Member Info for meoryou

Monaco

As a shareholder perhaps you should care about part of the business that will soon make $1 billion profit each and every year whatever the oil price.

But you are of course entitled to your own opinion.

And I would never suggest otherwise

And the answer

We've already had one debate with regard to share buybacks versus debt. I'm sure we'll have others by the sound of it. Look, I think I said earlier on the call, the investors that we talked to, they like the balance of the financial frame as we've currently got it structured. As I said, it's sector-leading distributions. And the balance sheet is in good shape. It is strong. We have brought it down a significant amount since 2020. And the flywheel that the share buybacks give us to be able to continually increase dividends, as you've seen in the last three years we have done 10% each of the second quarters. It creates a flywheel for that and the increasing earnings per share. So for now, we're comfortable with where that sits, and we like the balance, and so do our investors.

Yes. My follow-up is, I want to come up to the buyback question. I've had the pleasure of covering many of your peers for three decades. And the big difference between those buying back stock in yourselves is a much, much stronger balance sheet. And if I look at your share performance since you started the buyback, you really haven't had any benefit. Your share price is down and you bought back a fifth of your stock, but your net debt remains relatively high if you include the hybrids. I'm just curious why you believe that method of cash return is still the optimal way to maximize value for shareholders.

Yes, I have sort of a very short answer on Bunge. We've been in the joint venture since 2019. So we actually understand the operational performance metrics now quite well and saw the opportunity to take the 50% to then consolidate to 100% because the two biggest sources of value are inaccessible to us as just a 50%, namely, the first one is about integrating with Carol's business on the trading side. So that's a big source of value there. Very difficult to do when you're 50-50. And then the other source of value is applying -- Murray, you mentioned it earlier, some of the science, but also some of our techniques from refining on automated control systems, for example, we see the opportunity to increase the mill uptime. And so, again, difficult to do when you're -- when it's in a joint venture of 50-50.

So I think the sources of value, we can see them immediately ahead of us in the near term, and then there's tons to do long term. A lot to do on the biogas side, we can use the waste from the mills. We will take a relatively small investment waste from the mills to be able to then convert into biogas digest, biogas and then either use in our own vehicle network, it's a massive vehicle network there. We have 1,500 vehicles, combined harvesters in the field either to use your own fleet over time or to sell into the grid, that's a big opportunity.

Again, hard to do when you're 50-50 and you have different objectives for the joint venture. And then there's more to do in the future on next-generation ethanol. So I think those things, we see both near-term sources of value and then in the long -- in the medium to long term opportunities for investment to really bring this to life

I'll start with Lightsource BP, then Emma, you want to handle Bunge consolidation and then Kate. I think on Lightsource BP, look, we had a partner when we put it off balance sheet back in 2017 fabulous entrepreneur, helped us grow the business up to 4 or 5 gigawatt development per year, but hit the end of when they wanted to continue doing this.

So now is the time where they wanted to cash out, it was convenient for us to go in and take control over 100%. It's a fabulous vehicle to go and help Carol build out her business. So many customers around the world want natural gas coupled with power -- clean power to start to decarbonize their own energy systems. And with the growth of hyperscalers, we're seeing just increased demand after demand after demand.

So taking 100% control of that entity given that incredible native demand we see for energy, especially from the hyperscalers now and the desire of nations to transition makes an awful lot of sense. At the same time, once you've taken that control, you've restructured it, done some stuff to the portfolio based on where your customers sit, et cetera, you will then think about bringing a passive partner into this. You'll think about giving a passive partner it. They've got a very different cost of capital than we have. And so that should offer the chance to arbitrage the price over time.

On Paleogene, if you'll allow me to wax eloquent about the Paleogene for a minute. 10 billion barrels of discovered resource in the basin, that's now been highly developed by other companies. It's time for us to catch up with that. We've used an industry standard solution for Kaskida, it will produce 80 kbd. It will be less than $5 billion. It will drill six wells in the East bump. That's all that we're putting into that sanction case, delivering at least 275 million barrels.

When I listen to Gordon's team, we might do quite a bit better than that. The reason we might do quite a bit better than that is, we have 1,000 feet of pay and the average across the rest of the Paleogene is 500 feet of pay. So it's an enormous, enormous column of oil. And we'll be doing a seven frac completion inside those. So let's see if we get 2.75 or something much higher over time. It will be hopefully followed by Tiber, 12 months later, mid next year, we think we'll be sanctioning Tiber. It will pretty much be a photocopy of Kaskida as well for capital productivity. And at the same time, we're doing that, we'll be appraising the West bump at Kaskida. And hopefully, that will just tie back and flow into East Kaskida over time. And we've got a couple of exploration wells to the East and West of Kaskida and some more stuff near Guadalupe and Tiber as well.

