Q1 2025 Shell PLC Earnings Call

Operator: Welcome to Shell's first quarter 2025 financial results announcement.

Welcome to Shell's first quarter 2025 financial results announcement.

Shell CFO: Shell CFO shouldn't a Goldman will present the results then host a Q&A session alongside shell CEO while Swan.

Operator: CFO, Sinead Gorman will present the results.

Operator: then host a Q&A session alongside Shell's CEO Wael Sawan. If you would like to ask a question, please press star 1. If you wish to be removed from the queue, please press star 2.

Shell CFO: If you would like to ask a question. Please press star one if.

Shell CFO: If you wish to be removed from the queue. Please press star two.

Operator: We will now begin the presentation. Welcome to Shell's first quarter 2025 results.

Speaker Change: We will now begin the presentation.

Speaker Change: [music] welcome to Shell's first quarter 2025 results.

Sinead Gorman: Just over five weeks ago, at our Capital Markets Day in New York, Wael and I outlined the Shell investment case and our longer-term vision for the company. Our aim is to continue to deliver more value with less emissions, whilst rewarding our shareholders with consistency, delivering both competitive and resilient returns. And in Q1, we continue to make good progress. And as we look forward, we remain confident due to both our portfolio's strength and an which continues to deliver, guided by our principles of performance, discipline and simplification. What we hope is now clear is that we do what we say.

Speaker Change: Just over five weeks ago at our capital markets day in New York, while and I outlined the shale investment case, and our longer term vision for the company.

Speaker Change: Our aim is to continue to deliver more value with less emissions, whilst rewarding our shareholders with consistency delivering price competitive and resilient returns and in Q1, we continued to make good progress and as we look forward, we remain confidence due to both our portfolio strength and an organization which continues to deliver.

Speaker Change: Guided by our principles of performance discipline and simplification.

Speaker Change: What we hope is not clear is that we do what we say.

Sinead Gorman: As we said at Capital Markets Day, we met our CMD23 financial targets for 2025, almost a year early. And as a result, we've set new financial targets whilst we were staying firm on our carbon targets and ambition. Repositioning the portfolio is a key step towards achieving our targets and we have made meaningful progress in the first few months of 2025. We've completed our divestments of the Energy and Chemicals Park in Singapore and in onshore Nigeria and as we said we would, we are growing but in a disciplined way. We completed the acquisition of Pavilion Energy, strengthening our integrated gas portfolio by further expanding our LNG trading and optimisation capabilities.

Speaker Change: As we said at capital markets Day, we met our CMV 23 financial targets for 2025, almost a year early.

Speaker Change: And as a result, we've set new financial targets, whilst we are staying firm on our carbon targets and ambition.

Speaker Change: Repositioning the portfolio is a key step towards achieving our targets and we have made meaningful progress in the first few months of 2025, we've completed our divestments of the energy and chemicals Park in Singapore and in onshore, Nigeria and as we said we would we are growing but in a disciplined way we completed the acquisition.

Speaker Change: <unk> 2 billion energy strengthening our integrated gas portfolio by further expanding our LNG trading and optimization capabilities.

Sinead Gorman: In Upstream, we signed an agreement to increase our working interest in Ursa in the Gulf of America. We already operate this asset and we're pleased to be able to further consolidate our leading deepwater position. On projects, we took two key final investment decisions. The first is Gato D'Amato in Brazil. This will be a Shell-operated asset in the Santos Basin, where we are the largest foreign producer. The second is phase two of the Northern Lights carbon capture and storage development in Norway. This will increase the project's capacity from 1.5 million tonnes to more than 5 million tonnes of CO2 a year by 2028.

Speaker Change: In upstream we signed an agreement to increase our working interest in Orissa in the Gulf of America, we already operate this asset and we're pleased to be able to further consolidate our leading deepwater position.

Speaker Change: On projects, we took two key final investment decisions. The first is gotcha damasio in Brazil. This will be a shell operated assets in the Santos basin, where we are the largest foreign producer. The second is phase II of the northern lights carbon capture and storage development, Norway.

Speaker Change: This will increase the projects capacity from one 5 million tons to more than 5 billion tons of Sidoti year by 2028.

Sinead Gorman: And on operations, in the first few months of 2025, we've achieved significant milestones. I want to highlight just two of them. First, our Penguins FPSO in the UK North Sea is now online and supplying much-needed natural gas to the region. This modern FPSO is expected to extend the life of the field by up to 20 years. And second, Dover in the Gulf of America has started production. This is the second subsea tieback to our Appomattox hub after Rydberg, which came online last year.

Speaker Change: And on the operations in the first few months of 2025, we've achieved significant milestones I want to highlight just two of them.

Speaker Change: First our Penguins F. P. S O in the U K North Sea is now online and supply much needed natural gas to the region. This modern F. P. S. O is expected to extend the life of the field by up to 20 years and second Dover in the Gulf of America has started production. This is the second subsea tieback to our Appomattox hub after.

Rydberg, which came online last year.

Sinead Gorman: Now let's move to the financial results for the quarter. We delivered solid results in a price environment that was relatively stable compared with the last quarter. Our adjusted earnings were $5.6 billion, up 52% compared with Q4. And we generated $11.9 billion of cash flow from operations, excluding working capital. Consistent with outflows seen in the first quarter of recent years, working capital in Q1 was an outflow of $2.7 billion. Now turning to our businesses, integrated gas production was higher than in Q4 as the turnaround at Pearl GTL was completed. However, liquefaction volumes were lower because of unplanned outages in Australia.

Speaker Change: Now, let's move to the financial results for the quarter.

Speaker Change: We delivered solid results in a price environment that was relatively stable compared with last quarter.

Speaker Change: Our adjusted earnings were $5 $6 billion up 52% compared with Q4.

Speaker Change: We generated $11 $9 billion of cash flow from operations, excluding working capital.

Speaker Change: Consistent with outflows seen in the first quarter of recent years working capital in Q1 was an outflow of $2 $7 billion.

Speaker Change: Now turning to our businesses integrated gas production was higher than in Q4 as the turnaround approach retail was completed.

Speaker Change: However, liquefaction volumes were lower because of unplanned outages in Australia, our LNG trading and optimization results were in line with Q4 and that's despite the higher noncash paper losses recorded which we highlighted would be seen across the first three quarters of the year upstream.

Sinead Gorman: Our LNG trading and optimisation results were in line with Q4, and that's despite the higher non-cash paper losses recorded, which we highlighted would be seen across the first three quarters of the year. Upstream had a strong Q1, with continued high controllable availability. Norway, Nigeria offshore and Kazakhstan all delivered above 98%. In marketing, mobility and lubricants performed very well, as both continued to further increase premium product margins. However, the low carbon option businesses continue to operate in a difficult macro environment, which we highlighted at CMD. Chemicals also continued to see low margins this quarter, but with the divestment in Singapore, we expect that the chemicals earnings contribution will improve.

Speaker Change: Upstream had a strong Q1 with continued high controllable availability.

Speaker Change: Norway, Nigeria offshore and Kazakhstan, all delivered above 98%.

Speaker Change: In marketing mobility, and lubricants performed very well as both continued to further increase premium product margins. However, the low carbon option businesses continue to operate in a difficult macro environment, which we highlighted at CMT.

Speaker Change: Chemicals also continued to see low margins this quarter, but with the divestment in Singapore, we expect that the chemicals earnings contribution will improve and products the contribution from trading and supply improved relative to the previous quarter. It was at similar levels to Q2, and Q3 of last year. So overall, a solid set of results in the first quarter of.

Sinead Gorman: In products, the contribution from trading and supply improved relative to the previous quarter, and was at similar levels to Q2 and Q3 of last year. So overall, a solid set of results in the first quarter of 2025.

Speaker Change: 2025.

Sinead Gorman: We are now into the second quarter, and there are significant macro uncertainties, but our approach remains the same. We are following through on the long-term direction we set at Capital Markets Day. At times like this, the importance of a strong balance sheet and a robust financial framework are critical. And we have consciously positioned the company over the last few years, leaving us well placed. In Q1, our net debt position increased, reflecting lease additions from Pavilion and a drawdown from the loan facilities provided at the completion of the Nigeria onshore divestment. These are all known items and our balance sheet continues to be one of the strongest in the industry.

Speaker Change: We are now into the second quarter and there are significant macro uncertainties, but our approach remains the same we're following through on the long term direction, we sat at capital markets day.

Speaker Change: At times like this the importance of a strong balance sheet and a robust financial framework are critical.

Speaker Change: And we have consciously positioned the company over the last few years, leaving us well placed.

Speaker Change: In Q1, our net debt position increased reflecting lease additions from pavilion and a drawdown from the loan facilities providers at the completion of the Nigeria onshore divestment. These are all known items on our balance sheet continues to be one of the strongest in the industry.

Sinead Gorman: Moving on to shareholder distribution. Today we have announced a $3.5 billion share buyback program, which we expect to complete by the time of our Q2 results announcement. This makes it the 14th consecutive quarter in which we have announced $3 billion or more in buybacks. With this new $3.5 billion share buyback program, we are well within our enhanced shareholder distribution range of 40 to 50% of CFFO. A range that you can expect us to deliver on through the cycle, given our low distribution break-evens. To summarize, in Q1 we delivered a solid set of results in a relatively stable price environment.

Speaker Change: Moving on to shareholder distributions.

Speaker Change: Today, we have announced a $3 $5 billion share buyback program, which we expect to complete by the time of our Q2 results announcement.

Speaker Change: This makes it the 14th consecutive quarter in which we have announced $3 billion or more in buybacks with this new $3 $5 billion share buyback program, we are well within our enhanced shareholder distribution range of 40% to 50% of CFO.

Speaker Change: Arrange that you can expect us to deliver on through the cycle, given our low distribution breakeven.

Speaker Change: $40, Brent for dividends and buybacks continuing at $50.

Speaker Change: To summarize in Q1, we delivered a solid set of results and a relatively stable price environment.

Sinead Gorman: Our portfolio transformation is progressing, with several major achievements during the first few months of 2025. Looking ahead, we are confident in the direction we have set and the strength of Shell to deliver for our shareholders through an uncertain macro. We will continue to focus on operational performance, be disciplined with cost and capex spend and drive competitive and resilient returns. and most importantly, deliver on what we say.

Speaker Change: Our portfolio transformation is progressing with several major achievements during the first few months of 2025.

Speaker Change: Looking ahead, we are confident in the direction, we have set and the strength of shell to deliver for our shareholders through an uncertain macro.

Speaker Change: We will continue to focus on the operational performance be disciplined with cost and capex spend and drive competitive and resilient returns.

Speaker Change: Most importantly deliver on what we say.

Sinead Gorman: And finally, we hope that shareholders who are able to attend either virtually or in person will join us for our 2025 Annual General Meeting, which will take place on May 20th.

Speaker Change: And finally, we hope that shareholders, who are able to attend either virtually or in person will join us for our 2025 annual general meeting, which will take place on may 20th.

Sinead Gorman: Thank you.

Speaker Change: Yeah.

Operator: We will now begin the question and answer session. People dialed in. If you have a question, please press star 1. If you wish to be removed from the queue, please press star 2. Phone callers are requested to mute the audio on their computer webcast and listen attentively to their telephone audio as we begin to progress through the telephone questions. Thank you.

Speaker Change: We will now begin the question and answer session.

Speaker Change: People dialed in if you have a question please press star one.

Speaker Change: If you wish to be removed from the queue. Please press star two.

Speaker Change: Phone calls are requested to mute the audio on their computer webcast and listen attentively to their telephone audio as we begin to progress through the telephone questions.

Speaker Change: Thank you. Thank you very much for joining us today, we hope that after watching this presentation you've seen how we delivered a solid set of results in the first quarter, how we made meaningful progress in repositioning our portfolio to deliver on our targets and the strength of the company to deliver through an uncertain macro.

Operator: Thank you very much for joining us today.

Operator: We hope that after watching this presentation, you've seen how we delivered a solid set of results in the first quarter, how we made meaningful progress and repositioning our portfolio to deliver on our targets, and the strength of the company to deliver through an uncertain macro.

Wael Sawan: Today, Sinead and I will be answering your questions. And now, please, could we have just one or two questions each so that everyone gets the opportunity? And with that, could we have the first one, please, Luke?

Speaker Change: Today, she Nader and I will be answering your questions and now please could we have just one or two questions. Each so that everyone gets the opportunity and with that can we have the first one plays Luke.

Josh Stern: is Josh Stern from UBS. Hey, thanks. Good afternoon.

Speaker Change: Our first caller is Josh stone from UBS.

Speaker Change: Hey, thanks.

Wael Sawan: Two questions, please. Wael, you've talked in the past about being wanting to be more counter-cyclical in how you allocate capital. And you've clearly demonstrated that in the good times by being quite prudent with your capital spending. It just strikes me that in a downturn or potential downturn, it requires a lot more resolve to start spending more money or maybe sustaining the buyback. So just talk about your latest views on that and commitment to being more counter-cyclical.

