1 00:00:00,120 --> 00:00:03,240 Speaker 1: We are nine joints by Wales so On CEO of 2 00:00:03,520 --> 00:00:05,920 Speaker 1: Shell so Wale, good morning. Thank you for joining us 3 00:00:06,000 --> 00:00:09,120 Speaker 1: on the buyback then three point five billion RBC. Before 4 00:00:09,280 --> 00:00:11,119 Speaker 1: these results, one of their allets came out and said 5 00:00:11,119 --> 00:00:13,480 Speaker 1: you could raise that buyback it's a four billion. Are 6 00:00:13,480 --> 00:00:17,040 Speaker 1: you being overly conservative on the return of cash to shareholders? 7 00:00:18,760 --> 00:00:21,239 Speaker 2: Thank you for the opportunity this morning. What I'd say 8 00:00:21,320 --> 00:00:24,759 Speaker 2: is we have actually announced in June of last year 9 00:00:24,800 --> 00:00:26,920 Speaker 2: that we wanted to go on what we called our 10 00:00:26,920 --> 00:00:30,760 Speaker 2: first ten quarter sprint, which just drove the fundamentals of 11 00:00:30,800 --> 00:00:34,239 Speaker 2: the company to become much stronger, lower cost. We have 12 00:00:34,320 --> 00:00:37,000 Speaker 2: now announced one point seven billion dollars of cost takeout, 13 00:00:37,360 --> 00:00:41,960 Speaker 2: more capital, discipline, improved operational performance, all allowing us to 14 00:00:42,000 --> 00:00:45,920 Speaker 2: continue to be able to indeed enhanced shareholder distributions. We've 15 00:00:45,960 --> 00:00:48,400 Speaker 2: talked about thirty to forty percent of our cash flow 16 00:00:48,400 --> 00:00:51,520 Speaker 2: from operations going to distributions, and you're right to say 17 00:00:51,520 --> 00:00:53,680 Speaker 2: that we are with the three point five billion dollars. 18 00:00:53,960 --> 00:00:56,760 Speaker 2: We've been approaching the higher end, if not slightly above 19 00:00:56,800 --> 00:01:00,240 Speaker 2: the forty percent. And what we continue to focus on 20 00:01:00,400 --> 00:01:03,680 Speaker 2: is consistency of delivery. This is not about simply one 21 00:01:03,760 --> 00:01:05,880 Speaker 2: quarter after the next, looking at what we can do 22 00:01:05,920 --> 00:01:09,319 Speaker 2: from a distribution's perspective, but looking through this period and 23 00:01:09,360 --> 00:01:11,760 Speaker 2: continuing to make sure that we are able to reward 24 00:01:11,800 --> 00:01:15,640 Speaker 2: our shareholders consistently at the higher end while continuing to 25 00:01:15,800 --> 00:01:20,000 Speaker 2: moderately deleverage and invest in our businesses. So overall, we 26 00:01:20,240 --> 00:01:21,800 Speaker 2: like the balance of where we are at the moment. 27 00:01:23,360 --> 00:01:24,800 Speaker 1: Do you like the balance of the mix, though, in 28 00:01:24,880 --> 00:01:27,360 Speaker 1: terms of the upstream during the heavy lift, the downstream 29 00:01:27,360 --> 00:01:31,039 Speaker 1: looking a little vulnerable, refining margins still a little soft. Well, 30 00:01:31,120 --> 00:01:35,200 Speaker 1: is the business vulnerable if oil moves low? You've benefited 31 00:01:35,200 --> 00:01:37,800 Speaker 1: from eighty five dollars hour all over the quarter. That 32 00:01:37,959 --> 00:01:39,039 Speaker 1: environment could change. 33 00:01:40,280 --> 00:01:42,800 Speaker 2: It's fair to say that we have seen in essence, 34 00:01:42,840 --> 00:01:47,320 Speaker 2: normalization of prices and margins across the energy system back 35 00:01:47,400 --> 00:01:50,200 Speaker 2: down to pre twenty twenty two levels, whether you're talking 36 00:01:50,280 --> 00:01:54,000 Speaker 2: refining margins, whether you're talking LNG prices, even power prices. 