So it's a very, very, very strong resource base. We've got some derisking to do with appraisal wells and exploration wells that are very sensible to do, given the high-quality seismic that we've shot. And obviously, to your point, Peter, we have a 100% working interest there. I think for now, we're going to start Kaskida, get it going. We will appraise these wells. We'll drill the exploration well, see what we have. And in probably 12 to 18 months' time ask me that question again. And I'll think about how much of the resource we've appraised and got under our thumb to think about what we do. Do we bring in a partner or not. Kaskida alone will be a 5% increase in operating cash flow when it comes in at a group level, 5% alone, and Tiber will follow that as well. So it's will be an interesting choice to ask me 12 or 18 months away. Thank you.

And I think on the bio -- thank you, Carol. Excellent. We are very different than the competition. We have a different viewpoint on this and we believe in flexibility. On biorefining, maybe just a few things to say. Over time, it's become clear that a lot of people are building biorefineries, whether it's through coprocessing or hydrocracking. And that's not the part of the complex that will be short. So you'll have lots of steel. We think we need up to three different plants that we build this decade, not have been sanctioned yet, so we still have to go through our sanction process. But we think that gives us enough capacity for what we want for our aviation fleet and for our trading fleet.

We think instead that the value is in the upstream, and that's why we decided to reallocate scarce capital to the purchase of Bunge. It offers us a lovely biofuels -- bioethanol position inside the domestic market, inside Brazil. It also offers tremendous opportunity to increase yields to drive better performance inside the plants, because it can be modernized significantly over time with very little investment. And our scientists in San Diego, who we work with so closely have all kinds of different enzymes that they're thinking about that can increase yield and create different products out of it.

And last, Carol has the opportunity to on-trade this out of Brazil, which is always historically where we've been selling and into the West Coast of the United States or Europe to optimize trading flows as well. So we think that, along with focusing on the upstream on things like Carinata with new seed that's where you apply your scarce capital, that's where the value will be. And that's what's going to create long-term enduring value. It's not about any changes in viewpoint on pricing, no change on viewpoint on mandates. It's simply the fact that so many plants have been built. We can toll through them as opposed to constructing them ourselves, which is much more capitally efficient for shareholders.

On BPX, yes, the teams have made great progress there. I visited with them after our last set of results for a few days. And you're right, we brought on the third central gathering facility in the first quarter, and we started to fill that up. That's why we see the strong growth in liquids. In the second quarter, they are now working on the last one, which is really a compressor station, which will lower line pressure, which will draw more resource out of the ground, and that should come online sometime middle of next year.

As far as activity set, generally we've described these in rig years. The difficulty with that is they're drilling so fast that they're able to drill the same number of wells with half the rigs. So they've just done incredible work on ranging well drilling and some TDS technology as well. It's hard to believe that they've been able to do that step change yet again. So, when you look at the rig count numbers that we provide with you, it's as if it's 2 times the rigs that existed two years ago if you measure it to that metric, given the productivity they've seen. Right now in the gas basins, obviously gas price is quite low. We've got tons of resource, 22 TcF of resource. And we've just moved down to minimal drilling inside the Haynesville. So we're down to one rig in the Haynesville, just keeping going. But we continue to focus on the oily side.

So we'll continue to drill out the Permian and gradually fill that system up entirely. We'll probably hit peak production for liquids in the Permian around 2027, based on the last analysis I did. And the other very interesting thing that we talked about while I was there is, they're rethinking the Eagle Ford. So we have 500 wells there that have been producing for about a decade. They were fracked a decade ago. Obviously, fracking technology has moved on materially since then. So they've gone in and done 50 re-fracks. And the returns on these things are unbelievable. With the new technology on the fracks, you're getting all kinds of liquid production coming out of them. So we trialed 30. We now have 500 opportunities. The Gordon is working with them on to decide at what pace we fund those.

And the last thing I'd say on the Eagle Ford is, they also started to down space, which is very counter to what you think of in some of these plays that maybe you don't down space, you're getting it through laterals. But what they found is, the couple of downspacing wells they've drilled have delivered 3,700 barrels of oil a day, which is way above POPs, even what we're seeing in some of the Permian acreage. So the Eagle Ford is opening back up to us, and it's this mantra that we always have to think about with resources is, once you think you're done on recovery factor, have another go at technology and see what happens. And that's what we're proving in the Eagle Ford.

