WEBVTT - CEPSA Sets A New Strategy in ‘Positive Motion’ 0:00:00.680 --> 0:00:03.800 Hi, this is Dana Perkins and you're listening to Switched 0:00:03.800 --> 0:00:06.920 on the BANNIF podcast. At B and EF we talk 0:00:07.000 --> 0:00:10.080 a lot about the energy transition, the pace of change, 0:00:10.280 --> 0:00:14.080 the drivers, what the future of an increasingly complex energy 0:00:14.080 --> 0:00:17.119 system could look like. And today we have the opportunity 0:00:17.239 --> 0:00:21.440 to hear firsthand from Martin Witsellar, the CEO of SEPSA, 0:00:21.640 --> 0:00:24.760 regarding what they're changing, what are their targets for decarbonizing, 0:00:24.920 --> 0:00:26.439 what are some of the things that they might be 0:00:26.440 --> 0:00:29.320 struggling with, and what could the future of their company 0:00:29.360 --> 0:00:32.880 look like now. For background, SEPSA first started over ninety 0:00:32.960 --> 0:00:35.560 years ago and they are the first private oil company 0:00:35.560 --> 0:00:39.159 in Spain. Today they're across five continents and historically their 0:00:39.200 --> 0:00:42.880 business activities have been focused on oil, gas and chemicals, 0:00:43.159 --> 0:00:45.880 so this is quite a pivot. With their announcement of 0:00:45.920 --> 0:00:49.960 their Positive Motion Plan, SEPSA is now investing sixty percent 0:00:50.240 --> 0:00:53.840 of their eight billion investment budget into sustainable business activities. 0:00:54.240 --> 0:00:56.040 By the end of the current decade, they want to 0:00:56.040 --> 0:00:59.080 see a fifty five percent emissions reduction when compared to 0:00:59.120 --> 0:01:01.680 twenty nineteen law. So how are they going to pull 0:01:01.680 --> 0:01:04.360 it off and what is their strategy? Well, BN EF's 0:01:04.400 --> 0:01:07.760 deputy CEO, Albert Chung, spoke with Martin about just that. 0:01:08.200 --> 0:01:12.560 They discussed topics including international competition between nations within the 0:01:12.600 --> 0:01:16.399 clean energy space, seps's to Gigawat and a Lucian hydrogen 0:01:16.480 --> 0:01:19.280 Valley project, and the new Green Corridor between Spain and 0:01:19.280 --> 0:01:22.839 the Netherlands. And they also talk about transportation and mobility 0:01:22.840 --> 0:01:25.400 customers and how SEPs is adapting to meet their needs, 0:01:25.560 --> 0:01:28.360 and of course SEPs as plans for their upstream business. 0:01:28.640 --> 0:01:31.120 If you like this podcast, make sure to subscribe to 0:01:31.160 --> 0:01:34.800 receive updates on future episodes on your device and possibly 0:01:34.800 --> 0:01:37.160 give us a review on Apple or Spotify. If you 0:01:37.200 --> 0:01:39.520 want to be alerted on Twitter, subscribe to the handle 0:01:39.560 --> 0:01:42.360 at podcasts and you'll hear about new episodes that come 0:01:42.400 --> 0:01:46.080 out of Switched On and also other Bloomberg podcasts. Please 0:01:46.120 --> 0:01:49.240 note that bn EF does not provide investment or strategy advice, 0:01:49.320 --> 0:01:51.240 and our full disclaimer can be found at the very 0:01:51.320 --> 0:01:53.160 end of the show. And now let's get to the 0:01:53.200 --> 0:01:55.560 conversation between Albert and Martin. 0:02:05.960 --> 0:02:07.760 Martin, it's great to have you on the show today. 0:02:07.760 --> 0:02:09.079 Thank you so much for joining us. 0:02:09.320 --> 0:02:12.320 Albert, good morning from Madrid. Delightful to be with you 0:02:12.560 --> 0:02:15.359 and discuss some fundamental topics today. 0:02:15.520 --> 0:02:17.560 Thanks Martin. I do want to get your thoughts on 0:02:17.600 --> 0:02:20.440 this current energy situation in Europe and the opportunities and 0:02:20.520 --> 0:02:23.280 challenges in the energy transition. But before we dive into 0:02:23.320 --> 0:02:24.720 all of that, I was hoping you could take a 0:02:24.720 --> 0:02:26.760 minute just to tell us a bit about your own 0:02:26.880 --> 0:02:28.959 journey and your career and how you came to be 0:02:29.000 --> 0:02:30.760 in the position you're in today. Would you mind telling 0:02:30.800 --> 0:02:31.520 us a bit about that. 0:02:31.720 --> 0:02:35.480 So I joined the energy industry almost thirty years ago, 0:02:35.520 --> 0:02:38.799 which is a somewhat scary data point. When I joined, 0:02:38.880 --> 0:02:41.120 I thought the people that joined thirty years ago should 0:02:41.120 --> 0:02:42.959 go and do something else. But here I am and 0:02:43.160 --> 0:02:45.800 still full of ambition and keen to make an impact. 