Unidentified Analyst: Yes. Congrats for the result, Murray and Kate and the clarity of the overall message. Two questions, if I may. So one follow-up on the offshore wind. Do you have a plan for FID in the next 2 years, by example, in the U.K.? And the second question is, as you mentioned, reserve replacement ratio was quite low for both ’22 and ’23. Reserves to production life, SEC basis is just around 8 years, and this is, by the way, where you want to sit in the coming years. Can you remind us why 8 years is the right number for BP going forward?
Murray Auchincloss: Great. Thanks, Bertrand. I can take the reserve replacement ratio. Kate, do you want to think about FIDs for offshore U.K.?
Katherine Thomson: Sure.
Murray Auchincloss: Go ahead.
Katherine Thomson: Yes. So I would have said the U.K. offshore wind projects are progressing well. We’ve got good clarity around grid connections, which was one of the most important things. So we’ll be moving through that. In terms of FID, probably not this side of the end of 2025, but probably early once we get to the other side of that. I say we’re progressing well. We’ve got clarity on good connections as the most important things to give us certainty as we move towards FID. And we’re working hard with making sure that the supply chain is set up. There has been quite a lot of inflation inside the supply chain for offshore wind right across the remit of what we require. So we’re managing that as we approach FID, and I say we’ll take that decision as we get clarity and as we’re confident on the turn situation, and let’s see how the political environment shapes up in the U.K. over the next 2 years as well.
But at the moment — yes, towards the end of the 2-year time frame, early following that is how we’re thinking about it currently.
Murray Auchincloss: I think on reserve replacement ratio, I’m happy at 8. We talked about 8 at Denver. It’s a conservative 8, I think, is a way to think about this. Over time, we’ve really, really tightened the definition of what reserves you can book to a place of conservatism where this 8 is — would have probably been much higher a decade ago so I think that’s just the first thing to have in your mind. Second, I worry more about proved developed reserve replacement ratio than I do total proved reserves. And as long as you’re 90% plus, I feel good about the ability to sustain a business of our scale. And when you see the ARA, you’ll see that our numbers are looking very good on proved developed reserve replacement ratio. Moving forward then, obviously, all these sanctions will drive our PUD bookings up higher, as we sanction these things across the next 2 years.
So I think there’s just — it’s a bit more conservative than it has been in the past. And that’s why it feels okay to me. Bertrand, I hope that helps. Any more questions in the room? I’ve got two more online.
Giacomo Romeo: Giacomo Romeo, Jefferies. First question is on your convenience and EV charging EBITDA targets. Obviously, you don’t give us a split and it’s understandable. Just I’d like to understand how much this — the outlook — the split between the two has changed in your mind over time? I’ve noticed that your customer touch points perhaps are not growing as fast as you thought. That’s potentially impacted your convenience EBITDA growth, but perhaps you are accelerating growth on EV charging. So just trying to understand how sort of you’re thinking, how you’re going to get to those ’25 and ’30 targets in your mind and how that has changed? And if I can ask a clarification on — I’m sorry, your definition of here on current market conditions in the context of your buyback plan, very welcome the visibility.
Just trying to understand, as you mentioned Murray, it’s a volatile macro environment, how much willing are you to lean on the balance sheet if there is a, say, blip in the macro for a couple of quarters and — or should we look at this as an 80% on whatever is the outlook for the year?
Murray Auchincloss: Go for it Kate, and I’ll sweep up on convenience and electrification.
Katherine Thomson: So on current market conditions, I’ll say — what I said to start with which is I’d look at where our basket of commodities has been year-to-date. It gives you a really good sense of how we’re thinking about that. We’ve got the ability to tolerate movements. You’re going to see movements in our debt going through the next 4 quarters of this year based on purely what’s going on inside the business so that even looking at the environment because of the weighting of CapEx in the first half and divestments in the second half. So you’re going to see it move around. I’m comfortable with that. Our net debt at 20.9 gives us quite an ability to tolerate that movement. And as I say, if we get a fundamental disconnect in the market, then maybe we’ll take another look. But I think you should hold it as there’s a fair degree of tolerance around the conditions that we’ve had today across oil, gas and refining.
Murray Auchincloss: And I suppose we have said that the $1.75 billion this quarter is done and $1.75 billion and $1.75 billion in the next 2 quarters as well as, not subject to market conditions. So that’s a fair degree of certainty. On convenience electrification, there are a lot of things that have moved over the past 4 years. I think just some highlights in our mind. We thought fleets would move first. But given recessionary pressures and some relief from governments, fleets have slowed down. Contrasted with that, consumers have moved faster, mandates, preferences, whatever. So we found ourselves over time. We thought we’d be doing fleets as we started this. It’s actually drifted more towards individual as opposed to fleets.
We started with thinking about 12 countries, is where we focus for now, given adoption levels. We’re really focused on 4 countries, U.S., U.K., Germany, China. And so you’ve seen us very, very focused on where are the places that we think maximum adoption rates will happen. And we see it. You see the metrics on sales, et cetera. You can see that 2 of those countries are profitable already, and we feel very comfortable that we’ll move into profitability with the other countries as well. So those are the kind of changes. We’ve deployed less capital than we thought we would. Why? Because we concentrated down to 4 countries as opposed to going after 12 countries. So that’s the EV side, but the 2025 target, we’re still saying get into profit in 2025.
So no change to it, just a bit less capital than we originally would have been thinking. On the convenience side, it’s remained really robust. I’m really surprised about how robust convenience has been. Ex-TA growing 9% per year in gross margin despite the fact that you had COVID, lockdown, invasion, recession. You’ve got a perfect storm for that business. But given the power of the brands that we have like a Marks & Spencer here, and I can say the same for other countries, given the great work the teams are doing on digitizing, integrating the business in the U.S. together, we’ve started to integrate ampm with Thorntons with TA together in a way that we haven’t in the past. You’re just driving much more efficiency into that business. So what will happen, the 1.5 will obviously largely be convenience, and it’s more convenient than I would have expected, to be honest, given the headwinds that we faced.
So I hope that helps a little bit, and you can always catch Emma afterwards to find out more from her. I think we’re down to the last two questions online. Matt, go ahead.
