, we intend to maintain investment discipline with hurdle rates of 15% to 20% at $60 per barrel, maintain a balanced portfolio with a broadly equal mix across oil and gas, drive capital productivity through strong execution capability across our subsurface wells and projects organization and sustained cost efficiency and reliability improvements in our operations.

Pixabay/Public Domain

Our 2022 performance shows our focus on this, delivering our lowest unit production cost since 2006 and our highest plant reliability on record. Turning to refining. Three things. First, through our business improvement plans, we are continuing to drive greater competitiveness and value from our refineries. We are focused on improving process safety and operational emissions and delivering portfolio performance. Second, as I mentioned earlier, our refineries are a foundation for 2 transition growth engines, namely Bioenergy, specifically biofuels and hydrogen. We plan to grow biofuel coprocessing production and deliver 5 projects focused on sustainable aviation fuel. Our existing refining hydrogen demand will be an anchor to build scale through both green and blue hydrogen projects.

And third, we will continue to invest to digitize and modernize the systems and back office of our refining business, as we have in the Upstream over the past decade. This is expected to drive higher reliability, more efficient work and eliminate substantial waste in the system. The combination of an increasingly competitive refining portfolio and the opportunities we see to convert or consolidate refineries to deliver our biofuels and hydrogen strategies means that we plan to retain our current refining footprint and throughput at around current levels. So what does this mean in terms of our pathway to net zero. In short, our destination is unchanged with a triple net zero ambition across operations, production and sales by 2050 or sooner.

Since we laid out our aims in 2020, we have enhanced our net zero 0 ambition. We have increased AM1 to 50% in 2030. We have increased 3 to 15% to 20% in 2030 and net zero 0 by 2050 as well as expanding the scope of AM3 to include physically traded energy products. As we lean further into our strategy, we have updated our goals for AM5, now aligned with our transition growth engines for ’25 and 2030. We expect to invest more than 40% or $6 billion to $8 billion of our capital expenditure in transition growth engines in 2025, up from 3% in 2019 and around 50% in 2030, or about $7 billion to $9 billion. We have updated our pathway for AM2, our net zero production aim. We are now targeting 10% to 15% reduction by 2025 and aiming for 20% to 30% reduction by 2030.

We continue to believe that our ambition and aims taken together are consistent with the goals of the Paris Agreement. In summary, our transformation is gaining momentum. Some of the key elements of which are on this slide. We’re turning planning into delivery. Turning data on PowerPoints into shovels in the ground, being the good farmer that I am, and that’s what performing — while transforming is all about. It’s what people want to see. They want to see delivery, delivery, delivery. We’re making strong progress towards delivering our 2025 targets and our 2030 aims and we’re leaning in. And with that, importantly, Murray will now take you through our financial framework that underpins this. Murray?

Murray Auchincloss: Great. Thanks, Bernard. Shovels, not PowerPoint. I don’t want to live for a while. As you’ve heard, we see the potential to advance the delivery of our strategy. and create additional value by investing on average up to $2 billion per annum more than previously planned through 2030. Compared to our previous plan, we expect to invest more on resilient hydrocarbons in oil and gas and bioenergy. We also expect to invest more in Convenience and mobility, in Convenience and EV Charging. And we’re focusing our capital expenditure in hydrogen and renewables power, planning to reallocate around $10 billion across the decade towards Bioenergy and Convenience and EV Charging. In aggregate, we now expect annual capital investment, including inorganics, to be in the range of $14 billion to $18 billion through 2030.

For 2023, reflecting our expectation of a supportive price environment, we plan to invest between $16 billion and $18 billion. And we retain significant flexibility in our investment plans. In a lower price environment, we anticipate managing shorter cycle investment, particularly in hydrocarbons to maintain a resilient cash balance point of around $40 per barrel Brent; $11 RMM; and $3 Henry Hub. To turning to EBITDA, these changes to our capital investment plans underpin an uplift of $5 billion to $6 billion to our 2030 EBITDA aim. As a result, and together with our revised price assumptions, our 2025 EBITDA target increases to $46 billion to $49 billion and our 2030 EBITDA aimed to $51 million to $56 billion. And as Bernard outlined, within this, we now expect our transition growth engines to contribute $10 billion to $12 billion of EBITDA in 2030.

Our $46 billion to $49 billion 2025 EBITDA target is underpinned by the strong and highly visible operational momentum we see ahead of us. In our transition growth engines by 2025, we expect an 80% increase in our biofuel volumes, around a 30,000 barrel oil equivalent per day increase in biogas supply, a 25% increase in the number of strategic Convenience sites and around a doubling of EV charge points. In oil and gas, by 2025, we expect an incremental 200,000 barrels per day of high-margin production, an increase of 30% to 40% in production from BPX Energy and more than a 30% increase in LNG supply to around 25 million tonnes per annum from Coral, Venture, Mauritania, Senegal, Tango and the return of Freeport. And this strong operational momentum is supported by our continuing focus on cost efficiency and digital.

Having completed the largest reorganization in our history, we’ve delivered on our target of $3 billion to $4 billion of pretax cash cost savings by 2023 relative to 2019 around a year ahead of schedule. Looking ahead, we’re working hard to extend the progress we’ve made in deploying digital and standardization in the upstream to the broader group. This will take time, but we continue to see a substantial opportunity to drive savings, which absorb inflation and provide the space for us to profitably expand our transition growth engines. As we deliver our business plan, we remain focused on the disciplined delivery of our financial frame. Our first priority remains a resilient dividend accommodated within a balance point of $40 per barrel, Brent; $11, RMM; and $3, Henry Hub now defined on a point-forward basis.

We see capacity for an annual increase in the dividend per ordinary share of around 4% per annum at $60 per barrel, subject to the Board’s discretion. Second, maintaining a strong investment-grade credit rating. For 2023, we intend to continue to allocate 40% of surplus cash flow to further strengthen the balance sheet and now target further progress within an A grade credit rating. Third and fourth, we plan to invest with discipline in our transition growth engines and in our oil, gas and refining businesses. And finally, share buybacks. We are committed to allocating 60% of 2023 surplus cash flow to buybacks and expect a buyback of $4 billion per annum at around $60 per barrel at the lower end of our capital range and subject to maintaining a strong investment-grade credit rating.