0:02:45.800 --> 0:02:49.440 So joined in nineteen ninety five at Shell, the Anglo 0:02:49.520 --> 0:02:53.680 Dutch nowadays Anglo Major and pursue the career that took 0:02:53.720 --> 0:02:56.000 me through almost all the businesses. So I started in 0:02:56.040 --> 0:02:59.720 the downstream trading business, then in downstream trategy and marketing 0:02:59.800 --> 0:03:04.440 and finance, and moved into upstream and quickly from the 0:03:04.480 --> 0:03:08.239 upstream business, cut engaged on the gas business and that's 0:03:08.560 --> 0:03:12.760 where I probably spent the majority of my time in Shell. 0:03:13.120 --> 0:03:17.000 To basically grow consolidate the gas business and particularly the 0:03:17.160 --> 0:03:21.119 lerg business, which at the time was still i would 0:03:21.160 --> 0:03:24.359 say in the beginning a bit of a niche business. Nowadays, 0:03:24.400 --> 0:03:27.240 of course, is a global business in its own right, 0:03:27.280 --> 0:03:29.440 and certainly in Shehall it's one of the biggest businesses 0:03:29.639 --> 0:03:33.200 that the company has and I was privileged to lead 0:03:33.320 --> 0:03:36.360 that business for nine years, three years as an EVP. 0:03:36.560 --> 0:03:40.520 And then you may recall both BG Group former British Gas, 0:03:40.560 --> 0:03:44.200 who were also a significant energy company. We combined the 0:03:44.240 --> 0:03:47.720 businesses and I moved on to the executive committee of Shell, 0:03:47.760 --> 0:03:51.119 where I stayed for six years, running that gas business 0:03:51.200 --> 0:03:55.200 but also picking up the newly formed new energies business. 0:03:55.280 --> 0:03:59.440 In twenty sixteen, Shall switched on a new energies business 0:03:59.440 --> 0:04:03.240 which had before in the two thousands but basically closed 0:04:03.280 --> 0:04:05.240 down in two thousand and eight two thousand and nine, 0:04:05.680 --> 0:04:07.840 started up again in twenty sixteen, and so over the 0:04:07.920 --> 0:04:10.600 last six years, based in then Atherlans, I rent both 0:04:10.640 --> 0:04:14.040 the gas and energy business and the new energies business, 0:04:14.080 --> 0:04:17.320 which took Shell into offshore wind, into solar, but also 0:04:17.360 --> 0:04:22.400 into biofuels, hydrogen batteries, power training, power sales et cetera 0:04:22.839 --> 0:04:26.560 to customers, so setting up an integrated new energies business there, 0:04:26.760 --> 0:04:29.080 and then in the course of twenty twenty one, the 0:04:29.120 --> 0:04:33.160 opportunity to lead SEBSAT came along, and eventually I took it, 0:04:33.480 --> 0:04:36.159 not just because the amazing city that marid is, with 0:04:36.240 --> 0:04:39.240 its climate and it's the social life, it's position in 0:04:39.240 --> 0:04:41.560 the center of Spain, a bit more over because I 0:04:41.600 --> 0:04:45.800 saw an opportunity to lead a fundamental and very fast 0:04:45.839 --> 0:04:48.800 transformation of a company that has as a starting point 0:04:48.800 --> 0:04:51.200 and we can talk about it later, a quite traditional 0:04:51.360 --> 0:04:54.800 fossil fuel based integrated oil gas chemicals business, to lead 0:04:54.800 --> 0:04:57.520 a transition that would actually before the end of the decade, 0:04:57.640 --> 0:05:01.880 turned that into a leader in in clean energies, clean 0:05:01.960 --> 0:05:05.960 green molecules, and clean mobility or sustainable mobility. And that 0:05:06.120 --> 0:05:09.159 opportunity to me was irresistible. So I moved by the 0:05:09.240 --> 0:05:11.920 end of twenty twenty one, and I am now fourteen 0:05:11.920 --> 0:05:15.760 months into that adventure and very pleased with the progress 0:05:15.800 --> 0:05:18.120 and still at the same time quite in all of 0:05:18.160 --> 0:05:21.200 what still needs to be done to get to the endpoint. 