Good morning and welcome to BP’s Second Quarter Results and Strategy Live Presentation. I’m Craig Marshall, BP’s Senior Vice President, Investor Relations. You may have seen from this morning’s announcements, this call is going to be a bit different today. We have a full agenda, and do expect to take a little longer than advertised. We will cover our second quarter results, but we intend to use most of this time to take you through our new strategy that we announced today.

Thank you, Craig. Let me have my own welcome to everyone on our webcast. And thank you for joining us. As Chairman of BP’s board, I would not usually join our results call. Normally they are led by our executive team. But today, we are making an exception. This morning we outlined the set of results that were delivered during a uniquely challenging period. At the same time, we made announcements on three strategically important decisions. First, our new company strategy to meet the ambition and aims we set out in February. Second, a new and resilient financial frame, including a clear approach to how we allocate capital. And third, a new investor proposition that includes a new distribution policy. We believe these three elements will benefit our many stakeholders, including our investors. So before Bernard, Murray and Giulia explain the key details, I want to briefly outline the judgments the board has made in reaching these decisions and the process we have followed. Starting with our judgments, and our first judgment, simply recognize just as far start trust. The world is on an unsustainable path, its carbon budget is running out. Our second judgment is that in response to that star truth, energy markets have begun the process of fundamental lasting change, shifting increasingly towards low carbon and renewable. Oil and gas produced safely and efficiently. We believe continue to perform a vital role for the world and in our business. But this is our third the judgment over the longer-term, the demand for both oil and gas will be increasingly challenged. Finally, our fourth judgment is that BP alongside many others can make a contribution to the energy transition the world wants and needs and create value in doing so. We have the scales, the energy market experience, the resources and the global relationships.

Well thank you, Helge and welcome to everyone joining us today. I really appreciate you all taking the time and apologies that we’re going to run over a little bit, but we have a lot that we want to share with you. So first of all, if I may, I want to start by thanking my BP colleagues and our BP colleagues for the amazing job that they’re doing right now as we all deal with the impacts of the COVID-19 pandemic, as well as taking care of their families and supporting the communities in which they work. They have continued to help deliver the energy that the world needs and what has arguably been the most challenging quarter in the history of the industry.

Thanks, Bernard and good morning, everyone. Starting first with the environment. The COVID-19 pandemic continues to create a volatile and challenging trading environment. With Brent crude prices falling by over a third in the first half of the year, having recovered from $19 through April, Brent averaged $30 in the second quarter, supported by OPEC plus production cuts and some recovery in demand. Prices remain materially below, both the first quarter average of $50 and the full year 2019 average of $64. The refining environment also remains extremely challenged. BP’s refining marker margin average $5.90 cents in the second quarter compared with $15.20 a year ago, reflecting sharply reduced product demand and significantly lower industry refining utilization. Turning finally to gas markets, where the weaker economy has further reduced demand and worse than the pre-existing oversupply in the market. US Henry Hub gas price averaged $1.73 the quarter, the lowest in 25 years, NBP and JKM averaged $1.60 and $2.10 in the quarter. Turning to our results. In June, we updated our long-term price assumptions, lowering Brent to an average of around $55 and Henry hub to an average of $2.90 cents in 2020 real terms. As a result of these revised assumptions, and a review of our intent to develop, some of our exploration prospects, our reported results include significant impairment charges and exploration write-offs, contributing to BP’s second quarter report loss of $16.8 billion as Bernard said. The impairment charge of $11.8 billion and $2 billion of the expiration write-offs are non-operating charges, with the underlying result including $7.7 billion of pre-tax exploration write-offs. After adjusting for non-operating items, inventory gains and resulting tax credits, BP’s underlying replacement cost loss for the second quarter was $6.7 billion. Looking at more detail of BP’s underlying results, we reported a second quarter underlying replacement cost loss of $6.7 billion compared to a profit of $0.8 billion in the first quarter. Compared to the first quarter, this reflects the exploration write-off impact, lower liquids and gas realizations, weaker industry refining margins and demand destruction in the downstream due to COVID-19. This was partly offset by an exceptionally strong contribution from oil trading.

Thank you, Murray. Thanks for that run through. And now we’re going to move on to the next part of the morning, and we’ll start on strategy. But we have seen some tough quarters in our 110-year history, there’s no question about that. And while this last one has to be amongst the toughest, it only makes us more determined to change, not less back in February, we remember saying, we reset the SatNav for BP, we plugged in that destination and we said, there’s no turning back. And we recognize that many of our stakeholders wanted us to change and we said we want to change as well. We don’t just need to or we’re not under pressure to or we don’t have to, we want to, throughout BP so many people I talked to all over the world want us to help deal with the threat of climate change. And at the same time, there is a deep belief amongst us that this is a huge business opportunity for BP, we can make BP a better company and create value by taking on this opportunity and we believe and we hope and we think that we are one of the best placed companies in the world to do that. We’ve announced a new purpose, we’ve announced that we would reimagine energy for people and our planet. We said we would reinvent BP, we laid out our ambition to get to net zero and help the world get there as well. And now today, we are sharing the next major staging post with you. And it brings together three things that I talked about earlier, a new strategy, a new financial framework, and a new investor proposition. So let me start by describing the new strategy. After more than…

Thank you, Bernard. I’m delighted and excited to be here today. Some people have asked me why I joined BP? I would reply, why would somebody not join in this time of incredible transition? I can’t imagine a more exciting and purposeful challenge to be part of. Four months down the road since I joined, I am as or more excited and I truly hope I can help BP as we embark on this new journey. So let me begin by outlining our core beliefs which together with our purpose inform our strategy. I will then talk to the key elements of this strategy and how we intend to align our investments to transition to an integrated energy company, delivering solutions for our customers. Turning to our beliefs. For 10 years, we have published our energy outlook. This year we have been working to extend the scope, taking us out to 2050. We have also been working on factoring in the impact of the Coronavirus pandemic. We will share the details of our new outlook in September on day one of our BP Week. Before looking at the details, let me address one question. Why do we need an outlook? We use outlooks and scenarios to inform a range of possible pathways which the transition may take over the next 30 years. We believe it is not possible, nor sensible to identify one most likely scenario, but our strategy needs to be robust multiple scenarios and to the uncertainty around the pace and direction of the energy transition. To this end, we focus on three core scenarios. Business as usual, a continuation of recent trends without major change in the pace or direction of policy. This scenario is not Paris consistent, and results in a reduction in global energy greenhouse…

