Shell PLC

NYSE:SHEL

Earnings Call Analysis

Shell Q1 2024 Delivers Strong Financial Performance and Shareholder Returns

In Q1 2024, Shell achieved robust operational results with $7.7 billion in adjusted earnings and $13.3 billion in cash flow from operations. The company commenced production at Rydberg field in the Gulf of Mexico and ramped up operations at its Shell Polymers Monaca plant. Shell announced a $3.5 billion share buyback, contributing to over $10 billion in expected shareholder distributions for the first half of the year. The company continues to focus on maximizing value while progressing towards net-zero emissions by 2050.

Strong Start to 2024

Shell has kicked off 2024 on a robust note, showing solid operational and financial performance. Sinead Gorman, Shell's CFO, highlights that the company has achieved adjusted earnings of $7.7 billion and generated $13.3 billion in cash flow from operations, despite well write-offs. This has been driven by strong performance in their core assets, including the start of production at the Rydberg field in the Gulf of Mexico and ramping up operations at the Shell Polymers Monaca plant.

Operational Highlights

In the Upstream sector, Shell’s conventional oil and gas business excelled, particularly in the Gulf of Mexico, where the new Rydberg field has boosted their position. The company also experienced high liquefaction volumes and strong trading in its Integrated Gas business. Their Chemicals segment saw marked improvement, demonstrating potential for future growth, and their Products business capitalized on global supply disruptions to capture high margins through optimized trading activities.

Financial Discipline and Shareholder Returns

Shell maintained capital discipline and a robust balance sheet. They announced a $3.5 billion share buyback program, expected to be completed by Q2 2024, bringing total shareholder distributions for the first half of the year to over $10 billion. The company reiterated its guidance to distribute 30-40% of CFFO to shareholders through the cycle.

Energy Transition Strategy

Shell remains committed to its energy transition goals, aiming to be a net-zero emissions energy business by 2050. The company is actively reducing emissions and targeting a 15-20% reduction in customer emissions from oil products by 2030. Investments continue in renewable energy and decarbonization projects, exemplified by their efforts in the Texan Brazos Wind Farm and the construction of Europe’s largest green hydrogen facility.

Sustainable Improvements in Upstream

Shell has improved its upstream performance through consistent efforts over multiple years, focusing on reliability and operational excellence. The use of AI and data analytics has enhanced proactive maintenance, improving reliability by 1-2% in sectors such as LNG with minimal additional cost. The goal is to institutionalize these improvements, maintaining high asset availability and aligning goals across teams.

Capital Allocation and Market Response

Shell's strategy focuses on disciplined capital allocation. The company continued to prioritize buybacks over acquisitions due to the compelling valuation of its own shares, aiming to enhance shareholder value. Discussions on potentially relisting in the U.S. were noted but are not a current focus, with more emphasis placed on buybacks and operational improvements to bridge the share price valuation gap.

Growth in LNG and Exit from China Power Market

Shell plans to grow its LNG business by 20-30% through 2030, focusing on low-carbon intensity projects. The decision to exit the power market in China was made due to the market's unique characteristics and Shell’s focus on selective regions where they have a competitive edge and can leverage differentiated capabilities. However, they remain committed to the EV charging business in China, seeing significant utilization potential.

Consistent Operational Performance and Financial Outlook

Despite seasonal variances, Shell aims for steady operational performance across its assets, with each asset contributing to overall value. Cost reduction remains a focus, with a commitment to simplify operations and maintain capital discipline. Continuous efforts in these areas are expected to support sustained financial performance and shareholder returns.

Final Remarks

The company’s focus remains on delivering more value with fewer emissions, consistent with their energy transition strategy. Shell’s leadership expressed confidence in their approach and reiterated their commitment to capitalize on their strengths to drive performance. The upcoming Annual General Meeting on May 21, 2024, is an important event, where shareholders will vote on the energy transition strategy, further endorsing Shell’s long-term vision.

Earnings Call Transcript 2024-Q1

[Operator]

Welcome to Shell's First Quarter 2024 Financial Results Announcement. Shell's CFO, Sinead Gorman, will present the results, then host a Q&A session alongside Shell's CEO, Wael Sawan. [Operator Instructions] We will now begin the presentation.

[Sinead Gorman, executive]

Welcome to Shell's 2024 First Quarter Results. It's been nearly a year since Capital Markets Day when we showed you our plans to deliver more value.And in March, our energy transition update shows how we will do that with less emissions, demonstrating our commitment to being a net 0 emissions energy business by 2050, whilst delivering enhanced shareholder returns.As we continue to turn our plans into action, I'm pleased that 2024 is off to a good start. We delivered yet another set of strong operational and financial results in the first quarter. In Upstream, our conventional oil and gas business performed very well with many of our core assets delivering high controllable availability.We also started production at oil Rydberg field, which is connected to our Appomattox production hub, reinforcing our leading deepwater position in the Gulf of Mexico, where our oil production has some of the lowest greenhouse gas intensity in the world. This is another project that supports the energy security the world needs and underpins the longevity of our cash flows.At Shell Polymers Monaca, our petrochemicals plant near Pittsburgh, we have successfully ramped up to full operation in Q1 and are on a pathway to longer-term stability. In our Renewables and Energy Solutions business, we have strategically diluted part of our stake in the Texan Brazos Wind Farm, whilst keeping access to 100% of the offtake as part of our integrated power strategy.This allows us to build on our strengths and leverage our world-class trading and optimization capabilities. We continue to focus on maximizing the value of every electron molecule to help us deliver on all our targets.Moving on to our financial results. We continued to deliver strong results in the first quarter of 2024 despite above average well write-off, our adjusted earnings was $7.7 billion. And we generated $13.3 billion of cash flow from operations, driven by our consistent focus on performance.In the first quarter, we had high liquefaction volumes, coupled with strong seasonal trading and optimization in our Integrated Gas business, even though market conditions were less favorable than in Q4.In Chemicals, we saw marked improvement in performance compared with previous quarters, and we still have potential for further growth. And it was a strong quarter for our Products business, particularly in trading and optimization, where we were able to capture high margins due to global product supply disruptions.Moving on to our financial framework. We continue to be disciplined about our capital spend and our balance sheet is strong. Regarding shareholder distributions, today, we have announced another $3.5 billion share buyback program, which we expect to complete by the time of our Q2 results announcement in early August. That brings our expected shareholder distributions for the first half of the year to well over $10 billion.This demonstrates how we generate attractive shareholder returns in line with our guidance of 30% to 40% of our CFFO for shareholder distribution through the cycle. So, to summarize, Q1 was a good start to the year, a quarter of strong operational and financial performance. And for the rest of 2024, we will keep driving performance, focus on our strengths and continue to deliver more value with less emissions.Lastly, it's an important upcoming event for your calendar. Our Annual General Meeting 2024, is on May 21. We ask our shareholders to support our energy transition updates in which we outline how we continue to make good progress in reducing emissions from our operations whilst investing in areas where we have strength. These investments are helping our customers to decarbonize.And with this in mind, we have set a new ambition to reduce customer emissions from the oil products we sell by 15% to 20% by 2030. Therefore, we ask our shareholders to vote against the alternative resolution. By doing so, our shareholders will be endorsing this management team, our Board and Shell aim of being the investment case through the energy transition. Thank you.

