Good morning, everyone, and welcome to BP's Fourth Quarter and Full Year 2023 Results Presentation. I'm delighted to be here today with our newly appointed Chief Executive Officer and Chief Financial Officer; Murray Auchincloss; and Kate Thomson. Before we begin today, let me 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, along with this presentation, are available on our website. Let me now hand over to Murray.

Good morning, everybody. Thanks for joining us today here at St. James. We've done this before, haven't we? But it's the first set of results where I have the privilege to talk to you as CEO of BP. It's a great company. It has great people, and it's an honor to lead. Our destination is unchanged, IOC to IEC, international oil company to integrated energy company. We're confident in our strategy to deliver this, but are going to do so is a simpler, more focused and higher value company, providing energy solutions for our customers who are asking us to help, contributing to the energy transition, all the while remaining pragmatic and adapting in line with demand, as you saw with the update to our strategy this time 12 months ago. So what does it practically mean to transition from IOC to IEC. Over 100 years ago, we started to create our first value chain, oilfields attached to refineries, with products sold in service stations and airports. We're now introducing biofuels, sustainable aviation fuel and biodiesel to the customer. At the same time, we're lowering the carbon footprint of our plants by using lower carbon hydrogen and electricity for power. Why? Because we can deliver higher margins with lower emissions. Over 60 years ago, we started to create the second value chain, natural gas fields linked to domestic pipeline systems and eventually liquefaction plants. We're now introducing biogas, carbon sequestration and lower carbon electricity to the customer. Why? Because we can deliver higher margins with lower emissions. And over the past 4 years, we've been accelerating our efforts to create a third value chain, lower carbon power and hydrogen. For example, using solar-wind to create lower carbon hydrogen to provide to our plants and customers and using those electrons to…

Thanks, Murray, and good morning, everyone. I've been here once before, and I echo Murray sentiment. It is an honor to speak with you as CFO. Let's turn to our results. BP's focus on delivery supported another quarter of strong underlying operational and financial performance. Our upstream volume was 2.3 million barrels of oil equivalent per day, in line with our guidance. Gas and low carbon energy production was around 900,000 barrels of oil equivalent per day. The underlying financial result was around $500 million higher than the previous quarter, largely reflecting a strong gas marketing and trading result and stronger gas realizations, driven by higher gas prices. This was offset by a noncash write-off of around $300 million, largely related to the exit from a production sharing contract in Senegal and by lower production. In oil production and operations, production was 1.4 million barrels of oil equivalent per day. The underlying result was around $400 million higher than the previous quarter, largely reflecting favorable price lag impacts in the Gulf of Mexico and UAE. In customers and products, the underlying result was around $1.3 billion lower than the previous quarter. Looking at the businesses. In our customers' business, the underlying profit was $880 million, around $200 million higher than the previous quarter. The result benefited from stronger-than-expected fuel margins driven by a decline in supply and a one-off positive effect of around $100 million. This was partly offset by lower seasonal marketing volumes as well as higher costs in support of our transition growth engines. In products, the underlying loss was $80 million compared to $1.4 billion profit in the third quarter. The result reflects significantly lower industry refining margins, albeit with a smaller decrease in realized refining margins because of wider North American heavy crude oil differentials. In…

Thanks, Kate, nice to have her CFO, upgrade on the previous guy. Over the next 8 quarters, we're focused on delivering our 2025 targets, our drive to 2025. We are confident in achieving these for two reasons. First, we're clear on what businesses need to deliver. And second, we have strong momentum, as I've previously described. In oil and gas, we expect to start up 6 new major oil and gas projects, bring online 2 new central processing facilities in the Permian and BPX, checkmate and crossroads, I love their names. And equity and merchant supply to our LNG portfolio that underpins our 25 by '25 target. We'll continue to leverage our distinctive delivery model across project and operations to deliver plant reliability at around 96%, maintained base decline of 3% to 5% and $6 per barrel of oil equivalent unit production cost. In refining, we expect to drive greater competitiveness and value through our digitization and business improvement plans, including maintaining Solomon first quartile net cash margin. In Bioenergy, we expect to more than double our biofuels coprocessing volumes to around 20,000 barrels per day in 2025, investing in our advantaged refining portfolio. In biogas, we started about 5 gas plants in 2023, and Archaea expects to start up between 15 to 20 new plants per year through 2025. In convenience and EV charging, we plan to deliver EBITDA of more than $1.5 billion in 2025. In convenience, we are focused on the rollout of strategic convenience sites supported by customer offers, strategic partnerships and digital investments and integrating TravelCenters of America, realizing deal synergies and expect to grow EBITDA to around $800 million in 2025 with convenience, a significant contributor. In EV charging, we plan to grow energy sales across our 4 key markets and expect to deliver…

No questions online yet. Let's see, where should we start. Michele, why don't we start with you, please. Limit yourself to 2 questions, please, if you can. That wasn't directed personally at you, Michele.

Of course. It will only be two. And congratulations on the strong results. Two questions, if I may. The first one, when you talk about an A range credit metrics through the cycle, is there a simplistic way to bring it down to a net debt level that you would like to achieve in the course of the coming years? And my second question is on the transition growth engines. Clearly, you've got a very ambitious target in terms of EBITDA in 2025. It's more than a tripling of EBITDA, which goes well beyond the volume growth. I was wondering if you could help us a bit more understand where that increase in EBITDA margins would come from? Is it cost? Is it price? Is it cost-cutting and integration of the likes of Lightsource bp?

Fantastic. Thanks, Michele. I'll take the second question first, and then Kate, I'll hand over to you for the balance sheet question. On the TGs, yes, it's an aggressive growth profile from around $1 billion in 2023 to $3 billion to $4 billion by 2025. If you think about what we've done over the past few years, we've bought an awful lot of companies and now need to bring them in, standardize them and drive that growth through them. So the march from $1 billion to $3 billion to $4 billion, it starts with Archaea. We went slow on purpose to get the design right for rapid replication. We're now in action. We've got 5 plants online. We'll do 4 or 5 a quarter now, marching forward over the next 8 quarters. In TravelCenters of America, we brought it in. We're starting to deliver the synergies inside that. We see tremendous opportunity to introduce biofuels into it to enhance margins. We're probably going to beat the synergies on that. The company was not as efficient as we thought it might have been so that delivers more opportunity as well. We'll have Lightsource bp coming in that will allow us to grow that business and absorb that EBITDA as well. And in Emma's business, we do continue to see really strong growth despite recessionary forces and convenience, 9% year-on-year despite recessions, despite COVID, you name it. We've got a fantastic team that we brought in, that's really driving growth in that space as well. EV, earnings positive in 2 countries. We'll get everything to breakeven by 2025 as well. And of course, we'll tighten. We'll really tighten the focus on origination, not spend as much money on origination and really focus on what we're going to deliver moving forward. So I feel comfortable. It's a bold target to hit 3 or 4, but I feel comfortable with it based on what we've done and I look forward to reporting back to you on that over the coming quarters. Kate?