Thanks, Giulia and it’s great to have you here at BP. So far today, you’ve heard a lot about our beliefs on our strategy. The strategy is enabled by a new and resilient financial framework, comprising, a coherent approach to capital allocation with a new distribution policy and a clear set of priorities. A resilient balance sheet, a disciplined approach to investment allocation and a relentless focus on executing our five-year business plan. Together, we believe our strategy in our financial framework create a compelling investor proposition which offers committed distributions, profitable growth and sustainable value. And I will talk about each of these elements, but let me start by explaining how we aim to deliver long-term value through our approach to capital allocation. Over the past few months, we have come to the conclusion that the economic consequences of COVID-19 make the world uncertain. With that uncertainty, too much pressure exists on the balance sheet, and we need to take action to strengthen it. It’s clear our dividend must be resilient and we need to invest adequately in the energy transition to support our ambition under strategy, all of which must be underpinned by a coherent approach to capital allocation. This has been further reinforced, following the extensive engagement we have had with you, our shareholders over the recent months. Thank you for engaging with us in that. As a result, we have taken the decision to reset our distribution policy. It has a clear set of priorities, with a phased approach to how we will allocate our sources of cash, including divestment proceeds. First, funding our reset and resilient dividend intended to remain fixed at $5.25 per ordinary share per quarter. Second, our focus on de-leveraging the balance sheet to protect our investment grade credit rating. The first…

Thank you, Murray and we had you ad-libbing a bit there as well, which I thought was really good, so great to see. Thanks also to Giulia for your presentation and as Murray said, it is fantastic having Giulia on our team and we’re better for it. So, if it’s okay, I’d like to recap very quickly on four points, and then we’ll take your questions and we’ve got it all set up here and we’ve got lots of questions in the queue already. So but just four points that I think and we think are important to leave people with. The first is that, we are pivoting to low carbon energy and customer focus, and we intend to move fast, but we will do so with care and with discipline. Second, we are focusing our resilient hydrocarbons business on value. And while it will be a smaller part, it will remain core to BP for decades as an engine of value creation and the enabler of our transformation in the energy transition. Third, we are delivering on our net zero ambition. And we expect to be positioned for success on each of our emission reductions aims by 2030 and well on track for 2050. And fourth, we believe we can create long-term value for our shareholders through a compelling investor proposition that offers committed distributions, profitable growth and sustainable value. And as an integrated energy company focused on delivering solutions for customers, we believe we can serve all of our stakeholders and helping the world to de-carbonize, while seizing the huge business opportunity that is the energy transition. And we have, if I may say so, a fantastic team, a leadership team in place to deliver it. And we’re all really excited about what we intend to do and…

Good morning. Thank you very much. Yeah two questions, please. Thank you. I mean last quarter you talked about the macro, the liquidity of the company and the business performance and setting that dividend. You’ve done the hybrids, you did the surprise divestments. Things look a little bit different. So I just want to really get the rationale for making that dividend decision this morning or is it just your number three of your priorities there, Bernard, which is you want to invest at scale from this point onward? So perhaps if you could just talk around that just a little bit more. And then secondly, you know, the other big pushback is, can you deliver the, you know, attractive returns? And I think Giulia’s chart was very illustrative in terms of the returns by 2030. You talk about 12% to 14% ROACE by 2025. I think the weighted average of her slide 41 is probably around 12% to 13% ROACE as well, and you probably have about a third of your business in low carbon. But you know I just want to think about the risks around that. I think, you know, capital intensity, you talk about declining, but, you know, not necessarily the case for wind, wind could see some capital and you know intensity increases. So but just trying to understand, you know, that number comes out, it’s a good number, but I’m trying to understand the risks around it, please.

Very good, great. Os, thank you and great to see you’ve done some math already on some of the slides. I’m going to ask – so on the second part of Os’s question, I’d like Murray to take on a little bit around the financial returns and Giulia, if you could talk a little bit to some of the risks that you see, potentially in there. And, Os, I’ll take the dividend question, if I may. I mean, the way I like to think about the dividend decision is as follows. I like to think of it as being rooted in strategy and amplified by COVID. So it’s deeply rooted in strategy and our strategy is that we wish to become an integrated energy company. To do that, we have to invest. To do that, we have to have a strong balance sheet. We want to be able to invest continuously into there, not chopping and changing and that’s why the resilience point that Murray made is so important. So driving that balance point to $40, we believe is a good place to have a balanced point. So it’s rooted in strategy and clearly there is uncertainty in the world that has been created by the pandemic. And therefore, that sense of urgency is only amplified by COVID. So it’s a decision that is very much focused on and rooted in the strategy of the company, which is to become an integrated energy company. For that, we need to invest. For that, we need a strong balance sheet and then we put COVID on top of that and it’s amplified that situation. And what we’re moving from is the dividend policy that you’re very clear with, to a new financial framework that as Murray points out, in somewhere between $50 and $60 world is actually as attractive and more reliable maybe than the last and, importantly, offers upside were people to believe in a different world. So that’s a little bit about the dividend. Murray, do you want to just say a few words on Oswald’s math and the financial returns, and Giulia can maybe just talk about some of the things that are in there, that would be great.

Sure. Hey, Os. Good to see you. That’s a very big picture of you right now.

Well, doesn’t he? He’s looking better than you, Murray.

He’s looking better than me, yeah. So like returns on alternatives are obviously something that people are quite worried about, we’re not. If you’re in big public auctions for wind, there’s a wall of cash coming at it and you’ll probably see people bidding at around 5%, 6% of returns. By the time you stick a power purchase agreement on that and by the time you lever it, because there’s so much debt that’s willing to do these things, you’re up into the 8% to 10% range. And that’s probably what everybody inside the market would see. We then think we can do things differently, Os. We think the power of integration from our trading organization is awfully good. We can take the power offtake. We can package it with natural gas. We can package it with solar. We can sell it to a customer with complete flow assurance, clean energy and you know fixed price, if they want. We’ll hedge it for them. We’ll play around with currency with it if we want as well. And we think by doing that, you start to take the returns into you know well into the double-digit range. We’re not going to promise that, but that’s what our sense is of how these things will evolve in time. And you know we’re a corporation that takes risk and gets returns, and the risks that we can really take are inside that, inside the price base, inside the hedging space, et cetera from our very, very long history. Now, the other thing I’d say is the cost of supply of these things is dropping like crazy. You’ve seen a mass drop in the cost of supply on wind that will continue as things move offshore. We’re continuing to see it in solar, just as more and more investments go into it, that cost of supply will continue to drop. And we think given our capabilities in big offshore construction through our projects organization that we can contribute to that as well. So we really think we have something different to offer. We think we can be more efficient. Dev calls it the best price setter, MEPs. So we think we can do that and then we can think we can enhance returns, again, through all those interesting integrated aspects that we have. So, Os we’re pretty pumped about it, if I’m honest.

Giulia, are there any risks? Any issues that we need to be worried about?

