Welcome to Shell's first quarter 2023 financial results announcement. Shell's CFO, Sinead Gorman, will present the results, then host a Q&A session along with Shell's CEO, Wael Sawan. If you would like to ask a question, please press star one. If you wish to be removed from the queue, please press star two. We will now begin the presentation. Welcome to Shell's 2023 first quarter results presentation. Despite a less favorable macro environment than last quarter, we delivered another set of strong results. Our performance was due to our well-positioned, resilient portfolio. Newest offshore platform in the Gulf of Mexico, which has started production. Vito has an estimated peak production of 100,000 barrels of oil equivalent a day. Changes to the original design created a reduction of approximately 80% in CO2. This rework also brought about a cost reduction of more than 70% from the original host concept. Projects like Vito serve as a blueprint for other projects, allowing us to generate greater value from the Gulf of Mexico. In the Gulf of Mexico, we allow us to bring on new production through our existing Appomattox platform. In the U.K., we have restarted operations at our Pierce Field following a significant upgrade to allow gas to be produced. Peak production is now expected to reach more than twice what it was before the redevelopment, bringing much needed gas to the U.K. We also continue to make progress in building our low carbon portfolio. We completed the acquisition of Nature Energy, Europe's largest producer of renewable natural gas, complementing our U.S. position. We also completed the acquisition of Volta, which means we now own and operate one of the largest public charging networks for electric vehicles in the U.S. As part of our focus on delivering more value from the portfolio, we divested three non-core upstream positions. Two of them are in Malaysia's Baram Delta, and the other is Aera Energy in California. In summary, we delivered strong results, significant shareholder returns, and continued to high-grade the portfolio whilst navigating a volatile market. Lastly, there are two important upcoming events: our annual general meeting on May 23rd, where we ask you to support the progress we have made against our energy transition targets by voting for our energy transition progress report. Please also join Wael, myself, and several of the senior leadership team for our Capital Markets Day in New York on June 14th, when we intend to share more on how we are driving value through improved operational performance and disciplined portfolio management to deliver attractive shareholder returns. Thank you. We will now begin the question and answer session. People dialed in, if you have a question, please press star one. If you wish to be removed from the queue, please press star two. Phone callers are requested to mute the audio on their computer webcast and listen attentively to their telephone audio as we begin to progress through the telephone questions. Thank you for joining us today. We hope that after watching this presentation, you've seen how we delivered strong results and how we continue to high-grade our portfolio. Today, Sinead and I will be answering your questions. Now, please could we have just one or two questions each so that everyone gets the opportunity. With that, could we have the first one, please, Dan? The first question is from Oswald Clint at Bernstein. Please go ahead. Yes. Thank you very much. Yeah, two questions, please. The first one, I'm not gonna ask any big Capital Markets Day questions. I'm sure you want to leave those for next month. The first one maybe on the topic of capital investment levels. I've seen Shell pulling out of some carbon capture projects like the U.K. one, Northern Endurance. I've seen, you know, pulling out of big LNG resources like Browse. Both big areas where I guess we would expect Shell to kind of lean in further. Perhaps just talk around the rationale there. Is this signaling anything towards favoritism to perhaps faster payback oil at the moment, or is it inflation, or is it just some specific project economics around things like that? Secondly, going down to my favorite marketing division, we have the mobility division, very useful gross margin split that you give us. It looks like really strong first quarter performance, across even the basic fuels, the premium fuels, the convenience, and even the e-mobility just actually isn't that far behind. How do you explain what's going on there? Is this simply China reopening? Is it lag demand recovery post-COVID? Is it your own Shell initiatives or, you know, if you could respond to that and perhaps just talk around what you're seeing in terms of broader oil product demand so far, on the ground today, please. Thank you. Okay. Oswald, thank you for that, and thank you for recognizing that there's a few things we'll need to be able to leave to Capital Markets Day 2023 next month, and look forward to seeing you and others there. Just I start off with your first question, then if you want to take the second question on marketing as well. I think what's important here, Oswald, is we have talked about wanting to be performance-focused as well as really driving discipline, and capital discipline, but discipline more broadly in terms of ensuring that we are in the projects that potentially have the running room to deliver the sorts of returns we want. Our strategy is clear. We have said we want to be in advantaged oil. We want to continue to be a strong in our integrated gas business. We also want to lean into some of the lower carbon energy value chains as long as they are profitable. The examples you mentioned there, NEP, for example, in the Northern Endurance Partnership in the U.K., was one that was a very specific project that did not fit our economic requirements. Browse similarly is a project that's competing with some of the other projects in our portfolio, and on balance it simply does not attract the OpEx nor the CapEx that other projects are outcompeting it for. Similarly, I was asked in the media interview today, the decision to pull out of a couple of projects at Bukom in Singapore. These are all, project-specific decisions, on the basis of making sure that we are a lot more focused early on in how we deploy our OpEx and eventually how we deploy our CapEx to be able to achieve the returns, 'cause that has to be a core part of how we can deliver value longer term to our shareholders. No change in strategy, just focused on discipline. Sinead. Indeed, thank you, Oswald. Yes, our marketing division has certainly done very well this quarter. You see $0.9 billion of earnings compared to the $0.4 billion that we saw in Q4. Number of factors, as you said, good across the different areas. Of