Q3 2025 BP PLC Earnings Call

November 4, 2025

Murray Auchincloss: Percent detection on kicks. As well you saw in these results, production's high. We've upgraded our production guidance for the year. Why? We're at nearly 97% availability in the upstream. That's the AI helping us predict faults before they occur, repair them before they occur, along with all the investment in the hydrocarbon kit we've done. That 97% is a record across since merger time. Outstanding result, and we're also seeing that inside the wells. Wells are failing at a far less frequency than they were as the AI helps us manage pressure depletion inside our well stock. Another great example is well planning.

Hi, we've upgraded our production guidance for the year why because we're at nearly 97% availability in the upstream that's V. A I, helping us predict helping us predict faults before they occur repair them before they occur along with all the investment in the hydrocarbon kit we've done.

That that 90%, 7% a record across since merger time. So outstanding result, and we're also seeing that inside the wells wells are failing at a far less frequency than they were as the AI helps us manage plushy pressure depletion inside our well stock.

Ah another Great example, as well planning.

Murray Auchincloss: us to knock down well planning by 90% as it catalogs all the data, provides suggestions to the experts, and that is significantly increasing the speed with which we can plan wells, not only safely, but more efficiently. You know, it is not just contained to the upstream. We are working very hard with Palantir and Databricks to work our way through refining in a few of our refineries. In the customer's business, there is an interesting example of an AI agent that is helping us in our Aral service stations in Germany. We have trialed it with 20 service stations in Germany

The AI is enabling us to knock down well planning by 90% is it catalogues all the data provide suggestions to the experts.

And that's a significantly increasing the speed with which we can plan wells not only safely but more efficiently and then you know it's not just contained to the upstream we're working very hard with pound turn data bricks to work our way through refining and a few of our refineries and in the customer's business. There is an interesting example of it.

<unk> AI agent that is helping us in our rail service stations in Germany, We've trialed. It with 20 service stations in Germany. It's been designed to help us manage our stock levels there to make sure that food isn't wastage that we follow customer preferences for what they like to purchase and what they don't like to purchase and that after three months.

Murray Auchincloss: It's been designed to help us manage our stock levels there, to make sure that food isn't wasted, that we follow customer preferences for what they like to purchase and what they don't like to purchase. That, after 3 months, in those 20 locations, they've knocked down waste by 45%. We can see tremendous examples of improved uptime, improved performance, better capital efficiency through AI, and we're very excited about the opportunity this has as our data foundations get firmly in place. Thanks for the question, Lydia.

In those 20 locations they've knocked down waste by 45%. So we can see tremendous examples of improved uptime improved performance better capital efficiency through AI and we're we're very excited about the opportunity of this houses there is our data foundations.

Got a firmly in place thanks for the question with you.

Greg Brown: Thank you, Lydia. Right, we're gonna move to the US to take the next question from Doug Leggate at Wolfe. Doug, good morning.

Craig Marshall: Thank you, Lydia. Right, we're gonna move to the US to take the next question from Doug Leggate at Wolfe. Doug, good morning.

Thank you Lydia right, we're going to move to the U S to take the next question from Doug Leggate at Wolf, Doug Good morning.

Doug Leggate: Well, thanks. Good, I'm not even sure what time it is over there, so good afternoon, I guess. Murray, I guess I've got a couple of parts to this related to your production guidance long term. You're already over 2.3. BPX is knocking it out of the park, frankly, versus its more than 600 end of decade kind of guidance. Now you've got, you know, multiple discoveries and potentially an early production system from Bumerangue. My question is, how do you see the risk to your production guidance? Maybe a kind of part B to that. Would Bumerangue early production system be included in the CapEx guidance that you've given us over the current plan as well?

Well thanks.

I'm not sure what time it is over there so good afternoon I guess.

Marie I.

I guess I've got a couple of parts to this related to your production guidance long term you'd already over 2.3 B P X.

Is knocking it out of the park frankly versus its more than 600, and a decade kind of guidance I know you've got multiple discoveries and potentially an early production system from Boomerang <unk>. So my question is how.

How do you see the risk to your production guidance and maybe a part b to that with Boomeranged yearly production system be included in the Capex guidance that you've given us over the current plan as well.

Murray Auchincloss: Yep. Thanks, Doug. I'll hesitate to give a ton of guidance forward. You know, we've set out our plans to 2027 as principal guidance, then we gave an indicator of volumes at the end of the decade as well. I think it's probably premature until we work our way through more of the portfolio review to understand where we'll be headed. We do have choices on short term versus long term, of course, we can pivot more capital into BPX and drive up production near term, or we can pivot more to things like the Paleogene and Brazil to drive longer term resource production.

Yep. Thanks, Thanks, Thanks, Doug.

I'll hesitate to give a ton of guidance forward you know we've set out we set out our plans to 2027.

As principal guidance and then we gave an indicator of our volumes at the end of the decade as well.

I think it's probably premature until we work our way through more of the portfolio review to understand where we'll be headed we do have choices on short term versus long term. So of course, we can pivot more capital into a BP acts and drive up production near term or are we can pivot more to things like the paleogene.

And Brazil to drive longer term resource production.

Murray Auchincloss: I think, if I stepped back from it, I think the thing I'd say is that I feel we now have the potential to grow long-term organic oil volumes for long duration. I'm not sure I've been able to say that over the past 25 years with BP, that we've been in a resource position like that. It's a nice problem to have. What we're tightly focused on is staying within our capital frame and deciding what the right thing is to do to grow shareholder returns and value on behalf of the shareholders. I think where I'd wrap that question is, I'm very pleased to have been able to improve the guidance for 2025 after only 3 quarters. Tremendous performance from the teams, as I said earlier.

I think if I step back from it I think the thing I'd say is that I feel we now have.

The potential to grow long term organic oil volumes for.

For long duration, and I'm not sure I've been able to say that over the past 25 years with BP.

We've been in our resource position like that it's a nice problem to have.

And what we're tightly tightly focused on staying within our capital frame and deciding what's what the right thing is to do to grow shareholder returns and value on behalf of the shareholders.

So I think I think where I'd wrap that question is I'm very pleased to have been able to improve the guidance for 2025.

After only three quarters tremendous performance from the teams as I said earlier, we will update you on 2026 in February with what our viewpoint is of production then and I would say, we have more potential to grow, especially in the oil now and I feel we're in a better place than we've been in my career with BP, which is a nice thing to have.

Murray Auchincloss: We'll update you on 2026, in February with what our viewpoint is of production then. I would say we have more potential to grow, especially in oil now. I feel we're in a better place than we've been, in my career with BP, which is a nice thing to have. Hope that helps.

Hope that helps.

Doug Leggate: It does. Thank you.

It does thank you thanks, Doug.

Greg Brown: Thanks, Doug. Thank you. We'll take the next question from Lucas Herrmann at BNP. Lucas.

Craig Marshall: Thanks, Doug. Thank you. We'll take the next question from Lucas Herrmann at BNP. Lucas.

Thank you.

The next question from Lucas Herrmann at BMP Lucas.

Lucas Herrmann: Yeah. Murray, Craig, thanks very much. A couple of, well, a couple if I might. Just going back or staying with BPX, Murray. Just trying to understand the CapEx profile. I mean, appreciate the growth is very good. The lead counts kind of held. I guess my understanding was always that as you came to complete on the processing facilities, Bingo, so on and so forth, that we'd see a step down in spend, which doesn't really seem as though it's happening. Some explanation, you know, as to the developments there. If I can, just a simple one for Kate on the pension fund, if I could have a simple.

Yes.

Great Thanks, very much and.

A couple of ball well a couple of if I might.

Just going back well staying with the P. P X Maury.

I understand the Capex profile I mean appreciate the growth is very good.

Hold on I guess my understanding was always that as he came to complete all the processing facilities.

Bingo solar and so forth that we'd see a step down and spend which doesn't really seem as though it's happening. So some explanation as to the developments there and then if I can just a simple one for Keith on the pension bombed at blacks episodes simple.

Lucas Herrmann: Can you just talk around the buy-in that you've arranged with Legal & General and why you or why it's sort of stopped where it has at this point? Should we be expecting, you know, you to sell down or to allow Legal & General to buy in a greater proportion of the UK fund into the future? Thank you.

Simple can you just talk around the buy in that you've arranged with legal and general and while you wait for that.

Nope, we're at this point should we be expecting you to sell down or to allow legal and general supply in a greater proportion of the UK pound and into the future.

Thank you.

Murray Auchincloss: Thanks, Lucas. I'll let Kate talk, and then I'll come back on BPX.

Thanks, Lucas I'll, let Kate talk and then I'll come back on <unk>.

Kate Thomson: Yeah. Hi, Lucas. Thanks for the question. Yeah, I mean, it's been a conversation inside the Pension Trustee Board for a while in terms of de-risking. You can see a number of other companies have stepped into this in similar ways, some to a bigger degree than we have. I think the transaction that's been executed is a good one to date, of course it's not our decision as the sponsor or as the company. It rests fully with the Pension Trustee Board. I think they will continue to evaluate how they feel with regard to further de-risking as we go through the coming months, I've nothing further to be able to say in terms of guidance on that at the moment, Lucas.

