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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: Shell shares here in the US are up by about

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Speaker 2: one percent after the company's Capital Markets Day at the

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Speaker 2: New York Stock Exchange. One highlight plans to become the

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Speaker 2: world's top LNG trader, saying it's going to expand sales

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Speaker 2: by forty five percent a year until twenty thirty. The

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Speaker 2: British energy giant, also vowing to increase shareholder returns and

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Speaker 2: cut spending. Joining us to discuss this further is Wile

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Speaker 2: Swan Shell CEO, joining us from the floor of the

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Speaker 2: New York Stock Exchange. While really great to see you,

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Speaker 2: Thank you so much for joining us. Congrats on getting

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Speaker 2: through the day. Huge LNG targets, in particular how much

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Speaker 2: it's going to make up in terms of your business

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Speaker 2: twenty thirty percent larger by twenty thirty.

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Speaker 3: How do you get there? Yeah? Thanks Alex. Look, we're

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Speaker 3: very proud of where we are today.

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Speaker 4: Today in the Capital Markets Day, we took a polls

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Speaker 4: and reflected on the journey we've been on over the

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Speaker 4: past couple of years, and the key message was one

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Speaker 4: of trying to instill confidence. Here's a company that has

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Speaker 4: delivered what it said it was going to do and

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Speaker 4: actually over delivered in certain areas, and beyond that, as

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Speaker 4: you rightly pointed out, we've also today laid out as

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Speaker 4: a vision aut to twenty thirty five that has LNG

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Speaker 4: at the heart of it. We believe LNG is going

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Speaker 4: to be a critical part of the energy system and

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Speaker 4: we want to be the leading player energ But our

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Speaker 4: story also has lots of richness around wanting to sustain

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Speaker 4: material liquids production and being the most competitive and the

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Speaker 4: most focused energy marketer and energy trader in the world,

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Speaker 4: And so a holistic story that I think we're very

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Speaker 4: proud to be able to say is well on track.

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Speaker 2: Are you worried at all about a potential looming LNG

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Speaker 2: supply glut and kind of betting really big on this

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Speaker 2: for the next ten years at a time where there's

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Speaker 2: just too much supply coming online?

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Speaker 4: Okay, my job, I have to look at twenty years

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Speaker 4: and what I see when I do that is up

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Speaker 4: to twenty forty, we see a potential sixty percent increase

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Speaker 4: in overall LNG demand. We have a diversified port for you,

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Speaker 4: both of production sources as well as demand options, and

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Speaker 4: we are very much looking to leverage that global diversity

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Speaker 4: of production and customer contracts to be able to create value.

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Speaker 3: Importantly, our LNG port.

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Speaker 4: For you is heavily linked to long term contracts that

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Speaker 4: are tied to brand, which means we have a lot

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Speaker 4: of resilience and so we can ride at the inevitable

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Speaker 4: cycles in this business while making sure that the underlying

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Speaker 4: cash flow continues to come from this business.

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Speaker 1: So what should investors look for in terms of the

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Speaker 1: capacity increase on your energy output?

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Speaker 4: Very much what we outline today, which is four to

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Speaker 4: five percent per year, So indeed the twenty to thirty

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Speaker 4: percent by twenty thirty, and that's just to twenty thirty.

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Speaker 4: We see more running room beyond that, we have projects

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Speaker 4: that we can evolve over and above that. But what's

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Speaker 4: unique around our LNG business is not just the production piece.

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Speaker 4: We are actually also selling roughly the equivalent amount not

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Speaker 4: just of what we produce, but also another equivalent amount

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Speaker 4: to that because we're also one of the largest optimizers

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Speaker 4: of LERG in the market, and so in any year

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Speaker 4: we're selling around sixty million tons of LNG, which is significant,

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Speaker 4: and so we are trying to continue to build up

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Speaker 4: our portfolio to really have that diversity and to be

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Speaker 4: able to make sure that we can continue to essentially

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Speaker 4: stay in the fifteen to twenty percent of the overall

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Speaker 4: LG market is what we represent.