course we build particularly on the mobility side as you go into driving season that's coming through. What we also saw was very high from our perspective, margins from our lubricants business. Indeed in terms of being able to actually take the lower base costs that come through, which is partly linked to the macro of course, but those margins were very strong and have played out in the results. Overall, we are seeing recovery coming through from China, of course. More to watch on that one to see how fast that progresses. We'll be watching that as we go into Q2. Particularly on marketing, we also look forward to seeing driving season come through as well. Thank you. Thanks, Sinead, and thank you, Oswald. Dan, if we could have the next question, please. The next question is from Michele Della Vigna at Goldman Sachs. Please go ahead. Wael and Sinead, thank you and congratulations for the strong delivery and looking forward to the Capital Markets Day two. Quite specific questions if I may. First, I wanted to see if you could provide us with an update on two very valuable but also complex projects in your portfolio, LNG Canada and the Pennsylvania cracker. Secondly, I wondered if you had any comments on the temporary export tax imposed in Brazil. That's a very important and profitable asset in your portfolio. Is your understanding that the most likely outcome is this four-month tax effectively expires at the end of June, or you think there is a possibility that it gets extended beyond that? Thank you. Thank you, Michele, and nice to hear from you, and thank you for the kind words. Do you wanna start with the Brazil tax question? Certainly, indeed. As you say, in terms of Brazil, we are a very strong player in Brazil. We have great positions and great relationships in the country, and it's somewhere we've been for a long time and see a long future to come. Of course, it's disappointing to see taxes come in play which actually threaten some of the investment climate. We understand that it is in place for this four-month period. I certainly wouldn't want to speculate where the government will go next on that one. What we are seeing, of course, is that we have put in place the and challenged the injunction as it stands, so we look forward to seeing where it plays out. Thanks, Sinead. Michele, to your first question around LNG Canada and Penn Chem, what we now call our Shell Polymers Monaca facility. LNG Canada first, we continue to be incredibly excited about the prospect of that project coming on stream around middle of this decade. It's making good progress, so, Last update I got, we were already past the 70% mark in terms of construction on site. The Coastal GasLink, the developer of the pipeline, is also making good progress. This is despite what has been, of course, a difficult period when you consider the COVID disruptions, broader supply chain challenges around the world. No new guidance other than to say we continue to anticipate start up there around middle of the decade and look forward to seeing where that goes. On Shell Polymers Monaca, again, a world-class facility, significantly advantaged in the location that it sits and an opportunity to really sort of create sustainable earnings into the future for us as a company. The ramp-up, as we have guided in the past, is going to take the rest of this year. It's been slower than we would have hoped for, but the team is doing a great job battling with some of the obvious technical niggles that start-ups typically have. We continue to be hopeful that through the course of this year, we should bring it up to the levels that we had anticipated in the plan. Thanks for the questions, Michele. Dan, can we go to the next question, please? The next question is from Lydia Rainforth at Barclays. Please go ahead. Thanks, good afternoon to all of you. Two questions if I could. Wael, I'm just building on sort of Oswald's question earlier. We've seen a lot of what you don't want to do in terms of selling Browse, the Bukom projects. Can you talk us through what you do want to do more of, and possibly link to that sort of obviously the operation performance has been pretty good during Q1, particularly in IG. Has anything specific changed there? Secondly, probably for Sinead, the OpEx number was down quite significantly quarter-on-quarter and essentially flat versus last year, and I'm just wondering what, if anything, has changed in terms of how you're thinking about that number versus Q4. Thank you. Great. Lydia, thank you very much for that. I'll indeed take the first one and then come to Sinead on the OpEx question. The first two. On what I would like to do, I think firstly to recognize what I don't want to do is to invest in projects that are weak returns and simply to spend CapEx on projects that don't have potential to be able to be compelling return projects for us as a company. What do I want to do? I want to invest in the opportunities that are very much into our strategic focus, and we can touch on that of course. The opportunities that where we can see differentiated value being created by us as a company, and where we can see the sorts of returns that you would expect when we make those investments in those projects. I would describe it much more of a ruthless focus on the allocation of capital in a way to be able to ensure we are delivering the returns that we expect. Multiple examples of how we do that, right? We've just FID Dover, for example, in the Gulf of Mexico. A very exciting opportunity to be able to bring back new molecules into Appomattox. Take the opportunities around our LNG. We've taken the NFE, North Field Expansion, decision last year, and look forward to taking the North Field South FID soon as well. That's another area where we want to deploy capital because we see the sorts of returns. Then if I look at the low carbon space, of course we've completed Nature Energy. That's a space we're excited by, and we will continue to invest in that space because we see the synergies with a lot of our short positions, in particular in Europe, in our commercial road transport, for example, where we will deliver a lot of that renewable gas. So I think it's critical to look at the individual projects, and what you will see us do is shut down projects that we don't see having running room, and be very focused on the ones where we can create value. Do you want to touch on- OpEx that and maybe on the IG performance, which I didn't pick up as well. Certainly. Indeed. On the OpEx side, Lydia, I think in the same way as Wael talked about being, you know, ruthless in the focus of value and focusing on where you spend your dollars in terms of the CapEx, we're moving into that exactly the same view with respect to OpEx. For us, it is very important to make sure we