Welcome, and thank you for joining the Equinor Analyst Q1 Call. Throughout today's recorded presentation, all participants will be in a listen-only mode. The presentation will be followed by a question- and- answer session. If you would like to ask a question, you may press star followed by one on your touchtone telephone. Please press the star key followed by zero for operator assistance. I would now like to turn the conference over to Mr. Peter Hutton, Senior Vice President. Please go ahead. Thanks, Natalie, and welcome everybody. Ladies and gentlemen, welcome to the Equinor Results Call for the first quarter of 2022. I'm Peter Hutton, and the head of the Investor Relations team, and the call will be led by Ulrica Fearn, Chief Financial Officer. Ulrica will present the results for around 15 minutes, and then I will open up for questions as usual, and we'll aim to finish the call within the hour. Also on the call today, we're joined by Svein Skeie, who's the SVP of Performance Management and Risk, and May-Kirsti Enger, who is SVP of Group Accounting. With that, let me pass straight over to Ulrica for the presentation. Thank you. Well, thank you, Peter, and good morning, everyone. Today, we present strong financial results, which reflects continued effective progress to deliver on our ambitions and guidance that we outlined in our capital markets update. It includes building on our competitive strengths, optimizing our upstream production at low cost and low emissions, grow profitably in our renewables business, and develop low carbon solutions. All this whilst maintaining focus on cost and returns, generating cash, and providing attractive returns to shareholders. In the first quarter, we do demonstrate our ability to put our ambitions into action. However, the background of the results reflect the dark realities of a war in Europe, adding to an already tight and volatile energy market. We acted decisively after the Russian invasion, announcing the plan for exiting our Russian assets just three days later. After 30 years in Russia, it's no longer possible for us to operate in the country. Before the invasion, we had some contracts for future delivery of oil products. On the partner-operated field Kharyaga, one cargo has been lifted and sold after the invasion, of which Equinor received payment. No new contract have been entered into, and we comply with all relevant sanctions, and the process of exiting our Russian assets is progressing. We started the year with an already tight energy market, and the invasion of Ukraine and sanctions against Russia have added to that uncertainty. Energy from the Norwegian continental shelf now plays an essential role supporting energy security for Europe. Our main focus is to provide safe and stable production from our facilities. Since the start of the present energy situation, we have successfully done our utmost to produce and export more gas. Several steps have been taken to increase our gas production, with increased production permits and changing operation to export gas rather than inject to increase oil production in certain fields. We've also adjusted our planned turnarounds in order to maintain high production level throughout the summer. Further, Hammerfest LNG is on track for safe startup on the seventeenth of May. There's been much focus on gas, but the oil market is also affected by the war and the sanctions. The Sverdrup crude is a good replacement for Urals crude, and we noticed the effect on our cargoes. Last March, more than 60% of the volumes from Sverdrup went to Asia, whereas this year, all volumes have stayed in Europe. The energy crisis in Europe has moved energy security to the top of the agenda. Yet, the trilemma remains to be solved simultaneously, achieving energy security, energy affordability, and the necessary energy transition. We work along two lines. We're committed to support energy security while continuing to accelerate the transition needed for achieving the net zero ambition in 2050 and progress towards the net reduction of our own emissions by 50% by 2030. At our general meeting, our investors will get the opportunity to support our energy transition plan through an advisory vote. The plan shows how we will help secure sufficient energy while cutting emissions, increasing the production of renewable energy, and developing value chains to help our customers decarbonize. The energy transition plan provides an overview of specific measures and goals and is based on the strategy we presented last summer. We have seen good industrial progress in the quarter within all three strategic areas. On the Norwegian continental shelf, the fifth and final platform was installed at Johan Sverdrup, and Njord A is back on the field. Both are on track for startup in the fourth quarter. So far this year, we have announced two commercial discoveries, both close to infrastructure in the Troll-Fram area. Within renewables, our large projects are progressing well, with Empire Wind passing several milestones in the quarter and Dogger Bank starting offshore construction with laying the export cables. The Hywind Tampen turbines are currently being assembled and is on track for startup in the third quarter. Low-carbon solutions are progressing well with the Northern Lights project that will be the first commercial plant for CO2 storage with capacity for 1.5 million tons per year. We're in discussion with potential industrial customers to develop phase two of Northern Lights, taking the capacity to five to six MTPA. We were