Wael Sawan : Thanks, Sinead. And Michele, to your second point, I think if I start just by reemphasizing our conviction in the growing demand for LNG going into the future, I think underpinned both by call it, energy security considerations in a place like Europe, but also in Asia, continuing to see very strong demand as well as to replace the declining domestic gas in several countries in Vietnam, for example, the Philippines and others have become recently importers of LNG as well. So, there’s quite a lot of latent demand. And I think what you will find is that as the price as is happening at the moment, starts to stabilize again and the market fundamentals reassert themselves, you will see a lot of that latent demand starting to come back to the market.
So, I think that in the first instance, just gives a lot of confidence around the demand profile going forward. On the supply side, for the next year or so, there’s very little in terms of new capacity coming in. But indeed, you see that stepping up both on the American and the Qatari side predominantly into the second half of the decade. As Shell, as you know very well, Michele of course, we play across the commodity exposures. And so, for us, it’s the ability to be able to pick up from Henry Hub and to be able to be exposed to brand or indeed across TTF and JKM and others. And so, it is no bad thing to have a period of time with more supply coming into the market because it allows us to contract on the side of offtake agreements, which we have done in the past.
And so, we’re not looking to bet on one period or the next. What we are looking to do is to continue to build an advantaged portfolio that allows us to take advantage of those cross-commodity exposures. And that has been the power of this LNG business for us and will continue to be. Thank you for the questions. Luke, if I can go to the next question, please?
Operator: Our next caller is Biraj Borkhataria from RBC.
Biraj Borkhataria : Thank you, taking my question. The first one is on the dividend. And I guess you’ve raised your dividend 2 times into June and 4Q. I’m trying to understand what the cycle is from here going forward. I guess, if I think about the two reasons you’d raised the dividend, one is the underlying growth in the business and then there’s a share count reduction in the buyback. So, should we assume you do it once a year and combine both into one going forward? And the reason I ask because typically predictability is quite important there. And then the second question is just on the Venture Global issues. This has been ongoing for a few months now. We don’t really have clarity on the sort of process or the timing and so on.
So obviously, seen the letters flying around between the various parties and indeed, anyone who’s looked at the export data can see that the project has been actually much more reliable than other projects. And if you think about the ARBs between U.S. and Europe and the gas side on the over the last two years, you could be talking about multibillions in lost earnings per share. So, it seems like a strong stance that you have. I understand this is a legal process, but can you talk about what happens from here process-wise and then the potential outcomes thereafter?
Wael Sawan : Great. Thank you for the questions, Biraj. Let me start with the second one and then go to Sinead on the dividend. I think you characterized the issue well. I mean as far as I see at the moment in terms of what is publicly available, Venture Global have, I think, sold around 250 cargo, so far, 250 commissioning cargoes. And what we see is that the plant is at or near capacity and has been consistently. So, we’re very much focused on continuing to enforce our legal rights and protect the sanctity of contracts that are there. I won’t get into the details of the legal proceedings. Suffice it to say that we have pulled on the lever of arbitration that exists for us and continue to have the required discussions to be able to fundamentally point out that this is not just an issue between two counterparts.
Actually, it’s many counterparts, all of whom are not receiving the offtake commitments that Venture Global had committed to. But also, it starts to undermine the confidence in U.S. LNG for the longer term, something which, of course, with the recent announcement of the pause by the government, by the U.S. administration, just continue all to erode that confidence in the longer-term potential of U.S. LNG, which is a real shame, I think, given the potential it has. Let me pause there and maybe ask Sinead to cover the dividends.
Sinead Gorman : Indeed. Thank you, Biraj. And indeed, we’re very much focused on ensuring we have a compelling distribution to our shareholders. And actually, you saw, of course, in 2023, some $23 billion of distributions back. But you raised the point that, we did two, actually increase our dividend by approximately 20% last year, what you’ve seen this quarter is 4%. And of course, many of you asked during Capital Markets Day last year, would we do something further? Would we do a bigger hike at this time of year? And we were very clear now, we were very clear, we will say what — we will do what we will say. And in effect, what we told you that time was 4% progressive and that we’d be very much focused on buybacks. And that’s pure and simple just a preference towards buybacks, as you know, because of the value lens just given where they are in terms of price, number one.
And secondly, of course, that we’ve set the targets out there to say it is creating per share value. So that’s where we’re focused as well. So that should help with predictability. And if you look at the buyback range, it’s been pretty predictable over the last couple of quarters. So, what you should expect from us is if we’re going to say something, we will do it thereafter. So, I hope that helps.
Wael Sawan : Thanks, Jane. And thank you for the question, Biraj. If we can go to the next question, please, Luke.
Operator: Our next caller is Oswald Clint from Bernstein.
Oswald Clint: Yes, the first one, just on the slides, some good slides there on progress relative to last year’s targets on the free cash flow growth. You have the 6% up to 2013 to 10%. You’ve priced normalized those, which is helpful, but I think you’ve removed the numbers from the y-axis. We’re playing around with it, and it looks like over $25 billion price normalized last year, which I guess is the target for next year. So, the question is, are you surprised by this free cash flow delivery? Was an expectation that might be front-end loaded? Certainly, feels like the 2025 target is well underpinned at this stage. And then secondly, just on integrated gas and LNG, again, probably more 2024 focus, if I could. I mean, the East West spread could be a bit tighter this year.
