Q2 2025 BP PLC Earnings Call - Q&A

T. Five results today's video presentation features Morioka, Clos, Chief Executive Officer, and Kate Thompson, Chief Financial Officer.

Before I hand over to Murray, let me draw your attention to our cautionary statement.

In this presentation, we will make forward looking statements that refer to our estimates plans and expectations.

Actual results and outcomes could differ materially due to factors. We note on this slide and in our UK and SEC filings. Please.

Please refer to our annual report stock exchange announcement and SEC filings for more details. These documents are available on our website.

Over to you Murray Thanks, Greg.

Before we begin and following the announcement a fortnight ago I'd.

I'd like to extend my welcome to the incoming chair Albert manifold.

Albert will join the board on the first of September as a nonexecutive director and chair elect before taking over as chair on the first of October.

I am really looking forward to working with them.

Turning to today's presentation.

We are now two quarters into our 12 quarter plan and I'm encouraged by our results.

Our operations are performing well with continuing strong plant reliability in the upstream and the best first half refining availability since 2006.

We continue to invest to enhance our portfolio and have also made further progress on our divestment program with expected proceeds from completed or signed agreements now close to $3 billion. We.

We have also made good progress on delivering our program to safely and sustainably reduce our costs as we grow the company.

We have now delivered around $1 $7 billion of structural cost reductions since the start of the program with around three quarters from supply chain efficiencies and organizational transformation.

We remain focused on driving reductions down to the bottom line and Kate will provide more details on this shortly.

And today, we have announced an increase to our resilient dividend for the second quarter and a further share buyback program for the third quarter.

All of this is in service of delivering a compelling investor proposition and to sustainably grow long term shareholder value I'm pleased with progress but of course, there is a lot more to do.

We remain relentless in our aim to deliver improvements right across BP.

Turning to performance highlights year to date and for the quarter.

We remain focused on safety, which is our number one priority.

Process safety events have decreased by around 30% compared to the first six months last year.

To date upstream production is ahead of plan, increasing by around 3% quarter on quarter, and averaging $2 3 million barrels a day for the first half of the year.

Upstream plant reliability and refining availability were both above 96%.

Focusing on the second quarter the strong operational performance supported the delivery of $2 4 billion of underlying net income and $6 3 billion of operating cash flow, which included a $1 4 billion build in working capital.

Consistent with our financial frame, we have announced a dividend per ordinary share of $8 320 cents, a 4% increase and a further 750 million share buyback for the second quarter.

I'm also proud of the progress the team is making in executing our strategy.

As can be seen in the progress we have made since the first quarter as we grow the upstream.

Following the safe delivery of first oil at Argo southwest extension in the Gulf of America, and first gas at Mento in Trinidad we have now delivered five of the 10 major projects startups planned through 2027.

Additionally, the azula joint venture announced the successful startup of the Gogo integrated West hub project in Angola.

The first of a further seven projects planned for start up through 2027 across our joint ventures in Norway, Angola in Argentina.

In the U S. B P X energy started up crossroads, the fourth and final central delivery facility in the Permian Basin increased.

Increasing takeaway capacity in the liquids rich basin as we continued to grow production out to the end of the decade.

We've taken for final investment decisions this year, including Shah Deniz compression project in Azerbaijan. The next major phase of development of the giant Chardonnay as gas field.

Atlantis major facility expansion project in the Gulf of America, and an infill wells program at the K G D six Bakken India.

And we've continued to deepen our hopper and Azerbaijan together with our partners. We entered into a series of agreements that will build and expand on our major oil and gas interests in.

Murray Auchincloss: Thoughts on production as well.

In Libya, we signed an Mou with a national oil corporation to evaluate redevelopment opportunities and assert basin and.

Craig Marshall: Yeah. Hi, Michael. Hello, everyone. Good morning, good afternoon, wherever you are. Thanks for the question, Michael. As you can imagine, we are pretty excited about this discovery. The petro-technical community is pretty excited about this discovery. Just to set the scene before I specifically answer your question, we are boomeranging 400 kilometers offshore from Rio. A large structure, greater than 300 square kilometers. We drilled about 500 meters off crest to de-risk the drilling program. So we are off crest. We encountered a column of confirmed hydrocarbon. That column is 500 meters. It is a high-quality pre-salt carbonate reservoir. So we are pretty excited by that. There was an elevated measure of CO2, of course, on the measurement made on the rig. I would emphasize that we have sent samples away to a certified lab. We do need full compositional analysis to come back.

Hello, everyone. Good morning, good afternoon wherever you are right. Thanks for the question Mccalley as you can imagine.

And finally, our subsurface and drilling teams have continued their strong start to the year with 10 exploration discoveries so far.

We are pretty excited about this discovery the Petro technical community is pretty excited about this discovery and just to set the scene before I specifically answered your question.

Our best year in recent memory, including an exciting well and the Boomerang a block located in Brazil Santos basin in which we hold 100% participation.

So boomerang B 400 kilometers offshore from real.

We are large structure greater than 300.

The discovery is about 400 kilometers from Rio de Janeiro in water depths of 'twenty 400 meters.

We're kilometers we drilled about 500 meters of crest to derisk their drilling programs, who were off crest.

The well was drilled to a total depth of 5850 meters intersecting the reservoir about 500 meters below the crest of the structure and penetrating an estimated 500 meter gross hydrocarbon column in a high quality pre salt carbonate reservoir with an aerial extent of greater than 300 square kilometers.

We encountered.

Column of confirmed hydrocarbon in that column is 500 meters is high quality.

Pre salt carbonate reservoir. So we're we're pretty excited by that and there was an elevated measure of C. O two of course.

<unk>.

Measurement and we've made on the rig.

Rig site analysis indicates elevated levels of carbon dioxide will now begin laboratory analysis to further characterize the reservoir and fluids discovered followed by appraisal activities subject to regulatory approval.

And I would emphasize that we sent samples away to a certified lab, we do need food compositional analysis to come back. However, we're pretty excited by am I are we worried about elevated seal to not particularly we need to find exactly what that level is but the industry knows how to handle Ella.

Craig Marshall: However, we are pretty excited by it. Are we worried about elevated CO2? Not particularly. We need to find exactly what that level is. The industry knows how to handle elevated levels of CO2. We, as a company, have quite a bit of experience through various projects over many years of handling CO2. Of course, we need to understand it before we get to full resource in place. However, not overly worried by CO2. If I can move on to your second question, we have now started up. We promised a capital markets day, 10 startups, major project startups by 2027. We have now started up five, including Argos Southwest Extension, which started up on Monday. We have probably got one more this year and then four next year.

These five major project startups for major project F. I DS 10 exploration discoveries and significant new access deals delivered so far in 2025, all underpins our confidence in the continued growth of the upstream.

Weighted levels of C O two and we as a company have quite a bit of experience through various projects over many years of handling seal too. So you know of course, we need to understand before we we we get to the full resource in place and however, not overly worried by sea water.

In downstream the team is focused on driving improved competitiveness and reliability across our facilities.

Refining availability was 3% higher than the first half of the year compared to the same period last year.

Importantly, we completed two significant refinery turnarounds in the quarter, including a major crude and coker turnaround at Cherry point.

If if I can move on to your second question.

We've now started up we promised a capital markets day 10 startups major project startups by.

Earnings in our customers business for around 50% higher than the first half of the year compared to the same period last year supported by a strong integrated performance across fuels in midstream and delivery against our structural cost program and.

2027, we've now started up five including Argos southwest extension, which started dots there on Monday.

Robley got one more this year and then for next year. So a ramp up we brought her in roughly roughly 125000 barrels per day of production, which of course was in our plan full year. So we're on plan with the ramp up from these major these major projects. So I think you'll see us sticking.

And we are addressing areas, where our results are not what we expect for example in travel centers. We are executing a program to protect near term cash flow and improved profitability at the bottom of cycle.

Craig Marshall: Out of a ramp-up, we have brought on roughly 125,000 barrels per day of production, which, of course, was not our plan full year. So we are on plan with the ramp-up from these major projects. I think you will see us sticking on plan, maybe slightly ahead of plan through this year. We have had a good start to the year, strong production across the patch. We have got a few turnarounds in the second half of the year and weather, of course, in the Gulf of America. However, we think we are having a strong production year, which we would expect to continue.

In the U S. We are working to optimize further the fuels value chain.

Meanwhile, we're reshaping our portfolio to focus on businesses and markets, where we have advantaged and integrated positions.

On plan, maybe slightly ahead of plan through this year, we've had a good start to the year strong production across the patch.

We are progressing the strategic review of Castrol at pace. The business continues to perform very well with earnings more than 20% higher than the first half of the year compared with the first half of 2024, and the second quarter, marking the eighth consecutive quarter of improved year on year performance.

A few turnarounds in the second half of the year and weather of course in the Gulf of America. However, we think we're having a strong production year, which we would expect to continue.

Thanks, Craig Hey, Craig Thanks.

Murray Auchincloss: Thanks, Gordon. Thanks, Craig.

Last month, we agreed to sell our mobility convenience and BP pulse businesses in the Netherlands, and the sale processes for our Australian retail business and Gelson Kirk and refinery continue.

Craig Marshall: Thanks, Michaela. We'll go next to Irene Himona at Sanford C. Bernstein. Irene.

Thanks, Mike Kelly, We will go next to Irene homeowner Bernstein hiring.

Thank you very much good afternoon, and congratulations on the numbers and my first question also on the Brazilian discovery, if I may can you share.

Kate Thomson: Thank you very much. Good afternoon. Congratulations on the numbers. My first question also on the Brazilian discovery, if I may. Can you share the gas-to-oil ratio and talk around how you see timing for further drilling of this discovery, please? My second question on trading operations in downstream. Murray Auchincloss, you stated somewhere that the results were not what you expect. Obviously, you do not disclose the details. So can you perhaps elaborate on some of the disappointing data points you are seeing and how you are tackling them? Thank you.

In transition, we're continuing to high grade and Decapitalize low carbon energy. This includes agreeing the sale of our U S onshore wind business following a competitive bidding process.

The gas to oil ratio and talk around.

How you shape timing for further drilling.

In offshore wind, we have completed the formation of the Jarrod next BP, Our 50 50 joint venture.

Drilling of this discovery place and then my second question.

Ta in downstream marry your stage somewhere that the results were not what do you expect.

Finally, our decisions to exit projects in the U S and Australia demonstrates the further focusing of our hydrogen and Ccs portfolio.

Let's say you don't disclose the details so can you perhaps elaborate on.

In summary, strong operational performance this quarter and good strategic progress.

Some of the disappointing.

Data points, you're seeing and.

Our focus is on maintaining this momentum as we look ahead to the second half of 2025 and beyond.

What how you're tackling them. Thank you.

Great. Thanks, I ran I'll tackle the first one and I'll pass over to Gordon to talk about.

Murray Auchincloss: Great. Thanks, Irene. I will tackle the first one. I will pass over to Gordon to talk about the first question on Brazil. I think on TravelCenters of America, maybe just to talk about MNC as a whole first. We have had a very good run in MNC now for the first half of 2025 versus the first half of 2024. We are up about 50% in profitability across the two half years. The second quarter in MNC was the best on record since we started talking about MNC back in 2012. That is a fantastic result for M and the teams. The particular challenge that we have in TA is that we are seeing diesel margins across that business quite tight and not making as much on diesel as we would like. We think we are taking some actions to fix that.

With that I'll hand, it over to Kate to talk through our second quarter financial results.

The first question on Brazil, I think on travel centers of America.

Thank you, Larry and Hello, everyone.

I'll start with the segment financial performance in the second quarter, the gas and low carbon energy underlying financial results with $500 million higher than the previous quarter, reflecting an average gas marketing and trading results compared with a weak result in the first quarter and higher production volume partly.

Maybe just to talk about MSA as a whole first.

Had a very good run and haven't seen now.

For the first half of 2025 versus the first half of 2024 were up about 50% and profitability across the two half years and the second quarter and MMC was the best on record since we started talking about MSA.

All set by lower realization and a higher DD&A charge.

Back in 2012, so that's a fantastic result for EM in the teams that particular challenge.

And oil production and operations. The underlying result was $600 million lower compared to the previous quarter, reflecting lower realization into higher DD&A charge, partly offset by higher production.

But we Havent T. A is that we're seeing diesel margins across that business quite tight and.

Not making as much on diesel as we would like we think we're taking some actions to fix that but that's a that's a particular area of concentration for the midstream trading in Ta business itself to try to drive diesel margins to a better place and to get more customers into the business. So that's really the area of focus we have but across the rest of MMC.

And customers and products. The underlying result was around $900 million higher than the previous quarter.

Murray Auchincloss: That is a particular area of concentration for the midstream trading operations and TA business itself to try to drive diesel margins to a better place and to get more customers into the business. That is really the area of focus we have. Across the rest of MNC, very, very strong performance, both capturing customers, capturing margin, driving costs out of the system. I am really proud of the result across the retail fleet, as well as aviation, as well as gas drill. Just a tremendous quarter for the team. Congrats to the team. Gordon, over to you on Brazil.

Looking at the businesses and customers the underlying profit was around $400 million higher than the previous quarter, reflecting seasonally higher volumes and stronger fuels margins.