recently awarded two operatorships for CO2 licenses on NCS. The largest, Smeaheia, where our share is 100%, will have capacity to store 20 million tons of CO2 per year. This equals around 40% of all of Norway's current CO2 emissions. With this, we can help our customers and societies decarbonize and successfully achieve their climate ambitions. In the quarter, we deliver very strong financial results driven by high prices for both oil and gas, but also supported by strong operational performance. The high cash flow strengthens our balance sheet, and in these uncertain times, we use this to build resilience. At our capital market update, we announced a significant step up in our capital distribution, and now we are delivering on this. Based on the continued strong prices from second half of 2021 and earnings in the quarter, the board has decided on a cash dividend of $0.20 per share and an extraordinary cash dividend of $0.20 per share. Subject to approval at the AGM, we propose a second tranche of the share buyback program of $1.33 billion, in line with the level communicated at CMU of up to $5 billion in 2022. With this capital distribution, we balance investing in the energy transition at the same time as we deliver competitive returns to our shareholders. The twelve-month average serious incident frequency is 0.5. Most incidents are associated with dropped objects and lifting operations. The total recordable injury frequency for the past twelve months is 2.4. We continue to work systematically to find root causes and understand why incidents occur and learn from this. We deliver a strong operational performance for oil and gas and electricity. Our equity production for hydrocarbons totaled 2,106,000 BOE per day. Adjusted for the sale of Bakken, the production is stable from the first quarter of last year. We have a high production efficiency with low unplanned losses, while also taking several steps to increase production of gas to Europe. On NCS, the effect of this is clear, with a 10% increase of gas production. Martin Linge is approaching full capacity and contributes strongly. Our U.S. production is lower than last year, mainly due to the sale of Bakken and reduction in the drilling and completion activity onshore when the pandemic started. In Brazil, the production from the first wells in the Roncador IOR project started, an important milestone for improved recovery on the field. Our electricity production from renewables is up 13% compared to the same quarter last year to 511 GWh. The main contributor to the increase is the solar plant in Argentina, but with solid operations and better wind conditions, our offshore wind farms also increased their production. Our adjusted earnings total $18 billion and $5.2 billion after tax. IFRS net operating income ended at $18.4 billion, and IFRS net income at $4.7 billion. Energy prices increased in the quarter, and so too did prices for electricity and CO2. In the quarter, we see impact on our costs through the higher CO2 costs, both for the ETS quotas and the Norwegian CO2 tax. In addition, higher electricity prices affect some of our plants, such as Shell Bjorn and Mongstad. That being said, we have also seen the effect of higher electricity prices in our offshore wind farms that are exposed to the market price and good power trading results from Danske Commodities. In a world with increased inflationary pressure and high commodity prices, we follow the cost development in our operations and supply chains closely. Also, the electricity prices are closely linked to the high gas prices, and the gas price was indeed a strong driver of our results. For our Norwegian upstream business, the average realized price was $140 per barrel of oil equivalent. High commodity prices are the main reason for the reversal of impairments in the quarter. In the U.S., our impairment reversals totaled $532 million, and a total of $817 million is reversed on the NCS. Including impairments of $1.1 billion as a consequence of exiting Russia, the net reversal of impairments is $266 million. The tax rate in the quarter is around 71% due to very strong results on the Norwegian Continental Shelf. Now over to the segments. Our Norwegian upstream business had a record quarter with more than $16 billion in adjusted earnings before tax. EPN has successfully increased production and managed cost at a time when reliable supply is even more important. Our international upstream business outside the U.S. delivered strong results as well, with adjusted earnings of more than $1 billion before tax. The U.S. upstream business delivering higher results even with somewhat lower production, with adjusted earnings of more than $700 million before tax. Remember, we now benefit from tax loss carryforwards from previous period. We are also benefiting from the long-term improvement work done and see improvements in the underlying costs here. The midstream and marketing segment delivered adjusted earnings of $22 million. Also in this quarter, MMP recognized losses following different price hedging mechanisms and contracts entered into in periods with lower prices. Again, the positive effect of hedging bilateral contracts is recognized in internal price achieved by our upstream businesses. Within our reported numbers, MMP's results is, however, also strengthened by good trading results, including strong results from Danske Commodities. Our renewables business posts a negative result of $10 million, whereas the adjusted result from our producing facilities totaled $47 