show that discipline and that focus with respect to OpEx. In terms of specifically what you're asking about, which is the change between Q4 and Q1, we typically see our Q4 being higher. It's just traditionally what occurs in our business, largely because we do look at decommissioning in particular and look at the amounts that come through in Q4 there as well. There's also some staff costs. Actually last Q4 as well, we had some advertising that came in as well. That's the side of things that would have flowed through. Taking to the second IG one, the IG performance one, indeed. Really pleased to see IG delivering what it did. Incredibly strong earnings, as you will have seen. What occurred there? First and foremost, just great congratulations to the assets. The performance was outstanding. We saw operational performance hitting all of the metrics that we would like to see, and particularly in Australia. We saw Prelude up, but we saw all the other assets up as well, which is very, very pleasing. You see that flow through. Those volumes were there for our optimization, and we saw that. You'll see on slide seven in particular, I think, Lydia, in the pack, where we refer back to what we've discussed before, really about the fact that we're very much situated for, as you've heard me talk about, the Northern Hemisphere winter. Q4 and Q1, looking at those volumes coming through, and that's what you saw. Of course it was great to see it coming very much from the operational assets as well. Of course, the risk management or the paper aligned very closely. Thank you. Thanks, Sinead. Lydia, thank you for the question. Dan, can we have the next question, please? The next question is from Christyan Malek at JPMorgan. Please go ahead. Hi. first, congrats on the strong results. Two questions for both Sinead and Wael. Wael, appreciate you being on the call as well. The first is on trading and how you think about framing cash return going forward in the context of contributions from trading as it continues to be an important, but in itself more volatile contribution to cash flow. I just think about the mix of the buyback versus dividends. As you particularly compare your valuation to the U.S. majors, I would love to hear about how you think this gap can be closed, especially as it seems cash flow, and in turn buybacks fueled by trading, doesn't seem to be doing a great job in closing the multiple. That's the first question. The second question is the macro outlook seems totally conflicted with sort of fairly resilient data points on one hand coming through in some subsectors, but then yet recession appears to be the dominant narrative. I'd appreciate it's hard to take a strong view near term, but I want to know whether you are, and forgive me for asking, bullish or bearish over the long-term fundamentals in energy macro, maybe first in oil and then in gas, LNG. Thank you. Thank you for the questions. Christyan, you wanna take the first one? Sure. Indeed, Christyan. From the trading perspective, it's a really interesting one because this can often come up. The way we very much look at it is around the optimization rather than pure trading. I don't think it's any surprise that you're seeing, you know, a variety of the pure players out there, the pure trading houses who are actually just buying assets so that they can sustainably deliver exactly what we do, which is optimization around the assets. That's very much coming through. In the same way as I talked about, with respect to Lydia in terms of IG, we're seeing the ability to be able to trade around what or to optimize around what actually comes from those assets. We see the same thing actually coming through, particularly this quarter in terms of our refining and chemicals business or chemicals and products business. There specifically, we saw of course, some of our competitors bringing down refineries in Q1, particularly in the U.S. We made a conscious choice to optimize around particularly Norco, where we moved out some of the turnaround to later this year to be able to capitalize on both the, really the stronger refining margins compared to where it may go to, but of course actually to get the volumes out there. I would argue very strongly that a huge part of what we're doing, Christyan, is actually optimization around the assets that we have rather than what you would call pure trading. I would say that that's what should be considered as we go through on it. You alluded to, of course, you know, the U.S. valuation gap, et cetera. I think I would come back to time and time again. We're very focused on creating a track record by delivery. That's what you saw last quarter. That's what you're seeing this quarter. It's about ensuring we have performance, performance, and you'll see the discipline coming through, in particular in terms of the way we allocate capital. This is about quarter on quarter coming through. I think both of those will occur. As I said before, with respect to what you call, what you refer to as the trading side of things, that is truly optimization. Providing we can keep getting our operational performance well, we hand over an ability to optimize or to trade around that. Thank you, Sinead. Christyan, to your first, your second question, sorry, about the macro outlook. I think you characterized it well. It's a difficult space to predict where things are going at the moment, so I won't even try to go down that pathway. I'll give you a couple of perspectives. I think on the oil side in the first instance, of course we've seen the sell-off over the last 48 hours or so. Clearly there are market jitters, and I can understand the reactions to the Fed interventions and more central bank interventions with the tightening of credit is having an impact on the market. If you look at the physical fundamentals, that doesn't play out. The physical fundamentals continue to be strong all the way through looking at backwardation in the crude curve at the moment. People still want to be able to get their hands on cargoes ASAP. Those fundamentals are good. If I look at demand, we see China coming back. Right now crude demand in China is almost back to 2019 levels. Of course, there isn't a huge amount of spare capacity left in OPEC. You add to that the fact that the Strategic Petroleum Reserve is at a historic low. All of it sort of tells you that the supply side is constrained, and this is all assuming Russia continues to produce as it has, which is in essence at or slightly above pre-invasion levels. The supply side is pretty tight and the question is going to be what happens on the demand side, in particular in the U.S. and Europe. I think on the LNG side, the prompt is weak. You can see that of course, and that's understandable given the fact that European