Yeah, Hi, Hi, Lucas Thanks for the question so yeah.

I mean, it's been a conversation inside the pension trustee board for a while in terms of Derisking and you can see a number of other companies that can do this and similar ways for a minute.

Let's take a degree than we have them I think the transaction. That's been executed is a good one to date and that of course, it's not it's not our decision as the as the sponsor as the company fully with the pension trustee Board.

And I think they will continue to evaluate how they feel with regard to the derisking as we as we go through the coming months, but I have nothing further to be able to say in terms of guidance on that at the moment Lucas.

Murray Auchincloss: Great. Thanks, Kate. On BPX, Lucas, the way that we think about BPX is about $2.5 billion a year into it. Of course, we have the opportunity to flex that up and down. This year we'll spend around $2.5 billion in BPX, and as guidance, I think we guided around $2.5 through the next couple of years as well as we talked about the shape out to over 650 KBD in 2030. I think a few things I'd say about BPX. The productivity improvement we've seen from the team is very high. They've had 30% productivity improvement in completions and 15% in drilling over the past 12 months.

Great. Thanks, Kate on bps Lucas the way that we think about these PX is about $2 5 billion a year into it of course, we have the opportunity to flex that up and down.

So this year, we'll spend around $2 5 billion in bps and as guidance I think we guided around 2.5 through the next couple of years as well as we talked about then shape out too.

600 over 650, K B D in 2030.

I think a few things I'd say about the PX the productivity.

Productivity improvement we've seen from the team is very high.

They've had 30% productivity improvement in completions and 15% in drilling over the past 12 months there now at top quartile in each of the basins. We operate from a drilling days per 10-K, and they're at top quartile in NPV per.

Murray Auchincloss: They're now at top quartile in each of the basins we operate from a drilling days per 10K, and they're at top quartile on NPV per dollar spent, which are fantastic metrics to continue to push. Congratulations to the team on doing that. Another little advertisement for them would be they've drilled the best well in the Haynesville now ever. 4-mile lateral completed and now producing 80 million standard cubic feet a day, which is a record for the Haynesville. Congrats to the team for doing that. As far as where do we go from here with BPX? We see continuous drilling inside the oil windows. You'll notice quite a large liquid growth, Q2-on-Q2, 2024 and 2025.

Per dollar spent which are fantastic metrics to continue to push and congratulations to the team on doing that another little advertisement for them would be they've drilled the best well in the Haynesville now ever four mile lateral.

Completed and now producing 80 million standard cubic feet, a day, which is a record for the haynesville. So congrats to the team for doing that.

As far as where do we go from here with BP Ax, we see continuous drilling inside the oil windows, you'll noticed quite a large liquids growth to <unk> 24, and 25, that's as we fill up the Permian and we're doing an awful lot in the Eagle Ford as well, there's strong growth in the Eagle Ford from the infill space.

Murray Auchincloss: That's as we fill up the Permian, and we're doing an awful lot in the Eagle Ford as well. There's strong growth in the Eagle Ford from the infill spacing. The down spacing I've talked about before and from the refracs I've talked about before, very strong liquids growth across that business. The natural gas, the drilling and natural gas, we're running eight rigs across. We'll have a conversation as we head into 2026 about do we keep running at eight rigs? Do we move it up to nine rigs inside the gas window? The productivity improvements are so strong that they've actually drilled 13 wells basically for free this year relative to what our plans were. I think count on 2.5 until we give you additional guidance.

The Downspacing I've talked about before and from the re Fracs and I've talked about before so very strong liquids growth across that business and the natural gas the drilling of natural gas, we're running eight rigs across we'll have a conversation as we head into 2026 about do we keep running at eight rigs do we move it up to nine rigs inside the gas window.

But the productivity improvements are so strong that they've actually drilled 13 wells basically for free.

This year relative to what our plans were so I.

I think count on 2.5 until we give you additional guidance obviously more drilling.

Murray Auchincloss: Obviously more drilling, then infrastructure as we finished off the infrastructure, the major infrastructure program, as you mentioned. We see this, the chance for a strong growth moving in BPX moving forward, and we're happy to support the US in growing production. Thanks, Lucas.

Then infrastructure as we finished off infrastructure the major infrastructure program as you as you mentioned.

We see this and the chance for a strong growth moving in bps moving forward and we're happy to support the U S and growing production. Thanks.

Lucas.

Ryan Todd: Thanks, Murray.

Thanks, Brian. Thank you Lucas I'm going to take the next question from Chris Coupland at Bank of America, Chris.

Greg Brown: Thank you, Lucas. We're gonna take the next question from Christopher Kuplent at Bank of America. Chris.

Craig Marshall: Thank you, Lucas. We're gonna take the next question from Christopher Kuplent at Bank of America. Chris.

Kate Thomson: Yeah. Thank you very much. trying to stick to the one question rule, but, a wider one beyond Castrol. Murray, could you maybe, let us know where you're at on Gelsenkirchen, on Lightsource? If I may just ask, you've done the Tanap stake disposal now, in BPX. How many of those midstream opportunities do you still see when you look across your portfolio for potentially more non-controlling interest stakes? Thank you.

Chris Kuplent: Yeah. Thank you very much. trying to stick to the one question rule, but, a wider one beyond Castrol. Murray, could you maybe, let us know where you're at on Gelsenkirchen, on Lightsource? If I may just ask, you've done the Tanap stake disposal now, in BPX. How many of those midstream opportunities do you still see when you look across your portfolio for potentially more non-controlling interest stakes? Thank you.

Yeah. Thank you very much.

Trying to stick to the one one question rule, but a wider one beyond Castro Maury could you, maybe let us know where youre at on CASM kitchen on light source and if I may just ask you've done the 10 up stake disposal now in M. P. P X how many of those mid.

Stream opportunities do you still see when you look across your portfolio for potentially more noncontrolling interests six thank you.

Murray Auchincloss: Yeah. Great, Chris. Thanks very much. We laid out a program of $20 billion. Pleased to report that we've announced 5 now. I think $1.7 of proceeds in the door cage and, obviously, another three and a half to come in the door to help the balance sheet as we complete these transactions, as we get to completion and approval. I think what I would say is there's strong interest in Castrol, and we continue to move forward with that. We'll update you. Same for Gelsenkirchen, strong interest, and we'll update you. On Lightsource, we started strategic conversations with counterparts, and we're at an earlier stage on that than we are on both Gelsenkirchen and Castrol.

Yeah, Gregg Chris Thanks, very much and we laid out a program of 20 billion I'm pleased to report that we have announced five now I think 1.7 of proceeds in the door case and obviously.

Another three and a half to come in under the door too to help to help the balance sheet as we complete these transactions as we get to completion and approval.

What I would say is there's strong interest in castrol and we continue to move forward with that we will update you same for Galison kirchen strong interest and we will update you in a light source. When we started the strategic conversations with counterparts and where we're at more at an earlier stage on that than we are on both Gelson Kirchen <unk> Castro.

Murray Auchincloss: You should expect something that takes a bit longer to disclose on Lightsource. We're making strong progress on all three of those things, and as they're commercial processes, I don't wanna say much more than that. We'll update you when we have news to tell you. I think on the infrastructure stuff, Kate, why don't you take that bit, please?

So you should expect something that takes a bit longer to to disclose on light source, but we're making strong progress on all three of those things and we'll update you as their commercial processes I don't want to say much more than that we'll update you. When we are when we when we have news to tell you I think on the infrastructure stuff Kate why don't you take that please.

Kate Thomson: Yeah. Hi, Chris. As we look out in terms of the delivery of the rest of the $20 billion program, we don't see any other significant infrastructure deals in the pipeline. In terms of how you should think about NCI, the way I would suggest you hold it is it's not going to increase beyond this. Actually next year, as we redeem the hybrid that we pre-financed, there's about $1.4 billion left of the 2026 maturity that we pre-financed, if you remember. That will start to bring NCI down. Should we choose to take advantage of the 25% of the hybrids that we could taper under the S&P rules, should we choose to step into that space, then you'd see NCI reduce further.

Yeah, Hi, Chris.

As we look out in terms of the delivery of the rest of the $20 billion program. We don't see any other significant infrastructure deals in the pipeline. So in terms of how you should think about and see either way out. Its just you hold it as it's not going to increase beyond this and actually next year.

We redeemed in the hybrid that we pre finance, there's about 1.4 billion left at the 2026 maturity that we pre financed if you remember then that will start to bring N C. I down and then should we choose to take advantage of the 25% of the hybrids that we could taper.

Paper and do the S&P rules should we choose to step into that space, then you'd see N C. I would use the other side the way I would suggest you hold it as it is where it is and from here It will go down.

Kate Thomson: The way I would suggest you hold it is, it's where it is, and from here it will go down.

Murray Auchincloss: Thank you, Chris.

Thank you Chris understood. Thank you okay. Thanks, Chris.

Kate Thomson: Understood. Thank you.

Chris Kuplent: Understood. Thank you.