37 00:01:55,040 --> 00:01:57,600 Speaker 2: We are building a company that is actually resilient to 38 00:01:57,640 --> 00:02:01,480 Speaker 2: the low side of the prices as well, and that's 39 00:02:01,520 --> 00:02:05,320 Speaker 2: critical for us. We create value through the cycles, and 40 00:02:05,360 --> 00:02:07,360 Speaker 2: what we have done is by taking at some of 41 00:02:07,400 --> 00:02:10,720 Speaker 2: our costs, by really focusing on the capital discipline. We 42 00:02:10,760 --> 00:02:13,320 Speaker 2: believe that we have an organization, a company that is 43 00:02:13,360 --> 00:02:16,000 Speaker 2: able to continue to buy back shares to as low 44 00:02:16,040 --> 00:02:18,440 Speaker 2: as fifty dollars oil price that puts us in a 45 00:02:18,440 --> 00:02:21,240 Speaker 2: good situation. Our balance sheet is the strongest that it 46 00:02:21,280 --> 00:02:24,120 Speaker 2: has been in a very, very long time, and our 47 00:02:24,160 --> 00:02:28,160 Speaker 2: fundamental business model continues to work. While indeed we enjoy 48 00:02:28,200 --> 00:02:31,480 Speaker 2: the upside during high commodity prices. It's important to recognize 49 00:02:31,480 --> 00:02:36,000 Speaker 2: our marketing business particularly performs really well when you see 50 00:02:36,040 --> 00:02:38,560 Speaker 2: commodity prices go down, and of course we have the 51 00:02:38,560 --> 00:02:41,440 Speaker 2: world's leading trading business which also allows us to take 52 00:02:41,480 --> 00:02:45,280 Speaker 2: advantage of those volatility moments. So by and large, we 53 00:02:45,560 --> 00:02:48,160 Speaker 2: like this model we have of a multi energy vector 54 00:02:48,200 --> 00:02:50,760 Speaker 2: company that allows us to be able to win in 55 00:02:50,800 --> 00:02:54,240 Speaker 2: today's energy system, but also importantly to continue to win 56 00:02:54,280 --> 00:02:56,600 Speaker 2: in the lower carbon energy system of the future, of 57 00:02:56,639 --> 00:02:58,079 Speaker 2: which we are committed to play our role. 58 00:03:00,080 --> 00:03:01,920 Speaker 3: Talk there, good morning to you. Talk there about the 59 00:03:01,960 --> 00:03:04,840 Speaker 3: resilience of the business down to fifty dollars barrel. In 60 00:03:04,919 --> 00:03:07,680 Speaker 3: terms of the oil price. Clearly there's a lot of 61 00:03:07,680 --> 00:03:10,240 Speaker 3: focus on whether we see a higher oil price from here, 62 00:03:10,280 --> 00:03:14,720 Speaker 3: partly perhaps driven by geopolitical tensions. We haven't necessarily seen 63 00:03:15,360 --> 00:03:17,400 Speaker 3: prices come in as high as they could have done 64 00:03:17,440 --> 00:03:20,600 Speaker 3: since the most recent bout of Middle East tension. What 65 00:03:20,680 --> 00:03:23,840 Speaker 3: are you braced for? What do you think could happen 66 00:03:23,880 --> 00:03:25,280 Speaker 3: on oil prices as a result of this? 67 00:03:25,360 --> 00:03:29,680 Speaker 2: Geopolitics very difficult to predict. It's fair to say that 68 00:03:29,720 --> 00:03:33,639 Speaker 2: at the moment we see that the physical markets are 69 00:03:33,680 --> 00:03:37,280 Speaker 2: well balanced, if anything slightly tight, in particular on crude. 