A very very strong performance, both capturing customers capturing margin driving costs out of the system.

This is the best T K for over a decade as we continue to build momentum across the business.

Really proud of the result across the.

In products, the underlying profit with around $500 million higher than the previous quarter, reflecting stronger realized refining margins and a strong oil trading contribution.

Retail fleet as well as aviation as well as Castrol, just a tremendous quarter for the team. So congrats to the team Gordon over to you on Brazil, Yes. Thanks for the question I think just too early to be precise on gas oil ratios, we need to have that full compositional analysis back from the lobs, we took samples right across the.

Craig Marshall: Yeah, thanks for the question. I think it is too early to be precise on gas-to-oil ratios. We need to have that full compositional analysis back from the labs. We took samples right across the column. We should get the different compositional analysis at different depths in the column. That will be very, very telling when we get these results back. I will not speculate on the gas-to-oil ratio. In terms of timing, we are going to go through an appraisal program with agreement with the regulator, of course, which will probably involve some sort of drill stem test to get some dynamic data. It would be great to get some dynamic data from this well as we plan the development scheme. We will move at pace, Irene. If this turns out as good as we think it is going to be, we will absolutely move at pace.

Actually offset by a significantly higher level of turnaround activity.

I do want to recognize the trading organization for its performance this quarter during what was a period of challenging trading conditions.

Column.

So we should get the different compositional analysis of different depths in the column and that will be very very very telling when we get these results Buck so I won't speculate on the gas oil ratio in terms of timing, we're going to go through an appraisal program with the with the agreement with the regulator of course, which will.

This is a demonstration that the organization's resilience and that continuing focus on creating value and delivering returns through the cycle.

Below the operating segments underlying finance costs were $1 $1 billion and Noncontrolling interest was $300 million similar to the prior quarter and expected to remain at this level for the next couple of quarters.

Involve some sort of drill stem test to bring it to forget some dynamic data it would be great to get some.

The underlying effective tax rate decreased in the second quarter to 36%, reflecting changes in the geographical mix of profits.

Dynamic data from this well.

As we plan the development scheme.

But we won't move at peace Irene.

For the first half our underlying tax rate was 43% and we continue to expect the full year underlying effective tax rate to be around 40%.

If this turns out as good as we think is going to be we will absolutely move at pace.

Thanks Irene.

Murray Auchincloss: Thanks, Irene.

Craig Marshall: Thank you, Irene. We'll go next on Teams to Lydia Rainforth at Barclays, please.

Thank you Irene we will go next on teams to Lydia reinforce at Barclays. Please.

Taken together, we reported group underlying replacement cost profit of $2 $4 billion net adverse suggesting items of 300 million and inventory holding losses after tax this $400 million.

Thanks, Craig.

Lydia Rainforth: Thanks, Craig. Good afternoon. Two questions, if I could. Murray, in the stock exchange announcement, you do talk about a thorough review of the portfolio, a further cost review. Can you just talk through where that is different to where you were six months ago and what you are seeing that kind of gives you confidence that there is more value to come? Then, I mean, I certainly see what you mean. Clearly, you have done brilliantly well on the cost side. Perhaps, could you go through some examples of where you are seeing some of those savings and particularly the AI side? It does feel like upstream production is really good and probably leading the pack there. There is more to do downstream and corporate. I do not know if that is a fair analysis for that.

Good afternoon tea questions if I could.

And the stock exchanges.

Talk about.

If the portfolio further cost relief can you just talk to me about flat with a stake of 26 months and what you're seeing that kind of gives you confidence that there is more value to come and then tie in aesthetics clearly each of them well on the cost side.

On an I FRS basis, our headline profit was $1.6 billion.

Now turning to cash flow and the balance sheet.

Operating cash flow was $6 $3 billion, including a working capital build of one 4 billion.

Operating cash flow was $3 $4 billion higher than the previous quarter, reflecting higher earnings and lower working capital build.

Okay got it could you guys maybe some examples of why you're seeing some nice savings and JCB AI sites. They just feel like that's changed really good and probably leading the pack that that is mostly downstream incorporate a lot of data about the stat analysis for that.

We did see some of the first quarter working capital build with us in the second quarter, but this was more than offset by the scheduled $1 1 billion dollar Delta of America settlement payment and other movements.

Murray Auchincloss: Super. Thanks, Lydia. Look, I think on the portfolio side first, then I will hand to Kate. I will ask M&K to talk about the digital and AI side of things. On the portfolio, look, we have had a tremendous year for access inside the upstream with access in Azerbaijan, in Iraq, in Libya, in Abu Dhabi, and India. We are very excited about all that. You never really plan to have 10 exploration successes that are commercial. You just do not see that in history. They are pretty big. Namibia is pretty big. Obviously, Brazil, as Gordon describes, is pretty big as well. We constantly think about the portfolio. We are constantly churning the portfolio. We want to drive absolute discipline into this and be driven by value and returns more than anything else.

Super Thanks for that.

Look I think on the on the portfolio side first and then I'll hand to Kate and I'll ask Amoco to talk about the digital and AI side of things.

Capital expenditure was $3 $4 billion, bringing the first half capex to around $7 billion.

On the portfolio look we've had a tremendous year for access inside the upstream with access in Azerbaijan in Iraq, and Libya and Abu Dhabi.

Divestment proceeds received in the quarter were around one $4 billion, bringing the first half to around one 7 billion.

In India. So very excited about all of that and then you never really plan to have 10 exploration successes that our commercial you. Just don't you don't see that in history, and they're pretty big Namibia is pretty big.

As Mary said I expected proceeds from completed or signed agreements are now close to $3 billion underpinning our continued confidence in delivering expected divestment proceeds for 2025 in the range of $3 billion to $4 billion.

And obviously, Brazil is Gordon's describes pretty big as well so.

Together, our second quarter cash in place driven by higher operating cash flow and divestment proceeds exceeded our cash outflows, resulting in a reduction in net debt to $26 billion.

We constantly think about the constant portfolio, we're constantly turning the portfolio, we want to drive absolute discipline into this and be driven by value and returns more than anything else. So it's time to take stock as as Albert joins as our new chair and work together on this conundrum of lots of lots of great.

Murray Auchincloss: It is time to take stock as Albert joins as a new chair and work together on this conundrum of lots of great opportunities. You can only choose so many in life. We are doing it live as we speak. If you look back across the past three to six months, we have dropped three rigs across the portfolio as not competitive inside our capital frame. We have decided to shut down a program in Australia on green hydrogen. We have decided to shut down some programs in the U.S. on blue hydrogen and CCS. We just constantly challenge ourselves to drive to the highest quality inside the portfolio. Now, with the extreme success that we have seen inside the upstream, it is the right moment in time to do that as well. Kate, over to you on cost and then M&K.

Turning to our financial frame, which remains unchanged, we remain committed to our net debt target of $14 billion to $18 billion.

Opportunities, but you can only change so many M life. So you know we're doing it live as we speak if you look past back across the past three to six months, we've dropped three rigs across the portfolio is not competitive inside our capital frame we have.

On shareholder distributions Firstly, our policy is to maintain a resilient dividend for the second quarter, we have announced a dividend of 8.32 cents per ordinary share an increase of 4%.

Decided to shut down a program in Australia on Green hydrogen we've decided to shut down some programs in the U S on blue hydrogen in Ccs. So we're just constantly challenge ourselves to drive to the highest quality inside the portfolio and now with the extreme success that we've seen inside the upstream it's for the right time moment in time to do that as well Kate over to you on.

Secondly, we are committed to sharing excess cash through buybacks over time.

This policy enables us to share the upside and cash generation when the price environment is stronger while the.

Enabling the balance sheet to remain resilient in a lower price environment.

And today, we announced $750 million of share buybacks to be executed by the three key results.

Cost Micah, yeah, Thank you and hi, Lydia I could see them.

Kate Thomson: Yeah, thank you. Hi, Lydia. Good to see you. Your description of our cost progress as doing brilliantly well, I think I might describe it as decent progress. Why do I say that? I say that because there is a lot more to do. We set out the $4 billion to $5 billion target in May last year against the 22.6 and delivering $1.7 billion of structural cost reductions to date, I think, is pretty good progress. As you look at what we are doing quarter on quarter, you can see we do now have some momentum, which is great. I want to keep seeing this driving all the way down to the bottom line. We have reduced absolute costs by about half a billion. As I say, good progress, more to do.

Our guidance remains for total dividends and share buybacks to be in the range of 30% to 40% of operating cash flow over time.

Your description of our cost program progresses.

Permanently well I think I might describe as decent progress.

And why do I say that I say that because there's a lot more today, we set out in the 45 billion target and May last year against the 22.6 and delivering $1 7 billion of structural cost reductions today I think is pretty good progress and as you look at what we're doing in quarter on quarter. You can see we do now have some momentum which is.

Looking ahead, we continue to expect to announced buyback decisions at the time of course the results. The board will of course be mindful of both short term macro volatility and the medium term outlook for prices across the basket of commodities that drive our cash flow.

I'd now like to spend the next few minutes highlighting the progress we've made on two of our primary targets.

Great I want to keep saying that's driving all the way down to the bottom line. We've we're pretty stops it costs by about half a billion. So as I say good progress more today.

Firstly on our target to deliver 20% compound annual growth and adjusted free cash flow through 2024 to 2027, we're six months into our reset strategy and making good progress delivering around 40% growth year on year on a price adjusted basis supported by interventions we've taken.

As I think about the $4 billion to $5 billion and totally weevil withheld that that that's taking ourselves across most of our businesses and functions to top quartile, we have to keep challenging as you've heard me say before I won't say accelerate and exceed that wherever we can and it's only right that we should be challenging ourselves to say how much further we can go tell me.

Kate Thomson: As I think about the $4 billion to $5 billion internally, we have always held that, that that is taking ourselves across most of our businesses and functions to top quartile. We have to keep challenging us. You have heard me say before, I want to accelerate and exceed that wherever we can. It is only right that we should be challenging ourselves to see how much further we can go. Can we hit best in class in certain parts of our portfolio and understand what it takes to do that? As I say, I am pleased with the progress to date, but more to do. M&K.

On Capex and the benefit of lower cash taxes.

As we continue to drive improvement in performance, we remain confident in delivering the underlying organic growth from across the businesses.

Best in class in certain parts of our portfolio and understand what it takes to do that so as I say I'm pleased with the progress to date, but more today.

Secondly, we're committed to delivering $4 billion to $5 billion of structural cost reductions against our 2023 baseline by the end of 2007 and to updating you on our progress every six months.

Yeah. So I'll just touch on three quick thing so technology supply chain and data. So on the technology side, what we have done and this is inside of the technology organization is we're actually looking at reducing all we have been reducing our costs both through a process of digitization, but also we have reduced the number of contractors. The number of staff that we have in the <unk>.

Murray Auchincloss: I will just touch on three quick things: technology, supply chain, and data. On the technology side, what we have done, and this is inside of the technology organization, is we are actually looking at reducing, or we have been reducing our costs both through a process of digitization. We also have reduced the number of contractors, the number of staff that we have in the technology organization. While we are reducing our own costs, we have been looking at streamlining applications, streamlining the partners that we work with to a small set now of world-class tech partners. That is a lot of what we are doing in technology. For the organization, supply chain is one of the big places that we are focusing in terms of how we can access and leverage savings on costs.

Delivering sustainable cost reductions safely is an important factor underpinning our adjusted free cash flow target. This is an area of relentless focus for us as a leadership team.

Technology organization, while we're reducing our own costs, where we've been looking at streamlining applications streamlining the partners that we work with to a small set now of World Class Tech partners. So that's a lot of what we're doing in technology for the organization supply chain is one of the Big places that we're focusing in terms of how we how we can access and <unk>.

Before looking at progress, let me remind you how we frame our $4 billion to $5 billion target, which represents around 20% above 2023 underlying operating expenditures of $22 $6 billion.

As a reminder, underlying operating expenditures are reported across two income statement lines.

Average savings on costs. So the total resource management project, which K program, which Cape talked about is that's around our third party contractors. So far we've had 3200 exit we've got another 1200 to exit and we're continuing to now optimize and focus this using our patented system, they're using to track our cost.

Murray Auchincloss: The total resource management project, which Kate talked about, that is around our third-party contractors. So far, we have had 3,200 exit. We have got another 1,200 to exit. We are continuing to now optimize and focus this using our Palantir system that we are using to track our costs. We are connecting that to our ERP system and another people tracking system in our offshore platforms. We are looking at invoices, so contract value leakage to make sure the invoices we pay are the right amounts for the pieces of work we do. AI is all over this. We are leveraging Palantir and our own AI systems to do this. The last thing I will touch on is data. Across the company, we are currently managing about 100,000 pipelines of data across BP. We see this is costing us money, costing us more than it should do.

Production and manufacturing expenses or paying them.

And distribution and administration expenses or DNA.

Starting with our fourth quarter 2024 results, we introduced additional disclosures in our results announcements, which further breakout the PNM and DNA costs in today is that very primarily by volume.

