Welcome to the BP presentation to the Financial Community, Webcast and Conference Call. I now hand over to Craig Marshall, Head of Investor Relations.

Welcome to BP's Third Quarter 2018 Results Presentation. I'm Craig Marshall, BP's Head of Investor Relations. And I'm here today with our Chief Financial Officer, Brian Gilvary. Before we begin, I'd like to draw your attention to our cautionary statement. During today's presentation, we will make forward-looking statements that refer to our estimates, plans and expectations. Actual results and outcomes could differ materially due to factors we note on this slide and in our U.K. and SEC filings. Please refer to our Annual Report, Stock Exchange Announcement and SEC filings for more details. These documents are available on our website. Now, over to Brian.

Thank you, Craig. It has been another quarter of steady progress against the targets we laid out last year. The focus on safe and reliable operations and strategic delivery, alongside an improving price environment, has driven strong underlying earnings and operating cash flow. We'll start today with some comments on the macro environment before moving to highlights from the quarter and then covering our financial results in more detail. We'll then provide an update on our operational progress, including the status of our BHP transaction before finishing with a reminder of our financial frame and guidance for next quarter and the full year. We'll then take time to answer your questions. Looking at the macro environment, with the oil markets in a more balanced position, OECD commercial stocks have declined to below the 5 year rolling average. U.S. crude and product stocks, which account for around 40% of total OECD inventory, have reduced significantly over the last year to the middle of the range. With lower stock levels, the oil price remains volatile to any uncertainties, particularly around supply and geopolitics. Recent factors include the impact of U.S. sanctions on Iranian exports, supply disruption from Venezuela, together with production uncertainty from Libya and levels of spare capacity within OPEC In the U.S., infrastructure constraints, particularly in the Permian, have slowed title growth. These uncertainties could persist well into the first half of next year, supporting wider Midland crew differentials. Similarly, pipeline and rail constraints affecting the movements of Canadian heavy crude between our Alberta and the U.S., are driving wider WTI-WCS differentials, which are expected to be sustained over the coming months. In gas markets, low levels of storage capacity in the U.S. have driven Henry Hub prices closer to $3.30 for the first time in more than 6 months.…

[Operator Instructions]

Okay. Thank you again, everybody for listening. We're going to turn to questions. Just a reminder, as usual please limit your questions to no more than two per person so everybody gets a chance to ask one. And we are going to take the first question from Christian Malek at JPMorgan. Christian?

Hi. Thank you, Craig and thank you for taking my questions. Two questions. First while we welcome a fully cash-funded transaction of BHP, the only caveat, sort of highlight that this revised frames arguably makes your more basically long [indiscernible] but just speaking secure $5 billion to $6 billion of divestments in order to reduced debt. And your press release, you are assuming oil prices remain firm, expect to fund the deferred consideration with available cash rather than issue equity. So first question is can you risk - price continue to be volatile? Is it fair to say that you allow your gearing to material over top end of your band and you then move lower? And second question is shifting perhaps to more half glass full. I'd like to understand the scope enhance Tortue return in 2019 I know you talked about that, Brian, on your introduction. Is it likely to be triggered through target quantum of debt reduction? First, as you mentioned your expectations to move towards the middle of the band by end 2019. So, just the part of that upside would be very interesting. Thank you.

Okay. Thanks, Christian. So I think the way to characterize it is we have the option when we announced the deal at the beginning of July to do this in an all cash basis or on the basis of 50% shares, 50% cash. What we've come out and said today is that we will now look to do that in all cash basis. It's a much simpler transaction than we would've expected in terms of having to issue shares. And what that will create is much lower costs in terms of final transaction value. I think the chances or probability of a major oil price correction, which is probably what we'd need to see for gearing to go significantly above the 30%. I think right now, it's not clear it will reach through 30% next year depending where the absolute oil price is. I think it's probably worth just picking up. Given oil price stock levels, and it's been four months since we announced the transaction, given oil price stock levels have now drifted down towards below the five-year average, oil is now more prone to oil price movements and potential oil price major movements in either direction. So I think you could see plus or minus $5, plus or minus $10. It feels pretty firm right now. I think we saw it get ahead of itself through this quarter, particularly ahead of the Iran sanctions as we saw Iranian oil come off the market relatively quickly. We're starting to see some of that oil actually flow whether it be into the tank or into storage or domestically within Iran. But OPEC is sitting where it was vis-à-vis their quotas back in June. So I think it's unlikely we're going to see a major correction. You'll have to see a fairly significant correction. And for this year, we think by the end of this year, we will be balanced around $50 a barrel. That will naturally go to $35 to $40 a barrel on a point forward basis. And so, I don't think there's a concern of it go majorly above 30%. It may drift to the top end of the band to the first and second quarter of the payments, but I don't think it will go beyond that. And then in terms of gearing, as an objective, if that's not only an objective in itself, it will just naturally drift down. I know that we've said we will reposition the divestments now to pay down debt. We will start to do that going forward. So frankly, it will naturally drift towards the middle part of the band at around about $70 a barrel, assuming that's where we are for next year. But we weren't actually setting the plan for next year until January time.

