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Earnings Call Transcript 2020-Q2

[Craig Marshall, executive]

Good morning, and welcome to BP's second quarter results and strategy live presentation. I'm Craig Marshall, BP's Senior Vice President, Investor Relations.

You may have seen from this morning's announcements, this call is going to be a bit different today. We have a full agenda and do expect to take a little longer than advertised. We will cover our second quarter results, but we intend to use most of this time to take you through our new strategy that we announced today. For this reason, I'm joined today by Helge Lund, BP Chairman; as well as Bernard Looney, Chief Executive; Murray Auchincloss, Chief Financial Officer. And we're also joined today by our Executive Vice President, Strategy and Sustainability, Giulia Chierchia. As usual, we'll have time for Q&A at the end of the presentation, and we hope to finish around 11:30 a.m. U.K. time.

Before I hand over to our Chairman, I do need to draw your attention to our usual cautionary statement. During today's presentation, we will make forward-looking statements that refer to our estimates, plans and expectations. Actual results and outcomes could differ materially due to factors we note on this slide and in our U.K. and SEC filings. Please refer to our annual report, stock exchange announcement and SEC filings for more details. These documents are available on our website.

I'll now hand over to Helge.

[Helge Lund, executive]

Thank you, Craig, and let me add my own welcome to everyone on our webcast, and thank you for joining us. As Chairman of BP's Board, I would not usually join our results call, normally these are led by our executive team. But today, we are making an exception.

This morning, we outlined the set of results that were delivered during a uniquely challenging period. At the same time, we made announcements on 3 strategically important decisions. First, a new company strategy to meet the ambition and aims we set out in February. Second, a new and resilient financial frame, including a clear approach to how we allocate capital. And third, a new investor proposition that includes a new distribution policy. We believe these 3 elements will benefit our many stakeholders, including our investors.

So before Bernard, Murray and Giulia explain the key details, I want to briefly outline the judgments the Board has made in reaching these decisions and the process we have followed.

Starting with our judgments. And our first judgment simply recognizes a stark truth: the word is, on a sustainable path, its carbon budget is running out. Our second judgment is that in response to that stark truth, energy markets have begun a process of fundamental lasting change, shifting increasingly towards low carbon and renewables. Oil and gas produced safely and efficiently will, we believe, continue to perform a vital role for the world and in our business. But and this is our third judgment, over the longer term, the demand for both oil and gas will be increasingly challenged.

Finally, our fourth judgment is that BP, alongside many others, can make a contribution to the energy transition the world wants and needs and create value in doing so. We have the skills, the energy market experience, the resources and the global relationships. In applying these 4 judgments to our decision-making, the Board has been actively engaged with the leadership team in a process that began long before Bernard became CEO this year, but which has accelerated since.

From the beginning of 2019, we made our strategy the central focus of every Board meeting. This year, we have worked closely with Bernard and his team and we have, in certain periods, increased the frequency of our meetings to weekly, recognizing the scale of the shift our company needs to make. And the strategy we announced today has benefited from extensive dialogue with our shareholders. It will change BP from an international oil company to an integrated energy company focused on delivering solutions for our customers, a major necessary step in support of BP's purpose and ambition.

To deliver this strategy, the Board has agreed a new financial frame for BP. It provides a stable foundation for our company, strengthens our balance sheet, provides a clear approach to capital allocation and, crucially, through our disciplined approach to investment, creates the opportunity for us to significantly increase our investment in low-carbon activities in this decade, while at the same time operating a high-quality base business.

Together, our new strategy and financial frame create our investor proposition, which is designed to reward our investors through committed distributions and profitable growth, while generating sustainable value as we invest into the energy transition. Bernard, Murray and Giulia will shortly explain the details more fully.

But I will close for now by thanking them and their entire team for their leadership of BP during this extraordinary period. They could hardly have had a more challenging first few months. There will undoubtedly be further challenges along the way, and through this transition, I know we're going to learn a lot.

Yet, there's a lot this company already understands, about rising to those challenges when they come, about energy and about the opportunity we have to reimagine energy for people and our planet. And Bernard and his team have the Board's full support, and I'm very pleased to join them in announcing these big steps for BP this morning. Thank you.

[Bernard Looney, executive]

Well, thank you, Helge, and welcome to everyone joining us today. I really appreciate you all taking the time, and apologies that we're going to run over a little bit, but we have a lot that we want to share with you.

So first of all, if I may, I want to start by thanking my BP colleagues and our BP colleagues for the amazing job that they're doing right now as we all deal with the impacts of the COVID-19 pandemic. As well as taking care of their families and supporting the communities in which they work, they have continued to help deliver the energy that the world needs in what has arguably been the most challenging quarter in the history of the industry.

Those working on the front line deserve particular recognition. Many have made great sacrifices and dealt face-to-face, literally in some cases, with the risk in order to keep our operations running and our retail sites open. Equally, those working from home have had to deal with unique challenges, disruption and inevitable anxiety. And they're all doing a great job. And if you're listening this morning, thank you. I and we are enormously grateful.

As Helge says, we're moving earlier than we thought on our strategy. We're moving faster, we're moving further and we're moving more decisively. The world is in a different place because of COVID-19 and so are we. And the more we understand about the consequences for the global economy and the inevitable uncertainty that it brings, the more convinced we are that the ambition and the direction that we laid out on the 12th of February is taking us in the right direction for BP. It's right for our employees, it is right for our shareholders and it is right for society.

Within a decade, BP intends to be a very different kind of energy company. We're transforming from an international oil company, focused on producing resources, to an integrated energy company, focused on delivering solutions for customers from IOC to IEC. And this is a truly transformational step as we seek to become a net zero company by 2050 or sooner.

Today is about a new strategy, a new financial framework and a new investor proposition, 3 things. And as part of that -- this proposition, we have announced a new distribution policy, which will support us in facing an increasingly uncertain world, allow us to strengthen our balance sheet and invest adequately in the energy transition.

The policy combines 2 things: a reset and a resilient dividend intended to remain fixed at $0.0525 per ordinary share per quarter, subject to the Board's discretion; and a commitment to return at least 60% of surplus cash to shareholders through share buybacks once our net debt target has been reached and subject to maintaining a strong investment-grade credit rating.

And while this approach has been informed by the extensive engagement we have had with our shareholders, I do want to acknowledge the impact it will have on many, whether an individual retail investor or a large holder. However, it is a decision that we wholeheartedly believe is in the long-term interest of all of our stakeholders.

And any such decision must be put in context, and that's why we've accelerated our strategy presentation to today so that you can hear a coherent story of how all this fits and comes together, and we'll come back to talk about this in more detail later. But let me firstly -- turn firstly to recap on what has been a very busy few months.

And as you can see from the slide, we have been busy and I'd like to think -- we'd say we've been really busy since committing to reinvent BP on the 12th of February. And our actions have included action to make BP leaner and fitter, updating our long-term price assumptions, strengthening our balance sheet, reshaping our portfolio, notably with the divestments of our petrochemicals and Alaska businesses.

Importantly, all part of a single coherent plan, all part of that same journey. And the new strategy we're sharing with you today is the next big step on the journey and, I hope, puts many of those individual steps in context. And you will, of course, hear a lot more detail at our BP week in the middle of September.

Before I hand over to Murray to go through our 2Q results, I want to emphasize 2 things. Firstly, safety. Our commitment to safety remains consistent and unwavering throughout our transformation process. It is and it will continue to be our core value. And while it may not show up on every single slide, I can assure you, it permeates everything that we do.

Fundamentally, it's about care. It's about caring about people, it's about caring about our company and it's about caring about the communities where we operate. It's about ensuring that everyone goes home safely every day. And in the second quarter, 32 people were hurt in our operations, fewer than in previous quarters, but still 32, too many. We had 4 process safety Tier 1 events and 19 Tier 2 events, and we will not rest until we get those to 0, and we will not rest then.

Secondly, we're transforming the culture of BP. And at the end of the day, as we all know, it's all about people, and that begins with leadership. We have now selected the next level of leadership in BP, cutting the number of roles in half from 240 to 120 at the very top; taking out a layer of management with more layers to come out, so we create a more agile organization, one that is more connected to frontline. And to help give you a sense of the type of BP we're trying to create, maybe just a few words on the attributes we used to select those top 120 leaders.

We searched for leaders who clearly have a track record of delivery. We searched for leaders who are curious, open-minded; who are purpose-driven, not ego-driven; who lead through our values, especially safety. And importantly, leaders who are empathetic, but we are also prepared to hold people to account, and it's what we call empathetic edge.

40% of this team is women and about 1/3 ethnically diverse. Good, but not good enough. As a leadership, we are not fully reflective yet of BP as a whole or the communities in which we operate. And as I set out in my note in the days immediately after the killing of George Floyd, we will get there and we are in action, and you'll hear more about this in the weeks ahead.

So at this point, I'm going to pause now and hand over to Murray, and Murray will through -- run through our second quarter results, and then we will get on to our new strategy. Murray?

[Murray Auchincloss, executive]

Thanks, Bernard, and good morning, everyone.

Starting first with the environment. The COVID-19 pandemic continues to create a volatile and challenging trading environment, with Brent crude prices falling by over 1/3 in the first half of the year. Having recovered from $19 through April, Brent averaged $30 in the second quarter, supported by OPEC+ production cuts and some recovery in demand. Prices remain materially below both the first quarter average of $50 and the full year 2019 average of $64.

The refining environment also remains extremely challenged. BP's refining marker margin averaged $5.90 in the second quarter compared with $15.20 a year ago, reflecting sharply reduced product demand and significantly lower industry refining utilization.

Turning finally to gas markets, where the weaker economy has further reduced demand and worsened the preexisting oversupply in the market. U.S. Henry Hub gas price averaged $1.70 through the quarter, the lowest in 25 years. NBP and JKM averaged $1.60 and $2.10 in the quarter.

Turning to our results. In June, we updated our long-term price assumptions, lowering Brent to an average of around $55 and Henry Hub to an average of $2.90 in 2020 real terms. As a result of these revised assumptions and a review of our intent to develop some of our exploration prospects, our reported results include significant impairment charges and exploration write-offs, contributing to BP's second quarter reported loss of $16.8 billion, as Bernard said.

The impairment charge of $11.8 billion and $2 billion of the exploration write-offs are nonoperating charges, with the underlying result, including $7.7 billion of pretax exploration write-offs. After adjusting for nonoperating items, inventory gains and resulting tax credits, BP's underlying replacement cost loss for the second quarter was $6.7 billion.

Looking in more detail at BP's underlying results. We reported a second quarter underlying replacement cost loss of $6.7 billion compared to a profit of $0.8 billion in the first quarter. Compared to the first quarter, this reflects the exploration write-off impact, lower liquids and gas realizations, weaker industry refining margins and demand destruction in the Downstream due to COVID-19. This was partly offset by an exceptionally strong contribution from oil trading.

BP's effective tax rate in the second quarter was significantly lower, primarily due to the effect of limited tax relief on the exploration write-offs in certain jurisdictions. The second quarter dividend payable in the third quarter has been set at $0.0525 per ordinary share.

Turning to cash flow and our balance sheet. As of the second quarter, we have combined our inorganic and organic sources and uses of cash to be consistent with the new financial framework that I'll come on to discuss later.

Excluding Gulf of Mexico oil spill-related outgoings, BP's underlying operating cash flow was $6.1 billion for the first half. This included a reduction in working capital of $1.5 billion in the second quarter and a build of $2.2 billion for the first half.

Capital expenditure for the first half of the year was $6.9 billion, and lease liability payments were $1.2 billion. We paid $4.2 billion in dividends for the half year. In addition, in the first quarter, we completed our share buyback at a cost of $0.8 billion. Divestment and other proceeds totaled $1.8 billion for the half year, and we made post-tax Gulf of Mexico oil spill payments of $1.4 billion. BP's cash outflow was $6.5 billion for the first half.