Greg Brown: Okay. Thanks, Chris. Thank you. We're gonna go back to the US, taking the next question from Ryan Todd at Piper Sandler. Ryan, good morning.

Craig Marshall: Okay. Thanks, Chris. Thank you. We're gonna go back to the US, taking the next question from Ryan Todd at Piper Sandler. Ryan, good morning.

Thank you we're going to go back to the U S to take the next question from Ryan Todd at Piper Sandler Ryan Good morning.

Ryan Todd: Good, thanks. Tangguh is rightfully getting the bulk of the attention right now, but you've had quite a bit of success across the drill bit, across the portfolio. Can you talk about what are some of the other, you know, discoveries or opportunities this year that have been particularly exciting, maybe in particular Namibia, what you've seen so far, how it's comparing to expectations, and timeline of next steps?

Good thanks.

If I'm wrong is rightfully getting the bulk of the attention right now, but you've had quite a bit of success across the drill bit them across the portfolio can you talk about.

What are some of the other discoveries are opportunities this year that have been particularly exciting.

In particular in Namibia, what you've seen so far how it's comparing to expectation.

The next step.

Murray Auchincloss: Yeah. Thanks, Ryan. Let's see. I think maybe I think we're 12 out of 14 right now, if my math's right, on discoveries. You know, congrats to the explorers for such a great year. It's probably the best year in our history. Particularly interesting has been the convergence of seismic technology with new chips from companies like Nvidia and the emergence of AI. It's allowing us in places like Egypt, Trinidad, Brazil, to see below salt much better than we ever have. I can remember looking at the seismic on Egypt, where you could actually see the channels. We're seeing a change in technology that has helped exploration this year.

Yeah. Thanks Ryan.

Yeah.

Let's see.

I think maybe so I think we're 12 out of 14 right now if my maths right on discoveries congrats to the explorer for such a great year, it's probably the best year in our history.

Particularly interesting.

There's been a convergence of seismic technology with big with with new chips from companies like Nvidia and the emergence of AI, it's allowing us in places like Egypt, Trinidad, Brazil to see below salt much better than we ever have and I can remember looking at them.

Seismic on Egypt, where you could actually see the channels.

So there is where we're seeing a change in technology that has helped exploration. This year I don't want to say it'll it'll necessarily do that next year as well, but that's that's been part of the story of the excellent exploration we've had.

Murray Auchincloss: I don't wanna say it'll necessarily do that next year as well, that's been part of the story of the exploration we've had. I think Trinidad offers up 2 good discoveries for development. Egypt offers up 2 good discoveries for development. Brazil, we've talked about. If I move to Namibia, again, we're very excited. That's been done through Azule, our joint venture with Eni. We've had effectively 3 discoveries. The 3rd one, Volans, came in Q3. We've got a nice reservoir in Capricornus, the 2nd one, 38m. A very high Darcy rock, good oil properties. We have Volans discovery, 28m, if memory serves, rich gas condensate, only 14km away from Capricornus.

I think Trinidad offers up to good discoveries.

Our four development T jumped offers up to good discoveries for development.

Brazil, we've talked about.

If I then move to Namibia again, we're very excited that's been done through Zillow or.

Our joint venture with Eni.

We've had effectively three discoveries the third one boelens came this core in the third quarter.

We've got.

Nice reservoir and Capricornus, the second 138 meters of very very high Darcy rock Goodall.

Good oil properties.

And then we have.

Boelens discovery 28 meters if memory serves rich.

Rich gas condensate only 14 kilometers away from capricornus. So no maybe he is looking like a very good block we continue to test the samples in the lab through the operator of the exploration phase right now and we're quite optimistic about it and I think the Namibian energy Minister he called it the best block in the nation. So we're really pleased with that.

Murray Auchincloss: Namibia is looking like a very good block. We continue to test the samples in the lab through the operator of the exploration phase, Rhino, and we're quite optimistic about it. I think the Namibian energy minister called it the best block in the nation. We're really pleased with that and looking forward to further appraisal and an update from the operator, Rhino, in due course about how we take the development of this block moving forward. Thanks for recognizing it. A very good year for exploration, and we're proud of the teams for what they've delivered. Thanks, Ryan.

Looking forward to further appraisal and an update from the operator Rhino in due course about how we take them how we take the development of this block moving forward.

Thanks, Thanks for recognizing that a very good year for exploration and we're proud of the teams for what they've delivered thanks Ron.

Yeah.

Greg Brown: Thank you, Ryan. We'll stay in the US and take the next question from Paul Cheng at Scotiabank. Paul, good morning.

Craig Marshall: Thank you, Ryan. We'll stay in the US and take the next question from Paul Cheng at Scotiabank. Paul, good morning.

Thank you Ryan we will stay in the U S and take the next question from Paul Cheng at Scotia, Paul Good morning.

Paul Cheng: Thank you. Good morning, or good afternoon, your time, I suppose. Murray, I want to go back into exploration. You guys definitely have a very good year. In addition to the maybe that combining AI and seismic to allow you to be able to see through the rock better, is there any processes or the personnel changes that lead to this quick success, and how repeatable are they? From that standpoint, going forward, if you do believe that you have better success rate, should you deploy more capital into the exploration going forward, to be able to use it as maybe a larger source of replacing your resource going forward? Thank you.

Hi, Thank you good morning, or good afternoon, your time I suppose.

Mary I wanted to go back into exploration you guys definitely have a very good year. In addition to the maybe that combining AI and seismic to allow you to.

Be able to see food or work better if they had the.

Paul This is or the personnel changes that didn't need to there's a quick success and how we pick up a lot from that standpoint.

Going forward.

If you do believe that you will have better success, we shouldn't you deploy more capital into the exploration going forward.

To be able to use it and then maybe a larger source of pacing youll, we source going forward. Thank you.

Murray Auchincloss: Thanks, Paul. I guess there are a few things happening, first of all, inside exploration. We have a great, experienced team, who have been high-graded over time, and, you know, they've built on the track record of their predecessors and built up a very good base of knowledge around the world. We have great people with great deep knowledge, I would say, of the basins in which we operate. I think the second thing is technology is changing. The NVIDIA chips that we're now using inside our supercomputing are just incredibly fast and allow incredible iterations of theories. I'm kinda dumbing it down.

Thanks, Paul I guess.

I guess the there are a few things happening first of all.

Inside of exploration, we have a we have a great experienced team.

Who'd been high graded over time.

And they've they've built on the they've built on the track record of their their predecessors and built up a very good base of knowledge around the world. So we have great people with great deep knowledge I would say of the basins in which we operate.

I think the second thing is technology is changing.

The Nvidia chips that we're now using inside our supercomputing are just incredibly fast and allow incredible iterations of theories.

I'm kind of dumbing it down all the geologists on the call. Please forgive me for dumbing this down but it enables much faster interpretation ideas thinking.

Murray Auchincloss: All the geologists on the call, please forgive me for dumbing this down, but it enables much faster interpretation, ideas, thinking about how one can think about the subsurface. That, of course, has converged with wide azimuth seismic full waveform inversion algorithms. You've got this real thing of very good, experienced people with incredible horsepower and compute, much better than anything in history, along with dramatic technology steps from the service providers. I think the magic we have right now is the team's very engaged on the digital side and very engaged with using the technology and the AI to test new theories and see what else is there. That's a little bit about the magic. Is it repeatable?

Thinking about how one can think about the subsurface and that of course is converged with wide azimuth.

<unk> seismic.

Full waveform inversion algorithms. So you've got this real thing of a very good experienced people with incredible horsepower and compute are much better than anything in history, along with the dramatic technology steps from the service providers and then I think the magic we have right now is the tea.

<unk> very engaged on the digital side and very engaged with them.

Using the technology and the AI to test new theories and see what else is there. So that's a that's a little bit about the magic is it repeatable.

Murray Auchincloss: I'm never gonna say that with exploration. My father was a geologist, and I know you curse yourself if you say that. I don't think I'd necessarily bank on that, but we've certainly had a good year. We have some very good prospects next year. As far as increasing capital in the space, the lesson for life from us is always quality through choice. create as many opportunities you can, high grade down to the very best ones, and that gives you a higher chance of success than you otherwise would. That, to me, is what's so important, is you keep quality through choice. I think we're spending around $600 million a year right now on exploration.

I'm never I'm never going to say that with exploration My father was a geologist.

And I know I know you curse yourself, if you say that so I don't I don't think I'd I'd necessarily bank on that but we certainly had a good year. We have some very good prospects next year and as far as increasing capital in this space.

The lesson for life from US is always quality through choice.

And create as many opportunities you can high grade down to the very best ones and that gives you a higher chance of success than than you otherwise would so that to me is what's so important is you keep quality through choice I think we're spending around $600 million a year right now on exploration I would not want to push that up despite the success because.

Murray Auchincloss: I would not want to push that up despite the success because it forces quality. Thanks for the question. Congrats to the explorers for a great year, and we just need to remain capitally disciplined and make sure that we're pursuing only the very best opportunities. Thanks, Paul. Thank you, Paul. We will go to Michele at Goldman Sachs next. Michele?

It forces it forces quality. So thanks for thanks for the question congrats to the explorer for a great year.

