Unidentified Analyst: Two, please, if I could. On distributions firstly, can you just talk about to what extent the change from 60% to 80% is reflective of more pro-cyclical based confidence in medium-term macro and trading conditions? And linked to that, can we now think of the 80% as being fully through cycle as opposed to a more prolonged down cycle scenario in the future starting to trigger the case for reverting back towards 60%. And then secondly, it feels like the emphasis on simplification and efficiency has been enhanced today, if anything versus the recent past? Is that fair? And if so, where do you see incremental opportunities that perhaps weren’t called out as much in the past?
Murray Auchincloss: Great. Super. Kate, do you want to tackle the first one?
Katherine Thomson: Sure. Yes. Thanks, Matt. Yes, 80%, I think, very much through cycle. If you think about where we’ve been since the inception of the share buyback, we’re around 65% of surplus cash to share buybacks. And we’ve done that while making huge progress on our balance sheet. Our balance sheet is now in much better shape. We feel good about it. As I’ve said a number of times this morning, we can tolerate movements, so we feel huge confidence in our balance sheet. We feel huge confidence in the business performance and the ongoing momentum and delivery. So I mean, if there’s a fundamental change, then we’ll look. But right now, I’m confident that we can be completely clear that this 80% of surplus is going to be through cycle.
This is an upgrade, and it’s pretty much in line with the pro rata upgrade over 4Q and the first 2 quarters of next year, moving from [indiscernible] pretty much pro rata with that, but — so it’s about confidence in our balance sheet, confidence in our business performance and the ability to tolerate movements around.
Murray Auchincloss: Yes. And then on simplification, I think what I’d say is there are lots of opportunities. A new team we can reflect on and think about how we can work together more effectively. We can simplify our narrative, which you started seeing us do today. We can simplify overlap inside organizational structures that we’ve talked about today. We can simplify buyback guidance, which you’ve seen today. And there’s a long list of these things that the leadership team and I are thinking about. And our challenge is how do we just gradually do these things over time. driving efficiency into the business at the same time that we keep superstructure strong and keep the drive and focus on the strategy is strong. So that’s really what I’d say.
But the efficiency drive, we’ll be able to do an awful lot more with digital, now that we’ve got GenAI inside. We’ll do an awful lot more as we progress the digitization of the downstream business. We have offshore centers to build up now. That will drive an awful lot of efficiency into the business as well. So we — I think we’re enthusiastic, and we see a lot of opportunity in this space about simplicity, focus and then hard focus on returns. Thanks for your question, Matt. And the last question goes to Menno.
Menno Hulshof: Thanks for squeezing me and I know it’s been a long call. I’ll just start with question on the Paleogene as the key driver of liquids growth in the — gone through 2030. Can you just give us an update on where things stand at Tiber and Kaskida? And what are the key risks in bringing on initial volumes in that 2028 time frame? And then my second question, I believe, is for Kate, just on divestments which fell a bit short of 2023 guidance. Is there anything to read into there? Is that largely a timing issue? And I guess the second part of that is how much of a priority is getting the next, call it, $2 billion to $3 billion of asset sales across the line, given your confidence in the balance sheet?
Murray Auchincloss: Kate, why don’t you start on the divestment.
Katherine Thomson: Thanks, Menno. Yes, a few things on divestments. Yes, we were slightly short of our guidance that we put out at the end of the third quarter. I think you wouldn’t be surprised to hear me say that, as Murray has talked about a lot. We are hugely focused on value. And if I get the sense of transaction isn’t delivering value because I’m trying to hit a certain deadline to close it, I’m not going to do that. So there’s 1 or 2 that we have allowed to move into 2024. We’re just going through the process again to make sure that we’re getting maximum return for those assets. And that is what I’m going to be focused on delivering with regard to the divestment target. Broadly, at the moment, I would say we’re on track for the 25 by ’25.
Let’s see how it goes. I’m confident in the 2 to 3 that we’ve said we’re guiding for 2024. But as I say, I’m much more driven by getting value for the transactions we’re executing. I’m not going to be solely driven by hitting a number and a target if that doesn’t make sense, and we’re not getting the returns that we need so that’s how we’re going to be looking at it, and that’s what we’re going to be focused on.
Murray Auchincloss: And what a nice way to end the conversation on a Paleogene question, 9 billion barrels of oil in place, highly discovered resource across Kaskida, Tiber, Gila exploration opportunities with new acreage that we picked up as well. It’s time for BP to open that basin up again after a 15-year hiatus. So we’re really excited about it. We have full teams on Kaskida and Tiber moving forward right now. Kaskida, we hope to hit FID this year. Let’s see how it goes. I think the principal challenge in time line will be yard space. We’re just sounding out yards now as we go and when you can get slots inside the yards to build these things. The subsurface feels derisked now. There’s enough production analogs around Kaskida from similar fields with similar characteristics so I don’t feel there’s really any risk on the subsurface perspective, probably just more upside than risk.
The development cost looks very competitive. The economics look competitive so it will really be slot timing and we’ll update you with that as we go through the year. Tiber will be a follow-on from Kaskida. You’ll be doing these in sequence. And let’s see, we haven’t — let’s see where we go from Kaskida to Tiber. So I think my encouragement to the team is to do everything safe with cycle time. That’s what creates the most value for the corporation to save cycle time. And that’s what Gordon, you and I are working on, on Kaskida and Tiber. So thank you, everybody, for attending today here in person and online. It’s much appreciated. Just a few final words. Our destination is unchanged, IOC to IEC, but we’re going to be simpler, more focused, more efficient and really driving for value.
Thanks very much, everyone, for taking the time today to visit with us and look forward to seeing you in the future. Bye-bye.