So as we developed the strategy, we obviously looked into what the risks are. I would say two critical risks. The first one is ability to scale at pace, right, in terms of our growth areas. We believe we are not starting from scratch, right. We have a very strong base that we can build on in terms of our capabilities in Lightsource BP as well as our Wind capabilities. And where needed, we will hire externally and drive partnerships to further accelerate that growth. Secondly, we are mitigating that risk as Murray described by adopting a very strong capital discipline and therefore, an approach to hurdle rates. I think the second risk is obviously the environment that we are navigating in the current situation of the Coronavirus pandemic. And so, uncertainty as to how that will play out in 2021-2022 will obviously play a role. We believe that our plans are sufficiently diversified, both in terms of low carbon options as well as convenience and mobility to reduce that risk as we actually develop across markets and across opportunities. And it’s also fair to say that those opportunities, specifically in terms of low carbon energy and electricity and convenience and mobility have proven to be more resilient to the crisis that we are facing in terms of Coronavirus.

Yeah. I mean, it is amazing that what Murray said that actually I think, Murray, in some markets, I think in Germany, our store sales went up, for example, by 3%, I think, in the second quarter, which is incredible. So, Os I hope that helps, good to see you. We’re going to move on, if it’s okay to the next one. Christyan Malek at JP Morgan. Christyan, good morning. You might be on mute, that well-known phrase.

Sorry.

Yeah, not at all. Good morning.

Yeah. So first of all, congratulations, guys on the unveiling of your new strategy and the impressive blueprint from oil co to energy co. A couple of questions. First of all, on your low carbon business build out and how you plan to balance growth organically versus M&A. How will organic investment versus M&A be balanced in delivering, specifically the 50 gigawatts target and with the financing of any potential M&A steps be absorbed in the low carbon CapEx frame provided? And I guess, specifically on submarkets within low carbon that you may benefit from an so in terms of achieving critical mass more rapidly? The second question is, I’d like to better understand how you prioritize your buyback post net debt, reaching $35 billion against opportunities to invest in low carbon, which may see debt go up against. So in a scenario, for example, where you reached $35 billion sooner than you thought, but you had a great opportunity to invest in new energies, which would come first, the buyback or energy’s growth? Thank you

Christyan, thank you. I’ll ask Murray to take the second question around that choice. And I think the first question is around inorganic and organic growth. And Giulia, comment if there is anything that you wish to add here. What I would say very simply, Christyan, is as follows. We’ve laid out a series of targets today in that plan. So you see 50 gigawatt by 2030. You see a capital framework in there that starts off at $13 billion to $15 billion in Phase 1 and once we hit our net debt, it goes to $14 billion to $16 billion, which I would remind people is $1 billion lower than our previous range, okay, because we used to carry $15 billion to $17 billion. And what I can tell you is that capital framework is entirely consistent with the targets that we have set out. And within that capital framework is a mixture of organic and inorganic. Now, how it will quite play out is in terms of the exact mix is another story. But what I would want you to know is two things. Number one, the targets that are outlined are consistent with the capital frame that we have issued, and the capital frame that we have issued is a mixture of inorganic and organic capital. Now the question is, will there be bigger M&A one day? One should never rule that out. I think we have a lot of work to do over the next few years. We have that balance sheet to get in order. We have some more track record to develop. And while I would never rule it out, it’s not front of mind for us right here right now. Giulia, anything you’d add on that?

Well, just Malek, to your point on the – sorry, Christyan, apologies.

Well, it happens.

Sorry. So to your point on the low carbon and specifically the renewables operating model, I would just add to what you said, Bernard that we also plan to obviously operate, as we have been doing with a successful model such as Lightsource BP which basically means a light-asset model, highly levered and therefore, with access to lower cost of capital. And we will retain the flexibility to decide what to do in terms of farming or not assets as we go forward.

Great, thank you. I’m sure some people have called you, JP as well, Christyan. So I’m looking at your backdrop. And Murray, choices, what would we do?

Yeah. Hey, Christyan good to see you. Hope you’re doing well through COVID. Look, I think just take a look at our priorities is my advice. Number one priority of cash flow is to pay our dividend. Number two is to get our debt to $35 billion and then once we’ve got it to $35 billion, to maintain strong investment grade credit rating, right. So that’s priority number two. Priority number three is CapEx, $13 billion to $15 billion, $14 billion to $16 billion once we’re passed $35 billion net debt. That $14 billion to $16 billion includes inorganics, as Bernard has said. After that, then we move to surplus. That surplus is greater than 60% to our – at least 60% to our shareholders, no questions, at least 60% to our shareholders. And then I guess the Board will have discretion on the residual 40%, which is, I think, Christyan maybe what you’re asking about, and the Board will have a choice about you know does it accumulate cash to reduce debt in case the environment is tricky? Do they decide to do it inorganic or do they decide to do more share buybacks? And that will be a discussion for the Board each and every quarter. So to be clear, though, you’ve got to follow those priorities clear, please. We’ve tried to make them as coherent as possible.

Yeah, I think it is a very important slide, at least we think it’s a very important slide, because it does – it’s going to help us enormously internally as well as externally. So Christyan, thanks for the questions. Hope that helps. The next question is to Jason Kennedy of Santander. Jason?

Hey, there. Hopefully, you can hear me.

Not Kennedy, Jason Kenney, I should know that. Hi, Jason, we’re not doing well here on names.

Not a problem. Well done for the progress on reimagining energy and well done for reimagining conference calls as well. This is a good interactive experience for me and hopefully for you, too.

Good. Thank you.

I’ve got two questions. Firstly, on results probably some detail from Murray, please. There was a very large non-controlling interest in the quarter. I’m wondering if you could break that out and maybe give me an outlook for that line item full year ’20? Any guidance on P&L tax this year would be useful as well. Secondly, on the financial strategy and trying to relate the divestments, $25 billion of divestments to the 1 million barrel a day less of oil and gas output 2030. So how much of the lower hydrocarbon output by 2030 is due to divestments? And how much is just simple decline of the asset base running it for cash over the next couple of years? And if I may, just sneak another one in. On the whole strategy, how do you see your cost of capital changing over the period to 2030 with this increase in renewables and new energy businesses coming in and obviously just running out the hydrocarbon business over the next decade? Thanks.

Very good. Thanks, Jason. I think that’s actually four questions, because you had two parts and the results one. But Murray, I’m going to let you take the results one and the cost of capital, and I’ll take the financial, the divestments and so on. So non-controlling interest, P&L guidance and what’s going to happen to our cost of capital?