[Operator]

[Operator Instructions]

[Wael Sawan, executive]

Thank you for joining us today. We hope that after watching this presentation, you've seen how we delivered strong results and how we continue to focus on operational performance.Today, Sinead and I will be answering your questions. But first, I'd like to just take a moment to thank Tjerk Huysinga for all the work that he has done for us here at Shell. Tjerk has had a 35-year career, a very impressive career and has been pivotal in integrating the external market perspective into our strategy. So, we thought we would wish him well with a very strong quarter and thank him for all the effort he has put in.And now if we move to the questions, Luke, can we please have 1 or 2 questions, please, from every person on the call, and I hand it over to you, Luke, let us know who the first caller is. Thank you.

[Operator]

Our first caller is Michele Della Vigna from Goldman Sachs.

[Michele Della Vigna, analyst]

Congratulations on the strong delivery, and thank you, Tjerk, for all of your help over the years. I wanted to ask you 2 questions, if I may. The first one is, if I look at the delivery in this quarter, you've strengthened your balance sheet by $3 billion at the time when most of your peers actually increased the gearing.I was wondering what would give you at this point, the confidence to increase the buyback from the current level and take advantage of the really cheap valuation to continue to buy back shares and accrue value per share?And then my second question is about the growing debate about relisting in the U.S. for some of the European oil companies have seen your comments. Total Energy has commented about it as well. I was wondering if you could walk us through perhaps what would you think would be some of the benefits but also some of the hurdles in considering such a potential material move.

[Wael Sawan, executive]

Great. Michele, thank you for that. Sinead, do you want to take the first one? I can take the second.

[Sinead Gorman, executive]

Certainly. And indeed, Michele, what you saw was put $3 billion towards the balance sheet this quarter. Of course, there's a couple of reasons about that. First of all, in this quarter, what we saw, of course, was fantastic operational performance, which drove good cash flows. So, I give one part of it.We saw lower CapEx, of course, which gives a little bit of a bump in terms of the free cash flow, but also, of course, in terms of our distribution in terms of the buybacks, in terms of the phasing of them, a little bit fell into April. So, there was a little bit more that came through.What we do, of course, with the balance sheet is, and with debts, you see our debt fluctuate a little bit. We use it to demonstrate value whenever it comes through. But fundamentally, your question is really about distributions and the choice to do EUR 3.5 billion of share buybacks this quarter.As you know, we tend to look through various quarters. And what you saw, of course, in the past couple of quarters as we've had quarters with lower CFFO. And fundamentally, I've still done GBP 3.5 billion of buybacks at that point in time. So, we're now at 10 quarters where we've done buybacks of at least $3 billion. So, you see the pragmatic approach coming through and see some form of consistency.

[Wael Sawan, executive]

Thanks, Sinead. Michele, at your second question around the real estate, I think firstly, maybe just to sort of split it up into 2. I think let's start with the fundamentals, the valuation of this company. And what we have said in Capital Markets Day last June is our focus is on how we're going to grow those fundamentals, both on the free cash flow side, absolute as well as the free cash flow per share.The latter being something we want to grow 10-plus percent per annum through to 2025 and the former all the way through to 2030, growing at roughly 6% per year. That is what our focus is.So, what we have said is performance discipline and simplification are at the core of what we need to be driving. And you already see through this quarter, for example, the outcome of that, you're starting to see more stability on the operational performance. You're starting to see the costs move in the right direction. You're starting to see the discipline on capital started to shine fill.And, of course, all the subsequent benefits of a stronger balance sheet and so on and so forth. That is what the focus and that's what the priority is. Then there's a second bucket, which admittedly, we acknowledge that we see our share price as being below what we think is a fair market value at the moment. And what we are doing there, again, what we said in Capital Markets Day, we were going to do is to continue to lean into buybacks.And once again, here's another $3.5 billion buyback for this quarter, which I think underpins that commitment that we have going forward. The simple relisting is not going to address the first point around the fundamental valuation. It could potentially play a role in this disconnect that we see.But for now, what we're focused on very much is the buyback. And so, of course, as a management team, we have a duty of care to continue to look at all opportunities to bridge that valuation. And so, we will always have something like a listing or other elements under review, but I can tell you it is not a live discussion at the moment for us.Our absolute focus is on driving the strategy more value with less emissions to make us that investment case through the energy transition.

[Operator]

Our next caller is Biraj Borkhataria from RBC Capital Markets.

[Biraj Borkhataria, analyst]

The first one is just on the LNG segment. It's encouraging to see the LNG volumes at the top end of the guidance after you narrowed it to the trading update. But I noticed that in addition to the higher volumes, the gas realization in Integrated Gas was quite a bit higher than I would have expected. And last few quarters, it's been quite predictable. And I guess the big change is prelude quarter-on-quarter. So, can you just talk a bit about what's driving that? That would be helpful or if it's something else?And then the second question is on OpEx. And you just highlighted you continue to drive it lower. I was just wondering, at the group level, can you talk about the difference between the structural cost reductions of what you're seeing relative to the inflationary pressures that are coming through because the net result is lower, but I'm just trying to understand how you think you're performing on the controllables.And then maybe a cheeky third question, but you've removed some of the disclosures on mobility. I'm just wondering why that was?