So January. So your discussion around buyback would have to be approved around the sort of January, February time supposedly before year end?

You know, buyback so what we've also said, but this is the scrip buyback program was always meant to be built over time. And therefore would take some time. So for this year coming into 2019, we have committed to make sure that all the scrip is repurchased by the end of the year. We would've had the strange position through the fourth and first quarter where we'd be issuing stock and buying back scrip dividend, which we all have been counterintuitive not really making a lot of sense. So we'll probably slow down our scrip uptake through the first half of next year, but look to offset everything we've issued since the fourth quarter of 2017 by the end of next year.

Thank you.

Okay. We'll take the next question from Irene Himona at Société Générale. Irene?

Thank you. Good morning. I had two questions. First, Brian, you referred in your prepared remarks to the oil market, oil price volatility. I believe Bob was recently quoted in an interview saying that in your project, sort of, investment appraisal process, you now tend to use 60 to 65 and 50 to 55. Was just wondering if you can elaborate on that topic? And then secondly, Upstream unit production costs, up a little bit, 1.5% in the 9 months. I wonder if you can please share your expectations for that metric in 2019 as you incorporate BHP and if prices remain where they are? Thank you.

Thanks, Irene. Maybe I'll come back to the question of 60, 65 in Bob's recent comments because I received a lot of questions about that this morning, so I think I'll just take this opportunity to clarify what Bob was talking about in terms of the Oil & Money Gas Conference in 60, 65. In terms of unit production cost, it's very simple why you've seen a slight uptick. One is we had a big maintenance schedule through 3Q which we typically allude 2Q and 3Q in the Upstream. And also, obviously, with the higher oil prices, you start to get PSA effects come through the volumetric measures, which therefore reduces the denominator. So as oil prices go higher, that volume number comes down. So you will see a little bit of movement around that. But the overall trend is still in the same direction which is downward. And a lot of that's been driven by technology. And another number of things that I think Bernard will take you through in a lot more detail at our Investor Day in December. So we'll get to more granularity around that but the overall trend is still down. In terms of 60, 65, I think Bob was talking about so we run basically 2 or 3 numbers, but the ones that we're really focused in our investment case is $50 a barrel and $75 a barrel. And I think basically where Bob was basically describing where the middle of that range is, I think he was actually referring coming into this year, we normally set our plan, our oil price for a 12 month period, which just as well helps us manage the cash flows within that 12 month period. This year, we set that at 55. A few weeks or months ago, we may have thought about what oil price was set for next year, something around 60 to 65 seems like a conservative number that we can start to plan on that basis. But the 60, 65 does not reference anything around specific investments that we're making. We run those cases at $50 and $75 a barrel and its $75 a barrel real over a long period of time and 50 is the sort of base case that we run everything at. And that's how we look at our projects.

Thank you, Brian.

Okay. Thanks, Irene. We'll take the next question from Jason Kenney at Santander. Jason, good morning. Please go ahead.

Hi, Brian. This is Jason, Santander. Just looking at your indicator sensitivity and I'm wondering where the Downstream indicator, and I think it's $500 million operating profit to $1 per barrel refining indicator. I'm just trying to see how that reflects the widening crude discounts that you can get in Canada. I know they're not necessarily specifically Downstream or Upstream, but just trying to gauge if we can get a better sensitivity idea quarter-to-quarter or even year-to-year on those guidance by 2019 in particular?