They used to talk about recovery factors of 7% to 10%. They're now talking 30% recovery

And in convenience, we're well on track. So we did $0.5 billion this year already, first half. That's up $200 million, first half versus first half. And we're in action both on the revenue line as well as on the cost line. So on the revenue line just a few examples, our like-for-like sales are up and our store conversions. So when we convert stores to strategic convenience sites, which you'll see we've now increased another 50 over this recent reporting period. And when we increase our strategic convenience stores, we see double-digit increase in sales, just from those conversions. And at the same time, we're working on our revenue line on the base business. So for example, we're constantly innovating our offers. We launched pizza in Thorntons, that saw a 13% uplift in sales in the first month. We also launched just this year and it was launched, we launched 13 SKU stock keeping units on water, which is one of the top selling beverages for anybody who stops on the road, as well as sweet sort of jellies, candies. They're called epic brands.

Why do I say that? Because actually consumers are under pressure and consumers under pressure want a better value product and we actually make a better margin from these private labels. So where we go directly to suppliers, conceive of a range of the top-selling products, it works for us, higher profit and it works for the consumer because it's more value. So I think as I put those together, we're now in the top five of convenience stores in the USA and our program in Europe is well underpinned with the pipeline of conversion, big conversions still happening in Poland. Here in the UK we continue to convert at the margin and then big program in Germany.

I think Emma can talk to the business side of that more so. But I'd say it's a recognition, but we do still see positive margins for the future. In our Arkea, I’d say this is a slightly different story D3 RINs are actually holding up very well at the moment. It's a combination of high mandates, it's a combination of low availability around cellulosic ethanol, it's also that the waiver credit there has been discontinued. So that's a positive pricing market, averaged about [3.19] (ph) in Q2.

So why are we confident around Arkea? Well we're confident because we're also seeing increase in demand in the transportation market. So it's up 14% first half of this year versus last year and we also see continuing growth as people use biogas to decarbonize, but we're also confident on the supply side. So we brought online four plants this first half of the year. So that's roughly around 4 million mmBtu’s of high margin RNG. And we've got two more in commissioning at the moment due to start up this week and a further two undergoing final commissioning due to start up in August. So we're making progress in bringing those plants up online.

And just as a reminder, if Henry Hub were $3 an mmBtu, which I know is probably a little bit optimistic at the moment, but if it were and we were looking at placing our RNG into the transport market with RINs at $3, we can actually sell that RNG for 10 times more the value of Henry Hub. So that just gives you a sense still of the value in that portfolio. Now also what I would say is, we've learned a lot, commissioning times are reducing. [Madora] (ph) that took us around seven weeks, we're now at around seven to 10 days. So we are improving and getting those plants up and running more quickly. That's not to say that there are some headwinds, we've seen that across the market permitting interconnect delays, but we're confident about that delivery and we're still focused on delivering $800 million to $1 billion by 2030 [Multiple Speakers] Arkea.

MUSCAT: Energy major BP is acquiring a 49-per cent stake in Hyport Duqm, a gigawatt-scale green hydrogen and green ammonia project planned for implementation at Duqm in the southeast of the Sultanate of Oman.

An announcement to this effect came in BP Group’s financial results for the first half of 2024, published on Tuesday, July 30, 2024.

Importantly, BP is also assuming operatorship of the project, which is on track to rank among the first crop of large-scale green molecule projects globally that are slated to be operational before 2030.

“On June 13, BP signed an agreement with OQ and Dredging, Environmental and Marine Engineering NV (DEME) to acquire a 49-per cent stake and operatorship in the Hyport green hydrogen project in Duqm, Oman, subject to regulatory approvals, which could produce around 57,000 tonnes per annum of green hydrogen,” the energy giant stated in its financial report.

OQ is the integrated energy group of Oman, wholly owned by Oman Investment Authority (OIA). Its Alternative Energy arm (OQ AE) is a pivotal player in Oman’s green hydrogen industry, with interests in a number of the giga-scale green molecule schemes currently in the early stages of development in Oman.

Hyport Duqm was among the first to sign agreements with Omani authorities aimed at establishing an export-oriented renewable hydrogen scheme in Duqm. Spearheading the project from the outset were the partnership of Belgian-based DEME Concessions and OQ AE.