million. Only a few of our offshore wind farms are exposed to market prices, and these benefited from higher electricity prices. We are progressing the rapid development of the renewable portfolio, and the high activity level reduces the result of the segment. Our cash flow from operations totals more than $20 billion. In the quarter, taxes paid for the Norwegian Continental Shelf totaled $4.1 billion, being one of the three remaining installments based on 2021 results, leaving two remaining installments for the second quarter of a total of more than $8 billion. In the second half of the year, our taxes on NCS will be based on the 2022 earnings. Cash to capital distribution in the quarter is just over $1 billion. This includes the third quarter dividend and the market share of the share buybacks executed in the first quarter. The government share of the share buybacks conducted in 2021 and beginning of 2022 will be paid for in the third quarter. At our Capital Markets Day, we announced a significant step-up in capital distribution. Also, this will be part of our cash flow in the second quarter. We maintain our strict capital discipline, and as mentioned, we follow the cost development in our projects closely. Supported by this, our net cash flow ended at $12.7 billion. This strengthens our balance sheet substantially. With the market movements we have seen over the last few years and the current uncertainty in energy markets, as well as upcoming cash payments, it's a good time to retain this strong balance sheet position with more cash than debt. It's not long since our capital market update, and our strategy remains firm, and we make no changes to our guidance. We expect to invest around $10 billion on average this year and next, contributing to new production of energy for energy security as we are accelerating the transition towards low-carbon energy sources. With that, I'll round off here and open up for questions. Before we open up for questions, I will also mention that I've got my team here, as Peter said, including Svein Skeie, who currently heading up our performance management and risk. Svein has been heading up performance management and risk and answering analyst questions for the last 44 quarters, and including as a CFO. With that level of experience, it's great to see him moving on now into one of our businesses, joining MMP as SVP for new value chains from the first of June. I'm sure a lot of people will pass on their best, Svein, but I'll do so here and look forward to working with you in your new role, Svein. Thank you. Thanks a lot. Thank you. Thank you. Looking forward to that. Thanks. We'll hand over to questions, Peter. I do the same, and then we pass over back to Natalie to open up for questions. Thank you. Ladies and gentlemen, at this time, we will begin the question-and-answer session. Anyone who wishes to ask a question may press star followed by one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star followed by two. If you're using speaker equipment today, please lift the handset before making your selections. Anyone who has a question may press star followed by one at this time. One moment for the first question, please. The first question is from the line of Biraj Borkhataria from RBC. Please go ahead. Hi. Thanks for taking my questions. I have two, please. The first one is on your European gas sales. For Q2, and it's been answered for 2022, I just noticed there's quite a big divergence between NBP and TTF. Just so to help us model going forward, are you able to give a or let us know whether your European gas sales are weighted more towards NBP or TTF in the short term? And if you can provide a rough split, that would be helpful too. The second question is on your distributions to shareholders. I understand there's no change in the plan today. That's not surprising given you just laid out the plan in February. You're obviously in an extremely strong cash position and CapEx guidance is also, you know, relatively modest versus history. Should we assume that you'll only review your distribution framework on an annual basis alongside full-year results? Will we look to review it, you know, maybe twice a year like some of your peers? Thank you. Thank you very much, Biraj. Great questions. I'll start with the first one. I won't give you a split here I'm afraid, because it isn't fixed and we haven't. We've got significant flexibility both here on physical delivery and trading between the two. You know, with the direct volumes, we see more value to be made here and making the right choices. It's an attractive source of value and commercially sensitive, so I'm afraid we won't disclose that. On your second question on distribution, you're completely right. We just laid out our capital distribution. It was a big step we took in February. We will stick to our capital distribution policy as we've laid it out, which is reviewing where we are depending on the circumstances in the market and where we are, and we do that on a quarterly basis. Where we are at the moment and this quarter, we have assessed to stay where we are given the volatility, but we will also do so in the second quarter and onwards. We will keep on doing that throughout the year. Okay. Listen, could I just follow up on the first one? I don't wanna press it too hard, but it'd be interesting to get your thoughts on whether you see any fundamental reason for the disconnect as it seems today outside of kind of regional differentials in storage between what NBP versus TTF. Any thoughts on that