BP p.l.c.

Craig Marshall: Welcome, everyone, to BP's First Quarter 2026 Financial Results Call, which we're hosting today from our offices in Washington, D.C. I'm joined by Meg O?eill, Chief Executive Officer; Carol Howle, Deputy Chief Executive Officer; and Kate Thomson, Chief Financial Officer. I hope many of you will have seen our 1Q video by now, and we look forward to taking questions shortly. Before that, though, let me hand over to Meg for a few brief opening remarks. Meg? Marguerite O’Neill: Thanks, Craig, and hello, everyone. It's great to be here. And as I said in the video, it is a privilege to be here as BP CEO, and I'm really excited about the opportunity ahead of us. This has been another strong quarter for BP despite a lot of external volatility and importantly, our underlying operations continue to perform well. We produced 2.3 million barrels of oil equivalent per day, supported by continued high plant reliability higher production in the Gulf of America and strong performance in BPX, offsetting disruptions in the Middle East and some divestment impacts. Refining availability was above our target of 96% and throughput was over 1.5 million barrels per day, our highest quarterly figure in 4 years. In trading, our focus remains on capturing value through the cycle while operating within a clearly defined risk framework. This all supported delivery of $3.2 billion of underlying net income significantly higher than the fourth quarter and $8.9 billion of operating cash flow before a working capital build of $6 billion. We also made progress in simplifying our portfolio with the agreed sale of the Gelsenkirchen refinery announced in March, further increasing our structural cost reduction target by end 2027. And while net debt increased this quarter, this was largely due to a build in working capital. We remain confident in delivery of our net debt target and we also announced today our plan to reduce our corporate hybrid stack by over $4 billion by the end of 2027, subject to market conditions. So continued strong operational and financial delivery and accelerating strategic progress, a lot of really great work by the team. Carol, Kate and I are looking forward to your questions. And with that, I'll hand back to Craig to take us through the Q&A. Craig Marshall: Thanks, Meg. I'm going to take one question per person, please. So everyone gets the chance to ask and William to wrap the call up in about 45 minutes. So on that first question, we'll move to Josh Stone at UBS. Joshua Eliot Stone: Congratulations on the new role. I wanted to touch on something you said in your prepared remarks about going back to the traditional upstream, downstream reporting lines, the review to reduce complexity, increase accountability. Can you maybe just expand on what this means in practice of BP, perhaps where you see the biggest benefits coming from there? What needs to change internally? And also how the organization has responded so far to that announcement? Marguerite O’Neill: Well, thanks for the question, Josh. The decision to move towards upstream downstream model is all about changing ways of working and driving simplification, driving improved accountability and focus and speed and decision-making. And if you think about how the business operates, it's quite a different skill set. The skill set associated with finding oil and gas resources, developing and producing them is quite different from the way of thinking that's associated with getting customers the products they need, getting refining set up to deliver the product mix, be it gasoline, diesel, jet, I think it's also important to really highlight the value that we see within BP of our trading organization which allows us to maximize value from molecules as they move from refining all the way to those end customers. But it's all about driving accountability, driving simplicity and efficiency and decision-making and the initial response from the organization has been very positive. Craig Marshall: Thanks, Josh. We'll move next to Michele Della Vigna at Goldman Sachs. Michele Della Vigna: Congratulations on a quarter that really showed the strongest Meg, at your time as CEO of Woodside, you med the size of that company. I'm just wondering how important do you think revamping this oil and gas growth is to the BP investment right? Marguerite O’Neill: Yes, great question. Look, one of the things that I would highlight is some of the exploration success that we've had over the past year and a bit. So we've announced 14 discoveries since the start of 2025. I think it's important, Michele, to highlight that a number of those are what I would call short cycle. So those are discoveries that can quickly be tied back to existing infrastructure. That's -- those are opportunities to bring production online at pace, which helps with mitigating production decline, which is something we, of course, always fight in the base business. We do have other more material longer-term growth options. Bumerangue is probably the most noteworthy. It's not every day as you discover an 8 billion-barrel in place field, obviously, a bit of work to do. We need to do appraisal, but that's a significant part of our longer-term growth story. Complementary to the work that's underway already in the Gulf of America with the Paleogene development and BPX with onshore. So production growth is part of our plan. But I think it's important to go back to some of the points