We have also continued to focus on strengthening our balance sheet. During the second quarter, BP issued $11.9 billion of hybrid bonds. And at the end of the first half, BP's net debt was $40.9 billion, 10% lower than the end of 2019. We have taken the decision to adjust gearing to include the impact of leases as of the second quarter. On that basis, gearing fell 2.4% to 37.7% compared to last quarter. This included the impact of the issuance of the hybrid bond on the net debt and equity, and the reported loss in the quarter.

Turning to the outlook and our guidance. Global GDP is expected to contract this year by between 4% and 5%. Global oil demand is expected to be around 8 million to 9 million barrels per day lower than 2019, with OECD oil stocks above their 5-year range. And gas markets are likely to remain materially oversupplied.

Looking at our full year guidance. We now expect the post-tax charge for the Gulf of Mexico oil spill payments to be around $1.5 billion in 2020, as the much weaker environment results in a deferral of tax credits. Our pretax estimate for the year remains unchanged. We now expect 2020 full year DD&A to be around 10% lower than 2019. This includes the impacts of capital interventions and curtailments on production, divestments and, of course, impairments.

Following the recent announcement of around 10,000 job reductions, the majority of which are expected to occur by the end of 2020, we expect to take a restructuring charge in 2020 of around $1.5 billion. 2020 major project start-ups remain on track, and we now expect Ghazeer, the Ghazeer project in Oman, to start up this year ahead of schedule. Well done, guys.

Looking at the third quarter, in the Upstream, we expect reported production to be lower than the second quarter, reflecting divestment of the Alaska business and price impacts on entitlement volumes. While in the Downstream, we expect higher product demand, albeit still significantly below last year's levels. We also expect significant continued pressure on industry refining margins into the third quarter.

Looking at the third quarter so far, retail fuel demand has recovered to around 10% to 15% below a year ago. However, aviation fuel demand has remained more than 70% lower than a year ago. And despite demand impacts, store sales at our retail sites have increased year-on-year on a like-for-like basis and have remained resilient throughout July, a good proof point for our strategy.

In summary, I want to acknowledge the tough set of results that we have reported in what has been a very challenging quarter. We remain focused on driving down costs, managing capital within a disciplined frame and strengthening our balance sheet. The lessons learned have informed the development of our new strategy and the ongoing work we have done to create a stronger, more resilient financial frame. I will come back to talk about this later. For now, let me hand back to Bernard.

[Bernard Looney, executive]

Thank you, Murray. Thanks for that run-through. And now we're going to move on to the next part of the morning, and we'll start on strategy. We have seen some tough quarters in our 110-year history, there's no question about that. And while this last one has to be amongst the toughest, it only makes us more determined to change, not less.

Back in February, we remember saying we reset the Sat Nav for BP. We plugged in that destination, and we said, there's no turning back. And we recognized that many of our stakeholders wanted us to change, and we said, we want to change as well. We don't just need to or we're not under pressure to or we don't have to, we want to.

Throughout BP, so many people I talked to all over the world want us to help deal with the threat of climate change. And at the same time, there is a deep belief amongst us that this is a huge business opportunity for BP. We can make BP a better company and create value by taking on this opportunity, and we believe and we hope and we think that we are one of the best placed companies in the world to do that.

We've announced a new purpose. We've announced that we would reimagine energy for people and our planet. We said we would reinvent BP. We laid out our ambition to get to net zero and help the world get there as well. And now today, we are sharing the next major staging post with you. And it brings together 3 things that I talked about earlier: a new strategy, a new financial framework and a new investor proposition.

So let me start by describing the new strategy. After more than a century, really defined by 2 core products, commodities, oil and gas; through 2 core businesses, Upstream and Downstream, we are pivoting. We're pivoting from being an international oil company to an integrated energy company.

Over the next decade, we plan to significantly scale up our low-carbon electricity and energy businesses. We plan to transform our convenience and mobility offer. And we plan to focus our valuable oil, gas and refining portfolio and make it more resilient. In doing so, we are accelerating our transition from a company that's focused predominantly on producing resources to an integrated energy company that is focused on delivering solutions for customers.

And this is how we're going to do it. This is our new strategy. It's built around 3 focus areas of activity, the so-called verticals on this slide. And while each focus area represents an attractive opportunity in its own right, taken individually, they're not necessarily unique to BP. Therefore, we will leverage 3 sources of differentiation, which are the so-called horizontals on the chart, and this is where we feel we can really add and amplify value.

First, the 3 focus areas. Low carbon electricity and energy, where we will build scale in renewables and bioenergy, seek early positions in hydrogen and CCUS and we will build out our customer gas portfolio to complement these low-carbon energies. Convenience and mobility, where we put customers at the heart of what we do to help accelerate the global revolution in mobility and redefine the experience of customer retail and convenience retail. And resilient and focused hydrocarbons, which are key to our transformation and whose cash flows enable this strategy.

First and foremost, we will maintain our absolute focus on safety and operational reliability. We will drive up productivity and drive down emissions. And as the next wave of major projects completes over the next few years, capital intensity will fall and we will continue to high grade the portfolio, while limiting exploration to existing regions, we will not enter new countries to explore. And this will result in lower production and refining throughput over time, while increasing our focus on value, not volume.

Second, the 3 sources of differentiation: integrating energy systems along and across value chains, where we will pull together and knit together all of our capabilities to create comprehensive offers for our customers; partnering with countries, with cities, with industries as they shape their paths to net zero; and innovating with a really strong focus on digital to create efficiencies, support new businesses and enable new ways to engage with customers. And Giulia, much more qualified and will say much more about each of these elements shortly.

But overall, this, call it, a 3 by 3 strategy is intended to deliver long-term value for all our stakeholders. And that delivery will be anchored in the new sustainability framework, which Giulia is working on and the team, and we're building and we'll talk more about in September.

Now by following this strategy, we expect BP to be a very different energy company by 2030. We aim to increase investment in low-carbon tenfold, it's actually eightfold by 2025. We aim for a twentyfold increase in renewable energy-generating capacity, twentyfold, or a tenfold increase in the number of EV charging points. We aim to double our daily customer interactions. We aim to be partnering with 10 to 15 major cities worldwide and with 3 industrial sectors helping them meet their own net zero goals.

And we expect BP's resilient and focused hydrocarbon business to be around 40% lower in terms of production by 2030, but industry-leading in quality, in efficiency and highly valuable. And the cash generated by hydrocarbons will be key to supporting the transition into our 2 growth areas: low-carbon electricity and energy and customer convenience and mobility. And we expect to be directing 40% or likely more of our investment into these areas by 2030.

Through this plan, value is important, and we also expect to increase BP's return on average capital employed, or ROACE, to 12% to 14% by 2030. And we will do this with care, performing as we transform and with a relentless focus on financial discipline.

Some will ask, in fact many may ask, why BP? What does BP really bring to the table in this new world? And we like to think about it in 2 dimensions. First, we have the skills, built up not last week, not last month, not last year, but over -- built up over 100 -- more than 110 years of history. We are steeped in the world of energy. We understand energy markets and how they work.

And we have literally thousands of scientists, engineers, technologists. We build massive projects. We operate big plant. We have people with outstanding capabilities in trading, one of the world's largest traders in marketing and innovation. We're truly global, operating in over 70 countries around the world. And we have strong relationships with many of the world's leading companies and universities and with governments in all countries, including in fast-growing countries.

And secondly, we have the will, the desire. Our people want to make a positive difference. And I am simply in awe of some of the things that they have done for their communities so far during the pandemic. They want BP to change, and they know how to do it. We've transformed many times before and we've learned lessons along the way, tough lessons -- sometimes the best lessons are the tough ones, not just how to respond to adversity, but how to seize opportunities when the time is right.

This is what we aim to do. And we're not starting from scratch in this new world. This slide is a selection from the thriving energy transition, convenience and mobility partnerships and businesses that we are growing all over the world. BP biofuels is now a joint venture, BP Bunge Bioenergia. It is the second biggest player in one of the world's largest and fastest-growing biofuels markets.

In India last month, we launched our new Jio-BP mobility partnership with Reliance. It aims to create a fuels retail network of up to 5,500 sites over the next 5 years. And we'll do that in partnership with our great friend, Mukesh and the team at Reliance.

Our convenience partnerships with M&S in the U.K. and REWE in Germany are industry-leading. Nearly half of our margin from a U.K. forecourt comes from the on-site shop. We just extended our role in the gas value chain in China. We are the first international business to resupply -- to supply regasified LNG to end users.

Here in the U.K., we own BP Chargemaster, which runs the country's largest EV charging network. And BP Chargemaster is now rolling out ultrafast charging across our network, and our Aral brand is doing the same across Germany, installing ultrafast charging that can deliver up to 350 kilometers of charge in 10 minutes.

And I thought it might be helpful, or I'd like to share a few photographs that sort of give a sense of color to some of these businesses. And the first one I love, it's EV charging. And this is a picture, I think, taken probably from a security camera. It's a picture of one of the charging racks at our Zengcheng retail site in Guangzhou in Southern China.

And if you look closely, you can see this taken just after midnight, 00:02:53. And every charger, every charter is in use.

And China is the world's fastest-growing market for EVs, and half of the world's electric vehicles are today on China road -- China's roads. And last year, we announced a BP partnership with DiDi, the world's leading mobile transportation platform. They have 550 million users on one platform. And as the slide said, 10 billion, yes, 10 billion rides per year. And our joint venture plans to develop a network of charging hubs right across the country.

We turn to convenience. This is a photograph of our BP Connect Clifton retail station in Auckland, New Zealand. I've never been, but I must go one of these days. But it serves the #1 preferred coffee in New Zealand, which is our Wild Bean brand. And we launched that brand in 2001, and we now serve more than 150 million cups of coffee a year across 12 different countries. And we're probably much better known for -- on the high street for selling petrol and gasoline, but we also sell a lot of coffee.

And we see this and our convenience retail business as a whole, and Murray talked about its resilience in the second quarter, as a huge opportunity for growth. It generated gross margin of over $1 billion last year, and we have plans to nearly double the number of strategic convenience sites we have to over 3,000 by 2030.

This is the solar park that should soon be providing 25% of all the electricity for Penn State University in the United States. It's a 70-megawatt solar array being built by our Lightsource BP partnership, and it will help reduce the university's emissions. In the 2 years since we formed our partnership, Lightsource BP has expanded from 5 to 13 countries, including the U.S., with plans to develop 10 gigawatts of developed capacity by 2023, which is a fivefold increase on where they are today.

And this image helps to illustrate a point about our North America gas and power business. While we are known as a major gas producer in the United States, it is probably not so well-known that we're the biggest marketer of natural gas in North America. We sell more than 20 billion cubic feet every day. And over the last 20 years, we've been building relationships with over 100 cities, 100 cities across the United States, to help meet their energy demands with a combination of gas electricity, storage, pipeline capacity and physical risk management. This is integrated energy management in operation, and it is a capability that we can and now plan to extend into other regional markets.

These are just a few of examples of our capability as well as what we offer to customers today, and are part of the strong foundation we have to reinvent BP.

But to reinvent BP, we must also operate with a resilient financial framework. This framework is underpinned by a coherent approach to capital allocation with a clear set of priorities, 1, 2, 3, 4, 5.

First, funding a resilient dividend intended to remain fixed at $0.0525 per ordinary share per quarter. First call on funds. Second, a strong balance sheet with a strong investment-grade credit rating. Third, investing at scale to advance our energy transition strategy. Fourth, allocating sufficient capital to our resilient hydrocarbons business to generate sustainable cash flow and maximize value. And fifth, importantly, committing to return at least 60% of surplus cash as buybacks, providing direct leverage to cash flow upside and further enforcing investment discipline.

Together, creating a clear and coherent framework to support our strategy and our net zero ambition. And Murray, also more qualified, will come back to talk about this in more detail later in the presentation.

So what does this all mean? It means that we will not just be a different company in terms of our activities, we'll also be a very different company from an emission standpoint. By 2030, we want to be well advanced on the 5 aims we set out in February to underpin our ambition to be net zero by 2050 or sooner.