[Sinead Gorman, executive]

On your first one, Biraj, so actually, let me just take the last one was a really quick one. Just very clear, we're trying to simplify everything across the organization at the moment. So, we looked at our disclosures, which are quite extensive as you probably know, looking at our data book in some detail, and we looked at which ones we actually use most of where do we get the questions, so we simplified across everything.It's basically bang for the buck, how much effort we've put in ensuring that we have all of these up to date, et cetera. So, nothing more than that. On the LNG side, you asked about in terms of the realized price. You're right, you saw that change between, I think, it was $8 and $9. You saw that coming through on the realized price, really simply put for us.What you see, of course, is that we are quite heavy in terms of Brent price or oil price markers on some of this. So, some of them are oil, some of them are pure JCC and, of course, others are gas price. But in Q1, what we saw was, of course, Brent relatively flat, but JCC with that lag, that really played through now, and that completely over-weighted or compares or covered for, in effect, the slightly weaker gas prices as well. So, that's what played out.On the OpEx side, in terms of just where are we in terms of differences in structural performance, et cetera. You saw OpEx come down this quarter, you're right. But I would say, remember this phasing. So, you always see in terms of us Q4 OpEx going higher. Just to remind you on that, of course, Q4 is always decommissioning and restoration updates come through a few on bonuses and largely basically people billing us towards the end when that comes through as well.So, we're seeing good progress. And we talked about it at Q4 of $1 billion in of the total of 2 to 3 that we had talked about. Where are we seeing it come out? We'll do another update for you at the end of Q2 and walk you through some detail on that, but we're seeing good progress. It's beginning to filter through the organization. You already saw the portfolio side of things where we play.Now, how we play in terms of structural change is coming through. It's the simplification. One of the ones I just gave you earlier in terms of what we disclosed, what we spend our time on and trying to focus on that, which makes most sense. So, you see it simplify, try and speed up accountability and make sure actually the business is focused on where it should be, which is really about delivering value at the end of the day, and each part of that is different per asset.

[Operator]

Our next caller is Lydia Rainforth from Barclays.

[Lydia Rainforth, analyst]

And clearly, very, very good 1Q. But just an observation, 1Q does tend to benefit from limited insurance, better trading volumes, which don't always repeat in 2Q, 3Q. So, can you just talk to what we can expect from that Sprint 1 program that really keeps the momentum going for Shell into the rest of the year?And I suspect probably linked to that on the cost base, I'm just going about, I think you're introducing a new process as of July this year in terms of that kind of seem approach in terms of really simplifying things. What sort of impact do you expect that to have?

[Sinead Gorman, executive]

Yes, so Lidia, the comment of Q1 tends to be higher. So, there is that element for us with Q4 and Q1, we are skewed towards, particularly from a trading point of view, the Northern Hemisphere winter for our LNG business. However, what I would say is actually some of the trading optimization, which you referred to plays out at different times, actually just different aspects come through.So, there are elements, for instance, of maintenance that play at different times. So, you see maintenance heavier in one quarter than another, but you also see seasonality around, for instance, driving season. So, we would expect to see, of course, our marketing results come up with driving season increasing within the U.S. as well.We then see, of course, beyond that, we see different things like, for instance, for loops. It tends to be about industrial maintenance and industrial activities. So, for instance, Q1 tends to be a little bit higher, and we see Q4 also higher. So, that spreads out across the various assets.What you will see, though, and what is key here is that this is an organization who is looking to deliver on what is promised. So, what you're going to see, Lydia, is us continue to be focused on quarter after quarter being simply boring on this and delivering exactly what we said.So, what you also see then is each asset knowing exactly what they need to deliver in terms of value and playing to that strength. So, that should provide the consistency across there. And, of course, you're going to see the drumbeat of further announcements coming through as we continue with delivering on exactly what we told you we would do.The second part, of course, was around cost and the pace of it and taking things out. Good catch and these around female, I think what I referred to as last quarter as well, where we talked about changing and this is wider for others, it's about many of the standards that we have linked to the assets.And what we basically said is, how do we reduce those down to what is the bare minimum? What is really required to hit our values, safety and actually correct operation for the environment, et cetera. But what is needed has to be fit for purpose for each asset. And it's not the same between an onshore asset and deepwater assets or a mobility asset or a refinery.So, that's the sort of thought process. So, those same standards are reducing by some 70%. But it's much more than that. It's not just that 70%. It's then how is that taken by each of the assets to do what they think is correct.It comes down to what assets need in terms of management information, what they need in terms of staffing levels, what they need in terms of legal support, et cetera. And that's the change that you're seeing.Each asset each part of the business is looking at what are the risks, and therefore, what they need to cover those and to maximize value. So, that culture change will come through and has done very purposely.

[Operator]

Our next caller is Alastair Syme from Citi.

[Alastair Syme, analyst]

Well look, I'll definitely share my best wishes to check a pilot intersected on several occasions over a long number of years. And sometimes we've agreed and sometimes we haven't, but it's always been first class in direction. So, I look forward to sharing a drink in a few weeks. A quick question, where do we stand on booking? So if you give us a little update on that?And then a longer one. While as you think about the strategic plan in year 1, I wanted to know whether your assumptions and the competitive landscape has remained sort of broadly within your range of expectations. Or has there been anything out there that's made you tweak your plan, push or pull harder in any one or more areas?

[Wael Sawan, executive]

Thanks for and thank you for the kind words for Tjerk as well. Did you want to say a quick word on Booking first?

[Sinead Gorman, executive]

Yes, one line on that. I think we had said previously that we were going through a strategic review and that we concluded that and that our preferred option was towards divestments. We're continuing to pursue that route at this moment, and I look forward to being able to give you an update at some point in the future. You'll understand accounts they more than that at the moment.

[Wael Sawan, executive]