we made in the announcement and points that Kate has been making for a while is we've got to get the balance sheet strengthened. A stronger balance sheet puts us in a position where we can make those investments in production growth through the cycle. That's how we're thinking about the totality. I'm excited about the opportunities we have, but the focus right now is making sure we've got that laser focus on delivery every day and strengthening the balance sheet. Craig Marshall: We'll turn next to Doug Leggate at Wolfe Research. Douglas George Blyth Leggate: Thanks, Craig. Good morning, everyone. Meg, you've inherited the capital structure, which has been getting a lot of attention. And obviously, the hybrids get mentioned now as part of the targeted reduction in debt and equivalents. I'm just curious, from your standpoint, is there an ideal capital structure that you think of? I mean, the current environment, for example, one could argue there is a line of sight where the hybrids could be taken out completely, given the weight of the prospective cash flow you have. So I'm just curious how you think about what defines the capital structure and where you see the right balance of debt and equity on the equivalents. Marguerite O’Neill: Yes. Thanks, Doug. It's a really good question. So one of the things that I think about, and this is probably a very simplistic way of talking about, and I'll hand to Kate for a bit more detail is when we think about sources and uses of cash, one of the things we're trying to tackle is the amount of cash that is going to liabilities. And so that underpins the work that we're doing, strengthening the balance sheet, tackling net debt, now tackling hybrids. You would be aware of the Deepwater Horizon obligations that we're chipping through and the end of the obligations is within sight just a few years down the track. So it's all about reducing the amount of cash that we generate that's going to these liabilities, which means more cash is available for investing in the future of the business and returning value to shareholders. But I'll hand to Kate to talk about the stack and more specifics. Katherine Thomson: Thank you, Megan. Hello, Doug, good to hear your voice. Back in February, we made the decision as a Board to pause our buybacks, and that was a very deliberate act to accelerate the pace with which we were going to strengthen the balance sheet and deliver on our net debt target. Accelerating the deleverage is incredibly important. And I'm probably going to echo some of Meg's earlier comments because it does two things. It creates the platform for growing our company and it gives us a greater generation of free cash flow, lower financing costs seems that we have confidence in resilient distributions to shareholders and investing for growth through cycles. So those are really important. The level of confidence that we have in the delivery of our net debt target is what has given us the space to be able to make an economic decision around $4 billion of our hybrids, which is very clearly the 2 tranches that come forward for redemption in '26 and '27. I'd go back though to the holistic view of our total financial obligations that we shared deliberately in February. We're moving at pace to reduce across that, but we will be making economically driven decisions as we step into that and rebuild the balance sheet. And that's all about how we create our platform for everything that's to come. Craig Marshall: We will move next to Biraj Borkhataria at RBC. Biraj Borkhataria: Just to follow up on the hybrid stack, it's more of a technical question. So I understand you can't talk about your intention to do more than the 25% you've announced. But in practical terms, there are obviously various call dates for the remaining bonds. Would you need to wait for those and step through those step by step or is there a scenario where if you had the disposable cash, you could do all the remaining hybrid bonds in one go? Just thoughts on that. Katherine Thomson: I'll take that, Biraj. Good to hear your voice. So just in terms of the announcement that we've made today and how to think about that, we expect that S&P will commit the reduction under the methodology on corporate. So -- and remember that is $12 billion, the original hybrid that we issued in June 2020. So we expect to maintain the equity treatment on that. In terms of moving forward, I think it's incredibly important. Two things. One, hybrids remain an important and a permanent part of our capital structure. And also back to what I was saying a minute ago by economically driven decisions, retiring hybrids ahead of reduction periods can be very expensive depending on market conditions. So that's something we would think incredibly carefully about. I think the most economic way to retire hybrids is to allow them to roll off as they hit those periods. And the first one comes towards us now the window opened in March and concludes in the second quarter, hence, our guidance in terms of what we're going to be doing. And don't forget that will be part of a working capital build in the second quarter as a component of our working capital is that rolls off. Craig Marshall: We will take the next question from Lydia Rainforth at Barclays. Lydia Rainforth: Meg, welcome. I just -- I'm going to come back to this idea of talking about simplifying BP. Can you give us some concrete examples of what you actually mean? Because when I