30% to 35% of the way on aim 1, which is absolute reductions in our operational emissions. 35% to 40% reduction on its way on aim 2, and this is the absolute reductions in Scope 3 emissions associated with the carbon in our Upstream oil and gas production. This is an important metric, which sees those emissions fall by over 125 million tonnes. And around 1/3 of the way towards aim 3, which is reducing the overall carbon intensity of the products we sell by 50%.

On aim 4, we are making progress on deploying measurement for methane at all of our major oil and gas processing sites by 2023. And we will use that measured data, importantly measured, to confirm the baseline for a 50% reduction in methane intensity. And on aim 5, we intend to be making around $5 billion of investments in low-carbon by 2030, which is a tenfold increase on our $500 million spent last year.

Now as I hope you know, I believe in being transparent. So I want to make 2 points in relation to this emissions-reduction plan. The first is that it does not rely on offsets. We believe the world will need offsets to decarbonize. And natural climate solutions are a verifiable high standard or a tool in our toolbox, and BP will, no doubt, help to make carbon markets effective. But for the avoidance of doubt, we do not anticipate them being needed to meet our planned reductions over the next 10 years.

The second point relates to our aim 3. While we believe that our carbon intensity will come down by more than 15% by 2030, absolute emissions from the use of the products we sell will likely rise for several years before then starting to fall. And this is mostly driven by our plans for growth of transport in fast-developing markets as we deliver energy solutions to countries, to cities, to industries with growing energy needs.

Now some will inevitably argue that this is and has to be inconsistent with our net zero aspiration, and I understand that point of view, but respectfully, I don't agree with it. There is no one path to Paris. The reality is that developing economies will want to grow and their emissions from transport are likely to grow for some years to come. And so global emissions have to come down more elsewhere in the world if we're going to get to Paris. And this is -- this phenomenon of growth in those emerging economies is taken into account in Paris-consistent pathways, like the IEA Sustainable Development Scenario.

And once we're in the market, we believe that by building that presence, we are creating opportunities to scale low carbon mobility and solutions in due course. Because we have a retail network in Germany today means we're perfectly placed to put in charging network in Germany today, and the same will be true later in India. And we will be activating -- actively advocating globally for policies that incentivize lower-carbon choices and lower-carbon goals.

So in addition to delivering on our net zero ambition, our strategy and our financial frame support -- they all support the delivery of a clear and compelling investor proposition, which in itself provides 3 things: first, committed distributions through the reset and resilient dividend and our commitment to share buybacks; second, profitable growth as measured by EBIDA per share and ROACE, which Murray will come back to talk more about later; and third, sustainable value through investing in a company that itself is decarbonizing and in doing so will help the world decarbonize. And combined together, we believe this will deliver long-term shareholder value.

So let me finish now, you've heard enough from me, by anchoring what you have heard so far within a single coherent frame. It starts with our purpose and a set of core beliefs about the future. These inform our strategy, delivery of which will be anchored in a new sustainability frame. Our strategy is underpinned and enabled by a resilient financial framework. And the integration of each of these elements supports what we believe is a compelling investor proposition.

Taken together, we believe this will create long-term value for all of our stakeholders, our employees, our suppliers, our partners, our customers, our communities where we work and the countries in which we work.

So let me now hand you over to Giulia, who has recently joined BP, and we're delighted with that, who has -- Giulia has led the strategy work. And once Giulia goes through the strategy work, I'll ask Murray then to take us through the financial frame in a bit more detail and the business plan for the next 5 years. So over to you, Giulia.

[Giulia Chierchia, executive]

Thank you, Bernard. I'm delighted and excited to be here today. Some people have asked me why I joined BP. I would reply, "Why would somebody not join in this time of incredible transition?" I can't imagine a more exciting and purposeful challenge to be part of. 4 months down the road since I joined, I am as or more excited, and I truly hope I can help BP as we embark on this new journey.

So let me begin by outlining our core beliefs, which, together with our purpose, inform our strategy. I will then talk to the key elements of the strategy and how we intend to align our investments to transition to an integrated energy company, delivering solutions for our customers.

Turning to our beliefs. For 10 years, we have published our energy outlook. This year, we have been working to extend the scope, taking us out to 2050. We have also been working on factoring in the impact of a coronavirus pandemic. We will share the details of our new outlook in September on day one of our BP week.

Before looking at the details, let me address one question. Why do we need an outlook? We use outlooks and scenarios to inform a range of possible pathways which the transition may take over the next 30 years. We believe it is not possible nor sensible to identify one most likely scenario, but our strategy needs to be robust to multiple scenarios and to the uncertainty around the pace and direction of the energy transition. To this end, we focus on 3 core scenarios.

Business as usual. A continuation of recent trends without major change in the pace or direction of policy. This scenario is not Paris-consistent and results in a reduction in global energy greenhouse gas emissions of only 10% by 2050 versus 2018.

Rapid. One of many possible scenarios that can be considered, consistent with Paris, in line with the well below 2 degrees pathway. In this scenario, emissions fall by over 70%, with a fall of approximately 80% in the developed markets and 65% in the emerging world.

Net zero, in which global energy systems emissions fall by 95% by 2050 versus 2018, in line with the 1.5 degrees pathway. Societal pressure would be a key driver in this scenario, prompting further policy change.

Across these scenarios, the demand for fossil fuels falls by 2% in the business-as-usual-scenario, 50% in the rapid scenario and 75% in a net zero scenario. These 3 scenarios highlight the breadth of possible outcomes and the uncertainties we face. Our rapid and net zero scenarios indicate a direction of travel towards significantly lower carbon in the energy system. We do not anchor on a base case scenario, and we seek resilience across a broad range of scenarios. But for the avoidance of doubt, let me say it, we do not want business as usual and we'll advocate directly in support of net zero.

With this backdrop of uncertainty, we have established our core beliefs which we think holds true across scenarios. These beliefs underpin our strategy. Our first 3 beliefs relates to how we expect the energy demand mix to change.

First, the world is electrifying at pace, and we believe that renewables will be a clear winner. Under the rapid transition scenario, global electricity demand increases 80% by 2050. Renewables account for more than 40% of primary energy, a near tenfold increase. Even in a business-as-usual scenario, renewables still capture 90% of net energy growth.

Second, customers will continue to redefine mobility and convenience. By 2050, we could be in a world of over 1.5 billion electric vehicles, 80% of the total. Changes in mobility patterns will also impact convenience, redefining the role of physical stores and supporting the growth of the last-mile delivery.

Third, society is shifting away from its reliance on fossil fuels, and while hydrocarbons will be a necessary part of the mix for many decades to come, the growth outlook for oil and gas is challenged.

Our second set of beliefs relate to how the energy system will have to change in response to revolving demand. First, as the world electrifies and renewables, storage and hydrogen grow, supply will become more local, more complex and will require more integration across multiple energy sources to provide stability, maximize system efficiency and ensure a successful transition.

Second, we will see energy and mobility markets increasingly shift from being resource-led to being customer-led. Customers, in particular countries, cities and industry, will increasingly demand bespoke energy, mobility and decarbonization solutions. 114 cities have already pledged to 1.5 degrees by 2050. 23% of Fortune 500 companies have announced emission-reduction goals. A fundamental acceleration in the transition is needed to meet those goals.

Third, digital will continue to transform our lives, creating opportunities to drive integration, unlock value and engage with new customers and markets.

Those core beliefs underpin our 3 by 3 strategy, which Bernard spoke to. He introduced the 3 core focus areas, the verticals; and the 3 sources of differentiation, the horizontals. I will now take you through the details of the strategy. But before I do so, I want to reinforce that just as our strategy is founded on our purpose, it also stems from our commitment to sustainability.

We are building a new sustainability frame expanded to reflect 3 priorities: net zero, in line with our aims and including our advocacy efforts to help the planet to get to net zero; enhancing people's lives in the communities in which we operate; and caring for local environments and biodiversity in how we conduct our business and including our active participation in natural climate solutions. Our recent positions on human rights and biodiversity reflect our evolving sustainability ambitions. We will provide an update on our new sustainability frame in September, and intend to seek input from external stakeholders.

Let us now dive into our 3 focus areas, starting with low carbon electricity and energy. Our intention is to be a leading integrated low carbon electricity and energy player. We plan to scale our low carbon activities in selected markets where we see an opportunity for growth, for transition and for integration. We will participate along and across value chains and will scale in 4 areas.

First, low carbon electricity. We aim, as Bernard said, to build an integrated low carbon electricity position in selected, developed and emerging markets. We aim to be a top-tier renewables player by 2030 in our focused markets, ramping up to have developed 50 gigawatts of renewables capacity net to BP across solar and wind. We intend to grow our commercial and industrial customer portfolios and balance our electricity generation positions. And we aim to double our electricity trading. But we're not starting from scratch. We will complement our solid track record from Lightsource BP, BP wins and trading with strategic partnerships.

Second, Downstream gas. Alongside low carbon electricity, we will grow our integrated gas position, building on our high-value equity Upstream gas, our LNG portfolio and our marketing capability. By 2030, we intend to access key demand markets with 25 million tonnes per annum of gas sales, playing to our strengths in supply, trading and optimization. We also aim to reach at least 30 million tonnes per annum in LNG portfolio. We plan to integrate further Downstream, securing end-user demand through city gas, gas to transport, gas to electricity and renewable natural gas.

Third, bioenergy. Hard-to-abate sectors such as aviation, marine and heavy-duty vehicles, will need alternative solutions. We plan to scale our bioenergy business, focus on biofuels, biogas and biopower growing from 22,000 to more than 100,000 barrels per day. This will include advantaged coprocessing in our refineries and third-party facilities. To this end, we plan to replicate our successful models of BP Bunge in Brazil and of biogas in the U.S. and leverage our biomass conversion technologies such as Fulcrum, which access cost-advantaged feedstock.

Finally, we see hydrogen and CCUS as critical to the world delivering net zero, and we are accelerating to build early positions. Under our Paris-consistent scenarios, hydrogen grows to meet between 7% and 17% of final energy consumption. Even at the lower end of this range, hydrogen is a significant source of low carbon energy. We believe in the role for both blue and green hydrogen, and we'll focus on both in North America and in Europe, targeting industrial and heavy-duty transport as well as the Australian export market for green hydrogen.

We see hydrogen playing a key role in our energy portfolio. A possible building block for e-fuels. We aim for a 10% share in core markets. CCUS will also be an enabler of industrial decarbonization and blue hydrogen. As you know, we are active with our partners in Net Zero Teesside. The free low-carbon energy businesses, complemented by integrated gas, will all be needed to transition. Moreover, they are complementary to deliver low carbon systems and solutions.

Our second focus area is convenience and mobility. Consumers are changing, urbanizing, demanding an optimal use of their time, driving new digital business models. Mobility and retail convenience are changing, too, at a different pace across different regions. We believe we are well placed to help accelerate the global revolution in mobility and redefine the convenience retail experience.

Some might be surprised with our focus on convenience retail. We intend to focus on convenience because the opportunity is set to double in the world's leading economies over the next decade, because we have a track record of highly attractive returns and because we have the skills and scale to deliver. We currently have 10 million customer touch points per day. We sell 150 millions of coffee per year. 90% of British and German inhabitants live within 20 minutes of a BP site.

So what are we planning to do? First, we want to scale our presence in growth markets. China, India, Indonesia, Mexico, reaching over 8,000 sites by 2030 from 1,270 in 2019. We will build on our differentiation and brands, such as Castrol, to capture preeminent positions. Over time, our plan is to drive low carbon mobility through advocacy and partnerships, such as DiDi in China.

Second, we will accelerate and refresh convenience, providing consumers with a differentiated offer, what they need, where and when they need it. We aim to expand to over 3,000 convenience sites in developed markets from 1,600 in 2019. And we will put the customer at the heart of everything we do through a seamless digital experience and innovative offers such as delivered convenience and last-mile logistics.