Taken together, we believe this business plan and financial frame delivers for shareholders today. It offers first double-digit per share growth. We now expect to deliver an EBITDA per share CAGR of over 12% between 2H ’19, 1H ’20 and 2025 at $70 per barrel 2021 real. Second, competitive returns. We have increased our ROCE target and now expect to achieve over 18%, both in 2025 and 2030 and at $70 per barrel 2021 real; third, debt reduction through our intention to allocate a proportion of surplus cash flow to strengthening our balance sheet; and fourth, compelling shareholder distributions through our resilient and growing dividend and with leverage to higher prices through our share buyback commitment. Let me now hand back to Bernard to conclude today’s presentation.

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Q&A Session

Bernard Looney: Great. Thanks, Murray. As we come to a close at least in the presentation before we go to Q&A, what excites me, maybe the most and gives me the confidence in our ability to deliver on our growth plans is what I think is the world class, a world-class BP team. We’re building capabilities and skills. We’re leveraging deep experience within and we’re attracting new talent from a broad range of sectors. We’re becoming more diverse, making tangible progress on both female and minority representation across our organization. Our restructuring and our change is behind us. We only have one focus, that’s on delivery. And finally, and people ask me about this, our transformation is inspiring our people and others who want to join us.

Pride in working for BP is at an all-time high and staff confidence in our future is at the highest point since we started surveying over a decade ago. So let me wrap up. First, I hope you will agree that our results show that BP is performing while transforming. Second, we have the right strategy. And today, we’re leaning further in, helping give society the energy it needs and materially growing EBITDA at the same time. And third, crucially, we are delivering for our shareholders. Executing against our disciplined financial frame, growing our resilient dividend and delivering a material share buyback program. This all comes together, as you can see on this slide, in what we believe is a compelling investor proposition to grow long-term shareholder value.

Thanks very much for your patience and for listening and for watching the video. Members of the team will now join me on stage, and we’ll be delighted guys come on up, game time. We’ll be delighted to take your questions, starting in the room probably and then we’ll go to on the line.

A – Bernard Looney: So I think everybody knows everybody. Emma’s here. So we got Anja, Emma, Gordon, Carol and you’ve met Murray. So let’s get going, and we’ll start off here in the room, and we’ll start with Lydia, why don’t we start with Lydia,and then we’ll start making our way around. So Lydia, over to you, please. I’m looking for my notepad.

Lydia Rainforth: It’s Lydia Rainforth from Barclays. So 2 questions, if I could. The first one is on the change around the upstream production side. previously, they have been described as low-margin barrels. Can you just talk us through what’s happened to that margin now why you want to keep them? And whether that made you feel uncomfortable with to the AIM goal. And then the third one, and for Anja. Bernard trades having brought clarity to the strategy in the renewables part of the business or local part of the business. Can you talk to me what you found, what you’ve changed? And then perhaps linked to that, just how you, Carol and Emma, all work together in terms of some of that trading business being quite clear?

Bernard Looney: Fantastic. Great. Lydia, thank you. Gordon, why are you keeping these assets longer?

Gordon Birrell: Yes. Thank you for the question. I think over the last couple of years, there’s really 2 things that apartment does gives us huge confidence to keep these barrels. Number one is just the operational improvement. We’ve improved reliability on our assets. We continue to drive down unit cost. We continue to drive capital productivity in the Wells area. We’ve deployed new technology. Ocean Bottom Seismic now is being deployed widely across our portfolio, giving a better view of the barrels that remain. And then finally, I would say commerciality, if you look at what we’ve done, say, in Azul Energy, we brought together 2 very mature sets of assets with our friends in D&I brought them together into a company now called Azul that’s doing over 200,000 barrels per day has 3 major projects coming towards it has a huge growth potential actually.

So London, Aker BP and London Energy would be another example of where we’ve added through commerciality, we’ve added value. So that gives us lots of confidence that staying inside our portfolio, we can continue to add value to these barrels.

Bernard Looney: Thank you, Gordon, and well done on the reliability for last year, even better than when I was in charge of the upstream. But anyway, Anja Isabelle.

Lydia Rainforth: Anja is fine. Thanks for the question, Lydia. What I found is, first of all, a great foundation to start from. And I’ll give you, for example, Slides BP. It’s a 1,000 colleague organization by now. in motion to deliver gigawatts at lowest cost possible presence in 19 countries. So a very, very important capability for everything we want to do in hydrogen and also in Emma’s business, et cetera, et cetera, because renewables capabilities are absolutely key. Another example is our entry in offshore wind, which I give, let’s say, the BP team, the credit for. So I inherited a great pipeline to build on. And so my focus really in the last 12 months was 3 things. I mean being even clearer what we want to do in low carbon, what to do and what not to do.

So where do we want to play in hydrogen, how do we want to play in hydrogen. And I think Bernard alluded to it. And one important question was also to clarify the role of renewables in BP’s portfolio. And I think we have a very, very clear answer to that. It’s all about integration value. It’s not about just gigawatts, it is about value. And this is a very, I think, unique proposition. The second thing I focused on was building the delivery muscle. We stood up 2 new operating models, organizations focused on hydrogen and offshore wind. And we are fine-tuning as we speak, but up and running, and we brought external talent in. And the third is really growing the pipeline. And I think you’ve seen the numbers literally from very, very little to a very material pipeline in hydrogen and a very, very good pipeline in renewables.

And of course, development of the projects, maturing the projects and then the steering model behind it because these businesses are distinctively different to oil and gas and that they need a different steering model. So this was what I did in the last 12 months.

Bernard Looney: Brilliant. It’s fantastic Anja having you here. And there was a question about how you and Emma and Carol works together. Emma, Carol, anyone if you want to say how you bring it all together?

Emma Delaney: Seamlessly.

Bernard Looney: Good answer. We’ll take it as a short answer, Lucas. Thank you, Lydia.

Lucas Herrmann: It’s Lucas Herrmann, BNP Paribas. A couple as well, if I might. And perhaps the first ties in with 1 of Lydia. So 15% to 20%. it’s an obvious allocation question, 15% to 20% return in hydrocarbons, great than 15% biogas, great than 15% in electrification or EV, 10% or so in hydrogen and 6 to 8 unlevered in renewable. so explain to me or just timing to me, the 6 to 8 In renewable and their electrons, there are a commodity, you can buy them in. So why allocate in that direction. That’s the first question. And the second is to Murray, and it’s just maybe to Carol. And it’s how do we think about the LNG optimization trading business in terms of pricing this year? And I asked simply because gas prices globally have clearly come back a long way, but you position a long way forward.