Yeah. I think non-controlling interest is best just to follow the Brent price, gas price, et cetera and you’ll be able to figure out how those flow through. Fairly hard to predict right now, Jason, but you could probably just look back across the past six quarters and watch that. Alternatively, you can give Craig Marshall a call and he can give you more details on that one. On P&L tax guidance, it’s really tricky right now, Jason. Obviously with oil prices low, with gas prices low and with RMM so low and refinery utilization down, the absolute amount of P&L is very low. And of course, in some countries, like in Abu Dhabi, et cetera we pay tax naturally. So it’s very difficult to give any P&L tax guidance right now for the second half of the year. I’d just keep it as a low rate on a very low base would be my advice. I wish I could tell you more than that, but I don’t seem to be able to forecast what the effective tax rate is going to be any quarter right now, given the volatility in results. Apologies. On WACC, you would expect WACC to change over time and to start to decrease. But you know let’s see how that unfolds. For now, our WACC is clear. It’s the guidance we’ve provided inside the 2020 ARA, no change so far, but we’ll see how that unfolds over time as the portfolio shifts.

Very good, great. Murray, thank you. And Jason, on production and divestments and the $25 billion, just a few comments, maybe that would help on that. We look at underlying production, I think it’s broadly flat through the first five years. So we have major projects coming online and we obviously have a base, but it’s roughly flat over a five-year period. In the second half of the decade, ’25 to ’30, you will see underlying declines start to kick in. So think of it in two phases, and I think we show a 2.6 million barrels of oil equivalent per day to 2 million barrels of oil equivalent per day in the first five years and 2 million barrels of oil equivalent per day to 1.5 million barrels of oil equivalent per day in the second five years. You know we’ve said around because this is not a precise sign, so to speak, but it is what we are guiding to. So that’s how I would expect to see volumes. Just to clarify, the $25 billion, the $15 billion by the end of next year is retired. The $25 billion is between, as Murray said, the second half of this year out to ’25, so 4.5 years. And as Murray said, that includes the proceeds from Alaska and petrochemicals. And therefore, we have we think around $11 billion to $13 billion of that $25 billion sort of already done. So the point there is, we’re not in a rush, we’re not having to sell assets for some reason. We will find the time to seek value and do asset transactions that we think are good, strong, value-accretive asset transactions. So that’s the second thing that I would say on that. So Jason, hopefully that helps. And if it’s okay, thanks for the questions. We’ll move on. Next is to Lydia Rainforth of Barclays. Hi, Lydia.

Hi, there Bernard, just lovely to see you. I have two questions, if I could. The first one, you have made some fairly radical changes this morning and indeed through the quarter with the sell down of the petrochemicals and the restructuring. How do you think about what the right pace of change for BP is? And how do you manage that? And then a second question, just going back to the capital allocation process for low carbon. How do you actually do that in practice? How do you compare hydrogen to customer touch points to solar? And partly linked to that, Murray, you did talk about a set of those integration and the higher returns and they sound awesome. But when do we actually get evidence of those? And effectively, when do we get proof of concept? Thanks.

Okay, very good. So, Giulia if you could talk a little bit about the proof of concept around some of these things. Murray, if you can talk a little bit more about the choices that we might make within there. And on pace of change, there is you know the way we think about it, Lydia, a little bit, is that we set out, I think the title of the press release was about a decade of delivery. And I think we’re all very conscious that it is a decade of great importance for the world, and it needs to be a decade of delivery for the world. And we wanted to be a decade of delivery for BP in pursuit of our strategy, which we believe is in the interest of all of our stakeholders, but also in pursuit of what we think the world needs. Now, that says that there is a degree of urgency to what we need to do, because I think it is important that we act and that is what we are setting out today. Clearly, one has to be thoughtful and one has to be careful not to move too quickly. I think, however, that we are guided now by a very clear financial framework, with very clear investment hurdles. So we’re not saying we’re going to do this at any cost. We’re not chasing gigawatts as the equivalent of volume in the upstream world. We’re going after gigawatts at the right returns so that we can, as Murray says, see an integrated value picture across the company. And there’s a lot of change going on with NBP. It’s necessary. The organization has obviously got a lot on its mind with the virus, with what’s happening in the world and what’s happening inside the company. But our judgment is that, it is a time of action. It is the right plan, which, by the way is not back-end loaded towards 2030. If you look at the 2025 metrics, you’ll find that many of them are front-end loaded so that tenfold increase in low carbon is actually eightfold by 2025. So we feel that we’ve judged it right in terms of the plan. But we always have the opportunity to learn, to adjust. We will make mistakes, I have no doubt about that and we will correct. But in terms of a decade of delivery, I think it is a time for us to be in action and that’s the sort of plan that we’re setting out today. Giulia, some proofs of concept or when will we see some of this stuff turning? As Lydia, I think, said it sounds good from Murray, but are there some more proof points?

Yeah. So I would say in terms of our low carbon activities, the first thing is, we have defined 2025 clear targets and milestones, which Murray has communicated. So that’s the first element. The second element is, we are not starting from scratch and you have seen us also moving in recent weeks, right. So on the renewables side, we are starting from a 2.5 gigawatt of developed capacity. We have recently announced our partnership with JinkoPower in China to drive renewables solar development. We have also announced recently our participation in the Green Growth Energy in India, right, which allows us to participate in the funding of green growth opportunities in India. Similarly, on the buyer side, we – through our BP Bunge partnership JV, we have the second largest sugarcane ethanol and biopower, if you wish, activity in Brazil and we are planning to scale it further. We are also starting from a position on co-processing on our refineries, which we aim to further scale. So again, in bio, we are not starting from scratch. In terms of hydrogen, we are starting from a position of actually production and operation of hydrogen in our own refineries. And as we said, we aim for a 10% market share. We are active in Australia already in hydrogen for the export of hydrogen and ammonia and you will see more news coming in shortly, hopefully on the hydrogen side. So I would say, bear with us and hopefully we can come back to you very shortly with some more news.

And I would say, Giulia and Lydia, you know there’s no shortage of opportunity. I mean, I would tell you right now that we are inundated with opportunity in this space, people wanting to work with us, people seeing what we bring to a joint venture like DiDi or to a joint venture like Lightsource BP. So there is a – we are finding – we have certainly got, we are definitely, Murray, Giulia, in a world of quality through choice, which is what we always wanted in exploration many, many years ago to have more options than we have capital to deploy, because that means you’ll only do the best stuff. So I feel pretty good about that at the moment. Murray?