think about the upstream, downstream reorg, we're talking about simplification a lot. And then just linked to that, are the targets that BP have already set out the extent of the ambition we should think about? Or should we think about that being more than that over time? I'm not talking short term, but just over time. Marguerite O’Neill: Sure. Thanks, Lydia. Look, on the simplifying front, perhaps the clearest example is with the structure right now with production and operations, refining sits under that portfolio, which has been really, I think, incredibly valuable driving performance improvement in refining. And if you look at our reliability numbers, upstream, downstream are both in that 96% range. And I think that's a reflection of the value of having brought those parts of the business together. But it adds complexity, if you think about how refining fits in the value chain, getting refining right is about getting the right supply into the plants and getting the right products to customers. So much closer links to the customers and products and the mobility and convenience and aviation businesses. So moving refining into downstream really aligns it with the flow of products and allows the leader of that business to think holistically about how do you maximize value from the front of the refinery all the way to the end customer. So I think that's a good simple example of how the upstream downstream will drive more efficient decision-makings. Now the targets that we've announced out to 2027 are still in place and that would represent first quartile performance across the business and in all of our support functions. But obviously, we're going to be relentless in continuing to challenge ourselves, continuing to learn, continuing to benchmark and making sure that wherever we are in the business that we continue to have that chronic drive for cost efficiency for safe, reliable operations and for best-in-class performance. That's our goal. Craig Marshall: We'll take the next question from Chris Kuplent, Bank of America. Christopher Kuplent: Can I ask a very open question. I'm sure you've been very excited for months now to arrive at BP. Can you look back and say what's been the thing that's getting you most excited about it, perhaps already last year. And since you've actually entered, what's been the most surprising thing you've encountered? And the two may be the same thing. So I hope I get away with asking just this question. Marguerite O’Neill: Sure. Thanks, Chris. Look, it's -- there really is an honor to be part of the BP team. I've worked in a large integrated company. I've worked on a pure-play E&P. The thing that excites me about BP is the breadth of the business. So we've got world-class upstream with some really fantastic assets. We've got a very dynamic downstream and some very critical markets for our customers and then a world-class trading organization. And I think we've got all of the ingredients to be a really phenomenal company. And kudos to the team. We've been on a journey for the last couple of years trying to make sure that we are delivering on the potential of the organization. So I think there's opportunity to continue that journey to bring a bit more momentum to the decisions and the progress that the team has been making over the past year. In terms of most surprising, look, I'd say it's been really a warm welcome, which is surprising. I think BP's culture of care is well known. But seeing the kind of commercial capability up close and personal, which I'd only ever seen across the table as a joint venture partner, and we've got some really, really capable people here. And I think we've got all the raw ingredients between the assets and the talent to deliver on the full potential of the corporation. Craig Marshall: We'll take the next question from Henry Tarr at Berenberg. Henry Tarr: I suppose to come back to something that was asked earlier, I think you sort of referenced a stronger and simpler BP. As you look at the business, are there particular sort of core regions or assets that you think are very strong. And then perhaps others which might seem even after the divestment program that aren't quite as core, and then within that, how do you view sort of BPX as part of the portfolio? Marguerite O’Neill: Sure. Thanks, Henry. Look, you sort of spotlighted one of the core assets. Our Americas position really is world-class. If you look across the breadth of the business. the U.S., and as Craig said, we're doing this call from DC. The U.S. is incredibly important. All parts of the business are present here from upstream, onshore, offshore, downstream, trading, so we've got a very significant footprint here in the U.S. and a lot of our future growth is coming from the U.S. between the Paleogene and BPX. Going south from here, Bumerangues, again, a very significant discovery, 8 billion barrels in place. So that will be an important part of the business as we move forward in time. And then some of our core areas, the Middle East and AGT, we've got some real high-quality assets there. So I think there's a lot of strength in the business as it stands today. Now the team has been doing tremendous work already looking at assets in parts of the business that might not be core to our long-term journey and kudos to the organization for getting the Castrol deal across the line late last year, you would have seen the announcement of the Gelsenkirchen refinery divestment. So