So when I think about the profit delta, the price would imply for the year. What can you tell me to afford me comfort that what I see on the screen today, TTF and BP, JKM relative to last year is not something I’d necessarily affect volume aside, Murray, for the Gas and Power or the gas and low emission business. I hope that was clear.

Bernard Looney: Possibly to people who understand the market well, which is Carol. So Carol, I’m going to ask you to lead off on that. Murray can add if you wish us to. But Carol go for it. And Anil will ask you to take the 6% to 8% question, please. Go ahead, Carol.

Carol Howle: So yes, we have seen, as you said, a reduction in prices since last year. But I think there are also — when you look at the fundamentals of the market, there’s potentially still tightness going forward when you look at growing demand, China coming back in, for example, East unlocking. We did lose a lot of demand through winter, warm winter. That’s something that we’ll continue to watch going forward. So I think we’re looking at the supply-demand balances. We’re looking at all of the factors. They’re not all necessarily bearish, I’ll just say it on that perspective. and we have a portfolio which we’ve created around optionality so that’s pricing centers, it’s demand centers, it’s volume, it’s flexibility. And our job is to monetize that for and I think the team have done a great job of doing that over multiple years over multiple market conditions, but I’m sure Murray can give us the right nomenclature for the performance.

Murray Auchincloss: You guys have performed tremendously. Just to add any word. Lucas, it’s not about high price, low price, it’s about volatility, and there’s not an awful lot of supply out there right now. So that suggests volatility. So we look to Carol’s organization to manage that volatility. And I think there’s — they continue to be well positioned to do that.

Bernard Looney: And I think the A lot of the contracts and supply that we’re bringing on in the coming years. Importantly, were deals that were signed many, many years ago, not in the last year in the middle of some of the biggest price spikes in history, but many, many years ago. So also a great place as Carol grows from 19 to 25 by 2025. So Anja, 6% to 8% returns in renewables and power, why should we be an attractive business for BP?

Unidentified Company Representative: And I would slightly disagree if I made to your statement, there’s an abundance of green electrons around the world. Actually, this is not the case. We invest — we allocate capital to own renewable assets. if you believe this is a critical control point. So if you think about projects like RA, for example, in Australia, this is largely off-grid renewables. And it’s 70% of the total CapEx of the project. So we need a leading edge capability to deliver the green electrons at the lowest cost of energy. This is absolutely crucial for the success of this business. If you think moving to Europe, if you think about how to scale a hydrogen business in Europe, — it is all about scaling offshore wind because this is the only scalable technology in Europe, which can deliver gigawatts of, let’s say, green electricity in service of green hydrogen production.

This is why we believe we need to play in offshore wind because there are regions around the world where this is the only scalable technology. And I think this is how we think about it. If there are liquid markets, if there’s an abundance of green electrons, and we can buy them in a way cheaply competitively. We will not deploy capital in renewables, but we believe definitely for this decade to come, we have to because it is absolutely crucial.

Bernard Looney: Great. Thank you, Anja. Thank you, Carol. Os, then we’ll keep going.

Oswald Clint: Thank you very much. Just back on the returning average capital employed numbers, the — so I think 2020, we said up to 2% was delivered over the last 20 years. The last 3 years, we’ve added 4%. As we look out to that in 2025 and beyond, which is a big number. How much is the trading contribution in that, please? I’d love just to tie that perhaps, Carol, back to Anja say, do you believe that trading electrons, you can trade and add value here? I think coming from your old company and others, utilities tend to say it’s not quite possible. So I’d love you to square that circle, please. And then secondly, sorry, you’re deepening or higher conviction on EV Convenience, to Emma. Can you help us a little bit more on pricing across fleets, Hertz, Scottish Police Force, Uber London. I mean how much of that is helping it to 15% returns in that business and even some of the trucking that you’re doing in Germany. Is there an array of pricing here that’s helping?

Bernard Looney: Thank you, Oswald. Let’s start off. Murray, 18%, how much includes trading on your trading electrons. Do we make money and Carol may want to add together both of you guys and Emma. So Murray?

Murray Auchincloss: Yes. I don’t think I’ll guide on what’s trading as a component of the 18%, Os. That would be a little bit tricky for Carol moving forward. But I will say that Carol had a stunning track record over the last 3 years, 4% on average ROCE for the group, so you can calculate the numbers now, I’m sure. And Carol has a growing portfolio ahead of her with our biogas, with LNG expanding, and I think the profitability of trading will really depend on a few things. First, continuing volatility. Those continuing volatility happen as per Lucas’ question. Second, can we continue to manage gross margin competition because it’s a competitive space and can we continue to do a good job so far, so good. And I think I’d put my confidence in Carol and her team and then we have growing LNG.

So as Lucas says, it’s volume, not price, but again, it’s volatility. So I think I’m not going to guide on it, but certainly, we have a fabulous capability here in place. and I’m confident Carol and Heron organization will do just fine.

Bernard Looney: Thank you. Steve, Anja and Carol will agree on trading electrons, who wants to do that one.

Unidentified Company Representative: I’d kick it off, Yes. So I think So one of the questions previously was around integration, and we do work very closely across each other. We’re looking at power value chain seamlessly, fabulously seamlessly we think about routes to market, we think about how we want to lock positions in. We think about whether it’s corporate, industrial self-supply. We take trading positions around that. We look at greening of products. And so we won’t be giving numbers, but we did have a strong power trading delivery last year, and that is because we’ve built up this position across assets, corporates merchant and what we call virtual strategies. That’s in the U.S. We’re building that in the U.K. and Europe, and we’re also supporting around the Australian renewable energy hub.

Bernard Looney: Anything to add.

Carol Howle: Perfect answers always. Murray, I’d like to say that you’re bringing these guys up on the stage. I think we should…

Murray Auchincloss: Is it easier for you and I.

Bernard Looney: Brilliant. And deepening EVs, Emma, are deepening where the return is coming from pricing and so on.