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Speaker 1: So once you get to twenty thirty while what actually

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Speaker 1: happens to the oil side of this business.

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Speaker 4: So we have a very clear pathway to sustain our

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Speaker 4: liquids production to the tune of around one point four

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Speaker 4: million baros per day between now and twenty thirty, and

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Speaker 4: we have plans to extend that plateau well into the future.

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Speaker 4: So we already have plans in place for that. And

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Speaker 4: so the key areas where we see growth at the

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Speaker 4: moment are our integrated gas business, as we've talked about LNG,

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Speaker 4: but also I would say our marketing business, our mobility business,

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Speaker 4: which is the leading franchise in the world, our lubricants business,

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Speaker 4: which is another core part of our overall value proposition.

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Speaker 4: So those will be growth trajectories and are sustained liquid

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Speaker 4: production will allow us to have the fundamental underpinning that

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Speaker 4: continues to keep us as a scale company.

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Speaker 2: Overall sustained liquids doesn't sound like growing oil production. And

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Speaker 2: you know, this is my way of asking about you

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Speaker 2: guys don't have Permian assets.

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Speaker 4: So what we have is a very diverse portfolio. We

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Speaker 4: have the largest position in the Gulf of America, we

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Speaker 4: have the largest position in Brazil, which are the two

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Speaker 4: premier deep water basins in the world. It requires a

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Speaker 4: lot of running just to stay flat. So these portfolios

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Speaker 4: are declining anywhere between four to six percent per year,

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Speaker 4: so one has to stay running fast just to stay flat.

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Speaker 4: Beyond that, we will look at opportunities and we will

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Speaker 4: continue to look at those opportunities. But of course we've

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Speaker 4: left the Permian and we believe that the opportunities we

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Speaker 4: have in front of us in the Gulf of America,

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Speaker 4: in Brazil, in many of our heartlands like Kazakhstan, Oman Malaysia,

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Speaker 4: those are the places where we want to continue to

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Speaker 4: strengthen our portfolio.

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Speaker 2: The analyst notes about today, we're all relatively positive. RBC

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Speaker 2: has had a really nice quote said today reads is

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Speaker 2: more evolution than revolution, And I'm wondering if the revolution

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Speaker 2: part is what investors need to see to have Shell

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Speaker 2: Share start to outperform the likes of Exxon as well

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Speaker 2: as chev Run, and would that evolution be buying a

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Speaker 2: US gas producer doing some sort of substantial oil deal.

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Speaker 4: I think there's a couple of dimensions to that question.

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Speaker 4: I'm very pleased with the evolutionary nature of it, and

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Speaker 4: it's important that one footnote in all that discussion is

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Speaker 4: that we have brought back around twenty plus percent of

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Speaker 4: our share share register over the last three years, and

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Speaker 4: a big part of what we announced today is we

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Speaker 4: will continue to preferentially lean towards buybacks, having indeed increased

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Speaker 4: the overall distributions to forty to fifty percent of our CFFO.

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Speaker 3: On this trajectory that we're on.

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Speaker 4: We will have quietly bought another forty percent of the

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Speaker 4: company by twenty thirty. Need to me, the revolution is

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Speaker 4: not in singular actions. It's in looking at the life

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Speaker 4: cycle over a period of seven eight years. If we

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Speaker 4: can buy more than half of this company, that is

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Speaker 4: what is truly going to be differentiated and transformational for

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Speaker 4: our shareholders.

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Speaker 1: So while I do want to ask you though about

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Speaker 1: just the general structure, I mean a lot of in

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Speaker 1: terms of the cash giving back. There has been a

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Speaker 1: lot of discussion in analyst circles about this idea of

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Speaker 1: why we haven't seen more balance between the dividend versus

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Speaker 1: the buybacks relative to some of your competitors.

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Speaker 4: Yeah, it's a great question. I think the first thing

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Speaker 4: I keep getting asked is can you grow your overall

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Speaker 4: share of distributions, And thankfully we've been able to move

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Speaker 4: from twenty to thirty, to thirty to forty to forty

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Speaker 4: to fifty, so big tick there.