every business needs to chronically be asking ourselves what are the assets that are with us for the long term and what are things that might be of greater value in some else's hands. And that's a good chunk of the work that Carol is going to be doing as CEO. Craig Marshall: We'll take the next question from Martijn Rats at Morgan Stanley. Martijn Rats: Yes. Also welcome from my part. I wanted to ask you two things. It feels like a bit of a missed opportunity not to ask you about Iraq. BP is such a large operator there with the Rumaila field. I was wondering if you could give us your thoughts on sort of if the Strait of Hormuz were to be opened, what are we looking at in terms of the steps that need to be taken to kind of ramp up production? What does that operationally require the logistics of the supply chain? How much time would that take? I'd be really interested in your thoughts. And the second thing I wanted to ask has some longer-term sort of strategy sort of implications. There's real earnings on a quarterly basis from BP's trading business. And of course, if you have physical assets trading, sometimes trading opportunities sort of naturally sort of a rise and a company like BP should take advantage of that. But it -- but if the trading business grows over time, there was also a point where it sort of tried to change the nature of the company a bit. I mean, from an asset company with some trading, it can become a trading company with assets, if you see what I mean. And I was wondering if, given that you've taken a fresh look at BP, what do you think is the natural size of the trading business within the company? At what point does it become too large perhaps? Craig Marshall: Martijn, there's definitely more than one question in there. So what I am going to be pretty deliberate. We'll take your first question on Iraq. And then I'm sure the question on trading may come back up. I do want to make sure we get through everybody. So maybe Meg on Iraq, and I'm sure somebody can ask about trading and ask Carol. Marguerite O’Neill: Sure. Well, thanks for the question, Martijn. So I think we put it in the presentation. Our total production from the Middle East is around 400,000 oil equivalent barrels per day. We have historically exported about 100,000 barrels per day through the Strait of Hormuz, which includes barrels from Iraq and some barrels from Abu Dhabi. It's worth noting that we've also been able to lift some Abu Dhabi production from the [ Mataro ] terminal. Look, the Rumaila field is operated by the Rumaila operating organization. We have involvement as a technical services contractor. So questions on what it's going to take to get that back online are probably best directed the operator. But we stand by ready to work closely with the Iraqi government and with the operator to provide the advice and insights we can on getting the field back online as soon as possible. once the shipping restrictions are lifted. Craig Marshall: We'll turn next to Lucas Herrmann at BNP. Lucas Herrmann: Meg and the team actually best of success with everything. I want to ask a question on LNG, LNG trading, probably directed at Carol. So if I go back to 2022, the company very proudly talked about the redirection of 200 or so cargoes. And one of the features I understand of your contracts is 90% are written with redirection clauses. If I think about the -- if I think about the environment we're in now, the volatility, the spreads that one can see today, how do I think about your ability to maximize that? To what extent is there length in the portfolio? To what extent are you starting to enact those clauses on the basis that my initial presumption was correct? Carol, any guidance would help. Carol Howle: Lucas. You know we don't give guidance. So -- but no, good to hear from you. And so with regards to the LNG portfolio, you're right. So we can redirect our cargoes, more than 90% of our cargoes are reoptimized prior to final delivery. What I would say is we're still growing our LNG portfolio. So last year, we had just under 27 million tonnes per annum in terms of the strategic portfolio, which is up year-on-year and around 15 million tonnes of what we call the sort of incremental merchant volumes. So there's growth in that portfolio. There's also great diversification in the portfolio. So if I look at it in terms of our ability to rewire and think about where we can get supply into, as you say, these demand centers, particularly with the disruptions that we're seeing, we have supply from Trinidad, from Mauritania, Senegal from the U.S. and also from Coral in Mozambique, all of which we can look to optimize to make sure that we get LNG to customers. So we still run the portfolio in that way. We are still looking to make sure that we optimize BP's assets as well as support customer flows and deliveries. So on that basis, we continue to work through that. I think 2022, just to finish off was a little bit different in terms of we did see prices, TTF prices surged about 300%. And last quarter, it was around 100%. So slightly different levels of volatility, but the fundamentals of the business is still the same. Craig Marshall: We'll move next to Alejandro at Santander. Alejandro Vigil: Best of luck, Meg, with your new challenges. My question is about when looking at the market expectations of your role making in the company that could provide a boost in terms of the strategic delivery of the company. In