And to your second question there, Alastair. Look, I think the world around us, of course, has continued to be uncertain and volatile. And what you have seen is a number of things. I'd say, one, the amount of geopolitical risk that has played up the accentuation of the Russia-Ukraine issue, what we are seeing, of course, in the Middle East at the moment.And the challenging relationship across the U.S.-China access, all of it, of course, has just meant that, that volatility, that uncertainty that we had expected has been magnified, and we need to be able to adapt to that. And this is where I think it's reinforced my own conviction in the strategy that we have in something like LNG, where our ability to be able to have multiple supply points, our ability to have multiple demand points, our cross commodity exposures affords quite some resilience when you have such volatility.Also, what we're seeing, of course, is from an external perspective is, different countries are dealing with their own respective challenges. Whether that's fiscal challenges, whether that is the need to step up, for example, defense budgets, health care services. And, therefore, the pace of the energy transition in some of those countries is varying.And, once again, I think our strength of being really focused on the global picture, but then honing in on the local realities has been key. And so, what does all this mean for the way that we are responding? I think we're doubling down on what we saw coming into Capital Markets Day, right?We said at the time that there are some core basics we need to continue to follow through. We need to unlock the full potential of the asset base we have in place. And I think Q1 offered us a good glimpse of what that looks like when Monaca's up and running, when Prelude's up and running and so on and so forth.We need to continue to keep that funnel of opportunities coming through. LNG Canada, our Brazilian project, our Gulf of Mexico project. We need to continue that cost momentum and bring down the structural cost, and we need to keep that discipline. So, all of those elements continue to play up in my mind and critically to contribute to the direction we're going.With all of that, we continue to see that disconnect between what our share price is and what that underlying valuation is, which is why, if anything, we have become hungry to continue to go for even more of, I think it was more time, right? So, I said, eating Shell. Our ability to continue to buy back more of Shell over the coming years. One in particular, our free cash flow yield continues to be a comfortable double-digit one or mid-double digits.So, all of that, I think, reinforces our direction and reinforces the need for that cultural evolution that we have committed to make, which I see some real green shoots and growing in confidence that we can move at a pace even faster than what we had anticipated. Thank you for the questions.

[Operator]

Our next caller is Paul Cheng from Scotiabank.

[Paul Cheng, analyst]

Two questions, please. Way that your Pittsburgh, you can correct me, you're saying that in the first quarter, you're not running at full capacity. So, at this point on to improve the result in that, what is the operational improvement that we should expect? Or that is just going to be a function of selling the nonprofitable asset and also hoping for the margin to improve? That's the first question.Second question, clearly, is that it looks like the pace of energy transition perhaps is going to be a bit slower than previously assumed? And oil production may not peak until sometime next decade. You've been looking for your production in liquid production essentially flat, about 1.4 million barrels per day for the rest of the backing. Should we be listed, whether that is the right target? And whether that we should also eliminate the artificial band of looking at the exploration regions outside the existing area by 2025 or 2026?

[Wael Sawan, executive]

Thank you. Great. I'll try to cover both of those, Paul. And firstly, let me make a quick apology. My team here informed me that it was actually Lucas who said we were eating ourselves not Martin, so I stand corrected. Paul, on your point around Monaca or Shell Polymers Monaca. A couple of things. I think, firstly, to recognize this first quarter was one where we were indeed trying to drive up the performance of all the trains in particular, that third train, which you'd recall had the equipment failure or equipment faulty realization, which is what we were working to improve.And now that we have been able to fix that, we have seen all 3 trains at robust capacity. As we go into the next quarter, it's all about reliable operations now. It's stabilizing that facility. What I'm particularly proud of, I spoke earlier about culture change, right? And this was a great example that the team in Monaca showed that this is a culture change that is no longer just topped down.But actually, now what you see is truly across the organization. People grabbing on to the mantra of how are we going to achieve our values and drive value. And what the team there did was, you'll recall, we had talked about the facility potentially allowing us to produce around 40 different grades of polyethylene.And the current cash generation opportunity, given the disconnect between oil prices and gas prices is just about flow. It's just about how much we can get polyethylene through. And so, the team pivoted to be able to drive what they call fewer for longer strategy. And in essence, what they're doing is they're going for a handful of grades where we know the operating envelope is working well, and they will drive that to the limit so that we can get as much volume throughput as we can to be able to generate the cash.A really nice example of how they were able to adjust to the circumstances in the market to unlock value. And so, expect that to play up, expect us to continue to drive value through that as we stabilize the facility and over time, continue to premiumize. This is a journey of multiple months and years, of course, but we are moving very much in the right direction.On your broader point around liquids production, the pace of the energy transition is consistent with what our beliefs have been. So, there hasn't been a fundamental change. This is not a new revelation. We have always said that we want to be able to be resilient to different degrees or different paces of the energy transition, simply because both the shape and the pace of the energy transition are uncertain.And so, our strategy has been one that is resilient to that. And so, what we have done on the LNG side is to say we are going to grow that LNG business by 20% to 30% through to 2030.On the liquid side or the oil production side, to your point, we see that continuing to be a delivery of around 1.4 million barrels per day, plus or minus. And that's a focus that we have to be able to continue to high grade and make sure that it's not just about liquids production or volumes, it's all about making sure we continue to focus on those highest margin barrels. The ones which we have enjoyed in our portfolio, the ones that have given us the leading CFFO per barrel compared to our peers.And our reserve base, of course, given it is preferentially skewed towards deepwater and LNG allows us to do more of that. On your point around exploration, look, the focus of our exploration is to tap into basins where we feel we have a true competitive edge, true competitive edge. And you've seen that, in particular in the Atlantic Basin, where we are leveraging Gulf of Mexico, Brazil, Nigeria, into a place like Namibia, and we will do more of that.So, we are not necessarily constraining ourselves, but we are focusing on the areas where we can get the highest bang for our buck. And in the world of making sure that we are focused and constrained in how we allocate every dollar of capital, I think that's a wise move for us to continue to follow through on. Thank you for the questions, Paul.

[Operator]

Our next caller is Josh Stone from UBS.

[Joshua Stone, analyst]

Two questions, please. One on LNG. You've been connected in the press with a couple of transactions that would expand your LNG portfolio. I understand you won't be able to comment. But maybe more broadly, why now would be the right time to add to your LNG portfolio through acquisition and how you would ensure you get a fair value given what it seems to be a competitive process?And second question on the departure from the power market in China. Can you maybe just talk about what was it about this business that led to your decision to depart? Also curious you haven't exited the EV charging business. So is it the case that maybe you don't see the need to integrate between your power business and our easy charging business for the portfolio more broadly?

[Wael Sawan, executive]

Thank you, Josh. I'll take the first one. Sinead, if you want to take the power market. I suspect I have a sense of the deals that you have referenced there, Josh, that are being talked about in the press. I'd separate them. I think, one, for example, been talked about Ruwais LNG and Abu Dhabi.That's one which Abu Dhabi is developing on a greenfield basis. I won't give any specific comments other than to say organic opportunities to continue to grow our LNG portfolio opportunities that potentially can add more supply points to the portfolio in attractive locations where the carbon intensity is low and the value potential is high, are very much down the lane that we want to continue to grow.We have a fundamental conviction that this is not an LNG sprint of a few years, but that LNG will be required for decades to come. And this is why continuing to find those differentiated opportunities is something we will look at.We are indeed not looking at big M&A in that space. Whenever we're looking at LNG opportunities, we're looking at bolt-ons to our existing portfolio where we feel that the capabilities we have, the portfolio we have, the positions that we have built up over the years would allow us to be able to unlock more value than maybe a seller would be.And so, we would be looking at any of these opportunities, of course, being accretive to our overall delivery as an LNG business for Shell. I'll leave it at that.

