Welcome, everyone, to BP's Second Quarter 2025 Results Call. We'll be focusing today's call on the second quarter and first half performance and the contents of the video that I hope many of you will have seen by now. [Operator Instructions] Let me first then hand over to Murray for a few brief opening remarks.

Thanks, Craig. Hi, everyone. This has been another strong quarter for BP operationally and strategically. We're delivering our plan to grow the upstream and focus the downstream with reliability across both greater than 96%. Year-to-date, across the upstream, we've brought 5 new oil and gas major projects on stream, sanctioned 4 more and made 10 exploration discoveries, the best year for discoveries in recent memory, including the significant discovery in the Bumerangue Block in Brazil with lots of interest and commentary over the past 24 hours. Underlying earnings in our customers' business are up around 50% compared to a year ago and trading has delivered well quarter-on- quarter despite challenging conditions. Expected proceeds from completed or announced divestments have reached around $3 billion for the year, and we now have delivered around $1.7 billion of structural cost reductions since the start of our program in early 2024. We've also announced a dividend per ordinary share of $0.0832, an increase of 4% and a further $750 million share buyback for the second quarter. We are 2 quarters into a 12-quarter plan. And while we're encouraged by our early progress, we know there is much, much more to do. Gordon and Emeka are also here with Kate and I today. So please feel free to ask any questions with them, both too. There's certainly a lot going on in digital and technology and, of course, across all of the upstream. With that, over to Q&A, and Craig can get us started.

Super. Thanks, Murray. We're going to take the first question from Michele Della Vigna at Goldman Sachs. [Operator Instructions] So Michele, over to you first, please.

Congratulations on not just a strong quarter, but also what has been a very impressive discovery and a set of startups. I wanted to concentrate on those 2 if I may. On the Brazilian discovery, just wanted to understand from you how concerning is the CO2 content of the discovery. It's clearly giant, but we've seen in the past discoveries like Jupiter, for instance, with a lot of CO2 content that didn't get ultimately developed in Brazil. Just wanted to understand what was your thinking of that, even though clearly, it's very early in the appraisal of that discovery. And then on the start-ups, again, very exciting in Mexico, Trinidad, the Egypt, I'm wondering if you could perhaps give us a view of where you think production could be by the end of the year after we go through the potential hurricane season?

Great. Michele, thanks for the kind words. On exploration, we've had a fantastic year, the best in a decade, best really in recent memory, 10 commercial discoveries across the patch, including big discoveries in Namibia now in Brazil. So we're very excited about that. Why don't I hand over to Gordon, who I think will have a lot of attention on this call to talk about Bumerangue and thoughts on production as well.

Hi. Michele. And hello, everyone. Good morning, good afternoon wherever you are. Thanks for the question, Michele. As you can imagine, we're pretty excited about this discovery. The petrotechnical community is pretty excited about this discovery. And just to set the scene before I specifically answer your question. So Bumerangue 400 kilometers offshore from Rio, a large structure, greater than 300 square kilometers. We drilled about 500 meters of Crest to derisk the drilling program. So we're off Crest. We encountered a column of confirmed hydrocarbon and that column is 500 meters. It's high-quality pre-salt carbonate reservoir. So we're pretty excited by that. There was an elevated measure of CO2, of course, on the measurement we've made on the rig. And I would emphasize that we've sent samples away to a certified lab. We do need full composition analysis to come back. However, we're pretty excited by it. Am I -- are we worried about elevated CO2? Not particularly, we need to find exactly what that level is, but the industry knows how to handle elevated levels of CO2. And we, as a company, have quite a bit of experience through various projects over many years of handling CO2. So of course, we need to understand it before we get to full resource in place. However, not overly worried by CO2. If I can move on to your second question. We've now started up -- we promised at Capital Markets Day 10 startups, major project start-ups by 2027. We've now started up 5, including Argos Southwest extension, which started up on Monday. We've probably got one more this year and then 4 next year. So of a ramp-up, we brought on roughly, roughly 125,000 barrels per day of production, which, of course, was in our plan full year. So we're on plan with the ramp-up from these major projects. So I think you'll see us sticking on plan maybe slightly ahead of plan through this year. We've had a good start to the year, strong production across the patch. We've got a few turnarounds in the second half of the year and weather, of course, in the Gulf of America. However, we think we're having a strong production year, which we would expect to continue.

Thanks, Michele. We'll go next to Irene Himona, Bernstein. Irene?

Congratulations on the numbers. My first question also on the Brazilian discovery, if I may. Can you share the gas to oil ratio and talk around how you see timing for further drilling of this discovery, please? And then my second question on TA in Downstream. Murray, you stated somewhere that the results were not what you expect. Obviously, you don't disclose the details. So can you perhaps elaborate on some of the disappointing data points you're seeing and what -- how you're tackling them?

Great. Thanks, Irene. I'll tackle the first one, and I'll pass over to Gordon to talk about the second -- the first question on Brazil. I think on TravelCenters of America, maybe just to talk about M&C as a whole first. We've had a very good run in M&C now. For the first half of 2025 versus the first half of 2024, we're up about 50% in profitability across the 2 half years. And the second quarter in M&C was the best on record since we started talking about M&C back in 2012. So that's a fantastic result for M and the teams. The particular challenge that we have in TA is that we're seeing diesel margins across that business quite tight, and not making as much on diesel as we would like. We think we're taking some actions to fix that, but that's a particular area of concentration for the midstream trading and TA business itself to try to drive diesel margins to a better place and to get more customers into the business. So that's really the area of focus we have. But across the rest of M&C, very, very strong performance both capturing customers, capturing margins, driving costs out of the system, and I'm really proud of the result across the retail fleet as well as aviation as well as Castrol, just a tremendous quarter for the team. So congrats to the team. Gordon, over to you on Brazil.