Speaker Change: Good afternoon two questions. Please.

Speaker Change: You talked about being wanted to be more cyclical than how you allocate capital.

Speaker Change: We've demonstrated that in the good times by being quite prudent.

Speaker Change: Your capital spending.

Speaker Change: In a downturn what potential downside it it requires a lot more resolve to start spending more money or maybe sustaining the buyback. So just talk about your latest views on the asset commitments to being more counter cyclical.

Sinead Gorman: And then second question on integrated gas. Trading looks to be a decent cause for this time around, particularly if I just for the hedging losses. So Some of your peers have talked about it being more difficult to trade in gas because of event risk and sort of more jitteriness in the market. So what's been your experience there and what's your approach to putting on risk and putting risk on the books today? Thanks. Josh, thank you for those two questions.

Speaker Change: And then sorry.

Speaker Change: Question on integrate Jeff.

Speaker Change: Trading looks to be a decent quarter. This time around particularly if I adjust for the tragic losses.

Speaker Change: Some of your peers has talked about it being more difficult trading, Jeff because event risk and sort of more just your business in the market.

Speaker Change: So that's what's been your.

Speaker Change: Experience, there and what's your approach to putting on risk and putting risk on the books today.

Speaker Change: Thanks.

Speaker Change: Josh. Thank you for those two questions. Let me take the first one on SG&A to answer the second one.

Wael Sawan: Let me take the first one and ask Sinead to answer the second one. On your question around sort of counter-cyclical capital allocation, I think, let's start with what we're trying to do. We have said that we want to be able to unlock the full intrinsic value potential of this company. And we have said that free cash flow per share is going to be the key proxy, our North Star that we're going to drive towards. As you rightly say, what we have been doing over the past few years is, in essence, getting ourselves leaner and fitter for exactly the sort of uncertainty, for exactly the sort of cyclicality, which, of course, was inevitable.

Speaker Change:

Speaker Change: On your question around sort of counter cyclical capital allocation I think let's start with what we're trying to do we have said that we want to be able to unlock the full intrinsic value potential of this company and we have said that free cash flow per share is going to be the key proxy our north star that we're going to drive towards.

Speaker Change: As you rightly say, what we have been doing over the past few years is in essence getting ourselves leaner and fitter for exactly the sort of uncertainty for exactly the sort of cyclicality, which of course was inevitable. It's just we didn't know when it was going to happen and what's going to trigger it but I'm very glad that we are where we are today.

Wael Sawan: It's just we didn't know when it was going to happen and what's going to trigger it. But I'm very glad that we are where we are today. Now, the good news, of course, as we outlined in Capital Markets Day 2025, just a couple, just a month ago, is that for the next five years, we have given a very clear trajectory of 10% plus free cash flow per share growth between now and 2030 on the back of our organic opportunity. Everything else now has to compete with that when we talk about allocation of capital. And so, indeed, in a counter cycle, we have a couple of options.

Speaker Change: Now the good news is of course as we outlined in capital markets Day 2025, just a couple of just a month ago is that for the next five years, we have given a very clear trajectory of 10% plus free cash flow per share growth between now and 'twenty fidelity on the back of our organic opportunities.

Speaker Change: Everything else now has to has to compete with that when we talk about allocation of capital.

Speaker Change: So indeed in our counter cycle, we have a couple of options of course, we can look at distributions at what we do there and what we can do is also inorganic.

Wael Sawan: Of course, we can look at distributions and what we do there. And what we can do is also inorganic. I've said in the past we want to be value hunters. Today, value hunting, in my view, is buying back more Shell. Why? Today, our share price continues to be advantaged. We said in the past that the free cash flow yield meant it was advantaged, even more so today, where things stand. And so you will see us continue with conviction to lead into the buybacks, as we have been doing, and within that 40 to 50% of CFFO range.

Speaker Change: I've said in the past, we want to be value hunters.

Speaker Change: Today value hunting in my view is buying back more shares.

Speaker Change: Why today, our share price continues to be advantaged, we said in the past that the free cash flow yield meant it was advantaged even more so today.

Speaker Change: Where things stand and so you will see us continue with conviction to lead into the buybacks as we have been doing and within that 40% to 50% of <unk> range. We will be prudent of course, we will keep looking at inorganic opportunities, we have $1 billion to $2 billion and our cash capex guidance for that but the bar is high and we need to be able to see.

Sinead Gorman: We will be prudent, of course, we will keep looking at inorganic opportunities, we have one to $2 billion in our cash capex guidance for that. But the bar is high, and we need to be able to see a pathway towards free cash flow per share accretion in a relatively short period.

Speaker Change: A pathway towards free cash flow per share accretion in a relatively short period.

Speaker Change: Sure Matt Thank.

Sinead Gorman: Thank you, Josh. So indeed, LNG had a very good quarter, as you say, very pleased with the the outcome there. Let's take it into its component pieces. So in terms of the assets, the assets performed well, what we saw was some downtime, some unplanned downtime from Prelude, but very quickly bringing it back up. And we also had weather events. So we did see some of the cyclone and different issues there in Australia, particularly hit both QGC and Gorgon. That despite that, we still actually had length. And what that meant was that with demand remaining reasonably strong, we actually had strong margins as well, we're able to optimise around that.

Speaker Change: Thank you Josh scented LNG had a very good quarter as you say very pleased with me and they will come there, let's take it into its component pieces. So in terms of the assets the assets performed well what we saw with some downtime some unplanned downtime from prelude the very quickly bring it back up and we also had weather events. So we did see.

Speaker Change: Some of the cyclone and different issues, there in Australia, particularly with TTC and Gorgon that despite that we still actually had length and what that meant was that with demand remaining reasonably strong we actually had strong margins as well, we're able to optimize around that so that's what you saw come through in terms of our results in Q1.

Sinead Gorman: So that's what you saw come through in terms of our results in Q1.

Sinead Gorman: Now, if we take it to Q2, and what could happen there, What I'm expecting to see is some planned maintenance, and you've seen us talk about that. You see it in the liquefaction volumes in terms of the forecast that we give, and that's planned maintenance as you come into summer. It's what you see us typically do, and it's across a range of assets, whether it's Gorgon, whether it's Oman, LNG, etc., but it's across quite a range of them. So we do expect to see similar volumes to what we actually saw in Q1 as well. Now, as of today, of course, prices are lower than they were in the last quarter, and we'll see how demand plays out accordingly.

Speaker Change: Now if we take it to Q2 on what could happen there.

Speaker Change: What I'm expecting to see is some planned maintenance and you've seen us talk about that you see on the liquefaction volumes in terms of the forecast that we gave and that's planned makes sense as you come into summer. It's what you see is typically tier and it's across a range of box assets, whether it's gorgon, whether it's a man LNG etcetera, but across quite a range of them. So we do expect to see similar volumes to what we actually saw in Q.

Speaker Change: As well as of today of course prices are lower than they were in the last quarter.

Speaker Change: See high demand plays out accordingly, so for earnings you could see if you take the fundamentals and of course, the and the hedging the legacy hedging losses that you mentioned before that we've discussed.

Sinead Gorman: So for earnings, you could see, if you take the fundamentals and, of course, the hedging, the legacy hedging losses that you mentioned before that we've discussed... You could see that play out in terms of a lower or more pressure in terms of the earnings. That's on earnings.

Speaker Change: You could see that play out in terms of a lower a more pressure in terms of the earnings that's on earnings. So what I expect to see a strong and resilient cash and why do I say it well because those hedges that we just discussed are noncash and then secondly, I expect to see from working capital unwind as well, which relates to the first quarter because actually in the first quarter, what you have seen.

Sinead Gorman: So what I expect to see is strong and resilient cash. Why do I see it? Well, because those hedges that we just discussed are non-cash. And then secondly, I expect to see some working capital unwind as well, which relates to the first quarter, because actually in the first quarter, what you would have seen in cash was that actually we had quite high volumes of sales in March. And we need to collect that accounts receivable this quarter. So therefore, really resilient cash.

Speaker Change: Cash was that actually we have quite high volumes of sales in March and we need to collect that accounts receivable. This quarter. So therefore really resilient cash in Q2.

Speaker Change: Thank you very much and as Josh. Thank you for those two questions look let's have the next question. Please.

Sinead Gorman: Josh, thank you for those two questions.

Operator: Luke, let's have the next question please.

Speaker Change: Our next caller is Peter low from Redburn Atlantic.

Peter: Hi, thanks for taking my questions. Yeah, the first was on the CapEx budget, you reiterated it this morning, but can you perhaps talk a bit about how much flexibility that could be there should the macro environment continue to deteriorate?

Peter: Hey, hi, Thanks for taking my questions.

Peter: The first was on the Capex budget you reiterated it this morning, but can you perhaps talk a bit about how much flexibility that could be that shift in the macro environment continued to deteriorate.

Peter: And then the second one was just on the single pore disposal. Can you help us at all in thinking about the potential quantum of the earnings improvement you will see now that that divestment has completed, particularly in chemicals? Thanks. Thank you.

Peter: And then the second one was just on Singapore disposal.

Can you help us at all in thinking about potential quantum of the earnings.

Peter: I'll say now that that divestment teach it particularly in chemicals.

Peter: Thank you.

Sinead Gorman: Do you want to take both of those? Sure. So on the first one in terms of the CapEx budget, Peter, so we have reiterated our 20 to 22 billion CapEx budget. And why have we done that? Well, we've done it because of the position that we're in. We've spent a significant amount of time positioning this company over the last few years to make sure that we are able to manage not just run the company on fundamentals, but to ensure that we position it to be able to deliver through uncertainty. And that's what's happening now. And that's delivering through uncertainty for our shareholders.

Do you want to take both of those so on the first one in terms of the Capex budget piece here. So we have reiterated our 'twenty to 'twenty 2 billion Capex budget and why have we done that well we've done it because of the position that we're in we spent a significant amount of time positioning this company over the last few years to make sure that we are able to manage not just.

Peter: <unk> run the company on fundamentals, but to ensure that we position is to be able to deliver through uncertainty and that's what's happening now and that's delivering transparency for our shareholders and therefore from the perspective of capital, we're not asking our EM businesses, we're not requesting them to stop on projects to remove themselves from an <unk>.

Sinead Gorman: And therefore, from the perspective of capital, we're not asking our businesses, we're not requesting them to stop on projects to remove themselves from different commitments, etc. We are asking them to deliver on exactly what they said and to perform as we have promised. We're not asking them to step back from a range of different aspects. So we don't believe that at this moment in time, we need to step back within the capital range that we've got. However, if you were to look back what we've done in the past, if you go back to during the COVID times, we've demonstrated a strong ability to be able to pull many levers.

Peter: If in commitments et cetera, we are asking them to deliver on exactly what they said and to perform as we have promised we're not asking them to step back from a range of different aspects. So we don't believe that at this moment in time, we need to step back within the capital range that we've got however, if you were to look back what we've done in the past if you go.

Peter: Back to during the Covid times, we've demonstrated a strong ability to be able to pull many levers and you saw of course, our capex budget at that time being below 18 billion. So the flex is there, but that's not the position. We're in at the moment, we don't need to do that and we see great opportunities for value and you've seen that in terms of some of the deals that we've done you've just seen us take us further percentage shell.

Sinead Gorman: And you saw, of course, our CapEx budget at that time being below 18 billion. So the flex is there. But that's not the position we're in at the moment. We don't need to do that. And we see great opportunities for value. And you've seen that in terms of some of the deals that we've done. You've just seen us take a further percentage in IHRSA, which is, of course, something close to our heart. It's in deep water. It's in the Gulf of America, where our team delivers incredibly well.

Peter: In Orissa, which is of course, something close to our heart is in deepwater in the Gulf of America, where our team delivers incredibly well and therefore, we have asymmetry of data and have the ability to deliver on our own operated assets.

Sinead Gorman: And therefore, we have asymmetry of data and have the ability to deliver on our own operating Sinead Gorman, Wael Sawan, Andrew Mackenzie, Caroline Omloo, Sinead Gorman, Wael Sawan, Thank you for that Sinead.

Peter: Singapore, Singapore hospitals, Thank you I'm on the Singapore disposal. Indeed, just finished and this quarter. So what we've said around Singapore is that it was loss, making we do expect that to play out in terms of improvement in both the refinery margins and the chemicals margin as you take it out of the books.

Peter: Of course contributed to our structural cost reductions in terms of just giving you a bit of a feel for that is several hundred million dollars is the impact if you were to take it across the full year. So I hope that's helpful.

Peter: Thank you for that you need me to thank you for those questions.

Sinead Gorman: Peter, thank you for those questions. Luke, the next quarter.

Peter: Look the next quarter. Please.

Lydia Rainforth: Our next caller is Lydia Rainforth from Barclays. Thank you, and good afternoon to you both. A couple of questions, if I could.

Lydia rainfalls: Our next caller is Lydia rainfalls from Barclays.

Peter: Okay.