0:05:21.400 --> 0:05:23.840 Thanks Martin, Thank you for sharing that. It's really interesting 0:05:23.880 --> 0:05:25.919 to hear how your own story has in some ways 0:05:25.960 --> 0:05:28.680 mirrored the transition itself in terms of the focus of 0:05:28.680 --> 0:05:30.760 what you've been working on. Now, as you say you've 0:05:30.800 --> 0:05:32.320 been at the Helm of Stepster for a little bit 0:05:32.360 --> 0:05:34.800 over a year, now, could you first maybe tell us 0:05:34.800 --> 0:05:36.440 a bit about the company first of all for those 0:05:36.480 --> 0:05:38.440 of our listeners who are less familiar, and then I'd 0:05:38.440 --> 0:05:41.520 also love to hear what you've learned since joining the company, 0:05:41.839 --> 0:05:44.240 anything that surprised you perhaps over that year, and a 0:05:44.279 --> 0:05:45.200 bit that you've been there now. 0:05:45.360 --> 0:05:48.080 Yeah. So, SEMSA is a company headquarter in Spain, but 0:05:48.440 --> 0:05:51.560 with a relatively global portfolio in some businesses. So it 0:05:51.600 --> 0:05:54.320 has an extreme business in the Middle East and in 0:05:54.440 --> 0:05:58.279 Latin America. It has a chemicals business that really is global. 0:05:58.360 --> 0:06:02.320 It is in all time zones in nine different countries. 0:06:02.360 --> 0:06:05.680 We produce chemicals and we sell them in many more countries. 0:06:06.000 --> 0:06:09.640 And then the size a downstream business that's quite focused 0:06:09.640 --> 0:06:13.000 on the Iberian Peninsula, so in Spain, Portugal, but also 0:06:13.040 --> 0:06:15.600 has a presence in Mexico and Morocco. In the downstream, 0:06:15.800 --> 0:06:19.120 the company owns the largest refinery in Spain and another 0:06:19.160 --> 0:06:22.159 big one both in the south of Spain and Ondalucia, 0:06:22.200 --> 0:06:24.799 and that's relevant when we start to talk about the transition, 0:06:25.120 --> 0:06:29.000 and we are eighteen hundred service stations and are significant 0:06:29.040 --> 0:06:32.640 players in aviation, in bunkering. In all that, let's say, 0:06:32.680 --> 0:06:35.360 the classic B two B and B two C businesses 0:06:35.400 --> 0:06:39.239 in the oil industry were less less of a player 0:06:39.240 --> 0:06:41.920 in meatural gas actually, although we do import the products. 0:06:41.960 --> 0:06:46.920 So it's company with between twenty eleven thousand employees last 0:06:46.960 --> 0:06:49.640 year three billion dollars of EBITA to give you a 0:06:49.680 --> 0:06:53.240 sense of the dimensions. And one of the things I've 0:06:53.320 --> 0:06:57.160 learned is you, of course when I joined, or before 0:06:57.160 --> 0:07:01.320 I joined, I talked as significantly to be shareholders about 0:07:00.520 --> 0:07:04.000 what they were hoping to achieve with how they saw 0:07:04.040 --> 0:07:06.440 the future, and they very much saw the future or 0:07:06.960 --> 0:07:09.440 were very interested in the future that will be a 0:07:09.520 --> 0:07:13.960 radical transformation into the transition data. Partly because they think 0:07:13.960 --> 0:07:15.800 that's the right thing to do, that the world needs 0:07:15.840 --> 0:07:18.400 an example of that, or multiple examples of that. But 0:07:18.440 --> 0:07:21.800 I would say also partly because attracted by the situation 0:07:21.840 --> 0:07:26.600 in the equity markets where companies with a predominantly fossil 0:07:26.760 --> 0:07:30.240 portfolio at the moment, certainly in Europe, attracked ebe down 0:07:30.320 --> 0:07:33.160 multiples of three and a half to four in evaluation, 0:07:33.400 --> 0:07:37.640 whereas companies that are predominantly sustainable and green attract double 0:07:37.680 --> 0:07:41.200 digit eb down multiples in evaluations. So if you apply 0:07:41.280 --> 0:07:44.080 that to let's say a three billion door EBITA, it's 0:07:44.120 --> 0:07:46.679 the difference between a ten billion dollar valuation and thirty 0:07:46.680 --> 0:07:49.400 billion dollar valuation. And since re private equity owned, there's 0:07:49.400 --> 0:07:51.440 an incentive to see can you get from A to 0:07:51.480 --> 0:07:54.080 B and can you do it this decade? So with 0:07:54.120 --> 0:07:57.160 that inside and with the chareholder Wiship, I certainly have 0:07:57.280 --> 