[Sinead Gorman, executive]

I think this was quite a simple one in the sense that what we talked about with respect to Power is that we will be very disciplined in this area. We're very focused, and I think it was last quarter that I actually talked through that we'll stay in a select number of markets, which I referenced to places like the U.S., places like potentially parts of Europe, et cetera.And we went through that in some detail. But whilst China remains attractive, it is a very different market as well, of course. And what you're drawing is the linkage between the fundamental selling B2B linked to EV. And those are, of course, very, very different. So, why are we exiting one and staying in the EV side?So, in terms of the exit, we want to stay in markets where we bring differentiated capabilities where we have the ability to deal with intermittency where we have the ability to use our trading and optimization capability, battery power, a range of different things, and we didn't have that skill from a dedicated perspective, in China. That wasn't one where we were going to have a capability versus somebody else.However, on the EV side, that's where our brand, our experience and our partnerships have really, really played out. Of course, China is slightly different. There's very high utilization risk compared to anywhere else, frankly, compared to the U.S. or Europe. And therefore, what we see is very attractive returns.But, of course, that's going to change over time. So, it will all depend on how policies play out across the world. But specifically to your China point, we're very comfortable decoupling what was the B2B business versus an effect linked to the EV side of things, where, frankly, our brand plays out in a very strong way.

[Operator]

Our next call is Irene Himona from Bernstein.

[Irene Himona, analyst]

Congratulations on these very strong results. Two questions. First, on Upstream. You referred to improved performance and higher controllable availability. How sustainable do you think that is? And what drives it? If you can talk around, is it a change in processes or working practices and so on?And then my second question, trading was strong in power and products. In your 2023 if you very helpfully quantify the contribution last year of trading for both Power and products, can we hope or expect perhaps a similar annual disclosure regarding LNG trading?

[Wael Sawan, executive]

All right. Thank you, Irene. I'll take the first one and then leave what I suspect will be a sure second one to Sinead. I think firstly, on the upstream side, a lot of work has gotten us here. This is not a question of months or even a year. This has been a multiyear journey that has gotten this level of reliability and focus across our assets.We're seeing it, by the way, in our Deepwater business. We've seen it in the conventional oil and gas business, and it seems to be now really sort of coming across many of the assets. And that's very pleasing.I think it's a tribute to some of our leaders, someone like Zoe, who's leading the integrated gas upstream business and her Executive Vice Presidents, who have made this operational performance and absolute key focus area for them. And what are they doing with that? They're looking at indeed the processes and making sure that the processes are pointing the different contributors to reliability in the same direction.You see it, for example, in the way that some of our projects and technology teams are working with our asset teams. We've seen it in the deepwater space recently. The objectives are much more aligned. The goals are much more aligned and you're seeing the power of that coming through day and day out.By the way, does that mean that all is fine? No. Of course, we have a long, long way to go. But we are institutionalizing over the quarters, 1 quarter at a time, that real rigor in the way that we drive operational performance. An element of it is how also we reward folks where the consistency of excellent delivery rather than just thinking about the next new project is an important part of it.I also have to recognize some of the improvements that we have made in areas like overall proactive maintenance, where, for example, using some of the AI capabilities we have.We have EUR 5 trillion rows of data that are being fed from some 5 million sensors across the organization with 18,000 pieces of equipment that are feeding into it with nerve centers that are sitting in places like the U.S. and Bangalore, looking to be able to create capabilities that allow or that create signals for our operators to intervene ahead of certain upsets.It's helped us in the LNG space. As I've mentioned in the past, to the tune of 1% to 2% improvement in reliability at low cost. All of that is just building that next level of rigor when it comes to operational performance and something that I think we are growing in confidence around and starting to be able to sort of embed on a much more consistent basis through the company. Sinead?

[Sinead Gorman, executive]

Yes. And on your trading question, I mean one of the reasons, of course, that we disclose a little bit more in terms of the res sector in terms of the information there is simply put because we don't have as many underlying assets there. So, that's why we give you a little bit of the breakdown.And of course, fundamentally, across our assets, our T&O or trading and optimization works because of the underlying assets. So, it's not a so you can have one without the other. The magic happens when we link the 2 together because they're taking the products and ensuring what molecules, electrons, whatever it may be, they're in the right place at the right time and a huge part of that is coming from the underlying assets, slightly different in U.S.In terms of disclosures, of course, what we gave you was 2% to 4% grew actually uplift for our T&O business, our T&O part of the organization. And we said specifically, which is a bit that you should probably look to is that integrated gas or the LNG part is at the mid-to upper end of that. And, of course, all products part is at the mid- to lower end.So, I think those are the disclosures that we've given.

[Operator]

Our next caller is Ryan Todd from Piper Sandler.

[Ryan Todd, analyst]

Maybe a follow-up on the comments on trading and optimization in our Integrated Gas business. As you think about the outlook over the next 1 to 2 years, given an LNG market that seems to have settled into maybe more modestly priced LNG environment with maybe a little less volatility than we've seen over the past couple of years. How should we think about the trading and optimization outlook for the Integrated Gas business in the medium term?And then maybe a second question on CapEx. Last year, you reduced the targeted medium-term outlook for capital spend. You've done a great job instilling confidence in terms of cost control and downward pressure there. What are you seeing in terms of cost inflation across your portfolio, particularly in LNG and deepwater and what risk or tension does that pose as you try to drive capital costs lower across the portfolio?

[Wael Sawan, executive]

Great. All right. Do you want to take the first one? I can touch on the second one.