And we just need to remain capital disciplined and make sure that we're chasing pursuing only the very best opportunities. Thanks Paul.

Craig Marshall: Thank you, Paul. We will go to Michele at Goldman Sachs next. Michele?

Thank you Paul we will go to Mikael <unk> at Goldman Sachs next Mckinley.

Michele Della Vigna: Thank you, congratulations again on the strong delivery this quarter. I wanted to come back to the CapEx budget. You reiterated the guidance for this year, you've got a relatively wide range for 2026, 2027 or $13 billion to $15 billion. I was wondering, in an uncertain macro environment, if you were forced or decided to go to the low end of that range, where would you find the levers of flexibility to lower the budget effectively from the $14.5 billion of this year? I find it's an interesting time of year to start to think about some of those moving parts. Thank you.

Michele Vigna: Thank you, congratulations again on the strong delivery this quarter. I wanted to come back to the CapEx budget. You reiterated the guidance for this year, you've got a relatively wide range for 2026, 2027 or $13 billion to $15 billion. I was wondering, in an uncertain macro environment, if you were forced or decided to go to the low end of that range, where would you find the levers of flexibility to lower the budget effectively from the $14.5 billion of this year? I find it's an interesting time of year to start to think about some of those moving parts. Thank you.

Thank you and congratulations again on the strong delivery this quarter I wanted to.

Back to the Capex budget. So you reiterated the guidance for this year and you've got a relatively wide range for 'twenty six 'twenty seven of 13 to 15 I was wondering in an uncertain macro environment. If you were forced all decided to go to the low end of that range.

Do you find the leather appliques.

Flexibility too low with about just if they could be from the 14 any hassle theory.

It's an interesting time move yet to start to think about some of those moving parts. Thank you.

Murray Auchincloss: Kate, why don't you take that one?

Kate why don't you take that one.

Kate Thomson: Yeah, I will. Thank you. Hi, Michele. We have got a decent range around the frame for the next 2 years. That gives us plenty of space to maneuver, I think, in different price environments. If you look at this year, we've guided to around 14.5. If you take out of that the final bullet on our bp bioenergy and organic, you're actually sub 14 on an organic basis. If prices were to dip, we've got plenty of opportunity to take ourselves down to the bottom of that frame. We'll continue to be very careful as we deploy every dollar if prices are strong and we choose that we actually want to drift up towards the top of that frame.

I will thank you hi Mackenzie.

Yeah. So we have got a decent range around the frame for the next couple of years. So that gives us plenty of space to maneuver and different price environment. Since you look at this year, we've guided to around 14.5, and if you take out the final bullet on BP buyer.

<unk> inorganic then you're you're actually sub 14 on an organic basis.

If prices were to to that we've got plenty of opportunity to take ourselves down to the bossiness that frame and will continue to be very careful as we deploy every dollar if if prices are strong and we choose that we actually want to drift up towards the top of that frame I don't I didn't see it.

Kate Thomson: I don't see any need for us to let go of the tight discipline that Murray and I have put around capital. I think it forces the right conversations in terms of the value and returns focus that we're pushing into every investment decision that we are now stepping through. You've heard us talk about this on previous calls, that that discipline and that approach to our capital investment is so critical to us as we seek to drive improvement in the operating cash flow going forward and making sure that we're choosing the very, very best of the opportunities at our disposal. We've got probably one of the richest sources of opportunities to consider that we've had for a very long time right now, which is a great position to be in.

Any need for us to let go of the tight discipline that Mary and I have put around capital I think it forces the right conversations in terms of the value and returns focus that we're pushing into every investment decision and that we are now stepping through and you can you've heard us talk about this on previous calls that that disciplined in that approach.

Our capital investment is so critical to us as we seek to drive improvement and they and the operating cash flow going forward and making sure that we're choosing the very very best of the opportunities.

At our disposal we've got.

Probably one of the richest sources of opportunities to consider that we've had for a very long time, right now, which is a great position to be in and I'm very comfortable with the range and the flexibility that we've got and we've talked before where we would go if we needed to take ourselves down to the bottom of that range and there's plenty of opportunities around some of the onshore drilling, which we could choose to.

Kate Thomson: I'm very comfortable with the range of and the flexibility that we've got. We've talked before where we would go if we needed to take ourselves down to the bottom of that range. There's plenty of opportunities around some of the onshore drilling, which we could choose to slow down. There's a little bit around the exploration playing at the edges, depending on how much of our rigs are committed over the next 12 months. We have space, and we have flexibility within that 13 to 15.

Slow down there's a little bit around the exploration playing at the edges and depending on how much of our rigs are committed over the next 12 months, but we have space and we have flexibility within that 13 to 15.

Murray Auchincloss: Thanks, Michele.

Thank you Kelly.

Michele Della Vigna: Thank you.

Michele Vigna: Thank you.

Murray Auchincloss: Great. Thanks, Michele. We're gonna take the next question from Henry Tarr at Berenberg. Henry?

Craig Marshall: Great. Thanks, Michele. We're gonna take the next question from Henry Tarr at Berenberg. Henry?

Thank you great. Thanks, Mark Haley.

We're going to take the next question from Henry Tarr at Ehrenberg Henry.

Henry Tarr: Thanks for taking my question. I wanted to ask about Iraq. Can you give us any more detail on the sort of economics for BP of the contract in Kirkuk? There's a sort of large program planned. How material, or from a macro perspective, do you think the overall impact could be for production growth in Iraq if we look out sort of 3 to 5 years? Thanks.

Thanks for taking my question.

I wanted to ask about Iraq.

Can you can you give us any more detail on the sort of economics for BP of the of the <unk>.

Contract in Cook Cook.

And then obviously others have entered into the into the country.

And there is a large program planned how material.

From a macro perspective do you think the overall impact could be for production growth in Iraq. If we look at sort of three to five years. Thanks.

Murray Auchincloss: Thanks, Henry. I have to be careful on economics. The nation has not yet published the production sharing agreement. Until they do that, it's very difficult for me to say anything under the restrictions that we have. What I will say is progress since I last talked to you, we've done the initial production test and agreed that with the nation. That's 328 KBD of black oils being produced. The teams on the ground now, 45 people on the ground in Kirkuk, starting to work on well work jobs, asset jobs, compressor re-wheels, getting procurement contracts in place, et cetera. We look forward to helping the nation ramp up that field over time.

Thanks, Henry I.

I have to be careful on economics, the nation has not yet published to the production sharing agreement.

And until they do that it's very difficult for me to say anything under the restrictions that we have a.

What I will say is progress since I last talked to you. We have done the initial production test and agreed that with the nation. That's 320 8-K, B D. A black oils being produced.

And the teams on the ground now 45 people on the ground and in Kirkuk starting to work on ballpark jobs acid jobs compressor re wheels, getting procurement contracts in place et cetera, and we look forward to helping the nation ramp up that field over time.

Murray Auchincloss: I think the stuff that I can say on the terms are they're obviously better than the first-round terms. We're on round 8. Each round has been incremental as my understanding across time based on what's been published publicly. We have price upside in this one. We do have the ability to take price on gas as well, which has not happened in previous rounds. We have exploration rights on the acreage as well, both surrounding and deeper. It's a much better enhanced contract than we saw in the phase 1 terms of Rumaila. Kind of, gosh, how many years on is that now? Almost 20 years on. That's probably all I can say about the commercial terms of Kirkuk, but we're very happy with it.

I think the stuff that I can say on the terms are there obviously better than the first round terms were on round eight and each each round has been incremental as my understanding across time based on what's been published publicly.

And we do we do have price upside in this one we do have the ability to.

Take price on gas as well, which has not happened in previous rounds, we have exploration rights on the acreage as well.

Both surrounding and deeper.

So it's it's a.

It's a much better enhanced contract than we saw in the phase one in terms of Rumaila.

I'm kind of course, how many Arizona is that now almost 20 years on.

So that's probably all I can say about the commercial terms of cook, but we're very happy with it and in due course, when we're allowed we'll happily happily share the details.

Murray Auchincloss: In due course, when we're allowed, we'll happily share the details with the marketplace. I think on the overall capacity for Iraq, there is a lot of oil there. Obviously, we've seen a few other deals being signed recently. I guess my response is it's what the world needs. We continue to see oil demand moving forward strongly. We see strong demand for that oil. We perceive that some of the non-OPEC+ is pretty much tapped out after February, March, April next year, we see flat to declining production outside of OPEC+. It's gonna be dependent on places like Iraq to help fill the demand that's coming forward.

With the marketplace I think on the overall capacity for Iraq. There there is a lot of oil there.

And obviously, we've seen a few other deals being signed recently.

And I guess my responses, it's what the world needs.

We continue to see oil demand moving forward strongly we've seen strong demand for that oil.

We perceive that some of the not non OPEC plus is pretty much tapped out. After February March April next year, and then we see flat to declining production outside of OPEC, plus so its going to be dependent on places like Iraq to help fill the demand that's coming forward. So I think they are.