Yes. Thanks for the question. I think just too early to be precise on gas oil ratios. We need to have that full composition of analysis back from the labs. We took samples right across the column so we should get the different composition of analysis at different depths in the column, and that will be very, very telling when we get these results back. So I won't speculate on the gas oil ratio. In terms of timing, we're going to go through an appraisal program with agreement with the regulator, of course, which will probably involve some sort of drill stem test to bring -- to get some dynamic data. It would be great to get some dynamic data from this well as we plan the development scheme. But we will move at pace, Irene. If this turns out as good as we think it's going to be, we will absolutely move at pace.

Thank you, Irene. We'll go next on teams to Lydia Rainforth at Barclays, please.

Two questions, if I could. Murray, in the stock exchange announcement, you do talk about a thorough review of the portfolio of further cost review. Can you just talk through about where else different to where you were 6 months ago and what you're seeing that kind of gives you confidence that there is more value to come? And then, Kate, I mean, I said with, but clearly, you've done really well on the cost side. And perhaps Emeka and Gordon, could you go through some examples of where you're seeing some of those savings and particularly the AI side? So it does feel like upstream is really good and probably leading the pack there, but there's more to do downstream and corporate. I don't know if that's a fair analysis for that?

Super. Thanks, Lydia. Look, I think on the portfolio side first, and then I'll hand to Kate, and I'll ask Emeka to talk about the digital and AI side of things. On the portfolio, look, we've had a tremendous year for access inside the Upstream with Access and Azerbaijan and Iraq and Libya, in Abu Dhabi and India. So very excited about all that. And then you never really plan to have 10 exploration successes that are commercial. You just don't see that in history. And they're pretty big. Namibia is pretty big. And obviously, Brazil, as Gordon described is pretty big as well. So we constantly think about the portfolio. We're constantly churning the portfolio. We want to drive absolute discipline into this and be driven by value and returns more than anything else. So it's time to take stock as Albert joins as a new chair and work together on this conundrum of lots of great opportunities, but you can only choose so many in life. So we're doing it live as we speak. If you look past -- back across the past 3 to 6 months, we've dropped 3 rigs across the portfolio is not competitive inside our capital frame. We have decided to shut down a program in Australia on green hydrogen. We've decided to shut down some programs in the U.S. on blue hydrogen and CCS. So we just constantly challenge ourselves to drive to the highest quality inside the portfolio. And now with the extreme success that we've seen inside the Upstream. It's for the right moment in time to do that as well. Kate, over to you on cost and Emeka?

Yes. Thank you. Lydia, good to see you. Your description of our cost progress is doing brilliantly well. I think I might describe it as decent progress. And why do I say that? I say that because there's a lot more to do. We set out the $4 billion to $5 billion target in May last year against the $22.6 million and delivering $1.7 billion of structural cost reductions to date, I think, is pretty good progress. As you look at what we're doing quarter-on-quarter, you can see we do now have some momentum, which is great. I want to keep seeing this driving all the way down to the bottom line. We've reduced absolute costs by about $0.5 billion. So as I say, good progress, more to do. As I think about the $4 billion to $5 billion. Internally, we've always held that that's taking ourselves across most of our businesses and functions to top quartile. We have to keep challenging as you've heard me say before, I want to accelerate and exceed that wherever we can. And it's only right that we should be challenging ourselves to see how much further we can go, can we hit best- in-class certain parts of our portfolio and understand what it takes to do that. So as I say, I'm pleased with the progress to date, but more to do. Emeka?

Yes. So I'll just touch on 3 quick things. So technology, supply chain and data. So on the technology side, what we have done, and this is inside of the technology organization is we're actually looking at reducing or -- we have been reducing our costs, both through a process of digitization, but also we have reduced the number of contractors, the number of staff that we have in the technology organization. While we're reducing our own costs, where we've been looking at streamlining applications, streamlining the partners that we work with to a small set now of world-class tech partners. So that's a lot of what we're doing in technology. For the organization, supply chain is one of the big places that we're focusing in terms of how we can access and leverage savings on costs. So the total resource management project, which Cape Program, which Kate talked about, is that's around our third-party contractors. So far, we've had 3,200 exit. We've got another 1,200 to exit, and we're continuing to now optimize and focus this using our Palantir system that we're using to track our cost, and we're connecting that to our ERP system and another people tracking system in our offshore platforms. We're looking at invoices, so contract value leakage to make sure the invoices we pay are at the right amount for the pieces of work we do, and AI is all over this. So we're leveraging Palantir and our own AI systems to do this. And then the last thing I'll touch on is data. So across the company. So we have -- we're currently managing about 100,000 pipelines of data across BP. We see this is costing us money, costing us more than it should do, and it's actually preventing people and the team from being able to use AI in a consistent way across the company, both for growth and for a reduction in costs. We're partnering with Databricks and Palantir to implement a new unified data platform across the whole company that will be both reduced costs and actually provide us a lot better transmission of data across the whole company and reduce that 100,000 pipelines into a single one. This project typically could take up to 5 years. We're going to be done with it by the middle of next year, so in less than 2. So this is -- these are some of the things we're doing to impact costs across the company.

Thanks, Emeka. And I think when we talk to our partners about how far we're going on that data management, I think the answer is cutting edge.

Cutting edge is right.

Cutting edge globally. So we're really looking forward to it. And Lydia as we've said in the past, we're looking forward to taking all the hard work we've done with Palantir and the upstream into the downstream as well. We can update you on that if anybody wants to ask. Craig, back to you.

Super. Thanks, Lydia. We're going to jump to the phones for a couple of questions now. So I'll take the first question from Gui Levy at Morgan Stanley.

