Torgrim Reitan: There were two more. You had four questions. Yes, buyback and also distribution, yes. Okay. So a two-year program of share buyback, 10% to 12%, 6% this year, meaning between 4% and 6% next year. So we have given ourselves a little bit of flexibility. When that is said, we have tested what we put forward across a broad set of price assumption and all of that. And we are very, very committed to honor that. So between 4% and 6%, it will be. There was one more here on.
Paul Redman: The bottom end of your gearing range. Is there more route to…
Anders Opedal: What we have presented today is the range for 2024 and 2025, and we will come back to this in due time.
Bard Glad Pedersen: I have to ask now that you limit to one question because I have several down the list and we will start with one on the line.
John Olaisen: John Olaisen, ABG. Yes, thanks for taking my question. I wonder what kind of IRR should we expect for the next few renewable projects that you will be announcing. Or I guess what I’m really wondering about is if you are willing to take on more new big wind projects? For instance, [indiscernible] with only 4% to 5% real returns.
Torgrim Reitan: If you were able to hear it, if not, we will try to get it and then we take a…
Anders Opedal: I think I heard it. We have guided on a real unlevered guided range of 4% to 8%. And this is what we do when we prioritize project and we’re using that for our capital discipline.
John Olaisen: But the Empire Wind is only 4% to 5% returns. I just wonder, if you prioritize the best project first. And the first project at 45%, should – what we should expect for the next few projects that you will be announcing? Will you be willing to take on – still to take – willing to take on the low end of your guidance return projects?
Anders Opedal: I’m a little bit unsure. Did you hear the question, Torgrim?
Torgrim Reitan: I think, John, you asked about if we are accepting Empire Wind, does it mean that the rest are below that in return type of question, and I can assure you that this is not the way a project portfolio work that these things move around on this level. I think the Empire Wind project 4% to 8% forward-looking economics is clearly what we aim for, and clearly important that we need to see that. I think also the life cycle economics of the U.S. project taking into account, the divestment to BP will also bring this into the range. So I mean, clearly, we would have liked to see better returns and we are sure that we are going to create some additional returns from that project as we go. Beyond that in the project portfolio, there is actually a healthy return in the offshore wind portfolio.
Bard Glad Pedersen: Peter Low with Redburn.
Peter Low: Hi. Thanks. It’s Peter Low from Redburn Atlantic. Yes, so it’s a question on the 2030 cash flow guidance. You made the point that, that has increased versus last year. Can you just run through where those increases have come from because it wasn’t quite clear from the presentation? Thanks.
Anders Opedal: So you’re asking about the increase in cash flow from operation in 2030. Yes. So basically, what we do now is to invest in oil and gas, this will give $20 billion cash flow from operation on average all the way to 2030. We’re investing on top of our investments in oil and gas into renewables and low-carbon solutions. And the $3 billion increase in cash flow from operation after-tax in 2030 will come from the renewable business and the low-carbon solution. I think in one of the slides to Torgrim, he indicated also some of the projects that will contribute in this.
Bard Glad Pedersen: Will go with Yoann Charenton from Societe Generale.
Yoann Charenton: Thank you. Yoann Charenton from Societe Generale. A quick question on distribution, if I may. You are providing transparently the three scenarios that you use, but you tend to focus on the central scenario. And did I hear correctly during the presentation that based on the base case scenario for commodity prices, you don’t expect any potential for continuation of the extraordinary cash dividends beyond what has been announced today in the future? And when it comes to buyback, do we need to see basically TTF prices close to what is shown on this base case scenario for you to be able to deliver on the 10 billion to 12 billion share buyback program in the coming two years?
Anders Opedal: Okay. So we are today providing a very competitive capital distribution, where we increase the ordinary cash dividend with a 17% based on the outlook we are providing with growth in cash flow over the next year. And we also, for the first time, are very clear on our intention to grow this over time. As Torgrim said a little bit earlier today, is the extraordinary dividend, it’s based on past earnings, and we will have $0.35 this quarter and the next three consecutive quarters, but we will conclude this after the third quarter 2024. When it comes to the guidance or the share buyback of US$10 billion to US$12 billion, we have tested this in a different price scenario. So we are very confident that we will deliver this. This range is based on the outlook, but also the strong confidence we have in our execution capabilities.
Bard Glad Pedersen: Lydia Rainforth from Barclays, please.
Lydia Rainforth: Thank you. And so just following up on that, is the idea that the cash returns now are independent for the next two years of where the oil prices and gas prices are? Or is there some volatility there? And then secondly, sorry, but the idea of – you gave me 2030 international production, but I couldn’t see 2035 international production. And obviously, the business will become less NCS and more international, more low carbon. Does that present any kind of cultural or organizational factors that you need to think about?
Anders Opedal: So Philippe, you want to – I wanted to allude a little bit on the international portfolio, particularly the growth to 2030, but also how it would evolve after 2035. And I have to admit I forgot your first question now.
Lydia Rainforth: [Indiscernible] buy back on the dividend…
Anders Opedal: What we have presented today is increased predictability in the capital distribution, meaning that we will grow the dividend with $0.02. In addition, we will deliver the capital – the share buyback of US$10 billion to US$12 billion with $6 billion for 2024 that we are really confident of.
Philippe Mathieu: Can you hear me? Yes. On the international portfolio. So we have two peers, the growth to 2030, 50% CFFO growth. Beyond that, to 2035, we’re kind of looking at CFFO level more or less stabilized at the 2030 level. The growth we’re talking about in terms of to 2030 is we call it, quality growth. It’s all about the high grading of the portfolio. So think about the divestments we did, the acquisition of Suncor in the UK, the FIDs have been taken on the project. All of that results in two things. One, an increase in production of 100,000 between 2024 and 2030 that contributes to part of the CFFO increase. But the main part of the CFFO increase is coming from the increased quality we have in the portfolio. So basically, through these high gradings, we are shifting and replacing the legacy mature assets with next-generation assets.
And these assets are generating more CFFO per barrel, and they have lower emission. And that is what’s giving us in totality, the $5 increase in CFFO per barrel from today to 2030.
Anders Opedal: And then your last question about being a broader company, what does it mean for the internal employees, the culture, we see that is really the people that started in oil and gas that is now developing both the offshore win, but also the CCS and the hydrogen. It’s the same skill set you basically need for the transportation and storage of CO2. You need a reservoir, engineers, geologists to petrophysicists, I’m a former petrophysicists, I’m very happy about that. You need the pipeline engineers, et cetera. But at the same time, as we broaden out, we will do different things. We will do work differently across the company. So then it’s really important to make sure that we are talking the same language. We have the same purpose, turning natural resources into energy for people and progress with society.
That really creates the proudness in the company and that we’re actually depending independent of where we work in the company, we are actually working towards the same purpose. And this is what we’re working on. And we see actually when [indiscernible] is recruiting, and we have recruited more than 4,000 people over the last years is really being a part of a company where you can be a part of the energy transition that attracts new young people.
Bard Glad Pedersen: Thank you for that. We are now well on over time. And the list keeps becoming longer even as we take. So what I will ask you to do is to take your questions to the breakout sessions. Anders and Torgrim, will also be in one of the breakout sessions and the remaining questions we can take there. Then just thank you for your attendance and your engagement in this plenary session. We will move now towards the breakout sessions. And I just ask you to exit through these doors, go to the left through the corridor and then to the left again. Those of you who have signed up for the breakouts, you have a letter on your badge, A, B or C, and that is the room where you will start and then the EVPs will rotate between the rooms so that you have the opportunity to ask questions to all of them. So with that, we say thank you all for joining this event and see you then in the breakout sessions.