would be appreciated. I think at high level, I mean, we do see differences, but whether they're fundamental and staying in restraint, that sort of gets taken into the sort of our thoughts and our positions. You know, of course, we are seeing opportunities here because there are some differences and we seek to get a longer term view of those and take the opportunities as they come along. I won't share the very details behind that here. Thank you. Okay. Understood. Thank you. Thanks. The next question is in the line of Oswald Clint from Bernstein. Please go ahead. Yes. Thank you, and Svein, good luck with the new role. Look forward to seeing what these new value businesses are. Ulrica, thank you. Just on the topic of, you know, very sizable cash levels on the balance sheet. I know you mentioned uncertainty, resilience, but I wanted to ask your, you know, just the appetite here to perhaps accelerate, perhaps inorganically in some of the markets where you're seeing faster growth. Pointedly around natural gas, but specifically LNG and whether the board thinks or reviews or talks about should Equinor be bigger in the LNG value chain, whether that comes with participating in some new future greenfields or some of the smaller companies who are building some of these. Is that something that you discuss or think might be, you know, a kind of future business opportunity for Equinor? The second question, just you mentioned monitoring inflation across the business. I mean, there is talk here around U.S. steel costs and how it might affect, you know, U.S. offshore wind. Your partner yesterday was talking about being big enough to hedge steel and also to extract cost reduction synergies and didn't feel to be too concerned about some of the news for. I wanted to get your comments or your thought process around protecting some of the big offshore wind developments that you're currently still building. Thank you. Great. Thank you. Thank you so much, Oswald. The first question on LNG and more in general first, I think, in terms of reviewing, you know, capital expenditure. I think, are you reviewing investment opportunities? The best place for us to invest our money is back in the business for future revenue stream. How we prioritize and invest those is clearly, in general, outlined by our strategy. Within that, in an environment like this, we have to make sure we understand that we've got the right velocity and we will be searching for those opportunities that fit into the framework that we've laid out. We will be doing that across the portfolio. When it comes to LNG, we have a high exposure to an LNG and I think we're the largest seller to Europe. We basically have a good position there already, and we're overall sort of reviewing the overall position. What's happening here long term is one thing in terms of how you then invest long term, and quickly to react to the short-term market forces is the hard challenge. We'll be looking across the portfolio to see if there's anything that fits in with the direction we've already set. The second question is around inflation. I'd say in steel, et cetera, we are clearly monitoring it closely as you say, and we do see some sort of costs coming up, and as do everyone else. Of course, in our short-term already sanctioned projects, we have fairly strong positions, and we've locked in our rates for that. In the longer outer year, bit more exposed, but we will be drawing our. In all of these categories, we've got a clear view of what's going on and how it impacts our contracts, how it impacts our products, and working deeply with the suppliers to be honest, firstly, secure the supply and then secondly, secure the right prices. We are monitoring it closely, but we do feel that we need to stay ahead, and we are ahead by having some contracted in already, and then we are starting to working now on the outer contracts. Closely monitoring, seeing the trends, but not overly concerned, but we are seeing it coming into our books slowly. That's great. Thank you, Ulrica. Thanks. The next question is in the line of Mehdi Ennebati from Bank of America. Please go ahead. Hi. Good morning, everyone. Thanks for taking my question. Two questions, please. First one may be on your U.S. gas production, you know, in the Marcellus. Can you please tell us, you know, what you are expecting, you know, regarding that U.S. gas production trend? Or maybe can you just remind us, you know, how many rigs do you currently have in the Marcellus, and how many rigs do you expect to get, you know, by the end of year, just for us, you know, to try to measure, you know, your exposure to that growing natural gas price? The second question is about, you know, your taxation in Norway. Is it fair to consider that as usual, you will pay roughly twice, you know, the tax level in Q2 compared to Q1? Or should I take into account, you know, anything particular this quarter, just to make sure, you know, I am not missing anything? Maybe just a small follow-up, you know, on that correlation between NBP and TTF. I understand that you don't want, you know, to tell us, you know, what it is currently, et cetera, but would you be able to tell us for last year? Last year, you know, what was the portion of your European gas production that you were selling to the U.K., please? Thank you. Thank you. I think that was three questions. I'll start with the tax in Norway, and in terms of installments in, it's the same pattern as you've seen in the past. You shouldn't expect anything different from what it's been in