0:08:00.600 studied the company ahead of joining and these I thought 0:08:00.600 --> 0:08:03.920 it was possible. But I think the lesson that I've 0:08:04.000 --> 0:08:08.320 learned is that strategy is really an art of making choices, 0:08:08.520 --> 0:08:10.720 and too many companies and I think that was also 0:08:10.760 --> 0:08:13.800 probably the case in thepside before, end up doing a 0:08:13.840 --> 0:08:16.760 bit more of everything. In our sector, companies with such 0:08:16.760 --> 0:08:21.320 a broad portfolio of chemicals, upstream gas, downstream renewables end 0:08:21.400 --> 0:08:23.600 up their strategy ends up being, well, let's grow everything 0:08:23.600 --> 0:08:26.040 a little bit. And what we've come up with is 0:08:26.040 --> 0:08:29.960 a strategy that really makes choices, that decides to ribble down, 0:08:30.040 --> 0:08:33.720 triple down on sustainability businesses. We've announced that we will 0:08:33.720 --> 0:08:36.600 invest more than sixty percent over our eight billion investment 0:08:36.600 --> 0:08:41.400 budget into sustainable businesses the rest of this decade, creating 0:08:41.440 --> 0:08:44.200 a company that's more than fifty percent sustainable income by 0:08:44.240 --> 0:08:46.520 the end of the decade, and therefore, as a result, 0:08:46.720 --> 0:08:50.160 shrink the classic business of fossil based businesses by essentially 0:08:50.640 --> 0:08:53.240 running them for maximum value rather than investing in them. 0:08:53.240 --> 0:08:55.199 And I think that having such a clear choice on 0:08:55.280 --> 0:08:59.560 the strategy has been important internally to make to align 0:08:59.600 --> 0:09:02.280 everybody and to give direction to the company. But it's 0:09:02.280 --> 0:09:06.040 also been hugely helpful excellently because it really creates a 0:09:06.120 --> 0:09:09.520 story about where we're going, and a story that is 0:09:09.840 --> 0:09:12.680 easier to understand and that can be explained by all 0:09:12.760 --> 0:09:14.880 the other thousand people in the company, but also can 0:09:14.880 --> 0:09:17.720 be easily understood by people who we deal with in government, 0:09:17.760 --> 0:09:21.000 in regulatory agencies, in the press, and in the general public. 0:09:21.040 --> 0:09:24.320 And having a story that is focused and that is exciting. 0:09:24.480 --> 0:09:27.360 I think we're reaping the benefits of that every day, 0:09:27.520 --> 0:09:30.200 even if we're only at the start of executing story. 0:09:30.559 --> 0:09:32.680 Yeah, And I think that's a really powerful insight on 0:09:32.760 --> 0:09:35.800 strategy being the art of making choices. I really like that. 0:09:35.880 --> 0:09:37.880 And I've always thought that if you say yes to everything, 0:09:37.920 --> 0:09:40.240 then it's not a real strategy. So yeah, half of 0:09:40.240 --> 0:09:41.760 strategy is knowing what to say no to. So I 0:09:41.760 --> 0:09:44.480 think that's a really powerful message. Now, I know you've 0:09:44.559 --> 0:09:47.839 already touched on this. Actually, SEPSO has announced a new 0:09:47.840 --> 0:09:50.360 strategy in the last year called Positive Motion, which is 0:09:50.360 --> 0:09:54.080 all about transforming to net zero. You've already started telling 0:09:54.120 --> 0:09:55.839 me a bit about that, but cauld ask you maybe 0:09:55.920 --> 0:09:57.880 just to map out some of the main pillars, the 0:09:57.880 --> 0:10:00.319 main components of that. What are the main pieces that 0:10:00.360 --> 0:10:02.560 make up that overall strategy over the next eight to 0:10:02.559 --> 0:10:03.199 ten years. 