Thanks. Michele, thanks for your question. Let me just step back a minute and just make sure everyone is still very clear that the balance sheet and the credit rating, the stronger investment grade credit rating remains the second priority. That's fundamental to us. I think resilience of the company from a financial position is more than just net debt. And I like the way that the credit rating agencies think about the ratio of the cash that we're generating versus the total of our debt like liabilities. I think that's a good measure of resilience. The change we're making today, which is moving away from targeting progress within the rating to being clear around progress within the metrics is I've got control over that. We've got a great relationship with the rating agents. We speak to them very regularly, but we can't control the rating outcome and neither should we. We did get upgraded by Fitch in November. We remain on positive outlook with S&P and Moody's. So let's see. We are well within the metrics for an upgrade, but that's it for them to decide. But from my perspective, it's around making sure that we are maintaining a balance sheet that is resilient, allows us to see through volatility, allows us to tolerate a perspective of environment that is going to move but also cash flows that are going to move around within quarter. So you've seen from the guidance where we're guiding to heavier CapEx in the first half and heavier divestments in the second half. You're going to see our net debt move around. That's okay. We strengthened it so significantly in the last few years, down to this level, which is the lowest in a decade. That gives us a lot of confidence that we can tolerate that level of momentum. So I'm not going to put a net debt target out. I'm going to tell you I'm comfortable with where it sits right now and our ability to tolerate movement, and remind you that we will continue to obviously be putting around 20% of our surplus cash flow to the balance sheet. So it's going to continue to deleverage just at a slightly slower pace.

It's Biraj Borkhataria, RBC. I've got two questions. The first one is on your EBITDA targets over the -- more for 2030 than 2025. In the footnote, when you presented that in the past, you'll say CapEx at the higher end of the range. And in '22, you were at 16%, '23, 16% and now you're guiding to the middle for '24 and '25, so basically half the plan. So could you talk about the sort of, let's say, EBITDA sacrifice for not spending that extra $2 billion, and where it's coming from and how to think about that? And then the second question is on the dividend. So you referenced the 4% at 60, are you looking to explicitly link that to the buyback scheme? You're obviously buying back shares faster than any of your peers as your chart showing? Or do you see the most 2 separate things and your preference for the buyback here?

Great. I'll tackle the first one. Kate, you grab the second one. So the long-term guidance on capital frame has not changed, $14 billion to $80 billion through the decade. What we are changing is we're getting more disciplined with '24 and '25 year, tightening in on a $16 billion range for these 2 years. I think the way that I relate to this, Biraj, is that we've done a lot of acquisitions recently, EDF, Archaea, TravelCenters of America, Lightsource. These are big transactions. They represent north of 2% of our overall value, which is similar to some of the big transactions you've seen in the United States from some of our competitors on an equity basis. And, it's injecting a lot of people into the business. 19,000 alone inside TravelCenters of America. So it's time now to pause on acquisitions. We might do a few more, but to pause on them and instead focus on that hard work of integrating the systems, the people, the processes, the cultures of these entities, and that's really what we're focused on right now. As far as an EBITDA sacrifice, I remain very comfortable with our 2025 targets I think in a $0.20, $0.30. We haven't really deviated from the '25 to '30 time frame so it's not anything material. So I think the latest numbers adjusted give or take, on our 46 to 49 target in 2025. We're at about 44. So I'm feeling pretty good about that as well. Strong, strong growth inside the upstream. And so I feel comfortable about '25. No change to 2030 at this stage. And in due course, we'll update the market on what we're thinking about for targets for 2030. Those, of course, are aims right now, Biraj. Hope that helps. And over to Kate.

Thanks, Biraj. So on dividend, look, making sure that it's a resilient dividend, is really important to us, which is why we are keeping it as our first priority in the financial frame today. The reason we haven't created and I don't think we should create a link to share buyback is, of course, with the share buyback progress, the share count reduction occurs over time. We've got a very significant decrease in our share count reduction to date. That's going to continue, given what we've just laid out today. That gives the Board an ability to move the dividend per share up. But of course, the Board is going to take into consideration facts and circumstances every quarter, as it looks at the dividend, which will be depending on cash flow generation to date, what the outlook looks like, environment momentum. And they will take that decision as and when we get to each quarter. I don't think linking it to a particular buyback share count reduction is helpful because it removes flexibility. We want to retain flexibility so that when we're considering it as a Board, we can take into consideration that basket of considerations that will allow us to make the right decision for the company and the shareholders.

I think balance point is the key, isn't it? The thing that we feel really, really anchored to is that balance point of affordability on the dividend at . And of course, share count reduction helps drive that balance point down, but balance point is what we're obsessed about. Chris?

Chris Kuplent from Bank of America. Two quick questions. Murray, you've mentioned in your speech, Aker BP and some of the value creation you've now achieved off balance sheet with Angola as well. And I wonder whether you can contrast against that, how you're bringing Lightsource into fully your realm of control? We've seen the asset swap with Equinor, TA and all those acquisitions were fully owned, fully in control. So maybe you can compare and contrast a little bit why it matters to you in those situations? And my second question, Kate, I noticed the $14 billion 2-year guidance is based on current market conditions. Where do you -- how do you feel about current market conditions? I noticed that, yes, refining margins have come down a lot, but they still sit above your balance point comment, Brent, likewise. Give us a little bit of a feel how comfortable that current market condition comment can be interpreted?

Yes. Great. Okay. Chris, I'll start and Kate, can go second. So Aker BP, a fantastic transaction, unique circumstances associated with it. We were in declining assets late in life, made sense to exit the basin. That north -- the counterpart was in growth mode, but they needed cash generation to be able to grow. They just didn't have enough cash generation themselves. So we found after many years of discussions that we could bring those two companies together and create something pretty special. I don't know what the current numbers are, but we -- it was worth about $1 billion when we did the transaction. I think it's up around $3 billion or $4 billion now. So tremendous value creation for both sides. No loser inside that one. With Lightsource bp, we had a partner that's a private individual. They have grown and scaled this business tremendously, but they've reached the ability -- they've reached their max ability to finance this. So it's a little bit like the Aker BP situation where they didn't have enough cash to grow. So this was the moment in time for them to cash out for us to take over Lightsource bp. It has a couple of advantages for us to structure it this way right now. Coral has a fantastic trading business and demand for natural gas coupled with solar and battery technology continues to grow and grow and grow. We're seeing some really big demand coming out, especially from cloud providers, who have GenAI. Just the demand curves are asymptotic, is that the right word? I don't know. Whatever the right word is, huge, huge demand for these things. So being able to control that entity, package these things together and provide those trading options or those packages of energy is really important. The second thing is, if green hydrogen does move, you're going to want control of the developer if that happens. Why? So you avoid giving margin away to third-party developers that can be quite high. So at this moment in time, it makes an awful lot of sense to bring that in, repackage it, straighten it out, pointed towards helping Carol's business, helping Anja's business. And I think that creates distinctive advantage for us right now. We will continue to bring partners in for develop and flip. We'll contemplate what we do with the developer itself. Should we bring in a partner or not, that's something we'll keep thinking about and we'll remain very agile. But they have different circumstances. I hope those examples give you a sense of how we think about these things, which is how do you drive max value through different points in cycle in these entities. So I hope that helps answer the question, Chris. Kate?