Emma Delaney: Yes, great. Thanks for the question. So in our EV business, as you know, we have a very focused strategy. We’re focused on fleets, and we’re focused on fast charging on the go. And just to give you a sense of the balance of that, we probably expect about 70% today as we look at our business, 70% to come from on the go, fast charging, 30% from fleets. And we’ve really built capability over the last number of years now more than 500 people really working on deploying into both of those core focus , and it’s working. So power energy sales up 2.5x, utilization is up in every market where we operate. And it’s clear that for the — on the fast charging side, customers in the U.K. where you have a choice between fast and slow, customers choose fast 5x more frequently than slow.

So we’re really seeing a play into this fast charging on the go. We’re investing in this business today, of course, and it will turn earnings positive, some chunky earnings coming from that by 2025. So — we’re looking forward to that. fleets, in particular, what I like about fleets is we have a really sizable fleet business today, 170,000 customers around the world. Those customers and corporates have made commitments to decarbonize and the vectors energy vectors they need to decarbonize will be a multitude of energy vectors, all the way from biofuels, which is near-term decarbonization through EV Charging and EV Charging and trucks who would have thought 5 years ago that you’d have a 19-ton truck that can be run on electricity. And we’re playing into that market with some specific investments which we’ve made in Germany, where the truck — EV trucks are already taking off.

So I think fleets for us really offer an opportunity to play into a number of our areas, and we’re really looking forward to seeing what this business brings in the next couple of years.

Bernard Looney: Thanks, Emma. Let’s go to Irene, and then after that, guys will go to a couple of questions online. So Irene?

Irene Himona: Irene Himona, Société Générale. My first question on the framework. And congratulations on the numbers, first of all, and you have upgraded EBITDA targets very materially, partly because of the increase to your Brent from — but of course, you continue to guide on a 4% dividend increase based on $60 for consistency. But how should we think around that 4%? What does it grow to in your new framework of $70, please? And my second question, back to Convenience and mobility. Obviously, we focused on EV Charging. Can you give us some insight on the conventional part of that business. So for example, is Castrol lubricants finally delivering the long-awaited potential that we think it has.

Bernard Looney: Great. Irene, thank you. Murray, we’ll kick off with you, and then we’ll go to Emma on the non-EV charging part of the business.

Murray Auchincloss: Yes. For consistency, we stuck with guidance at $60 to guidance points, $4 billion on buybacks at $60 million and the capacity to grow the dividend at 4% per annum at 60%. That’s what we’ve chosen to do. If you’d like to figure out what it looks like at 70%, we’ve got our rules of thumb, they work pretty well. They have worked pretty well over the past 3 years. So I just use the rules of thumb to guide you towards $70, but I’m not giving specific guidance on different price decks. Too many things moving around to do that. So we’ll just stick with our guidance at $60.

Bernard Looney: Great. Thank you, Murray, and Emma?

Emma Delaney: Yes. Thanks, Irene. As I look at the fuels and Castrol part of the business, so non-EV, non-convenience part of the business for 2022, a number of headwinds there that we’ve been working against, so particularly ForEx, cost inflation, we saw during 2022. Nonetheless, some really bright spots. So aviation record year. Americas did really well. But nonetheless, some of the volume numbers in 2022 are still 8% behind COVID. So I think plenty of recovery is still to come in the base there, and we’ve seen some of that recovery in some of the businesses, some of the regions come through. And I’ll just point out Convenience, which is inextricably linked actually to our fuels retail business because most of our Convenience today exists on our existing retail network and some stellar performance there despite tricky trading conditions.

So 9% gross margin increase over the last 3 years and particularly in the Americas per annum, yes. And particularly in the Americas, if I look at AMPM 12 years of sales growth in that franchise, 2, 20% growth in Food for Now, which is a high-margin category. And even in the U.K., increased sales in Germany, we’ve been rolling out a partnership called Rave to Go. We see sales there, 1.5x sales on the competitor sites. So I think a lot in the Convenience side, which is inextricably linked to the fuel still some recovery to come actually, which is all to play for as we really recover out of COVID. You mentioned Castrol, I think Castrol has seen particularly in cash flow business, unprecedented headwinds over the last 3 years, base oil has affected them, in particular, additive shortages and ForEx, as I mentioned earlier.

But nonetheless, and we’re not yet where we need to be and where we want to be in Castrol, but we do have a new CEO in place in Castrol and a clear plan to get after Castrol’s recovery.

Bernard Looney: Great. Thank you very much, Emma. Let’s go to the line, and we go to Michele Della Vigna at Goldman Sachs, and then we’ll go to Paul Cheng at Scotiabank. So Michele?

Michele Della Vigna: Congratulations on the very strong quarter. Two questions, if I may. The first one on you have 1 of the best growth in the industry in terms of new supply coming on in 2023 and 2024. You took a major hedging position in Q3, which looking back, looks very well timed. I was wondering if you could give us an idea of how much of the extra LNG supply has actually been locked in, in terms of pricing for the next 2 years? And related to that, you had a $7 billion working capital build because of that in Q3. I was wondering how much of that actually unwound already in Q4 and how much is still to be expected for the next 2 years? And then if I can have a second question. We had a major new ESG disclosure coming through in Europe this year, which is the EU Green taxonomy.

I was just wondering out of what you call transition growth engines, which accounts for 25% of your CapEx now going to 50% by 2030. How much of that would you say is taxonomy aligned because I think that’s going to be a major focus out of ESG investors in Europe this year.

Bernard Looney: Kelly, thank you. Murray, working capital bill/release. Carol, how much have you hedged and sold forward, all of that good stuff. And I’m going to ask Julia to comment on the taxonomy We’ll get a microphone in the room. So Murray?

Murray Auchincloss: Yes. So if you go back to 3Q guidance, what we told you is that we expected $7 billion of working capital release from the LNG book, as cargoes were delivered starting in 3Q ’23, heavily weighted into ’24. That’s what we talked about last quarter. This quarter, we’ve had a $4 billion release in working capital. Some of that did come from that LNG book, given the size of the decrease. And so we had about $2 billion of that release in the quarter out of our $4 billion release. So as you look out to third quarter ’23 through the second quarter of 2024, we’d expect to see around $5 billion of release as those cargoes get delivered. We don’t think it’s tremendously price-sensitive. But when you have a 50% fall in LNG, a lot happens with the IM and VM that’s sitting, and that’s why some of that money came back in the fourth quarter. Carol, over to you.