0:10:03.400 --> 0:10:07.840 At its core, it starts with understanding who our customers 0:10:07.880 --> 0:10:10.280 are and what they need from us, what they most 0:10:10.320 --> 0:10:12.120 need from us this decade. Also on the B to 0:10:12.240 --> 0:10:14.240 B and the B two C side, we want to 0:10:14.480 --> 0:10:17.559 retain those customers and in a way attract many new 0:10:17.600 --> 0:10:23.080 customers and offer them decarbonization solutions. The carbon footprint of 0:10:23.120 --> 0:10:26.920 a company like Stebsite is significant, but eighty five percent 0:10:26.960 --> 0:10:29.720 of that carbon footprint if you go scope one, Scope two, 0:10:29.760 --> 0:10:33.120 Scope three, so let's say life cycle carbon impact of 0:10:33.160 --> 0:10:35.360 our product, not just our own emissions but also our 0:10:35.360 --> 0:10:38.560 customer emissions, eighty five percent of the emissions take place 0:10:38.880 --> 0:10:42.880 when the customer use our products when they drive the car, 0:10:42.960 --> 0:10:45.560 and they use the gasoline over the plane flys and 0:10:45.559 --> 0:10:48.240 they use the curacy. So for us to have a 0:10:48.360 --> 0:10:53.200 meaningful and impactful impact on climate change and on the 0:10:53.280 --> 0:10:58.400 energy to tradition, decarbonizing our own facilities doesn't make much of 0:10:58.440 --> 0:11:01.040 a difference because it's only fifteen percent of our carbon footprint. 0:11:01.160 --> 0:11:02.960 We need to do that, of course, and we're doing it. 0:11:03.080 --> 0:11:05.840 But much more importantly is that we help our customers 0:11:05.880 --> 0:11:10.520 decarbonize their energy use, which will then decarbonize the life 0:11:10.520 --> 0:11:15.000 cycleed carbon footprint of our business. But starts with understanding 0:11:15.000 --> 0:11:18.400 what do our customers need to decarbonize, and it's actually 0:11:18.440 --> 0:11:21.839 a relatively simple story. We think that there are mobility 0:11:21.880 --> 0:11:24.640 customers which are at the B two C side. That 0:11:24.720 --> 0:11:26.679 starts with let's say the cars that fill up at 0:11:27.240 --> 0:11:30.199 one of our eighteen hundred stations will need green electrons, 0:11:30.240 --> 0:11:34.400 will need electric vehicle charging solutions because that's where light 0:11:34.520 --> 0:11:38.520 vehicles are going by and large, So on that segment, 0:11:38.720 --> 0:11:43.400 we are raining down all Liberia super fast chargers so 0:11:43.440 --> 0:11:46.680 people can can charge in fifteen twenty minutes to eighteen 0:11:46.760 --> 0:11:49.960 ninety percent of their battery and go on their live 0:11:50.080 --> 0:11:52.760 journey again with their ev charge staff. Of course, we 0:11:52.800 --> 0:11:55.760 continue to offer diesel and gasoline as we go, but 0:11:55.880 --> 0:11:59.760 becoming the leader in super fast charging in Iberia is 0:12:00.040 --> 0:12:04.080 our main B two C strategy. Alongside that strategy comes 0:12:04.120 --> 0:12:07.559 a convenience strategy, because, of course those customers will spend 0:12:07.559 --> 0:12:09.679 a bit more time in our stations, let's say twenty 0:12:09.720 --> 0:12:11.920 minutes on average, and therefore we want to give them 0:12:11.920 --> 0:12:14.960 options to make the most of those twenty minutes. Whether 0:12:15.000 --> 0:12:17.839 that's drinking coffee or doing some e commerce, or picking 0:12:17.920 --> 0:12:20.240 up a meal, or picking up groceries or having a 0:12:20.280 --> 0:12:23.480 meal are many, There are many options. But we will 0:12:23.520 --> 0:12:26.640 treat those stations not so much anymore as places where 0:12:26.679 --> 0:12:28.360 you have to go because you want to fill up 0:12:28.360 --> 0:12:30.640 your garmend casoline, but where you want to go because 0:12:30.679 --> 0:12:33.240 there are convenience locations that are offer many options whow 0:12:33.320 --> 0:12:35.720 you charge your vehicles. So on the B two C side, 0:12:35.760 --> 0:12:38.960 it's super fast charging plus convenience strategy. On the B 0:12:39.040 --> 0:12:42.439 to B side, what our customers need most from us 0:12:42.880 --> 0:12:46.079 is green molecules. And I mean with that is many 0:12:46.200 --> 0:12:48.600 sectors in the B to B business that we serve 0:12:48.960 --> 0:12:51.360 are very difficult to be electrifying. The ones that can 0:12:51.400 --> 0:12:54.160 electrify will do so because that's the easiest way to 0:12:54.160 --> 0:12:57.600 decarbonize your energy usage. But there are many sectors such 0:12:57.600 --> 0:13:02.080 as aviation, such as maritime trans or such as heavy industry, 0:13:02.360 --> 0:13:05.760 but also such a heavy transport big tracks driving long 0:13:05.760 --> 0:13:09.640 distance for whom it's or the fertilizer sector, the chemical sector, 0:13:09.840 --> 0:13:12.520 for whom it's very difficult to electrify. But they still 0:13:12.559 --> 0:13:16.959 need a decarbonization solution and for that they need green molecules. 