70 00:03:37,280 --> 00:03:41,280 Speaker 2: Going into the summer season, we saw stock draws all 71 00:03:41,320 --> 00:03:44,200 Speaker 2: across the world except for China. I think the biggest 72 00:03:44,200 --> 00:03:48,440 Speaker 2: determinant of where prices might go is a combination of indeed, 73 00:03:48,480 --> 00:03:52,160 Speaker 2: as you mentioned, geopolitics, but critically OPEC's decision in the 74 00:03:52,200 --> 00:03:55,360 Speaker 2: coming weeks, around the pace at which it unwinds its cuts, 75 00:03:55,840 --> 00:03:58,760 Speaker 2: and of course the Chinese demand, of which there are 76 00:03:58,800 --> 00:04:01,800 Speaker 2: mixed signals at the moment. And so what we try 77 00:04:01,840 --> 00:04:04,120 Speaker 2: to do is to focus on what we can control, 78 00:04:04,440 --> 00:04:07,680 Speaker 2: and what we can control is everything from our own 79 00:04:07,800 --> 00:04:11,360 Speaker 2: cost structure, our capital discipline, our operational performance, and the 80 00:04:11,400 --> 00:04:14,400 Speaker 2: portfolio choices we make. We want to make sure that 81 00:04:14,440 --> 00:04:17,040 Speaker 2: we are allocating our capital in the most responsible way 82 00:04:17,040 --> 00:04:17,680 Speaker 2: we can. 83 00:04:18,760 --> 00:04:21,560 Speaker 3: Okay, and so with that in mind, well you might 84 00:04:21,560 --> 00:04:23,560 Speaker 3: not like this question, which maybe you think is something 85 00:04:23,560 --> 00:04:26,760 Speaker 3: you can't control US politics. I wonder what's at stake there, though, 86 00:04:26,839 --> 00:04:28,600 Speaker 3: because you do have to think about these things even 87 00:04:28,640 --> 00:04:32,200 Speaker 3: when you can't control them. LNG markets in particular, do 88 00:04:32,240 --> 00:04:37,920 Speaker 3: you see the USLNG landscape shifting considerably dependent on whether 89 00:04:37,960 --> 00:04:40,039 Speaker 3: we have a Harris or a Trump administration. 90 00:04:41,440 --> 00:04:44,880 Speaker 2: We don't see major shifts in the short to medium term. 91 00:04:44,960 --> 00:04:47,719 Speaker 2: These projects that are being talked about would only come 92 00:04:48,560 --> 00:04:51,719 Speaker 2: which are being held at the moment, would only really 93 00:04:51,760 --> 00:04:54,160 Speaker 2: sort of start up towards the end of this decade 94 00:04:54,200 --> 00:04:56,280 Speaker 2: early the next decade, and so for the next five 95 00:04:56,320 --> 00:05:00,159 Speaker 2: to six years, whatever is in the funnel and and 96 00:05:00,240 --> 00:05:03,599 Speaker 2: already sort of under construction will be what comes into 97 00:05:03,640 --> 00:05:06,960 Speaker 2: the market. But indeed, as I've said in the past, 98 00:05:07,000 --> 00:05:10,680 Speaker 2: the biggest issue is the LNG markets like any other 99 00:05:10,880 --> 00:05:15,040 Speaker 2: energy market that looks at long term fundamentals, requires stability, 100 00:05:15,160 --> 00:05:20,919 Speaker 2: requires consistency, requires predictability, and any major policies that start 101 00:05:21,000 --> 00:05:26,480 Speaker 2: to rattle investors in those big infrastructure projects can potentially 102 00:05:26,520 --> 00:05:29,520 Speaker 2: undermine confidence in that market, which which I think would 103 00:05:29,520 --> 00:05:32,159 Speaker 2: be a real miss given the incredibly important role that 104 00:05:32,320 --> 00:05:35,760 Speaker 2: LNG in particular will need to play. In the energy transition, 105 00:05:35,839 --> 00:05:38,760 Speaker 2: both from an energy security perspective but also from an 106 00:05:38,839 --> 00:05:41,320 Speaker 2: energy transition perspective for call to gas switching. 