Yes, that's tough to do. But what we have done is so in terms of guidance, you have to remember, John - Jason, within any particular quarter, there's not a lot of moving parts across the business. And so therefore, the rules of thumb are really designed for in a stable price environment. So an oil price of X [ph] that doesn't move by more than a few dollars within that year, then you could reasonably use these rules of thumb. When the oil price sort of goes from $50 to $80 a barrel, it's really difficult to use those rules of thumb. You're not going to get a perfect dollar for dollar move on those rules. That also applies in the refining space. We have seen huge differentials between Canadian heavy and WTI, up to $40, $45 a barrel so far this year. They looked like they're sort of set in terms of what we're expecting going forward. We'd still expect a differential certainly for this quarter and it's a next year higher than the average that we've seen over the last two or three years. You also have to then take in account the fact that of course, we have a portion on the pipeline. So we can't always run 100% heavy crude out of Canada. And we have an apportionment even in October, which is the public domain we were constrained. And we had certainly could access only 43% in October, 45% in November. And that's all about recovery of sink reproduction. So it's pretty hard to give you a rule of thumb around that. But needless to say, the Whiting investment was done at sort of mid-teens in terms of the assumptions around heavy versus WTI. So something around $14, $15, $16 is what we'd assume in the economics back when the oil price is down at sort of 50, 60. We're seeing differentials significantly higher than that, but we have no specific rule of thumb that we can give you other than the sort of rule calculation you can do of $1 a barrel across the refining margin may give you certain uplift. And I think people are trying to come with estimates of that in the past. But we have nothing that we can sort of stand behind as a rule of thumb because there are so many other moving parts in the slate of the refinery and what the products look like to really give you anything which should be helpful in terms of those calculations.

Okay. I mean it is a great resort in the third quarter. Do you think the fourth quarter could be similarly stunning?

No, I think third quarter in Downstream, you had supply and trading coming back to an average quarter from what was a small loss in the second quarter. And you had high availability, which allowed us to capture those high refining margins. So really, it's about - if the kits is working remember, right in the middle of the turnaround with Whiting today, if the kit is back running at the sort of levels we saw in the third quarter. But I think sustaining 96% availability from my humble experience of refining and marketing over 30 odd years, that's a pretty tough measure to sustain. The guys will try and do that through the fourth quarter. But I don't think you necessarily see that repeat into the fourth quarter.

Okay. Thanks very much.

I think, Jason, just to add to what Brian said as well, we obviously talked in the second quarter about the Whiting refinery being a seven-week turnaround. That kicked off around the middle of September. So clearly, it's weighted more towards the fourth quarter event. So in terms of capturing the differential, clearly, the team there works hard to do so. But there's heavy weighting in the turnaround in the fourth quarter, expected probably to end around mid to end of November.

Okay. Thanks.

Okay. Next question from Michele Della Vigna at Goldman Sachs. Michele?

Thank you for taking my question, and congratulations on the strong result. I was wondering whether the improved tax guidance for this year to below 40% is sustainable in the coming years as well in a similar oil price environment. And secondly, I was wondering if you could give us an update on the remaining Macondo business and economic loss claims. Thank you.

Yes, well, so Michele, tax said this year over 40%. We've steadily moved that down. Now we're saying below 40%. It is purely a function of the portfolio mix that we have today. And as we get stronger earnings out of Rosneft, because those earnings come through on a post-tax basis, that will reduce the overall underlying effective tax rate. So obviously, the higher the Rosneft number, that will weigh down - that will be a contributing factor towards a lower effective tax rate. But it's really about mix and the mix of the barrels and where the production is coming from. We haven't set guidance yet for next year. We'll go through and do a portfolio assessment. We'll look at an oil price planning assumption for the 12 month period for next year, and then we'll come up with the tax rate. I don't think it's going to be wildly different from the 40%. It probably will still be over 40% for next year, but we'll come back with guidance on that at part of the 4Q results. And then on Macondo, in terms of the liabilities, we are down to the final series of claims. The majority, I mean, the vast majority which have now been processed but there is a process with the Plaintiffs' Steering Committee, Court Supervised Settlement fund that allows claimants that have been denied to resubmit. And there will be an either one, two or the third cycle of resubmissions. But we're now in the sort of de minimis. And this is probably one of the quietest quarters that we've had around Macondo. Bell claims for this quarter, I think we're around about $50 million is what we've taken through in terms of provision, but we are in the final sort of I could say 22 claims but then there's a recycle effect that takes that number to 200. But there's a series of claims that have been denied and get recycled in the system under the original settlements. But sort of the de minimis and legal game now of whatever is now left on appeal and then we'll fight those appeals through the Fifth Circuit. And the Court of Justice appropriately going forward which is what we have been doing up to this point in time.

Thank you.

Okay, Michele, thanks. We'll move next to Lydia Rainforth at Barclays. Lydia?