[Sinead Gorman, executive]

In terms of sort of the trading and optimization outlook and in terms of going forward on LNG, I think it comes back again to the fact that we marry the 2 parts together, as you know, Ryan. So, is our underlying equity story for the volumes that we've got. And of course, then depending on the length that we have, how much we can actually play into the market.What we are seeing, of course, is that this sort of price point, you're seeing latent demand actually lift, particularly in Southeast Asia. So, of course, interesting of these sort of prices you're seeing parties like Vietnam, Pakistan, even India coming in more into the market and therefore, creating more demand and, of course, inching the price upwards as well.It's quite small, but you can see that change over coming from coal waste as well. So, the small changes in supply will actually have an outsized impact on price from time to time because it is a tight market that we see going forward.I go back to was Freeport last year or just before that, but it was just an immense change a tiny volume, frankly, but you saw how much it played is in the market. And that for us is where it's an interesting one because given the size of the assets we have for not just the liquefaction assets and the production, we also, of course, have an amazing amount of vessels.And those vessels allow us to be able to move the product where it needs to be or in this case, the LNG where it needs to be. So, when those that volatility or those changes or disruptions in the market happen, that's where we managed to take advantage of and actually make even more returns.So, it's very difficult to predict what's going to happen in the next 2 years in terms of the LNG market, but we see more demand coming in.

[Wael Sawan, executive]

Then Ryan, on your inflationary question, there's a couple of things. I think, firstly, it's just becoming much more rigorous in the way that we allocate capital.And you see that, I think, coming through. We've had opportunities where we could have exceeded lower returns because of the inflationary pressure, where we decided to pause Gato do Mato in Brazil is a good example, where we said, no, we want to recycle it, and we want to get a better price point. Otherwise, we're not going to simply invest for the sake of it.And so, I think there's an element of rigor and capital allocation discipline that's important here. On the inflationary end of it, what we see at the moment is inflation quarter from portfolio level at around the 5% mark, plus or minus.There are certain elements or certain categories that are more in the 6% to 10% range. You see it, for example, in FPSOs, you see it with subsea hardware. But by and large, on a portfolio basis, you're talking about 5%.And so, a big focus for us is what can we continue to do to be able to at least mitigate a portion of that, difficult to mitigate all of it, but a portion of it while we continue to exercise enhanced discipline in the way we allocate that capital. Thank you for the questions, Ryan.

[Operator]

Our next caller is Alejandro Vigil from Santander.

[Alejandro Vigil, analyst]

One question about Namibia has been a very exciting quarter for some other players in the area. What can you tell us about your exploration works there and update on your activity?And the second question is about divestments. You have announced EUR 1 billion this quarter, which are your expectations for the rest of the year in terms of cash in from divestments?

[Wael Sawan, executive]

Thank you, Alejandro, do you want to start with the divestment one? I can touch on the Namibia.

[Sinead Gorman, executive]

Yes, very short on that one, indeed. I think it's probably coming back to what we said at Capital Markets Day, where we play. We will play where we have differentiated capabilities. And you see us that exit that we talked about earlier, the great question earlier around from Paul in terms of China as well and moving on to the B2B business.You've seen that on other things. This quarter, indeed, South coast wins in the U.S. where we just don't feel that we can play in the right way given the returns that we would see, and we leave it to others who can do so in a different manner to us.So, there's a number of those that you see coming through as well. And, of course, we've already announced the Pakistan divestment. We're looking to go towards completion. So, you'll see a drumbeat coming through of where we step back or exit and divest from certain aspects of the portfolio, where simply it doesn't hit our hurdle.And that comes back to what Wael was saying, the discipline that we are showing to ensure that we hit everything that we said to you that we were going to do performance not promise, as I've said it before, that is playing out across the full portfolio. And we're doing that because we have a wonderful position to be in.When we're sitting where we are, where the business is delivering very well, as you've seen from this quarter, where you're delivering over EUR 7 billion on earnings, over GBP 13 billion in terms of CFFO and more to come as we show the discipline on CapEx, show the discipline on OpEx, et cetera, our alternative is always going to be to have the ability to buy back shares. And you've seen us do that now 10 quarters in a row, so above EUR 3 billion.So, in terms of the divestments that come, there is definitely more to come. And of course, we look forward to updating you as we go through.

[Wael Sawan, executive]

Thanks, Sinead. Your first question on Namibia Alejandro, what I would say is we continue our de-risking program there. We continue to drill exploration and appraisal wells and study the results of it. And importantly, we continue to study the results from many of our neighboring blocks to be able to better inform our own choices.We're not in a race here to be able to put the facility in place. What we have been very clear with the team on is this is a new basin. This is a complex reservoir. Significant volume is clear, but complex in terms of the porosities and the permeabilities. And so, it is important that we continue to ensure that if we are to invest significant capital here, we want to be able to have sufficiently de-risked it and make sure that we can deliver the sort of returns that our shareholders expect of us.And that's the mandate that the team is working on. So, working as quickly as they can, but with a clear objective to provide the right de-risking for us. I think the recent discovery from GAAP, I think, adds some excellent data points for the overall basin, and those will be taken into our broader considerations as we think about where we go next in our de-risking program. Thank you for the question, Alejandro.

[Operator]

Our next call is Christyan Malek from JP Morgan.

[Christyan Malek, analyst]

And yes, just thank you very much, Tjerk for all the help over the years and also congrats to Oswald. So, the first question, if I may, is regarding what seems to be still quite a large degree of inconsistency in terms of cash flow, the cash flows from last quarter to this quarter, I mean 60% new compare your cash flow variability to one of life Exxon, it's far more.And so, I guess the question I'm asking is, what level or range of cash flow through the quarters are you comfortable with? Given that volatility can be quite unpredictable. And within that same question, where do you think or sort of a normalized level of cash flow should be? And because I'm also trying to understand, when you say the Sprint, when does the sprint finish? What are you happy with? In the context of your KPIs to say we're done.We can now move to the marathon because all of the things you talk about are improvements that all businesses should be doing, and it's wonderful to see it. I just want to understand what's the end of the runway on this first initial phase?And that sort of segues into my second question around your molecules. The LNG business is exceptional. I just wonder whether you're going to thinking or planning to be as competitive and is scalable in the oil business.But given your comments around transition and what seems to be potentially a bullish scenario, why aren't you thinking or talking about potential for consolidation given the window that we have to acquire oil barrels and particularly given the difficulty into building with a huge increase in CapEx necessary?So, I just want to understand what's your think around buy versus build. Are you comfortable with the molecules that you have currently, particularly, let's say in a scenario or doubles or we are in a strong cycle. Are you back solving from that today?