which area of the -- which of the key targets of the company in terms of divestments, in terms of cost cutting, in terms of a stronger balance sheet, you see more upside in the company today? Marguerite O’Neill: Yes. Thanks, Alejandro. I appreciate the question. Look, I think there's opportunity, and the team is focused across the breadth of the business. And one of the things that I'm very focused on is ensuring that we're capturing maximum value from all of the assets we have in our portfolio today. And you talk about -- and one of the things I like to frame is there's some big rocks, things like the Castrol transaction that has a material positive impact on the balance sheet, but there's lots of work that the teams can do every single day to increase value to BP shareholders. That's working on reliability. It's things like well optimization, making sure we've got the right slates running through the refineries to get the products that the customers need and that offer the best value for BP shareholders. So I think there's a tremendous amount of work to do to continue that focus on safe, reliable, cost-efficient operations to relentlessly drive to be cost efficient across the business, and that includes the above field or staff functions. The trading business really is world class, and I think you're seeing the positive impact of that part of the business and the results today. And so I'm focused on -- it's a bit of all of the above. The balance sheet repair is critical. And again, it's about trying to make sure that we have more of the cash that we generate available for investing in growth and value to shareholders. So that, at the end of the day is something that's going to be a critical focus for the leadership team for the coming couple of years. Craig Marshall: We'll take the next question from Matt Lofting at JPMorgan. Matthew Lofting: And Meg, welcome to BP, wishing you the very best of luck. I think you spoke earlier in the video released earlier today on creating durable cash flows. I wondered if you could just unpack that a little bit in terms of how you and the team are thinking about that over and above baseline returns and some of the metrics that perhaps go into thinking about that? Marguerite O’Neill: Yes. Thanks, Matt. Great question. So one of the things that I think we're all quite aware of is the fact that we are in a very cyclical industry. We produce a commodity that if you look at that over the last 6 years has had a pretty extreme price volatility. So we need to make sure that the decisions we're making on the portfolio and the business allow us to be profitable through the cycle and to be able to have that same disciplined approach to investment through the cycle. So it means when prices are high, we remain disciplined. We continue to have our belt tight on operating expenditure and capital expenditure. And that is the sort of thing that will serve us well when there's a lower price environment. It means stress testing, the investment decisions we make, stress testing, the portfolio, making sure that, again, we have that resilience to a low price environment. Kate, could you elaborate on that? Katherine Thomson: I guess maybe I think the portfolio gives us quite a degree of diversification in a number of dimensions, based in terms of product geographical exposure fiscal exposure. And I think that is part and parcel of being resilient. In terms of further upside, I think one area of focus that we've been working hard on as well is around the capital frame. So I think it's incredibly important at moments like this that we keep tight control on CapEx. And then the focus is on excellent execution against the dollars that have been put to work in the various parts of the business. Craig Marshall: We'll take the next question from Jason Gabelman at TD Cowen. Jason Gabelman: I wanted to go back to the capital structure. And it seems like the balance sheet things are moving can not only meet the target, but potentially exceed the $14 billion debt target when you account for the cash row sale. So how do you think about the right size for the balance sheet? Do you think that $14 billion is the floor? Can you kind of go below that as you think about developing some of these high-quality assets that you have in the hopper? And more broadly, should we expect larger capital framework update now that Meg has taken over? Katherine Thomson: Shall I take that? Jason, so in terms of capital and the $14 million to $18 million, look, that's our primary focus right now, the delivery of that, and there are various components that will deliver on that, not least the closing of the Castrol transaction, which we've said will likely close towards the back end of 2026. I think it's incredibly important. We remain focused on delivery of that's the primary target. But as you can see from what we've said today, we are also reducing our hybrid stack, which drives lower financing costs in that dimension. So we'll continue to optimize on that. On CapEx, we have set a frame of 13 million to 15 million for the next 2 years. I think that feels right. I think it's the right capital structure to maintain and grow the company. And right now, as I've just said a minute ago, I think keeping tight control on that space is very, very important. And this year, we've tightened it further to 13 to 13. that feels good. It's the right balance around investing in the core parts of the business as well as