Hi, guys. Good morning. Two questions if I could. The first one on the Upstream side, I mean, given sort of what was pretty flat production quarter-on-quarter and pretty flat prices, there was quite big uplift in the profit there. Can you just talk through a little bit more detail on that drivers behind that? And then the second one, just on the divestments, it has been relatively quiet on the divestment front. So just wondering what confidence you could give us around that $5 billion to $6 billion and should we think about it being more back-end loaded towards next year? Thank you.

On the $5 billion to $6 billion, great. Thanks, Lydia. In terms of looking at Upstream earnings and what was driving it, the majority piece of this was actually obviously off the back of the oil price, as realizations and its realizations more than price improved is a big lion's share of what we've seen come through. But something around about the same sort of level but just below that is higher sales volumes, particular coming out of Angola in the North Sea have been the big drivers. Because obviously these higher prices, some of those regimes, particularly in the North Sea, highly leverage to earnings at the higher price. So that's the basic driver. But it's basically one high reliability. We were up over 95% for Upstream across the piece this quarter. We had the production growth coming through underlying this quarter 7%, 6.8% and underlying production growth now for the year of about 10%. So Bernard and the team are delivering against what they said they were going to be delivering against, and we have the extra benefit this year particularly Thunder Horse and Western Flank B coming on-stream ahead of where we have them planned for next year and significantly below budget. So I think all of those things have helped with the momentum that you've seen come through that earnings. But I think it's really about having the kit running reliably has allowed us to capture those high prices and get those stronger net backs. On divestments in terms of this year's program of over $3 billion, it is completely back end loaded this year as it was last year. And you recall last year, we think the divestment proceeds are around about $4.5 billion with $3.5 billion coming through in the fourth quarter. It's going…

Wonderful. Thank you.

Okay. Thanks, Lydia. We'll go to Thomas Adolff at Credit Suisse next. Thomas?

Morning and Congrats on the strong results as well. Two questions for me. Firstly, on your CapEx guidance, now I'm quoting one of your peers. Equinox said $11 billion is a good medium-term number based on today's cost index. And if you go beyond that, you would overstretch the organization and impact on project execution. So I wonder in the case of BP, would you say if you go above $17 billion, it would overstretch the organization? I know you want to stay in the $15 million to $17 billion range, but wanted to understand whether that's also the sweet spot organizationally. And then secondly, in terms of LNG and FIDs, I wonder if you could give an update on Tortue LNG. What's still missing? Will BP be the sole off-taker has the development plan be approved and what when exactly do expect to take FID? Thank you.

Great. Thank you, Thomas. So what I would describe in terms of the$15 billion to $17 billion is that is a range, which has a huge amount of flexibility. But $2 billion is a huge amount of money in terms of flexibility what we can do. And certainly, as we've seen deflation continue to come through this year, surprisingly so given where oil prices are, we are still seeing I think technology driving a lot of deflation. But we're now seeing $15 billion for this year. I think at the start of the year, we're expecting this to be close to the middle part of that range of $15 billion to $17 billion. So we've done a $15 billion. We have a huge amount of capacity. But Bernard and his team have created, particularly in the Upstream, to observe BHP and be able to ramp their drilling program up as we go into next year. And we're going to start that process in the fourth quarter probably around Eagle Ford and maybe just touching Permian. But we're not certain on that yet, but certainly in terms of the Eagle Ford. So I think we have flexibility within the program. What in terms of the organization, the size of the organization. We moved to Central Projects Group many years ago back in 2009. That has really come to fruition the last three or four years as Bernard's got that team humming in terms of rhythm. And I would describe our rhythm that you start to get into with an organization that it gets into a rhythm of delivering projects every six to nine months then coming on-stream. You learn from all the things that you learned from the previous project and you take those learnings and move it onto the next…

Thank you, sir.

Thanks, Thomas.

Okay. Thanks, Thomas. Yes, let's go to Robert West at Redburn next, please. Rob?

Hi. Thank you very much. I'd like to start on production. I don't know where other people were in the quarter, but production number was a little bit below what I had in, flat year-on-year. And really Brian, I'd be interested if you could sort of check some exuberance results from that. Because I'm looking at the trajectory of growth still to come. So ramping Shah Deniz further, the start-up the Clair and West Nile Delta. And I'm wondering if I look at this quarter as quite a lot of growth from that baseline or should I look at the - is there something in this quarter that is negative in terms of the production that might continue going forward? So that was the first question. And the second one is just I'd just like to go back to the timing of divestments, the $3 billion that you've alluded to in your comments this morning. I think so far, year-to-date, the run rate of divestments coming through, it's under $500 million. And so my question is just in terms of the settlement of the $3 billion, can you just say how much more of that is expected this year or is it just announcing the transactions that you're aiming to do before year-end? Thank you.