storage levels are high. We're looking at roughly 55% at the moment in Europe storage, which is high compared to historic averages. Also North Asia has really high storage levels, Japan, Korea, and that's a function of significant storage done last year, and something which I think is putting some of that downward pressure. If you look to the latter part of this year, the picture is a bit more mixed. There isn't a huge amount of new supply coming into the market, no more than 3 million tons for the rest of this year coming on. Maintenance will start to kick in as many of these facilities have been run hard for quite some time. Of course, Chinese demand is starting to really pick up. All of that seems to indicate against a more bullish trend in the second half of this year. Put all of that together, I think for a company like ours, we are well positioned of course. I mean, marketing will typically have stronger quarters in lower commodity price period. Volatility helps us of course on the trading and optimization side, and so on and so forth. I think that's the beauty of the many strong businesses that we are blessed to have as a company. Christian, thank you for those two questions. Dan, if we can go to the next one, please. The next question is from Amy Wong at Credit Suisse. Please go ahead. Hi, good afternoon, thanks for taking my questions. I have two. The first one is, just thinking about your decarbonization strategy. Based on my analysis, it looks like Shell is relying more heavily on using natural sinks and carbon capture as part of, you know, delivering that decline in CO2 intensity. Could you shed on some insight on why that is the case? Or, you know, is there any scope to maybe put more emphasis on Scope 1 and Scope 2 reductions as well? That's my first question. My second one is on a rather small piece of your business, which is sectors and decarbonization. I just want a question on that because, you know, it's small, but it's quite important in terms of kind of your growth there. I see that the volumes, the growth there have slowed down significantly and even went backwards quarter-on-quarter as well. Just some insight into what's happening in your sectors and decarbonization offering, that would be very helpful. Thank you. Great. Thanks, Amy. I'll take the first one, then if you wanted to take the sectors one. On the decarbonization strategy, I would look at it, Amy, in from two perspectives. One is what we can do to be able to bring down our own operational emissions. We've put a target out there of Scope 1 and 2 reductions of 50% by 2030 compared to where we were in 2016, and very pleased by the fact that we've gotten past 30% already, with no utilization of credits for those Scope 1 and 2. No offsets, I mean. We have a pathway to be able to achieve that 50% without a huge amount of dependence on nature-based solutions. Absolutely CCS will be a core part of it because beyond what you can do to abate the emissions somewhat through high grading operational measures and the like, you do need CCS for the bulk of the next wave of reductions, both for Shell and for others. Continue to be a believer that CCS will play a critical role as it has in other parts of our portfolio, whether it's in Canada or the project that we're doing in Norway called the Northern Lights Project with Equinor and TotalEnergies. In Scope 3, ultimately this is all about where our customers want to go, and what we're trying to do on Scope 3 emissions is to be able to build low carbon value chains. The customer needs to be there to be able to buy into those. Some customers are preferring to package our products with carbon offsets. That's a choice. We will be offering more and more of the lower carbon products. Something like our green hydrogen facility in the Netherlands will one day be able to offer green hydrogen molecules. We offer bioproducts to our customers. The customer ultimately will need to choose how they want to be able to achieve their own balance of profitability, emissions and the like. What we see ourselves doing is really offering the choice and looking to continue to, as much as possible, make that attractive for our customers. Let me pause there. Sure. Indeed, thanks, Amy, for the question. In terms of sectors and decarbonization, you say it's a small part of Shell at the moment, and it is, but it's an incredibly valuable part in terms of where it can go to in the future particularly. I certainly wouldn't look at it quarter-on-quarter. It just, it doesn't play out because actually a huge part of what they do, of course, is reacting exactly as Wael was talking about in terms of what the customer needs are. You do see lumpiness in it. In terms of the volumes in particular, we tend to react in terms of what the customer needs in those particular periods. There's different delivery, et cetera. This is one that is going to grow, I'm very comfortable in that. You've seen Nature Energy, of course, come through. We just completed it, so you don't start to see those volumes come, but let's talk about that later in the year as well. That, of course, completed in Q1, and we look forward to seeing its output and its growth trajectory as well. Thanks, Sinead. Thank you for that, Amy. Dan, if we can go for the next question, please. The next question is from Irene Himona at Société Générale. Please go ahead. Thank you. Good afternoon and congratulations on the results. I've got a couple of questions left. First of all, a specific one on Kashagan. Can you help us appraise at all the risk behind the reported state request for compensation from the consortium? Secondly, on capital expenditure, you continue to guide for an unchanged range, $23 billion-$27 billion. I appreciate this question may be answered in June, but I need to ask, as we're approaching mid-year, are you not able to pin down the number a little bit more accurately? Thank you. Great. Thank you. Do you wanna start with the second question on- Sure. Thanks, Irene Himona. Thanks for the questions indeed. As you say, $23 billion-$27 billion in terms of the range that we're guiding towards, what you see, of course, is that we're very focused in terms of value. We will take the opportunities that come towards us only in terms of the value lens, and you've seen that discipline coming through where particularly, as Wael's discussed, are stepping back from certain projects as well. You saw some of the ones he mentioned previously related to Bukom and some other ones as well that came through from different questions. What I would say on that in the sense of $23 billion-$27 billion, we're very comfortable with. We know that will give us the opportunity to deliver against our strategy and to see what other opportunities come there which have strong value focus. That