The first one, just going back to Bumerangue. The Brazilian oil agency a couple of years ago at the time of the bid round, they published some studies pointing out to a potential of 2 billion BOE of oil in place. Do you recognize this number? Is that sort of the level that you have in mind at the moment? And then the second one, just if you can provide us an update on the disposal process of Castrol, at what stage, are we at the moment? Any specific expectations in terms of timing and anything that you can possibly share with us in terms of valuation at this point? That would be great.

Just to clarify your first question on Brazil. Is there a number that you're referencing? We couldn't understand what number you said.

Yes. There was a number in a specific report from the oil agency of 2 billion BOE of oil in place. But admittedly, I'm not sure if that number has been updated or if that's something that you have in mind at the moment.

Thanks, Gui. Gordon, why don't you take the first one, and I'll take the second one.

Yes. Thanks, Gui. I don't recognize the 2 billion barrels. And again, I would just emphasize the scale of the structure, 300 kilometers square with a 500-meter column, and that's off Crest. So that 2 billion doesn't resonate with me to be specific.

And we've declared that it's the largest discovery in 25 years dating back to Kashagan and Shah Deniz, I think were the analogies that we put together. So that should help you understand it a little bit. I think on Castrol, look, I'm not going to say much. It's a commercial process. There's a lot of interest in it, and we're moving at pace. It's a complicated business, operates in 120 countries, but there's a lot of interest in it, and we will update you when we can. We will transact for value. Craig, back to you.

Thanks, Murray. Okay. We'll stay on the phones and take the next question from Matt Lofting at JPMorgan. Matt?

Two, if I could, please. First, I just wanted to follow up on the earlier comments you made around the further cost review specifically, I think you referred in the press release this morning to targeting sort of best-in-class. I wondered if you could just expand on how you think about defining best-in-class in the context of the moving parts in the industry, technology and the evolution there and also the fact that cost and fiscal regimes tend to vary across geographies? And then second, I just wanted to ask you about trading, performance seemed good in the second quarter versus wider industry comps. What's your outlook from here regarding the broader conditions for trading and optimization when you look through to the sort of second half of the year? And if you were to continue to see let's say, sort of a moderated baseline, as we've seen at times in the first half of the year is Q2 seen within the company as a good approximate baseline?

Super. I'll take trading, Kate, if you want to talk about best-in-class, please. Look, I think on trading, first, an average quarter for the gas business and a strong quarter for the oil trading business. As we look out to conditions moving forward, I think the things I'd say on the oil RPT side is that inventories from a physical basis are quite tight. So there's likely to be a fair bit of volatility in the event that there are outages occurring. That's probably true through the third quarter and into the start of the fourth quarter. In the fourth quarter on the oil side, we see more production coming online from outside of OPEC and trading conditions will highly depend upon what OPEC+ does, what happens with sanctions on Russia, what happens with sanctions on Iran. So I would expect continuing volatility in that space on diesel and gasoline, we move into a heavy tar season in October as well. So that should provide conditions for volatility. I think on the gas side, from our perspective, we trade optionality. That's how we've designed the gas books. So we don't necessarily try to link to a particular index. We don't try to do point-to-point sales. Instead, we look for opportunities to arbitrage between price differences on the spot or across time. And it feels in a market where natural gas becomes oversupplied as you move into late '26, '27 that we're well positioned to be able to arbitrage between these things. So I think what you should expect moving forward is as we've guided in the past, which is 4% to returns of the corporation from trading assume it's half oil, assume it's half gas and assume it's ratable across to each quarter. It won't be right in any 1 quarter, but it durably is what we have done over the past 4.5 years. So thank you for that question, Matt, over to you, Kate, on the cost and best-in-class.

Matt, I'll maybe start with the areas of the group that are slightly easier to benchmark and understand and I would put into that category, the sort of central functions like finance, like people and culture like technology. I think we've got a pretty good sense of where we probably stack up against our peer group with regard to that. Customers is similar. I think it's fairly straightforward to benchmark. As we step through the refining and the upstream part of the portfolio, that is where it is -- it gets more complicated. With refining, we have been using the Solomon benchmarking very regularly. And as I said, we're waiting for the updated benchmarks to come in over the summer to get a sense of where we stack up across our refining portfolio versus our peer group. And with the upstream, we go basin by basin because to your point, you need to understand the construct of the businesses inside your basin and you can't just look at the unit production cost and that takes into consideration various component parts, whether it's PSAs or tax and royalties, it's going down to a basin level so that you can understand within that basin, how you're tracking against your peer group. So that's the piece of work that we're going to get into at pace as we get these data points in over the summer. And as we get a sense of where there are gaps versus what we consider to be best in class, we'll update you as we go. And I guess the only other thing I would say that is worth remembering is we've been pretty explicit that the $4 billion to $5 billion of structural cost reductions, doesn't take into consideration any transactions with regard to Castrol, and Gelsenkirchen. So as and when we reach a conclusion on those 2 transactions, we'll update the market on those 2 elements and how that would impact the $4 billion to $5 billion cost target as well.

Thanks, Kate. Thank you, Matt. We'll come back to teams, and I'll let it do my hard work. We'll start with the first hand up, which is Josh Stone, Josh at UBS, please.

Yes. Two questions, please. If I could follow up on trading, clearly, a very good performance of oil trading this quarter, and it goes against some of the trends we've seen elsewhere in the market. You made some comments in the press around shortening the duration of trades. So I was hoping if you could just elaborate on this and speak to if there's any other drivers that are resulting in this the sort of relative strength you're seeing versus some others whether that's going to be access to data or appetite to take on risk? Or any comments there would be helpful. And then secondly, on impairments, there were another lump of an impairments this quarter, about $1.2 billion. You've given us the divisions, but are you able to elaborate on which assets are actually driving these impairments?

