Amy Wong: A couple of questions from me. The first one is looking at your operating expenses. It seems like it’s been creeping up across the group. So could we get a bit more color on what’s happening with underlying OpEx and whether management has plans to address that? And then my second question is unrelated, but it’s related, and it’s more about your Upstream and Integrated Gas business, particularly your exploration strategy. It’s not an area we hear a lot about on your exploration there. I mean a couple of years ago, you told us that you had a commercial resource base of over 20 years of production. I’m just kind of rolling that number forward. Where do we sit there?
Wael Sawan: Amy, thank you. Do you want to take both of these?
Sinead Gorman: Sure. So on the OpEx or operating expenditure, Amy. So for this year, it has gone up, where it’s sort of some 39 billion. What we’re seeing there is, number one, there’s a bit of a Q4 effect, which is always there related to just some of the costs that tend to come through. But if I take a step back because, of course, it’s one that I watch very closely. When you look at it for the full year, what are we seeing for that increase? We’re seeing inflation hitting. It really is. We’re seeing that come through in just across the different cost bases. We’re also seeing, of course, our D&R or decommissioning and restoration. We’re spending more in that space as well. That’s good expenditure, but it’s also an element of inflation in there as well.
We’re also growing. So a number of those new investments that have come in, that OpEx for those new ones at the start is just more. We have to get on top of that, and it’s higher than we’re seeing in terms of the divestments that are coming through. So that’s flowing as well. And then finally, just the same as everyone else, the utility costs, of course, have increased this year. We’re seeing it flow through our own results. Are we happy with it? No. Will it be an area of focus? Yes. In terms of your second question, which was really around our exploration strategy, we have a great exploration team. And they’re still very much focused on various areas. You’re seeing some of the progress coming through in terms of Namibia and some other aspects as well.
What you we’re talking about specifically, I’m going to take it back to sort of our reserves numbers there as well. So you’ll see our reserve replacement ratio, of course, at 120% for this year as well. But what I would look at there is we’ve often talked, of course, and you’ve heard us say many times about volume over value. But fundamentally, we want to see the longevity of our Upstream and IG businesses. These are fabulous businesses, and they’re generating great returns, and we’re very much focused on that. The reserves numbers that we see coming through, those are very much around the requirements that you have, the SEC reporting, and we adhere very, very closely to that. Of course, it does mean that some of the things just don’t flow through in those numbers but are still producing and making us money.
So very clearly, it is value over volume. Yes, so I hope that helps.
Wael Sawan: Thank you for that, Sinead. And thanks, Amy. Giacomo? Dan, I understand Giacomo is next.
Operator: Yes. The next question is from Giacomo Romeo at Jefferies.