Lydia rainfalls: Thank you and good afternoon for you guys a couple of questions. If I could the first one just we talked about volatility and uncertainty.

Sinead Gorman: The first one, just, we talked about volatility and uncertainty, but given the size of Shell's own network, what are you seeing on real time data in terms of demand, whether it's oil, oil products, LNG, just to kind of give us an indication of some of the fundamentals. And then secondly, on OPEX, progress, again, very, very good. What are you finding when you're taking these costs out? Are you finding it becomes easier and easier to simplify things, as you're taking some of those layers out? Thanks.

Lydia rainfalls: Given the size of shell their network, what he's seeing on real time data incentive demand, but oil oil products LNG just to kind of gives an indication.

Lydia rainfalls: Mental and then secondly on Opex.

Lydia rainfalls: Again very very good what are you finding when youre, taking these costs out you're finding it becomes easier and easier to simplify things as you're taking some of those lays out. Thanks.

Sinead Gorman: Thanks, Lydia. I'll cover both. I think on your first question around just where the macro is right now. I think it's fair to say that we are, of course, watching all the potential headwinds there, but we haven't yet been able to translate that from the data that we have. So the data is showing that, by and large, oil products and LNG are holding up from a demand perspective for different reasons. LNG, for example, of course, the low storage levels in Europe have meant that there is quite a large draw into Europe for LNG volumes, and there isn't a huge amount of new supply coming on stream in 2025.

Lydia rainfalls: Yeah.

Lydia rainfalls: I'll cover both.

Lydia rainfalls: I think on your first question around just where the macro is right now.

Lydia rainfalls: I think it's fair to say that we are of course.

Lydia rainfalls: Watching all the potential headwinds there, but we haven't yet.

Lydia rainfalls: <unk> been able to translate that from the data that we have with <unk>. So the data is showing that by and large oil products and LNG are holding up from a demand perspective for different reasons. LNG. For example of course, the low storage levels in Europe have meant that there is quite a quite a large draw in.

Lydia rainfalls: Into Europe for LNG volumes, and there isn't a huge amount of new supply coming on stream in 2025, and so that tightness continues in the market.

Sinead Gorman: And so that tightness continues in the market. In crude and in products, what we're finding is a well-balanced market at the moment. We keep our eye on a few key signposts. So marine bunker fuel and diesel into trucking are usually the first indicators of broader economic slowdown. We're looking at those carefully. And then thereafter, you start to look at things like, for example, jet aviation, people traveling or gasoline into passenger vehicles. Again, we monitor those particularly carefully to be able to see what the trends are. And particularly, we're looking at U.S. and China trends where the ongoing tariff situation means that those will be likely amongst the first to be impacted.

Lydia rainfalls: And in crude and products, what we're finding is a well balanced market at the moment, we keep our eye on a few key signposts, so marine bunker fuel and diesel into trucking are usually the first indicators of broader economic slowdown we're looking at those carefully.

Lydia rainfalls: And then thereafter, you start to look at things like for example, jet aviation people traveling or gasoline into passenger vehicles again, we monitor those particularly carefully to be able to see what the trends are and particularly we're looking at U S and China trends, where the ongoing tariff situation.

Lydia rainfalls: It means that those will be likely amongst the first to be impacted so so that's what we are currently keeping an eye on one.

Sinead Gorman: So that's what we are currently keeping an eye on.

Sinead Gorman: When it comes to OPEX, Look, very proud of the organization's momentum on this. I mean, it's been so much hard work. I think I've mentioned in the past, when we put the $3 billion, $2 to $3 billion ambition in capital markets day 2023. And we're able to deliver a year ahead of time at the top end of that range. This was very much a top down target. And now what we're seeing is actually the organization starting to bring forth the ideas that could potentially take out costs. And, and that is starting to play through and you see it as you as you rightly pointed out in the financials.

Lydia rainfalls: When it comes to Opex.

Lydia rainfalls: <unk>.

Lydia rainfalls: Very proud of the organization's momentum on this I mean, it's been so much hard work I think I've mentioned in the past when we put the $3 billion $2 billion to $3 billion ambition in capital markets Day, 2023, and we're able to deliver a year ahead of time at the top end of that range.

Lydia rainfalls: This was very much a top down target and now what we're seeing is actually the organization starting to bring forth the ideas that could potentially take out costs in and that is starting to play through and you see it as you've as you've rightly pointed out in the financials.

Sinead Gorman: We're trying to address that from multiple different points, whether it's supply chain and how we sharpen our focus on the supply chain, how we avoid incubating projects that are going to eventually die too long and killing them early. How do we continue to look at the way we are structured as a company, de-layer, simplify, how do we simplify the corporate center so that we can become leaner and clearer. So all of those elements are starting to play up. But I would say there is a lot more to do. We are nowhere close to our potential.

Lydia rainfalls: We're trying to address that from multiple different points, whether its supply chain and how we sharpen our focus on the supply chain. How we avoid incubating projects that are going to eventually die too long and killing them early how do we continue to look at the way we are structured as a company the layer simplify how do we simplify the corporates.

Lydia rainfalls: Center, so that we can become leaner and unclear. So all of those elements are starting to play out but I would say there is a lot more to do we are nowhere close to our potential and that's what I'm keen to really drive over the coming years to unlock the full potential of this incredible company.

Sinead Gorman: And that's what I'm keen to really drive over the coming years to unlock the full potential of this incredible company.

Sinead Gorman: Thank you for the questions, Lydia.

Lydia rainfalls: Thank you for the questions lithium.

Operator: Luke, next quarter, please.

Lydia rainfalls: Luke next quarter. Please.

Paul Chang: Our next caller is Paul Chang from Scotiabank. Thank you. Good morning. Well, I just want to follow up on the media question in the sense that Shell is a big ship, and I think you guys have done a phenomenal job in turning it.

Speaker Change: Our next caller is Paul Cheng from Scotiabank.

Speaker Change: Thank you.

Lydia rainfalls: Morning.

Lydia rainfalls: Well.

Lydia rainfalls: I just wanted to follow up on.

Lydia rainfalls: A question in there.

Lydia rainfalls: But.

Speaker Change: So, yes that takes shape and I think you guys have done a phenomenal job on linear.

Paul Chang: But at this point, do you think the organization capability or the culture have turned sufficiently that if you decide that a large acquisition that is attractive for you, that the organization could take on, or that it's going to take maybe that another one or two years to ensure that all the culture, all the changes is really fully synced in? That's the first question.

Speaker Change: At this point do you think the organization capability or the culture.

Speaker Change: Turn sufficiently that you'd see that the large acquisition that is attractive for you that the organization can take on all that is going to take maybe another one or two year to ensure that all the culture or the changes is really for this thing.

That's the first question.

Sinead Gorman: The second question is that in the event of oil price stay really low for an extended period of time, when I say really low, they call it to the 40s, between the buyback and capital, the capex cut, which one will be the first to go? Thank you.

Speaker Change: Second question with that.

Speaker Change: In the event if oil prices stay really low for an extended period of time than I'd say really low say call. It two to four days.

Speaker Change: Between the.

Speaker Change: Feedback and capital.

Speaker Change: Next cut which one will be the first.

Speaker Change: Thank.

Speaker Change: Thank you.

Speaker Change: Thank you Paul.

Wael Sawan: Two great questions. I'm going to give the tougher one to Sinead in a second, that's number two. Thank you.

Speaker Change: Two are two great questions I'm going to give the tougher one to <unk> in a second that's number two I'll go for a for the cultural question.

Wael Sawan: I'll go for the cultural question. I want to start by sort of saying. We start from a very, very good place in the culture of Shell. you know, the ethical bar that we have held ourselves to, the real sort of care for people, focus on safety, all of these are elements we have been holding on to. And what we have tried to supplement that with is what we call the winning performance culture. It's that next level, it's that hunger to win. It's our ability to be able to move from accepting mediocrity to really, every time we do something, yes, we celebrate, but we very quickly look at what more we can and should be doing.

Speaker Change: I want to start by by sort of saying.

Speaker Change: We start from a very very good place and the culture shock.

Speaker Change: The the ethical bar that we have held ourselves to the.

Speaker Change: Real sort of care for people focus on safety.

Speaker Change: All of these are elements, we have been holding on to and what we have tried to supplement that with is what we call. The winning performance sculpture. It's that next level, it's that hungry to win it's our ability to be able to move from accepting mediocrity to really every time, we do something that's we celebrate but we very quickly look at what more we can and should be doing.

Speaker Change: Is that fully rooted in where we are today.

Wael Sawan: Is that fully rooted in where we are today? No, I'll be honest with you, we have we have more work to do. What we see is a lot of green shoots, we see multiple parts of Shell starting to really move from, let me explain the story of how good we're doing to actually, let's, let's park that and look at what the gap is to our full potential as a company. That to me is the sign of an organization that is, that is going to be the winning organization. And, and we have more work to do in that space, despite the excellent progress that we have seen over the last couple of years.

Speaker Change: Honest with you we have we have more work to do what we see is a lot of green shoots we see multiple parts of show starting to really move from let me explain the story of how good were doing to actually let's let's park that and look at what the gap is to our full potential as a company that to me is the sign of an organization that is.

Speaker Change: That is going to be the winning organization and and we have more work to do in that space. Despite the excellent progress that we have seen over the last couple of years.

Wael Sawan: You're right to also point out that before we ever look at inorganic, sizable inorganic, we have to have our own house in order. And so what I would say is, in the parts where we have really seen that, where we have seen our capability to be able to really create value through the culture, we are making moves. And I'll give you one simple example. Pavilion. Pavilion is an LNG acquisition we did. We had a very clear view that this is a complex port for you. Multiple challenges would take us several months to be able to integrate into Shell.

Speaker Change: Youre right to also point out that before we ever look at our inorganic sizeable inorganic we have to have our own house in order.

Speaker Change: And so what I would say is in the parts, where we have really seen that where we have seen our capability to be able to really create value through the culture, we are making moves and I'll give you. One simple example pavilion.

Speaker Change: Pavilion as an LNG acquisition, we did we had a very clear view that this is a complex portfolio multiple challenges will take us several months to be able to integrate and Michelle.

Wael Sawan: We closed on the deal end of March. Today we stand in a position where that LNG team has already been able to integrate Pavilion into Shell within weeks. That to me is an example of where the culture is thriving, and that is where I'm willing to bet on inorganic opportunities where we know we can unlock more value through bringing that asset into Shell, because we have that comparative advantage and we have the culture and capability. Indeed.

Speaker Change: We closed on the deal end of March today, we spend in a position where that LNG team has already been able to integrate pavilion into shop within weeks.

Speaker Change: That to me is an example of where the culture is thriving and that is where I'm willing to both up to bet on inorganic opportunities, where we know we can unlock more value through bringing that asset into show because we have that comparative advantage and we have the culture and capability to do it.

Sinead Gorman: And then your second question was really around if oil prices are low at 40, what are we going to do? Well, on that one, Paul, we were very careful and we discussed it long and hard before Capital Markets Day to actually be able to frame it for you in Capital Markets Day, because we knew that there is always uncertainty. We wanted to be able to show you our frame, our thinking for after, if prices were to move from 70 down to that sort of level. So let me take you through it in terms of $50 first.

Speaker Change: Indeed, and then your second question was really around if oil prices are low at 40, what are we going to do well on that one Paul we were very careful and we discussed it long and hard before our capital markets day to actually be able to frame. It for you in capital markets day, because we knew that there is always uncertainty and we wanted to be able to show you our.

Speaker Change: Our frame our thinking.

Speaker Change: Or after.

Speaker Change: If prices were to move from 79, two at that sort of level. So let me take you through it in terms of $50 first so 50, Mark what we've said is assuming we're at 50 or CFA would be roughly speaking somewhere between $35 billion to $40 billion.

Sinead Gorman: So at 50 mark, what we've said is assuming we're at 50, our CFFO would be roughly speaking somewhere between $35 to $40 billion. In that world, we have a number of levers. We can pull the lever, of course, of CAPEX, which you've mentioned. We can also, of course, use OPEX. Unknown Attendee, Unknown Shareholder, Tjerk Huysinga, Sinead Gorman, Wael Sawan, Andrew Mackenzie, Caroline Omloo, Sinead Corbett, William from a smaller amount given the strength of our balance sheet today. That tells you how focused we are on that buyback. You then move to a $40 world and what we showed you there was we showed you the paradigm of $40 for a long period of time, assuming that our CFFO came down below the $35 billion or roughly around the $35 billion mark.

Speaker Change: In that world, we have a number of levers we can pull the lever of course us Capex, which you've mentioned we can also of course use opex. We can pull on divestments are there that can be difficult at that point in time and of course, we can consider our distributions for us at 50, what we said is we will continue share buybacks at 50, so what we've given you the model loss is.

Speaker Change: Basically say, we'll pull a little based on our end capex that will bring it on and we know we can and I. Just gave you the answer earlier in terms of Peter's question.

Speaker Change: We would also continue to maintain the buyback at that point, what we've modeled items at 40.