Murray Auchincloss: I think the world's gonna need it, but it wouldn't be right for me to talk into Iraq's production capacity. That's something that the nation will have to talk about as opposed to myself. Hope that helps, Henry. Many thanks. Thank you, Henry. Great, thank you. We're gonna take the next question from Kim Fustier, HSBC. Kim.

The world is going to need it but it wouldn't be right for me to talk into Iraq production capacity, that's something that the national have to talk about as opposed to myself I hope that helps Henry.

Okay.

Many thanks, Thank you Henry.

Craig Marshall: Thank you, Henry. Great, thank you. We're gonna take the next question from Kim Fustier, HSBC. Kim.

Great. Thank you we're going to take the next question from Kim <unk> at HSBC Kevin.

Kim Fustier: Hi, good afternoon. Thanks for taking my question. I wanted to ask about the Venture Global case. You've won the LNG arbitration case, unlike one of your peers. Why do you think your case was successful, and when do you think you might receive the $1 billion of damages that you've asked for? Thank you.

Hi, Good afternoon. Thanks for taking my question I wanted to ask about the eventual global Casey you won't be LNG arbitration case, Unlike one of your peers.

Why do you think your case was successful and when do you think you might receive the $1 billion of damages that you thought that your passport. Thank you.

Murray Auchincloss: Yeah, Kim, I'll obviously not gonna comment on any other cases. I'm not familiar with them, and it would be inappropriate for me to comment on that. As far as our case goes, we're very pleased with the result. Congratulations to our lawyers and our traders for having achieved this. The next phase on damages is being organized with the arbitration panel. A date has not yet been set. I'm sure there'll be an update when that occurs. As far as the damages themselves, that's not a number that is our number. That's. We don't recognize that number. All I'd say is we're pleased. We look forward to the next stage.

Yeah camera, all I'm, obviously, not going to comment on any other cases.

I'm not familiar with them and.

And it would be inappropriate for me to comment on that as far as our case goes we're very pleased.

We're very pleased with the results and congratulations to our lawyers and our traders for having achieved this.

The next phase on damages.

Is being organized with the arbitration panel date has not yet been set I'm sure there'll be an update when that occurs and as far as the damages themselves. That's not a number that is our number. That's we don't we don't recognize that number. So all I'd say is we're pleased we look forward to the next stage, we will update you when we're aware of them.

Murray Auchincloss: We'll update you when we're aware when that's happening. I'm very pleased with the result from the arbitration. Congrats to the team. Thanks, Kim. Okay, we're gonna go to Josh Stone at UBS, please.

Murray Auchincloss: We'll update you when we're aware when that's happening. I'm very pleased with the result from the arbitration. Congrats to the team.

And that's happening.

And I'm.

I'm very pleased with the results from the arbitration congrats to the team.

Craig Marshall: Thanks, Kim. Okay, we're gonna go to Josh Stone at UBS, please.

Yeah.

Thanks Kim.

Okay, we're going to go to Josh stone at UBS. Please.

Josh Stone: Thanks, Greg. Good afternoon. A question to Kate on the balance sheet. I'm curious as to how much attention you're paying to your gearing ratio on either a net debt to capital or equity basis, because, you know, the reason I ask is as you get more of these cash proceeds in from asset sales, you're effectively selling parts of BP, so your asset base will be coming lower, and that's also before the impact of impairment. Maybe just talk about how you're thinking about these ratios, 'cause I appreciate you've got, like, an absolute net debt target, but I think the gearing ratio is also relevant here. Maybe some comments on that would be helpful. Thanks.

Thanks, Greg and.

Good afternoon question for Kate on the balance sheet.

I'm curious as to how much attention you think of your gearing ratio, neither a net debt to capital or equity basis, because the reason I ask because as you get more of these cash proceeds from asset sales.

You will see the refractory setting parts would be piece of your asset base would be.

Becoming lower and muscles beforehand.

So maybe just talk about how you're thinking about these ratios because I appreciate it good luck in absolute net debt target.

But gearing ratios will say relevant so maybe some comments on that would be helpful.

Kate Thomson: Yeah. Hi, Josh. Thank you for the question. Let me step through how we think about our balance sheet, 'cause I think if you'll just bear with me, I'll take you through my thinking, 'cause I think it's quite important context. Financial resilience is really important to us as an organization as we move forward. It allows us to execute on the opportunities that we have as they present themselves. It's comprised of a number of things, and the first thing that everyone can measure us against is net debt. We've now put a target against a material reduction in net debt by the end of 2027, and we've put the $14 to $18 billion, which we will deliver.

Yeah, Hi, Josh. Thank you for the question and let me step through how we think about our balance sheet because I think if you just stay with me and I'll take you through my thinking because I think it's quite important context.

So financial resilience is really important to us as an organization as we move forward.

Allows us to execute on the opportunities that we have as they present themselves.

And it's comprised of a number of things in the first thing that.

Everyone can measure us against this isn't that that and we've now put a target against.

Material reduction in net debt by the end of 2027 and with the $14 billion to $18 billion, which we will deliver.

Kate Thomson: If you think about where we stand today at 2026, that would be a $10 billion reduction in terms of the net debt stack. Of course, I think if you remember some of the slides that I used to talk about balance sheet and financial resilience at the Capital Markets Day in February, I was trying to be pretty transparent that we understand our total liabilities and the drain on our operating cash flow. Those type of commitments is not just around debt. If I think about some of the other big components, we have over $1 billion a year going out on Deepwater Horizon. Another two of those will go before the end of 2027. That's $2.2 billion. We've got a level of pre-financing of the 2026 hybrid I referred to earlier.

If you think about where we stand today at 26 that would be a 10 billion dollar.

Reduction in times that they then that debt stack, but of course and I think if you remember some of the slides as I used to talk about balance sheet and financial resilience at the capital markets day in February.

Trying to be pretty transparent that we understand our types of liabilities and the drain on our operating cash flow at those type of commitments is not just around that.

If I think about some of the other big components, we have over $1 billion, a year going out on deepwater horizon and then.

And then another two days will go before the end of 2027th that's $2 2 billion, we've got them at a level of pre financing of the 26 hybrid I referred to earlier that is 1.4 billion say, even if we do nothing else where do we stand right now our liability stack will reduce over the next two.

Kate Thomson: That's $1.4 billion. Even if we do nothing else, where we stand right now, our liability stack will reduce over the next 2 and a bit years by $13 to 14 billion. That's how we think about it, as opposed to contemplating a gearing. We haven't got a gearing target. We've got a target on net debt. That's the first priority. That's what we will deliver. I hope you can hear from my language that we think about the totality of our liabilities, and we're cognizant on the total cost of all of those.

222, and a bit years by 30.

<unk> to $14 billion and that's how we think about it as opposed to contemplating a Gary we haven't got it Gary target, we've got a target on that that that's the first priority that's what we will deliver.

But I I hope you can hear from my language that we think about the totality of our liabilities I'm a cognizant on their total cost of all of those.

Josh Stone: Thanks, Kate.

Thanks, Josh.

Murray Auchincloss: Thank you, Josh. We'll take the next question from Jeff in TPH, please. Back over in the US. Thank you. Hey, good afternoon, and thanks for taking my question. We were hoping to also ask about the structural cost improvements, which have to be progressing quite well, especially based on the supplement disclosure, the roughly $400 million improvement quarter-over-quarter there. I'll actually gear my loan question here to follow up on BPX, if you could dig into basin specific plans a bit more and maybe give us a sense for how you plan the pace activity adds in the Haynesville specifically over the next 12 to 18 months or so, and maybe how the Eagle Ford may play a role, if at all, as part of that. Thanks. Yep. Great. Thanks, Jeff.

Craig Marshall: Thank you, Josh. We'll take the next question from Jeff in TPH, please. Back over in the US. Thank you.

Thank you Josh I will take the next question from Jeff in a T. P. H. Please back over in the U S. Thank you.

[Analyst] (TPH): Hey, good afternoon, and thanks for taking my question. We were hoping to also ask about the structural cost improvements, which have to be progressing quite well, especially based on the supplement disclosure, the roughly $400 million improvement quarter-over-quarter there. I'll actually gear my loan question here to follow up on BPX, if you could dig into basin specific plans a bit more and maybe give us a sense for how you plan the pace activity adds in the Haynesville specifically over the next 12 to 18 months or so, and maybe how the Eagle Ford may play a role, if at all, as part of that. Thanks.

Yes.

Hey, good afternoon, and thanks for taking my question. We were hoping to also asked about the structural cost improvements, which have to be progressing quite well, especially based on the supplement disclosure of the roughly $400 million improvement quarter on quarter, there, but I'll actually give my long question here to follow up on bps. If you could dig into patient specific plans a bit more and maybe give us a.

Central how you plan to pace activity adds in the Haynesville specifically over the next 12 to 18 months or so and maybe how the Eagle Ford May play a role if at all as part of that thanks.

Murray Auchincloss: Yep. Great. Thanks, Jeff.

Yep, great. Thanks, Jeff Thanks for the kind words on cost progress.