will be where we go. It will not be by providing numbers above that. Thanks, Sinead. Irene, at your first question around Kazakhstan and Kashagan specifically, indeed, disappointing to see the request for compensation, but not hugely unexpected. We've had challenges in the past, and I think, it's fair to say that we have typically resolved them amicably with, the Kazakh government. I suspect the same will happen here. I do think we continue to be a major player, of course, in Kazakhstan. We have not just Kashagan, but also Karachaganak. We're making big investments in the country. I've had the opportunity to go there this year, and I'll be going back again later in the year. And I think there's a very clear understanding that we have the opportunity to continue to grow on the basis of a stable and secure investment climate. The international or the foreign partners are joined up in our conviction that there is very little basis for the request for compensation. We'll go through the appropriate channels, both commercial discussions and, if needed, from the legal perspective as well, to be able to defend our rights. I do hope that we can resolve this in the right way. Thank you for the question, Irene. Dan, if we can go to the next one, please. The next question is from Alastair Syme at Citi. Please go ahead. Hi, well, Sinead, I wanted to understand where you're seeing unit development costs now across the upstream and integrated gas business. You know, I ask because since the fourth quarter call, you've filed the annual report, and the annual filings show that your sort of 3-5 years and 10-year F&D costs remain stubbornly over $20 a barrel. Yeah, you know, I think you're telling me that unit development costs are lower than this, but I just worry that the annual reporting numbers are not coming down or aligning to where underlying development costs are probably at. Maybe if you could help reconcile that. Great. Alastair, thank you for that. Do you want to address that? Certainly. Indeed. Thanks for the question, Alastair. What I would say is, we're spending a huge amount of time focusing in on costs across the group, making sure that we are competitive in everything that we do, and making sure that we really are disciplined about where we spend our dollars. That is across group. It's also in, as you say, the development space as well. We've had a very good track record in terms of driving these down. Is there more to do and more opportunities? Yes, we look forward to going after those. Of course, it's very difficult when you look at it across the different types of businesses, but specifically even across the upstream business itself. There are different types of wells, different types of fields, et cetera. We are continuing to drive those down as well. Thank you, Sinead. Alistair, thank you for the question. Dan, can we have the next question, please? The next question is from Biraj Borkhataria at RBC. Please go ahead. Hi there. Thanks for taking my question. Two, please. The first one's on the credit rating. You're at A +, and your slides have noted several times that you wanna aim for A A credit metrics through the cycle. I'm just trying to understand if there's any sense of urgency here. If I look at your balance sheet, it's always difficult, but if I normalize for things that you don't have relative to peers like hybrids and so on. Your balancing is actually cleaner than most of them. If you're looking for a AA credit rating, is the implication that you're looking to sit in a net cash position over time? Any comments around that would be helpful. The second question is an easy one, but the Pennsylvania Cracker, in a mid-cycle chemicals environment, what would you expect the earnings contribution to be from that project? Thank you. Thank you for that, Biraj. Did you want to take both of those? Sure. Certainly. On the first one, Biraj, and thank you for that, for doing the hard work to actually do a proper comparison across the different, our peers as well. I recognize that as well. Indeed, it is a healthy balance sheet and something that we've been focused on over the last couple of years, ensuring that that is the case. It just gives us freedom, as you say, for whatever the circumstances might be. Specifically around the credit rating, I would say, you know, if we look at the credit rating in its entirety, A A is of course, where we aim towards. Of course you can see what our priorities are as well. We sit comfortably within the metrics range. Of course, the rating agencies will make their choice given their views in terms of the industry risks, et cetera, and they do that with all of our peers as well. You can see what our priorities are with respect to that. We've returned cash in terms of the buybacks this quarter, particularly to the shareholders. I think that's where I would focus. In terms of the net debt level, you can see it coming down where we feel it's fit. It's about proper capital allocation at the end of the day, and I'm quite comfortable with the levels we're sitting at at the moment. No, I don't particularly have a focus on a net cash position. Thank you. Thanks, Sinead. Maybe I'll just pick up. Oh, sure. the Penn Chem one. It's what we expect, Biraj, there is this to be a robust asset going forward. I don't know if we disclosed the numbers, but I think this is a healthy asset in the $1+ billion earnings range is what we would expect in a normal year. And I suspect, of course, a lot of it is tied to what the macro looks like. But this is a really differentiated asset. We like the fact that we are uniquely positioned in that supply envelope. Roughly 2/3 of industry is around that specific asset, so we can get there from an advantage perspective compared to some of the competitors in the Gulf Coast. And of course, we have access to nicely priced gas in that area. By and large, this is an asset that should be able to out-compete and is well positioned to do so. Thank you for the question, Biraj. Dan, if we can go to the next one, please. The next question is from Paul Cheng at Scotiabank. Please go ahead. Thank you. Good morning or good afternoon your time. Two question. One is maybe a little bit granular. Looking at your E&P gas price realization, I was actually surprised how strong it is given that the European spot gas price is probably down about $15, and the U.S. Henry Hub is probably down about $3. Can you help us trying to reconcile why that your first quarter gas price realization so strong there? Is it under some kind of lag effect or some one-off adjustment? Second question, I want to go back into CapEx. I mean, you gave a range of $23-$27, $7 billion for both including organic and inorganic. Could you give us a range what is the organic piece is going to look like? Thank