Speaker Change: Present, so our distribution range of 40% to 50% so assuming we have somewhere between 35 and $40 billion of CFO.

Speaker Change: That comes out at 8 billion on our dividends and Rafi, some 6% to $7 billion of share buybacks, but we will continue doing buybacks at that level and we would have the ability to lean on the balance sheet from the smaller lines given the strength of our balance sheet. Today. So that tells you how focused we are on that buyback.

Speaker Change: Then moved to a $40 world and what we showed you that was which shows you the part on a $40 for a long period of time, assuming that our CFO came down below the 35 billion or roughly around 35 billion.

Sinead Gorman: Again, assuming that we distribute towards the lower end of our range at that point and we do 40% we will be easily able to cover our $8 billion of dividends just roughly using rough numbers. But of course for us the important thing is to be able to try and maintain the buyback as long as we can and hopefully that's what you see our focus is. Of course in those sort of worlds you would see our share price going down as Wael alluded to earlier. It's a great position for us to be in at the moment, you know with a $3.5 billion buyback we're buying back even more shares than we were before because the price has come down.

Speaker Change: Mark again, assuming that we distribute towards the lower end of our range at that point, which is 40% to 40% will be easily able to cover our 8 billion of dividends roughly using rough numbers, but of course for us. The important thing is to be able to try and maintain the buyback as long as we can and hopefully that's what you see our focus is of course, it does sort of world.

Speaker Change: She would see our share price going down as while alluded to earlier.

Speaker Change: Net position for us to be in at the moment that was a $3 5 billion buyback, we're buying back even more shares than we were before because the prices come down it's a great allocation of capital and that's what you would expect us to see and continue to look to do as prices continue to come down.

Sinead Gorman: It's a great allocation of capital and that's what you'd expect us to see and continue to look to do as prices continue.

Sinead Gorman: Thank you for that, Sinead.

Speaker Change: Thank you for that Chine, Paul Thank you for those questions.

Sinead Gorman: Paul, thank you for those questions. Luke, next quarter, please.

Speaker Change: Next quarter please.

Viraj Boketaria: Our next caller is Beraj Boketaria from RBC. Hi there. Firstly, thanks for the comments on the financial frame and that $50 scenario. That's pretty helpful.

Speaker Change: Our next caller is barrage book Italia from RBC.

Speaker Change: Hi, there.

Speaker Change: Thanks for the comments on the financial frame in that $50 scenario, that's pretty helpful.

Viraj Boketaria: I wanted to ask a question or two questions. The first one is just on the various deals you've done. You've done a number of small deals where some are closed, some are to come, and not all of the financial magnitude is disclosed. Could you just help us understand the cash impacts of these? It's still not clear to me what you paid for Pavilion, and then you've got the Singapore sale and a few others.

Speaker Change: I wanted to ask a question or two questions. The first one is just on your the various deals you've done you've done a number of small deals were closed.

Speaker Change: Close somewhat to come and not all of the financial.

Speaker Change: The magnitude is disclosed so could you just help us understand that.

Speaker Change: Cash impacts of these it's still not clear to me what you paid for pavilion.

Speaker Change: And then you've got to Singapore, and a few others.

Sinead Gorman: The second question is just on in the upstream, thinking about OPEX and DDNA, now that we deconsolidate Nigeria from the portfolio, is the Q1 run rate sensible, or how should we think about that going forward? Thank you.

Speaker Change: And then the second question is just on the upstream.

Speaker Change: Thinking about the Opex and D&A.

Speaker Change: The deconsolidation of <unk>.

Speaker Change: Area from the portfolio is the Q1 run rate sensible, how should we think about that going forward. Thank you.

Sinead Gorman: Do you want to take those? Sure. Yeah.

Speaker Change: Thank you do you want to take those at the.

Sinead Gorman: So in terms of two parts, Baraj, on Pavilion and Singapore, so the way I would look at it in terms of the cash impact on Pavilion, you saw we haven't disclosed the price that we give on it, but you can see in terms of how it plays out. It's largely a small amount of capital went out for it, but it's largely the leases that come through. So you saw that in our net debt and you saw it was below a billion, but you see it in that sort of range. So that will flow through. I wouldn't expect much impact in terms of really impacting the earnings from Pavilion this year.

So in terms of two parts a brush on pavilion in Singapore. So the way I would look at it in terms of the cash impact on pavilion, you. So we havent disclosed the price that we gave on it but you can see them in terms of Hyatt place is it's largely a small amount of capital N type for it but it's largely the leases that come through so.

Speaker Change: You saw that in our net debt and he said, it's below 1 billion, but you see it in in that sort of range. So that will flow through I wouldn't expect much impact in terms of really impacting the earnings from pavilion. This year, you'll start to see it in 2026 and Thats just the way the contracts play out.

Sinead Gorman: You'll start to see it in 2026. And that's just the way the contracts play out.

Sinead Gorman: Then on Singapore, the divestment, you saw it in our divestment proceeds, so you would have seen divestment proceeds of roughly speaking 600 million for this quarter. That is largely Singapore and there's a little bit of small items like Iraq loan repayment and things like that, but you see that coming through. What we've disclosed on that is that we have The Singapore was loss making. So you will see us have basically a price, it's a relevant price, you will just see free cash flow and intrinsic value improved as a result of that transaction.

Speaker Change: Then on Singapore, the divestment your cell phone or divestment proceeds. So you would've seen divestment proceeds of roughly speaking 600 million for this quarter that is largely Singapore, and there's a little bit F. N small items like Iraq loading and prepayments and things like that but you see that coming through what we've disclosed on that is that.

Speaker Change: We have.

Speaker Change: The Singapore was lossmaking. So you will see us have basically a price it's irrelevant to price you will just see free cash flow or intrinsic value and improved as a result of that transaction and then the other one that you didn't mention but I suspect. This also in your mind is S. P. D. C. So the Nigerian divestment, if I were to take the Nigerian <unk>.

Sinead Gorman: And then the other one that you didn't mention, but I suspect is also on your mind, is FPDC, so the Nigerian Divestment. If I were to take the Nigerian divestment and the Singapore divestment together, they're roughly speaking neutral in this current price environment. So my free cash will be roughly neutral.

Speaker Change: Vestments on Singapore divestments together, the roughly speaking neutral in this current price environment. So my free cash flow be roughly neutral what I'm probably more interested in is the fact that I will obviously have you were going there the impact on Opex. So you haven't seen my opex improvements yet in terms of either Singapore or S. P. T C L.

Sinead Gorman: What I'm probably more interested in is the fact that I will obviously have, and you were going there, the impact on OPEX. So you haven't seen my OPEX improvements yet in terms of either Singapore or SPDC. Only a small amount of that came through in the quarter. You'll start to see that come through throughout the year. And of course, it will take us a while as people move out. That was on the first one and partially on the second. So in other words, yes, more to come on OPEX.

Speaker Change: Small reminds us that came through in the quarter, you'll start to see that come through throughout the year and of course, it will take us a while and as people move on it.

Speaker Change: That was on the first one and partially on the seconds. So in other words, yes more to come on Opex and then in terms of the DNA you did start to see that come through and this quarter.

Sinead Gorman: And then in terms of DDNA, you did start to see that come through this quarter. Barrage, you'll have seen that one of the improvements that we saw on upstream was, of course, lower well write-offs versus Q4, but also lower depreciation. And that's also linked to the reserves. So just as you saw us come through in Q4, we updated our reserves numbers, so good cash.

Speaker Change: As you'll have seen that and one of the improvements that we saw on upstream was of course.

Speaker Change: Lower well write offs versus Q4, but also lower depreciation and that's also linked to the reserves and so just as you saw it come through in Q4, we updated our reserve number Sir.

Speaker Change: Good catch on that.

Sinead Gorman: Thank you Sinead, thank you Viraj for those questions.

Speaker Change: Thank you Sheena. Thank you bearish for those questions look next quarter. Please our next caller is Giacomo Romeo from Jefferies.

Operator: Luke, next quarter.

Giacomo Romeo: Our next caller is Giacomo Romeo from Jefferies. Yes, thank you for taking the question. If I can go back to the pavilion acquisition, I'm just trying to understand a bit better.

Speaker Change: Yes, Thank you for taking the question.

Speaker Change: <unk>.

Speaker Change: If I can go back to the Patheon acquisition, and just trying to understand.

Speaker Change: Yes.

Giacomo Romeo: Why you don't expect to see an impact on earnings this year was just pavilion not generating any profits and why what what changes next year in terms of contracts, just just to understand what are the moving parts there that actually drives your ability to extract profit out of what you're getting as part of the pavilion deal. And on the $50 scenario, you represent the better you had in the CMD slide as well. And you mentioned that you would see the potential for reducing CapEx a bit, you show that in the chart there, which areas would you be selling the same reduction?

Speaker Change: Why you don't expect to see any.

Speaker Change: Back to annuities.

Speaker Change: Just not generating any profits.

Speaker Change: What changes next year in terms of contract just trying to understand.

Speaker Change: Look I've been moving parts, there that actually drives genre.

Speaker Change: These two extracts for Allstate.

Speaker Change: Well you are getting as part of the pavilion deal.

Speaker Change: And on the 50 dollar should go.

Speaker Change: Ah represents the best that you added in the Sandy.

Speaker Change: Okay.

Speaker Change: You mentioned that you would see the potential for reducing capex a bit you showed that in the chalk.

Speaker Change: Which.

Speaker Change: Areas would you be seeing that reduction.

Wael Sawan: Can you provide more clarity there where you would prioritize CapEx? That would be helpful. Thank you.

Provide more clarity data, where you would prioritize capex that will be helpful. Thank you.

Wael Sawan: Thank you for that, Jacques.

Speaker Change: Thank you for that job well, let me take the second question first and then if you want to come back to the pavilion point.

Wael Sawan: Well, let me take the second question first, and then if you want to come back to the pavilion point. What I want to avoid doing, Giacomo, is almost locking myself down for one reason. I think the biggest thing we have tried to do is to become much more dynamic in our capital allocation issue. And what we used to do was sort of worry about does the capital dollar go into upstream or into downstream? What we're trying to do now is to say, does that capital dollar go into either of those or into inorganic or into more buybacks or into deleveraging?

Speaker Change: What I, what I want to avoid doing Giacomo is almost locking myself down for one reason I think.

Speaker Change: The biggest thing we have tried to do is to become much more dynamic in our capital allocation issue right.

Speaker Change: And what we used to do with sort of worry about does the capital dollar go into upstream or into downstream with we're trying to do now is to say does that capital dollar go into either of those or into inorganic for into more buybacks or into deleveraging. We're trying to make sure that we are always dynamic and looking at where the market is and looking at where the best.

Wael Sawan: We're trying to make sure that we are always dynamic and looking at where the market is and looking at where the best opportunities are. Now, having said that, of course, there is, call it a maintain level of capital. And the proxy that Sinead used earlier, the less than $18 billion, which is where we were in the COVID times, gives you a sense of what is a healthy maintain level. Today, we're talking about a range of $20 to $22 billion, which, of course, has growth embedded in it. Important to recognize there's $1 to $2 billion of inorganic capital that is available to us in that context.

Opportunities are now having said that of course, there is call. It a maintain level of capital and the proxy that should aid used earlier, the less than $18 billion, which is where we were in a and the COVID-19 times.

Speaker Change: It gives you a sense of what is in it what is the healthy maintained level today, we're talking about a range of $20 billion to $22 billion, which of course has growth embedded in it important to recognize those one to 2 billion of inorganic capital that is available to us in that context now in that environment, we can either.

Wael Sawan: Now, in that environment, we can either choose to deploy that capital because we can create countercyclical value, lifecycle value for our shareholders, or we can pull it back if we still don't see the opportunities. And so what I would say is.

Speaker Change: Choose to deploy that capital because we can create counter cyclical value lifecycle value for our shareholders or we can draw pull it back if we still don't see the opportunities and so what I would say it is.

Wael Sawan: Trust us to continue to be prudent in making sure that every dollar of our shareholders' capital is looked at with the rigor that you would expect of us, making sure that we take advantage of the opportunities at the right points in the cycle, and where we don't see those opportunities, to make sure we hold on to that capital as you have seen us do at the right points in time over the last few years.

Speaker Change: Trust us to continue to be prudent and making sure that every dollar of our shareholders' capital is looked at with the rigor that you would expect of US making sure that we take advantage of the opportunities at the right points in the cycle and where we don't see those opportunities to make sure we hold onto that capital as you as you have seen us do at the right points in time over the last few.

Speaker Change: <unk>.

Wael Sawan: And in terms of pavilion, Giacomo, really what I'm trying to say is what our traders do incredibly well is being able to have flexibility in action. So, as Wael said, we've managed to integrate this into the company very rapidly. They've done a great job on it, but it's a series of contracts. So there's a mixture of contracts and assets that come with it. Those contracts include both derivatives and physical, and they have different timing impacts. Therefore, you see that really play out whenever those all come in together, and that's really towards next year. So there's lots of puts and takes on it, which will determine value.