Murray Auchincloss: Thanks for the kind words on cost progress. I'm sure Kate would like to update somebody if they wanna ask a question on that one. As far as BPX, you know, our plans in the Permian as we built out the infrastructure, we of course want to keep that full now that we've built that out. 2 to 3 rigs to continue to keep that full for time. In the Eagle Ford, we continue to be very excited with the downspacing inside the oil windows of the Blackhawk and the refrac programs. The downspacing wells are doing better than the mother bore, than the original wells, simply because fracking technology has moved on so much from when they were drilled a decade ago.

I'm sure Kate we'd like to update somebody if I want to ask a question on that one as far as bps.

Our plans in the Permian as we built out the infrastructure.

We of course want to keep that fall now that we've built that out so two to three rigs to continue to keep that full.

For time.

In the Eagle Ford, we continue to be very excited with the downspacing inside the oil windows of the Blackhawk and the refract programs.

The Downspacing wells are doing better than the mother bore than the original wells simply because fracking technology has moved on so much from when they were drilled a decade ago.

Murray Auchincloss: The refracs similarly, we're seeing much higher production on refracs than we did in the original wells from a decade ago that Petrohawk would have drilled. Those are places that we'll continue to push and push the liquid side over time. On the gasier window, of course we've got the associated gas from the Permian, but equally we have a fantastic Hawkville gas, which is in the Eagle Ford, and we have fantastic Haynesville positions as well, the core of the core. On the Haynesville itself, we'll follow the infrastructure is the way to think about it.

And the re Fracs similarly.

We're seeing a much higher production on re fracs than we did in the original wells from a decade ago that petrohawk, what a trial.

So.

Those are places that we'll continue to push and.

Pushed the liquid side over time.

And then on the gasior window.

Of course, we've got the associated gas from from the Permian, but equally we have a fantastic hawkbill gas, which is in the Eagle Ford and we have fantastic haynesville positions as well the core of the core.

On the Haynesville itself will follow the infrastructure is the way to think about it.

Murray Auchincloss: As I said earlier, the teams have been doing a fantastic job on driving capital efficiency inside that basin, setting record after record on production capacity from the wells now up to 80 million a day on this latest 4-mile horizontal. Through our trading and marketing organization, we've been busy establishing offtake points. We'll just gradually continue to grow the Haynesville in line with the infrastructure build out, really in field gathering rather than any main export issues. We'll be contemplating 2 versus 3 rigs as we head into 2020 into the end of the Q4 and into 2026, we'll update you from there.

As I said earlier the teams have the teams have been doing a fantastic job on driving capital efficiency inside that basin.

Setting record after record on our production capacity from the wells now up to 80 million a day on this this latest.

Four mile horizontal.

And what we through our through our trading and marketing organization, we've been a busy establishing offtake points. So we'll just gradually continue to grow with the Haynesville in line with the infrastructure build out really unfilled gout infield gathering rather than any main export issues and we'll be contemplating two versus.

Three rigs as we head into 2020 into the fourth quarter until the end of the fourth quarter and into 2026, and we'll update you from there, but a tremendous resource tremendous performance by the team and good gas prices, obviously as well that we hedge out.

Murray Auchincloss: Tremendous resource, tremendous performance by the team, and good gas prices obviously as well that we hedge out, and we'll look forward to growing that part of the business. Hope that helps.

And we'll look forward to growing that part of the business hope that helps.

Yeah.

[Analyst] (Redburn Atlantic): Thank you.

[Analyst] (TPH): Thank you.

Thank you.

Greg Brown: Thanks, Jeff. Okay, we're going to go to Alice at Morgan Stanley. Alice, I know you're deputizing for Martin, who's also here in Abu Dhabi. Over to you, Alice.

Craig Marshall: Thanks, Jeff. Okay, we're going to go to Alice at Morgan Stanley. Alice, I know you're deputizing for Martin, who's also here in Abu Dhabi. Over to you, Alice.

Thanks, Jeff.

We're going to go to Alice Morgan Stanley Alex I know you Deputizing for Martin Who's also here in Abu Dhabi over to you Alex.

[Analyst] (Morgan Stanley): Yes, thank you. I have a question about downstream. You printed pretty strong results sequentially, but also with a number of moving parts. Of course, there was the successful delivery of the cost reductions, but also, you know, supportive macro for refining and then on the other hand, weak trading. Could you please give some insight into the contribution of each of those elements? Then on balance, what could we expect the run rate to look like? Thank you.

Yes. Thank you I have a question about downstream.

So you printed a pretty strong result looks sequentially, but also with a number of moving parts. So of course, there was the successful delivery of the cost reductions, but also support it's not good for refining and it's on the other hand weak trading. So could you. Please give some insight into the contribution of each of those.

So then when balanced what do we expect the run rate to look like.

Yep.

Murray Auchincloss: Kate, over to you.

Okay over to you yeah. Thank you Hi, Alex Let me, let me try and break out the components of the improvement in the downstream.

Kate Thomson: Yeah, thank you. Hi, Alice. Let me try and break out the components of the improvement in the downstream. I would say it's been a nine-month period of really good performance across pretty much all of the business, actually. In terms of the way that we've seen the organic improvement coming through. Firstly, on the customer side, a number of things. We've seen improvements, I would say, in almost every area of the customer side, whether it's aviation. Castrol is up 21%, I think now year-on-year for the nine months. We've got stronger performance coming through the tight integration that we've got between fuels and midstream. That's something we've been working really hard on that's coming through. We've got really good cost reductions.

I would say, it's it's been a nine months period of really good performance across pretty much all of the business actually in terms of the way that we've seen the organic improvement coming through he firstly on the customer side, a number of things we've seen improvements I would say in almost every area of the customer side, whether it's.

Aviation Castrol is up 21% I think now year on year for the nine months.

We've got strong performance coming through the tight integration that we've got between fuels in midstream that something we've been working really hard on that's coming through.

And we've got really good cost reductions are structural cost reductions delivered for the nine months, they fall inside customers and about half of the land and then the other component of the improvement in the downstream operating cash flow from.

Kate Thomson: Structural cost reductions delivered for the 9 months so far inside customers is about $half a billion. The other component of the improvement in the downstream operating cash flow from customers is around the bp bioenergy. As you recall, we consolidate that now. You're seeing an improvement in terms of the consolidated earnings versus just Railco of about $300 million. If I look at the product side of it, the refining portfolio is delivering superbly now. We've got refining availability year-to-date at 96.4%. That compares to the 96% that we set ourselves as a target back in February. That's a result of conscious investment and systematic improvement in the maintenance and integrity of our kit. As a consequence, it's running well.

Customers is around the BP bioenergy side as you recall, we consolidate that now so you're seeing an improvement in terms of the consolidated earnings for US is just railcar of about 300 million and then if I look at the product side of that.

The refining portfolio is delivering CPAP. They know we've got refining availability yesterday to 96, 4% compared to the 96% we set ourselves a target back in February.

That's the result of conscious investment in systematic improvement in the maintenance and integrity at all kit and as a consequence, it's running well and as the refining margin improves as it has done in the last quarter, we were able to capture the maximum of that.

Kate Thomson: As the refining margin improves, as it has done in the last Q, we're able to capture the maximum of that. I would also say that refining have done pretty well on their business improvement program as well in terms of reducing their costs. They've reduced their costs by about $200 million for the 9 months. Finally, perhaps on trading. Trading had a weaker Q this Q, but they had a very strong Q in Q2 compared to others. We were very pleased with that. As I look at the 9 months year-to-date, trading is pretty much in line with where it was last year. Very comfortable with where trading is. That's quite a long answer.

I would also say that refining I have done pretty well on that.

That business improvement program as well in terms of reducing that cost that reduced their costs by about $200 million.

For the nine months and then finally, perhaps on trading.

Trading had a weaker quarter this quarter, but they had a very strong quarter and TQ compared to others. We were very pleased with that and that as I look at the nine months year to date trading is pretty much in line with where it was last year. So I am very comfortable with where trading and say that's quite a long answer hopefully that's broken it down to enough detail for you to be.

Kate Thomson: Hopefully, that's broken it down to enough detail for you to be able to follow the various component parts, Alice.

We'll follow the various component parts of it.

[Analyst] (Morgan Stanley): Thanks, Alice.

Murray Auchincloss: Thanks, Alice.

Awesome.

Yeah.

Greg Brown: Thank you, Alice. We're gonna take the next question from Peter Low at Rothschild Redburn. Peter.

Craig Marshall: Thank you, Alice. We're gonna take the next question from Peter Low at Rothschild Redburn. Peter.

Thank you Alice we're going to take the next question from Peter low at Rothschild Redburn Pizza.

[Analyst] (Redburn Atlantic): Hey, thanks. Yeah. Maybe one just on the Gulf of Mexico. Now that you've taken FID on the Tiber Guadalupe project, does that open the door to potential farm down of your Paleogene positions? What's your current thinking on the optimum time to do that kind of within the development of those assets? Thanks.

Peter Low: Hey, thanks. Yeah. Maybe one just on the Gulf of Mexico. Now that you've taken FID on the Tiber Guadalupe project, does that open the door to potential farm down of your Paleogene positions? What's your current thinking on the optimum time to do that kind of within the development of those assets? Thanks.

Hey, Thanks, Yeah.