Yes. So Chris, current market conditions. So a couple of things I'd say, one, is I think it's important to anchor yourself around the fact that the cash flows of our company not driven by an oil price alone. So it's a basket of commodities, it's oil price, it's gas price, it's refining margins. You know that. And you can look at where we've been year-to-date so far to get a sense of where we're thinking on that. What I would say is that the confidence that we now have in our balance sheet to tolerate movements around that gives you a sense that we can be comfortable in the fact that we'll be able to distribute the $14 billion in a range around where those prices have been year-to-date. If we see a fundamental disconnect in the market, then, of course, we'll need to talk to the Board and update you, if that happens. But for now, the confidence we have in the business performance and the momentum we've got, the confidence that we've got and the strength of our balance sheet allows us to be confident that we can deliver the $14 billion at prices around where they've been year-to-date. That's how I hold it.

Oswald Clint, at Bernstein. It looks like -- I mean just backing out maybe $4.5 billion of trading last year, I always like to try and dig into this. So it looks like, again, as Kate was saying, you hit the 4% number. So that's great. I guess just in this next two years, can you just talk about -- again, the confidence maybe linked to that last question and points to macro is -- at this macro, you can keep doing that quantum in 2024, 2025 what -- including the new businesses trading around those. Just again describe the confidence around delivering that through this year and next. And then secondly, Murray, you said there are 4 generations in the oil and gas business. You're sitting and then you see -- I'm just curious about your appetite for a little bit more liquids growth potentially through the portfolio. We have the 3% to 2027. How do you think about bringing some more through, service cost inflation, all of that put together, please?

Yes, sure. Maybe I'll take both of these, sorry, Kate. Liquids, yes. So what we told everybody in Denver is that we see the capacity to grow our oil production, so to speak, by 2% to 3% through 2027. As we look ahead over the next 2 years, we have some big decisions on sanctions as well that will determine what happens beyond that, Os. So you have Cabo Frio in Brazil. You've got Kaskida, Tiber, Gila in the Gulf of Mexico and the Paleogene [indiscernible] Northern Canada, you have clear expansion. You have Abu Dhabi expansion. I'm probably missing some that I can't think of off the top of my head, but you have these massive projects, some of which are held 100%. I think Paleogene 9 billion barrels 100%. Let's see how we go on those. And if we decide to sanction more of them rather than less, then I think we can do better than that 2% to 3%. But I'm not going to be focused on volume. I'm going to be super focused on returns and what's the right returns as we look across that versus the gas portfolio as well. There's a plethora of potential gas sanctions as well. So I think that's the task of 2 years ahead. That's why I highlighted it. Our reserve replacement ratio has been a bit low in the past. It's going to get back much more competitive now, as we look at this 12% to 16% sanctions across the next 2 years. What the volume outcome from that will be? Hard to predict. We've given you 2 million a day by the end of the decade, 2% to 3% growth through '27 on oil, but I think the sanctions will really determine that. So as we get through…

And just say I am delighted to both of you individually and for the BP, for the roles that you now have and thank you also for the longevity of the guidance as well in terms of the buyback. But Murray, you've talked about was in a simpler higher-value BP, which all sounds great because that you'd ever say it's going to be more complex. But what stops you from get there? What are your biggest challenges over that next 8 quarters? And then for Kate, the buyback you talked you at least $14 billion. So what moves you from that? is it operational or is it kind of -- is it purely price related? And linked to that, how do you think about CapEx versus buybacks?

Lydia, that might have been 3 questions. It was 2.5, okay, very good. I'll let Kate handle the second set on challenges for simplification. So I think the easiest way to think about this is the past 4 years has been about origination. The scale of the hopper we built in the hydrogen and solar, in offshore wind, in oil and gas, everywhere, you can see, we have tons of options to move forward. And the big challenge is to now get the organization, the engineers and the commercial people to move away from origination to execution. That's the big challenge. So forcing the pace to get to decisions so we can increase cycle time to increase value, reallocating the people to the right places and then stopping the old stuff. As always in large corporations, stopping the old stuff is a perpetual challenge and that's probably the challenge the leadership team and I have is really getting people to really focus on the stuff and not pursuing other things. At the same time, there's a huge opportunity inside technology. We've made immense strides on digital over the past 10 years, especially in the upstream business. We've now struck a deal with Microsoft to be their -- one of their founding partners on AI Copilot. We're getting it in the hands of our engineers and across the company. And trying to figure out what are the best things to go after at scale is a key challenge because the opportunities are enormous in this space. So to me, it's all about focus, if I'm honest. It's all about focus and getting the organization to focus and then let go the other stuff. That's the biggest challenge that we'll have moving forward. Kate?

Yes. Thanks, Lydia. Maybe I'll talk about the $14 billion first, and then I'll come back to your question on CapEx and share buybacks. So the way I think about the $14 billion -- and Murray talked about the drive to 2025 and all of the confidence that we have and the momentum that's currently around the company, the operations are performing really well. We've got a number of things that come online over the next 2 years. That gives us enormous confidence in terms of the underlying operations and our ability to deliver the business outcome. So that bit I don't feel is in the picture in terms of deciding where we go with the $14 billion. For me, it's really about environment. And if there's a fundamental change in the environment, then obviously, our cash flows are going to change in relationship to that. So that's why we've anchored it on current conditions. We went to current rather than reasonable because we wanted to give you something that was objective and not subjective. So that's why we went with current market conditions, and you know what those are. In terms of CapEx and share buybacks, so I wouldn't interpret the tightening of the CapEx guidance to 16 as being part of the affordability of the 14. I see the CapEx tightening is a real symbol of our focus on the fact that we are going to be hugely disciplined in how we allocate our capital and very much, very much returns driven. Our sanctions have to hit hurdle. Otherwise, we won't move them through. And I think that's really important. Murray and I are incredibly clear on that. We've done a lot of inorganic activity, which we've talked about over the last couple of years. I think going forward, there's probably a less space for that for the next couple of years. I think the 16 feels about right based on the activity set that we've got today loaded and the tightness that we see around the big -- certainly, the upstream yards around the world we wouldn't really want to -- couldn't really do it well, actually, if you were to take that up. So I wouldn't link the share buyback upgrade to the CapEx tightening. The CapEx tightening is about discipline and focus. The share buyback is around the confidence that we have in the balance sheet and the underlying performance of the business to deliver, and that's what's generated our ability to upgrade and enhance. Thanks, Kate. I'll go online now, Paul Cheng, Scotia Bank. Paul?

Murray, I just want to go back into your prepared remarks say [indiscernible], and you also -- in your early comment that you want to say, let's go some of the pivots behavior and focusing on more efficient. So from that standpoint is the organization structure need to be adjusted or that you can do all that within the current organization structure.