And we're connecting that to our ERP system and another people tracking system in our offshore platforms. We're looking at invoices, so contract value leakage to make sure. The invoices. We pay are the are the right amount for the work pieces of work, we do and AI is all over this so we're leveraging pelletier and our own AI systems to do this and then the last.

First there is the tower and our underlying cost base.

We believe the additional disclosures frame, our underlying operating expenditure and structural cost reductions consistently with peers and improve comparability.

I'll touch on is data so across the company. So we have we're currently managing about 100000 pipelines of data across BP. We see this is costing us money costing us more than it should do and it's actually preventing people and the team from being able to use AI in a consistent way across the company both for growth and for for a reduction in costs.

And as a reminder, potential reductions that would be associated with the outcome of the Kestrel strategic review and Kelsen cookies transaction are not included in this target.

Murray Auchincloss: It is actually preventing people in the team from being able to use AI in a consistent way across the company, both for growth and for reduction in costs. We are partnering with Databricks and Palantir to implement a new unified data platform across the whole company that will both reduce cost and actually provide us a lot better transmission of data across the whole company and reduce that 100,000 pipelines into a single one. This project typically could take up to five years. We are going to be done with it by the middle of next year, so in less than two. These are some of the things we are doing to impact cost across the company. Thanks, M&K. I think when we talk to our partners about how far we are going on that data management, I think the answer is cutting edge.

And we have made strong progress in delivering these cost reductions since we started this program in 2024, we delivered around $750 million of structural cost reductions.

We're partnering with data breaks and pelletier to implement a new unified data platform across the whole company that will be both reduced cost and actually provide us a lot better transmission of data across the whole company and reduce that 100000.

In the first half of 2025, we've continued to build positive momentum delivering an additional $900 million in savings.

That means since the start of our program. We have now delivered around $1 $7 billion of structural cost reductions more than offsetting over $1.2 billion of costs related to the growth of our business and environmental factors.

Pipelines into single one this project typically could take up to five years, we're going to be done with it by the middle of next year. So in less than two. So this is these are some of the things we're doing to impact cost across the company.

Thanks, Erika and I think I think when we talk to our partners about how far were going on that data management I think the answer is cutting edge cutting edge is right cutting edge globally, So where we're really looking forward to it and.

This results in a reduction in absolute underlying operating expenditure of around $500 million.

Craig Marshall: Cutting edge is right.

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

Now looking at the first half of 2025 and more detail around 50% of gross costs were organic these relate to grow in the upstream with major project startups, such as mento, and Grace and BP ex energy production driving higher underlying operating expenditures.

Liddy as we've said in the past we're looking forward to taking all of the hard work, we've done with counter in the upstream into the downstream as well and I can update you on that if anybody wants to ask Craig back to you.

Super Thanks, Lydia, we'll going to jump to the phones for a couple of questions now so I'll take the first question from D Levy at Morgan Stanley.

Craig Marshall: Super. Thanks, Lydia. We are going to jump to the phones for a couple of questions now. I will take the first question from Guy Levy at Morgan Stanley. Guy.

The other 50% of growth is inorganic related to the full consolidation of light source be PE, and pp bioenergy, which means our underlying operating expenditures reflect removing costs associated with divestments and cost growth acquisitions.

The first one just going back to <unk>.

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

A.

Presenting on the agency a couple of a couple of years ago at the time of the beat around they published some studies point to a potential of <unk> D O olive oil in place.

We have no other material inorganic additions in the plan.

Our underlying operating expenditures are also influenced by environmental factors, notably inflation of around $300 million.

Do you recognize this number is that a sort of the level that you have in mind at the moment.

And then the second one just if you can provide us an update on the disposal process of Castro.

We continue to work to offset much of this through our procurement organization, including working closely with supplier allowances.

What stage are we at the moment.

Any specific expectations in terms of timing and anything that you can possibly share with us in terms of valuation at this point.

Looking forward, we expect continued momentum in the pace of delivery into the second half of 2025.

That would be great. Thank you can you just to clarify your first question on Brazil is there a number that youre referencing we couldn't understand what number you said.

Progress at our structural cost reduction program reflects the significant changes we've made to the performance culture across the organization to further embed discipline and accountability.

Murray Auchincloss: Guy, just to clarify, your first question on Brazil, is there a number that you are referencing? We could not understand what number you said.

AH Yes, there was a number in a specific reports from the Io agency of 2 billion Boe of oil in place.

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

You can see on this slide the contribution from each of the business grades with around 60% coming from the CMP segment since the start of 2024.

But admittedly I'm not sure if that number has had been updated or if that's something that you are that you have in mind at the moment. Thanks, Kate Gordon why don't you take the first one and I'll take I'll take the second one yes that Thanksgiving I don't recognize the 2 billion barrels.

We've also been heavily focused on reducing our core personnel overhead costs and we've delivered over $400 million of reductions from these activities.

Murray Auchincloss: Thanks, Guy. Gordon, why don't you take the first one? I'll take the second one.

Craig Marshall: Yeah, thanks, Guy. I do not recognize the 2 billion barrels. Again, I would just emphasize the scale of the structure, 300 kilometers square with a 500-meter column. That is off crest. So that 2 billion does not resonate with me, to be specific.

The benefits of this shows up in the business group numbers with the remaining $100 million in other businesses and corporate.

And again I would just emphasize the skill of the structure mm 300 kilometer square with a 500 meter column and nuts off crest, and so that 2 billion doesn't resonate with me to be specific.

Looking at they reductions by lever across the supply chain, we've delivered around $900 million of savings over a third of our supply chain spend reductions same southpaw reflect a reduction in contract is significantly enabled by technology, which I'll elaborate on in a minute.

And we've we've declared that it's the largest.

Murray Auchincloss: We have declared that it is the largest discovery in 25 years.

Discovery in 25 years.

Craig Marshall: 25 years, yeah.

Dating back to Kashagan and Chardonnay is I think for the analogies that we put together so that should help you.

Murray Auchincloss: Dating back to Kashogan and Chardonnay, I think, were the analogies that we put together. So that should help you understand it a little bit. I think on gas drill, look, I am not going to say much. It is a commercial process. There is a lot of interest in it. And we are moving at pace. It is a complicated business. It operates in 120 countries. But there is a lot of interest in it. And we will update you when we can. We will transact for value. Craig, back to you.

We have already reduced our contract to numbers by 3200, and we expect a further 1200 contractors to exit by the end of 2025.

I understand that a little bit I think on Castro look I'm not going to say much its a commercial process. There's a lot of interest in it and we're moving at pace. It's a complicated business operates in 120 countries, but there's a lot of interest in it and we will update you when we can.

Beyond that we will continue to rigorously review the remaining contractor activity across our businesses and functions.

We will transact for value Craig back to you.

And organizational transformation, we now expect 6200 BP roles to be impacted by the end of 2025 out of an office based work force of 40000 employees.

Thanks Murray, Okay, we will stay on the phones and take the next question from Matt Lofting at JP Morgan match.

Craig Marshall: Thanks, Murray. Okay, we'll stay on the phones and take the next question from Matthew Lofting at J.P. Morgan Chase. Matt.

Hi, Thanks for taking the questions two if I could please first just wanted to follow up on the earlier.

Matthew Lofting: Hi. Thanks for taking the questions. Two of them, please. First, I just wanted to follow up on the earlier comments you made around the further cost review specifically. I think you referred in the press release this morning to targeting sort of best in class. I wondered if you could just expand on how you think about defining best in class in the context of the moving parts in the industry, technology, and the evolution there, and also the fact that cost and fiscal regimes tend to vary across different geographies. Second, I just wanted to ask you about trading. Performance seemed good in Q2 versus wider industry comps. What is your outlook from here regarding the broader conditions for trading and optimization when you look through to the sort of the second half of the year?

With a majority of the exits anticipated in the fourth quarter of 2025, we expect material incremental savings from the first quarter of 'twenty six.

Comments you made around.

The further cost reviews, specifically I think you've said in the press release this morning too.

Marketing sort of best in class. So I wondered if you could just expand on how you think about.

And as Mary mentioned, we're in action high grading our portfolio more than 50% of portfolio related reductions to 2027, and now underpinned by announced divestments.

Finding best in class in the context of that.

The moving parts in the industry technology evolution, there and also the effect of cost in fiscal regimes to tend to vary across different geographies.

Before I close with guidance I, just wanted to showcase how technology is helping to improve capital productivity and drive cost reductions right across the portfolio.

And then second.

Just wanted to ask you about trading before them and see them in good and in the second quarter versus why the industry comps.

Our total resource management program Leverages advanced analytics tool developed in collaboration with talented to systematically manage the contractor landscape across BP.

What's your outlook from here regarding the broader conditions for trading and optimization. When you look through to the sort of second half of the year.

And if you were to continue to see that.

Matthew Lofting: If you were to continue to see a, let us say, a sort of a moderated baseline, as we have seen at times in the first half of the year, is Q2 seen within the company as a good, excellent baseline? Thanks.

This initiative has enabled us to achieve significant supply chain spend reductions as I previously mentioned.

So there are moderated baseline as we've seen at times in the first half of the year.

Is Q2 seen within the company is a good approach baseline. Thanks.

And organizational transformation, we're reducing the number of ERP systems that we use by 85% democratizing data to allow us to be executed in lower cost locations and implementing AI powered systems.

Super I'll take I'll take trading Kate if you want to talk a talk about best in class place.

Murray Auchincloss: Super. I will take trading. Kate, if you want to talk about best in class, please. Look, I think on trading, first, an average quarter for the gas business and a strong quarter for the oil trading business. As we look out to conditions moving forward, I think the things I would say on the oil RPT side is that inventories from a physical basis are quite tight. So there is likely to be a fair bit of volatility in the event that there are outages occurring. That is probably true through the third quarter and into the start of the fourth quarter. In the fourth quarter on the oil side, we see more production coming online from outside of OPEC. Trading conditions will highly depend upon what OPEC Plus does, what happens with sanctions on Russia, what happens with sanctions on Iran.

Look I think on trading first an average quarter for the gas business and a strong quarter for the oil trading business.

But in the businesses that are offshore oil and gas facilities digital tools enable us to optimize production through real time surveillance and equipment monitoring increasing overall BP operated production by around 5%. In addition to protecting over 10% more from going offline.

As we look out two conditions moving forward I think the things I'd say on the oil RPT side.

Is that inventories from a physical basis are quite tight.

So there's likely to be a fair bit of a fair bit of volatility in the event that there are outages occurring.

Planning, a well is complex and can take months and Azerbaijan. The engineers are now using generative AI to run thousands of scenarios in just a few days, helping to deliver a 90% reduction in the time required for well planning.

That's probably true through the.

The third quarter and into the start of the fourth quarter.

In the fourth quarter on the oil side, we see more production coming online from outside of OPEC.

And trading conditions were highly dependent upon what OPEC plus does.

In conjunction with Palin tear we're now taking the learning from a decade of digitizing the upstream across to our refining business. The way, we see multiple opportunities to remove costs create efficiencies and optimize our refinery portfolio.

What happens with sanctions on Russia, what happens with sanctions on Iran. So I would I would expect continuing volatility in that space on diesel and gasoline.

Murray Auchincloss: So I would expect continuing volatility in that space. On diesel and gasoline, we move into a Henry Tarr season in October as well. So that should provide conditions for volatility. I think on the gas side, from our perspective, we trade optionality. That is how we have designed the gas books. We do not necessarily try to link to a particular index. We do not try to do point-to-point sales. Instead, we look for opportunities to arbitrage between price differences on the spot or across time. It feels, in a market where natural gas becomes oversupplied as you move into late 2026, 2027, that we are well positioned to be able to arbitrage between these things. I think what you should expect moving forward is, as we have guided in the past, which is 4% to returns of the corporation from trading.

We move into a heavy tire season.

In October as well, so that should that should provide conditions for volatility.

And then in convenience the mobility, we're utilizing AI and digital tools to drive efficiency in our marketing organization.

I think on the gas side.

From from our perspective, we'd trade Optionality, that's how we've designed the gas books.

<unk>, we're now producing point of sale marketing materials and around 50% at the time it used to take that.

So we don't necessarily try to link to a particular index. We don't try to do a point to point sales instead, we look for opportunities to arbitrage between price differences.

By allowing greater speed to market and significantly reducing costs.

Turning to guidance and looking ahead to the third quarter, we expect upstream production to be slightly lower compared to the second quarter.

Spot or are across time, and it feels in a market where natural gas becomes oversupplied as you move into late 'twenty six 'twenty seven that we're well positioned to be able to arbitrage between these things and I think what you should expect moving forward is as we've guided in the past, which is 4% to returns of the corporation from trading.

And customers seasonally higher volumes compared to the second quarter and fuel margins to remain sensitive to movements in the cost of supply.

And in products, a significantly lower level of planned refinery turnaround activity, which is partly offset by seasonal effects of environmental compliance costs.

I assume it's half oil assume it's half gas and assume it's ratable across each quarter it won't be right in any one quarter, but durably as what we have done over the past four and a half years. So thank you for that question, Matt over to you Kate on the cost and best in class, Yeah, Yeah, Hi, Matt.