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Speaker 3: Then.

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Speaker 4: Indeed, it's the balance of how we want to return capital.

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Speaker 4: It's a point that you both made earlier, which is

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Speaker 4: we still find that our fundamental valuation does not fully

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Speaker 4: price the cash flows we see into the future. So

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Speaker 4: what a great opportunity to be able to use remarginal

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Speaker 4: dollar of distributions to be able to buy back our

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Speaker 4: shares and create that life cycle value.

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Speaker 3: For our shareholders.

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Speaker 4: By the way, we have increased our dividend per share

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Speaker 4: by twenty five percent over the last two years, and

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Speaker 4: we have a four percent progressive policy around our dividends,

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Speaker 4: so we are addressing the dividend. But today the right

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Speaker 4: capital allocation option is to go into more buybacks, and

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Speaker 4: that's what you see us doing.

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Speaker 1: Investors also, while have also I guess pondered, if not asked,

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Speaker 1: the question about your listing. Obviously your primary listing overseas

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Speaker 1: you're standing there on the floor of the New York

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Speaker 1: Stock Exchange. Has there been any sort of meaningful discussion

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Speaker 1: dot consideration about making the US your primary place of listening.

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Speaker 4: There has been, and indeed we made the decision a

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Speaker 4: couple of years ago to move our listing or to

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Speaker 4: move sorry our headquarters over.

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Speaker 3: To the UK.

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Speaker 4: At the heart of it, our focus is to make

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Speaker 4: sure that we are driving the fundamentals up to me.

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Speaker 4: That means growing the free cast of the company. Yes,

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Speaker 4: listing might add different liquidity, but we're already very liquid

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Speaker 4: here in the US. Over fifty percent of our shareholder

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Speaker 4: base is a US shareholder base, so we are attracting

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Speaker 4: many of the investors that believe in the investment thesis

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Speaker 4: we have. And so while we focus today on making

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Speaker 4: sure that we're pulling every lever to build consistency, to

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Speaker 4: build resilience, and to build longevity, of course we keep

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Speaker 4: all options open. Right now, a change of listing is

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Speaker 4: not a live discussion, but it's always under review, and

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Speaker 4: of course we'll look at it when the time is right.

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Speaker 2: It feels like a no for now. While I'm just

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Speaker 2: going to paraphrase that going back to M and A

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Speaker 2: for a moment, You're going to love this question. But

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Speaker 2: when it comes to say BP, I know you get

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Speaker 2: a lot of questions on when, if how are you

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Speaker 2: going to buy VP, But I want to approach it

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Speaker 2: from another angle and talk about synergies. A big part

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Speaker 2: of your outperformance in the past couple of years has

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Speaker 2: been synergies and weeding out those costs. At what point

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Speaker 2: does BP become so cheap you just cannot avoid looking

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Speaker 2: at them for those synergies, Alex.

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Speaker 4: You'll forgive me if I don't directly answer that question,

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Speaker 4: but what I will say is our focus over the

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Speaker 4: last few years has been to build fitness and strength

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Speaker 4: for Shell that today people are asking the question because

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Speaker 4: they see a fitter, stronger, more dynamic company. Anatomy is great.

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Speaker 4: We want to be able to build flexibility. We've been

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Speaker 4: able to bring our net debt down to essentially the

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Speaker 4: lowest it has been excluding lises for over a decade.

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Speaker 4: We've been able to outperform our peers in the sector

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Speaker 4: on both TSR as well as just pure shareholder purer

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Speaker 4: share performance, and we are generating free cash flow in

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Speaker 4: a very robust and solid way. And so today we

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Speaker 4: have options. At the same time, when we think about

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Speaker 4: those options, the priority is to deliver that ten percent

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Speaker 4: free cash flow per annum growth within our business that's

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Speaker 4: immediately within our control, and of course we will keep

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Speaker 4: an eye out for opportunities. But I have to say

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Speaker 4: the bar is high, because if you're going to go

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Speaker 4: for a big acquisition, one has to recognize that that

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Speaker 4: can potentially describe.