Great. Thanks, Paul. Appreciate the question. It was a touch hard to hear you, so I think I'll try to answer the question. If I don't answer the question, let us know, please. I think the question was organization structure. Do we feel we have the right organization structure to move to delivery? Look, we made a huge change in organization structure back in 2020, probably the largest organization structure in our 114-year history. I don't want to do that again. That was needed, but really demanding on people and demanding on the corporation. Some of those changes took a couple of years to enact in places like Europe. So I don't want to do mass change of structure. I don't think we need to either. However, there are places where we're inefficient. And we'll do a gradual program over time of driving efficiency into the business and the structure. There are places where we've got overlapped that we need to think about how to do it better. So that will be something in our minds. But big corporate structural change, no. Changes to reporting segments, I prefer not. I think that's not something that's going to help delivery of our targets in 2025. But look, I'm going to challenge the corporation and challenge ourselves to simplify everywhere we can. You felt it in the buyback guidance today, simpler guidance to help the market. You'll just see us continuing to push that and push that, but I don't want to do a giant wave now. Paul, did I answer your question?

Yes. Maybe that if I can. Along the way, you guys have done a number of joint ventures whether [indiscernible] but from an organization or data management, joint venture, a lot of time is difficult. So if you're trying to make it more simplified going forward, so we assume going forward, you will revise lesser on the joint venture structure? Or was that this is a different topic and you don't think it matters?

I don't relate to the JV structure as a mechanism to simplify or not on business delivery. I relate to the joint venture structure as a mechanism to more efficiently create value. So if you think back to Lightsource bp, we took it off balance sheet. We geared it up 5 years ago, and we let it grow on its own. That decision was about giving them independence so they could grow rapidly. They've now hit the limits of that, and we need to bring them back in, reset it and have a new model moving forward. But it was all a value-based decision as opposed to an efficiency-based decision. Think about BPX in the Lower 48, we decided once we bought BHP to allow that entity to have an OMS but not an OMS that was of a similar quality to our offshore businesses and that allows it to operate more freely, access acreage faster, do contracting faster, et cetera. So for that particular basin, solar and BPX, we felt that, that separate model would help them deliver more efficiently. So to me, it's about the structure that we use, is all about how do you create max value. That's how I think about it and that's how we will continue to think about it moving forward. Thanks for the question, Paul. Just back on the line one more, and then we'll come back into the room. Roger Read, please. Roger?

I guess probably coming back around on a couple of the questions already been asked. I just want to make sure I understand, on the improvement in EBITDA that you're looking at for $70 base, Brent, is there a way to think about that from a how much is likely from, let's call it, the conventional production side, whether it's the gas or the oil piece? And is that a mix issue with these new projects coming in? Or is there something else in terms of OpEx reduction we should be paying attention to? That's kind of question number one. And then in terms of the financial frame on the returns here of capital, and I appreciate the clarity, I think that's a nice step forward. If I think about your returns as a percentage of EBITDA compared to some of your peers, it's still on the lower end. So I'm just wondering, do you think about it as strictly what BP is capable of or do you want to try to close the gap longer term with peers in terms of, call it, ratios or percentage metrics?

Great. I'll let Kate answer the second one. On, EBITDA, so just 2025 is the -- I think what your question is, Roger, hope so, because I don't carry the 2030 numbers is tightly in my head. But for 2025, if you normalize 2023 to '25 conditions, we're at $44 billion of EBITDA moving towards $46 billion to $49 billion in 2025. We obviously have growth in the upstream that we've been talking about. There are divestments along the way that may or may not happen. Some of these ones are pretty tricky, but there are some potential divestments we've talked about in the past that may be part of that mix as well. But the new projects that are coming on are of higher quality to the existing business. I think the uplift is about 15% to 20%. So you should see margin mix impact from the upstream across the time period. So that's the first part of your question. Additionally, we talked about the transition growth engines earlier. We see growth of 1 up to 3 to 4 based on the acquisitions we've done and the direction of travel with the rest. So I think that should help you think about how we get into that $46 billion to $49 billion realm. Probably the first half of it is the historical oil and gas business and refining business, and the second half is the transition growth engines as well. I feel pretty underpinned on the $46 billion to $49 billion, to be honest. I think we'll hit that quite easily. Kate?

Yes. Thanks. And morning -- very early morning for you, Roger. Thank you for joining us today. Let me step back a little bit. So if you think about our balance sheet and where we were in 2020, we had net debt of over $50 billion. And I think you could argue we're starting from perhaps a slightly different place than some of our peers. And the focus that we have put into strengthening the balance sheet and putting 40% of surplus to that balance sheet and deleverage over the last few years, I think, has been really, really important. And as we've said today a number of times, it's taken us to a place now where we are stronger than we were. We've got confidence that our balance sheet can tolerate movements. And that has allowed us to do more with regard to shareholder distributions and move to the 80%. We feel that's in line with our peers. And so it's very much around the journey that we've taken to get to where we are today. Today, with what we're announcing with our predictable, simplified enhanced guidance, we feel that, that very much puts us in line with our peer group.

Good. Thanks, Roger. Why don't we come back into the room. Yes.

It's Josh Stone here from UBS. Two questions, please. Firstly, you haven't made any reference to emissions today. You revised your scope 2 emission target this time last year. Just how comfortable do you feel with that target for 2030? Are there some easy wins you can do to reduce emissions and still maintain value? And then second question for Kate on working capital. You mentioned there was a large release related to LNG. Just can you remind us, is there anything left to release on the LNG side?

Sure. On emissions, so we'll update our emissions in the ARA for what we actually achieved in 2023. We're still busy calculating that, as you can imagine. But I think we've got strong progress on scope 1 and scope 2 emissions from our company. We continue on with the drive to hit 50% reduction in emissions from scope 1 and scope 2 by 2030. That's engineering. It's pure and simple engineering. Now it's big programs like you'll see in Indonesia of taking carbon injecting it into the reservoir, getting more natural gas out, the carbon stays and trained, and there's less emissions for the planet. So those are the kind of things that we'll be doing, but it's a very -- Gordon has a very precise list of projects that we'll work our way through over the next 4 or 5 years to hit that particular target. I mentioned earlier, aim 4, which was about methane reduction. We hit an incredible milestone. Huge compliments to Gordon and the team for putting methane measurement in place across the oil and gas business. That's demanded new engineering, new technologies, working internally and externally to get to that result. I really proud of it because it's the most important thing for the planet that we reduce these. Methane emissions, we'll, of course, be sharing this technology and this learning with anybody inside the sector who wants to. On aim 3, the product mix changes, right? The product mix just changes over time. You could hear what I was saying about more electrons being sold. So we have fuel stations where we sell fuel. Some of that's migrating towards electrification as an example. And I think sales of electricity over 150% up on the previous year. So no concerns with the direction of travel we have right now. And we are seeing strong adoption. And we think things like Lightsource bp will help us immensely on this journey as well. So we can couple lower carbon offers with natural gas offers to customers as well. So no change. No change to what we're thinking as far as the aims go. Kate?

Yes, thanks. Thanks, Josh. So back at the third quarter results, I talked about around $3 billion still to come in terms of LNG delivery. As you saw, we've got around about a $2 billion working capital release in the fourth quarter. Most of that is related to LNG deliveries. So I would hold it that there's about a 1 left to come, as those deliver through the course of the first half of the year.