Yes, let me just pick up the second part of that question because it's fairly straightforward. We - just like last year, we will announce basically effectively last year, we had $4.5 billion of disposals. $3.5 billion of proceeds came in the fourth quarter. We'll have exactly the same this year, wouldn't be that level, but it will be overall it will be over 3 for the year which was what we've indicated we expect to be over 3 and we'll be looking to close a series of transactions in the fourth quarter that will get us over that figure. So that's pretty well-underpinned. And we did say at the start of this year. It's a mirror of last year precisely the same. We set it, we back-end load it. It is back-end loaded. And so there is no changes in terms of that. It's exactly the same pattern that you saw last year. Then in terms of this...

That's firm?

I said we still expect. I can't be firm, firm because that will be giving you guidance, which I wouldn't be able to do, because it's a function of closing transactions. But we have indicated in all of our material today that we still expect to be over $3 billion for the year. If we didn't think we can deliver in the fourth quarter, we would've told you that. So it's not, but I can't be firm, firm because it's a function of what we get to announce through the fourth quarter and get to close. So things can always slip into January. That's always possible. But right now our expectation is we will have over $3 billion of divestments by the end of this year. Then in terms of production, I think maybe if we go back to the guidance and what we've told you before. If you take out the portfolio impacts of ADNOC, PAE, the sort of PAE transaction true-up and AGT. So you take those things out, the ADNOC concession which was in the last year wasn't there this year, it's significantly over 100,000 barrels a day of production that we had last year that we no longer have, because it's no longer in the portfolio. So we actually adjust for that. I think you'll see close to 7% underlying growth this quarter. And then we've signaled to you for 4Q is that BHP transaction comes in, that will be additional portfolio volume that will come into the mix. So actually we're seeing on an underlying basis, if you strip out the portfolio that's been divested or has come out of the base business, actually quite significant growth this year to the tune of about 10% underlying year-to-date.

Got it. Thank you.

Okay. Rob, thanks for the question. We will next go to Alastair Syme at Citi. Alistair?

Hi. Thanks, Craig. Thanks for opportunity. Can you just, Brian, can you update on the impact of IFRS 16 as you see it? And will you revise the gearing band or will you look to absorb it? And secondly, can you maybe give a sort of a bit of an update on the roadmap around the Downstream free cash target towards $9 billion to $10 billion by 2021? If I'm right, we're running at about $6 billion over the trailing 12-month. Thank you.

Okay. Thanks, Alastair. So on IFRS 16, there will be an awful lot of moving parts associated with that particular accounting standard. And I think while it was intended as a standard to give clarity around sort of the extended debt book, of course, it will move pretty much a lot of the lines of the P&L and balance sheet as a consequence. So it's going to be a little bit noisy for you all. What we will do at the end of this year as part of 4Q, we'll give you true-up of how it impacts each of the individual lines of the P&L and balance sheet. But it's going to reflect a lot. We will basically present all of the information on the pre-IFRS 16 and post-IFRS 16 basis. So at least you get clean line of sight and transparency on what's moving. We haven't made any decisions yet whether or not we will end up with the gearing on the old basis, i.e. because it's a non-GAAP measure we can define it, however, we think is appropriate in terms of our financial frame. But probably the most important thing about IFRS 16 in terms of the original intent is our cash cover ratio is unaffected by IFRS 16. The rating agencies already use extended debt in the calculations of cash cover ratio. So leases are already part of the extended debt book. So it will have no impact from a rating agency perspective, but it will create a lot of noise and clunkiness around each of the individual lines of the P&L and balance sheet. But we'll give you a very clear route map of what that looks like. And then in terms of - is that okay, Alastair?

Yeah. That's perfect. Thanks.

And then in terms of the target of $9 billion to $10 billion, I'll wait until we get to the end of this year. But against that target, I think we're close to $7 billion delivered with a further $2 to $3 to come but on track with the targets and the way in which Tufan laid that out to 2021.

Do you think it will be quite linear for 2021, Brian?

I think in the current market, what I will guarantees you is, it will not come firstly, along the lines of which we planned it. That's the one thing we've learned about the last seven quarters because it will be a function of whether how oil price or other factors are doing at that time. But that while I think you've seen Tufan and his team creating a Downstream is a huge amount of resilience to deal with various economic factors that may impact that business. And I think the biggest one of those was the way in which Tufan and his team have been able to neutralize the volatility of refining margins in their base business. So we could lay a plan out for you. We'll guarantee will not the follow the exact quarter-by-quarter trend of that plan. But I think what Tufan has created is a huge amount of optionality within his portfolio to manage that and therefore we have confidence around its delivery.