Great. Thanks, Josh. I think on trading, without giving away commercial advantage, I'd just say on the oil trading side, they shorten the duration. Normally, you trade 3, 6, 9 months in duration for time spreads, et cetera, but there's a lot of path risk around that when there's macro volatility and headline volatility. So you move to shorter duration trades to manage that risk, and that's what the teams were doing through April and May. I think I'll stop there for giving up any commercial advantage beyond that and pass it over to Kate on the question on impairments.

Yes. Josh. Thanks for the question. Yes, we have taken a number of impairments across the businesses this quarter. And I think the first thing I'd say is that we're never happy to impair assets, it was capital ones. And we're very cognizant of that, which is why Murray and I are driving so hard on improving and increasing our capital productivity in every part of the business. Maybe a couple to call out, which may be helpful in the customer and products space. We impair assets where we are working through a sales process. There's an accounting approach that we have to take based on the value that we expect to see versus the value at which we hold those assets. And we took decisions, as Murray referenced a little bit earlier on the call with regard to hydrogen and biofuels down in Australia. And as a consequence, we've taken an impairment on that. That's all about quality of choice and making the right decisions for us as a company moving forward as we execute on our strategy. And maybe the only other one that's probably worth highlighting is in the gas and low carbon space, where we've taken a further impairment with regard to M&S. We're now lifting cargoes into our trading organization from that business, and that's where we see significant future value coming. We've now loaded finished loading our seventh cargo so far this year as it continues to ramp up. So M&S is performing well now. It started up and it's ramping up. And that's probably as much as it's worth sharing with you, with regard to impairments, but it remains an area of focus for us, Josh, please be clear on that.

Thank you, Josh. I am going to just jump quickly to the web. We've got a question from, I think, Alejandro Vigil at Santander. Alejandro, you've got 3 questions. I think 2 of them have been covered, but I'll take maybe the last question, read it out, probably one for you, Kate. What are our expectations of net debt by the end of the year is from Alejandro.

Yes. Thank you, Alejandro. Fair question. Net debt was down $1 billion this quarter versus 1Q, which is good to see, quite a lot of moving parts. You can see there's been a pretty sizable working capital build through the first half. We end the first half at total working capital build of $4.7 billion. If you think back to 1Q, we had $3.4 billion of working capital build. And I said the majority of that we should expect to reverse through the remainder of the year. We saw about $600 million of that reverse in 2Q, but it was more than offset by other moving parts. You'll recall the Deepwater Horizon payment we make every 2Q, there's also in the first half in payments with regard to assets held for sale. If they were not held for sale, let be accounted for us capital, we are forced to account for them as working capital because of accounting rules and there's been about $200 million of decommissioning payments as well in the first half. So as I look at all of that, the reason I'm stepping you through that is I think there's about $2 billion of permanent working capital build to date with regard to the group. As I look forward, my best estimate of the level of reversal still to come through the third and fourth quarter is between $1.5 billion and $2 billion. Other moving parts that we've been clear around is the $1.2 billion of redemption of hybrid that we will redeem in 3Q. And then you've got, of course, operational performance and price which will move around. So I would say if you are seeing flat price, all these other moving parts and the level of working capital unwind I've just stepped through, my expectation is we should see net debt continue to slightly trend down towards the back end of the year. I hope that's helpful.

Thank you, Kate. Okay, back to Teams, and we'll take the next question from Ryan Todd at Piper Sandler. Ryan?

Good. Maybe on one more on exploration. I mean congratulations on the great results year-to-date to discoveries. Maybe you can talk about how does the approach -- has your approach to exploration changed at all? Or is it just increased allocation of resources, good luck? And outside of Brazil, what have you seen that excites you the most? And then maybe a second question on much better refining performance this quarter operationally and in terms of margins. Can you maybe talk through what's gone well and how you think about the refining environment into the back half of this year and then to 2026?

Great. Let's see. I think on refining environment, I'll take that refining performance over to Gordon and then you guys transition on exploration and technology. Gordon and Emeka trade that off. So on refining, environment, Ryan, I think relatively tight is what I'd say right now, diesel margins, gasoline margins -- sorry, diesel gasoline jet stocks are quite low relative to history. As well, all of the additions we've seen in [ Daspokas ] and Dangote have now been offset by refinery closures around the world from the announcements you saw at fracs, the California refinery shutting down and other ones that have shut down. So instead of adding capacity to the non-Chinese refining fleet we're basically flat, while overall demand for energy continues to grow at 1%. So fairly tight as our sense. We expect to build as we move through the driving season as all the refineries are working. And then we expect it to become quite tight again as we move into tar season. I think I would say that extends into '26 as well, where if we do see the increasing demand we see for product, and we're not getting refinery expansions that we expect it to be tight as we work our way through the -- into the early days of '26. I won't really forecast anything beyond the early days of '26. So I think that would be the structure of the refining markets as we see it today. Gordon, over to you on refining performance.

Yes. Thank you for the question, Ryan. I'm very pleased with the refining availability. We've just delivered the quarter at 96.4% availability, which is the best quarter we've had since 2006. We've just delivered the first half of the year at 96.3%, which is the best first half since we started recording on this metric. So the refineries are actually running really well right now. And what's gone well. I think the vulnerability management, we've taken a process that we've run in the upstream for many years and implementing -- it's not finished implementing it in refining. So we manage our vulnerabilities, which basically means we intervene before a piece of kit falls over before it trips to prevent it tripping, just keeps it online longer. We've got centralized maintenance, centralized towers where common processes being deployed. So -- and of course, we're starting the process of digitization in refinery. All that adds up to a more systematic and control refining portfolio, which shows up as better availability. If I could transition Ryan into exploration, the success, I think a couple of things I would highlight. One were data-led. So it's not just luck. And working with Emeka's team, the quality of seismic and the lighting up of the subsurface on seismic images we get now is quite remarkable and that derisks exploration drilling. To some degree, I'll never -- you'll never completely derisk exploration drilling, but to some degree, data-led using good quality seismic using AI algorithms to light up the rock in a way we never could before, has made a difference. I think the exploration team have a mission. Their mission is to fill up or hopper with great resource that we can then bring forward to invest in as major projects. The one thing we're not doing is just throwing money at it. It's quality through choice. We actually haven't increased our exploration budget very much in the last 12 months. So we're forcing the teams to select the very, very best opportunities that we have, the most material and those that we think are going to come in. There are many, many things that excite me outside Brazil in the exploration world a bit I could just highlight West Africa and particularly Angola and Namibia, where, of course, we invest under the Azule joint venture with Eni. And we've recently had a discovery in Namibia with Capricornus well and there's more to come there. We've just studied the next well called Volans in Namibia. And then again, under the Azule brand, we had a discovery in Gajajeira in Block 114, pretty close to shore, very developable. So West Africa remains an exciting area for us in terms of exploration.