Carol Howle: Unfortunately, a short answer, I can’t give any guidance on how much we’re hedging or the forward sales because you don’t know I know slightly sensitive. Yes, slightly sensitive. But what I can say is the team has managed the portfolio very well through Q3. We did have below average performance in Q4. That main driver on that was actually Freeport performance risk, but I don’t see any reason why we can’t continue to deliver from that portfolio based on the optionality that we have within it going forward, and I’ll leave it at that.

Bernard Looney: Great. Thanks. And Giulia, quickly on EU taxonomy?

Giulia Chierchia: Yes. Thanks. So thank you, . Let me start by saying that we actually clearly support the efforts in terms of transparency in the economy. We’re looking to see what happens in terms of all the multiple taxonomies coming together, CSRB, the EU taxonomy. We will start disclosing along the new taxonomy in 2025 based on 2024 data as required by the CRB. Now if you look into how much of our investment is actually going to be aligned to the taxonomy, we’ll be disclosing our investments into transition growth engines until then. And you can assume that towards 2030, a significant majority of that will be aligned to the taxonomy.

Bernard Looney: Great. Thank you, Giulia. Excellent. Paul Cheng, Scotiabank, and then we’ll come back to the room.

Paul Cheng: Two questions, please. What’s the assumption — I think this is for Murray. What’s the assumption that behind the high end and the low end of your capital range. I mean, what is the parameter behind that? The second one is that maybe that is for Bernard. So if we’re looking outside your transitioning business on the conventional or legacy oil and gas, should Europe be part of your long-term portfolio, given the political environment?

Bernard Looney: Very good, Paul. Thank you. So Murray, the question, I think, was what would guide you to $14 billion or $18 billion. What’s the marginal thing to do in there.

Murray Auchincloss: Great. Thanks, Paul. Nice to hear you earlier in the morning in the U.S. I think 2023 is a good way to think about our guidance. Right now, the hydrocarbon prices are pretty strong. And as we’ve said, we expect them to continue to be elevated. Our organic CapEx in 2022, if you look at the fourth quarter, started to tick up probably into the low 14s. And if you multiply by 4 our quarterly run rate in — and of course, we’ve added the Archaea pipeline, which will increase organic CapEx. We’re adding more rigs, which will add CapEx. So we’re probably at an organic run rate now of $14 billion to $15 billion in 2023. what we’ve guided is $16 billion to $18 billion, including inorganics. So given the high price environment, given what we’re seeing organically, that gives you a sense of what our organic inorganic split is.

And looking forward, we’ll be guided by the price range that’s out there in the market each year as we think about that 14 to 18 range if prices fall back to the $40 level, we’ll obviously be at the lower end of the range as prices remain high, we’ll have the flexibility to stay at the upper end of the range. I think that’s probably what I’d say, Bernard.

Bernard Looney: Great. Thank you, Murray. And Paul, on Europe, I mean, I won’t collapse and make kind of regional statements in general other than to say we’re returns driven, our investments have to make the returns that we’ve laid out. There are some great opportunities in Europe today. We have a strong oil and gas business in the U.K. North Sea. We have a strong oil and gas business in Norway with Archaea BP. We are, I think, the fastest charging, the largest fast charging provider in Germany today. We’re excited about that. We have a new partnership with Ignacio Galan and the Iberdrola team that we’re very excited about in Spain around hydrogen and the potential for that. So it’s a case-by-case basis, Paul. We look at all countries.

We look at — ultimately, we have to be driven. Our investments are driven by our returns criteria. And there are great opportunities in countries around Europe, just like there are great opportunities. elsewhere in the world. So let me leave it at that and come back to the room to Chris Kuplent, please, and then we’ll — there must be some people over here, but excellent. Chris, go ahead.

Christopher Kuplent: Chris Kuplent from Bank of America. One under the banner of CapEx discipline. Just wondered whether your hurdle rates in upstream have changed alongside your 60 to 70 move on the real assumptions for pricing. And if you could, there’s quite a big difference between 1.5 million and 2 million barrels per day in 2030. So I just wonder whether you could maybe go and talk us through the additional projects that would make up either the stemming of decline or the much lower assumed disposals that are behind this new target. And maybe as a bonus question, what makes you so confident that with no reduction in your refining footprint and now a much higher oil and gas footprint upstream, your Scope 1 and 2 targets can remain unchanged.

Bernard Looney: Very good. I’ll have Gordon take the scope on and 2 questions as well. We’ll kick off with Murray first.

Murray Auchincloss: On hurdle rates? No change to hurdle rates, Chris.

Bernard Looney: Yes. So we go from that then to — what are we keeping? You’re not well, let you answer your question, $1.5 million to $2 million, and how are you going to deliver the Scope 1 and 2 emissions, which we have not changed, Chris, as you quite widely pointed out. So Gordon?

Gordon Birrell: Great question, Chris. Thank you for that. So we have a hopper of opportunities of 18 billion barrels. That’s what underpins our plan to 2030. And I have to say — the subsurface team under the leadership of have done a fantastic job of articulating these 18 billion barrels numerically and quality-wise, much better than I’ve seen in the past. We’ve got 18 billion barrels in there as we bring forward the opportunities they have to hit the hurdle rates and as Murray said, no hurdle rates. We’ve got to create momentum through to 2025. We’ve got 5 major projects coming on this year, a little bit back-end loaded, but 5 major projects that we have confidence, big projects, projects like Phase 1 in Mauritania, Senegal, projects like Tang Phase I in Indonesia, projects like Argos, Mad Dog 2 in the Gulf of Mexico, they’re going to come on and they’re going to bring high-quality barrels with them.

Through to 2025, we’ve got 9 at over 9 major projects coming on stream. So again, creating that momentum through to 2025. And then from ’25 to ’30, we have a rich opportunity set within that 18 billion barrels, so we can make choices that will continue to offset decline, allow us to sell the 200,000 barrels per day that was mentioned earlier is to end up at 2 million barrels per day by 2030. So I’m very confident that the resources in the ground — we’ve got the teams in place to execute. We keep driving capital productivity under Andy Kreger in wells. I’ll give you just 1 example, a fast piece tieback we’re executing right now in the Gulf of Mexico. Thunder Horse expansion between Phase 1 of that expansion in Phase II where half the cost safely, half the cost of a deepwater well.