you. Thank you. Let me pick up the second one, and then maybe if you can answer the first one. Sure. We don't separate it, Paul, I hope you'll appreciate. We want to make sure that we are deploying that capital in the best way for our shareholders. Sometimes that involves small acquisitions, and sometimes we preferentially go towards an organic investment. It's fair to say that the big bulky one, the $2 billion Nature Energy acquisition, sits within that $23 billion-$27 billion range. When we do guide for that, as you rightly say, we have guided for organic and inorganic within that range this year, with the big one being Nature Energy. Gas price? Yeah, very simply put, on that one, Paul, it's all about very highly localized markets and very much localized prices and of course, the relevant contracts that are in place. I wouldn't go into much more detail than that, particularly on our contracts, so apologies for that. Thanks, Sinead. Dan, if we can go to the next question, please. The next question is from Henri Patricot at UBS. Please go ahead. Yes, hello. Thank you for taking questions. Two please. The first one, on the buyback and conscious we have the CMD next month. I was hoping you could give some further comments on, you know, the background for keeping the buyback flat this quarter despite lower cash flow, weaker macro at the moment. Secondly, thinking about the cash flow generation over the rest of this year, working capital movements have been quite significant the last few quarters. This time, not so much. Is there anything we should have in mind in thinking about working capital movements over the rest of this year beyond the macro changes? Thank you. Both yours? I'll take both. Yep, happy to. Thank you, Henri. Indeed, I would say we've definitely, in terms of utilized outstanding performance from our businesses, to ensure we have compelling returns for our shareholders this quarter, I would hope you recognize. What we do in terms of the distributions, of course, is very much the original frame that we've talked about before. That 20%-30% in terms of distributions around CFFO. Now, of course, what that means is, and we've talked about it, that, you know, soft ceiling and the hard floor comes into play. It depends then of course, on a large bit of pragmatism that has to come in. We have to look at it not in terms of isolation, but across several quarters of course, because there are those variations that you rightly bring in your second question around working capital and many other things that play out. We look at it in terms of what do we see in terms of our performance and what do we have in terms of the macro coming through as well. That's how we make the decision. I would say yes, if you look back to the previous quarter, of course, sitting at some $21 billion of cash flow from operations compared to, as you said, you described it as weaker in terms of $14 billion. I would say strong cash flow is the way I would put it, Henri, in terms of this quarter. Of course, last quarter, what we saw were some unusuals in there with deposits from joint ventures, et cetera. We warned that that would reverse as well. If you look at it across both quarters, what you're seeing is in effect, much more of a pragmatic decision that came across. What you see is above 35% of distributions of CFFO coming across. That was your first one. In terms of working capital movements, I would keep it very simple. This is about all of our capital allocation decisions. We make sure that we allocate what is appropriate for what we see the potential value that comes through. There are some unusuals that happen in that in terms of, you know, different things that will occur in terms of as price falls, what occurs in terms of the inventory levels, et cetera. I wouldn't predict where it's going to go later this year. It will very much depend on where prices go to and where we see opportunity to truly generate value. Thank you. Thanks, Sinead, and thank you for the question, Henri, as well. Dan, if you want to go to the next question, please. The next question is from Christopher Kuplent at Bank of America. My questions have been asked, but I'll try anyway. Sorry for wasting your time. I hope I'm not. On CapEx, you mentioned Nature Energy, and indeed it's already in your Q1 number, right? What we're actually seeing is ex Nature Energy, a run rate below $5 billion. Should we assume, a famous question, that therefore your current run rate organically looks at a full year of $20 billion and you're sort of leaving yourself M&A headroom? Or are there a certain number of project phasings that you'd like to make us aware of, whether it's FIDs that you're planning that are still ahead, that you can already see today? I'm obviously not asking about future M&A announcements. Secondly, again, without wanting to touch on CMD messages, but again, Sinead, perhaps you wanted to give you the opportunity to highlight to us why, yet again, you feel happy going over and beyond your 20% - 30% payout ratio. Thanks. Wanna hit both? Sure. Thanks, Chris. Very happy to take both of them. In terms of the CapEx number, you're correct that we actually are looking at $6.5 billion for this quarter, it does include Nature Energy. Please don't assume that subtracting it and then multiplying by four is indicative of where we will end up. If you look back at time, you'll see that we typically are a lot lower in Q1 in terms of our CapEx, it is not indicative of where you would expect us to end up. We do have a number of things that will come through in the course of the year. We've already spoken about, of course, some of the FIDs that are coming. As you start to see different aspects, different projects, and the development of those coming through. As Wael continues to spend, as we see Jackdaw continue to spend, et cetera, you will see that flowing through as well. I would not suggest that that it is indicative. I would say there are other aspects in there as well. We've entered into things like if I look at our res space, you know, battery storage in Australia, you'll start to see that phasing coming through as well, which isn't there in Q1. Please don't take it as a, as a historical number in any way. No, it's not about building for M&A headroom at all. I would definitely say confirm that. In terms of why do I feel comfortable, your second question, in terms of 20%, you know, being above the 20%-30%, it's very much about performance. Again, as I would go back to Chris, as we go through that decision point, we're looking at to make sure we're not doing it in isolation, and there has to be some pragmatism in this, which I'm sure you understand. What we're looking at is, do we truly believe in the performance of this company that we can deliver on that