Murray Auchincloss: Sure. Why don’t I take the second one, while Kate looks at the working capital question. On C&M, We have a target to get to $7 billion in 2025. I feel okay about it, I think is the way I’d say it. We’re 4 and a bit right now. TravelCenters comes in for a full year. Castrol has now started to show a trend 5 quarters in a row, gradually creeping up. That’s good. Convenience growing 9% year-on-year. That’s good, and that continues. Electrification moving from a loss to positive, so it’s a lot of small movements we see that start to drive it up. Something we don’t control is the fuel margin. and the fuel margins have been unusual in this time period. They swung into the refineries as opposed to into the service stations itself.
I can’t predict how that’s going to turn out in 2025. I just really can’t predict that. but there’s probably $1 billion of swing on that. So you might see a number of 6 to 7 in C&M in ’25, but the other billions likely to be in the refineries instead. I just can’t predict at Lucas because it’s really — it’s difficult to predict where that margin is swinging up and down that value chain. So because we run an integrated value chain, I feel comfortable with 46 to 49. It just may be 6 as opposed to 7 in C&M and it may be a bit higher inside our refineries. So that’s how I get comfortable that I can see that path. It’s been a tremendously challenging time period for that business. When you think about COVID and lack of travel, when you think about how long the lockdowns occurred inside China, when you think of the inflationary pressures in the recession, it’s been a hard slog for Emma and the team, but I now feel they’re back up and on it, and we’re really starting to drive digitization offshoring into that business as well.
So that will be another lever that we get there. So that’s how I’m thinking about it, Lucas. Kate, over to you on W CAP.
Katherine Thomson: Yes. So on working capital, in terms of the detailed notes around what’s going on in underlying working capital, the $9 billion release is really a function of what happened back in 2022 where we saw about a huge spike in gas prices. That’s now largely unwind. As you’ve heard me say this morning, we feel we’ve got $1 billion left of unwind to come through, which is going to be one change in the working capital going forward in 2024. But the $9 billion that you see in the ’23 results today is largely a function of what happened in ’22 and the unwind of that position.
Lucas Herrmann: We understand each other. I mean I’m just looking at $3 billion — sorry. And we can take it off-line if that’s easier. But I’m just looking at $6.3 billion of outflow movement inventories, et cetera, et cetera, in 2022. Another $3.3 billion this year, which I assume to be working — flows out largely working capital associated. A chunk of it last year was LNG. Much of that money has come back. I’m still unclear as to why the negatives in the cash flow or of that scale, and they seem to be predominantly around inventory or am I — just misunderstood.
Katherine Thomson: There will be movements in inventory. There will be changes in valuation of RINs, other emissions allowances and all those kind of things flow through German MOT. If you — we can take you through a rec and take you through how it builds up, if that’s helpful, but we should do that offline.
Murray Auchincloss: Al Syme at the back of room please?
Alastair Syme: Thanks, Murray. Can I say you focus — the theme today is about operational delivery in the next couple of years and sort of scale back in M&A to some extent. But you find yourself with a pretty strong balance sheet at a time of higher rates, is putting a lot of stress on transition players and also perhaps in the U.S. shale. There’s a lot of private players trying to exit, but how do you think about utilizing that balance sheet versus the option of buybacks, which is where you’re choosing to allocate?
Murray Auchincloss: Yes. Thanks, Al. I guess I start from the position that we’ve done a lot. We’ve already done a lot with EDF, Lightsource, Archaea, TA. And there are only so many of these things you can do at once and deliver them effectively. So we’re probably — we’ve probably got 1 or 2 more in this for the next couple of years. And then that’s about the saturation point that you can actually integrate these things effectively. That’s how — that’s the starting thought I have. I’m very countercyclical. That’s why you saw us do Lightsource bp when we did because it was a nice countercyclical opportunity. So I’m very — and TA as well. So I’m very focused on new countercyclical opportunities. So I am sympathetic to that.
But there’s just — only so much the corporation can absorb at once and get the systems right, the processes right, the culture right. That’s what’s so critical for us. Natural gas in the U.S., let’s see where gas prices go. Certainly, there’s the chance that gas prices get suppressed. Would you think about doing something countercyclical in gas if an opportunity came up? Maybe. But I’ve got 22 Tcf of natural gas inside BPX right now between the Haynesville and the Eagle Ford. So it would almost have to be super cheap or free for me to contemplate that given that we’ve got so many years of development ahead of us with natural gas with the resources we have in the best place in the United States right now. So I believe in countercyclical, that’s what we’ve done.
We’re probably getting close to the limit of what we can do to effectively integrate it, and that’s what’s the driving consideration in mind as I think about slowing down a little bit moving forward. Hope that helps, Al. Sorry, you’ve got one more follow-up?
Alastair Syme: Yes, sort of BPX actually more liquids in Permian…
Murray Auchincloss: I’m sorry…
Alastair Syme: You met on BPX, more liquids in Permian rather than gas.
Murray Auchincloss: Yes. liquids, I think we’ve got 8 to 10 years of runway right now with infill drilling. I think it’s countercyclically. So you’ll do acreage swaps, which we’re doing all the time in BPX. I think we’ve done three big acreage swaps over the past few years that we don’t talk about very much. So certainly, they’re focused on those types of things. But with oil around $80, I’d wait until oil dipped before I did that. I’m sure oil will dip again to $60 some time in the future at some time I can’t predict. And that’s the time when you use the stronger balance sheet to go countercyclical as how I think about it, Al.
Peter Low: Peter Low from Redburn, Atlantic. First question, just on BPX. There’s a strong production number in the quarter. Can you talk a bit about when you’re expecting the next 2 central processing facilities to start up and should think that kind of when they come online, that will result in kind of an immediate step-up in production? Or are they filled more gradually? And then the second question was just on LNG and the target to increase that portfolio to 25 million tonnes. Does that include any volumes from Venture Global? And can you perhaps update just what’s happening there?
Katherine Thomson: Yes. So thanks, Peter. On BPX, yes, so the next 2 facilities come online. Checkmate is tracking well to be online this year. And the final one comes online next year. The way to hold it is that we’re paying at around about $500 million of our capital in BPX into completing this infrastructure build-out. That will then allow us a, to fill it, which is really important. So a drill and fill perspective. And then we’ll be able to take that capital and use it to put into our effective production drilling activity rather than using it to carry on completing the infrastructure. So that’s going to help as well. So that’s kind of the way to hold it is we’re going to be able to fill those gathering units and then we’re going to be able to redirect that capital to more productive uses as well.
Murray Auchincloss: Great. Thanks, Kate. On LNG build-out, we’re 23 in ’23, 25 in ’25 is the target. We expect to get additional volumes, as you say, from Venture, Tortue and Beach. If you go check the numbers, those add up to weigh more than 25. So that’s why we feel very comfortable with 25 in ’25. I’ll be surprise different not higher than that, but let’s not set too hard at performance contract for Carol in the room. As far as Venture itself, it continues in commercial dispute. I’m not going to get into any details on it other than to say that we will enforce our rights rigorously. One more question in the room, then we’ll go back to the lines.
Kim Fustier: It’s Kim Fustier from HSBC. You wrote off the vast majority of your initial $1.1 billion investment into U.S. offer win that was the Equinor JV. What’s the path forward for those projects? And do you think enough has changed in your decision-making processes to ensure that something like this doesn’t happen again going forward? Secondly, I just wanted to ask about the robustness of project economics in the low-carbon space in the U.S., if the incentives were to change for whatever reason?