That’s just one example of how we’re driving productivity. And all these things just give us confidence that the Clear Ridge team doing similar great work, subsurface-wise, drilling wise to develop the giant field west of Shetland more productively, more efficiently. So I’m actually very confident that we’ve got the resources in the ground. We’ve got tremendous teams in place to execute and all we need to do now is execute well through the balance of this decade.

Bernard Looney: Great. And you’ve kept your Scope 1 and 2 target constant despite the higher refining throughput and a higher production. How have you done that?

Gordon Birrell: It just makes it harder. That’s as simple as that. I think the world, the company, our stakeholders required cover on our give confidence. And I think, look, we’ve got a track record of delivering 1 million — roughly 1 million tonnes per annum of sustainable aviation reductions, just through improving the way we operate. We’re now starting to fill the hopper with projects that are slightly longer wavelength maybe require a bit of capital. So we’ve got lots of opportunities here to deliver on that AMI. It’s never easy. You got to while you’re operating, you’ve got to look for emission reduction. But I think that AMI is deliverable. I’m confident it’s deliverable, and we’ll continue to fill the hopper with opportunities through the balance of the decade.

Bernard Looney: And the reality is, it’s what society needs. And quite frankly, Chris, it’s what our people want to deliver. They don’t want to see us going back on A1 and we control it and we’re leaning into it. And we’ll find — it’s harder, of course, it’s gotten harder, but we’re going to deliver it. So thanks for raising that point. We’ll go here in the audience.

Unidentified Analyst: Patrick from UBS. I have a couple of follow-up questions. The first one on the upstream and the change in the production outlook to 2030. Should we expect a major change in terms of allocation between oil and gas and. Obviously, You raised your oil price due to . So should we expect to be skewed towards all projects in the later part of this decade? Or do you still intend to keep that fairly balanced oil gas.

Gordon Birrell: I think we’ll be fairly balanced oil and gas, Patrick, good question. Fairly balanced oil and gas. And of course, every one of these projects must go through our investment reach our investment hurdles. That will be the primary determinant of how we invest. But as we look forward to the 18 billion barrels, and I can see more than a dozen major project FIDs coming towards us from that hopper and it’s pretty balanced oil and gas.

Bernard Looney: Returns driven at the end of the day.

Gordon Birrell: Returns driven at the end of the day, yes.

Bernard Looney: Second question before you were interrupted.

Unidentified Analyst: Second question is a follow-up on Pri’s question around the capital allocation and the increase of $1 billion per annum for upstream and on the transition. It sounded like it’s all subject to the macro and your ability to generate the cash flow to finance that growth. So you basically have line of sight of enough projects to actually go through , is that fair?

Murray Auchincloss: Yes, there’s definitely not a lack of opportunities to spend CapEx. Let me put it that way. For ’23, ’24, ’25, short-cycle paybacks, Gordon is already getting the rigs. They’re already coming into the portfolio. The returns are super high on those. Likewise, on the trend. so I think that’s something we’ll do. And it’s robust through pretty low prices. You see where we’re holding our resilient balance point. It’s robust through pretty low prices. As you then look at the transition, we’re committed to doing these transition investments. If you cycled around the team, is doing a fabulous job on EV adoption. I wouldn’t be surprised if she does better than she’s talking about. Convenience is going very well. I think we’re very excited in the biofuel space between the refineries and additional facilities we see.

As Bernard said, the Archaea transaction is going to be faster, better. I think we’ll see lots of opportunities there. So I’d probably count on the higher end of the capital range and that we’ll drive towards that. All of this delivers EBITDA, obviously and an awful lot of the EBITDA that’s coming from the transition growth engine isn’t price sensitive. So we’ll have our higher earnings that aren’t as sensitive to the low price environment. So I’d count on us being able to manage through this time period with a fairly high activity set.

Bernard Looney: Great. And there is a big wrapper around this whole presentation, which is everything we do here has to meet our returns and our growth target has to meet. And that’s the wrapper, the underpinner the foundation of everything that we talk about today. And if the returns aren’t there, the capital doesn’t get spent. If the returns and growth are there, it will get spent. Christian?

Unidentified Analyst: from JPMorgan. So sort of one quite long question, if I may, which is 3 years ago, asked the question, well, if prices were higher, but as you said, would be very focused on CapEx. We wouldn’t increase CapEx and you’re increasing CapEx on oil through a high oil price deck. And so it sort of begs the question in terms of — I see how you have to frame a macro view and you’ve got to take a view. I agree with it in some ways, particularly in the oil piece. But what I’m struggling with is the disaggregation of value created through your macro outlook versus what you’re doing bottom up through the businesses and the proof of concept. In terms of the cash flow generated in your renewables vis-a-vis the investment and the return you’re making against a price view.

And it’s not that clear what you’re assuming in the Renewables segment as it is obviously in oil because you can just put a Brent forecast down. So how do you help us disaggregate that value creation from what is a macro call to actually creating value through the value chain in renewables, particularly when it’s becoming increasingly commoditized is sort of the part A of my question. Part B is in the spirit of changing CapEx relative to your macro view, what’s stopping you from flipping it back again if you become more bearish in one of those segments? In other words, you don’t think renewables is going to generate the same returns to reduce CapEx. I mean it sort of feels quite dynamic and fluid around CapEx versus the prevailing macro view, which can obviously change, and as you said, be very volatile.

Bernard Looney: So you’re making an assumption, I think, that we’re growing capital because we increased our price deck. That’s not the case. We’re growing capital because we want to grow — you asked for a disaggregation. It’s very clear. It’s in the deck. We deliver $5 billion to $6 billion of extra EBITDA by 2030 for get price from the investments that. $3 billion to $4 billion in hydrocarbons, $2 billion extra in our transition growth engines. So this is about growth. This is about opportunities that we see to invest both in today’s energy security and in the energy transition, all of which we believe are accretive. They drive earnings. It’s why one of the reasons we’ve raised the dividend today is because we are investing and we see more potential to grow.