Murray Auchincloss: Assume it is half oil, assume it is half gas, and assume it is ratable across each quarter. It will not be right in any one quarter, but it durably is what we have done over the past four and a half years. So thank you for that question. Matt, over to you. Kate on the cost and best in class.

In terms of cash flow, we expect cash taxes paid to be around $1 billion higher than the second quarter due to the timing of installment payments.

And we have elected to redeem $1 $2 billion of hybrid bonds. In September. This represents the remaining amount callable in the June to September 2025 window.

Kate Thomson: Yeah, hi Matt. I will maybe start with the areas of the group that are slightly easier to benchmark and understand. I would put into that category the central functions like finance, like people and culture, like technology. I think we have got a pretty good sense of where we probably stack up against our peer group with regard to that. Customers is similar. I think it is fairly straightforward to benchmark. As we step through the refining and the upstream part of the portfolio, that is where it gets more complicated. With refining, we have been using the Solomon benchmarking very regularly. As I said, we are waiting for the updated benchmarks to come in over the summer to get a sense of where we stack up across our refining portfolio versus our peer group.

Maybe start with the areas that the groups that are slightly easier benchmark can understand then I would put into that category the sort of central functions like finance.

And this was pre financed in November 2024.

Like and people people and culture like technology, I think we've got a pretty good sense of where are we probably stack up against our peer group with regard to that.

Regarding the full year 2025 guidance. In addition to the change in customers I have a few things to highlight.

And customers are similar I think it's fairly straightforward to benchmark them as we as we step through the refining and the upstream part of the portfolio that is where it is it gets more complicated with refining we have been using the Sullivan benchmarking very regularly and as I said, we're waiting for the updated benchmarks.

And products were now no longer providing guidance on refining margins because we're now giving you a weekly refining indicator margin, which I will give you more detail on shortly.

The a b and C underlying quarterly charge is now expected to be in the range of <unk> $5 billion to $1 billion subject to foreign exchange impacts.

Come in over the summer to get a sense of where we stack up across our refining portfolio versus our peer group.

We now expect the depreciation depletion and amortization to be slightly higher than 2024.

Kate Thomson: With the upstream, we go basin by basin because, to your point, you need to understand the construct of the businesses inside your basin. You cannot just look at the unit production cost. That takes into consideration various component parts, whether it is PSAs or tax and royalties. It is going down to a basin level so that you can understand within that basin how you are tracking against your peer group. That is the piece of work that we are going to get into at pace as we get these data points in over the summer. As we get a sense of where there are gaps versus what we consider to be best in class, we will update you as we go.

And with the upstream we we go basin by basin because to your point you need to understand the construct of the businesses inside your base and you can't just look at they they are unit production cost in that.

We continue to expect divestments and other proceeds to be around $3 billion to $4 billion with the remaining proceeds weighted towards the fourth quarter of 2025.

That takes into consideration various component parts, whether it's PSA as a tax and royalty is that it's getting down to a basin level. So that you can understand within that base and how you're tracking against your peer groups say that's the piece of work that we're going to get into at paces. We got is the state these data points over the summer and as we get a sense of why they're all gaps the assessed what we.

Before I hand back to Mary and consistent with our continuing effort to improve guidance and enhance transparency.

Effective today, we are introducing a new BP refining indicator margin.

This metric is more representative of Bp's refining portfolio and realized refining margin per barrel.

Can centers to be best in class well well update you as we go and I guess any other thing I would say that as.

We believe this weekly disclosure enhances external understanding of our realized margin delivery in refining profitability.

Kate Thomson: I guess the only other thing I would say that is worth remembering is we have been pretty explicit that the $4 billion to $5 billion of structural cost reductions does not take into consideration any transactions with regard to Castrol and Gales and Kirken. As and when we reach a conclusion on those two transactions, we will update the market on those two elements and how that would impact the $4 billion to $5 billion cost target as well.

It's worth remembering is we've been pretty explicit that the $45 billion.

Despite this we've also updated our refining a rule of thumb.

Actual cost reduction doesn't take into consideration into consideration any transactions with regard to Castro and gals Luca can say as and when we reach a conclusion on those two transactions will update the market on those two elements and how that would impact the four to 5 billion cost target as well great. Thank you Kate.

As a consequence of this change the BP refining market margin is retired.

The price assumptions applicable to two of our primary targets have been rebased with the refining indicator margin and importantly, there is no change to our targets.

Murray Auchincloss: Great. Thank you, Kate.

Thanks Kate.

Craig Marshall: Thanks, Kate. Thank you, Matt. We will come back to Teams, and I will let it do my hard work. We will start with the first hand up, which is Joshua Stone. Joshua at UBS, please.

More details can be found in the appendix to this presentation and in our supplementary disclosures now let me hand back to Murray Thanks, Kate to summarize in the first half of 2025.

Thank you, Matt we'll come back to teams and I'll, let it do my hard work will start with the first hand up which is Josh stone Josh at UBS. Please.

We have delivered strong operational performance with greater than 96% reliability.

Yeah, Thanks, and good afternoon to.

Biraj Borkhataria: Yeah, thanks. Good afternoon. Two questions, please. If I could follow up on trading, you clearly had a very good performance at oil trading this quarter. It goes against some of the trends we have seen elsewhere in the market. You made some comments in the press around shortening the duration of trades. I was hoping that you could just elaborate on this and speak to if there are any other drivers that are resulting in this sort of relative strength you are seeing versus some others, whether that is maybe access to data or appetite to take on risk. Any comments there would be helpful. Secondly, on impairments, there was another lump of impairments this quarter, about $1.2 billion. You have given us the divisions. Are you able to elaborate on which assets are actually driving these impairments? Thanks.

Two questions. Please if I could follow up on trading.

<unk> made further progress on delivering structural cost reductions enhanced our portfolio, notably in the upstream and progressed, our divestment program and announced a second quarter dividend increase of 4% per ordinary share payable in the third quarter and second quarter share buyback of $750 million to be executed.

Clearly a very good performance of oil trading this quarter in it and it goes against some of the trends we've seen elsewhere in the market.

You made some comments in the press around shortening the duration of trades. So I was hoping that you just elaboration mission.

If there's any other drivers that are resulting in this the sort of relative strength youre seeing versus some others.

By the time of our third quarter results.

Actually the access to taste or appetite to take on risk.

We are two quarters into a 12 quarter plan and are laser focused on delivery of our four key targets.

Comments that would be helpful.

And then secondly on impairments.

And while we should be encouraged by early progress we know there's much more to do.

Another lump of in impairments this quarter about $1.2 billion, you've given us the divisions, but are you able to elaborate on which assets are actually driving these impairments.

In advance of Albert joining the board on the first of September he and I have been in discussions and have agreed that we will conduct a thorough review of our portfolio of businesses to ensure we are maximizing shareholder value moving forward.

Great. Thanks, Josh I think on trading.

Murray Auchincloss: Great. Thanks, Josh. I think on trading, without giving away commercial advantage, I would just say on the oil trading side, they shorten the duration. Normally, you trade three, six, nine months in duration for time spreads, et cetera. There is a lot of path risk around that when there is macro volatility and headline volatility. So you move to shorter duration trades to manage that risk. That is what the teams were doing through April and May. I think I will stop there for fear of giving up any commercial advantage beyond that and pass over to Kate on the question on impairments.

Without giving away commercial advantage I'd, just say on the oil trading side. They shorten the duration normally you trade 369 months.

Allocating capital effectively.

We are also initiating a further cost review and while we will not compromise on safety. We are doing this with a view to being best in class in our industry.

And duration for time spreads et cetera, but there's a lot of path risk around them that were around that when there's when there's macro volatility and headline volatility. So you've moved to shorter duration trades to manage that risk and that's what the teams were doing through April and May I think I think I'll stop there for a pair of giving up any commercial advantage beyond that and pass over to Kate on the question on <unk>.

We reaffirm our commitment to ensure that there is an embedded process of continuous business improvement across our operations. This is all in service of accelerating the delivery of our strategy BP can and will do better for its investors. Thank you for listening.

Okay.

<unk>.

Kate Thomson: Yeah. Hi, Josh. Thanks for the question. We have taken a number of impairments across the businesses this quarter. The first thing I'd say is that we're never happy to impair assets. It was capital once, and we're very cognizant of that, which is why Murray and I are driving so hard on improving and increasing our capital productivity in every part of the business. Maybe a couple to call out, which may be helpful. In the customer and products space, we impair assets where we are working through a sales process. There's an accounting approach that we have to take based on the value that we expect to see versus the value at which we hold those assets. We took decisions, as Murray referenced a little bit earlier on the call, with regard to hydrogen and biofuels down in Australia. As a consequence, we've taken an impairment on that.

Yeah, Hi, Josh Thanks for the question Yeah, we have taken a number of them patents across the businesses this quarter and I think the first thing I'd say is we're never happy to impair.

It was capital ones and we're very cognizant of that which is why mariana driving so hard on improving and increasing our capital productivity in every part of the business and maybe a couple of to call out which may be helpful. In the customer and products space. We are weak when Pat asked that's why we are working through a sales process does that.

Accounting approach that we have to take based on the value that we expect to see and that's just the value at which we hold those assets and we took decisions as Larry referenced a little earlier on the call with regards to hydrogen and Biofuels down in Australia, and as a consequence, they've taken an impairment on that that's all about quality of choice and making the right decision for us.

Kate Thomson: That's all about quality of choice and making the right decisions for us as a company moving forward as we execute on our strategy. The only other one that's probably worth highlighting is in the gas and low carbon space, where we've taken a further impairment with regard to M&S. We're now lifting cargoes into our trading organization from that business. That's where we see significant future value coming. We've now finished loading our seventh cargo so far this year as it continues to ramp up. So M&S is performing well now. It started up, and it's ramping up. That's probably as much as it's worth sharing with you, Ruth, with regard to impairments. It remains an area of focus for us, Josh, please be clear on that.

The company moving forward as we execute on our strategy.

Maybe the only other one that's probably worth highlighting is in the gas and low carbon space.

While we've taken a further impairment with regard to M&A.

And we're now lifting cargoes until our trading organization from that business and that's why we see significant future value coming with now loaded finished loading all of our seventh call Guy. So far this year as it continues to ramp up say I'm an S is performing well now as it started up and it's ramping up.

And that's probably as much as it's worth sharing with you with regard to impairments, but it remains an area of focus for US just please be clear on that.

Murray Auchincloss: Thanks, Kate. Craig.

Okay.

Great.

Craig Marshall: Thank you, Josh. I am going to jump quickly to the web. We have got a question from, I think, Alejandro Vigil at Santander. Alejandro, you have got three questions. I think two of them have been covered. I will take maybe the last question, read it out. Probably one for you, Kate. What are our expectations of net debt by the end of the year? That is from Alejandro.

Thank you, Josh I'm going to just jump quickly to the web.

We've got a question from Oh, I think Alejandro vigil at Santander Alejandro you got three questions I think two of them have been covered but I'll take maybe the last question read it out.

Probably once a U K what are our expectations of net debt by the end of the year from Alejandro.

[laughter] yeah. Thank you Alejandro and fair question net debt was down until in dollars. This.

Kate Thomson: Yeah, thank you, Alejandro. Fair question. Net debt was down $1 billion this quarter versus Q1, which is good to see. Quite a lot of moving parts. You can see there's been a pretty sizable working capital build through the first half. We end the first half at a total working capital build of $4.7 billion. If you think back to Q1, we had $3.4 billion of working capital build. I said the majority of that we should expect to reverse through the remainder of the year. We saw about $600 million of that reverse in Q2. But it was more than offset by other moving parts. You will recall the Deepwater Horizon payment we make every Q2. There's also, in the first half, been payments with regard to assets held for sale. If they were not held for sale, they would be accounted for as capital.

This quarter.

This is one key which is good to see quite a lot of moving parts. You can say this has been a pretty sizable working capital build through the first half.

We ended the first half of total working capital build of $4 $7 billion. If you think back to want.

One key we had $3 4 billion of working capital build and I said the majority of that we should expect to reverse through the remainder of the year.

We saw about $600 million of that reverse in teekay, but it was more than offset by other moving parts ill recall the deepwater horizon payment. We make every every two Q. There's also in the first half and payments with regard to assets held for sale. If they were not helped us I'll, let be accounted for as capital. We are forced to account for them as working capital because of the account.

Kate Thomson: We are forced to account for them as working capital because of accounting rules. There's been about $200 million of decommissioning payments as well in the first half. As I look at all of that, the reason I'm stepping you through that is I think there's about $2 billion of permanent working capital build to date with regard to the group. As I look forward, my best estimate of the level of reversal still to come through the third and fourth quarter is between $1.5 billion and $2 billion. Other moving parts that we've been clear around is the $1.2 billion of redemption of hybrid that we will redeem in Q3. Then you've got, of course, operational performance and price, which will move around.

Rules and it's been about 200 million of decommissioning payments as well and the fast and the first half so as I look at all of that the reason I'm I'm stepping you through that as I think that's about it.

$2 billion of permanent working capital Bill to date.

With regard to the great.

Look forward my best estimate of the level of our vessels still to come through the third and fourth quarter, especially in one and a half and $2 billion.

