Sinead Gorman: Happy to. Indeed, thanks, Martijn. In terms of trading and optimization, particularly this quarter, we saw a really good, results from LNG trading and optimization, it’s a pretty exceptional quarter. Q4 tends to be very good, as you know, for them. We saw that repeated again. You are right. We said 2% to 4% in terms of Capital Markets Day in terms of the uplift that comes through. It’s very difficult to guide quarter-on-quarter, of course, because there is that volatility that comes through. The way I tend to look at it is, it tends to be linked to either the opportunities that we have or in effect weather. What we tend to see, of course, is that, with respect to the LNG side set up for the northern hemisphere that Wael mentioned earlier, Q4 and Q1 tend to be the stronger ones.
Not surprising as gas at the end of the day, so this is about the winter there and of course, about the volatility in ARB opportunities, which were very strong as he already alluded to as well in Q4. What we see in chemicals and products and particularly on the product side, of course, is that although there’s a weather element of that, So, of course, with gasoline, driving season, et cetera, and diesel, you see much more. It’s about, the opportunities that come about. Q4 tends to not be there, and that’s why we get that volatility over it. So, we see that 2% to 4% is a pretty good representation, but you’re right, IG tends to be on the higher end of the to 4% within that range, and you tend to see the chemicals and products more middle to lower end of it, so it gives that blend across it.
In terms of the disposals, you talked about particularly, Nigeria, what are you talking about there? Well, in terms of the reserves, just to give you a bit of a feel, it’s less than 5% of our reserves. But as we know, when we talk about any of these barrels, it’s less than a 100 kboe day as an example. But, of course, it depends on price, and it depends on your ability to get paid as well as it comes through. So, each barrel is not created equal, and I think that’s very much the case in terms of Nigeria. So, we’re not worried about in terms of the impact coming out of the cash flows. And, actually, when you look at the disposals we have announced and the disposals we’ve already done, that growth element that Wael and myself have both talked about, whether it’s Timi, Vito, LNG Canada, all of those different ones coming through, they more than exceed the cash flows from the divestments, which is the key point to take away here.
Operator: Our next caller is Lucas Herrmann from BNP.
Lucas Herrmann: I wonder if I could push you a bit on chemicals or a little bit more on chemicals or maybe you could help me out. Wael, looks like you lost about $2 billion at the EBIT level on Chemicals this year. The losses were larger in the fourth quarter than they were in third, despite your indication indicating margin being improved and the comment that two of the three trains, et cetera, at Monaca are working. Can you help me understand, as Monaca comes on, hopefully, as Singapore goes out? How do I think about the progress that one might expect to see in terms of EBIT, cash flow improvement across that business? And which chunks of the business are actually making money at the present time, if any? Just walk me through the business and give me help me determine, how to think about the profitability or otherwise the ones likely to see as we go through this year and try and leave the macro behind, which I don’t think is going to help you greatly, unfortunately?
Wael Sawan: Was that it, Lucas? Have I missed anything that you wanted to ask as well?
Lucas Herrmann: No. That was probably far too long anyway, Wael, but appreciate any insights.
Wael Sawan: I’ll give a perspective and then invite Sinead to also add if needed. Look, I think, of course, the performance of chemicals has been something that is very much in the spotlight for us. And we haven’t tried to sugarcoat that even as far back as Capital Markets Day, and we still realize we have a long journey to go there. I’d say there are three key levers that we are pulling there, Lucas. One, is indeed the, the fundamental is making sure that the $14 billion so or so of capital employed in Shell Polymers Monaca, the Pen Chem facility, are generating the return. You don’t see a lot of that coming through in Q4. You’re right, because Q4 was actually those units were down in Q4 as we were looking to complete all the maintenance work on the cracker itself before we were about to bring up the third, trying and to repair things, that we had discovered through the startup process.
And so, that startup of those units was, I think, towards the tail end of last year, in the December period and have gone through into the January period. And as I earlier said, the third train is in the process of starting up, so don’t expect much at least for the first few weeks coming out of it until we’ve ramped it up. What we have said and we haven’t changed our guidance is that, you should expect $1 billion to $1.5 billion of EBITDA from Monaca, one, it’s up and running, which is not going to be in 2024. It’s more likely to be in 2025, 2026. That’s when you should expect that. The second key lever that we are using is that we’re deploying, of course, is the portfolio. One you talked about — I won’t address that. That, of course, is bleeding, and therefore, the sooner we can move on that portfolio move, we will move the better.
We are also looking to high grade our portfolio through something like the recent announcement on Rhineland, where we are shutting down one of the crackers and converting it into a high-quality base oil unit that will supply roughly 40% of Germany’s needs. That portfolio transformation is also ongoing. And then thirdly, there is a cost component. We just need to get sharper on cost. And so, what we are doing there is, for example, reducing our IT spend there, as part of a broader corporate focus program on IT, where we have in essence, reduced some 35% of our IT contractors, some 3,000 people since middle of last year and really getting much sharper on where we want to focus our scarce IT dollars. We have recently announced a significant downsizing of the commercial team in chemicals, down by some 25% headcount.