Great. Thanks, Kate. Martijn.

It's Martijn Rats from Morgan Stanley. A little positive in this set of results. I mean you're giving us an awful lot to work with. So that's great, but I do want to ask you two things. I wanted to ask about the impairments because in the fourth quarter, there were still some impairments, and we tend to sort of shake them off and say, well, noncash, but it was cash once. Is there some common denominator in this impairments, perhaps you can sort of say a few words about that? And the other one I wanted to ask about the activist shareholder letter, if you had any response to that? I know it's a small investor, but nevertheless, it was sort of intriguing.

Why don't you start with impairments, Kate?

Yes. Thanks, Martijn. So impairments, yes, as you would expect every quarter, we look for potential impairment triggers. In the fourth quarter, there are a number of things that come together. We update our price perspective. We update our group discount rate. We've got our changes to reserves, and you put all of those assumptions together and -- so it's a confluence of a number of things coming together that cause impairments. So a theme around updates to prices and rates, coupled with some other things that are going on -- for example, one of the things I would talk about -- I think in the stock exchange announcement, we do reference BPX. We were out in Denver. We are unwavering in our confidence with regard to BPX. There's a couple of things going on in that number. And it's price and discount rate, but it's also some acreage swaps that's driving that. So you shouldn't interpret the impairments as having any impact on our EBITDA targets in 2025. If there are some changes on reserves, we may see some downward trend in terms of volumes from one part of our portfolio, but they're offset by upward trends in other parts of the portfolio. So we're comfortable.

And then on your second question, Martijn. Look, we welcome constructive engagement with all shareholders. I think that's an important thing as a publicly traded company, we think about. We disagree with our assertions. We just disagree with them, if I'm honest. We run an integrated model. I think you've heard me talk about integration quite a bit today, and we think we do it fairly well. We're really proud to be bringing Lightsource bp in. It has a strong track record of delivery. It's a top 5 solar producer globally, and it's achieved mid-teens returns -- mid-teens returns over the past 5 years in their development flip model. And we've obviously been in power for a long time, 15 years now in the U.S. in integrated power onshore. So we do quite a lot with electricity across our business, coupling it with gas. I think we're #1 in gas and #2 or 3 on any day in power trading in the United States. And on offshore wind, as we've said before, our returns hurdles on offshore wind are 6% to 8% unlevered. But by the time you lever it up, by the time you farm it down and bring in a partner, by the time you integrate it into our business, you're well into double-digit returns, and that competes well with the rest of our business. So we're happy with our strategy. Direction is unchanged. You'll see us be much more focused, much simpler and very, very returns focused, but we're very happy with the direction of travel and the shareholders I talked to are happy as well. Thank you for the question. Next question in the room?

Can I go back towards cash flow? And just if I look at the cash flow statement [indiscernible] movements in inventories, other current liabilities, et cetera, et cetera, it's been in the order of 9 billion, 9.5 billion the largest, past 2 years sort of that's upon the -- most of the LNG is now with you. I'm just trying to understand the extensive -- the reasons behind the increase -- on through that particular line, how much of it is about putting more up on trading, so on and so forth, perhaps you can help me. Sorry, I should have taken a microphone...

I'm going to turn to my cash flow statement set as well...

There is a second one.

Do you want to ask the second one, while I just look at the cash flow statement?

Yes. And the second one is, it goes back to the customers' business and just 2019, the guidance for '25 with $7 billion of EBITDA from the $5 billion base, 4 years on, 3 years on with $4.3 billion or so of EBITDA. You're indicating $1 billion or so of further improvement from the transition growth engines in that business. There's obviously something that comes from travelers, but help me bridge the gap.

Sure. Why don't I take the second one, while Kate looks at the working capital question. On C&M, We have a target to get to $7 billion in 2025. I feel okay about it, I think is the way I'd say it. We're 4 and a bit right now. TravelCenters comes in for a full year. Castrol has now started to show a trend 5 quarters in a row, gradually creeping up. That's good. Convenience growing 9% year-on-year. That's good, and that continues. Electrification moving from a loss to positive, so it's a lot of small movements we see that start to drive it up. Something we don't control is the fuel margin. and the fuel margins have been unusual in this time period. They swung into the refineries as opposed to into the service stations itself. I can't predict how that's going to turn out in 2025. I just really can't predict that. but there's probably $1 billion of swing on that. So you might see a number of 6 to 7 in C&M in '25, but the other billions likely to be in the refineries instead. I just can't predict at Lucas because it's really -- it's difficult to predict where that margin is swinging up and down that value chain. So because we run an integrated value chain, I feel comfortable with 46 to 49. It just may be 6 as opposed to 7 in C&M and it may be a bit higher inside our refineries. So that's how I get comfortable that I can see that path. It's been a tremendously challenging time period for that business. When you think about COVID and lack of travel, when you think about how long the lockdowns occurred inside China, when you think of the inflationary pressures in the recession, it's been a hard slog for Emma and the team, but I now feel they're back up and on it, and we're really starting to drive digitization offshoring into that business as well. So that will be another lever that we get there. So that's how I'm thinking about it, Lucas. Kate, over to you on W CAP.

Yes. So on working capital, in terms of the detailed notes around what's going on in underlying working capital, the $9 billion release is really a function of what happened back in 2022 where we saw about a huge spike in gas prices. That's now largely unwind. As you've heard me say this morning, we feel we've got $1 billion left of unwind to come through, which is going to be one change in the working capital going forward in 2024. But the $9 billion that you see in the '23 results today is largely a function of what happened in '22 and the unwind of that position.

We understand each other. I mean I'm just looking at $3 billion -- sorry. And we can take it off-line if that's easier. But I'm just looking at $6.3 billion of outflow movement inventories, et cetera, et cetera, in 2022. Another $3.3 billion this year, which I assume to be working -- flows out largely working capital associated. A chunk of it last year was LNG. Much of that money has come back. I'm still unclear as to why the negatives in the cash flow or of that scale, and they seem to be predominantly around inventory or am I -- just misunderstood.

There will be movements in inventory. There will be changes in valuation of RINs, other emissions allowances and all those kind of things flow through German MOT. If you -- we can take you through a rec and take you through how it builds up, if that's helpful, but we should do that offline.

Al Syme at the back of room please?

Thanks, Murray. Can I say you focus -- the theme today is about operational delivery in the next couple of years and sort of scale back in M&A to some extent. But you find yourself with a pretty strong balance sheet at a time of higher rates, is putting a lot of stress on transition players and also perhaps in the U.S. shale. There's a lot of private players trying to exit, but how do you think about utilizing that balance sheet versus the option of buybacks, which is where you're choosing to allocate?