the past. With regards to the U.S. gas and Marcellus, we've got production. Let me see. I'll hand over to Svein to answer that question. Yeah. In general, on the U.S. onshore production, of course, this quarter compared to last year, the main impact coming from Bakken, the oil part that we divested. But also in the Appalachian part of it, we see that there have been some natural decline there. We took down activity in the COVID period and took that down on our operated part and didn't have any rigs on that front. But also the non-op, both the North and South has also been taken down. However, what we see now is that activity is coming up again. Currently there are four rigs in summer over the North and South that is drilling. By that, we also expect now during the year that the production in the Appalachia will then start to pick up as a result of that one. Thank you, Svein. Excuse me. When do you expect the production to pick up in the U.S.? Should we expect end of year or more, you know, middle of this year? It will gradually start to. Yeah To come back. We are now putting the DUCs, the drilled uncompleted. Those are the ones coming in firstly, and then you do the drilling and do the completions and then it come gradually as during the year. Very good. Thank you, Svein. On the split, we can't supply. It's commercially sensitive, even for the last year. Thank you. Thank you. Okay. Thank you. Bye. Next question is from the line of Lydia Rainforth from Barclays. Please go ahead. Thanks, good morning. I've two questions. Actually, it's probably going to be three. Svein, I can't believe it's been 11 years doing that. Just in terms of the operational side, what do you think has been the biggest change since you've been in that role? You know, where are the improvements still left to come within the business? Then actually just, I was just curious as to what the new value chain within MMP are that you're looking to develop. Then secondly, if I could just pick up on Smeaheia, I think. I'm not quite sure if I'm pronouncing that right. Just, 20 million tons is a big number. Just as to the timeframe on that and kind of when you're thinking about inorganic versus organic opportunities, whether that's enough in terms of how you want to develop that CO2 business. Again, the willingness to pay for it. Thanks. Thank you very much, Lydia. I'll start with handing over to Svein for the first two questions. Thanks. Thanks a lot, Lydia. Reflecting over that one, I think if you look now at the operational performance with the production efficiencies, the things that we have been able to do over the years here by bringing down unplanned losses quite a bit and then being able to in this quarter as one example, high and reliable production. That has been a major thing. The huge benefit that we have seen from the integrated operation centers and being able to deliver on that front. On the safety side, good performance, the trend coming in that has been very good. The portfolio development there and the focus that we have had on the resilience and utilizing the optionality, working with it, bringing down the cost there. That has been an extremely good development over these years. On the new value chain, of course, I will c ome back further to that one at a later stage. It's also what we see that it's working on more towards the customers, ensuring the flows there, looking at the energy that we are selling in totality. That is something that we really can work with and will work with, in the coming years. Very good. I think you have a question around Smeaheia and the CO2 storage. The ambition around that is to develop the license into a 20 MTPA full-scale storage solution. That's for Equinor projects, so clean hydrogens to Europe and H2BE in Belgium, but also for external customers. It is very exciting. It will enable us to expand our CCS business, which is crucial in succeeding to meet our goals and meeting the climate ambitions for industries that want to store CO2. This is a big opportunity for us. You said about, you know, investing further into this space. I mean, here's a big focus that can really take us forward in that area and making that happen is gonna be a big focus for us going forward. Great. Thank you. Thank you. The next question is from the line of Teodor Sveen-Nilsen from SB1 Markets. Please go ahead. Good morning, and thanks for taking my questions. Two questions. First, just on your previous guidance over 15%-30% net debt to capital employed through the cycle, how should we think about that going forward? Are you moving away from that target leverage ratio? My second question is just on supply chain and costs. You already explained that you have seen some cost increases for steel, for example. I just want to know, are there any particular places in the value chain you see a more tighter supplier market than what you did a couple of years ago other than just a commodity price effect? That's all. Thanks. Thank you, Teodor. On the 15%-30% range for net debt ratio, we are sticking to that. We are in exceptional circumstances at the moment, and the world is very volatile. We believe long term, 15%-30% is our long-term target for net debt. You know, we don't have to go back far before we were at the top end of that. A year and a quarter ago, we were above 30%. This is exceptional times, but we're not changing our 15%-30% net debt ratio. We believe that is the long-term effective way of running the business under normal circumstances. You're touching on cost and actually supply