focusing on and growing some of our future production that you can see coming online. And Meg referenced some of the short-cycle stuff. We're also investing in some of the longer stuff, but that's about creating the right balance. Craig Marshall: We will take the next question from Fergus Neve at Rothschild. Fergus Neve: I just wanted to go back to exploration, which you touched on briefly earlier in the call and is a real interest at the moment in the industry, even announced discoveries in Egypt and Angola this year. And I think the solar well offshore Libya was being drilled when we all met for the 4Q results, which was a well, you were quite excited about I wonder whether you could give us an update on your exploration activity so far this year and a look ahead of any other wells we should be looking out for as the year goes on. Marguerite O’Neill: All right. Well, thanks, Fergus, and I appreciate the interest in exploration. It is one of the key engines to get new opportunities into the front end of the business. So I'm very pleased with the success that the team has had over the past, call it, year and a quarter. As we said, two discoveries, so good progress in Egypt and Angola. Egypt is a great example of discovery that's very close to existing infrastructure, so something that has that ability to be commercialized at pace. Matsola, you may have heard from our partner in that. It was a noncommercial discovery, but it is in a very big and diverse basin with a number of prospects, and we have further exploration opportunities in Libya that we will be pursuing over the course of the coming years. Perhaps another one to watch is we'll be drilling another well in Brazil on an exploration prospect there ahead of doing the appraisal drilling on Bumerangue. So those are probably some of the ones to be watching out for over the course of 2026. Craig Marshall: And we'll take the next question from Kim Fustier at HSBC. Kim Fustier: Kate, you flagged that the difference between the refining indicator margin and the realized margin could be greater than $5 a barrel if current conditions persist, driven by crude differentials, product yields and freight costs. Are you able to give any more color on those three components? And I guess, is there anything you can do to capture more of the margin and mitigate the headwinds? Can you do things like tweak refinery product yield towards more jet and diesel? Marguerite O’Neill: Yes. So I'll take that, Kim. Thank you for the question. Yes, what we're trying to do here is give as much help as we can to the market in terms of how to think about rules of thumb in what are pretty unusual circumstance regarding our basket of commodities. We've described the fact that the rim is a little bit dislocated from realized margins right now in terms of realized margins being below the refining indicator margin. And I've said three things that contributing to that. One is feedstock availability. One is product yields. It's volatile. We are producing output that I would describe as different from standard, and that's very much about trying as much as we can to create products that our customers need around the world. and then ship it to those destinations. And then of course, we've got higher freight costs. In terms of where we're seeing it the most, so it's -- at the moment, we're seeing it more in Europe than anywhere else. But as you would appreciate, this remains an incredibly volatile situation. I'm not going to predict how the next couple of months will unfold. We will give as much color as we can once we get to the trading statement for the second quarter, to try and describe how it's actually manifested. Craig Marshall: Super thanks, Kim. And this is the last question. I'll make the offer, given we have time to come back to Martijn for his follow-up after this question. But Mark Wilson at Jefferies. Mark Wilson: Okay. BP has seen very strong exploration success in recent years and conversion of that discovered contingent resource into reserves is what changes reserve life in years, which has been a focus for various companies in the sector. I would say less of a focus for BP, but BP's reserve life is lower than the average. Could I ask you there for Meg, what's your view of a healthy reserve life number for modern IOC? Should it -- does it have to be double digit? Or does technology cycle time improvements, et cetera have changed that number fundamentally. Marguerite O’Neill: Well, thanks for the question, Mark. Look, I think we've been pretty upfront about the journey we've been on. We went through a period in the early 2020s, where we were not exploring as actively. And we've made some adjustments in the last couple of years to refocus on this core approach to bringing new opportunities into the business. We've also signaled that we want to be getting our reserve bookings up. Good progress was made last year. Kate will remind me of the number? Katherine Thomson: 90%, of which about 15% was due to price. So if you back out price, it was about 76%. That was a material improvement. Marguerite O’Neill: Yes. So we are making good headway in replacing produced reserves, and we've set ourselves a target of 100% reserve replacement by 2027. So the team is very focused. As I said, this is a core method for growing the upstream and continuing to refill those opportunities and something we're laser-like focused on. Craig Marshall: Thanks, Mark. Okay. We have 8 minutes