Maybe we'll just go for America now that you've taken if I D.

Tiber Guadalupe project does that open the door to potential farmed out of your paleogene positions or what's your thinking on the optimal time to do that kind of within the development of those assets. Thanks.

Yeah.

Murray Auchincloss: Yep. Thanks, Peter. Yeah, very, very happy to have taken the sanction on Tiber. It's obviously the second sanction inside the Paleogene Kaskida, a year ago, and now Tiber, two ADKBD boats. We own them 100%, with tremendous resource recovery potential, sanctioned and potential moving forward. You know, I was really pleased for the projects team. They're able to knock $3 a barrel off the development cost on Tiber by effectively photocopying what we've done on Kaskida. Build one or design one, build many. That's all very good. We are in conversations with counterparts about the potential farm down in the Paleogene. You know, we'll do this for value.

Yeah. Thanks Peter.

Very very happy to have taken a.

Sanction on Tiber.

It's obviously the second sanction inside the Paleogene Cascade, a year ago, and now Tiber to ATK BD boats, we own them, 100% with tremendous resource recovery potential.

Sanctioned and potential moving forward and you know I was really pleased for the projects team, they're able to knock $3 a barrel off the development cost on Tiber by effectively photocopying, what we've done on Cascade out so build one design one build many.

So that's a that's all very good we are we are in conversations with counterparts about the potential farm down in the Paleogene.

And you know we'll do this for a value. That's all that we have in our minds is how do we do this for value and we want to make sure that its accretive and that it's in the shareholders' interest to do that but we continue the conversations and like all other divestments will update you will update you when we have something to Italian thanks for thanks for the question Peter.

Murray Auchincloss: That's all that we have in our minds is how do we do this for value? We wanna make sure that it's accretive and that it's in the shareholders' interest to do that. We continue the conversations, like all other divestments, we'll update you when we have something to tell you. Thanks for the question, Peter.

[Analyst] (Redburn Atlantic): Thanks.

Peter Low: Thanks.

Greg Brown: Thanks, Peter. We'll turn to Mark Wilson at Jefferies. Mark.

Craig Marshall: Thanks, Peter. We'll turn to Mark Wilson at Jefferies. Mark.

Thanks, Thanks, Peter will turn to Mark Wilson Jefferies Mark.

Jason Gabelman: Thank you for taking my question. I will bring it back to Bumerangue. You still got a lot of data you mentioned, and that appraisal will take a flow test. The release a few days ago spoke to an early production system. It sounds to me like a flow test there would have to be for a prolonged period of time to test multiple areas of a large column and fully understand the CO2 mix. That also sounds quite costly within a $600 million exploration budget, if that includes appraisal. First I'd like to ask you if I'm visualizing that work scope correct for, say, 2027 in terms of what flow testing is needed.

Mark Wilson: Thank you for taking my question. I will bring it back to Bumerangue. You still got a lot of data you mentioned, and that appraisal will take a flow test. The release a few days ago spoke to an early production system. It sounds to me like a flow test there would have to be for a prolonged period of time to test multiple areas of a large column and fully understand the CO2 mix. That also sounds quite costly within a $600 million exploration budget, if that includes appraisal. First I'd like to ask you if I'm visualizing that work scope correct for, say, 2027 in terms of what flow testing is needed.

Oh. Thank you for taking my question I will bring it back to a Boomerang do you still got a lot of data you mentioned and another appraisal well take a flow test. They released a few days ago spoke to an early production system. It sounds to me like a flow test would have to be a prolonged period of time to test multiple areas of the large column I'm fully under.

The C O two mixed but it also sounds quite costly within a 600 million exploration budget. If that includes appraisal. So first I'd like to ask if I'm visualizing that works cope correct for say 2027 in terms of what flow testing as needed and and would you appraise that at 100%.

Jason Gabelman: Would you appraise that at 100%, or would we expect overall exploration cost to go higher to accommodate the Bumerang appraisal? Thank you.

Mark Wilson: Would you appraise that at 100%, or would we expect overall exploration cost to go higher to accommodate the Bumerang appraisal? Thank you.

What do you expect overall exploration cost to go higher to accommodate the Boomerang appraisal.

Thank you.

Murray Auchincloss: Yeah. Great, great question. It's a pretty, it's a pretty good reservoir, so we think the flow test where we're drilling the second appraisal well will give us a pretty strong indication of what the rest of the reservoir will perform like. We of course could be surprised as we go through that, but given the strength of the seismic, what we're seeing on the logs, we think that is the case. As far as, we'll do that somewhere around 4 2 2026, early 2027. We do have a team working in early production scheme. Of course it will depend on how the flow test goes.

Yeah, Great Great question.

It's a it's a pretty it's a pretty good reservoir. So we think the flow test.

Where we're drilling our second appraisal well will give us a pretty strong indication of what.

What the what the rest of the reservoir will perform like we of course could be surprised as we go through that but given the strength of the seismic are what we're seeing on the logs. We think that is the case.

As far as so so we'll do that somewhere around four to 26 early 2027.

We do have a team working an early production scheme of course, it will depend on how.

On how the flow test goes the flow test is really focused on productivity of the wells to be honest and how many wells, we're going to need to drill.

Murray Auchincloss: The flow test is really focused on productivity of the wells, to be honest, and how many wells we're gonna need to drill. That's the primary focus that we'll have on that as we've done all the sampling and the sidewall core already from the initial appraisal well. It's mainly about how many wells might we need to produce the reservoir over time. As far as timing of partnership, that's something in time we will bring in a partner for sure. You probably don't wanna do it until you're through the appraisal well and the flow test 'cause that'll have an awful lot more information that's de-risked. That's of course a decision that we'll think about with the board as we move forward.

That's the primary focus that will have on that as we've done all the sampling and the sidewall core already.

From the initial initial appraisal well so it's mainly about how many wells might we need to produce the reservoir overtime.

As far as timing of partnership.

That's something in time, we bring in a partner for sure.

You, probably don't want to do it until you're through.

The appraisal well on the flow test because that'll have an awful lot more information, let's derisked, but that's of course, a decision that we'll think about with the board as we move forward.

Murray Auchincloss: The exploration, I'm not quoting an exploration number including appraisal at this stage. We're somewhere around $500 million or $600 million on exploration. We're drilling about 15 wells a year right now, and we'll update you as we work our way through this as we enter 2026 and 2027. We will stay inside that $13 billion to $15 billion capital frame that Kate talked about. That's very important. Hope that helps, Mark.

The exploration I'm, not quoting an exploration number and including our appraisal at this stage, we're somewhere around five or 600 million on exploration, we're drilling about 15 wells a year right now and we'll update you as we work our way through this as we enter 'twenty six 'twenty seven.

But we will stay inside that 13 to 15 billion capital frame that that Kate talked about that's something that's very important so hope that hope that helps mark.

Yeah.

Greg Brown: Thank you, Mark. Okay, we're gonna go to Bertrand at Kepler next, please.

Craig Marshall: Thank you, Mark. Okay, we're gonna go to Bertrand at Kepler next, please.

Thank you mark them.

Okay, we're going to go to Bertrand at Kepler next please.

Bertrand Hodee: Yes. Coming back on the Venture Global arbitration, Murray, you've just mentioned that the $1 billion plus in damages that were in the press was not your numbers. Can you elaborate a bit, or are you seeking a higher number?

Yes.

Coming back on the eventual global arbitration Moa you, you've just mentioned that the.

$1 billion plus in damages.

That's where the price was not your numbers.

Could you elaborate a bit or are you sticking a higher number.

Murray Auchincloss: Bertrand, thank you for the question. Look, this is, you're quoting a number that was in a press release from Venture Global. We have not disclosed anything to the public markets around our viewpoint on this. As it's a commercial process, I cannot disclose anything because it could impact the arbitration process, and I'm not gonna do that. I'm just going to have to say that that was their number, not ours. In due course, we'll file our claims with the arbitration panel, and when the arbitration panel decides, they can make their views public. I have to be very careful in the process, and I can't talk about anything commercially. Sorry, Bertrand.

Bertrand Thank you for the question.

Look this is a this is.

Quoting a number that was in.

Our press release from venture Global we have not disclosed anything to the public market surround our viewpoint on us and as it's a commercial process I cannot I cannot disclose anything because it could impact the arbitration process and I'm not going to do that so I'm afraid I'm just going to have to say that that was their number.

On hours and in due course, we'll file our claims with the arbitration panel and when the arbitration panel decides that they can make their views public but I have to I have to be very careful in that process and I can't talk about anything commercially.

Sorry Bertrand.

Bertrand Hodee: No, but, I appreciate the follow-up. Thank you.

I hope at the IPO.

For trial.

Greg Brown: Okay. Thanks, Bertrand. Thank you, Bertrand. We're gonna move to the US again, Jason Gabelman at TD Cowen. Jason.

Craig Marshall: Okay. Thanks, Bertrand. Thank you, Bertrand. We're gonna move to the US again, Jason Gabelman at TD Cowen. Jason.

Thank you Bertrand.

We're going to move to the U S again, Jason gable minute TD Cowen Jason.