Thank you. Can I just clarify? Do you think the sort of macro environment the trailing 12-month is representative of what you've envisaged for 2021 in that target?

No, I think we already know we're in a very different environment. Because originally the whole environment we set for all the target is around $55 a barrel real now. And the upstream will take benefits from that in terms of the additional free cash flow we get from where the prices are today. We've got, I think I mentioned earlier volumes, I don't know it's a broken record, but volumes are back below the five year average or certainly close to five year average both on a macro, global economic basis and within the United States. So I think certainly, oil prices are pretty well-underpinned above 70 for the next sort of six month period or so. At least we can't see anything which would majorly move those out to kilter with that and may actually be some movement to the upside but I think plus or minus $10 a barrel is pretty tough to call it. By the time we get to 2021 I think there's a lot of things we could see more production coming on Lower 48.You may see some softening of demand although we're not seeing major demand-side correction at the moment if prices stay very high. But I think within in terms of the Downstream, we are seeing benefits right now, big, light-heavy spreads we're seeing with Canadian crude coming into the big machine coal, Whiting refinery which can take up to 320,000 barrels a day of heavy crude. It's clearly not at those sorts of levels given curtailment issues. So I think what I'd say Alastair is look, we've created a portfolio now which has a huge amount of optionality around that portfolio. So we're pretty confident with the targets we've laid out for you for 2021. We just may not end up delivering the same way that they were originally envisaged back in the start of last year. And we're already seeing that for at least seven quarters.

Okay. Thank you very much.

Okay thanks, Alastair. We'll next go to Henry Tarr at Berenberg. Henry?

Hi there and thanks for taking my questions. Firstly, looking at new FIDs, have there been any changes to the strategy in terms of contracting? So you're looking to sort of lock in low-cost for example or do you see sort of no reason to do this today? And then in terms of the portfolio, assuming that oil prices remain firm, gearing comes lower over the coming quarters, you have some flexibility there. Where would you and maybe this is a longer dated question, but where would you be looking to add to the portfolio should the opportunity arise?

That's great. Thank you, Henry. That's a good question on optionality. So in terms of FIDs, I think we would give 5 this year from memory which is around I think Oman, a couple in North Sea, India and Angola where we've seen five FIDs. I think what the organization has created now with Bernard's leadership and the non-exec team is a lot of our contracts are long-term anyway. So a lot of our rig contracts will be on a sort of 5, 7 year basis, on a rolling basis. So we've already been able to capture some of those lower rates. And we're certainly not seeing any inflation on the rig rate side right now. So I think we would look to contract and procure activity on a central basis across the suite of projects, and we will look to optimize across that piece. And that's the whole purpose of this, sort of central projects group and the central procurement group in the Upstream to do those things. So I think we've already got locked in contractually a lot of activity associated with some of these projects. That sort of point one. And then in terms of opportunity set, and I think, we announced in September we've acquired a license to the Santos Basin. That will be an example of a sort of step out for us where we do think there's a huge opportunity for us in a country like Brazil where we've seen some major economic reform over progressive reform over the last 2 or 3 years. And we have a great partner there, Petrobras that we're working with. So that will be an example of the sort of areas where we would look to be stepping up and sort of increasing, but within the $15 billion to $17 billion frame that we've already laid out. And maybe just building on that, you will have seen already this year we've had new access in license around in - I talked about Santos Basin also U.S. Gulf of Mexico our traditional backyard. Mexico, the North Sea another one of our traditional backyards and Azerbaijan. So but that's over within the 15 to 17 frame.

Good. And just one quick follow-up then. With oil prices where they are now, are you seeing a greater emphasis then on exploration rather than acquiring barrels at this point in the cycle or?

I think it's a mix. I mean, you know, you always want to be able to find oil with your own drill bit or - through exploration. That's always the primary focus because ultimately, it will be the lowest-cost way to access resources. Equally, if you look at what we've just done on Lower 48, I think we've bought a very premium position, which we will definitely enhance value. And the more that we see those assets, we can see that. So I think it's going to be a mix going forward. But obviously, it would always like to find oil discovered resources through the drill bit.

Thanks. That's great.

Okay. Thanks, Henry. We'll next go to Jon Rigby at UBS. Jon?