constraints. I think absolutely right. I mean, we do see some costs, higher environmental cost, some higher operational maintenance cost. But really there is also the other sort of supply chain constraint risk out there. We do see some of that coming through. I mean, the freight rates have increased again, which means that that's mainly a cost, but it also starts impacting the supply chain itself. You know, engineering and construction, global engineering services, for example, is very tight. You know, the number of FPSOs under construction is the highest in many years. Rigs utilization you know is fairly high. There are. It's not just constraints, it's also very high capacity, running on all different areas. We need to be very observant of that and work closely with our suppliers. This is a little bit why I referred back to not just cost, but making sure that the security of supply is as high on our list as the cost of supply. Yes, we do see a tight market in many areas and in-depth supplier relationships is what we feel is gonna be needed to get through this for both sides. Okay. Thank you. Thank you. The next question is from the line of Alastair Syme from Citi. Please go ahead. Hi, thanks, Ulrica. Two questions. You talked about Norwegian tax payments in the second quarter, but would you care to make any comments about an early view on how you think those look in second half? Secondly, the decision to raise gas output at Oseberg and Troll, you know, my understanding that these were geological considerations. You know, other than the gas price, you know, what's really changed to allow those capacities to be raised? Thank you. Thank you. When it comes to the first question, Alastair, we won't be giving any guidance on that because that would be giving guidance into the second quarter, and we'll be coming onto that in a quarter. I won't be doing that now, but it will come a little bit later. In terms of Oseberg and Troll and the business cases behind that, it is. I mean, you're absolutely correct. It is a deep assessment as to what's right and what's the right economics and possibility from a gas versus export versus injection point of view. Every site has got its own specific features, and there will be a business case for each and of course, at different price ranges, it will look different. So we're basing this on an ongoing basis on business cases that we will then reassess as we move forward, depending on the overall environment as well as the specific geological sort of features of that site, if that makes sense. Okay. Thank you very much. Thank you. The next question is in the line of Yoann Charenton from Société Générale. Please go ahead. Good afternoon, Ulrica and team, and congrats, Svein, on the new role. I understand it is sensitive to discuss this divergence in pricing, comparing NBP to continental European benchmarks. I won't ask about physical flow, but are you able to tell us if Equinor has taken paper positions to mitigate this spread? A second question, looking at the organic CapEx figures that was reported in the first quarter, just trying to understand because, I mean, indeed it is down year-on-year despite higher full year guidance for the year than for 2022. Are you able to explain what are the drivers behind this low number and can you provide a sort of ramp-up schedule throughout the year? We should look at basically organic CapEx ramping up? Very good. No. On your first question, there, Yoann, I cannot tell you what our strategic positions are and we have shared that we do take them from time to time. I can't share with you what they are. Peter, you can add to that. Just to say further times on the call. These are commercially sensitive. Yeah Positions. We trade around these. It gives our positions away. It's nothing that we're. You know, we've got interest in giving full disclosure, but not when it's going to compromise our trading position. You know, keep trying, but we can't give an answer on this one, I'm afraid. On the CapEx question, you know, it's fairly normal levels where we are at the moment. We have a gross CapEx of $2.2 on that. It's where we expect it to be. It will rise a little bit, as guided to the end of the year. We will come back towards the annual figure that we quoted. We'll reflect as we go along increased activity rates on REN projects as we're coming through the year. It's a little bit maybe back-ended from a breakeven point of view, but this is pretty much normal levels. We are quite happy with this level of investment at the moment as well because, you know, again, we know what we need to go after. We want to deliver it and in full before we're rushing into doing more that we can't, biting off more than we can chew. Happy with the level and it will ramp up a little bit due to the activity rates in REN for the rest of this year. That's very clear. Thank you, Ulrica and Peter. Thank you. The next question is from a line of John Olaisen from ABG. Please go ahead. Good afternoon, everybody. I noticed that you have reported what seems like full production from Russia in Q1. Just wondered, have you also booked revenues? How about going forward in Q2 and for the rest of the year? Will you report production revenues, ownership in these assets, or not? What will actually happen with your Russian assets? Do you presume they are gone forever, or are you trying to sell those assets? What will actually happen, please? Little bit about the Russian assets, please. Yeah. Thank you. You know, as I sort of briefly mentioned before, our