Finally we intend to shape and drive next-generation mobility solutions for our customers. We plan to scale up EV charging to 70,000 points across China, Germany, U.K. and the U.S. We will build on successful platforms such as BP Chargemaster and DiDi, in line with our vision to be the fastest, most convenient network. We aim to become the partner of choice for fleets as shared mobility could grow to almost 60% of EV usage over the next 3 decades. We plan to build and grow Castrol's customer access to accelerate the transition to EV and new fluids.

And finally, we will develop early positions in hydrogen for heavy-duty transport, aiming for more than 50 refueling sites in core markets. By 2030, we see 50% of our retail gross margin coming from convenience and electrification activities. All in all, by putting the customer at the center of everything we do, we aim to double our customer touch points over the next 10 years.

Our long-standing portfolio of production and refining is at the core of our BP heritage. Looking forward, a portfolio of resilient assets, focused on value, with the driving force to reduce carbon will continue to be part of our transition. As Murray will outline, we plan to raise BP-operated Upstream plant reliability and refining availability to over 96% in the next 5 years. Furthermore, improving capital and cost efficiency are intended to result in more competitive positions in production and refining.

Second, as presented by Bernard, we have clear 2025 targets and 2030 aims to reduce both our operational emissions and carbon. Against aim 1, we aim to reduce our operational emissions by at least 15 million tonnes by 2030. Against aim 2, we aim to reduce at least 125 million tonnes of scope-free emissions by 2030.

Third, we will complete the ongoing program of major projects.

And fourth, we intend to high-grade our portfolio. We intend to focus on highest quality basins and on resilience for oil, gas and refining operations.

These criteria will be central to our decisions on which assets to divest from our portfolio. We expect this could result in a reduction in production volumes to around 1.5 million barrels oil equivalent per day and in refinery throughput volumes to around 1.2 million barrels per day in 2030.

These numbers do not include our shareholding in Rosneft, which is a fundamental part of our broader portfolio, providing us with a strong position in Russia, a key resilient oil and gas province. We welcome Rosneft's reported reduction in CO2 per unit since 2016 by 7% in Upstream and by 11% in Downstream. These are just 2 examples of our shared commitment to reducing emissions.

Inevitably, there may be questions as to the role of hydrocarbons in our strategy. Hydrocarbons are key to our transformation. They are a core part of our strategy and de facto, they enable the strategy. Hydrocarbons are likely to be the key source of earnings and of growth in returns over the next several years. What we are saying is that as BP becomes a fully integrated energy company, hydrocarbons will be one part of a more balanced portfolio.

As mentioned, we believe in our ability to amplify value from our focus area through 3 sources of differentiation: the horizontals on the 3 by 3 slides. These are at the essence of the new BP.

First and foremost, we will focus on driving integration in everything we do. Through integration, we bring everything together to create end-to-end customer solutions. Our organizational setup was designed for this purpose. We will integrate and optimize along each value chain. We have been doing so for many years in our fuels value chain. Similarly, we will build integrated positions in electricity, gas and in mobility from customer through to the resource. As an example, we aim to offer charging solutions to EV fleets, ideally powered through our renewable electricity.

We will integrate across value chains. This integration will be physical by integrating and optimizing physical assets and their operation, or virtual, enabled by trading. As an example of physical, integrating industrial sites with renewable electricity generation, hydrogen to decarbonized operations and eventually municipal solid waste conversion to produce bio and e-fuels. As an example of virtual, offering firm zero carbon electricity to industrial customers, where our renewables team produces electricity from solar and wind assets. Our trading and shipping team complements and balances the intermittency with electricity from gas and offsets the carbon with credits derived from natural climate solutions, the latter supported by our venturing investments in finite carbon.

Second, to bring integrated solutions to our customers, we have formed a dedicated team to partner with countries, cities and industries. We will focus on 10 to 15 cities and on 3 industrial sectors, including high-tech and consumer-facing; heavy transport, which includes aviation, marine and trucks; and heavy industry, which includes cements and steel. And we will aim to partner to define transition pathways and develop joint solutions.

Third, we will drive forward with digital and innovation. We aim to transform our core businesses to drive efficiency, reduce costs and drive value creation. We aim to more than double CapEx spend on digital from today to 2025 and increase again substantially by 2030. Digital will be a key enabler of a significant part of the cost savings, which Murray will discuss shortly.

Over the last 3 years, we have hired 150 digital professionals each year, from a diverse set of companies such as Wärtsilä, Tesla and Uber, including one of our SVPs. We now have 40% of our digital estate on the cloud and intend to double that in the next 5 years. Within this digital estate, we have simplified the number of applications by 30% in recent years. We intend to build on seamless digital experiences to grow our customer-facing businesses. And finally, we can move forward with adjacencies using our growth vehicles to nurture new business through bp ventures and Launchpad, with Launchpad expecting to grow from 4 to more than 15 active residents by end of 2022.

These 2030 aims are far more than just words. We intend to align our CapEx allocation to our strategy to transition from IOC to IEC. Over the next 10 years, we intend to increase our investment into our 2 growth areas from about 15% of CapEx in 2019 to 40% or more by 2030. Such CapEx allocation represents a sevenfold increase in low-carbon electricity and energy and a doubling in convenience and mobility. Over time, the change in CapEx allocation translates into our capital employed.

By 2030, we expect to see return on average capital employed in the range of 12% to 14% from resilient and focused hydrocarbons, in line with full cycle returns; 15% to 20% from convenience and mobility, in line with historical performance; and 8% to 10% from low-carbon electricity and energy, while achieving steady growth and at a low-risk profile.

Let me conclude by summarizing. All in all, we expect BP to be a very different business in 2030, well underway to being net zero by 2050 or sooner. As we transition, over 60% of our capital employed could still be in the resilient base, which includes our Upstream oil and gas, refining, fuels marketing and lubricants. We should remember that the base plays a critical part in funding the transition. It supports our returns to our shareholders and it provides the financial flexibility to transition.

At the same time, by 2030, as much as 50% of our CapEx could be spent on transition, of which a significant majority will be low carbon. That powers the transition of BP, the transformation of BP, drives delivery of our new strategy and puts us well underway to be a leading and established integrated energy company.

Let me now hand over to Murray, who will take us through our new resilient financial frame.

[Murray Auchincloss, executive]

Thanks, Giulia, and it's great to have you here at BP.

So far today, you've heard a lot about our beliefs on our strategy. The strategy is enabled by a new and resilient financial framework, comprising: a coherent approach to capital allocation with a new distribution policy and a clear set of priorities; a resilient balance sheet; a disciplined approach to investment allocation; and a relentless focus on executing our 5-year business plan.

Together, we believe our strategy and our financial framework create a compelling investor proposition, which offers committed distributions, profitable growth and sustainable value. I will talk about each of these elements, but let me start by explaining how we aim to deliver long-term value through our approach to capital allocation.

Over the past few months, we have come to the conclusion that the economic consequences of COVID-19 make the world uncertain. With that uncertainty, too much pressure exists on the balance sheet, and we need to take action to strengthen it. It's clear our dividend must be resilient, and we need to invest adequately in the energy transition to support our ambition and our strategy, all of which must be underpinned by a coherent approach to capital allocation. This has been further reinforced following the extensive engagement we have had with you, our shareholders, over the recent months. Thank you for engaging with us in that.

As a result, we have taken the decision to reset our distribution policy. It has a clear set of priorities with a phased approach to how we will allocate our sources of cash, including divestment proceeds.

First, funding our reset and resilient dividend intended to remain fixed at $0.0525 per ordinary share per quarter.

Second, our focus on deleveraging the balance sheet to protect our investment-grade credit rating. The first step is to deleverage to $35 billion net debt, maintaining a strong investment-grade credit rating thereafter.

Third, allocating sufficient capital to advance our energy transition, with this allocation intended to rise once near-term deleveraging target was achieved. Fourth, investing appropriately in our resilient valuable hydrocarbons business to generate sustainable free cash flow.

And fifth, committing to return at least 60% of surplus cash as buybacks after having reached the $35 billion net debt target and subject to maintaining a strong investment-grade credit rating. This provides direct leverage to cash flow upside and further enforces investment discipline. And I will now talk to each of these details -- or each of these priorities in detail.

So turning first to the balance sheet. We believe a resilient balance sheet is the foundation to pay the reset dividend and advance our strategy. In the near term, we target deleveraging to $35 billion of net debt from the $41 billion we had at the end of 2Q.

Thereafter, our target is a strong investment-grade credit rating. A good indicator for this is the cash cover ratio, which we aim to keep within the 30% to 40% range through the cycle. This is not a target. Our gearing target is now retired as it is not representative of how we manage our balance sheet as part of our financial framework. However, we will continue to report this metric as some investors find it useful. We have already made substantial progress towards our net debt target with the $11.9 billion hybrid bond issuance and the $1.8 billion of divestment proceeds during the first half of 2020.

Looking forward, delivery of these objectives is firmly underpinned, and we expect to show further progress as we deliver our business plan. We believe our financial frame enables us to manage our average 2021 to 2025 cash balance point to around $40 Brent, assuming an average RMM around $11 and Henry Hub at $3 in 2020 real terms.

Deleveraging our balance sheet will be supported by a target of $25 billion of divestment proceeds between the second half of 2020 and 2025. This includes proceeds from the recently announced $5 billion petrochemicals divestment and from the sale of our upstream Alaska business.

We are also creating resilience through evolving our long-term capital structure, and we have made progress during the first half with the issuance of hybrid bonds and 30-year debt. Recognizing the growing pool of investors with a desire to finance the energy transition, we are also increasingly thinking about how to embrace that as a part of our sustainable financing framework. We will talk more about this in the coming months.

As we have already announced today, we have introduced a new distribution policy, comprising a reset and resilient dividend and buyback commitment. Our first priority is a resilient dividend of $0.0525 per ordinary share per quarter that we intend to remain fixed at this level. To be clear, it is not a progressive dividend.

This is supplemented by a commitment to distribute at least 60% of surplus cash through share buybacks once our net debt target is achieved and subject to maintaining a strong investment-grade credit rating. The remainder of any surplus cash flow will be allocated at the Board's discretion. This creates a more flexible model for shareholder returns and results in comparable distributions relative to our previous distribution policy at around $55 per barrel, while also offering increased exposure to investment in the energy transition.

As our strategy has changed, we have also refreshed our investment allocation process to align with reinvented BP. As you would expect, it starts with a core set of 6 investment criteria: balancing strategic alignment; returns; volatility; integration value; sustainability; and risk. Resource allocation is done in a more agile way across our 35 individual businesses. We have lowered our central case assumption for oil prices and significantly increased our carbon price. And we have set stringent hurdle rates.

First, a payback of less than 10 years for all investment in Upstream oil, refining and for fuels retail in mature markets. Second, a payback of less than 15 years for Upstream gas. Third, we have a range of sector-specific internal rates of return hurdles for transition in low-carbon investments between 10% and 15%. And for renewable power, we look for returns of around 10%, aspiring to do better through integration and trading optimization.

All of this is then optimized to make sure we are adequately trading off returns versus net present value, balancing short-, medium- and long-term value growth.

Successfully delivering our financial frame means performing while we transform. The 2021 to 2025 business plan is intended to deliver on this, combining strong growth in EBIDA per share and growing returns with investment at scale in the energy transition.

Our business plan is defined by 3 elements. First, a disciplined approach to expenditure. As I've already outlined, our investment plans are aligned with our strategy and based on strict economic appraisal. Per year, including organics, we plan to invest $13 billion to $15 billion until we reach our net debt target, expecting to be at the lower end of that range in the near term, and $14 billion to $16 billion thereafter. These ranges include around $9 billion allocated to resilient and focused hydrocarbons to sustain cash generation and spend a $4 billion to $6 billion, rising to $5 billion to $7 billion on low carbon electricity and energy and convenience and mobility.