Yes. Thanks, Al. I guess I start from the position that we've done a lot. We've already done a lot with EDF, Lightsource, Archaea, TA. And there are only so many of these things you can do at once and deliver them effectively. So we're probably -- we've probably got 1 or 2 more in this for the next couple of years. And then that's about the saturation point that you can actually integrate these things effectively. That's how -- that's the starting thought I have. I'm very countercyclical. That's why you saw us do Lightsource bp when we did because it was a nice countercyclical opportunity. So I'm very -- and TA as well. So I'm very focused on new countercyclical opportunities. So I am sympathetic to that. But there's just -- only so much the corporation can absorb at once and get the systems right, the processes right, the culture right. That's what's so critical for us. Natural gas in the U.S., let's see where gas prices go. Certainly, there's the chance that gas prices get suppressed. Would you think about doing something countercyclical in gas if an opportunity came up? Maybe. But I've got 22 Tcf of natural gas inside BPX right now between the Haynesville and the Eagle Ford. So it would almost have to be super cheap or free for me to contemplate that given that we've got so many years of development ahead of us with natural gas with the resources we have in the best place in the United States right now. So I believe in countercyclical, that's what we've done. We're probably getting close to the limit of what we can do to effectively integrate it, and that's what's the driving consideration in mind as I think about slowing down a little bit moving forward. Hope that helps, Al. Sorry, you've got one more follow-up?

Yes, sort of BPX actually more liquids in Permian...

I'm sorry...

You met on BPX, more liquids in Permian rather than gas.

Yes. liquids, I think we've got 8 to 10 years of runway right now with infill drilling. I think it's countercyclically. So you'll do acreage swaps, which we're doing all the time in BPX. I think we've done three big acreage swaps over the past few years that we don't talk about very much. So certainly, they're focused on those types of things. But with oil around $80, I'd wait until oil dipped before I did that. I'm sure oil will dip again to $60 some time in the future at some time I can't predict. And that's the time when you use the stronger balance sheet to go countercyclical as how I think about it, Al.

Peter Low from Redburn, Atlantic. First question, just on BPX. There's a strong production number in the quarter. Can you talk a bit about when you're expecting the next 2 central processing facilities to start up and should think that kind of when they come online, that will result in kind of an immediate step-up in production? Or are they filled more gradually? And then the second question was just on LNG and the target to increase that portfolio to 25 million tonnes. Does that include any volumes from Venture Global? And can you perhaps update just what's happening there?

Yes. So thanks, Peter. On BPX, yes, so the next 2 facilities come online. Checkmate is tracking well to be online this year. And the final one comes online next year. The way to hold it is that we're paying at around about $500 million of our capital in BPX into completing this infrastructure build-out. That will then allow us a, to fill it, which is really important. So a drill and fill perspective. And then we'll be able to take that capital and use it to put into our effective production drilling activity rather than using it to carry on completing the infrastructure. So that's going to help as well. So that's kind of the way to hold it is we're going to be able to fill those gathering units and then we're going to be able to redirect that capital to more productive uses as well.

Great. Thanks, Kate. On LNG build-out, we're 23 in '23, 25 in '25 is the target. We expect to get additional volumes, as you say, from Venture, Tortue and Beach. If you go check the numbers, those add up to weigh more than 25. So that's why we feel very comfortable with 25 in '25. I'll be surprise different not higher than that, but let's not set too hard at performance contract for Carol in the room. As far as Venture itself, it continues in commercial dispute. I'm not going to get into any details on it other than to say that we will enforce our rights rigorously. One more question in the room, then we'll go back to the lines.

It's Kim Fustier from HSBC. You wrote off the vast majority of your initial $1.1 billion investment into U.S. offer win that was the Equinor JV. What's the path forward for those projects? And do you think enough has changed in your decision-making processes to ensure that something like this doesn't happen again going forward? Secondly, I just wanted to ask about the robustness of project economics in the low-carbon space in the U.S., if the incentives were to change for whatever reason?

Sure. I guess maybe I'll tackle both of those. On the East Coast venture with Equinor, over time what we've decided is that integrated delivery models are much more important for us than a PPA-like model. Empire really is a PPA model. So it was time to divorce ourselves that Equinor carry forward with that, they want to do that. And for ourselves, we'll step away from that one. In exchange, we got some land that we can monetize as well as Beacon. Beacon's 2.5 gigawatts. It stands the transfer integration. So we're #1 gas trader in the United States, #2 or 3 in power. We see the capacity to absorb that into that book and create some interesting value. We'll take our time to do this. We're not in any rush. The U.S. really needs to build out. And of course, we'll bring in partners, et cetera, over time. So that's how we're thinking about that. As far as decision-making quality, I think back in 2020, we were taking this as a first step into the basin, recognizing that we were paying a premium to learn. We learned and we move on from that is, I think, the best way for me to describe it moving forward. Economics in low carbon incentives, et cetera. I think we just need to remember that incentives exist everywhere inside the energy space across the United States and across most countries in the world. There is an equal incentive in oil and gas, called the intangible drilling credit, as there is RINs, as there is on the IRA. So the U.S. is a place that incentivizes energy provision across the wide range of it arrangement. Sometimes we get a little bit forgetful. And we think it's only new energies that have those incentives.…

Maybe a couple for me. On the refining side of the business, products results were quite weak this quarter. You've had a lot of moving pieces in the portfolio in recent years. And even though margins were weaker in the fourth quarter than they've been of late. They were still particularly seasonally relatively solid and above mid-cycle in most places, and you posted a loss in the business. So as we think about the earnings power of your refining business, can you help us understand on the quarter, maybe some of the moving pieces, whether one-off or specific trends that might have been headwinds? Was it a trading issue a matter of specific hit? Or how should we think about what was or was not maybe kind of repeatable on this fourth quarter? And then the second question on Lightsource bp, you referenced mid-teens returns over the last 5 years, which is very impressive. We don't have a lot of visibility on that. However, maybe we'll get more going forward. But as you look over the next 5 years, could you maybe talk about some things that have or have not changed in the environment, particularly if you think about the build and farm down business? Are there -- are margins compressing on that side or not? How do you think about margins over the next 5 based on trends in that business versus the last 5?

Super. Thanks, Ryan. Kate, do you want to take refineries. I'll take Lightsource?

Sure. Thanks, Ryan. Good morning. Thank you for the question. In the refining portfolio, we did signal a significant level of turnaround activity and maintenance in the fourth quarter. And it was a very heavy quarter, as I said, I think in my prepared remarks. We had a full site turnaround at Castellon. We also had unit-level towers at 2 other refineries. So if you look at what's going on, I think credit to the team are -- availability is really high. So we're at 96.1% for the quarter. Our utilization as a consequence of the level of activity in those refinery turnarounds was down to around 84%. That's really what's driving it, coupled with the slight drop in margins that you recognize. But yes, it's around the level of activity that we are putting through those refineries to upgrade and make sure that they are maintained and solid as opposed to what's going on in the refinery margin environment.