0:13:17.559 --> 0:13:20.480 And we've elected so again a choice. We could try 0:13:20.520 --> 0:13:23.720 and serve the industry that electrifies, but we actually believe 0:13:23.800 --> 0:13:27.400 that we can be more distinct by developing green molecules. 0:13:27.640 --> 0:13:29.520 We've been in a molecule business for one hundred years. 0:13:29.520 --> 0:13:33.440 They've been hydrocarbon molecules. Now we will develop green molecules. 0:13:33.480 --> 0:13:37.680 And essentially there's two main families there. There are biofuels 0:13:37.679 --> 0:13:41.559 and gases, and there is the green hydrogen family. On biofuels, 0:13:41.600 --> 0:13:43.880 we want to become one of the main suppliers of 0:13:43.920 --> 0:13:47.120 sustainable aviation fuel in Europe and we will start making 0:13:47.800 --> 0:13:51.400 some substantial investments this year. We already produce sustainable aviation 0:13:51.520 --> 0:13:54.720 fuel and on green hydrogen. We will also become one 0:13:54.760 --> 0:13:57.600 of the major suppliers in Europe of green hydrogen and 0:13:57.640 --> 0:14:01.480 its derivatives green ammonia and pretend green methodol, and in 0:14:01.520 --> 0:14:04.839 that way we can decarbonize the carbon footprint of our 0:14:04.920 --> 0:14:07.440 industrial of our let's say B two B customers who 0:14:07.480 --> 0:14:11.280 need green molecules and our BDC customers that need green electrials. 0:14:11.480 --> 0:14:15.840 So that is broadly, let's say the growth strategy underpinned 0:14:15.840 --> 0:14:19.360 by a significant renewable energy investment, which we will do 0:14:19.480 --> 0:14:23.760 to sell green electrons to customers or so to end customers. 0:14:24.040 --> 0:14:26.040 We will do it for own use. We will do 0:14:26.120 --> 0:14:30.440 about seven gigabatts of renewable solar wind electricity then will 0:14:30.480 --> 0:14:32.720 go to feed the super fast charging for the B 0:14:32.760 --> 0:14:35.200 two C customers and then will be used to make 0:14:35.400 --> 0:14:38.200 to produce the green hydrogen and to produce the biofuels 0:14:38.200 --> 0:14:40.960 and biogases. And so it's an own use strategy. We 0:14:41.000 --> 0:14:44.560 will not significantly compete in the electricity market itself, not 0:14:44.680 --> 0:14:47.400 because we because it's a bad business, but again because 0:14:47.440 --> 0:14:50.520 strategy is about making choices. So that's that's the growth 0:14:50.600 --> 0:14:53.520 part of the agenda. And then we will de emphasize 0:14:53.600 --> 0:14:57.000 our extreme business. As you may have seen, we've recently 0:14:57.360 --> 0:15:00.880 announced the sale of our oil production business Adown. That's 0:15:00.920 --> 0:15:02.960 about half of our extreme and in the rest of 0:15:03.000 --> 0:15:06.000 our exstream positions, we are really not growing apart from 0:15:06.040 --> 0:15:08.440 making the investments in the fields that we already have 0:15:08.560 --> 0:15:11.320 that makes sense. We are running that business for maximum value, 0:15:11.360 --> 0:15:13.880 and you will see the relative weight of our extreme 0:15:13.920 --> 0:15:16.960 business decline in our portfolio as we grow the green 0:15:17.040 --> 0:15:20.320 side and as we run that business form maximum value 0:15:20.560 --> 0:15:23.400 going forward. Our chemicals business does have a green agenda, 0:15:23.600 --> 0:15:26.920 is able to decarbonize and become green at kind of 0:15:26.920 --> 0:15:30.920 the pace that our energy businesses, so we've decided to 0:15:31.000 --> 0:15:33.720 keep that alongside our business for now and go on 0:15:34.280 --> 0:15:38.880 also go on a pretty aggressive green strategy. Our main 0:15:38.920 --> 0:15:41.080 business is to make La b which goes into the 0:15:41.080 --> 0:15:44.400 surfactanins business, which eventually people use to wash their clothes 0:15:44.520 --> 0:15:47.600 or wash their hands, et cetera. And we believe that 0:15:47.760 --> 0:15:50.720 is a sector that will decarbonize early, where our green 0:15:50.760 --> 0:15:52.440 propositions will attract the preview. 