Other moving parts that we think they are around as they 1.2 billion of redemption of hybrid that we will redeem in N. Three Q and and then you've got of course operational performance and price, which will move around set I would say if you assume flat price and all these other moving parts in the level of working capital unwind up just that through my.

Kate Thomson: I would say if you were seeing flat price and all these other moving parts and the level of working capital unwind I've just stepped through, my expectation is we should see net debt continue to slightly trend down towards the back end of the year. I hope that's helpful.

As we should see net debt continue to slightly trend down towards the backend of the <unk> that's helpful.

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

Craig Marshall: Thank you, Kate. Back to Teams. We'll take the next question from Ryan Todd at Piper Sandler. Ryan.

Good thanks.

Ryan Todd: Good, thanks. Maybe one more on exploration. Congratulations on the great results here today, 10 discoveries. Maybe you can talk about, has your approach to exploration changed at all? Or is it just increased allocation of resources? Good luck. Outside of Brazil, what have you seen that excites you the most? Then maybe a second question on much better refining performance this quarter operationally and in terms of margins. Can you maybe talk through what has gone well and how you think about the refining environment into the back half of this year and into 2026?

Maybe on <unk>.

One more on exploration I mean, congratulations on the great results year to date than discoveries.

Maybe you can talk about how does the approach as you approach to exploration changed at all or is it just increased allocation of resources. Good luck.

And outside of Brazil are what have you seen that excites you the most.

And then maybe a second question on much better refining performance this quarter, both operationally and in terms of margins.

Can you maybe talk through what's gone well and how you think about the refining environment and into the back half of this year and into 2026.

Murray Auchincloss: Great. Let's see. I think on refining environment, I will take that. Refining performance over to Gordon. Then you guys transition on exploration and technology. Gordon and M can trade that off. On refining environment, Ryan, I think relatively tight is what I would say right now. Diesel margins, gasoline margins, sorry, diesel, gasoline, jet stocks are quite low relative to history. As well, all of the additions we have seen in Dos Bocas and Dangote have now been offset by refinery closures around the world from the announcements you saw at PRAX, the California refinery shutting down, and other ones that have shut down. So instead of adding capacity to the non-Chinese refining fleet, we are basically flat while overall demand for energy continues to grow at 1%. So fairly tight is our sense.

Great.

Let's see I think on refining environment I'll take that refining performance over to Gordon.

And then you guys transition on exploration and technology Gordon dynamic trade that off so on refining environment, Ryan I think.

Relatively tight is what I'd say right now diesel margins gasoline margins jet sorry diesel gasoline jet stocks are quite low relative to history.

As well all of the additions, we've seen them and dos Bocas and Dango tell you have now been offset by refinery closures around the world from the announcements he saw it tracks the California refinery shutting down in the other ones that are shut down so instead of adding capacity to the non Chinese refining played where basically.

Flat, while overall demand for energy continues to grow at 1% so fairly tight as our sense, we expect to build as we move through the driving season is all the refineries are working.

Murray Auchincloss: We expect to build as we move through the driving season, as all the refineries are working. Then we expect it to become quite tight again as we move into tar season. I think I would say that extends into 2026 as well, where if we do see the increasing demand we see for product and we are not getting refinery expansions, that we expect it to be tight as we work our way through into the early days of 2026. I will not really forecast anything beyond the early days of 2026. So I think that would be the structure of the refining markets as we see it today. Gordon, over to you on refining performance.

And then we expect it to become quite tight again as we move into tar season.

I think the I think I would say that extends into twenty-six as well, where if we do see the increasing demand we see for product and we're not getting a refinery expansions.

That we expect it to be tight as we work our way through the back into the early days of twenty-six I won't I won't really forecast anything beyond the early days of 26, So I think that would be the structure of the refining markets as we see it today Gordon over to you on refining performance Yeah. Thank you for the question Ryan.

Craig Marshall: Yeah, thank you for the question, Ryan. I'm very pleased with the refining availability. We've just delivered the quarter at 96.4% availability, which is the best quarter we've had since 2006. We've just delivered the first half of the year at 96.3%, which is the best first half since we started recording on this metric. The refineries are actually running really well right now. What's gone well, I think the vulnerability management, we've taken a process that we've run in the upstream for many years and implementing. It's not finished implementing it in refining. We manage our vulnerabilities, which basically means we intervene before a piece of kit falls over, before it trips, to prevent it tripping, keeps it online longer. We've got centralized maintenance, centralized tars. We have common processes being deployed. Of course, we're starting the process of digitization in refinery.

Very pleased with the refining availability, we've just delivered the quarter at 96, 4% availability, which is the best quarter. We've had since 2006 with just delivered the first half of the year at 96.3, which is the best first half since we started recording on this metric so the re.

Finally, they are actually running really well right now and whats going well I think the vulnerability management with taking a process that was run in the upstream for many years and are implementing is not finished implementing it in refining. So we manage your vulnerabilities, which basically means we intervene before a piece of kit folds over before it trips to.

Revenge tripping keeps the online longer we've got centralized maintenance centralized towers, we have common processes being deployed.

And of course, we're starting the process of Digitization in refinery all of that adds up to a more systematic and control refining portfolio, which shows up as better availability.

Craig Marshall: All that adds up to a more systematic and controlled refining portfolio, which shows up as better availability. If I could transition, Ryan, into exploration, the success, I think a couple of things I would highlight. One, we're data-led. It's not just luck. Working with M&K's team, the quality of seismic and the lighting up of the subsurface on seismic images we get now is quite remarkable. That de-risks exploration drilling to some degree. You'll never completely de-risk exploration drilling. But to some degree, data-led, using good quality seismic, using AI algorithms to light up the rock in a way we never could before has made a difference. I think the exploration team has a mission. Their mission is to fill up our hopper with great resource that we can then bring forward to invest in as major projects.

If I could transition Ryan into exploration.

The success.

I think a couple of things I would highlight one where data late so it's not a <unk>.

It's not just luck and working with amicus team the quality of seismic on the lighting up off the subsurface on seismic images, we get no was quite remarkable and not de risks our drilling exploration drilling to some degree I'll never you never completely derisk exploration drilling but to some degree day.

Led using good quality seismic using AI algorithms to light up the rock in a way we never could before has made a difference I think the exploration team have a mission and their mission is to fill up our hopper with that with great resource that we can then bring forward to invest then as major projects. The one thing we're not doing is just throwing more.

Craig Marshall: The one thing we're not doing is just throwing money at it. It's quality through choice. We actually haven't increased our exploration budget very much in the last 12 months. We're forcing the teams to select the very, very best opportunities that we have, the most material, and those that we think are going to come in. There are many, many things that excite me outside Brazil in the exploration world. But if I could just highlight West Africa and particularly Angola and Namibia, where, of course, we invest under the Azul joint venture with E&I. We've recently had a discovery in Namibia with the Capricornus whale. There's more to come there. We've just studied the next whale called Bulans in Namibia. Then again, under the Azul brand, we had a discovery in Gajajera in block 114, pretty close to shore, very developable.

Asset quality through choice, we actually haven't increased their expertise in budget very much.

In the last 12 months, so we're forcing the teams to select the very very best opportunities that we have the most material and those that we think are going to come in.

There are many many things that excite me I would say, Brazil, and the the exploration water a bit if I could just highlight west Africa, and particularly on gular in Namibia, where of course, we we invest under their zoo joint venture with Eni and we've recently had a discovery in Namibia with the couple of quarters as well and there's more to come there.

We've just studied the next well called belongs in a in Namibia and then again under the Zoo brand. We had a discovery in the guard here and block block 114 pretty cool secure very did developable. So west Africa remains an exciting area for us in terms of exploration.

Craig Marshall: West Africa remains an exciting area for us in terms of exploration.

Yes.

Murray Auchincloss: What I will add is in seismic, we are one of the leaders in seismic technology. We have been for a number of years, and we are continuing to invest to build on that lead. Some of the investments that we are looking at are both investments in compute and investments in seismic algorithms. These two things go together. On the compute side, what we have done is we have quadrupled the capacity of our high-performance computing center. This has allowed us to increase the speed at which we can do our processing by about 5 to 10 times. Some steps actually are increased by 50 times. What all of this does put together is it actually helps the subsurface teams to increase the speed at which they can build a hopper. It helps to better exploit the resources that we have right now.

So what I'll, what I'll, what I'll add is and seismic we are one of the leaders in seismic technology. So we have been for a number of years and we're continuing to invest to build to build on that lead.

Some of the investments that we're looking at are both investments in compute and investments in the <unk> seismic algorithms and these two things go together on the compute side. What we've done is we have quadrupled this capacity of our high performance Computing Center. This is allowed us to increase the speed at which we can do our algorithm or a processing by about five to 10 tie.

<unk> and some steps actually are increased by 50 times, what all of this does put together is it actually helps the subsurface teams to increase the speed at which they can build a hopper it helps to better exploit the resources that we have right now it helps it helps the teams to actually build quality through choice as Gordon is talking about.

Murray Auchincloss: It helps the teams to actually build quality through choice, as Gordon is talking about. We are using a lot of this, we are doing both in partnership with NVIDIA and with the deep technical expertise our teams have built over time. That is some of the contribution I think I would add from seismic from the technology perspective. Super, guys. A bit of a long answer to a complicated question. I would round it off, Todd, by saying we got fantastic petro-technical capability. It has always been strong and remains strong. We are really proud of the results. Well done, guys. Craig.

And we're using a lot of this we're doing both in partnership with Nvidia and with a deep ex textbook technical expertise of our teams have built over time. So that's the sum of the contribution I think I would I would add from seismic from the technology perspective Super guys a bit of a long answer to a to a complicated question, but I'd rounded off are taught by saying we've got fantastic to Petros.

Technical capability. It has always been strong and remains strong and we're really proud of the results so well done guys Craig.

Biraj Borkhataria: Thank you.

Okay.

Craig Marshall: Thanks, Ryan. We'll move next to Peter Lowe at Redburn. Peter.

Thanks, Ryan we will move next to Peter low Redburn Peter.

Hi, Yeah. Thanks, perhaps just don't the PX are there was a step up of production this quarter as you've now brought on by the fourth and final deliveries that are in the Permian.

Matthew Lofting: Hi. Yeah, thanks. Perhaps just on BPX, there is a step up in production this quarter. You have now brought online your fourth and final delivery center in the Permian. What should we expect for the production trajectory from here for that business? The second question was just to go back to convenience and mobility. As you say, it was a particularly strong result. I think the strongest for quite some time. It sounds like that is not coming from TA. Can you perhaps elaborate where that improvement is coming from? Thanks.

What should we expect for the production trajectory from here for that business.

And then the second question was just to go back to Covid visibility as you say, it's particularly strong results I think the strongest for quite some time.

Sounds like that's not coming from Ta. So can you, perhaps elaborate where that improvement is coming from.

Yep, Great I'll, let I'll, let Gordon think about bps, while I answer is C. N M. A C. N. EMS performance is very broad based we've seen exceptionally strong results across a C N EM Americas.

Murray Auchincloss: Yep, great. I will let Gordon think about BPX while I answer CNM. CNM's performance is very broad-based. We have seen exceptionally strong results across CNM Americas, CNM Europe, CNM Asia. It is coming from all the convenience and mobility businesses there. That is tight cost control, management of product, and managing margin effectively. We are near record levels of profitability in aviation. Of course, you can see the eight great quarters in a row for Castrol. I think the last thing to say is the midstream and supply teams are really looking hard at optimizing our value chains. We are pushing further down value chains to try to optimize margin, bringing trading midstream closer and closer together as we work together to drive real outcomes. That is another source of brilliant performance from the teams. I look forward to continuing strength in this space especially.

A N M Europe C N M Asia, So it's coming from all the convenience and mobility businesses, there that's tight cost control.

Management of product.

And.

And managing margin effectively.

Were near record levels of profitability in aviation and of course, you can see the a great quarters in a row.

For for Castrol I think the last thing to say is the midstream and supply teams are really looking hard at optimizing our value change and we're pushing further down value change to try to optimize margin, bringing trading midstream closer and closer together as we worked together to drive real outcomes.

And that's that's another source of brilliant performance from the teams and I look forward for continuing our strength in this space, especially so I hope that I hope that helps Peter and Gordon a redo on the PX production trajectory, Yeah, Hi, Peter B PX production, our strategy laid out during capital markets day remains the same which is.

Murray Auchincloss: I hope that helps, Peter. Gordon, over to you on BPX production trajectory.

Craig Marshall: Yeah, hi, Peter. BPX production, our strategy laid out during Capital Markets Day remains the same, which is 7% CAGR through to 2030, growing the business to 650,000 barrels per day by 2030. That stays on plan. Of course, it won't be a perfectly straight line through to 2030, but the overall strategy remains the same. Q1 to Q2 production was particularly strong, 16% quarter to quarter growth, Q1 to Q2, and really strong production. Efficiency is coming through strongly. That's what I observe in BPX under the leadership of Kyle Kunz and his team. Some of the capital productivity metrics continue to improve. On the NPV per section metric, we're one, two, or three across the three basins that we operate in. Our reserves per foot drilled were top quartile across our three basins that we drill in. We're number one in the Black Hawk and the Haynesville.