Okay. And so what I'll add is, in seismic, we are one of the leaders in seismic technology. So we have been for a number of years, and we're continuing to invest to build on that lead. Some of the investments that we're looking at are both investments in compute and investments in the seismic algorithms. And these 2 things go together. On the compute side, what we have done is we have quadrupled this capacity of our high-performance computing center. This has allowed us to increase the speed at which we can do our processing by about 5x to 10x and some steps actually are increased by 50x. What all of this does put together is it actually helps the subsurface teams to increase the speed at which they can build a hopper, it helps to better exploit the resources that we have right now. It helps the teams to actually build quality through choice as Gordon is talking about. And we're using a lot of this we're doing both in partnership with NVIDIA and with the deep technical expertise our teams have built over time. So that's some of the contribution, I think, I would add from seismic from the technology perspective.

Super guys. It's a bit of a long answer to a complicated question, but I'd round it off, Todd, by saying we got fantastic petrotechnical capability. It has always been strong and remains strong, and we're really proud of the results. So well done guys. Craig?

Thanks, Ryan. We'll move next to Peter Low at Redburn. Peter?

Perhaps just on BPX, there was a step-up in production this quarter, and you've now brought online your fourth and final delivery center in the Permian. What should we expect for the production trajectory from here for that business? And then the second question was just to go back to convenience mobility. As you say, it's particularly strong results. I think it was strongest for quite some time. It sounds like that's not coming from TA. So can you perhaps elaborate where that improvement is coming from?

Yes. Great. I'll let Gordon think about BPX while I answer C&M. C&M's performance is very broad based. We've seen exceptionally strong results across C&M Americas, C&M Europe, C&M Asia. So it's coming from all the convenience and mobility businesses there. That's tight cost control management of product and managing margin effectively. We're near record levels of profitability in aviation. And of course, you can see the 8 great quarters in a row for Castrol. I think the last thing to say is the midstream and supply teams are really looking hard at optimizing our value chains, and we're pushing further down value chains to try to optimize margin, bringing trading midstream closer and closer together as we work together to drive real outcomes. And that's another source of brilliant performance from the teams. And I look forward for continuing strength in this space, especially. So I hope that helps, Peter. And Gordon, over to you on BPX production trajectory.

Yes. Peter, BPX production, our strategy laid out during Capital Markets Day remains the same, which is a 7% CAGR through to 2030, growing the business to 650,000 barrels per day by 2030. And that stays on plan. Of course, it won't be a perfectly straight line through to 2030, but the overall strategy remains the same. 1Q to 2Q production was particularly strong, 16% quarter-to-quarter growth, 1Q to 2Q and really strong production efficiency is coming through strongly. That's what I observed in BPX under the leadership of Kyle Kunz and his team. Some of the capital productivity metrics continue just to improve on the NPV per section metric, we're 1, 2 or 3 across the 3 basins that we operate in on a reserves per foot drilled. We're top quartile across our 3 basins that we drill in and we're #1 in the Black Hawk and the Haynesville. So -- and these metrics just keep improving as the team focus on them. So production is strong, and we expect it to continue to be strong through this year.

Thanks, Gordon. Thank you, Peter. We'll go next to Doug Leggate, Wolfe in the U.S.

I actually have a follow-up on BPX. Maybe I'll direct it to Gordon given the answer to the last one. Gordon, you had the reorientation of the partnership with Devon Energy. And my understanding is you got a disproportionate share of wells in progress that probably helped your volume in Q2. So I'm just wondering if that was a one-off or if you expect that to be the new baseline to grow off -- we did have a chance to talk to Kyle about this, and it seemed to us that there was some upside risk to that longer-term growth target. That's my first one. And my second one is for Murray. Murray or maybe, Kate, if I look at Slide 15 in your deck, when you're talking about the structural cost cutting, the cost savings, you've got $900 million this year to date, but an offset is $800 million of the growth in the organic -- the acquisition piece. So my question is how much of the $4 billion to $5 billion over the 2027 time line, would you expect to also have offsets in other words, how much would actually flow through to the bottom line?

Super. I'll let Kate take the structural cost conversation and then Gordon to take Devon. Go ahead, Kate.

Yes. Yes, with regard to the structural cost reductions so $1.7 billion so far since we announced the $4 billion to $5 billion of structural cost reductions. As I look through the first half in particular this year, you can see the bricks that we're trying to be as explicit as we can in terms of what are the costs that are going up in our organization versus how is the structural cost reduction offsetting those. We said we were going to grow the upstream. That's a key part of our strategy, and we're doing that. That brings costs with it. So as you can see from the first half results, we've added about $200 million of costs associated with higher production in BPX Energy and bringing major projects online. The other thing that's gone on with regard to growing the organization is the acquisition cost associated with Lightsource bp and bp bioenergy. We also have environment, so inflation around $400 million, $300 million of that was inflation in the first half of the year. And then more than offsetting that is the $900 million of reductions going the other way to deliver the absolute cost reduction. As I look forward of the $4 billion to $5 billion, I want to see material cost reductions flowing all the way down to the bottom line. That's good for us. It's good for our shareholders. In terms of quantification, it's very hard to call it, Doug, because it's very hard to see what's going to go on with regard to inflation in the environment. We've seen wicked inflation in the last 3 or 4 years. I don't want to box myself in by predicting what that's going to become. But you can hear, I think, from the tone of what we're saying today that we are relentless in our drive to get as competitive and as lean as we can within the boundaries of safe operations and growing our organization for long-term shareholder value.