Resource allocation – hey, Lydia, nice to see you. How does it work in practice? Look, we’ve got 35 businesses more or less that we allocate capital across. What – you know if you thought about our history, it’d be like the Gulf of Mexico, the North Sea, and then you’ve got new places like Bunge, Solar, et cetera. So 35 of these businesses across the world, including inorganics that we think of allocating across. What’s so tricky about this is that things are moving so fast, you have to get super, super clear on your assumptions, right. What’s the cost of supply doing? That was easy when you’re drilling in oil and gas. Well, it’s trickier when you’re thinking about solar. What’s happening with that cost of supply? What’s your commodity price going to be? That was kind of easy to make a central assumption on oil, making an assumption on power across 37 geographies is a bit tricky. So trying to get super clear across those 35 businesses, about what the core set of assumptions are, how you get them to P50 through constant conversation, so you can then create a balance set of you know a core starting point. And then you ask yourself, right, how do we add integration on top of this? Where are the sources of value for it? What are the risks? Where could you get nailed on interest rate movements, currency movements, et cetera? So life becomes much more complicated in this new world, Lydia, and I like that because that’s how we create value. We get these risk mitigation things that a pure play can’t do, so we can see the risk, get it clear and then figure out how to mitigate it. And then bang, you’ve got a low risk proposition with really stable returns. So that’s kind of a practical example of how we’ve got it working now. It’s complicated though, but I think you make money in complication.

He likes it, because he can also understand it. So we know, Murray. So Lydia, thank you. Craig is telling me we need to speed up our answers a little bit guys to get through more people. So, I’ll take the lead on that, if I can. Next is Biraj Borkhataria from RBC. Biraj?

Hey, thanks for taking my questions. Hopefully, you can hear me. I wanted to ask about the upstream. You know you’re talking about a substantial drop in production over the next decade. I’m just wondering how the US onshore fits in with your intentions in the upstream? Not so long ago you did you know a $10 billion deal, which at that time was called transformational, but it doesn’t really appear in the presentation today. So can you just talk about where that asset and that theme fits in the portfolio there? And the second question is on chemicals. Some of your peers are talking about you know chemicals providing a different option to pivot, they’re looking at ways to de-carbonize and focusing on the circular economy and the things associated with that. So can you just talk through your rationale for that sale? Is it just an area where you felt like you didn’t have a strategic advantage? Or was it a scale issue or anything else, that would be helpful. Thank you.

Biraj, thank you. I’ll ask Murray to take the lower 48 question. He knows the business well. On chemicals, think of it as two things. Number one, it’s – you know we’re very proud of what our team has done there, particularly over the last several years around performance improvement, efficiency improvement. We like some of the technologies we have. The reality is, is that from a scale perspective, it would have taken a lot of capital for us to grow it into a really competitive business and that was sort of the strategic rationale. We also believe that we secured a good price for it, that the purchaser and the seller both think is a fair valuation of that business. So it’s a very good transaction, and we now need to focus on completing it. So that’s the rationale. And Murray, quickly on the lower 48, its role?

Yeah. Hey, Biraj. BPX remains core to the business, continues to do really well. The reservoirs are better than we thought. We’re finding more zones than we thought originally. Synergies were at $400 million. We’ll probably get more synergies, but we’re above the $350 million target we talked about. And obviously, the capital is deflating these days. Service rates are down. And so when we start drilling again, service rates are going to be an awful lot lower. So the investment case remains strong. No impairments as we went through our process. So that’s very good news. And the way we’ll think about it moving forward is it’s flexible. We have two great gas basins. We have two great liquids basins and depending on what happens on natural gas price or depending on what happens on oil price, we’ll have the ability to modulate investment into that. Last thing I’ll say is, right now, it’s going to break even at around $3 Henry Hub, which you can see in the forward markets in December, and $35 WTI. So about right now, it’s now cash flow breakeven with about $1 billion of CapEx going in. And if prices pick up and we get activity going back in there, we should start to see growth in cash flow over time.

Strong returns potential still out in that basin. Quality reservoir still matters. Biraj, thank you so much. Good to see you. Next question is from Michele Della Vigna from Goldman Sachs. Michele, good morning.

Good morning, Bernard and thank you for taking my question. On the low carbon strategy, you have clearly come a very long way already, mainly focusing on unconsolidated associates like Lightsource. I was wondering, as low carbon becomes a key pillar of your business, and also in terms of regulation, things like the European green taxonomy really looks at the progress through the revenue exposure, wouldn’t it perhaps be better to think more as a consolidated activity for your low carbon business, even if from a headline perspective that could mean lower returns and higher gearing from an accounting standpoint, but actually give more visibility on how large and important this business is becoming for the BP of the future? And then a second related question, as we look at your existing business, particularly your new investments in E&P, how do you think about the hurdle rate? And particularly investing in greenfield versus brownfield in view of the transition that you want to implement? Thank you.

Michele, thank you. Good to see you. Murray, if you can take the E&P hurdle rates. On the consolidation or not, I think what I would say, Michele, is that we start with strategy, which is what businesses do we want to be in. We assess our capabilities to participate. Sometimes we need partners, sometimes we don’t. And I think we then, as we have in Lightsource BP, got a great partner, I think consolidation is always an option. Gearing, as Murray said, we’ll continue to monitor, but we’re no longer guiding against it. It is about having a strong investment grade credit rating is what our objective is. So we will be guided by doing what we think is right to grow those particular businesses. And those options are available to us. It’s got to fit within that financial framework. It’s got to match those five orders of priorities. I wouldn’t rule it out at all in various businesses, and it will be dependent on the circumstances at the time on what’s right for that business to take it to the next level. Sometimes, that might be an option, sometimes it might not. So time will tell. E&P hurdle rates, Murray?

Yeah, sure. Hey, Michele. So the E&P is kind of transforming as we bring the major projects online. We’re moving to infill drilling, filling up those platforms and moving to tiebacks. There probably won’t be a tremendous number of big greenfields anymore in the future. And the way that we think about it is given the transition risk, if you’re going to move into a big oil greenfield, you better pay back within 10 years at our new price stacks with new carbon taxes. That’s just sensible to do. So that’s a focus on returns and payback, and that really governs what decisions we’d make. On gas, because gas is part of the transition, we’re saying payback in 15 years at the new gas prices that you can see and you can back calculate the return on that as well. So we think by focusing on payback, we can manage transition risk and quality at the same time. And that’s how we’ll be looking at it moving forward.

Very good. Thank you, Murray. Thank you, Michele. Next question from Irene Himona at Societe Generale. Irene, good morning. How are you?

Good morning, everyone. Thank you very much for your presentation. I had two questions. So the first one going back to oil and gas, which as you said, will be the enabler of the transition. You look to it for sustainable cash generation. Of course, by 2030, we will be looking at peak oil demand, possibly peak gas. So can you talk a little bit about your vision for, let’s say, the cost structure of that 1.5 mbd legacy portfolio by 2030, whether it’s unit cash costs or any metric you can help us with? My second question, I noted that one of your four low carbon aims by 2030 is an LNG portfolio of over 30 million tons. Again, if you can talk around where you potentially envisage growth in that portfolio, please? Thank you.

Very good, excellent. I’ll take the oil and gas question. Who wants to take the LNG question? Murray, do you want to take that?