buyback at this point in time? Do we believe in where the macro is going to? How does that position us across it? With a healthy balance sheet operating assets, sorry, assets operating incredibly well, it gives us the confidence to do the $4 billion of buyback. I hope that helps. Thanks, Sinead, and Chris, thank you for the question. Dan, can we have the next question, please? The next question is from Lucas Herrmann at Exane. Please go ahead. Yeah, thanks very much. Good afternoon, both of you. Couple of them. Sinead, I wanted to go back to Biraj's question, first of all, and try and understand how you think about, you know, the operating lease component of debt. Clearly, it's the majority of your debt or operating finance leases are the majority of your debt. It's really just to get a sense of, I guess, ultimately, where you feel bank or commercial debt or what level we should be thinking about you driving towards. As I think I've heard you in the past, it's quite difficult to, you know, get a sense from this side. That was observation, you know, number one. The second. I don't know, again, if this is more appropriate for Capital Markets Day. If I look at the build in some of the transition growth businesses, EVs, biogas, biofuels, you know, others, you know, clearly you're putting quite a lot of capital cost in. We can see, you know, returns deteriorating across some of the divisions for, I suspect, those reasons. You're also obviously putting quite a lot of operating costs in. How do we get a sense of, you know, the extent to which the underlying performance of the existing businesses is, I'm gonna use the term suffering, or certainly the headline numbers are suffering as a consequence of. Operating and CapEx growth spend. In part, it's almost like what's the scale of the OpEx and CapEx growth spend at this time? That was it. Thank you. Thank you for those questions, Lucas. Do you wanna take the first one? I can take the second one. Certainly. Absolutely, Lucas. Indeed, when you look at leases, again, I apologize. I feel like I'm repeating too much, but it really is just about the value side of things. We discuss it actually as part of our capital allocation as well. In the same way as when we've talked before about our sort of Capital Investment Committee, and the teams come to us with opportunities. We do the same with large leases as well. A huge number of our leases are related, of course, to our midstream, and particularly around integrated gas, as you can imagine, particularly around the vessels, etc. We take those from the point of view of just value. Does it make sense to lock in now? Same with some of our FPSOs, et cetera, where we make the call to lock in now versus different things that will come in the future. It serves us very well to do so. That's really the focus that comes in on that. I think, Lucas, the second bit, which I'm certainly not avoiding, but you asked about, you know, is there a level that we should look at? For me, there isn't. I fundamentally am comfortable with where we are in terms of our debt level at the moment. You know, will I see opportunities to take a dive? You saw that. You saw us reduce, you know, last quarter. You see us reduce a smaller amount this quarter as well. I'm also very comfortable if our debt level has to go up as well because we'll do it linked back to that value conversation. If you remember in Q3, many comments about the performance in Q3, but particularly our debt level did go up. It was for a very good reason. We were very comfortable, and you can see the performance coming through, particularly from Integrated Gas in Q4 and Q1 accordingly. I'm comfortable that my debt levels will merge. I would say just back to that first one on specifically on the operating leases, it is very closely managed and is very much a focus as well. Thank you for that, Sinead. Lucas, on your broader question, I think a few things to point out. I think one, from a strategic perspective, we're absolutely convinced that biomolecules, green electron-based molecules eventually, and so on, will dictate the premium in the market. We see that actually in a number of different markets. I mean, our bio business has been doing very, very well, driven largely by regulatory requirements, right? Compliance requirements, but also increasingly through voluntary demand by certain enterprises that have made net zero commitments. There is a very attractive market. Now, like any investment profile, you're going to have to put some of that capital up front. Here we need to be very conscious and very transparent around where we are deploying that capital. I hope you see that. Indeed, Capital Markets Day, we can talk a bit more about the specifics across the different segments. We need to be very conscious of the OpEx. I've already said, and I think Sinead has also said, we feel that the OpEx is on the heavier side at the moment, so we are very focused on how we are going to be able to manage the allocation not just of the CapEx, but also of the OpEx. We will continue, of course, to refine the transparency of the numbers that we are sharing with you to give you the sorts of insights that allow you to determine whether we are appropriately investing shareholder capital, which I can assure you we spend a lot of time on internally, not just in terms of the decisions we're making, but a lot of look backs on the wisdom of the choices we're making, what can we learn, and how can we optimize and improve going forward. You will see more and more of that come through. It is a critical piece that we're going to have to accept that to be able to create those sustainable returns that are going to come in the latter part of this decade, we need to make some investments right now. We need to be measured. We need to be choiceful. We also need to be very clear that we see pathways towards double-digit returns for those investments, which is what we are very focused on when it comes to the Capital Investment Committee in Shell. Thank you for those, questions, Lucas. Dan, if we can go to the next question, please. The next question is from Henri Tarr at Berenberg. Please go ahead. Hi, and thanks for taking my questions. Two, one is just on chemicals, which is clearly sort of cyclically weak currently, and you have the cracker in Pennsylvania ramping up. What's the outlook for the utilization of assets and margins there? What are you aiming for as all of the assets do come back on in terms of sort of returns through cycle? Secondly, just in terms of operating costs, I think you talked about those a little bit. Are you seeing inflation currently coming through the supply chain or is that moderating at this point? Thank you. I can take the second one if you want. You want to talk about chemicals? Sure. Happy