[Wael Sawan, executive]

Yes. Great. Thank you for those 2 questions, Christian, and for the recognition, both for Tjerk and so I'll take the second question first, and then I'm going to come to Sinead have a moment to think about the first one. I think on the oil business, a couple of things I'd say.Firstly, over the next 6 years, we have guided, of course, to stable liquid production on the back of what we already have in the portfolio. So, that's our base case. The consolidation question, I think, is a good one, and we continue to look for opportunities to be able to, of course, bulk up as any good company should be doing. We have a couple of challenges here.One is, of course, our share price, we don't think is reflective of an opportunity to be buying somebody else and creating accretive returns for our shareholders. That, in my mind, is a must-do right? If we start to sort of run on the back of value-destructive deals, then we've lost the plot. So, we want to continue to be doing the right thing by our shareholders in that context.The second point, of course, is that all the deals we're seeing out there at the moment, tailing comparison to actually buying back our shares against a double-digit free cash flow yield with a suite of portfolios, whether it's in deepwater, LNG, our trading business, our marketing business, which we know very well, which is much more derisked, which doesn't require as much of an integration effort and as much of a premium to be able to adjust, we can buy those at the discount today.And so, we will continue to do that. and we will continue to do that until we actually see that the share price has responded in a way and that we have the currency to do anything else. And that's why we said very clearly for this first sprint. It is all about getting the fundamentals right. And I'm sure Sinead will address the endpoint. But for my sense on it is the first print is nothing more than a milestone.There will be more that we need to continue to do well beyond that first print in terms of getting the business to its full potential. There is an enormous amount of latent potential, and that's what we're going to go after and unlock. Sinead?

[Sinead Gorman, executive]

Indeed. And thank you, Christyan. This is where you'll always get me excited about it because your comments, I can take it in 2 ways. So, the way I will refer to it is, of course, more than EUR 13 billion of CFFO despite approximately EUR 3 billion, just under GBP 3 billion of working capital is. So, you're right, $16 billion of cash flow is an awful up.And indeed, every quarter, there is a lot of cash flow coming through from this business. And, of course, that's what gives us the confidence to be able to do the buybacks. And that's exactly what we're doing despite the volatility. You've heard me talk about it before, we actually welcome volatility in the sense that we have a strong balance sheet.We take the time to be able to delever from time to time. And we also, of course, manage to provide consistency. And that's the key point for investors in terms of the buyback. To remind you, since the Permian deal, including what we've announced now, we've done over EUR 40 billion worth of share buybacks. That's a huge proportion that has come through. And this is 10 quarters of $3 billion or more.So, in terms of inconsistency or consistency, I would say absolutely not, you see that drumbeat time and time again, we are predictable in terms of what we do. And how can we do that? We do it because of the underlying cash flows of this business. You're right, it does change quarter-to-quarter, and that's why I look through the quarters to be able to provide that stability throughout.That's why we've provided targets out there in the market in terms of the free cash flow and free cash flow per share. We have confidence in the levers of that. So, that's exactly what we're doing.Stability in terms of the CapEx discipline, OpEx time, buybacks through debt being able to be delivered as well, providing that overall investment case as well. So, my worry is, and what should I think in terms of free cash flow? What's key to me is to ensure that I have a balance sheet at a live meeting invest through the cycle, allows me to be able to continue to buy back shares, which at this price are, frankly, just undervalued.And I get excited about the fact that the share price today is not even representing the underlying value of the business today, let learn what we are going to do in terms of capital markets day delivery as well.So, yes, all good on that. And you said when does Sprint finish. As you can see, I can get excited about this. The Sprint it will finish at the end of 2025. That's what we've said so far. Thank you.

[Operator]

Our next caller is Lucas Herrmann from BNP.

[Lucas Herrmann, analyst]

A couple, if I might. I just wanted to come back to chemicals and to try and it's I guess it's back to Paul's question around utilization. You've moved away from 60%. You're guiding towards 72% to 80%, and I'm presuming you're saying within that, the Monaca's running, if anything, it sounds above nameplate.So, it's really trying to understand why the numbers remain as modest as they are. Is that a consequence of a very difficult margin environment, and you're actively deciding you're not going to run plant. Do you think that on the EUR 25 billion of capital that's invested in that business, how much of that capital do you think can earn a cost of capital return? How much of it not?And secondly, and Paul, sorry to stay on some of the businesses where I don't quite understand what they're delivering, sectors and decarbonization. If I look back that business used to deliver $600 million, $700 million of net income per annum. It's done GBP 20 million in the first quarter. Does it kind of become an area of experimentation and development and spend for the future and for the power and progress strategy?Or what kind of level of net income do you think we should realistically anticipate from that business in the near to medium term rather than a long?

[Wael Sawan, executive]

Lucas, thank you for that and we will indeed keep eating away. Let me take the first one and then ask Sinead to address the second one. On chemicals, you'll recall, Lucas, of course, in June, we talked about chemicals and how we were positioning chemicals.We had some assets in the portfolio that were, if anything, actually destroying value, they are negative return on capital employed, others that were sort of coming out from a nonproductive phase of capital deployment into productive phase such as Shell Polymers Monaca and others that were somewhere in between like our European assets, and we had to sort of do some work on them.I think it's fair to say that on all 3, we're making good progress at the moment, right? So, of the $25-plus billion of capital employed, we have already talked about the planned divestment of Bukom Jurong, which is the Singapore asset base. We have announced a couple of things on a few of the units in Europe. And then the other 50% of that capital employed sits in Shell Polymers Monaca.There's a lot that we are doing in that space. We have talked about selling or high grading the portfolio by selling the assets that are underperforming. We have talked about other specific units that are underperforming, we will either shut them down or convert them.We have recognized that our cost structure in that business needs to be addressed, and we've made some moves, including, for example, a few months ago where we trimmed down significantly the commercial staff base. We have shifted the interaction between our chemicals and products and our trading organization where there are some elements which we had duplication. We have now removed that duplication and consolidate it.So, we're doing all the things we can do to be able to bring this business to be the best it can be within the constraints that we continue to have. As we continue to step up on Shell Polymers Monaca, what you will see is continued improvement there, of course, as we look to go into the next grade of products and the next greater product, we will be locking windows with many of our customers that typically happens in the late third quarter, early fourth quarter.So, all of that is yet to come. But right now, we're maximizing value within the constraints we have. And I would say, to your point, margins continue to be very challenged, right? The indicator chemical margin for this quarter was 150, better than what it was in Q4, but that is still worthful compared to the historic trends.And so, we will do all we can within what we can control and position ourselves to have choices thereafter.