Yes. I think if you adjusted for those, Kate, they'd be quite comfortable profitable, in line with expectation. As far as Lightsource bp and trends, so as I talked about over the past few years, that's what the return cycle has been. As interest rates have risen in 2023, it's been quite difficult to get prices and interest rates to match in a development flip model. In Australia, Lightsource was able to move transactions forward. In Europe, they were able to move transactions forward, so there wasn't a disparity between price and discount rate, but the United States was a challenge. And it was a challenge on pricing to get price high enough to match the discount rates. So they slowed down the program in the United States. That will be something that picks back up, as we see interest rates drop through '24 and '25. You guys will be able to guess interest rate trends better than I will, but we all read the same stuff in the media, I am sure. So I think that's one particular trend. We do see lots of capacity for solar. There are more and more countries that are starting to develop solar. So I don't feel supply chain bottlenecks happening, and demand just continues to skyrocket. And I think especially the trend that is interesting is GenAI. And I think the more and more that corporations, individuals use GenAI, we'll see more and more demand for power. And I think we're going to need every little bit of renewables and natural gas we possibly can to help power of the world systems given that expansive demand inside GenAI. So I hope that gives a super high level overview, Ryan, for the question. Anybody back in the room? Irene. Sorry, I can see you behind the podium, Irene.

Irene Himona, Societe Generale. Murray, you highlighted how moving from origination to execution is going to be key to delivering operational excellence. I'm curious as to how you do that in practice. So what levers do you have to drive a sort of cultural or working cultural change day to day? My second question, you highlighted throughout the presentation that amazing volatility we've obviously had in the last 3 or 4 years. If we do find ourselves in a world of 60, how -- I understand we will still get 80% of surplus cash is buyback. How should I think of the flexibility of the $16 billion of CapEx which you announced today in that scenario?

Yes. Great. Thanks, Irene. Culture. I suppose it's what -- it's where we as leaders inside the team place our emphasis. Do we place the emphasis and the encouragement for new stuff? Or do we encourage people to get on with sanction and move forward? So there's something about, as a leadership team, we need to shift our focus to the execution side. And then equally importantly, how do we align third-party contractors on that basis? How do we make sure the supply chains are robust and how do we gain confidence and then what we're doing will be as efficient as it possibly can be. So I don't think it's a material challenge to start constructing. The material challenge will be to turn off the old stuff and all the other things. That's the material challenge that we have that each and every one of us, as leaders, is constantly focusing on. I'm looking at Leigh-Ann, who runs our digital. Everybody wants to spend lots of money on digital and do their favorite programs. The key is in really, really getting control in it and focusing it down to only the big things that matter. So I don't know, maybe not every company is like us, but that's always our challenges turning off the old stuff. On $60 world, we actually have quite a bit of flexibility inside -- you changed your oil and gas drilling plants, and we've got quite a bit of flexibility across the portfolio to swing CapEx down materially, if we needed to. Kate, I don't know, would you like to add anything to that one?

No, I think that's absolutely right, Murray. I think where we started 2023, we're at 16 to 18. And as we went through, we tightened that write-down and by the time we got to 3Q, we were saying around 16. And I think for me, the most important thing is creating the right level of focus. As you'd expect, at this stage, we've probably got a fair bit of CapEx committed for 2024. And as Murray said, we've got a lot more flexibility with regard to '25. And I was hold BPX as my big optionality within that frame to move things up and down if we need to make fast reactions. But what I would say is that the strength of the balance sheet, the resilience we've created as a consequence of that means that we don't have to make sharp reactions and we can take our time, but we have flexibility.

Thanks, Irene. Let's go to online again. Bertrand, please.

Yes. Congrats for the result, Murray and Kate and the clarity of the overall message. Two questions, if I may. So one follow-up on the offshore wind. Do you have a plan for FID in the next 2 years, by example, in the U.K.? And the second question is, as you mentioned, reserve replacement ratio was quite low for both '22 and '23. Reserves to production life, SEC basis is just around 8 years, and this is, by the way, where you want to sit in the coming years. Can you remind us why 8 years is the right number for BP going forward?

Great. Thanks, Bertrand. I can take the reserve replacement ratio. Kate, do you want to think about FIDs for offshore U.K.?

Sure.

Go ahead.

Yes. So I would have said the U.K. offshore wind projects are progressing well. We've got good clarity around grid connections, which was one of the most important things. So we'll be moving through that. In terms of FID, probably not this side of the end of 2025, but probably early once we get to the other side of that. I say we're progressing well. We've got clarity on good connections as the most important things to give us certainty as we move towards FID. And we're working hard with making sure that the supply chain is set up. There has been quite a lot of inflation inside the supply chain for offshore wind right across the remit of what we require. So we're managing that as we approach FID, and I say we'll take that decision as we get clarity and as we're confident on the turn situation, and let's see how the political environment shapes up in the U.K. over the next 2 years as well. But at the moment -- yes, towards the end of the 2-year time frame, early following that is how we're thinking about it currently.

I think on reserve replacement ratio, I'm happy at 8. We talked about 8 at Denver. It's a conservative 8, I think, is a way to think about this. Over time, we've really, really tightened the definition of what reserves you can book to a place of conservatism where this 8 is -- would have probably been much higher a decade ago so I think that's just the first thing to have in your mind. Second, I worry more about proved developed reserve replacement ratio than I do total proved reserves. And as long as you're 90% plus, I feel good about the ability to sustain a business of our scale. And when you see the ARA, you'll see that our numbers are looking very good on proved developed reserve replacement ratio. Moving forward then, obviously, all these sanctions will drive our PUD bookings up higher, as we sanction these things across the next 2 years. So I think there's just -- it's a bit more conservative than it has been in the past. And that's why it feels okay to me. Bertrand, I hope that helps. Any more questions in the room? I've got two more online.

Giacomo Romeo, Jefferies. First question is on your convenience and EV charging EBITDA targets. Obviously, you don't give us a split and it's understandable. Just I'd like to understand how much this -- the outlook -- the split between the two has changed in your mind over time? I've noticed that your customer touch points perhaps are not growing as fast as you thought. That's potentially impacted your convenience EBITDA growth, but perhaps you are accelerating growth on EV charging. So just trying to understand how sort of you're thinking, how you're going to get to those '25 and '30 targets in your mind and how that has changed? And if I can ask a clarification on -- I'm sorry, your definition of here on current market conditions in the context of your buyback plan, very welcome the visibility. Just trying to understand, as you mentioned Murray, it's a volatile macro environment, how much willing are you to lean on the balance sheet if there is a, say, blip in the macro for a couple of quarters and -- or should we look at this as an 80% on whatever is the outlook for the year?

Go for it Kate, and I'll sweep up on convenience and electrification.

So on current market conditions, I'll say -- what I said to start with which is I'd look at where our basket of commodities has been year-to-date. It gives you a really good sense of how we're thinking about that. We've got the ability to tolerate movements. You're going to see movements in our debt going through the next 4 quarters of this year based on purely what's going on inside the business so that even looking at the environment because of the weighting of CapEx in the first half and divestments in the second half. So you're going to see it move around. I'm comfortable with that. Our net debt at 20.9 gives us quite an ability to tolerate that movement. And as I say, if we get a fundamental disconnect in the market, then maybe we'll take another look. But I think you should hold it as there's a fair degree of tolerance around the conditions that we've had today across oil, gas and refining.