Speaker Change: And in terms of pavilion, and Jakob and really what I'm trying to say is what our traders to incredibly well is being able to have flexibility and access so as wild said, we've managed to integrate this into the company very rapidly.

Speaker Change: Net job on it but it's a series of contracts say, there's a mixture of contracts and assets that come with it those contracts include both derivatives and physical and they have different timing impacts. Therefore, you see that really play out whenever theres all coming together and that's really towards next year's there's lots of puts and takes in it which will determine value. We also of course at the physical side of it we have five.

Wael Sawan: We also, of course, have the physical side of it. We have five vessels. We have a number of regas, access to regas terminals, etc. By being able to have that flexibility, to be able to optimise, that's where they truly make money. And of course, it's just the timing of when they get access to those, and how full they are, etc. So, pleased with how it's been integrated so far, and really looking forward to them deriving the value that they promised us. And that'll really be into 2026. Absolutely.

Speaker Change: Vessels, we have and number of week as access to a week off terminals et cetera.

Speaker Change: Being able to have that flexibility to be able to optimize that's why they truly make money and of course, it's just the timing of when they get access to this and heartfelt etcetera. So pleased with how it's been integrated so far I'm really looking forward to them driving the value that they promised us and that will really be into 'twenty 'twenty six absolutely. Thank you for that and then this jacqueline and thank you for your questions as well.

Giacomo Romeo: And Giacomo, thank you for your questions as well.

Operator: Luke, next quarter, please.

Speaker Change: Luke next quarter. Please.

Henry Tarr: Our next caller is Henry Tarr from Berenberg. Hi there and many thanks for taking my questions. I wanted to ask about marketing. Both Mobility and Lubricants had a very strong quarter, which certainly suggests underlying demand. We haven't seen a slowdown so far, as you mentioned earlier.

Speaker Change: Our next caller is Henry Tarr from bearing bug.

Henry Tarr: Hi, there in Germany.

Speaker Change: Taking my questions.

Henry Tarr: I wanted to ask about marketing.

Henry Tarr: Mobility, and lubricants had had a very strong quarter, which certainly suggests underlying demand you haven't seen a slowdown.

Henry Tarr: As you mentioned earlier.

Sinead Gorman: I just wondered whether there's anything else going on there from a sort of self-help perspective, as we think about modelling out for the rest of the year. And then maybe sectors and decarbonisation, just sort of rounded out, you know, the environment remains pretty weak and we're seeing a decline.

Speaker Change: I, just wonder whether there's anything else going on there from a sort of self help perspective, as we think about modeling out for the rest of the year and then maybe Susan decarbonization to sort of round it out.

Speaker Change: The environment remains pretty weak and we are seeing a decline are there any signs of life at the end of the tunnel.

Sinead Gorman: Are there any signs of life at the end of the tunnel for this business? Thank you.

Speaker Change: So this business.

Speaker Change: Yeah.

Sinead Gorman: I think one sort of broad question, did you want to address that? Yeah, certainly. So in terms of, indeed, strong quarter for our marketing business, so very pleased to see that it was higher than Q4, as you say. Let me break it into those three parts that you alluded to. So first of all, on mobility, it was actually quite similar to Q4, but actually good for Q1 because we haven't come into driving season yet. They're doing a great job in terms of making sure exactly that self-help point, so driving costs down, focusing in on advertising, focusing in just on every dollar that they spend, but also on the premium products.

Speaker Change: Thank you.

Speaker Change: One one sort of broader question did you want to address that yeah. So in terms of Ah Indeed strong quarter for our marketing necessary very pleased to see that it was higher than Q4 as you say, let me break it into those three parts that you alluded to so first of all on mobility and it was actually quite similar to Q4, but actually good for Q1, because we haven't come into driving season yet.

Speaker Change: They're doing a great job in terms of and making sure it exactly that self help points of driving cost down and focusing in on advertising focusing just on every dollar that they spend but also on the premium products and that's where you start to see the margin coming through so.

Sinead Gorman: And that's where you start to see the margin coming through. Significant progress there and I look forward to seeing further throughout the year. On the lubricant side of things, it was indeed a good quarter for lubricants and we saw strong margins really driven by that premium lubricants that they've been selling. They're doing a great job on that and frankly last year was sort of their best year ever and we continue to see them hit new records. Looking forward to seeing exactly what they can do next.

Speaker Change: Significant progress there and I look forward to seeing further throughout the year on the lubricant side of things. It was indeed it was a good quarter for lubricants and we saw strong margins really driven by and that have premium and feel of premium lubricants that they've been selling and doing a great job of NASA frankly last year was sort of a.

Speaker Change: Their best year ever and we continue to see them hitting new records. So looking forward to seeing exactly what they can do next and sexism D carb bit different there's obviously a component pieces to that but it was more challenged as you say, particularly this quarter as different difficult across the whole environment. There's a couple of things in there. So we see pockets of strength of course in terms of trading so.

Sinead Gorman: Sectors in decarb are a bit different. There's obviously component pieces to that, but it was more challenged as you say, particularly this quarter as difficult across the whole environment. There's a couple of things in there. So we see pockets of strength of course in terms of trading. So we did see some of the uncertainty and some good pockets of making money through our trading organisation, particularly in the US in advance of the tariffs coming through. But of course we also see challenges in places like Raisa, which in Brazil is a difficult environment, difficult crops at the moment and of course just high interest rates.

Speaker Change: We did see some of the uncertainty and some.

Speaker Change: Good pockets of making money through our trading organization, particularly in the U S. In advance of the tariffs coming through but of course, you also see challenges in places like you know ryzen, which in Brazil, it's a difficult environment difficult crops at the moment and of course, just high interest rates. So mixed space, there and we look forward to watching the space very closely to see how that.

Sinead Gorman: So mixed space there and we look forward to watching the space very closely to see how that continues to develop. For us, biofuels is something that we can optimise around our traders, but also of course the short that we have within our own mobility as well, but we watch the space closely given how difficult it is.

Speaker Change: Continues to develop for US Biofuels is something that we can optimize R&R traders, but also of course, the short that we have within our own liability as well, but we watch the space close to any given Iowa hypothesis.

Sinead Gorman: Thank you, Sinead. And I have to say, very proud of how our marketing organization is showing up with with all the focus on the transformation that they have been through. So, and I expect a lot more to come.

Speaker Change: Thank you should they then have to say very proud of how our marketing organization is showing up with with all the focus on the transformation that they have been through so and I expect a lot more to come.

Operator: Thank you for those questions. Henry, can we go to the next quarter, please, Luke?

Thank you for those questions Henry can we go to the next quarter. Please look.

Matt Lofting: The next caller is Matt Lofting from J.P. Morgan. Thank you for taking the questions. Two quick ones, please. Shell has a substantial business in the US across the value chain.

Speaker Change: The next caller is Matt Lofting from J P. Morgan.

Matt Lofting: Thanks for taking my questions.

Speaker Change: Two quick ones. Please shell has a substantial business in the U S across the value chain I Wonder if you could share.

Wael Sawan: I wonder if you could share any perspectives you currently have on the direct impact of the tariff framework, at least it stands at the moment, and whether there's any specific assets where you see potential effects. And then secondly, if we combine the upstream and integrated gas business, there's a track record over the last four to six quarters of beating consensus expectations. To what extent do you see that as fruition of the performance improvement agenda over the last couple of years and how sustainable do you see that performance going forward? Thank you.

Speaker Change: If she currently you have on the direct impact of tariff framework at least stands at the moment and whether there is any specific assay sway you see potential effects and then secondly.

Speaker Change: If we combine the upstream and integrated gas business track record over the last.

Speaker Change: Four to six quarters of beating consensus expectations to what extent do you see that as fruition.

Speaker Change: The performance improvement agenda over the last couple of years and how sustainable do you see that performance going forward. Thank you.

Wael Sawan: Matt, thank you for that.

Speaker Change: Matt. Thank you for that let me take the first one and then ask <unk> to address the second one.

Wael Sawan: Let me take the first one and then ask Sinead to address the second one. Yes, we have a very material position in the US. We're the largest player in the Gulf of America. And I think, really pleased with the positions we have there some of the best zip codes in the Gulf. We are, of course, also the largest off taker of US LNG. And of course, a significant presence in Shell Pennsylvania and Shell Polymers Monaco, which is our petrochemical facility. So indeed, we have we have good line of sight to what were two things there.

Speaker Change: <unk>.

Speaker Change: Yes, we have a very material position in the U S. We're the largest player in the Gulf of America.

Speaker Change: And I think are really pleased with the positions we have there some of the best ZIP codes in the Gulf.

Speaker Change: We are of course also the largest off taker of U S. LNG.

Speaker Change: And of course, a significant presence in shell, Pennsylvania, and the shell polymers, Monaco, which is our petrochemical facility.

Speaker Change: So indeed, we have we have good line of sight to work with two things there.

Wael Sawan: What I would say maybe starting with the global picture around tariffs is we at the moment see relatively limited impact to us and what we see is manageable. Of course, the call it first order impacts are more related to the supply chain than they are related to energy product sales. And so what we're doing is we're looking for mitigations around that. As an example, in the US, Sparta, one of the major facilities we are developing, already had a significant portion of their steel purchased well before the tariffs hit. So there was a lot of work that was ongoing in anticipation and therefore to mitigate and de-risk some of these issues.

Speaker Change: What I would say, maybe starting with the global picture around tariffs is.

Speaker Change: We at the moment see a relatively limited impact to us and what we see is manageable.

Speaker Change: Of course, the quarter first order impacts are more related to the supply chain then there than they are related to energy product sales.

Speaker Change: And so what we're doing it where it was we're looking for mitigation around that.

Speaker Change: As an example in the U S. A sport that one of the major facilities. We are developing already had a significant portion of their steel purchased well before the tariffs hit. So there was a lot of work that was ongoing.

Speaker Change: In anticipation and therefore to mitigate and Derisk some of these issues.

Wael Sawan: The bigger question we are looking at when it comes to the tariff impact is, of course, the second order impact, what that means to the real economy, what it means to supply demand. That, of course, has a lagging impact. It's unlikely to be within a quarter or two. But as we look into 2026, that's what we keep our eye on in terms of how it plays out. But so far, knock on wood, it has been very manageable and the teams are doing well to be able to make sure there is very limited pain to the organization.

Speaker Change: The bigger question, we are looking at when it comes to the tariff impact is of course, a second order impact what that means to the real economy. What it means to supply demand that of course has a lagging impact it's unlikely to be within a quarter or two but as we look into 2026, that's what we keep our eye on in terms of how it plays out but.

Speaker Change: So far knock on wood has been a very manageable and the teams are doing well to be able to make sure. There is very limited pain too to the organization.

Sinead Gorman: And in terms of integrated gas and upstream, I think, thank you for recognising what the teams have done, Matt, because if you take it back to Capital Markets Day 2023, what we said to you then was that if we own these assets, we're going to run them well, we're going to be the rightful owners of these or we shouldn't be in them. And what you've seen are both our integrated gas teams and the upstream teams to take that on board. They are running very, very hard. And they're not just running hard to drive down costs, they're running hard to maximise performance.

Speaker Change: And in terms of integrated gas and upstream I think just I think thank you for recognizing what the teams have done that because if you take it back to capital markets Day 2023, what we said to you then was that if we own these assets, we're going to run them well, we're going to be the rightful owners of these that we shouldnt be in them and what you have.

Speaker Change: Our breadth of our integrated gas teams and the upstream teams to take that onboard they are running very very hard and I'm not just running hard to drive down costs are running hard to maximize performance and.

Sinead Gorman: And they do it with the lens that they know what the competitive benchmark is, they're very much focused around performance, discipline and simplification that allows them to free up the thinking as to where they should spend their time. One example of that is, we know there's going to be uncertainty, we know that issues can occur. But when something goes down, it's how quickly can we get it back up and running? And I'm prayed it is a wonderful case in point, which we've seen since the turnaround that it will go down. If it goes down, how quickly can we get it back?

Speaker Change: And they do it with a lens that they know what the competitive benchmark is they're very much focused behind performance discipline and simplification that allows them to free up the thinking as to where they should spend their time on one example of that is we know there's going to be uncertainty, we know that issues can occur, but when something goes down is how quickly can they get it back up and running and I'm afraid it is a wonderful case.

Speaker Change: So pointing to which we've seen since the turnaround that it will go down if it goes down how quickly can we get it back and it's 60% last time to get it back up again, so that focus means that we're driving for cash we're driving for every single dollar and that's what this team is doing so they're managing through uncertainty. They continue to have that drive that wish to perform and it doesn't matter, which.

Sinead Gorman: And it's 60% less time to get it back up. So that focus means that we're driving for cash. We're driving for every single dollar, and that's what this team is doing. So they're managing through the uncertainty. They continue to have that drive, that whoosh to perform, and it doesn't matter which part of the world you're talking about, that competitive spirit is there, and I think it's gonna continue.