Yes. Hi. Good morning, Brian. Two quick questions on one on disposals. So if I'm right, I think you count the Conoco transaction as a disposal. So am I right in thinking that the net cash in for the fourth quarter despite the growth disposal numbers not likely to be that significant in which case. I'm also right in thinking that disposals next year will be sort of an aggregation of that link to BHP plus, I guess, you probably want to continue to pursue the $3 billion ongoing disposal plan as well. So probably closer to 8 to 10 for 2019? And then just secondly linked to that, but sort of more philosophically is I think you keep talking about your 20% to 30% band. But it seems to me that over the last couple of years, BP has been wanting to be opportunistic in making acquisitions of assets and so on. I'm aware the Abu Dhabi transaction you issued stock. This one, you almost did and then have chosen not to because of the complexity and value and I completely agree with the decision you made on that. But wouldn't it be better all things equal, for BP to be running at 20% or lower so that you can do these kind of transactions in a fairly straightforward way? You just turnover your check book and pay for it and go home again?

Yeah. On that, I'll pick up the last part of the question. I think one of the things, John, I think we all need to reflect on sort of helps a little bit in terms of catching why we are where we are in that gearing band. First of all, 10% to 20% gives you a huge amount of flexibility. So that's a big $1 billion number that you have in terms of flexibility. We sit towards the top of that band, of course, because unlike other players in this sector, we've had somewhere close. By the end of this year, we'll be able to $14 billion of cash has flowed out as part of the Macondo, various Macondo settlements. And that stays with us on a sort of $2 billion next year then $1 billion a year after that is what we've sort of the guidance we've given you. So if you sort of correct it for that $14 billion, of course, you would be down at the sort of bottom end of that range, and so you have to recognize that. We will pursue deals which will be opportunistic, strategic. And we will look at the financial frame and where we are within the financial frame. The financial frame has given us huge discipline over the last 30 years. We've run with a very similar frame. It allowed us to manage the $67 billion Macondo liabilities over 2010 to where we are today. It's allowed us to manage the oil price correction, which we came into with about 13% gearing. If you remember when the oil price went from $110 down to $28 a barrel, and it's allowed us to go through that corrective phase, and it allowed us to actually come out with the BHP transaction. And…

Okay. Thank you.

Okay. Thanks, Jon. We'll go to Lucas Herman at Deutsche Bank next. Lucas, good morning.

Craig, thanks very much and Brian, good morning. Couple of project questions if I - or one project question if I may and then just a further question on Whiting. Brian I just thought if you could update on Shah Deniz and how the production profile on the ramp is going and similarly clear or how you expect the ramp to proceed as we go into 2018. And secondly on Whiting just conscious that in 2014, 2015 last time Whiting was down. Yeah the impact on quarterly results in the Americas business was pretty significant and pretty disappointing. I'm not expecting disappointment again but I just wonder whether you can give us some better indication of the contribution that you expect Whiting's downtime to see you said or the best phrased.

Okay. I'll yeah…

How much Whiting give up relative to the normal quarter? What should we be expecting rather than being shocked?

I think they'll be really difficult, Lucas, but I think I'll pass that question to Craig. We'll talk about projects. Shah Deniz startup ended - basically we started up end of June 2018. I think Bernard's taken you through this before but 26 development wells. We have two offshore platforms we have about 500 kilometers from memory of subsea pipelines. The Sangachal onshore processing and compression facilities are all new. And of course, that gives us the big expansion into the South Caucasus pipeline. Total peak production is expected to be 310,000 barrels a day and everything is going well with that project as far as I know. You'll get a lot more detail on that in December when Bernard takes you through where we are with this year's project suite and what the future looks like. Clair Ridge, we're still on track for 4Q. We are almost complete and ready to commission. We've got new facilities. We have 2 bridge link platforms on that development. It's a completely new development with some brownfield modifications around the original Clair Phase 1 and the Sullom Voe terminal. It will have 110,000 barrels of peak production. But we're right into the sort of winter now in the North Sea. So I don't think there are any guarantees. We expect its startup in the fourth quarter of 2018. But as we get into the sort of weather patterns of the North Sea between now and the end of the year I really couldn't say and we couldn't call it that closely. But right now, all things being equal, we expected it to come on-stream in the fourth quarter, weather permitting. Craig, on Whiting, I've got no idea what sort of guidance. I guide you to give you anything specific in the way of numbers but at least you could tell her on the turnarounds at least give a sense of the amount of weeks it will be out.