Doug, thanks for the question. The first thing I would say is we're very happy with the value uplift from the Devon transaction. Devon has been a tremendous partner for many years. We worked well with them in that part of the Lower 48, but it was time to simplify and do our own thing. So we're very pleased with the value uplift. We're very pleased with the transaction. To be specific on your question, the amount of production that came with the transaction was very, very small. Now it will grow as we bring some of the drilled uncompleted wells online but it doesn't represent a massive new baseline for our growth. It's a relatively small wedge.

Thanks, Doug. We'll take the next question from Biraj Borkhataria at RBC. Biraj?

I wanted to go back to the comments around the strategic review or thorough review of the portfolio because you obviously did a thorough review ahead of the CMD. So does this mean you start with a blank sheet of paper again and start over? Or should investors assume this review is for things over and above what you've already announced. And the question relates to Castrol because if you're doing a thorough review of capital allocation, would it make sense to do a big transaction like that? Or would you wait for it to kind of finish the process? And then the second question, just on the financial frame and net debt. I see reported net debt going down, but the lease stack is going up and also the lease costs are creeping higher again. Could you just talk about from here, whether you'd expect sort of total leases to be stable from here or move up or down? Or what exactly is driving that?

Biraj on the first one, we obviously are starting our portfolio review from where we stand now. So we've made a bunch of decisions back in February. And we've had a whole bunch of additions to the portfolio from the upstream that I talked about. And within a $13 billion to $15 billion frame, we now need to think what's the right priority driving for value, and returns on behalf of shareholders. There's no change to the divestment program. We continue to have a $20 billion divestment program, and we continue pushing Castrol forward. So rest assured, this is all about trying to stay within the strategy, accelerate the delivery of it, but of course, continuing to drive quality through choice, which we live and breathe each and every day. Kate, over to you on the other question?

Biraj, just on leases. So the way that we think about leases is pretty different from the way that we think about debt. At the end of the day, we're incurring leases directly to drive value in terms of production, et cetera. And as you look at what's happened year-on-year, our lease liability has grown by about $4 billion from this time last year, just over $2 billion of that is the accounting for the floating LNG in Mauritania and Senegal. To my point, it's about driving production. Offsetting that is about $900 million of recoverable which we'll receive from our partners in respect to those lease costs. There are a couple of other moving parts. We brought on to our books about $600 million of leases associated with the BP bioenergy acquisition. There was a lease renewal of about $400 million in one of our refineries in the U.S. and then there's some trading around lease opportunities, which I won't disclose because that's commercially sensitive. So leases are an area that we step into deliberately to drive value for shareholders, and I think they're appropriate. We, of course, are testing them to make sure they are of value to us. But with regard to the forward shape of it, I mean it will depend on very specifically on some of the big moving parts, particularly in our upstream portfolio. We've been talking a lot about Brazil and Bumerangue on this call. Now if that moves at pace, I can foresee a number of lease situations potentially around FPSOs over in Brazil that will be added to that and rightly so with regard to our lease liability on our balance sheet. So it's very difficult to guide going forward. It depends on the resource allocation decisions that we step through as we get to each final investment decision.

Thank you, Biraj. I'm going to jump back on to the telephones now for 2 questions. First one from Paul Cheng at Scotiabank. Paul?

Gordon, I want to go back into the BPX. The second quarter, the production increase is quite impressive. Is it all coming from Permian? And also, can you give us some idea that how is the Haynesville your drilling and development plan is going to look like for the remainder of the year into next year. Are you adding any rig over there? The second question, I want to go back into pursue. Can you give us some kind of idea, let's assume that you're going to take multiple boats for the development because the reservoir is very big. And from a cost recovery standpoint, is all the costs in one pool or they are just individual project basis. And can you give us some idea then the time line, I will assume to fully delineate that you may need at least, say, 3 or 4 appraisal wells. So is that the early is that everything go, say according to plan, maybe a late 2027 or early 2028 FID?

Gordon, I'll let you do Brazil and I'll answer BPX to give you a bit of relief. Why don't you start off with Brazil.

Yes. Thank you. Paul, thanks for the question. I'll answer the easy one first. The terms of the lease that we have in -- our public knowledge and it's one cost pool. So everything is funded through a single cost recovery pool. And then I would expect we need to get the results back from the lab on the full composition analysis, which will inform the hydrocarbon that we have in the column, and that will then inform the detail of the appraisal program. So we have more work to do to plan it. But I would expect, as you say, a 3- or 4-well appraisal program to allow us then to move to a full field development. I wouldn't speculate exactly when we would have that appraisal program done. But we will move at pace as soon as we get these results back. And in fact, of course, we've done some predrill work already on what an appraisal program would be. We're not starting from scratch, but we'll move at pace on appraisal.