Speaker Change: Part of the World you are talking about it's a competitive spirit is there and I think it's going to continue.

Sinead Gorman: All right, very much so.

Speaker Change: So thank.

Operator: Thank you for those questions.

Speaker Change: Thank you for those questions.

Martijn Rats: Matt, now let's go to Luke for the next quarter, please.

Speaker Change: Now, let's go to look for the next quarter place.

Martijn Rats: Our next caller is Martijn Rats from Morganstam. Hi, hello, and also two questions, if I may, I wanted to ask you about the market conditions that you see for disposals. I can imagine that with all the uncertainty that exists, it may have become more difficult to execute some of the disposals that you're still working on. But look, hard to know. I was wondering if how you see that, how you see the basically the disposal market.

Moderator: Our next caller is martijn rats from Morgan Stanley.

Martijn Rats: Hi, Hello also had two questions. If I may I wanted to ask you about the market conditions that you see for disposals I can I mentioned that with all the uncertainty.

Martijn Rats: It may have become more difficult to execute some of the disposals that you're still working on but.

Martijn Rats: Hard to know I was wondering if you.

Martijn Rats: You see that how do you see the basically the disposal market.

Sinead Gorman: And then secondly, slightly more practical, perhaps, but I was wondering where we are now with LNG Canada. And because it looks like we're sort of relatively close to the startup and how we can expect the quarterly earnings stream to be impacted by that project. Thank you.

Martijn Rats: And then secondly, slightly more practical perhaps but I was wondering where we are now with LNG Canada.

Martijn Rats: Because it looks like a relatively closer to start up in.

Martijn Rats: And how we can expect the quarterly earning stream to be impacted.

Martijn Rats: By that project.

Martijn Rats: Thank you I always take the LNG kind of the question, but I'm going to hand, it over to you. This time mesh Nathan I'll quickly touch on the disposals.

Sinead Gorman: I always take the LNG Canada question, but I'm going to hand it over to you this time, Sinead, and I'll quickly touch on the disposals. The biggest thing I'd say, Martijn, is thankfully, we have been working for the past two years to get well ahead of Right, I mean, if there's one thing that I'm most proud of in Q1, yes, the results were great to see. But I'm very proud of the culmination of significant efforts for a number of years to be able to, in essence, move beyond Nigeria onshore, a huge, huge undertaking and congratulations to the team for completing that.

Speaker Change: The biggest thing I'd say Martinez thankfully, we have been working for the past two years to get well ahead of this right I mean, if there's one thing that I'm. Most proud of in Q1, yes. The results were great to see but I'm very proud of the culmination of significant effort for our <unk>.

Speaker Change: Number of years to be able to in essence move beyond Nigeria onshore a huge huge undertaking and congratulations to the team for completing that Singapore energy and chemical Park.

Wael Sawan: Singapore, Energy and Chemical Park, another major, major achievement, and of course, Pakistan, those were the biggest elements of our disposal program. While others today are looking to dispose to be able to make their financial framework work, our focus now can be very much on actually delivering what we have promised, delivering the 10 plus percent of free cash for per share growth, by the way, the majority of which is not correlated to oil price. And that is the position that I think is particularly nuanced for us. The majority of that 10% is coming from 5 to 7% comes from buybacks, and the rest is absolute free cash flow growth, which is not needing to be correlated to oil price because it is self-help from OPEX, flexing on CapEx as and when we need to, and a lot of it is the transformation of downstream and renewables.

Speaker Change: Another major major achievement and of course, Pakistan those were the biggest elements of our disposal program, while others today are looking to dispose to be able to make their financial framework.

Speaker Change: Work.

Speaker Change: Our focus now can be very much on actually delivering what we have promised delivering the 10 plus percent of free cash flow per share growth by the way the majority of which is not correlated to oil price and that is the position that I think.

Speaker Change: Is particular nuance for us the majority of that 10% is coming from.

Speaker Change: 5% to 7% comes from buybacks and the rest is absolute free cash flow growth, which is not needing to be correlated to the oil price because of the self help from opec's flexing on capex as and when we need to and a lot of it is the transformation of downstream in renewables. It's the improvements we mentioned in capital markets Day 2025.

Sinead Gorman: It's the improvements we mentioned in Capital Markets Day 2025 and marketing. It's the uptick that we expect for chemicals. It's our ability to turn around the res business. And that doesn't even include the upside that we see for trading in a volatile environment. And so that is very much where we are today. And that's why, as we, of course, look at continuing to churn through the portfolio, the big ones are behind us. Yeah, and on LNG Canada, indeed, we're really pleased with the progress so far. And of course, you saw the commissioning cargo come in to be able to test all of the different aspects of the facility.

Speaker Change: In marketing, it's the uptick that we expect for chemicals, it's our ability to turn around the rest of business and that doesn't even include the upside that we see for trading in a volatile environment and so that is very much where we are today and that's why as we of course look at continuing to churn through the port for you the big ones are behind us.

Speaker Change: And on LNG, Canada, Indeed, we're really pleased with the progress so far and of course, you saw the commissioning cargo come in to be able to test all of the different aspects of the facility and we're still on track of course, the first cargo intended in the middle of this year I won't comment on earnings because of course from our perspective, what we're really interested in and it's not the.

Sinead Gorman: And we're still on track, of course, for the first cargo intended in the middle of this year. I won't comment on earnings because of course, from our perspective, what we're really interested in is not the first cargo we're interested in when it ramps up because by the time that's when it really starts to have, you know, a sizable impact into our numbers, both in terms of liquid fraction volumes, but actually both earnings and cash. So I'm much more interested in where we get to towards the end. And a reminder, of course, it's two trains. So you're going to have the first train starting up and then there's a lag until you get to the second train.

A first cargo we're interested in when it ramps up because my time, that's when it really starts to have a sizable impact into our numbers. Both in terms of liquefaction volumes, but actually both earnings and cash so I'm much more interested in where we get to towards the end of the year and.

Speaker Change: And a reminder of course, it's to train so you're going to have the first train starting up and then Theres a lag until you get to the second train and so I think we will you will see more of that flow of course coming through in the earnings impact in due course.

Sinead Gorman: So I think we will, you will see more of that flow, of course, coming through and the earnings impact in due course.

Operator: Thank you very much, Martijn. Can we go to the next question, please, Luke?

Speaker Change: Thank you very much more time can we go to the next question. Please look.

Roger Reid: Our next caller is Roger Reid from Wells Fargo. Yeah, thanks. Good morning or good afternoon as the case may be.

Roger Read: Our next caller is Roger read from Wells Fargo.

Roger Read: Yes, thanks, good morning, or good afternoon, as the case may be.

Roger Read:

Wael Sawan: Maybe come back to the sort of resiliency question or a slightly different tact. So at the Capital Markets Day, you laid out, you know, the cost savings goals, presumably in a lower oil price environment, you would have a little more urgency to get that done. So I'm just sort of curious how you're thinking about it that way.

Roger Read: Maybe come back to the sort of resiliency question or a slightly different tack. So.

Roger Read: At the capital markets day, you laid out.

Roger Read: The cost savings goals, presumably.

Roger Read: Lower oil price environment.

Roger Read: We have a little more urgency to get that done. So I'm just sort of curious how you're thinking about it that way and then the second question or follow along with that.

Sinead Gorman: And then the second question or follow on with that is What environment you're describing, obviously the cash flows and buying back shares is important, but how would you think about allocating on acquisitions in addition to thinking about the overall resiliency and the dividend and so forth?

Roger Read: As well.

Speaker Change: Ooh environment Youre, describing obviously the cash flows and buying back shares is important but how would you think about <unk>.

Roger Read: Allocating.

Roger Read: On the acquisitions in addition to thinking about the overall resiliency and the dividend and so forth.

Wael Sawan: Let me take the first one and then ask Sinead to address the second one. I think. Let's go back to what we've been saying, Roger, for the last couple years. I think, hopefully, what you've heard me say is, we know this is a cyclical industry, we know there is going to be uncertainty. And therefore, we believe there's three key characteristics of a winning company. It's making sure that we are consistent, it's making sure we're resilient, and it's making sure that we are disciplined in our capital allocation. All of that is underpinned by just being lean and fit.

Speaker Change: Let me take the first one and then ask Renee to address the second one okay.

Roger Read: Thank.

Speaker Change: Let's go back to what we've been saying Roger for the last couple of years I think hopefully what you've heard me say is.

Speaker Change: We know this is a cyclical a cyclical industry. We know there is going to be uncertainty and therefore, we believe there's three key characteristics of a winning company. It's it's making sure that we are consistent its making sure were resilient and it's making sure that we are.

Speaker Change: Disciplined in our capital allocation.

Speaker Change: All of that is underpinned by just being lean and fit right and that's where the cost agenda plays and I can tell you. There is absolutely not any more urgency on the cost agenda. Then there was a few months ago because the cost agenda is a critical agenda, not just to be able to weather whatever choppy waters, we're going into.

Wael Sawan: And that's where the cost agenda plays in. I can tell you, there is absolutely not any more urgency on the cost agenda than there was a few months ago. Because the cost agenda is a critical agenda, not just to be able to weather whatever choppy waters we're going into, but actually the cost agenda, in my mind, is an example of whether Shell deserves the alpha when it comes to operations. We need to be able to demonstrate that this is a company that has that operational alpha on a consistent basis. And the cost is an important metric in that.

Speaker Change: But actually the cost agenda in my mind is a an example of whether shell deserves the alpha when it comes to operations, we need to be able to demonstrate that this is a company that has that operational alpha on a on a consistent basis and the cost is an important metric and that and this is not cost cutting for cost cutting.

Wael Sawan: And this is not cost-cutting for cost-cutting sake. We are willing to put more costs in the areas where we can unlock more value. But really being very focused on where there is waste in the organization, where can we enhance productivity? And that's playing in through AI, through what we're doing in that space. Supply chain, we still think there is a lot more to go in the supply chain space. And I can tell you, there is a massive amount of urgency in the organization. And that will continue, not just for the five to seven billion, but as we continue to really build that muscle of being the best we can be as Shell.

Speaker Change: [noise] sake, we are willing to put more cost in the areas, where we can unlock more value, but really being very focused on where there is waste in the organization, where can we enhance productivity and that's playing in through AI through what we're doing in that space supply chain. We still think there is a lot more to go in the supply chain space and I can tell you there is a mess.

Speaker Change: The amount of urgency in the organization and that will continue not just for the five to 7 billion, but as we continue to really build that muscle of being the best we can be issue.

Wael Sawan: Indeed.

Wael Sawan: So thank you, Roger. And yes, your question around buybacks versus acquisitions. I think we've been very clear that value creation is the key. It's the North Star of what we're going after. And of course, that's why we say free cash flow per share is the measure that we do. So everything we do has to rank against basically the shares and the buying back of the shares. And we've just talked about the fact that, you know, as oil prices gone down, they've actually got cheaper. So it's an even better capital allocation for us. But there's no reluctance from our side in terms of it going after value elsewhere.

Speaker Change: So thank you Roger and yes, your question around buyback versus acquisitions.

Speaker Change: I think we've been very clear that value creation is the key here and it's north star of what we're going after and of course, that's why do we say free cash flow per share is the measure that we do everything we do have to rank against basically the shares and then buying back the shares and we've just talked about the fact that you know as oil price has gone down they've actually got cheaper. So it's an even better capital allocation for us.

Speaker Change: But theres no reluctance from our side in terms of going after value elsewhere, we're not afraid to go after it but the bar is incredibly high and of course, you see that we have the option of course within their own organic portfolio as well and just to remind you even when we looked at the upstream portfolio that we drew all right in terms of what sort of projects will start delivering before 2013, we give you.

Wael Sawan: We're not afraid to go after it, but the bar is incredibly high. And of course, you see that. We have the option, of course, within our own organic portfolio as well. And just to remind you, even when we looked at the upstream portfolio that we drew out in terms of what sort of projects we'll start delivering before 2030, we give you examples of projects which on average had break-evens of $35. So you can see how attractive even our own portfolio is. We then, of course, have those buybacks that we just discussed, which are incredibly cheap and therefore it's a good allocation of capital.

Speaker Change: Examples of projects, which on average have breakeven of $35. So you can see how attractive even our own portfolio. As we then of course that those buybacks that we just discussed which are incredibly cheap and therefore, it's a good allocation of capital and then finally, we have of course M&A. So we have that option to be able to go that we're incredibly well positioned for.

Wael Sawan: And then finally, we have, of course, M&A. So we have that option to be able to go there. We're incredibly well positioned for that.

Wael Sawan: So if you remember where our balance sheet is, we've positioned the balance sheet such that we have more than $35 billion of cash. We have lines of credit that we could utilise if we need to, but it's just not something that's on our because we have all of the options available to us. So, yeah, well positioned to be able to go after wherever we see value, whether that happens to be the buybacks even further or whether that happens to be in terms of acquisitions. Nice position to be in.