In addition, we're in action to drive our cash cost base structurally lower. As we reinvent BP, we're on track to deliver the $2.5 billion of cash cost reductions by the end of 2021 compared to our 2019 cost base that we discussed last quarter. We have an ambition to deliver $3 billion to $4 billion of total cash cost reductions by 2023, a reduction of around 20% on our overall cost base. These are underpinned by structural reductions enabled by reinventing BP as a leaner, more agile, digitally enabled organization. They're focused not only on fewer people but on eliminating waste and driving supply chain efficiencies. Despite all the strides we've made so far, we continue to have a long, long way to go.

Second, an active approach to portfolio management as we high-grade our portfolio to advance our strategic aims. From the second half of 2020 to 2025, we target $25 billion in divestment proceeds. Near-term plan proceeds are well underpinned by announced or in-progress transactions, with medium-term proceeds supported by a hopper of identified assets. We will only sell for value.

Third, the relentless execution of a business plan founded on established and growing businesses that underpin our confidence in our 2025 targets.

Let me now provide you with a few more details on the operational drivers of that business plan. As you've heard from Bernard and Giulia, we already have a strong platform of businesses and capabilities that we aim to continue to grow to achieve material scale by 2025. Let's run through a few examples.

First, on our wind, solar and biopower businesses, where we have built a strong record of improving operating performance. We aim to have develop around 20 gigawatts of renewable capacity by 2025. This will be complemented by increasing traded electricity to 350 terawatt hours by 2025, a big move. Our growth is initially underpinned by our strategic solar partnership with Lightsource BP, which provides a strong foundation from which to grow based on their ambition of having developed 10 gigawatts by 2023. And our existing U.S. onshore wind portfolio, which provides opportunities to grow our win position in the U.S. and internationally, both onshore and offshore.

Second, in bioenergy, we're aiming for 50,000 barrels per day by 2025, growing our bioethanol production through our Brazilian joint venture, BP Bunge, and refinery bio coprocessing production.

Across convenience and mobility, we have strong brands, differentiated offers and strategic partnerships which have underpinned our track record of earnings growth and robust returns. This and the plans we have in place across our businesses gives us confidence in continued earnings and cash growth through the cycle.

Today, we have more than 10 million customer touch points per day, and we aim to increase this to more than 15 million by 2025. We intend to do this by delivering customer-centric integrated products and services underpinned by innovation, digital platforms and strategic partnerships.

In growth markets, we have around 1,300 sites in the fast-growing economies of China, Mexico and Indonesia. And we just completed our joint venture with Reliance Industries to create a world-class retail, mobility and aviation partnership in India under the brand Jio-BP. This is a key driver of our plans to grow our network of BP-branded retail sites in these markets to more than 7,000 by 2025.

In established OECD markets, we're investing to refresh our convenience offer to provide an enhanced customer experience, including aiming to grow our network of convenience sites with our differentiated offer to over 2,300 by 2025. We expect to grow the share of margin from convenience and electrification to around 35% by 2025.

In resilient and focused hydrocarbons, we will be managing the business for cash and returns, not volume. By combining the operational management of our Upstream and refining operations, we will seek to improve safety and efficiency as we share best practices and leverage digital capabilities. This is awesome stuff.

In Upstream oil and gas, we continue to build on our track record of major project delivery. And in line with prior guidance, we expect to reach 900,000 barrels of oil equivalent per day of new major project production in 2021. In 2020, we expect to start-up Raven and plan for the accelerated startup of Ghazeer in Oman.

As a result of COVID-19, we now expect Mad Dog Phase 2, Cassia Compression, Tangguh expansion project to start in 2022. As we complete this phase of project development, absolute capital investment will fall. This reflects both portfolio actions and increasing focus on near-field opportunities and infill drilling, projects with faster payback periods and much higher rates of return.

We expect underlying production to be broadly flat in 2025 relative to 2019 on less investment. However, headline production will depend on divestments, but is expected to be lower, as we continue to high-grade our portfolio in line with our strategy. Even after portfolio activity, we expect the combination of lower unit production costs, improving plant reliability and lower capital intensity to underpin growth in cash flow and generation.

Turning to refining. Here, we intend to high-grade the portfolio to deliver first quartile net cash margin and sustainable EBIDA generation. We aim to grow earnings per barrel through continued delivery of business improvement plans, focused on reliability, cost efficiency, advantaged feedstock and commercial optimization. We also plan to roll out intelligent operations to deliver world-class productivity improvements.

We plan to build on our strong track record of refining availability, targeting BP operator refining availability over 96% by 2025, and we expect to grow underlying earnings by around $1 billion by 2025 versus 2018. More half of that growth -- more than half of that growth has already been delivered.

So let me summarize. We expect our 2021 to 2025 business plan to result in strong growth in EBIDA per share and strong improving ROACE. On an underlying basis, before planned divestments, we expect our business plan to deliver 5% to 6% annual EBIDA growth, driven primarily by our legacy businesses. We have confidence in this.

As we've outlined, an important part of our strategy and business plan is portfolio high-grading. After allowing for the impact of portfolio change and reflecting the expected impact of our share buyback commitment, we expect to achieve headline growth of 7% to 9% in EBIDA per share. Again, we feel confident in this.

And based on expected higher profitability, combined with an expected improvement in capital efficiency and our disciplined focus on investment allocation, we expect to see strong and growing returns, with ROACE rising to 12% to 14% in 2025.

Before I close, I want to share what our plan looks like in practice over the next 5 years. Assuming an oil price of $50 to $60 Brent and including divestment proceeds, this slide shows you how we intend to pay a resilient dividend, deleverage our balance sheet, invest at scale in the energy transition and our resilient hydrocarbon businesses, and distribute surplus cash flow through share buybacks with the remainder of any surplus allocated according to Board discretion. This provides a clear articulation of how we think about our priorities for uses of cash.

In summary, you've heard a lot today on our strategy and financial frame. Taken together, we believe this will deliver a compelling investor proposition, a proposition that balances committed distributions, profitable growth and sustainable long-term value as we transition from IOC to IEC. This is underpinned by the measures we've talked about today which are summarized on this slide in which we are all in service of delivering long-term shareholder value.

Let me now hand back to Bernard, who will conclude today's presentation.

[Bernard Looney, executive]

Thank you, Murray. And we had you ad-libbing a bit there as well, which I thought was really good. So great to see. Thanks also to Giulia for your presentation. And as Murray said, it is fantastic having Giulia on our team and we are better for it.

So if it's okay, I'd like to recap very quickly on 4 points and then we'll take your questions. And we've got it all set up here, and we've got lots of questions in the queue already. So -- but just 4 points that I think and we think are important to leave people with.

The first is that we are pivoting to low-carbon energy and customer focus, and we intend to move fast, but we will do so with care and with discipline.

Second, we are focusing our resilient hydrocarbons business on value. And while it will be a smaller part, it will remain core to BP for decades as an engine of value creation and the enabler of our transformation in the energy transition.

Third, we are delivering on our net zero ambition, and we expect to be positioned for success on each of our emission reductions aims by 2030 and well on track for 2050. And fourth, we believe we can create long-term value for our shareholders through a compelling investor proposition that offers committed distributions, profitable growth and sustainable value.

And as an integrated energy company focused on delivering solutions for customers, we believe we can serve all of our stakeholders, and helping the world to decarbonize, while seizing the huge business opportunity that is the energy transition. And we have, if I may say so, a fantastic team, a leadership team in place to deliver it. And we're all really excited about what we intend to do. And I hope, obviously, that you will be as well.

In February, we set the destination. Today, we set out the route. And now it's on all of us, people on that image and all of us across BP to take this plan and put it into action and deliver on all the things that we've set out here today. And it's unlikely to be a straight line. It's unlikely to be a straight road, so to speak, on that journey. And we will need support, we'll need your support. But we do think it's the right plan, and we do believe it's the right plan for all of us.

So thank you for your patience this morning. We've thrown a lot at you, we recognize it's a bit of a surprise. But now it's over to you, and Giulia and Murray and I will be delighted to take your questions. [Operator Instructions] I'm learning from Craig here. [Operator Instructions] But we've got about an hour here, I think, or a little less than an hour, so I think we're in good shape time-wise.

So assuming that's okay with everybody, I'm going to move over here. Murray, you and I thought we might stand. I'm going to stand. I think it's a good idea. We have 1,523 people, I think, on the webcast. But none more important than Oswald Clint, who is set up to ask our first question.

So Os, over to you, from Bernstein. Good morning.

[Oswald Clint, analyst]

I only have 2 questions, please. The first, obviously, just on the dividend, please. I mean last quarter, you talked about the macro, the liquidity of the company and the business performance in selling that dividend. You've done the hybrids, you did the surprise divestments. Things look a little bit different. So I just want to really get the rationale for making that dividend decision this morning. Or is it just your #3 of your priorities there, Bernard, which is you want to invest at scale from this point onward? So perhaps if you could just talk around that just a little bit more.

And then secondly, the other big pushback is, can you deliver the attractive returns? And that, I think, Giulia's chart was very illustrative in terms of the returns by 2030. You talk about 12% to 14% ROACE by 2025. I think the weighted average of her Slide 41 is probably around 12% to 13% ROACE as well, and you probably have about 1/3 of your business in low carbon. But I just want to think about the risks around that. I think capital intensity, talk about declining, but not necessarily the case for wind, wind could see some capital intensity increases. So just trying to understand, that number comes out, it's a good number, but I'm trying to understand the risks around it, please.

[Bernard Looney, executive]

Very good. Great. Os, thank you and great to see you've done some math already on some of the slides. I'm going to ask -- so on the second part of Os' question, I'd like Murray to take on a little bit around the financial returns. And Giulia, if you could talk a little bit to some of the risks that you see potentially in there. And Os, I'll take the dividend question, if I may.

I mean the way I like to think about the dividend decision is as follows: I'd like to think of it as being rooted in strategy and amplified by COVID. So it's deeply rooted in strategy, and our strategy is that we wish to become an integrated energy company. To do that, we have to invest. To do that, we have to have a strong balance sheet. We want to be able to invest continuously into there, not chopping and changing, and that's why the resilience point that Murray made is so important. So driving that balance point to $40, we believe, is a good place to have a balance point.

So it's rooted in strategy. And clearly, there is uncertainty in the world that has been created by the pandemic. And therefore, that sense of urgency is only amplified by COVID. So a decision that is very much focused on and rooted in the strategy of the company, which is to become an integrated energy company. For that, we need to invest. For that, we need a strong balance sheet. And then we put COVID on top of that, and it's amplified that situation.

And what we're moving from is the dividend policy that you're very clear with, to a new financial framework that, as Murray points out, in somewhere between $50 and $60 world is actually as attractive and more reliable maybe than the last and, importantly, offers upside were people to believe in a different world. So that's a little bit about the dividend.

Murray, do you want to just say a few words on Oswald's math and the financial returns, and Giulia can maybe just talk about some of the things that are in there, that would be great.

[Murray Auchincloss, executive]

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

[Bernard Looney, executive]

He looks well, doesn't he? He's looking better than you, Murray.

[Murray Auchincloss, executive]

He's looking better than me, yes. So returns on alternatives are obviously something that people are quite worried about, we're not. If you're in big public auctions for wind, there's a wall of cash coming at it and you'll probably see people bidding at around 5%, 6% returns. By the time you stick a power purchase agreement on that and by the time you lever it because there's so much debt that's willing to do these things, you're up into the 8% to 10% range. And that's what -- that's probably what everybody inside the market would see.

We then think we can do things differently, Os. We think the power of integration from our trading organization is awfully good. We can take the power offtake. We can package it with natural gas. We can package it with solar. We can sell it to a customer with complete flow assurance, clean energy and fixed price, if they want. We'll hedge it for them. We'll play around with currency with it if we want as well. And we think by doing that, you start to take the returns into double -- well into the double-digit range. We're not going to promise that, but that's what our sense is of how these things will evolve in time. And we're a corporation that takes risk and gets returns, and the risks that we can really take are inside that, inside the price base, inside the hedging space, et cetera, from our very, very long history.