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Speaker 3: And therefore we're very focused.

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Speaker 4: On making sure if we do something in the inorganic space,

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Speaker 4: that the bar is high and that we go in

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Speaker 4: ready to do that.

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Speaker 2: And that also kind of felt like a no. I'm

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Speaker 2: just saying from where I sit.

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Speaker 4: Yeah, I would qualify Alex as it's finding the right

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Speaker 4: time to make the moves and what is the long

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Speaker 4: journey first?

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Speaker 2: Okay, but is BP like on the road to the

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Speaker 2: moves or is BP like on the highway somewhere that

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Speaker 2: you're not passing.

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Speaker 4: What I would say is we are always looking at companies,

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Speaker 4: both in Europe and beyond, and every company will have

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Speaker 4: its time and at that point we will make a decision.

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Speaker 1: All right, Well, I'll get you off the hook here

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Speaker 1: and give Alex a break for a second. I do

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Speaker 1: want to get your thoughts so on just a broader

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Speaker 1: economic condition globally. And I have to ask you, of

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Speaker 1: course about what's going on here in the US politically.

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Speaker 1: And I know you don't have a lot of exposure

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Speaker 1: to assets here, but obviously what we do here has

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Speaker 1: ripple effects across the world. Have you actually had a

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Speaker 1: chance to actually meet with anyone from the administration, including

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Speaker 1: the President?

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Speaker 3: So firstly, just.

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Speaker 4: A correction, So, our biggest capital employed globally is here

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Speaker 4: in the US. We are the largest producer and operator

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Speaker 4: in the Gulf of America. We are the largest off

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Speaker 4: taker of US LNG of any company, so we have

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Speaker 4: a very material presence, not to mention thirteen thousand staff

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Speaker 4: that are very.

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Speaker 3: Much the core of our company here.

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Speaker 4: I have had the opportunity over recent weeks to indeed

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Speaker 4: meet many in the administration, including the privilege to meet

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Speaker 4: the President. And what I would say is we are

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Speaker 4: very encouraged and welcome the strong support for the energy sector,

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Speaker 4: not something that has always been there in the US

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Speaker 4: or beyond, and I do think the energy sector is

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Speaker 4: a critical underpinning of any successful economy.

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Speaker 3: Beyond that, what I would say is what is key

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Speaker 3: for our sector.

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Speaker 4: For companies like ours is predictability in the investment climate

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Speaker 4: and stability of the investment climate because many of our

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Speaker 4: investments have payback periods usually above seven eight years, and

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Speaker 4: so that is a critical part of being able to

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Speaker 4: have the peace of mind to make the material investments

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Speaker 4: that we need to be making.

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Speaker 3: Well before we let you go.

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Speaker 2: If there is a piece deal between Ukraine and Russia,

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Speaker 2: are you anticipating Russian gas flows to Europe and how

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Speaker 2: are you seeing them?

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Speaker 3: Global flows here difficult to call where that ends up playing.

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Speaker 4: I mean, what you find, of course is Russian gas

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Speaker 4: to Europe has gone down from roughly forty percent of

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Speaker 4: Europe's demand to just under ten percent, so potentially some.

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Speaker 3: Flows will occur.

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Speaker 4: What we are focused on is making sure that through

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Speaker 4: our world leading trading capability that we have, that we

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Speaker 4: are managing all these potential discontinuities that we are seeing

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Speaker 4: in trade flows, and so we want to make sure

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Speaker 4: that we.

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Speaker 3: Can deliver to our customers.

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Speaker 4: How the situation in Russia evolves is anyone's guests, but

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Speaker 4: we are preparing for multiple different scenarios so that we

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Speaker 4: can honor those straight flows that need to be met.

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Speaker 1: Well, we really appreciate you taking time for us. I

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Speaker 1: know it's been a long and busy day. While Swan there,

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Speaker 1: he's the CEO of Shell. Down there in downtown Manhattan,

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Speaker 1: on the floor of the New York Stock Exchange.