Fantastic. Thanks, Gordon. And then on BPX, just to step into Gordon space a bit. The growth between 1Q and 2Q, principally the Permian with the ramp-up of Crossroads as well as an awful lot of work on refracs and infill drilling in the Eagle Ford. Just to remind you, the refracs are working fabulously. And the infill program on wells drilled a decade ago are twice as productive as the original wells. That's just the changing technology on frac over time. So we're seeing a lot of growth out of the Eagle Ford. You should expect liquids, assuming prices stay relatively stable, you should expect liquids production out of BPX to continue to grow through the decade. Of course, if price moves up or down, we may change that capital allocation, but that's our sense right now. As far as the gas basins, I think the first thing I'd say is capital productivity is really improving. We're about 10% year-on-year improvement in capital productivity right now. In the Haynesville, they just drilled their first EU well. So that's a vertical well than a big U with fracs on the straight sides of the U. Obviously, you don't frac into the U, and we were getting tremendous productivity out of that. We're seeing from 3 well pads, 160 million SCUFs a day out of 3 well pads and with the capacity to get up to 180 if we can solve some metallurgy issues. So I think productivity is fantastic. And the business is actually holding gas production relatively flat around 2 to 3 rigs. That's across the Permian, the Haynesville, the Eagle Ford, the Hawkville, et cetera. So the team is doing a very, very good job in that space. As far as what we'll do with '26 and '27 ramp-up, that's still something that we're thinking about. We're watching gas prices. We have started hedging out '26 and '27, and that will determine how much we lean into that space by adding rigs. That's a decision we'll make in the fall as we head towards our 2026 capital allocation. So ask me again next quarter, and we can answer that question. Thank you, Paul.

Thanks, Murray. Thank you, Paul. We'll stay on the phone and go to Chris Kuplent at Bank of America. Chris?

Hope you can hear me okay. Two quick questions for me remaining. First one to U.K. Can you square the circle for us a little bit on disposal proceeds and your net debt guidance for the end of the year. I noticed TANAP has been structured as an equity raise. How does that relate eventually to a net debt reduction in the way you consolidate it? And are there other niggles for us to be aware of in terms of how you structure some of these disposals that have been announced? And then the second one, back to Murray or perhaps Gordon. On the topic of strategic review and what else you might think of around your portfolio, you're one of the last super majors with U.K. North Sea assets, not in some sort of new JV. You've pioneered the structure you've kicked off with Aker BP in Norway. Are there -- is the U.K. a particular focus for yourself as you review potential portfolio changes. Maybe you can comment on the value of that in your portfolio?

Great. Thanks, Chris. Gordon, why don't you tackle North Sea? And then I'll hand over to Kate on divestment process.

Yes. Thanks, Chris. The North Sea, we have a proud history, and we're proud of the team up there producing for over 60 years now, and it's been a tremendous piece of business. The reason we haven't jumped into a joint venture is we believe we've got the best portfolio up there, and that's been our view for quite a while. However, we're also monitoring any potential changes to the fiscal situation in the North Sea, which we expect to get some clarity on this at some point this year. And then I think once we get clarity on the fiscal situation, we'll then make decisions. So it's just too early. We've got to get a little bit more information in the North Sea. I would say North Sea performance this year in terms of safety, production, cost has been tremendous. And so they really have stepped up and the plant has been -- the production facilities have been much more reliable than they were the last couple of years. So kudos to the team up there, but we stay and we watch and we see what happens with the review of the fiscal.

Yes. So Chris, in terms of net debt guidance, firstly, I'd say that we are expecting some strong operations to continue. Gordon is doing a great job of the kit staying up and available. So we plan on that continuing. I've talked you through a level of working cap release through the second half of the year that we expect to come through. And then the other major moving part is around divestment proceeds. So we've signed 3. We've had divestment proceeds in the door of 1.7. And your specific question with regard to TANAP, this decapitalization of pipelines, I think, is a sensible way to approach our infrastructure. We don't need to own them, but we do need to have control over the ability to move our equity production to market. So the way we account for it is proceeds, we receive the cash. But then it's accounted for through noncontrolling interest. So you see that line going through the balance sheet, and you'll see it going through the income statement as well each quarter.

Thanks, Chris. We'll come back to teams and take the next question from Kim Fustier, HSBC. Kim?

I had 2, please. Firstly, I wanted to ask about the strength in underlying cash flow, ex working capital, over $7.5 billion, which was quite impressive. I noticed that the quarter-on-quarter increase was sort of $0.5 billion more than the increase in net income this quarter. So could you maybe talk about the moving parts there? Was there anything unusually strong about this quarter? Any larger dividends from associates, for instance, or lower cash tax payments? And then my second question is on the Gulf of America. I believe you're now in a farm down process. On your Paleogene assets Kaskida and Tiber, what's the level of interest from industry? And what do you think would be the best time to farm down? Would it be at the point of FID for Tiber and when might that be? Or would it be later during the development phase?

I'll take Gulf America to give Gordon a break, and I'll pass over to Kate on underlying, I think tax is the answer. As far as Gulf of America goes, we're in conversations with counterparts on Kaskida, we will continue doing that and see what's possible if we can get value for shareholders. If we can, great, if we can't, then we're happy to carry on for 100%. And then Tiber, we expect to bring 2 sanction this year, just waiting for that to be brought up to the Resource Committee and to the Board, and clearly, we won't do anything until we've FID'd that, but that we can consider, given that we have 100% in both that we bring in a partner. And the only question is, at what time do we think we can maximize value for shareholders. And we're in conversations with counterparts. There's, of course, lots of interest for premium assets such as this, and we just need to make sure we get the right value for shareholders as we move through that conversation. Kate, underlying EBITDA and earnings, I guess.

Yes. So Kim, excluding working capital, our ops cash effectively grew by $1.5 billion quarter-on-quarter. Around $1 billion of that is due to underlying earnings and in particular, I'd call out better trading, better gas trading and better oil trading, and the other major component is lower cash taxes, over $200 million quarter-on-quarter. And then there's another slew of various smaller drivers but nothing worth calling out.

Strong underlying performance, Kim, I think, is the core message really strong underlying performance, and well done to the teams for delivering it.

Thank you, Kim. We'll go to the next question from Lucas Herrmann at BNP Exane. Lucas?