Now the other thing I'd say is the cost of supply of these things is dropping like crazy. You've seen a mass drop in the cost of supply on wind, that will continue as things move offshore. We're continuing to see it in solar. Just as more and more investments go into it, that cost of supply will continue to drop. And we think given our capabilities in big offshore construction through our projects organization that we can contribute to that as well. So we really think we have something different to offer. We think we can be more efficient. Dev calls it the best price setter, MEPS. So we think we can do that, and then we can think we can enhance returns, again, through all those interesting integrated aspects that we have. So Os, we're pretty pumped about it, I'm honest.

[Bernard Looney, executive]

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

[Giulia Chierchia, executive]

So as we developed the strategy, we obviously looked into what the risks are. I would say 2 critical risks. The first one is ability to scale at pace, right, in terms of our growth areas. We believe we are not starting from scratch, right? We have a very strong base that we can build on in terms of our capabilities in Lightsource BP as well as our wind capabilities. And where needed, we will hire externally and drive partnerships to further accelerate that growth. Secondly, we are mitigating that risk, as Murray described, by adopting a very strong capital discipline and, therefore, an approach to hurdle rates.

I think the second risk is obviously the environment that we are navigating in the current situation of the coronavirus pandemic. And so uncertainty as to how that will play out in 2021, 2022 will obviously play a role. We believe that our plans are sufficiently diversified, both in terms of low-carbon options as well as convenience and mobility to reduce that risk as we actually develop across markets and across opportunities. And it's also fair to say that those opportunities, specifically in terms of low-carbon energy and electricity and convenience and mobility have proven to be more resilient to the crisis that we are facing in terms of coronavirus.

[Bernard Looney, executive]

Yes. I mean it is amazing that, what Murray said that actually, I think, Murray, in some markets, I think in Germany, our store sales went up, for example, by 3%, I think, in the second quarter, which is incredible. So Os, I hope that helps, good to see you. We're going to move on, if it's okay, to the next one.

Christyan Malek at JPMorgan.

You might be on mute, that well-known phrase.

[Christyan Malek, analyst]

Sorry.

[Bernard Looney, executive]

Yes, not at all.

[Christyan Malek, analyst]

So first of all, congratulations, guys, on the unveiling of your new strategy and the impressive blueprint from oil co to energy co.

A couple of questions. First of all, on your low carbon business build-out and how you plan to balance growth organically versus M&A. How will organic investment versus M&A be balanced in delivering specifically the 50 gigawatts target and with the financing of any potential M&A steps be absorbed in the low carbon CapEx frame provided? And I guess, specifically on submarkets, within low carbon that you may benefit from an IEC in terms of achieving critical mass more rapidly.

The second question is I'd like to better understand how you prioritize your buyback post net debt reaching $35 billion against opportunities to invest in low carbon, which may see debt go up again. So in a scenario, for example, where you reached $35 billion sooner than you thought, but you had a great opportunity to invest in new energies, which would come first, the buyback or energy's growth?

[Bernard Looney, executive]

Christyan, I'll ask Murray to take the second question around that choice. And I think the first question is around inorganic and organic growth. And Giulia, comment if there's anything that you wish to add here.

What I would say very simply, Christyan, is as follows. We've laid out a series of targets today in that plan. So you see 50 gigawatt by 2030. You see a capital framework in there that starts off at $13 billion to $15 billion in Phase 1. And once we hit our net debt, it goes to $14 billion to $16 billion, which I would remind people is $1 billion lower than our previous range, okay, because we use to carry a $15 billion to $17 billion. And what I can tell you is that the capital -- that capital framework is entirely consistent with the targets that we have set out. And within that capital framework is a mixture of organic and inorganic. Now how it will quite play out is, in terms of the exact mix is another story.

But what I would want you to know is 2 things. Number one, the targets that are outlined are consistent with the capital frame that we have issued, and the capital frame that we have issued is a mixture of inorganic and organic capital. Now the question is, will there be bigger M&A one day? One should never rule that out. I think we have a lot of work to do over the next few years. We have that balance sheet to get in order. We have some more track record to develop. And while I would never rule it out, it's not front of mind for us right here right now.

Giulia, anything you'd add on that?

[Giulia Chierchia, executive]

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

[Bernard Looney, executive]

Great. Thank you. I'm sure some people have called you JP as well, Christyan, so I'm looking at your backdrop. Murray, choices, what would we do?

[Murray Auchincloss, executive]

Yes. Hey, Christyan, good to see you. Hope you're doing well through COVID. Look, I think just take a look at our priorities is my advice. #1 priority of cash flow is to pay our dividend. #2 is to get our debt to $35 billion. And then once we've got it to $35 billion, to maintain strong investment-grade credit rating, right? So that's priority #2. Priority #3 is Capex, $13 billion to $15 billion, $14 billion to $16 billion once we're passed $35 billion net debt. That $14 billion to $16 billion includes inorganics, as Bernard has said.

After that, then we move to surplus. That surplus is greater than 60% to our -- at least 60% to our shareholders, no questions, at least 60% to our shareholders. And then, I guess, the Board will have discretion on the residual 40%, which is, I think, Christyan, maybe what you're asking about, and the Board will have a choice about does it accumulate cash to reduce debt in case the environment is tricky, does -- do they decide to do it inorganic or do they decide to do more share buybacks. And that will be a discussion for the Board each and every quarter. So to be clear, though, you've got to follow those priorities clear, please. We've tried to make them as coherent as possible.

[Bernard Looney, executive]

Yes, I think it is a very important slide, at least we think it's a very important slide, because it does -- it's going to help us enormously internally as well as externally. So Christyan, thanks for the questions. Hope that helps.

The next question is to Jason Kenney of Santander.

[Jason Kenney, analyst]

Hopefully, you can hear me.

[Bernard Looney, executive]

It is Jason Kenney, I should know that. Jason, we're not doing well here with names.

[Jason Kenney, analyst]

No problem. Well done for the progress on reimagining energy and well done for reimagining conference calls as well. This is a good interactive experience for me and hopefully for you, too.

[Bernard Looney, executive]

Good. Thank you.

[Jason Kenney, analyst]

I've got 2 questions. Firstly, on results, probably some detail from Murray, please. There was a very large noncontrolling interest in the quarter. I'm wondering if you could break that out and maybe give me an outlook for that line item full year '20. Any guidance on P&L tax this year would be useful as well.

Secondly, on the financial strategy and trying to relate the divestments, $25 billion of divestments to the 1 million barrel a day less of oil and gas output 2030. So how much of the lower hydrocarbon output by 2030 is due to divestments? And how much is just simple decline of the asset base running in for cash over the next couple of years?

And if I may, just sneak another one in. On the whole strategy, how do you see your cost of capital changing over the period to 2030 with this increase in renewables and new energy businesses coming in and obviously just running out the hydrocarbon business over the next decade?

[Bernard Looney, executive]

Very good. Thanks, Jason. I think that's actually 4 questions, because you had 2 parts to the results one. But Murray, I'm going to let you take the results one and the cost of capital, and I'll take the financial, the divestments and so on. So noncontrolling interest, P&L guidance and what's going to happen to our cost of capital.

[Murray Auchincloss, executive]

Yes. I think noncontrolling interest is best just to follow the Brent price, gas price, et cetera, and you'll be able to figure out how those flow through. Fairly hard to predict right now, Jason, but you could probably just look back across the past 6 quarters and watch that. I'll turn over, so you can give Craig Marshall a call and he can give him more details on that one.

On P&L tax guidance, it's really tricky right now, Jason. Obviously, with oil prices low, with gas prices low and with RMM so low and refinery utilization down, the absolute amount of P&L is very low. And of course, in some countries, like in Abu Dhabi, et cetera, we pay tax naturally. So it's very difficult to give any P&L tax guidance right now for the second half of the year. I'd just keep it as a low rate on a very low base would be my advice. I wish I could tell you more than that, but I don't seem to be able to forecast what the effective tax rate is going to be any quarter right now, given the volatility in results. Apologies.

On WACC, you would expect WACC to change over time and to start to decrease. But let's see how that unfolds. For now, our WACC is clear. It's the guidance we've provided inside the 2020 ARA, no change so far, but we'll see how that unfolds over time as the portfolio shifts.

[Bernard Looney, executive]

Very good. Great. Murray, thank you. And Jason, on production and divestments and the $25 billion, just a few comments, maybe that would help on that. As we look at the underlying production, I think it's broadly flat through the first 5 years. So we have major projects coming online and we obviously have base, but it's roughly flat over a 5-year period. In the second half of the decade, '25 to '30, you will see underlying declines start to kick in. So think of it in 2 phases, and I think we show a 2.6 to 2 in the first 5 years and 2 to 1.5 in the second 5 years. We've said around because this is not a precise sign, so to speak, but it is what we are guiding to. So that's how I would expect to see volumes.

Just to clarify, the $25 billion, the $15 billion by the end of next year is retired. The $25 billion is between, as Murray said, the second half of this year out to '25, so 4.5 years. And as Murray said, that includes the proceeds from Alaska and petrochemicals. And therefore, we have, we think around $11 billion to $13 billion of that $25 billion sort of already done. So the point there is we're not in a rush. We're not having to sell assets for some reason. We will find the time to seek value and do asset transactions that we think are good, strong, value-accretive asset transactions. So that's the second thing that I would say on that.

So Jason, hopefully, that helps. And if it's okay, thanks for the questions, we'll move on. Next is to Lydia Rainforth of Barclays. Hi, Lydia.

[Lydia Rainforth, analyst]

I have 2 questions, if I could. The first one, you have made some fairly radical changes this morning and indeed through the quarter with the sell-down of the petrochemicals and the restructuring. How do you think about what the right pace of change for BP is? And how do you manage that?

And then a second question, just going back to the capital allocation process for low carbon. How do you actually do that in practice? How do you compare hydrogen to customer touch points to solar? And being partly linked to that, Murray, you did talk about some of those integration and the higher returns and they are awesome. But when do we actually get evidence of those? Hence, effectively, when do we get through proof of concept?

[Bernard Looney, executive]

Okay. Very good. So Giulia, if you could talk a little bit about the proof-of-concept around some of these things. Murray, if you can talk a little bit more about the choices that we might make within there.

And on pace of change, there is -- the way we think about it, Lydia, a little bit, is that we set out, I think the title of the press release was about a decade of delivery. And I think we're all very conscious that it is a decade of great importance for the world, and it needs to be a decade of delivery for the world. And we wanted to be a decade of delivery for BP in pursuit of our strategy, which we believe is in the interest of all of our stakeholders, but also in pursuit of what we think the world needs. Now that says that there's a degree of urgency to what we need to do because I think it is important that we act, and that is what we are setting out today. Clearly, one has to be thoughtful. And one has to be careful not to move too quickly.

I think, however, that we are guided. Guided now by a very clear financial framework with very clear investment hurdles. So we're not saying we're going to do this at any cost. We're not chasing gigawatts as the equivalent of volume in the Upstream world. We're going after gigawatts at the right returns so that we can, as Murray says, see an integrated value picture across the company. And there's a lot of change going on within BP. It's necessary. The organization has obviously got a lot on its mind with the virus, with what's happening in the world and what's happening inside the company.

But our judgment is that it is a time of action. It is the right plan, which, by the way, is not back-end-loaded towards 2030. If you look at the 2025 metrics, you'll find that many of them are front-end-loaded. So that tenfold increase in low-carbon is actually eightfold by 2025. So we feel that we've judged it right in terms of the plan. But we always have the opportunity to learn, to adjust. We will make mistakes, I have no doubt about that, and we will correct. But in terms of a decade of delivery, I think it is a time for us to be in action, and that's the sort of plan that we're setting out today.

Giulia, some proofs of concept? Or when will we see some of this stuff turning? As Lydia, I think, said it sounds good from Murray, but are there some more proof points?