decision to exit Russia we took on the 27th of February, and we're in the process now to exit those assets. Since then, we have stopped all investments into Russia after that date. We took an impairment this quarter of over $1 billion. There is therefore. Given that we've stopped all trading with oil products from Russia, there is nothing more to come in from a production point of view, from a revenue point of view or cost point of view into our results going forward. Just to From Q- Just to clarify. Q2 you will not report production from Russia. Is that it? That's correct. Yeah. What you see in the first quarter is effectively those production really from in January and February. Yeah, January and February. There's a little bit from Kharyaga in March. But that's it. It will be completely gone by the second quarter. Wow. January and February production was just for the same level as for the full quarter, the previous quarters. Is it? Uh, approx- Things are improving in Russia when you're leaving. Yeah. Well, it. Roughly. Yeah, roughly, yes. Okay. What do you think about your assets? Are you trying to sell them or do you presume they're lost? Well, as I said, what I can say is that. Is the company actively? What I'm saying is that we're in the process of exiting those assets and we're actively working on that. Okay. My second and final question is if you could please give us an update on the Peregrino and the expected timing of the restart of Peregrino, please. It's on track to pick up and we are where we need to be. I think it's the fourth- It's during the summer. During the summer. Yes, that's right. Yeah. That's when we expect to start it up. Yeah. It resumes in summer 2022. As I said, there's no news from where we were before, which is good. Mm-hmm. Is the summary started in Q? Will that be a Q3 or? We've said summer 2020. Can you be more specific? We've said summer 2022. Summer means summer in Brazil, not. Okay. Thank you. I'm sorry. No, no, not in Brazil. Summer in Northern Hemisphere. No, summer in the Northern Hemisphere. It's not summer in Brazil. Not sure we're gonna have a summer here in the northern hemisphere. No. I mean, yeah. Well, that's disappointment too. Thank you. Our next question is the line of Henri Patricot from UBS. Please go ahead. Yes, everyone. Thank you for the presentation. A couple of questions from my side. The first one, following up on the other topic of cost and inflation, you know, on the upstream side of the business. You actually mentioned that there's a decline in the LNG cost in the U.S. Is that something that we should expect to reverse with the rest of this year? What do you expect the rest of the upstream business? Secondly, on the MMP trading performance, strong performance in the first quarter, can you give us any sense as to whether that's something that we, you know, can expect to see in the second quarter? Thank you. Thank you very much, Henri. I mean, if you refer to the cost in the U.S. where we've had a bit of a benefit, that was our sort of restructuring of that business that is coming through at the moment. In terms of what we're expecting in general on cost, we do see a pressure on costs going upwards. However, we are very active in trying to, one, mitigate those costs, but two, find improvement programs. We've got a big improvement program that tries to also mitigate what is coming through anyway. We are sticking to our sort of ambition to for UPC. It is, we do see pressures coming into our results at the moment. I will say that some of those inflationary pressures come into our revenues as well. That's the little bit of a saving grace. Yes, we do see pressures and try to mitigate them. For now, we're sticking with our CapEx guidance as it is, and we're sticking with, you know, we're trying to mitigate it through other means if we can't directly. MMP, on what's coming through on MMP is two things. We've explained to you and also the invitation to consensus is the impact of, on, from the positions that we have. It's also mitigating that good trading in this quarter across the board. We have basically across different element of the portfolio in this market, managed to create a bit of upside anyway. In volatile markets, there is more of that to be had. It's both. It's a downside that we've indicated, but it's also better trading coming the other way. I called out Danske Commodities before. Okay. Second follow-up on this. The key thing to monitor is t he level of volatility in both the oil and gas market to get a sense of performance actually in the second quarter. Sorry, I couldn't quite catch that. I'm sorry. Just for the effort, the trading performance, are they the key driver to watch? Is the level of volatility in oil and gas markets. What's the key drivers? I mean, it's started before Ukraine really. It's the tightness of supply and a shift in demand on the back of COVID that started it. Then you've got the overall supply and demand complication from the Ukraine conflict on top of that. I will say, we can probably say we've seen more volatile markets after that and recently rather than less, and it seems to be continuing. It's an unfortunate situation that drives a lot of volatility. But we're glad to be able to leverage back on that to make sure we can secure supplies and do take our positions accordingly. Okay. Thank you. Thank you. The next question is in the line of Jason Kenney from Santander. Please go ahead. Hi there. Thanks for taking my questions. Just building on a couple of earlier one, on CO2 storage, I