Nice to see some momentum returning to the business. A couple if I might, Kate, Murray, one big beautiful bill fiscal implications for you, corporate tax in particular, if I could start there. And then second really just probably to Gordon. But I mean going back to refining, the last 2, 3 years, we have seen a lot of 5-year turnaround, a lot of downtime, production, the run rates, as you highlighted, have been very good, but they've been very good on -- you see we say, muted available capacity. As we look forward over the next year or 2, how should we think about availability within that business, let alone uptime?

Gordon, do you want to lead off on refining, I'll tackle the tax?

Yes, absolutely. Lucas, thanks for the question. Just as a reminder, the '22, '23 time frame we were catching up on tars from the backlog during COVID. I'd say '24, '25 a more normal period of turnaround. However, 2Q '25 was particularly high, and we've guided through to be slightly -- to be lower power -- for lowest power outages for the balance of '25. And then as we go forward into 2026, '27, we should see lower turnarounds relative to '24, '25, Lucas. So we'll be on the ramp down on tar days relative to '24, '25 as we go into '26, '27. And I hope -- I believe we can hold on to the availability that we've been delivering this half as we go through '26, '27, that's the mission.

And then I think on the U.S. legislation, we're very positive on it. The U.S. is a very big operation for us. 60% of our profitability and cash flow comes from the United States. We invest 50% to 60% of our capital there as well. So it's a massive business for us. We're very proud to support the United States in growing their energy production. We look forward to growing production out of both the Gulf of America and BPX by, I think it's 10% per annum out through the end of the decade. So we're pleased with that. The tax bill that came through was very favorable to us. Obviously, it sustained the corporate tax rate at 21%, and the immediate expensing really helps offset any pressure from tariffs as well. So there wasn't -- it was very positive for us, Lucas, and it's very positive for us in the United States, and we're excited and happy to be continuing to drive in U.S.

Murray, is there any quantifiable benefit you can think about at this stage? Sorry for the echo.

On -- from a financial perspective, it wasn't like we were accruing a higher tax rate of or anything like that. So it's just -- it's a continuation on the 21%. And then cash taxes would offset anything in tariffs, I think, is all I would say at this stage, although tariffs are highly variable. So I think it's not material, but it's very positive for us Lucas, I can't really say more than that right now.

Thanks, Lucas. We'll take the next question from Henry Tarr at Berenberg. Henry?

I had 2. There was a strong rebound in the gas and low carbon business in the quarter. How do you think about that as you look into the second half and into next year? One of your peers pointing for some different reasons, perhaps, but just slightly lighter outlook as we look into 2026, so how you see that business? And then the second question, in your sort of early interactions with the new Chairman, what have the discussions mainly been focused on? So clearly, this is the change around the portfolio and looking into that. But which areas do you think he might have the most impact on in the organization?

Super Henry. Look, first, I'm really excited for Albert to come on board. He's got a tremendous track record at CRH. 10 years of fantastic delivery, experiencing many of the industrial challenges that we face in an oil and gas company as well. So it will be fantastic to have Albert on board full time. We've been in conversations early on. And the question is how do you drive shareholder value as much as you can? How do you get really, really disciplined with capital, investing for returns and value as much as you can and how do you drive real competitive cost tension into the business to make sure that we challenge ourself day in and day out to be the very best in the basins which we operate, which Kate unpacked a little bit earlier. So it's a hard performance drive. I think from a portfolio perspective, too early to judge anything we just need to go through this, and work together to see what makes the most sense for us across the portfolio, given the richness of the opportunity set that sits with us. So we look forward to updating you in due course in that space. I think on gas and low carbon, maybe you were asking a gas trading question. Maybe that's what that was. I'm not sure, Henry, if that's what you were really asking.

Partly gas trading, yes.

Partly gas trading. Yes, I think it's mostly gas trading. No change of assumptions for us. We run our business differently than other corporations do. We run our gas trading business for optionality. And whether the market is oversupplied or undersupplied, what we look for is volatility where we can redirect. As Carol talked about in February, 50% of our LNG business is redirectable in '25, growing to 60% in 2026. So if you have a geographic arbitrage, if you have a time arbitrage, we don't really slave ourselves to a percentage point of some slope. We don't do point to point. We try to get this optionality. So there shouldn't be any change in what our assumptions are for trading. In the past, we have delivered 4% across the past 5 years, and we would expect that to continue in the future. So no change to our viewpoint on how our gas trading business will do. And of course, we've got exciting new things that have been brought online recently. Obviously, ventures following to us now, Mauritania and Senegal is flowing to us now and something that doesn't get many headlines is we started up G&A Phase 2 in Brazil, where we've got a 3 gigawatt power plant in Brazil with a 1 million to 3 million -- 1 to 3 MTPA short into Brazil that we have exclusive access to. So an interesting new addition to the leg of trading moving forward. So hopefully, that answers your question on gas and low carbon, Henry.

Super, Henry, we are 5 minutes over time. So I appreciate -- I think there's a couple of questions pulling for a second time. Please relay those questions back to Investor Relations. We'll certainly get answers back to you. My thanks to everybody on the panel and maybe I can just hand back over to Murray to close the call.

Super. Well, thanks to Gordon, Emeka, Kate, and thanks the entire BP team for delivery. It was another strong quarter for BP operationally and strategically and encouraging progress. But as I've said, this is 2 quarters in of a 12-quarter program, and there's a lot more to do across the next turn quarters. We are fully focused on delivering safely, reliably, investing with discipline and driving performance improvements across all parts of the business, all in service of delivering our 4 key targets and in maximizing long-term shareholder value, we can and will do better. Thanks for listening and for those taking vacation, I wish you a peaceful and relaxing break. And we look forward to talking with you soon. Thank you. Bye-bye.