Speaker Change: So if you remember where our balance sheet is we've positioned the balance sheet such that we have more than 75 billion of cash we have lines of credit that we could utilize if we need to but it's just not something that's on our mind because we have all of the options available to us so yeah, well positioned to be able to go after wherever we see value.

Speaker Change: That happens to be the buybacks, even further or whether that happens to be and in terms of acquisition nice position to be thank you shouldn't AIDS. Roger. Thank you for those questions look next quarter. Please our next caller is Christopher Copeland from Bank of America.

Roger Reid: Roger, thank you for those questions. Luke, next quarter.

Christopher Kaplent: Our next caller is Christopher Kaplent from Bank of America. Thank you. Two questions for me as well, if I may. And while this is coming from not a cynical place, but you mentioned earlier that perhaps the problem in the past was Shell's culture happy to accept mediocrity. Maybe I would put it differently and ask you, isn't some of the biggest weaknesses or has been in the past? I was always I'm always going to call it hubris, i.e. we can do this. No one else can. And I want to ask you about the Rotterdam decision that you've taken.

Christopher Copeland: Thank you two questions from me as well if I may.

Speaker Change: While this is coming from.

Speaker Change: No not a cynical place, but you mentioned earlier that perhaps the problem in the past.

Speaker Change: With shelf culture happy to accept mediocrity.

Speaker Change: Maybe I would put it differently and ask you isn't some of the biggest weaknesses or has been in the past.

Speaker Change: I'm always going to call. It kupres I E. We can do this no one else can.

Speaker Change: And I want to ask you about the Rotterdam decision that you've taken.

Christopher Kaplent: Can you give us an update on that? You know where you're stepping back from things that perhaps five years ago had been part of the overall Shell ambition? So open question. And as I said, it's not coming from a cynical place.

Speaker Change: Give us an update on that where youre stepping back from things that perhaps five years ago had been part of the overall shall ambition.

Speaker Change: So open question I mean, as I said, it's not coming from our clinical place and.

Sinead Gorman: And the second question, perhaps to you, Sinead, you presented just a few weeks ago a marketing capital budget of up to three billion. And in the first quarter, I see marketing spent 250 million. What did you do to these people? How how much lower can it go in terms of explaining that very light capital allocation in just Q1? Are there any funnies in there?

Speaker Change: Second question, perhaps you should Nate.

Speaker Change: You presented just a few weeks ago.

Speaker Change: Marketing capital budget of up to 3 billion and in the first quarter IC marketing spend $250 million, what what did you do to these people.

Speaker Change: How how much lower can it go in terms of.

Speaker Change: Explaining that very light capital allocation in just Q1 are there any funnies in there just.

Christopher Kaplent: Just a quick follow up, please.

Speaker Change: Just a quick follow up please thank you.

Wael Sawan: Thank you for that, Christopher. You never come from a cynical place. I absolutely don't have to sort of precede that.

Speaker Change: Thank you for that Christopher you you never come from a cynical place I I absolutely you don't have to sort of proceed that look from a cultural perspective.

Wael Sawan: Look, from a cultural perspective, You can call it. You can call it hubris or whatever. I think at the end of the day, what happened was we took Sinead Gorman, Wael Sawan, Andrew Mackenzie, Caroline Omloo, Sinead Gorman, Wael Sawan, Almost meant that we can drive more and more complex projects with an assumption that the risk was going to be linear. And of course, it wasn't. It becomes logarithmic. And what typically catches us out is not the theoretical perfection of building a project. It's all the realities around it. It's the supply chain disruptions. It's permitting delays.

Speaker Change: You can call it.

Speaker Change: You can call it hubris or whatever I think at the end of the day what happened was.

We took.

Speaker Change: Quite some risk in particular with our capital allocation.

Speaker Change: In retrospect as we've done a lot of the reviews to learn to learn because there's a lot. We have learned over the last 20 years and a lot of that has actually helped shape. The way we're thinking about the organization right now.

Speaker Change: The fact that we have such an incredible technical capability.

Speaker Change: Most meant that we can drive more and more complex projects with an assumption that the risk was going to be linear and of course it wasn't it becomes logarithmic and.

Speaker Change: And what typically catches us out is not the theoretical perfection of building a project. It's all the reality is around it it's the supply chain disruptions, it's permitting delays, it's the market changes while we're building. This facility. It's the cumulative risk of putting multiple units together and then figuring out that it is more challenge that is the issue. So what we have tried.

Wael Sawan: It's the market changes while we're building this facility. It's the cumulative risk of putting multiple units together and then figuring out that it is more challenge. That is the issue.

Wael Sawan: So what we have tried to do is to go for much more digestible opportunities and really look at the appropriate risk adjusted returns for our investments. Really become much more forensic. Today, when I get a business proposal, there's a few things that are different than what it was in the past.

Speaker Change: To do is to go for much more digestible opportunities and really look at the appropriate risk adjusted returns for our investments really become much more forensic today when I get a business proposal. There's a few things that are different than what it was in the past. One is we have a full time red team that is looking.

Wael Sawan: One is we have a full time red team that is looking at the counter view of why we might be wrong with this to really challenge our basic assumptions. That was something we learned from BG and instituted in Shell. The second thing we do is we look at track record. What is our track record in that space? And the third thing we do is, what is the alternative use of that capital?

Speaker Change: At the counter view of why we might be wrong with this to really challenge our basic assumptions that was something we learned from BG and instituted ensure wait.

Speaker Change: Second thing we do is we look at track record what is our track record in that space and the third thing. We do is what is the alternative use of that capital and of course in the context of the Rotterdam project to be specific on what you described yes, we looked at the market around us we saw length in and Biofuels in particular come.

Wael Sawan: In the context of the Rotterdam project, to be specific on what you described, yes, we looked at the market around us. We saw length in biofuels in particular coming from the US. We saw backtracking on mandates in Europe. And we saw a volatile environment. And to simply just plow on and put more capital is not wise capital allocation. We have a responsibility. Sinead and I have a duty of care to our shareholders in the way we discharge their capital. And that's why we felt at the time we pause it. And it's still under pause as we look at the broader environment around us and what we can do with the project to see whether we are able to justify investing more in it.

Speaker Change: And from the U S. We sold backtracking on mandates in Europe.

Speaker Change: And we saw a volatile environment and to simply just plow on and put more capital is not wise capital allocation. We have a responsibility chine then I have a duty of care to our shareholders in the way we discharged their capital and that's why we felt at the time, we pause it and it's still under pause as we look at the broader environment around us.

Speaker Change: And what we can do with a project to see whether we are able to justify investing more in it.

Sinead Gorman: Sinead, thank you. And I think actually, a lot of what you said is particularly relevant here in terms of marketing. So Chris, if you were to look back at of course, Q1 last year as well, what we have seen, of course, then was that it was the lowest CapEx spend for the year as well. So Q1 tends to be for marketing, much lower than elsewhere. So I wouldn't say we've done anything per your use of phrasing to the team. It's more actually they're really stepping up and exactly where Wael went to, they're very much focused on just what are the alternative uses, and they've raised the bar themselves.

Speaker Change: Okay. Thank you and I think actually a lot of what you said is particularly relevant here in terms of marketing. So Chris. If you were to look back and of course Q1 last year as well and what we have seen of course, then was that it was the lowest capex spend for the year as well as if Q1 tends to me for marketing much slower than elsewhere.

Speaker Change: I wouldn't say, we've done anything for your use of freezing.

Speaker Change: The team, it's more actually they really stepping up and exactly what our wild Wednesday, they're very much focused on just what are the alternative uses and they've raised the bar themself. So part of it is facing part of its rest in the bar and the other part is the dynamic capital allocation you mentioned actually I'm one of the earlier ones, they're very clear that it's not their capex. So that's a bit of a change from it.

Sinead Gorman: So part of it is phasing, part of it's raising the bar. And the other part is the dynamic capital allocation, you mentioned actually in one of the earlier ones, they're very clear that it's not their CapEx. So that's a bit of a change from in the past as well. It's much more it's about the group and what can we do with that.

Speaker Change: In the past as well it's much more it's about the group and what can we do with that so we're not being dogmatic about where we put the capex. We're looking at more of the comparative exactly what you said should be between buybacks should we be holding it are there more opportunities in upstream as an example of one.

Sinead Gorman: So we're not being dogmatic about where we put the CapEx, we're looking at more of the comparatives, exactly what you said, should we be doing buybacks, should we be holding it, are there more opportunities in upstream as an example. Thank you, Sinead.

Operator: Chris, thank you for those questions. Luke, next quarter.

Chris. Thank you for those questions look next quarter. Please.

Lukas Herrmann: Our next caller is Lukas Herrmann from BNP Palaiba. Yeah, thanks very much and afternoon to you both. Thank you very much for the call.

Speaker Change: Our next caller is Lucas Herrmann from BNP Paribas.

Speaker Change: Okay.

Lucas Herrmann: Yes, thanks, very much and God afternoon to you both thank you very much for the tool.

Sinead Gorman: A couple of my mics, just wanted to touch on chemicals. And you've mentioned certain assets up the strategic review, I just wondered whether, you know, how the market or the broader chemical market responded to those comments and, you know, where you were left in line with that guidance on utilisation for this quarter of 74 to 82%, especially Should I think of that as being unusually low? I know it's not dissimilar to the last quarter, but I guess I'm slightly surprised that perhaps the levels aren't increasing.

Speaker Change: Couple if I might.

Speaker Change: Did you touch on chemicals and.

Speaker Change: You've mentioned certain assets.

Speaker Change: You can review I, just wondered where the how the market will the broader chemical market responded to those comments and.

Where you were left and in line with that guidance on utilization for this quarter.

Speaker Change: 74% to 82%, especially.

Speaker Change: Should I think about as being unusually low I know, it's not dissimilar to the last quarter, but I guess I'm slightly surprised that perhaps the levels are increasing.

Sinead Gorman: And beyond that, a really simple one for you, Sinead, just on disclosure. I suspect you're trying to simplify things, but a lot of the marketing sheets have disappeared, which I presume is intentional, but one of the numbers or some of the numbers that have disappeared as well are the breakdown of net income by mobility, loot, sectors and de-carb, which makes life monitoring, return on capital, et cetera, exceptionally challenging. Intentional or just omission? The thing that Sinead does is emission there, Lucas, but I'll leave her to respond to that. Chemicals, I think, you know, just to sort of reground us all, macro conditions continue to be very challenged and likely will be challenged for the coming months and years, in particular as we see the buildup in China.

Speaker Change: And beyond that really simple lumpy you should I just on disclosure.

Speaker Change: I suspect you're trying to simplify things, but a lot of the marketing sheets.

Speaker Change: So if the deal was intentional but one of the numbers on some of the names that have disappeared as well or the breakdown of our net income by mobility.

Speaker Change: On the call, which makes life monitoring, which I don't believe that true exceptionally challenging.

Speaker Change: Intentional or just a mission.

Speaker Change: Nothing that Shanaze Chine does is emission there Lucas, but I'll leave her two to respond to that.

Speaker Change: Oh chemicals.

Speaker Change: I think just just to sort of re ground us all.

Speaker Change: Macro conditions continue to be very challenge and likely will be challenged for the coming months and years in particular as we see the buildup in AR in China.

Sinead Gorman: And so what we get to is a strategic decision to be able to move forward in that regional approach that we outlined in Capital Markets Day 2025. And looking at how we can do that, you didn't hear us talking about an outright divestment because of those difficult conditions. And we talked about strategic and partnership opportunities to be able to do that. Now, since, of course, we went public with Capital Markets Day 2025, I'm pleased to report that there are, we have had a lot of inbounds of interest. And we're in the midst of a process right now to be able to have those discussions, because this is not a simple who's bidding highest for this.

Speaker Change: And so what we get to is.

Speaker Change: A a strategic decision to be able to move forward in that regional approach that we outlined in capital markets day 2025.

Speaker Change: And looking at how we can do that we didn't you didn't hear us talking about it and I'll try divestment because of those difficult conditions, and we talked about strategic and partnership opportunities to be able to do that.

Speaker Change: Now since of course, we went public with capital markets Day 2025, I'm pleased to report that there are we have had a lot of inbounds of interest.

Speaker Change: And we're in the midst of a process right now to be able to have those discussions because this is not a a simple who is.

Sinead Gorman: This is much more of a discussion around what is the structure that is going to make sense for us? What are the exposures we want to see? And we will take our time. We have said we want to take, you know, through the coming years to be able to make sure we get the best deal for our shareholders. And that is something we will honour, because this is not by any stretch of the imagination that we want it to be a fire sale. This has to be value creating for us to the best of our abilities.

Who is bidding highest for this this is much more of a discussion around what is the structure that is going to make sense for us what are the exposures, we want to see and we will take our time. We have said we want to take you now through the coming years to be able to make sure we get the best deal for our shareholders and that is something we will honor because this is not by any stretch of imagination do we want it to be a fire sale.

Speaker Change: This has to be value value, creating for us to the best of our abilities on your point around the 74% to 82% what of course, it's always challenging when when we give these numbers is we're basing it on our assumption around where do we actually want to have a the facilities running and where are we see switching it off because.