Hyport Duqm is being developed on an area of 150 km² within the Special Economic Zone at Duqm. The production of green hydrogen to green ammonia will be powered by both wind and solar energy, with a combined capacity of around 1.3 GW under Phase 1 and potentially more than 2.7 GW on completion of Phase 2.

The first phase of the project, which is part of Oman’s ambitious green energy targets (Vision 2040), is set to produce approximately 330,000 tonnes of green ammonia.

The Project Development Agreement (PDA) signed with Hydrom, the orchestrator of Oman’s green hydrogen industry, grants Hyport Duqm a 47-year licence to develop and operate the project.

Hyport Duqm is among eight green hydrogen projects that have signed firm agreements with Oman’s authorities to date with a goal to achieve an annual production capacity of around 1.38 million tonnes of renewable hydrogen by 2030. Total investments in the projects are estimated at $48 billion.

In June last year, BP had signed a separate project development and land use agreement with Hydrom for a potential 150,000 tonnes a year green hydrogen project near Duqm.

“The project is currently in the concept development stage, and we continue to progress our data collection campaign using LiDARs (light detection and ranging devices), solar stations and met masts,” said BP Oman in its 2023 Socioeconomic Review published earlier this year.

Morning all

So crude plus products inventories fell by 6 1/2 million barrels,and oil price back up today over 1.5%.

The Middle East is now one miss calculation ( or stupid act) from becoming a wider conflict .( and the risk is higher than ever)

OPEC still doing what only OPEC can do.

But oil markets seem to only be focused on China demand.

If interest rates around the world start to fall soon……

Https://oilprice.com/Latest-Energy-News/World-News/API-Reports-Large-Draw-in-Crude-Inventories.html

Crude oil inventories in the United States fell again this week, this time by 4.495 million barrels for the week ending July 26, according to The American Petroleum Institute (API), after analysts predicted a smaller 2.333 million barrel draw.

Gasoline inventories also fell this week, by 1.917 million barrels, adding onto last week’s 2.8-million-barrel decrease. As of last week, gasoline inventories are 2% below the five-year average for this time of year, according to the latest EIA data.

Distillate inventories shrunk this week by 322,000 barrels, on top of last week’s 1.5-million-barrel decrease. Distillates were about 9% below the five-year average for the week ending July 19, the latest EIA data shows.

Sometimes it’s only after Shell report that our results can truly be judged,as good or less good.

It never takes that long to be judged as a bad set.

Tinker

Despite our great anguish at the current share price, I see Bernard’s little cash cow, turning into a herd of cash cows.

I also think that it’s all programmed in.

I think the modern big oil company is more and more being set up like a production line.

I think BP have a long list of lowish cost projects,with low risk if the world magically turns green one day.

I also think I might be thinking tooo much

To take investment decision on German hydrogen project this year

July 30 (Reuters) - BP said on Tuesday it has given the green light to development of a green hydrogen facility at its Castellon refinery in Spain.

The British energy firm also said it was preparing to take a final investment decision (FID) regarding a 100 megawatt (MW) green hydrogen project in Germany by year end.

Both projects could potentially create sustainable aviation fuel and green hydrogen for customers while helping BP decarbonise, BP added.

Or more likely following the oil price down?

I missed the second half

But first 30 minutes very very positive.

Bunge

Bought other half because there is massive potential to up scale within the current plant.( Murray’s words without having ot get permission or spend large amounts)

BPX Energy

Doing twice as much for each rig,ie 100% more.

Going into legacy wells and refracting with tremendous results.

Intend to take this out to most of the older wells.

Also going deeper in some areas into next layer of hydrocarbons.

Doing similar in G of Mexico.

All these suggest extra oil and gas and bio fuels as and when required at relatively low cost.

archaea energy

Very positive to massive premiums when trading

Hi Happy

I think focus on returns

Is code for no low return renewables.

They said today Bunge is immediately cash positive on close ,so I’m ok with that.

We will always have different lines in the sand,

But that never stops me enjoying your posts.

No one can ever accuse you on not being consistent,or of not having plenty of facts to back up your views.

2 more years of 10% div rises and we are back where it all started,but sooo more affordable.

The underlying company, never gives me sleepless nights,it’s doing a lot right

That’s the question

If the US likes it we will get another pop later today.( think they might like lower debt)

If the earning call Q&A between 1pm and 2 pm goes well, maybe a pop there.

Despite the sp there is a lot positive going on with BP at present.

But they are only pops not a change in market sentiment.

I’m still positive,but really find it hard to understand the market view.

Maybe interest rate cut will be the catalyst,who knows