[Sinead Gorman, executive]

Yes. sectors in decarbonization, I'll keep it reasonably short, Lucas, because I think there's a number of parts from here. And you've got parts like Holland Hydrogen 1, you've got the HEFA plant in the Netherlands, both of which you're right. They're not generating any net income at the moment, but they will in the future. And, of course, you have to invest for and you know the investment case for on those.So, no need to talk about that. We also, of course, have had a difference between what would have been the voluntary market before in terms of the drop in, of course, of different fuels. You're right, that has come down in the recent times, but that obviously goes back and forth along the way.The other part of it, of course, is that risen sits there as well. And rising, of course, in what we've seen in Brazil over the last couple of quarters is we've seen actually a lot of ethanol into the market. Now, I can either take that as being very worrying or actually ticket as being -- we know there will be a change because what Brazil will do as it typically does.You have the flexibility, of course, for cars to run their dual fuel. They can flip between ethanol and normal fuel. They will change the requirements there, which is what they've done year-on-year, and that will require basically more ethanol input into which will increase the market as well.So, you see that, but you're right, it's at a low price now. And beyond that, of course, there's things like aviation and marine in there. And, of course, what you typically see is that you'll see the ramp-up, particularly for aviation, coming towards the traveling season, it's pretty low at the moment. But to be fair, it has not come back since what we saw pre-Covert as well.Beyond that, which I think is where you're going to as well, investments going forward, clearly, they'll be at the hurdle risk, and that's where we're very thoughtful. What we've seen is actually the EVP for that business actually looking at where she can step back from certain things and say, "Do I have a differentiating capability". So, we don't serve the mining sector for decarbonization in there anymore because that's not where we add a lot of value.We don't make good margins. So I'll keep it there.

[Wael Sawan, executive]

Sure. Thank you, Shane. Luke, I think we're close to time. Any more questions?

[Operator]

Our final caller today is Christopher Kuplent from Bank of America.

[Christopher Kuplent, analyst]

A quick one, maybe, Sinead, you can, of course, point to seasonality in CapEx. It's been a light quarter, but maybe you can talk to that seasonality versus real underlying efforts of spending less. I've noticed that spending levels have halved basically in mobility, for example. Maybe you can touch on a few points there.And maybe you referred to the AGM that's upcoming in your opening remarks. So, I'll leave it to you, while maybe to comment on how Shell is this time around, at least in the AGM season, made an example amongst the big oils and the shareholder resolution that you're up against.Can you maybe put that into context considering the conversation whether live or not about where your primary listing should be?

[Wael Sawan, executive]

Excellent. Thank you very much, Christopher. Let me hand over to you, Sinead, for the first one.

[Sinead Gorman, executive]

Yes, I'll keep it short to allow enough time for the second one. You're right. CapEx is low, absolutely this first quarter. It tends to be very lumpy there as well. I think it was Libya in Q3 last year. Actually, you called us on that and asked for a bit more. What we're seeing, of course, is just that capital discipline is kicking in. You're absolutely right. You see that in mobility, et cetera, but it is about timing as well.So, a lot of our payments tend to be a little bit lumpy. So, you see it at different times. So Q4, as you will have seen, was quite an uptick there as well. But that discipline lands is going through the whole organization. You'll see lumpiness, things like Wael, et cetera, different payments that still have to come through in the course of the year.So, I'm not reducing the guidance at the moment, keeping it in terms of 22% to 25%.

[Wael Sawan, executive]

Thank you, Sinead. Then to your broader question, Christopher, thank you for the opportunity maybe to comment on the AGM on May 21. So a few things. I think One is, we go into this AGM with, I think, real momentum in the share price. One or a few of the comments that I received at the last AGM where many of the shareholders with a few shares, retail shareholders saying, "Hey, we've been holding your shares for a long, long time. We want to be able to see some uptick"And hopefully, we can stand proud and say, we have been able to continue to drive some of the valuation of the company while recognizing there is a lot more to go. And so, we will humbly submit that there's a lot more running room. We will also, of course, be putting forward our energy transition strategy for a vote, which hopefully, everyone will have seen the thoughtfulness that we put behind it, the broader understanding of the energy system.What I would say is a company that is truly leaning forward in the energy transition, but in a thoughtful and profitable way because ultimately, that transition is only going to materialize with scalable and profitable business models, which is what we are trying to unlock, and that will require us. It will require governments, it to require customers to step to the plate.There is, of course, also the follow this resolution. I think to your implicit point around to make an example, I think there is a focus on Shell, which we welcome because at the end of the day, we have the opportunity to be able to, I think, tell a very compelling story. A story of how this company has invested or would be investing $10 billion to $15 billion between 2023 and 2025 and invested $5.6 billion in the low-carbon space last year.A company that is investing in the largest green hydrogen facility in Europe and looking to create real value out of that when others have made promises but have not followed through. And so, it would be a real opportunity to tell our story. But importantly, as well, a reminder that the resolution, while period in its intent, fundamentally hits a few key points for us.One is, it is bad governance. It looks at one specific metric without looking at the entire energy system, and this is where we would ask our shareholders to spend time just reading through the energy transition strategy and looking at how we are thinking about the broader positioning of the company.We also think that, that resolution is going to be very bad for shareholders. We will be giving our businesses to others for the sake of it. It will be bad for our customers who are depending on us to actually support them in this transformation and in this transition, and it will not actually help the climate because all it will result in is us getting at the businesses that others would serve.And so, for all those reasons, you've seen a unanimous support or unanimous advice from both the management team and the Board for the eighth year in a row to say, do not support that resolution and support management's resolution. And I hope that through the efforts and through the debate that is becoming much more qualified these days and a deeper understanding of how we need to keep the balance through the energy system, our shareholders will vote in the right way in support of management's recommendations.And I look forward to that very little in terms of how this all impacts listing. I think the ESG agenda when done in the right way, it should be done all over the world. So, that's not a Europe or U.K. specific thing. But hopefully, it's more the investors leaning in and being able to truly get much more detailed in the way we're thinking about our energy transition and not full pray to what is too simplistic and to some extent, a distractive resolution that has been tabled.Let me leave it there, Christopher, thank you very much for that. And apologies for those who haven't been able to get their questions in. I'm sure your questions will be more than adequately addressed by our IR team.Let me close off by saying thank you to all of you for the questions for joining the call. In conclusion, we have delivered yet another strong quarter. We announced another $3.5 billion of share buybacks, which makes this, as Sinead already said, 10 quarters in a row with buybacks of at least $3 billion.I think we are building now a track record of consistency and are progressing well in our first sprint to deliver more value with less emissions and continue to aim to be the investment case through the energy transition. We wish all of you very well and have a pleasant end of the week. Thank you all.