107 00:05:42,920 --> 00:05:45,320 Speaker 1: Are you getting that? Are you getting that reassurance? Here? 108 00:05:45,320 --> 00:05:48,720 Speaker 1: In the UK? The new Labor government raising the windfolds 109 00:05:48,760 --> 00:05:51,320 Speaker 1: ax on energy players here. What is your response to 110 00:05:51,360 --> 00:05:51,760 Speaker 1: that move. 111 00:05:53,200 --> 00:05:55,320 Speaker 2: Look, we've invested for a long long time in the 112 00:05:55,440 --> 00:06:00,640 Speaker 2: UK and in successive recent government means what we have 113 00:06:00,720 --> 00:06:05,240 Speaker 2: seen is changes to the overall framework for the energy system. 114 00:06:05,279 --> 00:06:08,360 Speaker 2: For the energy investments. The number one thing we look 115 00:06:08,440 --> 00:06:11,160 Speaker 2: for when we look to invest, Given the nature of 116 00:06:11,200 --> 00:06:15,280 Speaker 2: our investments, which typically are long term investments, multidecadal investments, 117 00:06:15,560 --> 00:06:17,720 Speaker 2: both by the way, in the conventional energy space as 118 00:06:17,760 --> 00:06:20,200 Speaker 2: well as in the new energy space, what we look 119 00:06:20,240 --> 00:06:24,240 Speaker 2: for is physical and regulatory stability and anything that potentially 120 00:06:24,279 --> 00:06:28,200 Speaker 2: destabilizes that, of course, is not welcome. And so what 121 00:06:28,279 --> 00:06:31,000 Speaker 2: we continue to do is to engage constructively with the 122 00:06:31,000 --> 00:06:34,520 Speaker 2: government to be able to clearly express our views and 123 00:06:34,560 --> 00:06:36,880 Speaker 2: then to respond to the signals that the government chooses 124 00:06:36,920 --> 00:06:37,679 Speaker 2: to put into place. 125 00:06:39,400 --> 00:06:42,000 Speaker 3: Have you already been engaging with the government, Well, what 126 00:06:42,040 --> 00:06:44,760 Speaker 3: are the early signals You're guessing we. 127 00:06:44,760 --> 00:06:49,239 Speaker 2: Have been engaging with the government for several weeks now, 128 00:06:49,279 --> 00:06:53,800 Speaker 2: and we expect continued engagement in the coming weeks. I 129 00:06:53,920 --> 00:06:58,560 Speaker 2: continue to hope for a balanced approach, recognizing some of 130 00:06:58,640 --> 00:07:02,080 Speaker 2: the challenges that the incoming government is trying to deal with. 131 00:07:02,440 --> 00:07:04,800 Speaker 2: But at the same time, what we can do from 132 00:07:04,800 --> 00:07:07,320 Speaker 2: a SHELL perspective is to advise on what are the 133 00:07:07,360 --> 00:07:11,160 Speaker 2: key ingredients of an investment climate that will be conducive 134 00:07:11,200 --> 00:07:14,280 Speaker 2: to the sources of investment that are able to support 135 00:07:14,760 --> 00:07:17,920 Speaker 2: any government as it's thinking about its energy policy. We've 136 00:07:17,960 --> 00:07:22,040 Speaker 2: said to many governments we are willing partners in their 137 00:07:22,080 --> 00:07:27,119 Speaker 2: efforts to establish energy security and decarbonize their energy grid 138 00:07:27,720 --> 00:07:30,880 Speaker 2: as long as it makes sense from a strategic perspective 139 00:07:30,880 --> 00:07:32,640 Speaker 2: for us, and as long as we see the stability 140 00:07:32,680 --> 00:07:33,400 Speaker 2: that is required. 141 00:07:35,560 --> 00:07:37,440 Speaker 3: Well, thank you very much, thanks for joining us. Well 142 00:07:37,480 --> 00:07:39,640 Speaker 3: so on the CEO of Shell.