to. In terms of the chemical side of things, indeed, we saw margins actually improve, of course, this quarter, largely due to the sort of lower prices on feedstocks there, Henri. Indeed, I think where we will go to 'cause you asked specifically about utilization going forward. We've provided some of the guidance in terms of the quarterly update notes, so you'll see that coming through as well. We don't tend to advise on the, or give forward looking on the specific assets. Of course, it will be purely about economic optimization. We will ensure that if it's looking like there's great margins, we will try to keep those assets up. If it is not, we will ensure that it is about an economic decision. In the same way as we looked at this quarter, ensuring that Norco, so our refining side of things, we saw Norco stay up this quarter, and we will push the maintenance to later. Those will be the decisions that we will make. I think your second part of the first question was returns through the cycle, and indeed, it's very much focused on ensuring that we have a robust level of return, which is acceptable for each of these business. You know, where we go to on this, we've given those IRRs as we've come through before as well, so. Thanks, Sinead. Henri, on the OpEx question, we do see pressures coming through. 10%-15% is on average what we're seeing, but I think that's a bit of a blunt instrument because, of course, it depends on the category. Our scale helps here, we're leveraging significantly our supply chain organization to be able to use the weight and the demand of Shell to mitigate some of the impact of that. It's coming in below 10%, but that's because of the many levers that we have to draw on. Once again, I think it's very local, it's very circumstantial. We pick up. We're no longer, for example, in the shales patch in the U.S., we recognize that seeing a lot more inflationary pressure. In parts of the Middle East where we are making investments, and where we have day-to-day OpEx, we don't see a huge amount of bump up. Europe is indeed experiencing a bit more inflation. It is very circumstantial. Our weight and our size, I think allows us to be able to manage it. But also, we're being very choiceful around where do we continue to cut back, in areas that we no longer see running room for ourselves, so that we can actually redeploy our scarce OpEx into the areas where we can find the biggest bang for buck for the future. Being very choiceful around it, a bit like what we're trying to do for the CapEx, of course. Thank you for the question. Dan, if we can go to the next question, please. The next question is from Kim Fustier at HSBC. Please go ahead. Hi, good afternoon, and thank you for taking my questions. I have two, please. Firstly, I'd like to follow up on the cancellation of the Bukom conversion project. Are you able to give any more detail on why you pulled the plug? Was it the costs associated with the conversion project, or the location, or the lack of feedstock in the region? What do you now intend to do with that facility? In terms of your SAF production target that you had by 2025, I think, do you believe you're still on track to hit that target? Secondly, could you provide an update on Nigeria? I think oil production in the country had recovered over the past year or so, but we've seen more outages in the last few weeks. What's the latest there, both on the oil side and the LNG side? Anything on the potential disposal. Thank you. Okay. Thanks for that, Kim. I'll take the first one if you wanna take the second one... Sure Sinead. I think on the, on your question there, Kim, around Bukom, so that's our Singapore facility. It's a refining refinery there, and we have right next to it, Jurong, which is our petrochemical complex. We had been developing options for two particular projects. One was a HEFA plant, so bio for sustainable aviation fuels, and the second one was a base oil unit as feedstock to our lubricants business. We developed the plans for it, but ultimately, the economics were simply not robust enough. Biggest reason for the bio plant was the fact that actually in Asia, we don't yet see the regulatory requirements in place that would potentially create the price points that would make this an attractive investment to make. We see those, for example, in Europe, where we are investing in a similar plant at our Pernis facility in the Netherlands. You need the market to be able to be there, and we were simply choiceful in our allocation of capital. If the market isn't there, we're not going to simply invest that capital hoping it's going to come. And similar calculus on base oil. Both of them, I would say, were very specifically project specific economic decisions that we made in that, in that regard. Of course, our staff are running the much broader facility that we have there and continue to do so. Of course, we continue to look at how we can optimize our margins in those facilities, pulling on all the levers we have, both on the top line as well as on the bottom line. Indeed. Thank you for that, Kim. In terms of Nigeria, I would start, first of all, with the fact that we've, of course, discussed our intent in terms of exiting from the onshore oil side of that business. That intent is, of course, there. We stand behind that. Of course, it is currently paused given some of the given specifically the injunction and the court case. That is the intent, and nothing has changed there. In the meantime, we continue to operate safely and efficiently the assets through the joint venture that is there, SPDC, which is the onshore joint venture. What I would say is the team are working very hard to ensure there's appropriate delivery on the oil side. Of course, we are blessed with many partners in the LNG business, which is very attractive, as we go through at the moment. Beyond that, what I would say, of course, is I think you're alluding to some of the activities as particularly with some of our peers in terms of offshore. I would leave that to the operator to comment on specifically. Once again, we're very much focused on those assets where we operate, making sure that we deliver, and we're making sure that we bring the performance up increasingly. That's what you're seeing in terms of the results, which is what is driving the results that we had, which are outstanding this quarter and allowing us to be able to give those compelling returns to our shareholders as well. Thanks, Sinead and Kim. Thank you for that, what ends up being the final question. Dan, thank you for taking care of us today. Thank you all for your questions and for joining the call. We wish everyone a pleasant end of the week and hope that you can join us at our Capital Markets Day 2023 next month in New York. Thanks all.