0:15:52.760 --> 0:15:55.160 So maybe just to drill into some of the opportunity 0:15:55.160 --> 0:15:58.640 areas there that you see across immobility, across hydrogen and 0:15:58.680 --> 0:16:01.720 bio fuels and sustainably aviation fuels. How are you thinking 0:16:01.720 --> 0:16:04.240 about the relative size of those opportunities between now and 0:16:04.280 --> 0:16:07.520 twenty thirty? Are they different sizes and different values to you? 0:16:08.320 --> 0:16:10.680 Do they carry different risk profiles? How are you thinking 0:16:10.720 --> 0:16:12.760 about the balance of those different opportunities there? 0:16:13.320 --> 0:16:16.680 They are all different and indeed have kind of different 0:16:16.760 --> 0:16:20.080 sizes and risk profiles. If you look at electric vehicle charging, 0:16:20.560 --> 0:16:23.280 it is a business that where there's no question that 0:16:23.360 --> 0:16:27.480 will be there. The European Union will drive adoption of 0:16:27.600 --> 0:16:31.360 EV very very hard in the coming decade, and therefore 0:16:32.040 --> 0:16:34.920 the fleet will change to EV. There's no question. The 0:16:35.000 --> 0:16:37.640 question is a bit how fast you see very big 0:16:37.680 --> 0:16:40.640 differences in Europe Norway, I think eighty five percent of 0:16:40.680 --> 0:16:43.880 the cars are now EV's that are sold. Netherlands and 0:16:43.960 --> 0:16:46.640 Germany it's twenty five growing to thirty, and in Spain 0:16:46.680 --> 0:16:49.120 it's four. And so the big question how fast will 0:16:49.120 --> 0:16:52.000 that four grow to twenty to thirty, to fifty and 0:16:52.040 --> 0:16:54.600 eighty And it's a bit a noble but it certainly 0:16:54.640 --> 0:16:57.880 depends also on the amount of infrastructure available. So we 0:16:58.400 --> 0:17:00.960 want to be part of the solution, will investigate it, 0:17:01.080 --> 0:17:03.520 We will invest ahead of the growth of that EV park, 0:17:03.920 --> 0:17:07.640 which hopefully will in itself trigger growth of the EV park, 0:17:07.720 --> 0:17:09.600 because we believe it's a bit of a business of 0:17:09.600 --> 0:17:11.840 a land grap where it's better to be early than 0:17:11.880 --> 0:17:15.720 to than to be laid, and by creating an installed base, 0:17:15.800 --> 0:17:17.960 we can grad a much higher market share in the 0:17:17.960 --> 0:17:20.639 EV charging business, let's say up to twenty five percent 0:17:20.680 --> 0:17:22.840 that we have in the fossil the business, where we 0:17:22.880 --> 0:17:25.919 are somewhere somewhere apt to after thirteen percent. It's an 0:17:25.920 --> 0:17:29.240 opportunity for step change in our market share by going 0:17:29.280 --> 0:17:34.440 early on ev charging, but eventually the opportunity is limited 0:17:34.520 --> 0:17:37.560 by the size of the car park in Iberia and 0:17:37.720 --> 0:17:40.639 the size of our network, so you cannot grow that forever. 0:17:41.119 --> 0:17:45.800 On biofuels, particularly sustainable aviation fuel, the risk profile is 0:17:46.280 --> 0:17:48.720 an interesting one. It's not so much to demount because 0:17:48.760 --> 0:17:52.520 the aviation sector really has only one credible near to 0:17:52.640 --> 0:17:55.919 medium term to decarbonized, which is stainable aviation fuels, and 0:17:55.960 --> 0:17:58.960 again in Europe will be forced by the European Union 0:17:59.160 --> 0:18:03.120 to adopt. Many companies want to adopt, but even those 0:18:03.119 --> 0:18:05.560 who don't want to will be forced by regulation to 0:18:05.600 --> 0:18:07.920 start buying the stainable aviation fuel. So in a way, 0:18:07.960 --> 0:18:10.479 the demand in that sector is kind of de risked. 0:18:10.440 --> 0:18:13.080 It will be there and it will grow. The risk 0:18:13.119 --> 0:18:15.680 profile in the biofuel's business much from the supply side. 0:18:15.720 --> 0:18:19.760 Can you find enough second generation feedstock that is genuinely 0:18:19.800 --> 0:18:23.040 sustainable and not food based but waste based. Can you 0:18:23.080 --> 0:18:25.560 find enough speedstock to grow your business? And so we 0:18:25.600 --> 0:18:30.040 are very very strongly focused at being allocating substantial resource 0:18:30.200 --> 0:18:33.280 to find a to originate in feedstock supply into the 0:18:33.320 --> 0:18:35.240 South of Spain so we can be a leader in 0:18:35.359 --> 0:18:39.520 producing biofields of stainable aviation fuel. The main risks on 0:18:39.600 --> 0:18:42.280 the supply the feedstock supply side, on the green hydro 0:18:42.359 --> 0:18:44.360 side is the other way around. Feedstock is not a problem. 