Yeah. So just repeating a little bit of what we talked about earlier, so the Whiting turnaround started around in the middle of September. It's forecast to go through to around the middle of November. If you remember, Lucas, Whiting has around400,000 barrels a day of capacity. It can run up to and probably slightly above 80% heavy crude. You've seen the heavy crude differentials this quarter running at around $24 a barrel and actually spot-wise, higher than that but obviously apportioned according to Enbridge pipeline nominations. So I think it's a matter of getting your calculator out, Lucas, and probably doing a bit of back of the envelope stuff. But it is a significant turnaround. It is for a duration of say around six or seven weeks. We're clearly playing into refining mark in margin that's leveraged Canadian crude and where accessing or rather in the case of turnaround, limited in terms of the access to the differential. So yes, that's probably about as much as we can say on Whiting. But it will clearly have an impact in fourth quarter.

All right, Craig. Thanks and Brian, so I just coming back to Shah Deniz, could you give any indication on production was through this quarter?

No, we wouldn't normally give you specifics by asset. We would normally, sort of, do that by on an asset basis. But I think, we'll get more of a sense of that at the Oman Investor Day in December.

All right. Thanks very much.

Okay. Moving towards the end of the questions. Penultimate question from Thomas Klein at RBC. Thomas?

Well, just a quick one for me, thanks. On divestments which have been discussed a few times, just wondering if you'd be willing to sell down your stake in Aker BP to hit your targets, given it's performed well since its original formation? Thanks.

We would definitely not comment on any specific asset, but I equally, while I wouldn't comment, I would say Aker BP has been one of those innovative investments we have made to take what was at the time of late life asset in terms of our own position, go and join with partners that we've trust and know well, and we have a long-term relationship with and I think what that has created is a huge amount of value for each shareholder base and for BP. So I could only say positive things about Aker BP, but it certainly wouldn't be, from a personal basis, something that we would look at. But we never say never with any assets. But in Aker BP, it has been a great investment, but it certainly wouldn't be one that we will be looking to sell. And actually, to be clear, we don't have any deficit to make up in the disposal program. We have typically a disposal suite of assets that would be non-strategic in terms of long-term hold position or things which we believe would be more value in the hands of others. Aker BP wouldn't fall into either of those tests. So now, we're very happy with the Aker BP investment.

Thank you.

Thank you, Thomas. And we'll take the last question then from Jason Gammel at Jefferies. Jason?

Thanks very much, Craig I had two on Whiting if I could, please. You did make reference to this being a pretty major turnaround. My understanding is that it involves at least the Coker and largest CDU. So my question is does this leave you well-positioned to really not have to do much in terms of taking Whiting down during 2019-2020 when a high conversion, high middle fleet yield refinery could be getting some pretty significant advantages from the IMO rules? And then the second question is you've referenced that you've been under apportionment on delivery of WCS because of the Enbridge line. Do you have any line of sight into when you might be able to get back to your full nominations? And if not, is there any potential for using rail to access incremental WCS?

Yes. So I think on the latter part, as new infrastructure comes in place and new pipelines come in place, those constraints issues that lead to apportion today start to ease. But I don't think that's going to happen in the short-term. That's more of a medium, long-term remedy. In terms of the refinery turnaround, it's got the crude unit, the Coker unit and the sulfur treatment unit are out, and they are being done on the usual routine that would expect on any maintenance plant. I'd be very surprised if we're going to come back and redo those again in 2019. That's highly unlikely because the typical maintenance schedules that we look at on a 2 to 3 to 5 year basis. So I don't think that will come back into play next year. And you're right, that means that we will be geared up and have been geared up and have been now for about last18 months, 2 years preparing for the new standards that have come through in 2019 back into 2019 which will be a huge opportunity for everybody.

Thanks.

Okay. Thank you, Jason. That's the end of the questions. Let me just maybe hand over to Brian for a couple of closing comments. Thank you.

Great. Thanks, Craig, and thanks for all your patience today and the suite of questions. And I think this is another - it's the seventh quarter of the 20-quarter strategy that we laid out for you back at the start of last year. I think at the heart of everything that you've seen today terms of the results, it's safe and reliable operations. When the operations are safe and reliable, it means that you're able to take advantage of the price environment that you find yourself in. And I think we did that through the third quarter, and we will continue to focus on that. On a point forward basis, we're looking forward to seeing everybody at the Oman Investor Day. We have a very big turnout coming. For that, we will give you a little bit more insight on what the future of the company looks like out beyond 2021. And some of the big things going on in the modernization and technology space, which is changing a lot of what we're doing inside the company, and is underpinning the results that you saw today. So with that, we look forward to speaking to you again on the fourth quarter call, and if not, we will see you in Oman.