before the end of the call, and I'm going to turn back to Martijn for his question, which will be pointed at Carol. And then we do have two follow-ups that I think will take us to the end. So maybe, Martijn, you first, and then we'll get to Lydia and Alastair for the follow-ups. Martijn Rats: Yes. Thanks, Greg. Look, the question is simply what you think is the -- broadly the right size of the trading business within BP. It's large enough to capture the opportunities that there are, but not so large that it starts to dominate other things. Yes, that was the question. Carol Howle: Yes. No. And thank you. And what I would go back to is the main or the sort of core objective of the supply trading and shipping business is to support BP's assets. So we're there to make sure from a production perspective, we keep our molecules flowing and we improve netbacks were there to make sure that we keep the refinery supplied with the best feedstocks. We're there to make sure that we can also help deliver those products to the market, whether that's wholesale or into the retail businesses or into the aviation businesses. So that's the core objective that we have. Then it's around building a merchant portfolio on top of that, that optimizes all of those flows or allows us very sort of as we've talked about before, capital-light opportunity to access growth markets where, again, we can look to improve the returns on our refined products or indeed our upstream production. Then the trading piece, the pure trading piece is the sort of the icing on the cake, I would say. And that is subject to volatility. It's obviously subject to us managing that very closely and from a risk perspective, from a disciplined perspective. But really, Martijn, I mean, we're here to serve the BP assets. So we're not there to be trading for trading's sake. Our primary goal is to serve BP. Craig Marshall: I will go next to Alastair who hasn't asked a question first. So Alastair at Citi. Alastair Syme: I was actually going to ask another trading question to Carol, I guess, within the boundaries of what you're prepared to talk about commercially. But can you sort of explain to me why the oil trading result in the quarter was exceptional and the gas trading on average? I mean I was kind of under the impression that both commodities moved directionally in the same manner and on pretty much the same external events. So why they relative? Carol Howle: I mean, so the first thing I'd say is that as we've all seen, in a significant structural tightness due to the conflict and also due to the closure of Strait of Hormuz, and what we've seen is -- on the oil side, we've seen the disruption come through on crude, and we've seen it also come through on refined products, both in terms of impact to the Middle East, but also a reduction in refinery runs in Asia. So that's meant we've seen a shortage of supply in Asia, which has been also gradually rolled through into the West. Now what we've been doing on the oil side is really very much, as I said, focused around making sure that we keep our production flowing. We keep our refineries wet. We keep our refineries producing a maximum yield with regard to where we're seeing the shortage of products for our customers, which would be across jet and diesel. So we've been doing that. We've got a global scale and a diverse portfolio across a number of different geographies that we've been able to rewire supply and demand across. And that's where you've seen that value coming through on the trading side. With regards to the gas side, I think I mentioned earlier on the call, we haven't seen the extent of volatility because I think sometimes people sort of equate this to 2022. We haven't seen the extent of volatility in those gas markets as we saw previously. Now what we are watching though and monitoring very carefully are things like the EU stock levels. we're looking at where they should be against the 5-year average. It is injection season. So we're watching that very carefully. Obviously, continued disruptions to Strait of Hormuz has the potential to increase the shortages that we're seeing in the market. But again, as I said, I think, in answer to Lucas' question, the portfolio that we've got across BP and merchant does have the diversification in it to make sure that we work very closely to meet our supplier commitments. Craig Marshall: We'll come back to Lydia at Barclays. Lydia Rainforth: I appreciate the second chance. And I was just going to come back to Kate and Carol, if I could. I mean just obviously, there's been a lot of changes over a number of years. Can you just talk about through now how you work together as a management team? And partly linked to that, Kate, I mean, just given another restructuring side of upstream, downstream, are there going to be more restructuring charges that we should think about having to put in? Or is this generally additive from where we are? Katherine Thomson: So look, Lydia, we do provide updates on restructuring charges. We'll do a deep dive into costs generally at the second quarter. I think one comment I would make is I'll take the opportunity with the mic to say that we've continued to make good progress on our structural reductions, we have now delivered another $300 million. So we're 70% delivered against the 4% to 5% that we originally set out. In terms of restructuring costs, I think it's really important that right now, we get the organization of