think Lydia was asking. Can you kind of walk me through a theoretical future value chain or project DCF? I mean, is it like an upstream cash flow with upfront CapEx and ongoing OpEx, and then volumes injected at a price rather than volumes produced at a realization? Or is it a bit more integrated than that? Just trying to start thinking about, you know, the investment you're gonna be making and looking at some paybacks and maybe even breakevens for projects, you know, within the next decade or so. Yeah, I think that's it on CO2. Secondly, just, I mean, I don't know on the Kharyaga cargo that was sold in March. I don't know. Have you said whether you'll keep the profit from that, or is it, you know, gonna be allocated elsewhere? Thanks. I will start on the CO2 question. I think I could answer that very long, or I can also answer it very, very short. I mean, the potential for CCS and in Europe and this, these sort of type of projects that we're talking around is quite big. Sort of the basic mechanics comes down to the ETS price and what, you know, what is more economical, I guess, for the customer to do one or the other. Several customers are showing interest in capturing and storing CO2, and are, you know, not directly worried about cost immediately. It's more the possibility of doing so. That goes for the supply and demand side. This is about capturing the cost, but it also in the right way, and it varies with the sector and it varies with the sort of type of storage that you do. Transport and storage cost will in general benefit quite a lot from economies of scale. This is taking all that into consideration and that the market is very young. That's part of Svein's job to really work out what the value chain is gonna look like here. But we do see that with the assumption of ETS prices where they're sort of heading towards now, there is a viable business here that will make economic sense for a range of industries to sort of implement CCS rather than paying those taxes for emitting. We're sort of pretty much there or thereabout at the moment with the ETS price to make a good economic business case for it. You will hear us working that through, and we'll share more specifically on the returns on that as we go through. We do feel that there is a viable case that will give us sensible returns to then invest in. The plan is to invest as we develop that as a sort of third area of focus going forward. I think. Yes, makes sense. In terms of the cargo, yeah, we've taken that cargo, and that's as we've said. It was taken before and contracted before all this started. You're keeping the profit? We've taken the cargo. Yeah. Okay, thanks. The next question is from the line of Anders Rosenlund from SEB. Please go ahead. Thank you. We've already established that you have a long-term leverage target of 15%-30%, and it's currently 32% negative. How will Equinor get to its leverage target? Yes. I shared a little bit earlier on as well that it's we've got quite a lot of demands on our cash going forward from here. The best place for that cash is clearly investing in the business, and we will be doing that to the tune, as I've said, about $10 billion of CapEx. Secondly, we have a capital distribution program that we pushed quite a lot higher than in February. That's another $10 billion to spend. We have got also a large tax payable sitting on our balance sheet, which on the back of the revenues that we've got. In terms of paying that, we'll basically shift the net debt ratio quite significantly and into positive territory. That's when we make these decisions. We look at it. This is how we have to look at it. We need to look at it long-term and into the future, taking into consideration all the calls that we have made, all the calls that will come, and also the delay in the tax payments that we've got. That's where we are. We will continue, as I said before, to look across the portfolio and to understand whether there's any further great investments that fit into our strategic portfolio. The big calls are coming in the next six months, and we've clearly got the balance sheet to be able to support that. I just follow up because you're reiterating your guidance for CapEx spending through 2025, which is far into the future. Does that mean that has been reevaluated recently, or is simply that a continuation of what you guided for in connection with the CMU? Yeah. It's exactly the same as we said in connection with the CMU. We do keep assessing it, especially in a world where we are looking at the moment, but we feel comfortable with that level of spending. It is a step up, which it should be, and it's a step up and a shift also in terms of where we spend that CapEx, you know, more and more into the renewables business. We're comfortable with the $12 for 2024 and 2025, and it's completely consistent with what we said in February and back in January the year before. Sorry, in June the year before. Okay. Very good. There are no further questions at this time, and I would like to hand back to Peter Hutton for closing comments. Thanks, Natalie. Well, thanks, Ulrica. Thanks, Magnhild. Thanks, Svein. And thank you for your time this morning. I know this is busy. As always, if there's any further questions that you have, please contact investor relations on the usual numbers, and we will get back to you as we can. Thank you for the time this morning. Thank you. Ladies and gentlemen, the conference is now concluded. You may disconnect your telephone. Thank you for joining, and have a pleasant day. Goodbye.