So this isn’t about prices go up, CapEx goes up. It’s very, very different to that. This is a very, very disciplined focused on growth where we can meet the returns that we laid out. And I think within there, we’re very clear Murray about where that extra EBITDA comes from, how much is — I think we’re crystal clear actually in the deck on that. Murray, what have I missed?

Murray Auchincloss: Where returns settled — returns driven, Slide 18 tells you our returns and our assumptions. I’m not really sure how I’d get much clearer on that. And this is about performance really. If you go back to 2020, our balance sheet wasn’t as strong as it is now. So we’ve got a much stronger balance sheet. We’ve improved our position with the ratings agencies. It gives us the capacity to invest more, to drive more returns for shareholders. So we — it’s much more about performance and where — what the strength of the company is rather than an arbitrary view on price, which you’re right, can change every time.

Bernard Looney: Yes. So we’ll invest more. We’re going to grow the company. We’re going to deliver the returns and the shareholders are going to see increased value both through distributions like the announcement today on the dividend, but we can follow up on it. Where do I go next. Here in the back.

Unidentified Company Representative: You forgot the left side.

Bernard Looney: This is a feedback-rich organization. Just upward feedback is alive and well. Great. Go for it.

Amy Wong: It’s great to hear that. It’s Amy Wong here from Crédit Suisse. Want to take advantage of having Anja on the panel to ask a question on biogas. Clearly, you guys are making a pretty big statement with — we have the Archaea Energy acquisition. But also I just want to hear about — how do you scale business because I think what I really struggled in some of the investors sous understand how biogas business, where you’re going from landfill to landfill is a scalable business and can deliver the type of returns. And I think it was also mentioned on the panel that you’re going to do Archaea better and faster. So what’s driving some of those comments?

Bernard Looney: Amy, thank you. It’s actually Carol’s business, so we should give it to Carol. And we had Nick Stork here and his team, I think last go to founder. And we are particularly excited about this business. Go for it.p.

Carol Howle: No. We are very excited about the business, and we do see great opportunities. So I think when you look at it, I mean, at the moment, of course, we’re looking at integration, BPK platform coming together. But as Bernard mentioned previously, there’s a significant — there’s more than 80 projects in that pipeline. We’ve got the ability to do a modular scaling across each of these landfills go in there, develop the gas and bring that out and then look at different transportation routes to market. So we can increase and accelerate production. We can increase recoveries, and we can also look at accessing newer revenue streams as well. I mean in the future, we’ll have hydrogen as opportunity. But right now, we can do methanol, we can do CCS, EV Charging for Emma’s business.

We’ve got utilities interested in renewable natural gas because it’s lower CI. So it’s transportation, it’s utilities. We could take it into our refineries. There are so many opportunities around it, which creates the optionality that we like in the portfolio, it gives us an opportunity to build the best markets for that to gain premiums and also to trade around those positions. So it is certainly scalable, and we see strong returns, and we see the opportunity to invest more. And yes, hugely excited to be working with the team.

Bernard Looney: And if I could back to Christian’s point, Christian is a good example. We’re putting more money into our Archaea than Archaea would have on their own. They could have probably done 20 sites a year of that 80. We’ll do more quickly because we have the balance sheet to be able to lean into that investment. What’s the stat we’ll get 30% of that CapEx back if we get them online by 2025. So these are decisions that with the balance sheet, we can lean. It got nothing to do with the price assumption on oil. This is an opportunity driven. We’re going to speed up that pipeline and get those 80 sites online in the next couple of years. And the EBITDA from that’s going to be material without questions. So pretty exciting. Anyway, Amy, thank you. Where were you guys pointing to me, Biraj ,sorry? How are we doing, Craig? Okay? Okay. All right. All right.

Biraj Borkhataria: It’s Biraj from RBC. Two questions, please. First one, in the upstream. Could you just clarify whether or what role, if any, exploration success has in your plans to 2025 and 2030. And so related to that, on the inorganic side, most of the inorganic activity acquisitions wise has been on low carbon last couple of years. And I don’t want to make Gordon’s Life even harder, but are you open to inorganic bolt-ons in the upstream? And how you’re thinking about that within the constraints of the framework? And then second question is going back to LNG. So last quarter, Murray, you highlighted the big working capital outflow because of the margining. If I’m thinking about hedging through summer, the 2023 price was actually way above the price cap, which was then implemented. So how does that price cap impact 2023, if at all, in the LNG business?

Bernard Looney: Fantastic. Okay. Thank you, Biraj. Carol, I’ll ask you to lead off on price caps for Murray, as you guys debated. Carol, go for it on price caps and hedging. And then Gordon is exploration success built into your plan? Do you need it? And are you going to come to Murray and I with a bunch of money to go and buy oil and gas assets when you’ve got 18 billion barrels of your own . Go ahead, Carol.

Carol Howle: So talking about the European market correction mechanism. So we’re working through that. I mean there are a number of nuances around that. In terms of it has to be over a certain number of days, and then there also has to be a certain delta in terms of when that actual cap gets triggered. I think the whole market is working through that at the moment. Do we think in any way that it impacts our ability to manage our portfolio? No. We do have other opportunities. We’ve got opportunities directly, bilaterals. We’ve also got opportunities in terms of different structures that we can use. Our role is to make sure that we’ve got the optionality. We’re being proactive around managing that risk, and with Murray’s support and treasury support. That is certainly what we did last year in terms of getting ahead of some of these changes in the market.

Bernard Looney: Thank you, Carol, Gordon?

Gordon Birrell: Yes. On exploration, the 2030 outcome is influenced by exploration success by a very small way. What do I mean by that? We have exploration success built into the 18 billion barrels, but on a risk basis, we take the exploration risk, and the reason we’ve done that is we have some pretty rich, what we call ILX, infrastructure-led exploration opportunities, particularly in the Gulf of Mexico, in the North Sea and in Egypt, which if they come in will become part of the fast tieback opportunity set, but to emphasize and to answer the question, they’re all risk within the 18 billion barrels. So that’s a very small impact on the outcome in 2030.

Bernard Looney: Not relying on it.

Gordon Birrell: Not relying on it. It’s a simple answer on that. And then am I going to come and ask for money to buy inorganic. The answer is a qualified yes. where it’s a natural — where it’s a natural fit in the portfolio. Are we going to go buy something way outside our current portfolio, we’re outside our heartlands that we have in our company. No, that doesn’t make any sense. Other companies can go and do that. Where there’s a natural bolt on and we could add more value having it in our portfolio than we think anyone else could and it meets the criteria of contributing to low carbon and low cost and security of supply, then of course, we would consider that.