7% CAGR through to 2030 growing the business to 650000 barrels per day by 2030 and that that stays on plan of course, it won't be a perfectly straight line through to 2030, but the overall strategy remains the same one Q2 production was particularly strong 16% a year.

Quarter to quarter growth, one Q to Q.

And.

Really strong production.

Efficiencies coming through strongly that's why observe and <unk> under the leadership of <unk> and his team and some of the capital productivity metrics continue to improve on the on the NPV per section metric, we're one two or three across the three basins that we operate in.

And reserves per foot drilled we're top quartile across our three basins that we drill in and we're number one in the black Hawk and the Haynesville, so that and these things. These metrics just keep improving as the team focus on them. So production is strong and we expect it to continue to be strong through this year.

Craig Marshall: These metrics just keep improving as the team focuses on them. Production is strong, and we expect it to continue to be strong through this year.

Yeah.

Murray Auchincloss: Thanks, Gordon. Thank you, Peter. We'll go next to Douglas Leggate at Wolfe Research in the U.S. Morning, Doug.

Thanks, Gordon and thank you Peter we will go next to Doug Leggate, So at Wolf and the U S morning, Doug.

Good morning, Chris Good morning, everybody. Thanks for taking my question I actually have a.

Biraj Borkhataria: Morning, Craig. Morning, everybody. Thanks for taking my question. I actually have a follow-up on BPX. Maybe I will direct it to Gordon, given he answered the last one. Gordon, you had the reorientation of the partnership with Devon Energy. My understanding is you got a disproportionate share of wells in progress that probably helped your volume in Q2. I am just wondering if that was a one-off or if you expect that to be the new baseline to grow off. We did have a chance to talk to Kyle about this. It seemed to us that there was some upside risk to that longer-term growth target. That is my first one. My second one is for Murray.

A follow up on V P X.

Maybe I'll direct it to Gordon given me answer the last one Gordon you want you have the reorientation of the.

Partnership with Devon energy and Mamba standing as you got a disproportionate share of wells in progress that probably helped your volume in Q2. So I'm just wondering the thought was a one off or if you expect not to be the new baseline to grow off.

We did have a chance to talk to Kyle about this and it seemed to us that there was some upside risk to that longer term growth target plus.

My first one on my second one is for Murray.

Biraj Borkhataria: Murray, or maybe Kate, if I look at slide 15 in your deck, when you are talking about the structural cost cutting, the cost savings, you have $900 million this year to date. An offset is $800 million of the growth and the organic, the acquisition piece. My question is, how much of the $4 billion to $5 billion over the 2027 timeline would you expect to also have offsets? In other words, how much would actually flow through to the bottom line? Thank you.

Maria or maybe if I, if I look at slide 15 in your deck.

When you were talking about the structural cost cutting the cost savings you've got $900 million this year to date.

But an offset is 800 million of the growth in the organic.

The acquisition piece.

So my question is how much of the four to 5 billion.

Over the 2027 timeline would you expect to also have offset some other words, how much would actually flow through to the bottom line. Thank you.

Murray Auchincloss: Super. I will let Kate take the structural cost conversation and then Gordon to take Devon. Go ahead, Kate.

Super I'll, let Kate take the structural cost conversation and then Gordon to take down go ahead, Kent, Yeah, Hello, Good morning.

Kate Thomson: Yeah, hello, Doug. Good morning. With regard to the structural cost reduction, $1.7 billion so far since we announced the $4 billion to $5 billion of structural cost reductions. As I look through the first half in particular of this year, you can see the bricks that we are trying to be as explicit as we can in terms of what are the costs that are going up in our organization versus how is the structural cost reduction offsetting those. We said we were going to grow the upstream. That is a key part of our strategy. We are doing that. That brings cost with it. As you can see from the first half results, we have added about $200 million of costs associated with higher production in BPX Energy and bringing major projects online.

Yeah with regard to the structural cost reductions say $1.7 billion.

So far since we announced the $4 billion to $5 billion.

Structural cost reductions.

And as I look through the first half in particular this year. If he said you can say that breaks that we're trying to be as explicit as we can in terms of what are the costs that are coming up in our organization versus how is the structural cost reduction offsetting nice.

We said we were gonna grow they upstream that's a key part of our strategy and we're doing that that brings cost with it. So as you can see from the first half result, we've added about $200 million of costs associated with higher production in P. P X energy and bringing major projects online. The other thing that's gone on with regard to growing the organization as they are.

Kate Thomson: The other thing that has gone on with regard to growing the organization is the acquisition costs associated with Lightsource BP and BP Bioenergy. We also have environment, so inflation, around $400 million. $300 of that was inflation in the first half of the year. Then more than offsetting that is the $900 of reductions going the other way to deliver the absolute cost reduction. As I look forward of the $4 billion to $5 billion, I want to see material cost reductions flowing all the way down to the bottom line. That is good for us. It is good for our shareholders. In terms of quantification, it is very hard to call it, Doug, because it is very hard to see what is going to go on with regard to inflation in the environment. We have seen wicked inflation in the last three or four years.

Acquisition costs associated with light source, they pay and and BT by energy. We also have environment. So inflation around 400 million 300 of that was inflation.

In the first half of the and then more than offsetting that is the 900 of reductions got it any other way to deliver the absolute cost reduction.

Look forward at the $4 billion to $5 billion I wanted to say material cost reductions flowing all the way down to the bottom line. That's good for US it's good for our shareholders.

In terms of quantification is it's very hard to call. It that because it's very hard to say, what's going to go on with regard to inflation in the environment. We've seen work at inflation and in the last three or four years I don't want to box myself in by predicting what that's going to cause they can but you can hear I think from the tone of what we're saying today that we are relentless in our drive.

Kate Thomson: I do not want to box myself in by predicting what that is going to become. You can hear, I think, from the tone of what we are saying today that we are relentless in our drive to get as competitive and as lean as we can within the boundaries of safe operations and growing our organization for long-term shareholder value.

To get as competitive and as lean as we can within the boundaries of safe operations and growing our organization for a long time shareholder value.

Hi, Doug Thanks for the question. The first thing I would say is we're very happy with the value uplift from the Devon transaction, Devon had been a tremendous partner for many years, we worked well with them in a in that part of the lower 48, but it was time to simplify and do our own thing so.

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

We're very pleased with the value uplift, we're very pleased with the transaction to be specific on your question. The amount of production that came with the transaction was very very small now it will grow as we bring some of the drilled uncompleted wells online and but it doesn't represent a massive new baseline for growth, it's a relatively small.

A relatively small wage.

Alright, thank you.

Biraj Borkhataria: All right. Thank you.

Thanks, Doug we'll take the next question from a barrage book Qatari at RBC barrage.

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

Yeah.

Hi, Thanks for taking my question I wanted to go back to the comments around the strategic review a thorough review of the portfolio.

Biraj Borkhataria: Hi. Thanks for taking my question. I wanted to go back to the comments around the strategic review or thorough review of the portfolio because you obviously did a thorough review ahead of the CMD. Does this mean you start with a blank sheet of paper again and start over? Or should investors assume this review is for things over and above what you have already announced? The question relates to Castrol because if you are doing a thorough review of capital allocation, would it make sense to do a big transaction like that? Or would you wait for it to kind of finish the process? The second question is just on the financial frame and net debt. I see reported net debt going down. But the lease stack is going up. Also, the lease costs are creeping higher again.

Because you obviously did a thorough view ahead of the CMT. So does this mean you start with a blank sheet of paper again and start over or should investors assume this review is full things over and above what you've already announced.

And the question relates to Castro, because if you're if you're doing a thorough review of capital allocation would it make sense to do a big transaction like that or would you wait for it to to to kind of finish it's the process.

And then the second question is just on the the financial frame and our net debt.

Wanted net debt going down, but at least stuck is going up and also the lease costs are creeping higher again could you just talk about <unk>.

Biraj Borkhataria: Could you just talk about from here whether you would expect the sort of total leases to be stable from here or move up or down or what exactly is driving that? Thank you.

From here, whether you would expect this of total leases are to be stable from here or move up or down or what exactly is driving that thank you.

Brush on the first one we obviously are starting our portfolio review from where we stand now so we've made a bunch of decisions back in February.

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

And we've had a whole bunch of additions to the portfolio from the upstream that I talked about and within a $13 billion to $15 billion frame. We now need to think what's the right priority driving for for value.

Returns on behalf of shareholders. There is no change to that I have is a divestment program. We continue to have a 20 billion divestment program and we continue pushing Castro forward. So.

Rest assured this is all about trying to trying to stay within our strategy to accelerate the delivery of it but of course, continuing to drive quality through choice, which we live and breathe each and everyday caito over to you on the other question.

Kate Thomson: Yeah, hi, Biraj. Just on leases. The way that we think about leases is pretty different from the way that we think about debt. At the end of the day, we are incurring leases directly to drive value in terms of production, et cetera. As you look at what has happened year on year, our lease liability has grown by about $4 billion from this time last year. Just over $2 billion of that is the accounting for the floating LNG in Mauritania and Senegal. To my point, it is about driving production. Offsetting that is about $900 million of recoverable, which we will receive from our partners in respect of those lease costs. There are a couple of other moving parts. We brought onto our books about $600 million of leases associated with the BP Bioenergy acquisition.

Yeah, Hi, first just on lease to say the way that we think about leases is pretty different from the way that we think about that at the end of the day, we're incurring Lee says directly to drive value in terms of production etcetera.

And as you look at what's happened year on year, while all our lease liability has grown by about $4 billion and from this time last year just over 2 billion of that is the accounting for the floating LNG and Mauritania and Senegal to my point, it's about driving production.

And offsetting that is about 900 million of recoverable, which will receive from our partners in respect of those lease costs. There are a couple of other moving parts, we brought onto our books about $600 million of leases associated with the P. P. Bioenergy acquisition. There was a lease for Aneel of about 401 of our refineries in the U.

Kate Thomson: There was a lease renewal of about $400 million in one of our refineries in the U.S. Then there is some trading around lease opportunities, which I will not disclose because that is commercially sensitive. Leases are an area that we step into deliberately to drive value for shareholders. I think they are appropriate. We, of course, are testing them to make sure they are of value to us. With regard to the forward shape of it, it will depend very specifically on some of the big moving parts, particularly in our upstream portfolio. We have been talking a lot about Brazil and Boomerang on this call. If that moves at pace, I can foresee a number of lease situations potentially around FPSOs over in Brazil that will be added to that, and rightly so with regard to our lease liability on our balance sheet.

And then there's some trading around and lease opportunities, which I won't disclose because that's commercially sensitive say leases are an area that we step into deliberately to drive value for shareholders and I think they were appropriate. We of course are testing them to make sure. They all value a value to us, but with regard to the forward shape to that I mean.

It will depend on very specifically on some of the big moving parts, particularly in our upstream portfolio. We've been talking a lot about Brazil and Boomerang a on this call know if that if that means that pace I can foresee a number of lease situations potentially around them.

Over in Brazil, It will be added to that and rightly say with regard to or at least thought that appear on our balance sheets are it's very difficult to guide going forward. It depends on the resource allocation decisions that we stepped through as we as they get to H final investment decision.

Kate Thomson: It is very difficult to guide going forward. It depends on the resource allocation decisions that we step through as we get to each final investment decision.

Thanks Paresh.

Murray Auchincloss: Thanks, Biresh.

Craig Marshall: Thank you, Biraj. I'm going to jump back onto the telephones now for two questions. First one from Paul Cheng at Scotiabank. Paul.

He barrage I'm going to jump back onto the telephones now for two questions first one from Paul Cheng Scotiabank Paul.

Thank you good morning, or good afternoon.

Biraj Borkhataria: Thank you. Good morning or good afternoon. Gordon, I want to go back into the BPX. The second quarter, the production increase is quite impressive. Is it all coming from Permian? Also, can you give us some idea then how the Haynesville, your drilling and development plan is going to look like for the remainder of the year into next year? Are you adding any rig over there? My second question, I want to go back into Brazil. Can you give us some kind of idea? Let's assume that you are going to take multiple boats for the development because the rest of it is very big. From a cost recovery standpoint, is all the costs in one pool or is that the individual project basis?

Gordon who wanted to go back into the B B peaks.

The second quarter. The production increase is quite impressive is it all coming from Permian and also can you give us some idea that house the haynesville a jewel of tooling and development plan is going to look like for the remainder of the year into next year are you, adding any week over there.

The second question is I want to go back into.

The pursue.

Can you give us some kind of Oh, Dear Oh, that's assumed that you're going to take multiple boat for the development because the rest of it is very big and for me closer recovery standpoint. He has all the causes in one pool or they're just getting the wheat you appointed pieces.

And can you give us some idea that the time my Oh, we assume two food eating knee that you may need at these of say three or four a peso well. So is that the earliest that you have everything go.

Biraj Borkhataria: Can you give us some idea that the timeline, I would assume, to fully delineate that you may need at least, say, three or four peso wells? Is that the earliest that you are going to benefit, say, according to plan, maybe a late 2027 or early 2028 FID? Thank you.

Uh huh.

According to plan, maybe a 2000 late 2027 or the 2020. Thank you.

Murray Auchincloss: Greg, I will let you do Brazil. I will answer BP to give you a bit of relief. Why do you start off with Brazil?