Sure.

Excellent. Oil and gas, 2030, I think the things that I would draw your attention to, so you know by focusing it, as you would expect, Irene, you know the quality of each barrel on a unit basis continues to improve. And that’s the first thing. So portfolio will help underpin that. We wanted to be industry-leading in terms of quality and efficiency, that’s what Gordon, his job is to make sure that we do that and that’s why we will drive digital. That’s why Gordon is going to implement agile structurally in what is 16,000 or 17,000 people across refining and upstream, the traditional upstream business. We’re not aware of anyone doing that on a structural sense, organizing in an agile way. He intends to put that in place. We’re targeting $6 per barrel of unit production costs by 2025 and we’ll continue to drive that down if we can. We’re big believers in digital, as you know, from your trips with us. So we’ll continue to push that agenda. Giulia talked about doubling our investment in capital in that over the next five years and more thereafter. So we get your point 100% that we have got to prepare for that world of decline one day, who knows when it will be. And therefore, the only thing that we can control is the quality and the efficiency and the productivity of those barrels, and Gordon is right on that. Murray, on LNG?

Irene, so we’re going from about 15 mtpa now to 25 mtpa by 2025 and 30 mtpa by 2030. I guess those numbers matched, didn’t they? I hadn’t really thought about that. Look, it’s going to come –

That’s not the reason, but it’s –

That’s not the reason, but it’s ironic, isn’t it? The mix of merchant versus equity is really the big thing that we’ll have to work our way through. You’ll have seen from our press releases over time, we have tons of merchant LNG these days, whether it’s from Mozambique, whether it’s from the West Coast of Africa, you name it. So we’ve got a great merchant portfolio now where you can take advantage of arbitrage and move things across locations and make great money. And the equity decisions, right now, we’re about 50-50 equity versus merchant. The big decision for the decade is, you know can we get barrels off the ground with a low enough carbon content that the government and the partners are happy about? Can we do the next wave of LNG inside M&S? Can Mauritania-Senegal, can we make it competitive enough? So I think that’s the big question for us as we move across the next decade, and the challenge for our teams is how do we make sure that our own equity, the browsers of the world, the M&Ss of the world, the Indonesias of the world are low cost and competitive against Henry Hub exported, with the right carbon footprint or should we instead move to merchant where you don’t have to deploy that capital. So that’s a choice ahead of us. We have clear targets out to 2025. Beyond that, we’ll see how that unfolds over time. Thanks, Irene.

Thank you very much.

Thanks, Murray. Thanks, Irene. Henry Tarr next from Berenberg. Hi, Henry?

Hi, there. And yeah thanks for doing this conference call, it’s refreshing. So I’ve got a couple of questions from my side. One is, you know looking across the areas of investments, so renewables and convenience mobility. Are there any technologies or areas which you don’t have in the company currently or where you want to boost capabilities? And then secondly, the developed renewables target of 50 gigawatts, is this equity to BP? Or does it include JV partners? You may have already answered that, apologies if so. And then just quickly, thirdly, if you’re aiming to increase convenience sites materially, how do you think convenience sites are going to be changed by EVs over the next sort of decade? And I guess, what’s going to drive the margin there from 25% to 35%? Thanks.

Great. Thanks, Henry. I’ll let you off on the three questions, because I’ll let Giulia take the first one around renewables and convenience, any new technology. Second one is around convenience sites and how they’ve changed in the world of EVs and how we can get that 25% to 35% margin increase. The reason I let you off is, because you answered it, it is net equity developed gigawatts. So they are net share, net equity, so they’re not gross numbers on the gigawatts, they’re net to BP. So that’s that. Giulia, are you happy to take the other two questions, please?

Yeah. So in terms of technologies across our low carbon portfolios. So we believe that the core of the technologies are that to deliver on our ambitions. Obviously, technologies keep evolving in all areas in which we will be playing, right. Take renewables, we’re looking into, obviously, evolutions in terms of floating. We’re looking into evolutions in terms of hydrogen, you know both in terms of technology, but cash cost curves to actually make those technologies available, right. So we believe technologies are there. They are evolving. And through our venturing activities, we continue to invest to have the right platforms to participate. And as mentioned, where necessary, we will also partner in terms of accessing those capabilities and technologies. In terms of convenience sites changed by EVs, we, as I was mentioning, if you look out to 2030 , we are seeing electric vehicles representing potentially 80% of the total you know passenger car pool, right.

2050 or 2030?

2050, sorry. So we are seeing a significant shift in terms of the role of those retail sites, but we are seeing that shift playing out in time. And we don’t expect that shift to actually happen from one day to the other. So if we look forward, we see within sites, sites that will continue playing the current role for quite some time. We see sites that will have to be repurposed much more strongly towards convenience and retail. And sites, for instance, on highways, which will, over time, evolve towards actually fast-charging and ultra-fast charging, right. So it’s going to be a transition of sites. We’re obviously working towards defining what that optimal network configuration looks like over the years.

Great. Henry, thank you. Hope that helps. We’ll keep going. Peter Low of Redburn. Peter, good morning.

Good morning. And that’s for taking my questions. The first was just on the distribution framework. Why have you opted to distribute incremental cash flow through buybacks rather than, say, a variable component to the dividend? Is that designed to decrease that absolute dividend payment over time? And then the second one was, you mentioned in your prepared remarks that your emissions targets do not rely on offsets. I just wondered how you could get to net zero in oil and gas production by 2050 without offsetting the Scope 3 emissions associated with that. Should we now assume you’d be producing no oil and gas in 2050? Thanks.

Peter, thank you, too, good questions. I’ll let Murray take the buyback versus the dividend, the choice there. On the emissions targets, what I said in the prepared remarks is that by 2030, our plans do not require offsets to deliver. We also said that offsets are in the toolbox. They’re absolutely necessary for the world. BP intends to facilitate a market in offsets. We will do that through our trading division. And we may use them, and we use them today for compliance purposes. And as we move beyond 2030, they have the potential to become a bigger part of the toolkit. But specifically, what I said is that between over the next 10 years, to get those very material reductions in emissions, you know these are 30% to 35% or 35% to 40%, we do not rely on offsets to do that. Buybacks versus dividend, why the choice, Murray, on the incremental.

Hi, Peter. The ultimate theory question, isn’t it? So look, we’ve looked at this hard over the past year, thinking about how to frame this. I’d say our sense is that variable dividends are very difficult to get credit with from an appreciation perspective. And we think that as we rotate the portfolio and transport the company, it makes more sense to return cash to shareholders through that share buyback. And we think that through a ratable share buyback program, that becomes more certain and investors will get more credit for that. So it’s not – it’s obviously a very – it’s a theory-based question. It’s something that we wrestled with as well, but we think that’s how we’ll create more value for shareholders is through that rotation of the assets and through share buybacks as opposed to one-off dividends or variable dividends.