Sinead Gorman: On your point around the 74 to 82%, what of course is always challenging when we give these numbers is we're basing it on our assumption around where do we actually want to have the facilities running? And where are we switching it off? Because right now the margins mean that we are cash negative. And so that's why you continue to see us in the way we report it. This is a choice point where we actually switch off certain units to be able to make sure that we're not bleeding cash when we can avoid it. And, you know, the biggest, of course, indicator of all is what's happening in Shell Polymers Monaco.

Speaker Change: Right now the margins mean that we are cash negative and so that's why you continue to see us in the way. We reported this is a choice points, where we actually switch off certain units to be able to make sure that we're not bleeding cash when we when we can avoid it and and you know that.

Speaker Change: The biggest of course indicator of all.

Speaker Change: Is what's happening in shell polymers, Monaca I can say that in shell polymers Monaca. The performance continues to be strong in the way they are producing and there. It's a question of continuing to premium is the sales of our products.

Sinead Gorman: I can say that in Shell Polymers Monaco, the performance continues to be strong in the way they are producing. And there it's a question of continuing to premiumise the sales of our product. Indeed. And Lucas, indeed, it was intentional. It wasn't by omission. Yeah, and you're spot on. It was very much about focusing in on just simplifying our reporting. So it's both an acknowledgement of how much we give in terms of disclosures of just an awful lot of data that many people don't use and relative to our peers. But probably more importantly, it was about actually just the work that goes into producing it.

Speaker Change: Janet.

Lucas Herrmann: And Lucas indeed, it wasn't intentional it wasn't by information.

Speaker Change: You're spot on it was very much about focusing in on just simplifying our reporting so its space.

Speaker Change: Noel Edmonds of how much we gave in terms of disclosure suggest an awful lot of data that many people don't use and relative to our peers, but probably more importantly, it was about actually just the work that goes into producing it so for US what we've done is we've given you the subsegment for marketing at the adjusted EBITDA level. So you get that quarterly and of course. It gives you the capsule employed also at that.

Sinead Gorman: So for us, what we've done is we've given you the sub segment for marketing at the adjusted EBITDA level. So you get that quarterly. And of course, capital employed also at that sub segment level annually, which is when it really matters, given the level of capex that we've got coming through. That's important, of course, so that you can see exactly per your point, back to that Roachi and disclosures or the targets or the views, ambitions of where we wanted to go to later on. So you can see that coming through and you can measure us against it.

Speaker Change: Sub segment level annually, which is when it really matters given the level of Capex that we've got coming through that's important of course that you that you can see exactly part of your point back to that really itchy and disclosures are the targets or the views ambitions of where we wanted to go to later on so you can see that coming through and you can measure us against it but.

Sinead Gorman: But one of the just without boring you on the detail, Lucas, we were really struggling with being able to give some sensible allocations of things like tax between, you know, mobility versus lubricants versus biofuels, for instance, in a specific country, it just didn't make sense. We were spending so much time and effort and cost on doing it versus the value that you get out of it. So nothing more than that, then.

Speaker Change: What if they are just without boring you on the detail Lucas we were really struggling with being able to give some sensible allocations of things like tax between you know mobility versus lubricants verses Biofuels for instance in a specific country just doesn't make sense. When we're spending so much time and effort on cost on that versus the value that you get out of it so nothing more than that.

Speaker Change: Then our simplification efforts.

Sinead Gorman: Thanks Sinead.

Operator: Lucas, thank you for those questions. And Luke, can we go to the next question?

Speaker Change: Thanks, Lucas. Thank you for those questions and Luke can we go to the next question. Please.

Doug Leggett: Our final caller today is Doug Leggett from Wolfrith Surge. Thank you.

Speaker Change: Our final caller today is Doug Leggate from Wolfe research.

Doug Leggate: Thank you good morning from from New York and good afternoon over there.

Doug Leggett: Good morning from from New York and good afternoon over there. Wael and Sinead, I know you talked earlier about the importance of per share growth targets, the 10% you talked about earlier, but there is an underlying assumption in there, which is a flat real oil price at 70 and a buyback pace. So my question is, To what extent would you be prepared to lean on the balance sheet to maintain the current buy-back pace? And if not, what would that mean then for your per share targets if the flat real oil price scenario did not play out?

While you were in <unk>.

Doug Leggate: You talked earlier.

Doug Leggate: About the importance so per share.

Doug Leggate: <unk> targets of 10% you talked about earlier.

Doug Leggate: So there is some underlying assumption in there, which is a flat real oil prices 70 on a buyback pace. So my question is.

Doug Leggate: To what extent would you be prepared to lean on the balance sheet to maintain the current buyback pace and if not.

Doug Leggate: What would that mean to your per share targets.

Doug Leggate: <unk> oil price scenario did not play out and I've got a quick follow up please.

Doug Leggett: And I've got a quick follow up. Good.

Wael Sawan: Well, I'll say a few words and then Sinead, if you want to pitch into this last question as well. Look, I think I think there's a few things there, Doug, that that you touch on. Firstly, the five to 7% that we're assuming is going to be the buybacks that are underpinning the per share growth. If anything, at the moment, of course, we're on the upside to that, because what's happening is, as we see that our shares are even more advantaged in today's environment, we continue to be able to, to buy back at healthy levels. And therefore, I would like us, I'd like to see, you know, us achieving comfortably that five to 7% going forward, to the fundamental of your question, to the fundamental of your question around, are we comfortable leading on the balance sheet?

Speaker Change: Well all I'll say, a few words and then sure Nate if you want to put you into this last question as well.

Speaker Change: Look I think I think there's a few things there Doug that you touch on firstly, the 5% to 7% that we're assuming is going to be.

Speaker Change: The buybacks that are underpinning the per share growth.

Speaker Change: If anything at the moment of course, we're on the upsides to that because what's happening is as we see that our shares are even more advantaged in today's environment, we continue to be able to to buyback at healthy levels.

Speaker Change: Therefore, I would like us I'd like to see us achieving.

Speaker Change: Comfortably that 5% to 7% going forward.

Speaker Change: The fundamentals of your question to the Fundament of your question around are we comfortable living on the balance sheet, yes.

Wael Sawan: Yes, you know, Sinead said it, I've said it, I mean, we have built the balance sheet for the purpose of being able to transact on a daily basis with our big trading outfit, but also to be able to do exactly this at exactly this point in time, which is create shareholder value. Whether that shareholder value is best created through more buybacks, or whether that shareholder value is created through an inorganic or the like, that's what we talk about dynamic capital allocation. Important not to forget the other part, the top line of the free cash flow per share growth, right?

Speaker Change: Sure Nate said it I've said it I mean, we have built the balance sheet.

Speaker Change: For the purpose of being able to transact on a daily basis with our big trading outfit, but also to be able to do exactly. This is exactly this point in time, which is create shareholder value whether that shareholder value is best created through more buybacks or whether that shareholder value is created through an inorganic or the like that's what.

Speaker Change: We talk about dynamic capital allocation.

Speaker Change: Important not to forget the other part the topline of the free cash flow per share growth rate that topline still has a lot of running room as I mentioned earlier that is not correlated to oil price.

Wael Sawan: That top line still has a lot of running room, as I mentioned earlier, that is not correlated to oil price. And that's not even including elements like our integrated gas portfolio and what growth it's going to give us. And just the downstream renewables upside that we have, and the self-help on both OPEX and CapEx is what will underpin that 10 plus percent that we continue to see resilient through much lower oil prices as well.

Speaker Change: And that's not even including elements like our integrated gas port for you and what growth, it's going to give us and and and just the downstream renewables upside that we have and the self help on both Opex and Capex is what will underpin that 10 plus percent that we continue to see resilient through a much lower oil prices as well.

Sinead Gorman: Did you want to add to that before? I think the only thing I would say is just to reinforce, the balance sheet has been positioned, the portfolio has been positioned. That's exactly what we've been doing over the last couple of years. So in terms of the portfolio, even just Singapore divestment that we alluded to or discussed earlier, Doug, that is not about flat price. By taking that out, we've talked about the fact it was loss making. That is actually loss making asset that comes out and therefore increases the free cash flow as it comes out.

Speaker Change: Did you want to add to that before I think the only thing I would say is just to reinforce them.

Speaker Change: The balance sheet as being positioned the portfolio has been positioned that's exactly what we've been doing over the last couple of years. There in terms of the portfolio, even just Singapore divestment that we alluded to are discussed earlier.

Speaker Change: Doug that is notably flat price by taking that high it we've talked about the fact it was loss, making that is actually loss, making asset that comes out and therefore increases the free cash flow as it comes out that's totally irrelevant to our totally disregarding price that will happen anyway, Opex Capex, which while you mentioned and then in terms of the.

Sinead Gorman: That's totally irrelevant to or totally disregarding price. That will happen anyway. OPEX, CAPEX, which you mentioned. And then in terms of the balance sheet, just to remind you, we're sitting at 7% gearing if I exclude leases. So we are very well positioned to be able to lean on that balance sheet. And you've seen us do it before in quarters where we've needed to and we will continue to do so.

Speaker Change: The balance sheets, and just to remind you we're sitting at 7% gearing if I exclude leases. So we are very well positioned to be able to lean on the balance sheets and you've seen us do it before in quarters, where we've needed to and we will continue to Jason. Thank you Shannon It Doug did I hear you, saying you had or something else.

Doug Leggett: Thank you, Sinead. Doug, did I hear you saying you had something else? Yeah, a very, very quick follow up is my hopefully my second question. And it's on the five to seven billion cost savings. I just wondered very quickly, Wael, if you could tell us where you are on that range now that you've had the portfolio changes in Nigeria and Singapore, as Sinead just mentioned. I'm just trying to figure out how much of the five to seven is portfolio related, and where you would consider to be on the run rate of that today. Thank you so much.

Speaker Change: Yes.

Speaker Change: Very quick follow up with myself hopefully my second question is on the five to 7 billion cost savings I was just wondered very quickly why youll that you could <unk>.

Speaker Change: <unk>, where you are on that range now that you've had to portfolio changes in Nigeria, Singapore as <unk>, just mentioned I'm, just trying to figure out how much of the five to seven.

Speaker Change: Literally related and where you would consider to be on the run rate of that today.

Sinead Gorman: Thank you very much, Doug. Did you want to take that last one? Yeah, I think I'll keep it simple. Doug on it. The three billion already delivered by the end of 2024 was in effect, as you know, the first year was much more on the portfolio side. The second year was much more moving towards actually just structural changes.

Doug Leggate: Thank you so much. Thank you very much Doug did you want to take that last one yeah, I think I'll keep it simple and Doug on the.

Doug Leggate: The 3 billion already delivered by the end of 2020 for was and in fact as you know the first year with much more on the portfolio side. The second year was much more moving towards actually just structural tranches will give you a formal update at the end of Q2, but what we see primarily into the second part which goes towards delivering five to seven.

Sinead Gorman: We'll give you a formal update at the end of Q2. But what we see primarily into the second part, which goes towards delivering five to seven, it's much more about the way and the changes through the company, so the way we run the company. But taking out both of those assets has removed several hundreds of millions from OPEX. That will only happen, of course, as you run through the year. It's not as though it happens immediately, because of course, there are both internal changes and people need to move over, as do the assets. So good progress, and yeah, convinced that we will deliver our target.

Doug Leggate: It's much more about the way in the changes through the company. So the way we run the company, but you know we're taking on both of those assets has removed several hundreds of millions from Opex that will only happen of course as you run through the year, it's not that that would happen immediately because of course, there are both internal changes and people need to move over as to the asset sale.

Doug Leggate: Good progress and are convinced that we will deliver our.

Sinead Gorman: Thank you very much, Sinead. Thank you for that, Doug.

Doug Leggate: My target. Thank you very much and a thank you for that Doug I think that brings us to the end. Thank you all for your questions and for joining this call.

Operator: I think that brings us to the end.

Sinead Gorman: Thank you all for your questions and for joining this call. In conclusion, we delivered a solid set of results in this first quarter and announced another three and a half billion dollars of share buybacks, which makes this the 14 quarters in a row with announced buybacks of at least three billion dollars. Looking ahead, given our track record of delivery and our strong balance sheet, we head into the rest of the year with confidence as we continue to deliver more value with less emission.

Doug Leggate: In conclusion, we delivered a solid set of results in this first quarter and announced another three and a half a billion dollars of share buybacks, which makes this the 14 quarters in a row with announced buybacks of at least $3 billion. Looking ahead, given our track record of delivery and our strong balance sheet, we head into the rest of the year with <unk>.

Doug Leggate: <unk> as we continue to deliver more value with less emissions wishing you all a very pleasant weekend. Thank you for joining us and look forward to catching up again soon thank you.

Operator: Wishing you all a very pleasant weekend.

Operator: Thank you for joining us and look forward to catching up again soon.

Operator: Thank.

Doug Leggate: [music].