[Giulia Chierchia, executive]

Yes. So I would say, in terms of our low-carbon activities, the first thing is we have defined 2025 clear targets and milestones, which Murray has communicated. So that's the first element. The second element is we are not starting from scratch, and you have seen us also moving in recent weeks, right? So on the renewable side, we are starting from a 2.5 gigawatt of developed capacity. We have recently announced our partnership with JinkoPower in China to drive renewable solar development. We have also announced recently our participation in the Green Growth Energy (sic) [ Equity ] Fund in India, right, which allows us to participate in the funding of green growth opportunities in India.

Similarly, on the buyer side, we -- through our BP Bunge partnership JV, we have the second-largest sugarcane ethanol and biopower, if you wish, activity in Brazil and we are planning to scale it further. We are also starting from a position on coprocessing on our refineries, which we aim to further scale. So again, in bio, we are not starting from scratch. In terms of hydrogen, we are starting from a position of actually production and operation of hydrogen in our own refineries. And we -- as we said, we aim for a 10% market share. We are active in Australia already in hydrogen for the export of hydrogen and ammonia, and you will see more news coming in shortly, hopefully, on the hydrogen side. So I would say, bear with us, and hopefully, we can come back to you very shortly with some more news.

[Bernard Looney, executive]

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

[Murray Auchincloss, executive]

Resource allocation, Lydia, nice to see you. How does it work in practice. Look, we've got 35 businesses, more or less, that we allocate capital across. What -- if you thought about our history, it would be like the Gulf of Mexico, the North Sea, and then you've got new places like Bunge, solar, et cetera. So 35 of these businesses across the world, including inorganics that we think of allocating across.

What's so tricky about this is that things are moving so fast, you have to get super, super clear on your assumptions, right? What's the cost of supply doing? That was easy when you're drilling in oil and gas. Well, it's trickier when you're thinking about solar. What's happening with that cost of supply? What's your commodity price going to be? That was kind of easy to make a central assumption on oil, making an assumption on power across 37 geographies is a bit tricky. So trying to get super clear across those 35 businesses, about what the core set of assumptions are, how you get them to P50 through constant conversation. So you can then create a balance set of a core starting point.

And then you ask yourself, right, how do we add integration on top of this? Where are the sources of value for it? What are the risks? Where could you get nailed on interest rate movements, currency movements, et cetera? So life becomes much more complicated in this new world, Lydia, and I like that because that's how we create value. We get these risk mitigation things that a pure-play can't do, so we can see the risk, get it clear and then figure out how to mitigate it. And then bang, you've got a low-risk proposition with really stable returns. So that's kind of a practical example of how we've got it working now. It's complicated though, but I think you make money in complication.

[Bernard Looney, executive]

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

Next is Biraj Borkhataria from RBC. Biraj.

[Biraj Borkhataria, analyst]

Hopefully, you can hear me. I wanted to ask about the Upstream. You're talking about a substantial drop in production over the next decade. And I'm just wondering how the U.S. onshore fits in with your intentions in the Upstream? Not so long ago you did a $10 billion deal, which at that time was called transformational, but it doesn't really appear in the presentation today. So can you just talk about where that asset and that theme fits in the portfolio.

And the second question is on chemicals. Some of your peers are talking about chemicals providing a different option to pivot, they're looking at ways to decarbonize and focusing on the circular economy and all things associated with that. So can you just talk through your rationale for that sale? Is it just an area where you felt like you didn't have a strategic advantage? Or was it a scale issue? Or anything else, that would be helpful.

[Bernard Looney, executive]

Biraj, thank you. I'll ask Murray to take the Lower 48 question. He knows the business well.

On chemicals, think of it as 2 things. Number one, it's -- we're very proud of what our team has done there, particularly over the last several years around performance improvement, efficiency improvement. We like some of the technologies we have. The reality is, is that from a scale perspective, it would have taken a lot of capital for us to grow it into a really competitive business and that was sort of the strategic rationale. We also believe that we secured a good price for it, that the purchaser and the seller both think is a fair valuation of that business. So it's a very good transaction, and we now need to focus on completing it. So that's the rationale.

Murray, quickly on the Lower 48, its role?

[Murray Auchincloss, executive]

Yes. Biraj, BPX remains core to the business, continues to do really well. The reservoirs are better than we thought. We're finding more zones than we thought originally. Synergies were at $400 million. We'll probably get more synergies, but we're above the $350 million target we talked about. And obviously, the capital is deflating these days. Service rates are down. And so when we start drilling again, service rates are going to be an awful lot lower. So the investment case remains strong. No impairments as we went through our process. So that's very good news.

And the way we'll think about it moving forward is it's flexible. We have 2 great gas basins. We have 2 great liquids basins. And depending on what happens on natural gas price or depending on what happens on oil price, we'll have the ability to modulate investment into that. Last thing I'll say is, right now, it's going to break even at around $3 Henry Hub, which you can see in the forward markets in December, and $35 WTI. So about right now, it's now cash flow breakeven with about $1 billion of CapEx going in. And if prices pick up and we get activity going back in there, we should start to see growth in cash flow over time.

[Bernard Looney, executive]

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

[Michele Della Vigna, analyst]

On the low-carbon strategy, you have clearly come a very long way already, mainly focusing on unconsolidated associates like Lightsource. I was wondering, as low carbon becomes a key pillar of your business, and also in terms of regulation, things like the European green taxonomy really looks at the progress through the revenue exposure, wouldn't it perhaps be better to think more as a consolidated activity for your low carbon business, even if from a headline perspective that could mean lower returns and higher gearing from an accounting standpoint, but actually give more visibility on how large and important this business is becoming for the BP of the future?

And then a second related question, as we look at your existing business, particularly your new investments in E&P, how do you think about the hurdle rate and particularly investing in greenfield versus brownfield in view of the transition that you want to implement?

[Bernard Looney, executive]

Michele, thank you. Good to see you. Murray, if you can take the E&P hurdle rates.

On the consolidation or not, I think what I would say, Michele, is that we start with strategy, which is what businesses do we want to be in. We assess our capabilities to participate. Sometimes we need partners, sometimes we don't. And I think we then, as we have in Lightsource BP, got a great partner, I think consolidation is always an option. Gearing, as Murray said, we'll continue to monitor, but we're no longer guiding against it. It is about having a strong investment-grade credit rating is what our objective is.

So we will be guided by doing what we think is right to grow those particular businesses. And those options are available to us. It's got to fit within that financial framework. It's got to match those 5 orders of priorities. I wouldn't rule it out at all in various businesses, and it will be dependent on the circumstances at the time on what's right for that business to take it to the next level. Sometimes, that might be an option, sometimes it might not. So time will tell.

E&P hurdle rates, Murray?

[Murray Auchincloss, executive]

Yes. Sure, Michele. So the E&P is kind of transforming as we bring the major projects online. We're moving to infill drilling, filling up those platforms and moving to tiebacks. There probably won't be a tremendous number of big greenfields anymore in the future. And the way that we think about it is given the transition risk, if you're going to move into a big oil greenfield, you better pay back within 10 years at our new price stacks with new carbon taxes. That's just sensible to do. So that's a focus on returns and payback, and that really governs what decisions we'd make.

On gas, because gas is part of the transition, we're saying payback in 15 years at the new gas prices that you can see and you can back-calculate the return on that as well. So we think by focusing on payback, we can manage transition risk and quality at the same time. And that's how we'll be looking at it moving forward.

[Bernard Looney, executive]

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

[Irene Himona, analyst]

I had 2 questions. So the first one, going back to oil and gas, which, as you said, will be the enabler of the transition. You look to it for sustainable cash generation. Of course, by 2030, we will be looking at peak oil demand, possibly peak gas. So can you talk a little bit about your vision for, let's say, the cost structure of that 1.5 mbd legacy portfolio by 2030, whether it's unit cash costs or any metric you can help us with?

My second question, I noted that one of your 4 low carbon aims by 2030 is an LNG portfolio of over 30 million tonnes. Again, if you can talk around where you potentially envisage growth in that portfolio, please?

[Bernard Looney, executive]

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

[Murray Auchincloss, executive]

Sure.

[Bernard Looney, executive]

Yes, excellent. Oil and gas, 2030, I think the things that I would draw your attention to, so by focusing it, as you would expect, Irene, the quality of each barrel on a unit basis continues to improve. And that's the first thing. So portfolio will help underpin that. We wanted to be industry-leading in terms of quality and efficiency, that's what Gordon, his job is to make sure that we do that, and that's why we will drive digital. That's why Gordon is going to implement agile structurally in what is 16,000 or 17,000 people across refining and Upstream, the traditional Upstream business. We're not aware of anyone doing that on a structural sense, organizing in an agile way. He intends to put that in place.

We're targeting $6 per barrel of unit production costs by 2025, and we'll continue to drive that down if we can. We're big believers in digital, as you know, from your trips with us. So we'll continue to push that agenda. Giulia talked about doubling our investment in capital in that over the next 5 years and more thereafter. So we get your point 100% that we have got to prepare for that world of decline one day, who knows when it will be. And therefore, the only thing that we can control is the quality and the efficiency and the productivity of those barrels, and Gordon is right on that. Murray, on LNG?

[Murray Auchincloss, executive]

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

[Bernard Looney, executive]

That's not the reason.

[Murray Auchincloss, executive]

That's not the reason, but it's ironic, isn't it? The mix of merchant versus equity is really the big thing that we'll have to work our way through. You'll have seen from our press releases over time, we have tons of merchant LNG these days, whether it's from Mozambique, whether it's from the West Coast of Africa, you name it. So we've got a great merchant portfolio now where you can take advantage of arbitrage and move things across locations and make great money.

And the equity decisions, right now, we're about 50-50 equity versus merchant. The big decision for the decade is, can we get browse off the ground with a low enough carbon content that the government and the partners are happy about? Can we do the next wave of LNG inside M&S? Can -- Mauritania, Senegal, can we make it competitive enough? So I think that's the big question for us as we move across the next decade, and the challenge for our teams is how do we make sure that our own equity, the browsers of the world, the M&Ss of the world, the Indonesias of the world are low cost and competitive against Henry Hub exported, with the right carbon footprint or should we instead move to merchant where you don't have to deploy that capital. So that's a choice ahead of us. We have clear targets out to 2025. Beyond that, we'll see how that unfolds over time. Thanks, Irene.

[Bernard Looney, executive]

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

[Henry Tarr, analyst]

So I've got a couple of questions from my side. One is, looking across the areas of investments, so renewables and convenience mobility, are there any technologies or areas which you don't have in the company currently or where you want to boost capabilities? And then secondly, the developed renewables target of 50 gigawatts, is this equity to BP? Or does it include JV partners? You may have already answered that, apologies if so.

And then just quickly, thirdly, if you're aiming to increase convenience sites materially, how do you think convenience sites are going to be changed by EVs over the next sort of decade? And I guess, what's going to drive the margin there from 25% to 35%?

[Bernard Looney, executive]

Great. Thanks, Henry. I'll let you off on the 3 questions because I'll let Giulia take the first one around renewables and convenience, any new technology. Second one is around convenience sites and how they've changed in the world of EVs and how we can get that 25% to 35% margin increase. The reason I let you off is because you answered it, it is net equity developed gigawatts. So they're net share, net equity, so they're not gross numbers on the gigawatts, they're net to BP. So that's that.

Giulia, are you happy to take the other 2 questions, please?

[Giulia Chierchia, executive]

Yes. So in terms of technologies across our low carbon portfolios. So we believe that the core of the technologies are there to deliver on our ambitions. Obviously, technologies keep evolving in all areas in which we will be playing, right? Take renewables, we're looking into, obviously, evolutions in terms of floating. We're looking into evolutions in terms of hydrogen, both in terms of technology, but cash cost curves to actually make those technologies available, right? So we believe technologies are there. They are evolving. And through our venturing activities, we continue to invest to have the right platforms to participate. And as mentioned, where necessary, we will also partner in terms of accessing those capabilities and technologies.

In terms of convenience sites changed by EVs, we -- as I was mentioning, if you look out to 2030, we are seeing electric vehicles representing potentially 80% of the total passenger car pool, right?

[Bernard Looney, executive]

2050 or 2030?