Bernard Looney: Very good. I mean I think we used to call it smart M&A or commercial deals. Aker BP instead of exiting Norway, we created Aker BP. Aker BP then went and bought Lundin Aker BP operated by other production from Johan Sverdrup alone. It’s 250,000 barrels a day. It’s a pretty extraordinary company now that was created. Instead, we could have exited Angola, maybe, but we didn’t. We wanted to stay. We wanted to grow. We’ve created Azul Energy. So think about it as I think you may see us doing some smart M&A, commercial deals, partnerships, things that make sense in that space. We’ll go ahead, go for it. Craig, are you okay to run on a little bit here, 15 more minutes or not.

Craig Marshall: I’m not. But yes, we can go into the 15 minutes.

Bernard Looney: I think we said while we’re going. So we’ll go 15 more minutes, and then we’ll let you guys have a break, and we’ll have time outside. Go ahead.

Peter Low: Peter Low from Redburn. Yes, the first question, you’ve announced an increase in spending today across the oil and gas and the renewable and low carbon piece. I think it’s probably fair to say you’re seeing inflationary cost pressures in both. How are you managing that? And kind of what inflation assumptions are embedded within the CapEx budget? And then the second question was just on kind of the 2030 renewable power targets. So the 50 gigawatts and the 10 gigawatts. Can you just explain the difference between those 2? Is a lot of it going to be under construction? Or will you be farming it down? Some color on that would be helpful.

Bernard Looney: Fantastic. Murray, first of all, just general CapEx/inflation, and then Anja.

Murray Auchincloss: Inflation is — continues to be pretty low for us. You’ll remember, back in 2022, we had about 10% inflation inside the Lower 48 Gordon. Since then, for 2023, we’ve gone out and let longer-term contracts, and we’ve seen deflation as opposed to inflation. So it’s not really featuring as a material issue across the upstream I think in low carbon, there’s really no change from previous guidance around 5% inflation is what we saw in the offshore wind platform. There’s more inside solar but solar self-funding inside BP — inside Lighters BP, so that doesn’t impact the overall balance sheet. So despite the extraordinary environment we’ve been through the past couple of years, these guys have done a tremendous job working with supply chain to mitigate those supply chain effects. And I wouldn’t expect them to not continue to do that in the future.

Bernard Looney: Great, Anja, 15 and 10?

Unidentified Company Representative: 15, 10, we said 15 gigawatts to FID. And as I said, we’ll be very selective in terms of where we allocate CapEx because it has to ultimately make sense, create integration value and as such a superior return and derisk because you don’t have access to green electrons everywhere around the planet. So 50 to FID, 10 will be in operations, hold it another 10 in construction. And then the rest is farm downs. A lot of the 50 will come from Lightsource BP, which is a develop and sell model very, very attractive, very stable. But we will also farm down on, let’s say, for example, offshore wind assets, et cetera, because ultimately, what we want is access to the green electron and the high-grading opportunity, and we don’t need to necessarily control 100% of the asset.

Bernard Looney: Excellent. Thank you, Anja. Martin, sorry. These photographs guys, you need to update your photographs because Os is the only person who hasn’t aged

Martijn Rats: All right. Wonderful. Well, so slightly conceptual, but I was wondering the $8 billion in oil and gas in sort of today’s environment. It’s not entirely sort of obvious. And so a lot of technical questions have already been asked about it. But I was wondering how the internal sort of decision-making process came about to sort of got you there. what the milestones or the sign post along the way were where you say you have really like we need to do this? Was this just simply about oil and gas prices or European energy crisis or whatever it might be. The second thing I wanted to ask you is about the assets that you now intend to retain a little bit longer. And I’m sure you’re not going to spell those out for us. But I was wondering if you could perhaps talk about whether they have a sort of shared characteristic as in the assets that you’re now likely to retain longer?

Is it oil? Is it gas? Is it offshore? Is it onshore, East Hemisphere, Western Hemisphere, where there’s some common denominator that we can sort of work with. And then finally, if I can throw in a third one, given the way things going, I mean could you stay in the building?

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.

Lydia Rainforth: One last one for me. Just given the amount of cash flow and EBITDA that you now have, where do you want net 0 debt to actually go to, Murray, just in terms of to help us think about long term? Because I mean, if I look at the 2025 numbers, you’re essentially trading on 2x the EBITDA. So assuming you’ve got no that point. So where do you want to?

Murray Auchincloss: Yes. I think — look, we give this guidance year by year is what we give you. We’ve firmed up the guidance a little bit this time instead of just strong investment-grade credit rating. We’ve said further progress in the A range. So we’ll be working with the rating agencies to try to achieve that. We think with the growth we’re seeing that we should be able to progress through the A range with that continued debt reduction, but it’s a little bit about how our interaction with the ratings agencies go. So fingers crossed, but we provide this guidance 1 year at a time. We don’t look beyond that, the macro environment is just too volatile to do anything else, leave. So 40% of surplus to debt reduction and continued focus on growing EBITDA so that we can get that cash flow from operations over expanded debt down.

Bernard Looney: Great. Thank you, and thanks for listening. I hope. I hope you’ve got a bit of a sense of the business, the strategy and I hope, importantly, the team sort of I think we’re in our stride 3 years in now, and I hope you can see the confidence that we have in what we’re trying to do. We have no more time for questions. For those of you in the room, thank you for coming here. For those of you on the phone, thank you for joining us. It is an important day for us as we transform ourselves. And I hope you’ve heard 3 clear points they’re short. Don’t worry. First, we’re delivering — BP is delivering. We are performing while transforming. Second, we’re leaning further into the strategy, and we’re doing that with increasing confidence.

And third, crucially, we remain focused on delivering for our owners, our shareholders. And I and the team look forward to seeing many of you this week when we’re out on the road, we’re headed to the U.K. or we’re in the U.K., we’re headed to Europe. We’re headed to the United States as well. And for those of you who made the journey here in person, we’ve got some refreshments outside, and the team will hang around to spend time and chat with you if you’d like. So thanks, everybody. Really appreciate it.