Gordon I'll, let you I'll, let you do Brasil and I'll answer be PX to give you a bit of relief.

Wanted to start off with Brazil, Yeah. Thank you Hey, Paul Thanks. Thanks for the question I'll answer the easy one first.

Craig Marshall: Thank you. Hey, Paul. Thanks for the question. I will answer the easy one first. The terms of the lease that we have in Brazil are public knowledge. It is one cost pool. Everything is funded through a single cost recovery pool. I would expect we need to get the results back from the lab on the full compositional analysis, which will inform the hydrocarbon that we have in the column. That will then inform the detail of the appraisal program. We have more work to do to plan it. I would expect, as you say, a three or four well appraisal program to allow us then to move to a full field development. I would not speculate exactly when we would have that appraisal program done. We will move at pace as soon as we get these results back.

The terms of the lease that we have embryo of public knowledge and it's one cost to them.

Everything everything is funded through a single where cost recovery too.

And then I would expect we we need to get the results back from the lab on the few compositional analysis, which will inform the hydrocarbons that we have in the column and that will then inform the detail of the appraisal program. So we are with more work to do to planet, but I would expect as you see you saw a three year.

Four well appraisal program to allow US then to move to a full field development I wouldn't speculate exactly when we would have the appraisal program done, but we will move it piece as soon as we get these results back and in fact of course, which we've done some pre drill work already on an appraisal program, we'd be we're not starting from scratch.

Craig Marshall: In fact, of course, we have done some pre-drill work already on what an appraisal program would be. We are not starting from scratch. We will move at pace on appraisal.

But we'll move at pace on appraisal.

Murray Auchincloss: Fantastic. Thanks, Gordon. On BPX, just to step into Gordon's space a bit, the growth between Q1 and Q2, principally the Permian with the ramp-up of crossroads, as well as an awful lot of work on reef racks and infill drilling in the Eagleford. Just to remind you, the reef racks are working fabulously. The infill program on wells drilled a decade ago are twice as productive as the original wells. That's just the changing technology on frac over time. We're seeing a lot of growth out of the Eagleford. You should expect liquids, assuming prices stay relatively stable, you should expect liquids production out of BPX to continue growth through the decade. Of course, if price moves up or down, we may change that capital allocation. That's our sense right now.

Fantastic. Thanks, Thanks, Gordon and then on BP X just to step into Gordon space a bit.

The growth of between one <unk> and <unk> principally in the Permian with the ramp up of crossroads as well as an awful lot of work on re fracs and infill drilling in the Eagle Ford.

Just to remind you of the Refracts are working fabulously and the infill program on wells drilled a decade ago or are twice as productive as the original wells. That's just the changing technology on frac over time. So we're seeing a lot of growth out of the Eagle Ford you should expect our liquids assuming prices stay relatively stable you should expect.

Liquids production.

Out of BP X to continue to grow through the decade of course of price moves up or down we may change that capital allocation, but that's our sense right now as far as the gas basins I think the first thing I'd say is capital productivity.

Murray Auchincloss: As far as the gas basins, I think the first thing I'd say is capital productivity is really improving. We're about 10% year-on-year improvement in capital productivity right now. In the Haynesville, they just drilled their first U well. That's a vertical well and a big U with fracs on the straight sides of the U. Obviously, you don't frac into the U. We were getting tremendous productivity out of that. We're seeing from three well pads 160 million scuffs a day out of three well pads and with the capacity to get up to 180 if we can solve some metallurgy issues. I think productivity is fantastic. The business is actually holding gas production relatively flat around two to three rigs. That's across the Permian, the Haynesville, the Eagleford, the Hawkville, et cetera. The team is doing a very, very good job in that space.

<unk> is really improving were about 10% year on year improvement in capital productivity right now in the Haynesville are they just drilled there first you well so that's a vertical well and a big you with Fracs on the.

The straight sides of the you obviously, you don't frac into the U and we were getting tremendous productivity out of that we're seeing from three well pads 160 million Scuffs a day out of three well pads and with the capacity to get up to one area. If we can solve certain metallurgy issues.

So I think our productivity is fantastic and the business is actually holding gas production relatively flat around two to three rigs that's across the Permian and the Haynesville the Eagle Ford the heartfelt et cetera. So the team is doing a very very good job in that in that space as far as what we'll do with 26 and 27 ramp up that.

Murray Auchincloss: As far as what we'll do with 2026 and 2027 ramp-up, that's still something that we're thinking about. We're watching gas prices. We have started hedging out 2026 and 2027. That'll determine how much we lean into that space by adding rigs. That's a decision we'll make in the fall as we head towards our 2026 capital allocation. Ask me again next quarter. We can answer that question. Thank you, Paul.

Still something that we're thinking about we're watching gas prices, we have started hedging out 26 and 27.

And that'll determine how much we lean into that space by adding rigs. That's a decision we'll make in the fall as we head towards our 2026 capital allocation. So ask me again next quarter and we can answer that question. Thank you Paul.

Craig Marshall: Thank you.

Okay.

Murray Auchincloss: Thanks, Murray. Thank you, Paul. We'll stay on the phones and go to Christopher Kuplent at Bank of America. Chris.

Thanks Marie Thank you Paul we'll go to stay on the phone as a go to Chris Coupland at Bank of America, Chris.

Thank you I hope you can hear me Okay. Two quick questions for me remaining so.

Matthew Lofting: Thank you. I hope you can hear me OK. Two quick questions from me remaining. First one to you, Kate. Can you square the circle for us a little bit on disposal proceeds and your net debt guidance for the end of the year? I noticed TANAP has been structured as an equity raise. How does that relate eventually to a net debt reduction in the way you consolidate it? Are there other niggles for us to be aware of in terms of how you structure some of these disposals that have been announced? The second one, back to Murray or perhaps Gordon.

So that's one so you Kate can you.

Square the circle for us a little bit on disposal proceeds and your net debt guidance. So at the end of the year I noticed kind of is.

It's been a structured as an equity raise.

How does that.

Relate to eventually to two of them are debt reduction and the way you consolidate it.

Nichols for us to be aware of in terms of how you structure. Some of these disposals that have been announced and then the second one back to Mario perhaps Gordon.

On the topic of strategic review and what else you might think of around your portfolio.

Matthew Lofting: On the topic of strategic review and what else you might think of around your portfolio, you are one of the last super majors with UK North Sea assets, not in some sort of new JV. You have pioneered the structure. You have kicked off with Akabiti in Norway. Is the UK a particular focus for yourself as you review potential portfolio changes? Maybe you can comment on the value of that in your portfolio. Thank you.

The last Supermajors Woods U K North sea assets not in some sort of new JV.

Pioneered the structure, you've kicked off with Aker BP in Norway.

<unk> is the U K with particular focus for yourself as you review potential.

Potential portfolio changes, maybe you can comment on the value of that in your portfolio. Thank you alright. Thanks, Chris Gordon why don't you tackle a north sea and then I'll hand over to Kate on divestment process, Yeah. Thanks, Chris.

Murray Auchincloss: Great. Thanks, Chris. Gordon, why don't you tackle North Sea? Then I'll hand over to Kate on divestment proceeds.

Craig Marshall: Yeah, thanks, Chris. The North Sea, we have a proud history. We are proud of the team up there producing for over 60 years now. It has been a tremendous piece of business. The reason we have not jumped into a joint venture is we believe we have got the best portfolio up there. That has been our view for quite a while. However, we are also monitoring any potential changes to the fiscal situation in the North Sea, which we expect to get some clarity on at some point this year. Then I think once we get clarity on the fiscal situation, we will then make decisions. It is just too early. We have got to get a little bit more information on the North Sea. I would say North Sea performance this year in terms of safety, production, cost has been tremendous. They really have stepped up.

North Sea say, we've approached history and we're proud of the team up there producing for over 60 years know and it's been a tremendous piece of business. The reason go home and jumped into a joint venture is we believe we've got the best portfolio up there and that's been our view for for quite a while.

However, we're also monitoring any potential changes to the fiscal situation and the north Sea and which we expect to get some clarity on this at some point this year and then I think once once we get clarity on the fiscal situation will then make decision. So it's just too early and we're going to get a little bit more information on the north Sea.

We'd see North Sea performance. This year in terms of safety production cost has been tremendous and so there really have stepped up and the plant has been the production facilities have been much more reliable than they were the last couple of years, So kudos to the team up there and but we see and we watch them to see what happens.

Craig Marshall: The plant has been, the production facilities have been much more reliable than they were the last couple of years. So kudos to the team up there. We stay and we watch and we see what happens with the review of the fiscals.

With the review of the Physicals.

Okay.

Murray Auchincloss: Kate.

Kate Thomson: Yeah, so hi, Chris. In terms of net debt guidance, firstly, I'd say that we are expecting our strong operations to continue. Gordon's doing a great job of the kit staying up and available. We plan on that continuing. I've talked you through a level of working cap release through the second half of the year that we expect to come through. The other major moving part is around divestment proceeds. We've signed three. We've had divestment proceeds in the door of $1.7. Your specific question with regard to TANAP, this decapitalization of pipelines, I think, is a sensible way to approach our infrastructure. We don't need to own them. But we do need to have control over the ability to move our equity production to market. The way we account for it is proceeds. We receive the cash. But then it's accounted for through non-controlling interest.

Yeah, So hi, Chris I'm in times of net debt guidance, Firstly, I'd say that well.

But things are strong operations to continue Gordon's doing a great job of the kit staying up and available and so the way we plan on that continuing torchy through a level of working cap release through the second half of the year that we expect to come through and then the other major moving part is around divestment proceeds they were signed.

Three we've had divestment proceeds in the door off 1.7 mm.

On your specific question with regard to turn up this big capitalization of pipelines I think is a sensible way to approach our infrastructure, we don't need to own them, but we do need to have control over the ability to take these are equity production to market. So the way we account for it as proceeds we received.

The cash but.

But then it's accounted for through Noncontrolling interests that you see that line going through the balance sheet and you'll see it going through the income statement as well each quarter. Thank.

Kate Thomson: You see that line going through the balance sheet. You'll see it going through the income statement as well each quarter.

Murray Auchincloss: Super. Thank you, Kate. Thank you, Craig.

Thank you Kate it's Craig Thanks.

Craig Marshall: Thanks, Chris. We'll come back to Teams and take the next question from Kim Fustier at HSBC. Kim.

Thanks, Chris we'll come back to teams and take the next question from Kim Fisher HSBC Kim.

Yeah, Hi, good afternoon. Thanks for taking my questions I have two please.

Biraj Borkhataria: Yeah, hi. Good afternoon. Thanks for taking my questions. I had two, please. Firstly, I wanted to ask about the strengths in underlying cash flow, ex-working capital, over $7.5 billion, which was quite impressive. I noticed that the quarter-on-quarter increase was sort of half a billion dollars more than the increase in net income this quarter. Could you maybe talk about the moving parts there? Was there anything unusually strong about this quarter? Any larger dividends from associates, for instance, or lower cash tax payments? My second question is on the Gulf of Mexico. I believe you are now in a farm-down process on your Paleogene assets, Cascadia and Tiber. What is the level of interest from industry? What do you think would be the best time to farm down? Would it be at the point of FID for Tiber? When might that be?

Finally, I wanted to ask about the strength in underlying cash flow ex.

Ex working capital over southern half a billion dollars, which was quite impressive.

I noticed that the quarter on quarter increase was sort of half a billion dollars more than the increase in net income this quarter. So could you maybe talk about the moving parts there.

Was there anything unusually strong about this quarter any larger dividends from associates for instance, or or lower cash tax payments.

And then my second question is on the Gulf of America, I believe you're now in a farm down process on your Paleogene assets, because getting the type of what's the level of interest from industry and what do you think would be the best time to farm down, but just the other point of S. I D for Tiber and when might that be.

Biraj Borkhataria: Or would it be later during the development phase? Thank you.

Or would it be later during the development phase thank.

Thank you.

Murray Auchincloss: will take Bank of America to give Gordon a break. I will pass over to Kate on underlying, I think, tax is the answer. As far as Bank of America goes, we are in conversations with counterparts on Cascadia. We will continue doing that and see what is possible if we can get value for shareholders. If we can, great. If we cannot, then we are happy to carry on for 100%. Then Tiber, we expect to bring to sanction this year, just waiting for that to be brought up to the resource committee and to the board. Clearly, we will not do anything until we have FID'd that. We can consider, given that we have 100% in both, that we bring in a partner. The only question is, at what time do we think we can maximize value for shareholders?

I'll take Gulf America to give Gordon a break and I'll pass over to Kate on underlying I think taxes answer as far as Gulf of America goes we're in.

Our stations with counterparts on Cascadia.

We will continue doing that.

And see if see what's possible if we can get value for shareholders. If we can great. If we can't then we're happy to carry on for 100%.

And then Tiber are we expect to bring to sanction this year.

I'm just waiting for that to be brought up to the resource committee and to the board.

And clearly we won't do anything until we have a if I did that but that we can consider given that we have 100% and both that we bring in a partner and the only question is at what time do we think we can maximize value for shareholders and we're in conversations with counterparts. There's of course lots of interest for premium asset such with us and we just need to make sure we get the right value for shareholders as we move through that.