Jason Gabelman: Yeah. Hey, thanks for taking my questions. I wanted to ask just on the equity affiliate portion, given you have quite a few of them at this point. As you think about what the overall net contribution of those affiliates to your cash flow is, I'm wondering if that's changed at all given the Jira Next BP joint venture and Beacon Wind within that joint venture being canceled and perhaps less cash infusions into that joint venture. Conversely, the success at Azul with the Namibia explorations, resulting in perhaps less cash distributions from that entity in the near term and just, you know, how that kind of rolls up into your overall views on distributions moving forward. Thanks.

Yeah, Hey, thanks for taking my questions I wanted to ask just on the equity affiliate portion given.

You have quite a few of them at this point and as you think about what the overall net contribution of those affiliates to your cash flow is I'm wondering if that's changed at all given the geron next BP joint venture and Beacon wind within that joint venture being cancelled and.

Perhaps a less cash infusions into that joint venture, but Conversely, well success out of juul with the NIM maybe explorations.

The resulting in perhaps less cash distributions from that entity in the near term and just you know how that kind of rolls up into your overall views on distributions moving forward. Thanks.

Kate Thomson: Yes. So shall I? I'll take that if you like. In terms of Jira Next, the way to think about that is it's about creating for us in the future optionality, but in a very, very capital-light way. Jira Next will make their own decisions in terms of the projects that they execute and the sort of hurdles that they're testing against. From our perspective, it'll be very capital light and capital that we if we were required to put capital in, it's gonna have to compete with the other calls on capital in our portfolio, which is a pretty high hurdle. In terms of Azul, a very different type of joint venture. It's been a very good quality joint venture for us so far.

Yeah. So I'll take that if you like in terms of Jarrod next and the way to think about that is it.

It's about creating first in the future optionality.

But in a very very capital light way so.

Gero next will make their own decisions in terms of the projects that they that they execute and they sort of hurdles that that testing against that from our perspective, it will be very capital light and capital that we if we were required to put capital and it's gonna have to compete with the other calls on capital in our portfolio, which is a pretty high hurdle.

In terms of Oh, I'm, a very different type of joint venture it's been a very good quality joint venture for us. So far I think we've got about $7 billion of distributions from year to date.

Kate Thomson: I think we've got about $7 billion of distributions from it year to date. Sorry, in total since inception. It's now self-funded. It's got a PXF, and it's also issued its first bonds externally. In terms of it being able to it finance itself going forward and its growth, that's how we think about it right now. It has the ability to do more with regard to external financing, so we're not expecting it to be a drain on our capital. Of course, the extent that it is recycling its own cash flow to invest in opportunities like Namibia, then you would see a slight reduction in terms of the dividends that we receive from that organization. It's too early to be able to scale that for you.

Sorry in total since inception.

It is now self funded.

Got a payer access and it fills that we ship tons externally say in terms of it being able to.

Finance itself going forward and it's growth that's how we think about it right now it has the ability to do more with regard to external financing. So we're not expecting it to be a drain on our capital of course to the extent that it is we can get some cash flow to invest in the opportunities like Namibia than you would see a slight reduction in terms of the dividends that we receive from that.

Organization, but it's too early to be able to scale up for you.

Murray Auchincloss: Yeah. If I just added a few things on Azule, we don't often talk about it, but it's had tremendous success, Jason. Agogo came online earlier this year, eight months ahead of schedule. Congratulations to the team for doing that. NGC is the next major project that's gonna come online shortly. They of course, had the exploration discovery near the LNG plant of TCF and a couple hundred million barrels of associated condensate. In Angola, it's doing fantastic. I was down there recently to celebrate the Agogo startup, and Gordon was offshore on it. Just a tremendous joint venture with Eni that's doing very, very well for us, and we're very pleased to have expanded that into Namibia and the success we're seeing in Namibia. Craig.

And if I just add a few things unresolved, we don't often talk about it but it's had tremendous success Jason.

Our Gogo came online earlier this year eight months ahead of schedule. So congratulations to the team for doing that in D. C is the next major project, that's going to come online shortly.

And they of course had the exploration discovery near the LNG plant of Tcf.

ACF in a couple of hundred million barrels of associated condensate. So in Angola are doing fantastic I was down there recently to celebrate the gogo startup and and Gordon was offshore on it. So it's just a tremendous joint venture with Eni and that's doing very very well for us and we're very pleased to have expanded that into Namibia and the success we're seeing.

In Namibia.

Craig So so I hope that helps Jason.

Murray Auchincloss: So I hope that helps, Jason.

Bertrand Hodee: Thanks.

Jason Gabelman: Thanks.

Thanks.

Greg Brown: Thank you, Jason. Okay, I think we are probably at the final question. Given time, we're gonna take that from Maurizio Carulli at Quilter Cheviot. Maurizio.

Craig Marshall: Thank you, Jason. Okay, I think we are probably at the final question. Given time, we're gonna take that from Maurizio Carulli at Quilter Cheviot. Maurizio.

Thank you Jason.

Okay. I think we are probably at the final question given time, we're going to take that from merits you can really at quilter affiliates merits you.

Maurizio Carulli: Good afternoon, Murray and Kate, and well done for the positive results. Can I have a bit more of color on the 20% increase in Castrol earnings and what has driven it? Also, if I may squeeze in an additional question, it is possible to have more detail on your recent strategic investment in the electronic cooling solutions. Thank you.

Good afternoon, commodity and Kate and I will done a false positive results.

Can I have a bit muddled call or on the 20% thing could easily.

Yes.

And what does that leave any.

And also if I may squeezing that'd be shock waste you're supposed to have worked with more detail on your recent strategic investment in the.

They literally could cooling kidney film.

Thank you.

Kate Thomson: Maybe, do you want me to take that one, Murray?

So maybe she'll do a me too.

Murray Auchincloss: Yeah, go for it.

Kate Thomson: Yeah. This is a consequence of very deliberate progress that Michelle's been executing now for, I think this is the ninth quarter where we've seen quarter-on-quarter progress. They have a strategy of onward, upward forward, and it's a deliberately seeking to make their organization as cost competitive as it can be and grow volumes, which they've managed to do systematically over the last couple of years in almost every part of the business. The other part of the improved delivery at Castrol, of course, is as a consequence of the fluctuations that we've seen in base oil and additives, and they hit a high post-COVID. Those have tapered off a little bit. That's also coming through, which is helping.

Yeah. So this is the consequence of very deliberate.

Progressive Michelle's been executing now for I think it says this is the ninth quarter, where we've seen quarter on quarter part of question. They have a strategy of onward.

Put forward, it's a deliberately seeking to make that that organization as cost competitive as it can be and grow volumes that you have managed to do systematically over the last couple of years and in almost every part of the business.

Yes.

Well the other part of the improved delivery capital of course is as a consequence of the fluctuations that we've seen in base oil and attitudes than they they hit a high postcava does it taper off a little bit. So that's also coming through which is helping but it's about very deliberately growing volumes driving costs down to improve that overall operating cash flow.

Kate Thomson: It's about very deliberately growing volumes, driving costs down to improve their overall operating cash flow delivery inside the organization. That's doing really well. Do you want to talk about the liquid?

Delivery inside the organization, so that's doing really well fields.

So let's talk about the.

Murray Auchincloss: Yeah. The liquid cooling for data centers is an interesting opportunity. They've signed a couple of deals with counterparts. It's commercially sensitive, so I can't name the names. And they're in trial on that with a few companies. It's a long-term growth potential for the business that looks quite interesting. It's quite a competitive space, and we're hopeful that that starts to develop and at a faster pace moving forward. Thanks very much for the question, Maurizio. Nice to hear your voice.

Liquid yeah, the liquid cooled the liquid cooling for data centers as an interesting opportunity they've signed a couple of deals with counterparts are commercially sensitive. So I can't name the names and they are in trial on that with our with a few companies I mean, its a long term growth potential for the business.

It looks quite interesting, it's quite a competitive space and well well well, we're hopeful that that starts to develop and and at a faster pace moving forward.

Thanks, Thanks, very much for the question or it's here and nice to hear your voice.

Yeah.

Greg Brown: Okay, great. Thank you, Maurizio. We are gonna finish promptly on the hour. Irene, Chris, I know you were still pooling. Maybe please follow up with the IR team in London. Happy to do so. A big thanks on behalf of Murray, Kate, myself. Thank you for listening. Thank you for the continued interest in BP's results today, and we'll stop the call there. Thank you again.

Craig Marshall: Okay, great. Thank you, Maurizio. We are gonna finish promptly on the hour. Irene, Chris, I know you were still pooling. Maybe please follow up with the IR team in London. Happy to do so. A big thanks on behalf of Murray, Kate, myself. Thank you for listening. Thank you for the continued interest in BP's results today, and we'll stop the call there. Thank you again.

Okay, great. Thank you merits you we are going to finish promptly on the hour Irene Chris I know you are still pulling maybe please follow up with that with the IR team in London happy to do so.

A big thanks on behalf of Mary Kate myself. Thank you for listening. Thank you for their continued interest in Bp's results today and will stop the KOL there. Thank you again.

Yeah.

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