0:18:44.440 --> 0:18:47.800 You just need water and reheuble electricity and where we 0:18:47.880 --> 0:18:49.919 are in the South of Spain is the best place 0:18:50.040 --> 0:18:53.119 in Europe for reneble electricity. We have the best combination 0:18:53.840 --> 0:18:56.760 of sun wind and space. And what I mean by 0:18:56.760 --> 0:19:00.400 space is the opportunity to build world class solar wind 0:19:00.480 --> 0:19:02.600 parks because there's quite a those space in the Midleland 0:19:02.600 --> 0:19:06.240 and South of Spain that that's usable. It's the population 0:19:06.320 --> 0:19:08.400 density is quite low. All of a sudden, the winter 0:19:08.520 --> 0:19:12.119 you get very two renewable electricity and the other component 0:19:12.160 --> 0:19:14.600 you need is water and you don't need so much 0:19:14.600 --> 0:19:16.800 of it. And actually by reducing our own use in 0:19:16.800 --> 0:19:19.080 the refinery is we can free up enough water to 0:19:19.119 --> 0:19:21.840 grow a very very large hygien business. So there is 0:19:22.000 --> 0:19:25.280 no constraint on the feedstock side on hygien. The constraint 0:19:25.280 --> 0:19:28.240 there at the market is to actually develop customers who 0:19:28.240 --> 0:19:30.480 want to buy hydrogen and that so that's a very 0:19:30.480 --> 0:19:32.800 different risk profile. But the good thing is these three 0:19:32.800 --> 0:19:36.280 businesses all have their own different risk profiles, and so 0:19:36.359 --> 0:19:38.520 by growing all three of them, you can actually you 0:19:38.600 --> 0:19:42.000 get diversification. You don't just depend on one single one 0:19:42.000 --> 0:19:43.760 of them working out. One of them might work out 0:19:43.800 --> 0:19:46.320 better than the others. But by growing all three into 0:19:46.359 --> 0:19:50.600 a leadership position, we're pretty comfortable with the decarbonization drive 0:19:50.640 --> 0:19:53.439 that we have in Europe, with the advantage position that 0:19:53.480 --> 0:19:55.000 we have in the South of Spain in terms of 0:19:55.400 --> 0:20:00.560 clean power being the cheapest in Europe, we will have 0:20:00.560 --> 0:20:03.520 a strong clean energy portfolio in the course of this decade. 0:20:03.640 --> 0:20:06.560 Maybe just to spend another minute on hydrogen, I noticed 0:20:06.680 --> 0:20:09.680 your very exciting announcement that you've made around this two 0:20:09.680 --> 0:20:13.400 gigawats project. I believe it's called the Andalusian Green Hydrogen 0:20:13.480 --> 0:20:15.879 Valley if I recall correctly. We have a coalition of 0:20:15.920 --> 0:20:19.800 partners including Furtive Barrier, the fertilizer company, which clearly will 0:20:19.800 --> 0:20:22.080 have a use for hydrogen. So my question first of 0:20:22.080 --> 0:20:24.440 all is what did it take to get that project 0:20:24.600 --> 0:20:27.360 up and running. Clearly having that anchor customer is critical. 0:20:27.560 --> 0:20:29.840 And then where do you then see that hydrogen flowing? 0:20:29.880 --> 0:20:32.000 More broadly, I presume there'll be other applications for that 0:20:32.080 --> 0:20:34.480 hydrogen coming out of this two gigawort project, So where 0:20:34.480 --> 0:20:37.240 do you see it going into? Which industries and which geographies. 0:20:37.520 --> 0:20:41.639 It's a very exciting projects. It's ten times the size 0:20:41.640 --> 0:20:44.600 of the largest hydro project in Europe being constructed at 0:20:44.600 --> 0:20:49.720 the moment, which is in Rotterdam built BCHEL Mega. What 0:20:50.000 --> 0:20:52.120 is a is a major chef change in the industry, 0:20:52.680 --> 0:20:55.960 and we are we are fortunate we have a number 0:20:55.960 --> 0:20:59.440 of things in place. As I said, very cheap renewable 0:20:59.520 --> 0:21:02.640