[Giulia Chierchia, executive]

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

[Bernard Looney, executive]

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

[Peter Low, analyst]

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

[Bernard Looney, executive]

Peter, thank you, 2 good questions. I'll let Murray take the buyback versus the dividend, the choice there.

On the emissions targets, what I said in the prepared remarks is that by 2030, our plans do not require offsets to deliver. We also said that offsets are tools in the toolbox. They're absolutely necessary for the world. BP intends to facilitate a market in offsets. We will do that through our trading division. And we may use them, and we use them today for compliance purposes. And as we move beyond 2030, they have the potential to become a bigger part of the toolkit. But specifically, what I said is that between -- over the next 10 years, to get those very material reductions in emissions, these are 30% to 35% or 35% to 40%, we do not rely on offsets to do that.

Buybacks versus dividend, why the choice, Murray, on the incremental.

[Murray Auchincloss, executive]

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

[Bernard Looney, executive]

Murray -- thanks, peter, thank you for your question. Next question from Jason Gammel of Jefferies.

[Jason Gammel, analyst]

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

[Bernard Looney, executive]

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

[Murray Auchincloss, executive]

Yes. Hey, Jason, good to see you. Hope you're well. Look, the hybrid really hit at a unique point in time. We're working through a crisis. We need liquidity as much as we possibly can get. The hybrid market is something that we thought about for the past 5 years once we saw some of the competition doing that as an interesting way to diversify your sources of cash, to be honest. Obviously, there's been a lot of debt and there are hybrids.

So we've been thinking about doing it as a mechanism of diversification of cash flows for quite some time. And we went out to the market and we were stunned by the degree of interest inside this. We had 3 to 4x subscription over top of what we thought we might have. And we think the average interest rate of 4.5% on perpetual debt is pretty darn competitive. You'd have a hard time issuing equity at that level.

So we think it's a nice complement to the overall capital structure of the company. We like the scale because it helps. It also helps with the net debt target, Jason. The ratings agencies give you 50% credit for it. And as we think about it, it helps drive down our net debt. It gets us in shape for the future. It underpins our resilient dividend. And it helps ensure that we have investment-grade credit rating. So it just hit at a perfect time with lots of different opportunities with an incredible cost for a perpetual debt at 4.5%. And that's why we went ahead and did it, Jason.

[Bernard Looney, executive]

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

[Giulia Chierchia, executive]

Yes. Thank you, Jason. So first of all, let me start by just clarifying that we are not aiming to play only in renewables, right? We are aiming to play in an integrated low-carbon electricity value chain, therefore, balancing renewables generation together with the customer portfolio and trading, right? So we're not focusing only on renewables generation.

The second element is, as we look into the markets in which we are planning to play, we see a mix of growth developing and developed markets, right, where we will, therefore, have a varying level of exposure to regulation. And thirdly, I would say, again, we're not starting from scratch, right? We have renewables operations across 13 markets already today and have significant experience in terms of managing those regulatory frameworks from the past. And we will continue doing so as we move forward.

[Bernard Looney, executive]

Thanks, Giulia. And you keep reminding me and we keep reminding each other, this point about it's not renewables for renewables' sake. We want to build renewables so that we can offer an integrated energy solution to customers. That's what we're trying to do. It's not kind of spin that we want to become an integrated energy company. It's what the example from North American Gas and Power is about today, where we're offering customers, sometimes cities, sometimes big corporates, like Amazon or whoever, we're offering them firm, clean and affordable power.

So we can give them firm by taking our equity gas, taking our equity wind, taking some solar off the market, that gives us a reliable source of energy. We can make it firm, affordable for them by hedging it for them because we've got the trading organization. And we can make it clean, it's mostly clean already, but the final bit we can do through the carbon offsets through -- again, through our trading organization. So we're bringing integrated solutions together. So I think this is a very important point that we want to keep hammering home, which is it's not any one of these areas for its own right, it's about how we create a package that we can offer to customers. And Jason, happy to talk to you more about that.

Next question -- thanks, Jason, from Jon Rigby of UBS.

[Jon Rigby, analyst]

Two questions. First is on the -- going back to the dividend a moment. I'm struck by the fixed element of it. Not -- and I agree with your comments about variable. But a good signaling device for a company that's making progress is an increase in the base dividend, and that's a way that the Board can signal confidence and progress to the market. So I'm struck by the fact that you don't intend to do that. Particularly, if your strategy also talks about reducing shares in issue. So the absolute cost of dividends could actually be false over the period. So I just wonder whether you could just revisit that, and maybe in the discretionary bit of cash flows, maybe there's room to increase the fixed element.

The second question goes to the impairment charges you've taken this quarter. I mean it's not the first time you've taken significant impairment charges over the last decade. And most of them have come in a business that you know intimately, which is E&P. And I was struck by Murray's comment that he felt, I think, very comfortable with the rates of return achievable in renewables, a business that you're really just entering for the first time. So can you talk a little bit about whether you've enhanced the process of assessing the capital allocation and investment decision? Because it seems to me is that a floor in all of the sort of outlooks on returns, et cetera, are that you put capital to work in the wrong assets or the wrong businesses or using the wrong assumptions.

[Bernard Looney, executive]

Thanks, Jon. A bit of feedback for us there in our investment governance, I think, Murray. So I'll ask Murray to take that.

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

[Murray Auchincloss, executive]

Yes, tricky. Jon, nice to see you. Tricky question on the impairments, isn't it? So if I thought about exploration first, I would say we've been in action over the past decade trying to get this more under control. If you think back to the heydays of the early part of the decade, Jon, we were spending $1.8 billion up to -- $3.8 billion, I think, was the peak level of exploration spend we had with license, bonuses, et cetera. That, of course, was when the oil price was $140. And to be honest, in hindsight, that doesn't make sense when -- with our current view of oil price, and maybe as a sector and as a company we were chasing that too much.

I feel like we've done a good job over time getting that under control. We've drifted exploration spend down significantly over time. Under James Dupree's leadership, we were very careful with bonuses, we're very careful with well commitments, et cetera, et cetera. So exploration is something that we're wary of. We're now not going to explore new countries. We'll probably only be spending $300 million to $400 million on that a year to try to manage that.

And as we think about the new world and as we think about new investments, Jon, we'll have that memory in our mind. We'll think about those commitments. We won't be committing too much at once. It will have to be phased with off-ramps so that we manage the risk as we move from a different -- from one type of exploration to a different type of exploration in things like hydrogen, CCUS wind, et cetera. So that's thought one.

Thought 2 on the impairments on the balance sheet. Yes, we've raised the thresholds again, Jon. So we used to talk to you about 15% at 60. We've dropped the price deck materially. We've bumped up the carbon tax materially. We've also dropped gas prices materially. So we've raised that threshold. And we're trying to make sure that through payback of less than 10 and pay back of less than 15 on gas, you really start to push that as well. And we'll try on the new stuff to have firm rates of returns that we hit with very clear assumptions, making sure that we're clear on what a P50 is, with equal upside and downside, will help us learn those lessons where we've been too optimistic in the past.

So we're trying, Jon. We recognize the things that we could have done better in the past, and we're trying to get better for the future, learning the lessons and applying them into the new businesses.

[Bernard Looney, executive]

And I think we have to have a little humility here, Jon. I mean this is not exactly -- there's a lot we have to take away from this, and we shouldn't just skate over it and say they are what they are. It is a piece of reality. I think we are not alone in the industry, but we're certainly not a part. And I think we have learned a lot. Our exploration spend is down 75% from the peak, 75% over 75%. And I don't see it going up from that point, I see it going down.

So I think life has changed over the last couple of years. But as a person who was accountable for the Upstream, I take these results very seriously and want to make sure that we don't have to keep repeat doing this in the future. But it is important to acknowledge reality, and that's what we've done in the second quarter. So I appreciate your question. I know where it's coming from, and I appreciate the spirit in which it's asked. So thank you. Thanks, Jon. I think we can get 2 more questions in before we close.

Pavel Molchanov from Raymond James.

[Pavel Molchanov, analyst]

Are you guys hearing me?

[Bernard Looney, executive]

Yes, sir. Go ahead, Pavel.

[Pavel Molchanov, analyst]

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

[Bernard Looney, executive]

Great. Thank you. Murray, the MLP.

[Murray Auchincloss, executive]

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

[Bernard Looney, executive]

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

[Pavel Molchanov, analyst]

Understood. Yes.

[Bernard Looney, executive]

Okay. All right. All right. Thank you very much. Appreciate it. Lucas Herrmann from Exane.

Lucas, I remember, being very frustrated with me at the last quarterly results call.

[Lucas Herrmann, analyst]

Bernard, can you hear me?

[Bernard Looney, executive]

Clearly.

[Lucas Herrmann, analyst]

Great. Hopefully, you won't be frustrated with this.

[Bernard Looney, executive]

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

[Lucas Herrmann, analyst]

Two brief questions, Bernard. The first just pipeline in terms of the renewable build-out, and I appreciate you're not chasing. But how much visibility do you actually have at the present time? I simply ask because if I push in the comments from Lightsource and elsewhere, it's -- the target of 20 seems -- well, just talk around visibility, if possible.

And then one for Murray, if I might. Murray, if I look at a kind of normalized years, let's go back to 2019 as they're a normalized year, what proportion of your cash flow from ops or EBIDA, however you wish to present it, would you say comes from the businesses that you define as customer-focused today? So I'm really talking about fuels marketing, lubes, the LNG trading business, the biofuels business. Just some idea of what the overall cash flow as a proportion of 2019 was from those activities.

[Bernard Looney, executive]

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

[Murray Auchincloss, executive]

Lucas, I'm just trying to think my way through that exotic question. So look, inside the Downstream, obviously, the refineries don't make a ton of money, Lucas. So if you look at the Downstream results, it's primarily customer and products and the oil trading side of life. So the majority of the Downstream would be the answer.

On the biofuels, alternative energy, the 2.5 gigawatts were in build mode, so you're not making much money now. Money comes once you built out, which will be middle of the decade when you start seeing that being built out. So expected period of low returns as we build our way up and we establish traded positions around it, so expect that to happen middle of the decade.

On the Upstream, I'm going to hesitate to give you a number on what we do inside IST because that would give you an IST number, which we don't disclose. But I think, if you look back over time, you might be able to guess what we get from integrated supply and trading inside gas inside the Upstream portfolio. But you know that we don't disclose that.

[Lucas Herrmann, analyst]

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

[Murray Auchincloss, executive]

Sounds like a good calculation.

[Bernard Looney, executive]

Okay. Thanks, Murray. Giulia?

[Giulia Chierchia, executive]

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

[Bernard Looney, executive]

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

[Lucas Herrmann, analyst]

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

[Bernard Looney, executive]

Correct.

[Giulia Chierchia, executive]

Yes.

[Bernard Looney, executive]

Thank you for clarifying. I think -- thank you, Lucas. I think we'll need to bring it to a close. We -- I've got a few remarks here and I've got something that I want to do. So just hang with us for a minute. As the numbers on the webcast are staying steady, which is great, so just hang with us for a couple of more minutes.

Thanks, everyone, for joining. We've asked a lot of your time today, and we really appreciate you taking the time. I hope you found it useful. We've shared a lot of information. We recognize that, and we want to and need to keep the conversation going. We'll do -- we'll be doing that with some of you. I know over the next few days, it's going to be busy for us through the end of the week.

And I hope everyone can join us in September for BP week. And what we want to do in BP week, having brought through the -- brought forward a sort of macro strategy, what we want to do on that day is help you meet the team, help you meet the people who are going to deliver this and some of their teams, and help you get more into the detail about what it is that underpins this plan. And if we don't speak before then, I hope you guys get a bit of a break. We're certainly hoping to, and we're around the world, trying to do that ourselves.

We do have a little video. It's 2 minutes long, I think. I think it's fantastic. It sums up what we laid out today, and we're going to play that now. And with that, I'm just going to say thank you and watch the video if you have a moment, and we'll be in touch. Thanks, everybody, and well done to the team. Thanks, everyone.