Murray Auchincloss: We are in conversations with counterparts. There is, of course, lots of interest for premium assets such as this. We just need to make sure we get the right value for shareholders as we move through that conversation. Kate, underlying EBITDA and earnings, I guess?

K to underlying underlying Abadan earnings I guess, yes, I am sorry, if I can escalating working carefully Oh, Oh gosh effectively grew by $1.5 billion quarter on quarter, a band a billion of that is J S. G to underlying earnings and in particular I'd call out better training better gas trade and better oil trade.

Kate Thomson: Yeah, so hi, Kim. Excluding working capital, our ops cash effectively grew by $1.5 billion quarter on quarter. Around a billion of that is due to underlying earnings. In particular, I'd call out better trading, better gas trading, and better oil trading. The other major component is lower cash taxes, over $200 million quarter on quarter. Then there's another slew of very smaller drivers, but nothing worth calling out.

On the other the other major component is lower cash taxes over tens of million quarter on quarter and then there's another slew of various smaller drivers, but nothing worth calling out.

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

Murray Auchincloss: Strong underlying performance, Kim, I think, is the core message. Really strong underlying performance. Well done to the teams who are delivering it.

Yep. Thank you Kim we'll go to the next question from Lucas Herrmann at B M. P. Exxon Lucas.

Craig Marshall: Thank you, Kim. We'll go to the next question from Lucas Herrmann at BNP Paribas. Lucas.

Great. Thanks, very much and nice to see some momentum returning to the business.

Biraj Borkhataria: Craig, thanks very much. And nice to see some momentum returning to the business. A couple, if I might. Kate, Murray, one big beautiful bill, fiscal implications for you, corporate tax in particular, if I could start there. Then the second, really, just probably to Gordon. But going back to refining, the last two, three years, we have seen a lot of five-year turnarounds, a lot of downtime. Production, the run rates, as you highlight, have been very good. But they have been very good on, should we say, muted available capacity. As we look forward over the next year or two, how should we think about availability within that business, let alone uptime? Thank you.

Couple of my might trade.

Kate Murray, one big beautiful Bill.

Fiscal implications for you and a corporate tax in particular, if I could start there and then the second really.

Probably the Golden but I mean going back to refining yeah. The last two three years, we have seen a lot of five year turnaround load of downtime.

Production run rates as you highlighted being very good but they've been very good on you know you'll see we say mutual available capacity.

We look forward over the next year or two how should we think about availability within that business, let alone arm.

Time, thank you.

Gordon you want to lead off on refining all taxes I'll tackle attacks, yeah, absolutely hi, Lucas Thanks for the question.

Murray Auchincloss: Gordon, you want to lead off on refining all tax with all tackle to tax?

Craig Marshall: Yeah, absolutely. Hi, Lucas. Thanks for the question. Just as a reminder, the 2022-2023 time frame, we were catching up on tar from the backlog during COVID. I would say 2024-2025, a more normal period of turnarounds. However, Q2 2025 was particularly high. We have guided through to be lower tar for lowest tar outages for the balance of 2025. As we go forward into 2026-2027, we should see lower turnarounds relative to 2024-2025, Lucas. We will be on the ramp down on tar days relative to 2024-2025 as we go into 2026-2027. I believe we can hold on to the availability that we have been delivering this half as we go through 2026-2027. That is the mission.

Just as a reminder, the 'twenty two 'twenty three time frame, we were catching up on towers from the the backlog during Covid I'd see 'twenty four 'twenty five a more normal.

Period of turnarounds, However, <unk> 25 was particularly high and we've guided through to be slightly to be lower cars for Lewis power outages for the balance of 25, and then as we go forward into 'twenty 'twenty 'twenty six 'twenty seven we should see lower turnarounds relative to 'twenty four 'twenty five.

Five Luca so we'll be on the ramp down on tower D is relative to 'twenty four 'twenty five as we go into 'twenty six 'twenty seven and I Hope I believe we can hold onto the availability that we have been delivering this half as we go through 'twenty six 'twenty seven that's the mission.

Murray Auchincloss: On the U.S. legislation, we are very positive on it. The U.S. is a very big operation for us. 60% of our profitability and cash flow comes from the United States. We invest 50% to 60% of our capital there as well. So it is a massive business for us. We are very proud to support the United States in growing their energy production. We look forward to growing production out of both the Gulf of America and BPX by, I think, it is 10% per annum out through the end of the decade. So we are pleased with that. The tax bill that came through was very favorable to us. Obviously, it sustained the corporate tax rate at 21%. The immediate expensing really helps offset any pressure from tariffs as well. So it was very positive for us, Lucas. It is very positive for us in the United States.

And then I think on I think on the U S legislation, we're very positive on it the.

The U S is a very big operation for 60% of our profitability and cash flow comes from the United States.

We invest a 50% to 60% of our capital there as well so it's a it's a massive business for us and we're very proud to support the United States and growing their energy production. We look forward to growing production out of both the Gulf of America and be PX by I think it's 10% per annum out through the end of the decade. So we're pleased with that the tax bill that came through was very favorable to us.

Obviously, a sustained to the corporate tax rate at 21%.

And the immediate expensing really helps offset any pressure from tariffs as well. So there wasn't it was it was very positive for us Lucas and it's.

Very positive for us in the United States, and we're excited and happy to have it.

Murray Auchincloss: We are excited and happy to be continuing to drive that continuous.

I'd like to draw is that any of us.

Mark is there any quantifiable benefit you can think about at this stage sorry for the Echo.

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

On from a financial perspective.

Murray Auchincloss: From a financial perspective, it wasn't like we were accruing a higher tax rate or anything like that. It's just a continuation in the 21%. Cash taxes would offset anything in tariffs, I think, is all I would say at this stage, although tariffs are highly variable. I think it's not material. But it's very positive for us, Lucas. I can't really say more than that right now.

It wasn't like we were accruing a higher tax rate of a or anything like that so it's a it's just a it's a continuation of the 21%.

And then cash taxes would offset anything in tariffs I think is all I would say at this stage. Although tariffs are highly variable. So I think it's not a it's not material, but it is very positive for us because I can't really say more than that right now.

Biraj Borkhataria: OK, thank you.

Okay. Thank you.

Yeah.

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

Thanks, Lucas we'll take the next question from Henry Tarr at Bamberg Henry.

Hi, there and thanks, Thanks for taking my questions.

Matthew Lofting: Hi there. Thanks for taking my questions. I have two. There was a strong rebound in the gas and low carbon business in the quarter. How do you think about that as you look into the second half and into next year? One of your peers pointing for some different reasons, perhaps, but to a slightly lighter outlook as we look into 2026. I wonder how you see that business. The second question, in your early interactions with the new Chairman, what have the discussions mainly been focused on? Clearly, there is the change around the portfolio and looking into that. Which areas do you think he might have the most impact on in the organization? Thank you.

There was a strong rebound in the gas and low carbon business and in the call.

Water.

How do you think about that as you look into the second half and into next year one of your peers pointing for some.

Some different reasons.

Slightly lighter outlook as we look into 2020 six so that how do you see that business and then and then the second question.

And you were sort of early interactions with the new chairman.

One of the discussions mainly been focused on.

So clearly this the change around the portfolio.

Looking into that.

Which areas do you think he might have the most impact on the organization. Thank you.

Super Henry look first I'm really excited for our Alberta to come on board He's got a tremendous track record at CRH.

Murray Auchincloss: Super, Henry. Look, first, I am really excited for Albert to come on board. He has got a tremendous track record at CRH. 10 years of fantastic delivery, experiencing many of the industrial challenges that we face in an oil and gas company as well. So it will be fantastic to have Albert on board full time. We have been in conversations early on. The question is, how do you drive shareholder value as much as you can? How do you get really, really disciplined with capital investing for returns and value as much as you can? How do you drive real competitive cost tension into the business to make sure that we challenge ourselves day in and day out to be the very best in the basins which we operate, which Kate unpacked a little bit earlier? It is a hard performance drive.

10 years of fantastic delivery experiencing many of the industrial challenges that we face in an oil and gas company as well.

So it'll be it'll be fantastic to have Albert onboard full time, we've been in conversations early on and you know the question is how do you drive shareholder value as much as you can how do you get really really disciplined with capital investing for returns and value as much as you can and how do you drive real competitive cost tension into the business to.

To make sure that we challenge ourselves self day in and day out to be the very best in the basins, which we operate which Kate unpack a little bit earlier. So it's it's a hard performance drive I think from a portfolio perspective too early to judge anything we just need to go through this and worked together to see what makes the most sense for us across the.

Murray Auchincloss: I think from a portfolio perspective, too early to judge anything. We just need to go through this and work together to see what makes the most sense for us across the portfolio, given the richness of the opportunity set that sits with us. We will look forward to updating you in due course on that space. I think on gas and low carbon, maybe you were asking a gas trading question. Maybe that is what that was. I am not sure, Henry, if that is what you were really asking.

So, giving the richness of the opportunity set that sits with us. So we'll look forward to updating you in due course on that in that space I think on gas and low carbon maybe you were asking a gas trading question, maybe that's what that was I'm not sure Henry if that's what you were really asking.

Partly guests trading yes, partly gas trading yeah, I think it's mostly gas trading no change of assumptions for us we run our business differently than other corporations do we run our gas trading business for Optionality.

Craig Marshall: Partly gas trading, yes.

Murray Auchincloss: Partly gas trading. I think it is mostly gas trading. No change of assumptions for us. We run our business differently than other corporations do. We run our gas trading business for optionality. Whether the market is oversupplied or undersupplied, what we look for is volatility where we can redirect. As Carol talked about in February, 50% of our LNG business is redirectable in 2025, growing to 60% in 2026. If you have a geographic arbitrage, if you have a time arbitrage, we do not really slave ourselves to a percentage point of some slope. We do not do point to point. We try to get this optionality. There should not be any change in what our assumptions are for trading. In the past, we have delivered 4% across the past five years. We would expect that to continue in the future.

And whether the market is oversupplied or under supplied what we look for is volatility where we can redirect as Carol talked about in February at 50% of our LNG business is redirected and twenty-five growing to 60% in 2020 six. So if you have if you have a geographic arbitrage if you have a time arbitrage.

We don't really slave ourselves to a percentage point of some slope.

We don't do point to point, we tried to get this optionality. So there shouldn't be any change in what our assumptions are for trading in the past we've delivered 4% across the past five years, and we would expect that to continue in the future.

Murray Auchincloss: So no change to our viewpoint on how our gas trading business will do. Of course, we have got exciting new things that have been brought online recently. Obviously, Venture is flowing to us now. Mauritania and Senegal is flowing to us now. Something that does not get many headlines is we started up GNA phase two in Brazil, where we have got a 3-gigawatt power plant in Brazil with a 1 to 3 MTPA short into Brazil that we have exclusive access to. An interesting new addition to the leg of trading moving forward. Hopefully, that answers your question on gas and low carbon, Henry.

So no change to our viewpoint on how our gas trading business will do and of course, we've got exciting new things that have been brought online recently, obviously ventures flowing to US now Mauritania and Senegal is flowing to us now and something that doesn't get memory headlines as we started up G&A phase two in Brazil.

Where are we got.

A three gigawatt power plant in Brazil, with a one to 3 million a one to three M Tpa short into Brazil that.

That we have exclusive access to so an interesting new addition to the leg of trading.

Moving forward so hopefully.

That answers your question on gas and low carbon Henry.

Okay.

Super Henry we are five minutes over time, so I appreciate I think theres a couple of questions pulling for a second time. Please relay those questions back to Investor Relations. We will certainly get answers back to you my thanks to everybody on the panel and maybe I can just hand back over to Marie to close the call.

Craig Marshall: Super, Henry. We are five minutes over time. I appreciate it. I think there are a couple of questions pulling for a second time. Please relay those questions back to Investor Relations. We will certainly get answers back to you. My thanks to everybody on the panel. Maybe I can just hand back over to Murray to close the call.

Murray Auchincloss: Well, thanks to Gordon, Emica, Kate, and thanks to the entire BP team for delivery. It was another strong quarter for BP operationally and strategically, and encouraging progress. But as I have said, this is two quarters in of a 12-quarter program, and there is a lot more to do across the next 10 quarters. We are fully focused on delivering safely, reliably, investing with discipline, and driving performance improvements across all parts of the business, all in service of delivering our four key targets, and in maximizing long-term shareholder value. We can and will do better. Thanks for listening. For those taking vacation, I wish you a peaceful and relaxing break. We look forward to talking with you soon. Thank you, everyone.

Super well, thanks to Gordon Amira Kate.

Thanks to entire IBP team for delivery. It was another strong quarter for BP operationally and strategically and encouraging progress, but as I've said. This is two quarters in a 12 quarter program and Theres a lot more to do across an extra and of course, we are fully focused on delivering safely reliably investing with discipline and driving perform.

Once improvements across all parts of the business all in service of delivering our four key targets and in maximizing long term shareholder value, we can and will do better thanks for listening and for those taking vacation I wish you a peaceful and relaxing break and we look forward to talking with you soon thank you bye bye.