the team inside the company right, and we will step through that at pace, but in the right way. And we'll obviously be engaging with our people, first and foremost, before we pay anything else externally. Everything else will flow out of the consequence of how we structure the company and how we run our teams. Carol Howle: And then I think from the sort of leadership perspective, as Kate and I talked about earlier in the year, we very much have been working as the management team around sort of turnaround of BP and you've seen that delivery coming through on the performance side, on the operational excellence side and obviously from the financial perspective and the progress against our core targets. I do think and Meg will probably be embarrassed for us saying this, but she's a fantastic leader. And I do think actually having her in the organization and bringing in that external perspective, both challenging us where we could be better because I do think BP has more upside but also supporting us and engaging us in, I think, a very different way. And one of the webcasts from a staff perspective, the feedback at the end was very much around confidence, pride in the organization and clarity. And I think that's what you'll see from the management team going forward. Craig Marshall: Okay. Well, I'm going to sneak in two more and then we'll aim to finish pretty promptly. So Jason Gabelman's [ report ] at TD Cowen, Jason. Jason Gabelman: Maybe two quick clarifying questions. Is there any risk to your European refineries access to crude? Or do you feel like those are well supplied? And can you just talk about how you think about Middle East investments and if you need a higher return given the higher risk we're seeing in the market? Carol Howle: I mean on crude supply, I mean, we're working very hard to keep our refineries supplied. We have a wide range of both upstream positions but also merchant positions. And so we're able to diversify the slate into our refineries. So we're not seeing an issue there. But as I say, the team are working very hard to do that and to make sure that we're then supplying our customers. Marguerite O’Neill: On the Middle East question, BP has been in the Middle East for 100-plus years. It's a core part of the company's footprint and everywhere we go around the world, we're always looking at opportunities and risks. It's in the DNA of what we do is managing a wide variety of risks as we make our investment decisions. Craig Marshall: And then final quick question from Doug back at Wolfe. Douglas George Blyth Leggate: Let me double dip. And Meg, I inadvertently forgot to say my words of welcome as well. We're very much looking forward to working with you and good luck. However, I have a very specific question. As a lifelong upstream professional coming into an organization that has just announced 8 billion barrels of oil in place with 1 well, I think, as Ariel described it in an area the size of London. Are you concerned about market perceptions? Is there any scenario in your mind where there is not a development at Bumerangue? Marguerite O’Neill: Look, I saw the Bumerangue announcement, of course, when I was on the outside and thought, okay, this sounds big, but you always need to dig in with some -- with a critical eye. I've had the opportunity to sit down with the Bumerangue team, see the seismic data, see the well logs, understand what they're doing in terms of the appraisal plan and the development concepts that we're maturing. So obviously, a bit of work to do given the size and complexity of resource. So the appraisal plan will be really critical to firming up our understanding of not just fluids in place, but how fluids will move through the reservoir and how we might commercialize it. But very impressed with the quality of the team that we've put on this opportunity. The leadership moves at pace to get some of our best folks on to this so that we can move the opportunity forward with an appropriate amount of pace. So I'm -- look, I'd say I'm excited. It's not every day that you discover a field of this size and quality. So great opportunity for us and great -- pleased with the commercial terms that we have for the opportunity as well. So we've got all the right ingredients. Craig Marshall: That's the end of the questions. We'll wrap up the call, but maybe if I can just hand over to Meg for some closing remarks. Marguerite O’Neill: Excellent. Well, thanks, Craig, and thanks to everyone for joining us on the call. It's been great to have a first chat with you, and I look forward to getting to know you over the coming weeks, months and years. I'm really pleased, again, with the strong quarter operationally and financially and the good work we're making on delivering on our strategic goals. The priority we have across the management team and the organization is to accelerate progress. with that really tight focus on safe, reliable operations and capital discipline. As you've heard, I think, quite consistently, and Kate's been leading this since before I arrived. We need to have that really rigorous focus on strengthening the balance sheet. And that means we need to stay disciplined in our spending and our investments, and that will allow us to build a more resilient VP. So just closing, and I know it's a month in. This really is a great company. We've got remarkable people, world-class assets, and I'm super excited about the opportunity ahead. So thank you all.