Murray, thanks. Peter, thank you for your question. Next question from Jason Gammel of Jefferies. Jason, good morning.

Hello. Good morning, Bernard. Thanks for taking the questions. First question I had was the types of markets that you’re going to be targeting for renewable power. And my line of thinking is that the high growth markets may also have a high degree of regulation. So is that something that is acceptable for you? The second question I had is around the hybrid issuance. The cost was a fair bit higher than the 30-year paper that you’d issued. So can you go into a little more elaboration on why you made that decision other than just the optics of how it’s handled in the balance sheet?

Jason, thank you. I am going to ask Giulia to handle the renewable power markets and regulation. And Murray, as the architect of the hybrids, of our hybrid issuance, can you say a few words for Jason, please, on that first? Go ahead, Murray.

Yeah. Hey, Jason, good to see you. Hope you’re well. Look, the hybrid really hit at a unique point in time. We’re working through a crisis. We need liquidity as much as we possibly can get. The hybrid market is something that we thought about for the past five years once we saw some of the competition doing that as an interesting way to diversify your sources of cash, to be honest. Obviously, there’s been a lot of debt and then there are hybrids. So we’ve been thinking about doing it as a mechanism of diversification of cash flows for quite some time. And we went out to the market and we were stunned by the degree of interest inside this. We had three to four times subscription over top of what we thought we might have. And we think the average interest rate of 4.5% on perpetual debt is pretty darn competitive. You’d have a hard time issuing equity at that level. So we think it’s a nice complement to the overall capital structure of the company. We like the scale, because it helps. It also helps with the net debt target, Jason. The ratings agencies give you 50% credit for it. And as we think about it, it helps drive down our net debt. It gets us in shape for the future. It underpins our resilient dividend. And it helps ensure that we have investment grade credit rating. So it just hit at a perfect time with lots of different opportunities with an incredible cost for a perpetual debt at 4.5%. And that’s why we went ahead and did it, Jason.

Very good. I'm very glad we did it. I’m very glad we did it. It’s been a great move. Giulia?

Yeah. Thank you, Jason. So first of all, let me start by just clarifying that we are not aiming to play only in renewables, right. We are aiming to play in an integrated low carbon electricity value chain, therefore, balancing renewables generation together with the customer portfolio and trading, right. So we’re not focusing only on renewables generation. The second element is, as we look into the markets in which we are planning to play, we see a mix of growth developing and developed markets, right, where we will, therefore, have a varying level of exposure to regulation. And thirdly, I would say, again, we’re not starting from scratch, right. We have renewables operations across 13 markets already today and have significant experience in terms of managing those regulatory frameworks from the past. And we will continue doing so as we move forward.

Thanks, Giulia. And you keep reminding me and we keep reminding each other, this point about you know it’s not renewables for renewables’ sake. We want to build renewables so that we can offer an integrated energy solution to customers. That’s what we’re trying to do. It’s not kind of spin that we want to become an integrated energy company. It’s what the example from North American Gas and Power is about today, where we’re offering customers, sometimes cities, sometimes big corporates, like Amazon or whoever, we’re offering them firm, clean and affordable power. So we can give them firm by taking our equity gas, taking our equity wind, taking some solar off the market, that gives us a reliable source of energy. We can make it firm, affordable for them by hedging it for them because we got the trading organization. And we can make it clean, it’s mostly clean already, but the final bit we can do through the carbon offsets through – again, through our trading organization. So we’re bringing integrated solutions together. So I think this is a very important point that we want to keep hammering home, which is it’s not any one of these areas for its own right, it’s about how we create a package that we can offer to customers. And Jason, happy to talk to you more about that. Next question, thanks, Jason from Jon Rigby of UBS. Good morning, Jon.

Hi, Bernard. Thank you. Two questions. First is on the – going back to the dividend a moment. I’m struck by the fixed element of it. Not – and I agree with your comments about variable. But you know a good signaling device for a company that’s making progress is an increase in the base dividend, and that’s a way that the Board can signal confidence and progress to the market. So I’m struck by the fact that you don’t intend to do that. you know, particularly, if your strategy also talks about reducing shares in issue. So the absolute cost of dividends actually bit froze over the period. So I just wonder whether you could just revisit that, and maybe you know in the discretionary bit of cash flows, maybe there’s room to increase the fixed element. The second question goes to the impairment charges you’ve taken this quarter. I mean, it’s not the first time you’ve taken significant impairment charges over the last decade. And most of them have come in a business that you know intimately, which is E&P. And I was struck by Murray’s comment that he felt, I think, very comfortable with the rates of return achievable in renewables, a business that you’re really just entering for the first time. So can you talk a little bit about whether you’ve enhanced the process of assessing the capital allocation and investment decision? Because it seems to me is that a floor in all of the sort of outlooks on returns, et cetera, that you put capital to work in the wrong assets or the wrong businesses or using the wrong assumptions. Thanks.

Thanks, Jon. A bit of feedback for us there in our investment governance, I think, Murray. So I’ll ask Murray to take that. And on the dividend, Jon, you know you asked whether there’s opportunity for the discretionary element of cash flows to somehow be directed towards a growing dividend. And I think clarity on these matters is really important. The answer to that is no, there is not. The discretionary element of cash flow, we said that we will return at least 60% in buybacks. Buybacks are obviously one opportunity to go to the rest of the cash, as is the balance sheet, as is the potential, if there is one, of a value accretive deal, as I said, down the road. But that’s our judgment on providing that fixed, and what we anticipate being a fixed and resilient and reset dividend and the buybacks giving the upside. Murray, on the impairments?

Yep, tricky – Hi, Jon, nice to see you. Tricky question on the impairments, isn’t it? So if I thought about exploration first, I would say we’ve been in action over the past decade trying to get this more under control. If you think back to the heydays of the early part of the decade, Jon, we were spending $1.8 billion up to – $3.8 billion, I think, was the peak level of exploration spend we had with license, bonuses, et cetera. That, of course, was when the oil price was $140. And to be honest, in hindsight, that doesn’t make sense when – with our current view of oil price, and maybe as a sector and as a company we were chasing that too much. I feel like we’ve done a good job over time getting that under control. We’ve drifted exploration spend down significantly over time. Under James Dupree’s leadership, we were very careful with bonuses, we’re very careful with well commitments, et cetera, et cetera. So exploration is something that we’re wary of. We’re now not going to explore new countries. We’ll probably only be spending $300 million to $400 million on that a year to try to manage that. And as we think about the new world and as we think about new investments, Jon, we’ll have that memory in our mind. We’ll think about those commitments. We won’t be committing too much at once. It will have to be phased with off ramps so that we manage the risk as we move from a different – from one type of exploration to a different type of exploration in things like hydrogen, CCUS, wind, et cetera. So that’s thought one. Thought two on the impairments on the balance sheet. Yep, we’ve raised the threshold again, Jon. So we used to talk to you about 15% at 60. We’ve dropped the price deck materially. We’ve bumped up the carbon tax materially. We’ve also dropped gas prices materially. So we’ve raised that threshold. And we’re trying to make sure that through payback of less than 10 and pay back of less than 15 on gas, you really start to push that as well. And we’ll try on the new stuff to have firm rates of returns that we hit with very clear assumptions, making sure that we’re clear on what a P50 is, with equal upside and downside, will help us learn those lessons where we’ve been too optimistic in the past. So we’re trying, Jon. We recognize the things that we could have done better in the past, and we’re trying to get better for the future, learning the lessons and applying them into the new businesses.