And I suppose we have said that the $1.75 billion this quarter is done and $1.75 billion and $1.75 billion in the next 2 quarters as well as, not subject to market conditions. So that's a fair degree of certainty. On convenience electrification, there are a lot of things that have moved over the past 4 years. I think just some highlights in our mind. We thought fleets would move first. But given recessionary pressures and some relief from governments, fleets have slowed down. Contrasted with that, consumers have moved faster, mandates, preferences, whatever. So we found ourselves over time. We thought we'd be doing fleets as we started this. It's actually drifted more towards individual as opposed to fleets. We started with thinking about 12 countries, is where we focus for now, given adoption levels. We're really focused on 4 countries, U.S., U.K., Germany, China. And so you've seen us very, very focused on where are the places that we think maximum adoption rates will happen. And we see it. You see the metrics on sales, et cetera. You can see that 2 of those countries are profitable already, and we feel very comfortable that we'll move into profitability with the other countries as well. So those are the kind of changes. We've deployed less capital than we thought we would. Why? Because we concentrated down to 4 countries as opposed to going after 12 countries. So that's the EV side, but the 2025 target, we're still saying get into profit in 2025. So no change to it, just a bit less capital than we originally would have been thinking. On the convenience side, it's remained really robust. I'm really surprised about how robust convenience has been. Ex-TA growing 9% per year in gross margin despite the fact that you had COVID, lockdown, invasion, recession. You've got a perfect storm for that business. But given the power of the brands that we have like a Marks & Spencer here, and I can say the same for other countries, given the great work the teams are doing on digitizing, integrating the business in the U.S. together, we've started to integrate ampm with Thorntons with TA together in a way that we haven't in the past. You're just driving much more efficiency into that business. So what will happen, the 1.5 will obviously largely be convenience, and it's more convenient than I would have expected, to be honest, given the headwinds that we faced. So I hope that helps a little bit, and you can always catch Emma afterwards to find out more from her. I think we're down to the last two questions online. Matt, go ahead.

Two, please, if I could. On distributions firstly, can you just talk about to what extent the change from 60% to 80% is reflective of more pro-cyclical based confidence in medium-term macro and trading conditions? And linked to that, can we now think of the 80% as being fully through cycle as opposed to a more prolonged down cycle scenario in the future starting to trigger the case for reverting back towards 60%. And then secondly, it feels like the emphasis on simplification and efficiency has been enhanced today, if anything versus the recent past? Is that fair? And if so, where do you see incremental opportunities that perhaps weren't called out as much in the past?

Great. Super. Kate, do you want to tackle the first one?

Sure. Yes. Thanks, Matt. Yes, 80%, I think, very much through cycle. If you think about where we've been since the inception of the share buyback, we're around 65% of surplus cash to share buybacks. And we've done that while making huge progress on our balance sheet. Our balance sheet is now in much better shape. We feel good about it. As I've said a number of times this morning, we can tolerate movements, so we feel huge confidence in our balance sheet. We feel huge confidence in the business performance and the ongoing momentum and delivery. So I mean, if there's a fundamental change, then we'll look. But right now, I'm confident that we can be completely clear that this 80% of surplus is going to be through cycle. This is an upgrade, and it's pretty much in line with the pro rata upgrade over 4Q and the first 2 quarters of next year, moving from [indiscernible] pretty much pro rata with that, but -- so it's about confidence in our balance sheet, confidence in our business performance and the ability to tolerate movements around.

Yes. And then on simplification, I think what I'd say is there are lots of opportunities. A new team we can reflect on and think about how we can work together more effectively. We can simplify our narrative, which you started seeing us do today. We can simplify overlap inside organizational structures that we've talked about today. We can simplify buyback guidance, which you've seen today. And there's a long list of these things that the leadership team and I are thinking about. And our challenge is how do we just gradually do these things over time. driving efficiency into the business at the same time that we keep superstructure strong and keep the drive and focus on the strategy is strong. So that's really what I'd say. But the efficiency drive, we'll be able to do an awful lot more with digital, now that we've got GenAI inside. We'll do an awful lot more as we progress the digitization of the downstream business. We have offshore centers to build up now. That will drive an awful lot of efficiency into the business as well. So we -- I think we're enthusiastic, and we see a lot of opportunity in this space about simplicity, focus and then hard focus on returns. Thanks for your question, Matt. And the last question goes to Menno.

Thanks for squeezing me and I know it's been a long call. I'll just start with question on the Paleogene as the key driver of liquids growth in the -- gone through 2030. Can you just give us an update on where things stand at Tiber and Kaskida? And what are the key risks in bringing on initial volumes in that 2028 time frame? And then my second question, I believe, is for Kate, just on divestments which fell a bit short of 2023 guidance. Is there anything to read into there? Is that largely a timing issue? And I guess the second part of that is how much of a priority is getting the next, call it, $2 billion to $3 billion of asset sales across the line, given your confidence in the balance sheet?

Kate, why don't you start on the divestment.

Thanks, Menno. Yes, a few things on divestments. Yes, we were slightly short of our guidance that we put out at the end of the third quarter. I think you wouldn't be surprised to hear me say that, as Murray has talked about a lot. We are hugely focused on value. And if I get the sense of transaction isn't delivering value because I'm trying to hit a certain deadline to close it, I'm not going to do that. So there's 1 or 2 that we have allowed to move into 2024. We're just going through the process again to make sure that we're getting maximum return for those assets. And that is what I'm going to be focused on delivering with regard to the divestment target. Broadly, at the moment, I would say we're on track for the 25 by '25. Let's see how it goes. I'm confident in the 2 to 3 that we've said we're guiding for 2024. But as I say, I'm much more driven by getting value for the transactions we're executing. I'm not going to be solely driven by hitting a number and a target if that doesn't make sense, and we're not getting the returns that we need so that's how we're going to be looking at it, and that's what we're going to be focused on.

And what a nice way to end the conversation on a Paleogene question, 9 billion barrels of oil in place, highly discovered resource across Kaskida, Tiber, Gila exploration opportunities with new acreage that we picked up as well. It's time for BP to open that basin up again after a 15-year hiatus. So we're really excited about it. We have full teams on Kaskida and Tiber moving forward right now. Kaskida, we hope to hit FID this year. Let's see how it goes. I think the principal challenge in time line will be yard space. We're just sounding out yards now as we go and when you can get slots inside the yards to build these things. The subsurface feels derisked now. There's enough production analogs around Kaskida from similar fields with similar characteristics so I don't feel there's really any risk on the subsurface perspective, probably just more upside than risk. The development cost looks very competitive. The economics look competitive so it will really be slot timing and we'll update you with that as we go through the year. Tiber will be a follow-on from Kaskida. You'll be doing these in sequence. And let's see, we haven't -- let's see where we go from Kaskida to Tiber. So I think my encouragement to the team is to do everything safe with cycle time. That's what creates the most value for the corporation to save cycle time. And that's what Gordon, you and I are working on, on Kaskida and Tiber. So thank you, everybody, for attending today here in person and online. It's much appreciated. Just a few final words. Our destination is unchanged, IOC to IEC, but we're going to be simpler, more focused, more efficient and really driving for value. Thanks very much, everyone, for taking the time today to visit with us and look forward to seeing you in the future. Bye-bye.