And I think we have to have a little humility here, Jon. I mean you know – this is not exactly – you know there’s a lot we have to take away from this, and we shouldn’t just skate over it and say, they are what they are. It is a piece of reality. I think we are not alone in the industry, but we’re certainly not a part. And I think we have learned a lot. You know exploration spend is down 75% from the peak, 75% over 75%. And I don’t see it going up from that point, I see it going down. So I think life has changed over the last couple of years. But you know as a person who was accountable for the upstream, I take these results very seriously and want to make sure that we don’t have to keep repeat doing this in the future. But it is important to acknowledge reality, and that’s what we’ve done in the second quarter. So I appreciate your question. I know where it’s coming from and I appreciate the spirit in which it’s asked. So thank you. Thanks, Jon. I think we can get two more questions in before we close. Pavel Molchanov from Raymond James. Pavel, good morning.

Good morning or good afternoon. Are you guys hearing me?

Yes, sir. Go ahead, Pavel.

Excellent. You have an MLP. And I’m curious, what will happen to BP Midstream Partners in the context of the anticipated production decline by 2030? You know what should those MLP investors take away from all this?

Great. Thank you. Murray, the MLP.

Well, I got to be careful because that’s a publicly traded entity, so I don’t want to be talking into that, Pavel. I’m afraid I’ll have to pass on that question, and that will be something that the MLP Board will have to answer. I hope you don’t mind that, Pavel, not for me to do that.

Pavel, thank you. We can follow-up with you afterwards as well if we need to. But I think Murray’s probably knows best on this one. Thanks for your question. Is that okay, Pavel?

Understood. Yes.

Okay. All right, all right. Thank you very much. Appreciate it. Lucas Herrmann from Exane. Lucas, I remember, being very frustrated with me at the last quarterly results call. Good morning, Lucas.

Yeah, morning, Bernard. Can you hear me?

Clearly.

Great. Hopefully, you won’t be frustrated with me with this.

No, you were frustrated with me, not me frustrated with you.

Two brief questions, Bernard. The first just pipeline in terms of the renewable build out, and I appreciate you’re not chasing. But how much visibility do you actually have at the present time? And I simply ask, because if I’m the comments from Lightsource and elsewhere, it’s you know that the target of 20 seems – well, just talk around visibility, if possible. And then one for Murray, if I might. Murray, if I look at a kind of normalized year, let’s get back to 2019 and say a normalized year, what proportion of your cash flow from ops or EBIDA, however you wish to present it, would you say comes from the businesses that you know you define as customer-focused today? So I’m really talking about fuels marketing, lubes, the LNG trading business, the biofuels business. Just some idea of what the overall cash flow as a proportion of 2019 was from those activities? That’s it, thank you.

Lucas, thank you. Good to see you. Murray, if you can take the first question – the second question first. And Giulia, interested in any thoughts you have around the pipeline on gigawatts. Murray?

Lucas, I’m just trying to think my way through that exotic question. So look, inside the downstream, obviously, the refineries don’t make a ton of money, Lucas. So if you look at the downstream results, it’s primarily customer end products and the oil trading side of life. So the majority of the downstream would be the answer. On the biofuels, alternative energy, the 2.5 gigawatts were in build mode, so you’re not making much money now. Money comes once you built out, which will be middle of the decade when you start seeing that being built out. So expected period of low returns as we build our way up and we establish traded positions around it, so expect that to happen in the middle of the decade. On the upstream, I’m going to hesitate to give you a number on what we do inside IST, because that would give you an IST number, which we don’t disclose. But I think if you look back over time, you might be able to guess what we get from integrated supply and trading inside gas inside the upstream portfolio. But you know that we don’t disclose that.

So if I had to guess, Murray, that 25% to 30% or so of cash flow is broadly those activities at present time?

Sounds like a good calculation.

Okay. Thanks, Murray. Giulia?

In terms of our pipeline of renewables towards, in particular, our 2025 target, you know as announced, Lightsource BP is working to build a pipeline of 10 gigas by 2023 and is well on the way to develop that. We are in addition, we do have a pipeline of additional opportunities in the hopper, so we feel comfortable with the delivery of those targets.

But I guess to Lucas’ point, it is pretty punchy. I mean it’s not a simple target. And that’s why the – we have to remember, to Jon’s point, our value over volume learnings and make sure that we only invest if we can get the returns that we feel are attractive. But based on what we know, Lucas, without going into any further detail, if you can understand, we feel pretty good about it.

And just to be clear, that the 10 gigawatt from Lightsource, you treat 5 gigawatt of that as being your potential.

Correct, correct.

Yeah.

Correct. Thank you for clarifying. I think – thank you, Lucas. I think we’ll need to bring it to a close. We – I’ve got a few remarks here and I’ve got something that I want to do. So just hang with us for a minute. As the numbers on the webcast are staying steady, which is great, so just hang with us for a couple of more minutes. Thanks, everyone, for joining. We’ve asked a lot of your time today, and we really appreciate you taking the time. I hope you found it useful. We shared a lot of information. We recognize that, and we want to and need to keep the conversation going. We’ll do – we’ll be doing that with some of you. I know over the next few days, is going to be busy for us through the end of the week. And I hope everyone can join us in September for BP Week. And what we want to do in BP Week, having brought through the – brought forward a sort of macro strategy, what we want to do on that day is help you meet the team, help you meet the people who are going to deliver this and some of their teams, and help you get more into the detail about what it is that underpins this plan. And if we don’t speak before then, I hope you guys get a bit of a break. We’re certainly hoping to, and we're all trying to do that ourselves. We do have a little video. It’s 2 minutes long, I think. I think it’s fantastic. It sums up what we laid out today, and we’re going to play that now. And with that, I’m just going to say thank you and watch the video if you have a moment, and we'll be in touch. Thanks, everybody, and well done to the team. Thanks, everyone.