Hello, welcome to this audio webcast discussing Saudi Aramco's Full Year 2020 Results. I'm Fergus MacLeod, Saudi Aramco's Vice President of Investor Relations, and we're joined today by Mr. Amin Nasser, Saudi Aramco's Chief Executive Officer, Mr. Khalid Al-Dabbagh, our Chief Financial Officer. Our webcast today will comprise a presentation followed by a question and answer session, and we anticipate the entire call lasting around one hour. I would like to remind you that this webcast and conference call are being recorded. Before we start, I would like to draw your attention to this cautionary statement. During today's presentation, we may make forward-looking statements that refer to estimates, plans, and expectations. Actual results and outcomes could differ materially due to factors we note on this slide, and please also refer to our regulatory filings and website for more details. With that, I will now hand over the call to our Chief Executive Officer, Mr. Amin Nasser. Thank you, Fergus. Welcome, ladies and gentlemen, and thank you for joining us from all around the world. It is a great pleasure to be with you today. 2020 was a year like no other, and so I will start by saying a few words about what made it so extraordinary for Saudi Aramco. No company was immune to the impact of the pandemic and the unprecedented economic and market volatility. Both operationally and financially, our operations were flexible and agile and continued to supply low carbon intensity energy to the world safely and reliably. For that, I am proud of the extraordinary efforts of the men and women of Aramco for rising to meet the challenges caused by COVID-19 in 2020. Let me begin by saying a little more about our response to the pandemic. Our top priority was the safety, health, and well-being of our employees and communities. We immediately activated a dedicated task force of experts to focus on coronavirus prevention and containment, especially for the majority of our employees who work in field locations. More recently, we have rolled out a vaccination program for our people and their dependents, which is progressing rapidly. We also extended assistance to the healthcare providers in our communities, both at home and abroad, supplying ventilators, air purification devices, and protective equipment. To ensure business continuity and a reliable supply of energy to our customers around the world, we activated prepared contingency plans. These plans allowed us to both maintain high reliability and to deliver all-time production records in both oil and gas. Our investment in advanced and robust IT infrastructure helped by allowing up to 55,000, more than 80% of our employees, to work remotely. To safeguard the future, we also ensured project execution was not impacted. I am confident that we are emerging from the crisis stronger than ever before, that we are well-positioned to meet the needs of a world where energy demand is beginning to recover. This slide shows the unprecedented scale of the crisis. Demand for oil collapsed in the second quarter on a scale never seen before in our lifetime as the pandemic took hold and oil prices collapsed with it. Brent crude averaged $42 per barrel in 2020, down more than $20 compared to 2019, the lowest level since 2004. WTI even dipped into negative territory. The situation has improved since then, except for aviation, the pace of improvement is beginning to quicken, especially in Asia. China has already recovered strongly, Indian demand is also close to where it was pre-pandemic. Demand remains challenged in the U.S. and Europe. With vaccine deployment accelerating, we expect recovery to accelerate as well, especially in the second half of 2021. The improvement now underway in oil prices has been faster than many expected. We are confident that Aramco is emerging from the pandemic in a position to deliver the supplies of affordable energy needed to support the recovery. Against this challenging background in 2020, our people have much to be proud of. Some of their achievements are laid out on this slide. Operationally, as I mentioned, we set new daily records for both crude oil and natural gas production, demonstrating our unique spare capacity, operational agility, and flexibility. We did this while maintaining our extraordinary track record of reliable supply to our customers around the world. Long before the term ESG was first used, environmental stewardship was an integral part of our approach to business. Our aim is to deliver more energy with lower emissions. We have one of the lowest upstream carbon intensities in the world, meaning that each barrel of Saudi Aramco crude consumed produces less CO2 overall, taking Scope 1, 2, and 3 emissions together than a barrel from other major producers, assuming, of course, that these barrels are refined and consumed in similar carbon intensity downstream facilities and final end uses. This is a result of our philosophy of careful long-term reservoir management, leveraging advanced technologies, and minimizing emissions and flaring. We continue to explore new avenues that can reduce emissions still further, such as delivering energy to customers in the form of zero-emission blue hydrogen. In August, we exported the world's first shipment of hydrogen in the form of blue ammonia to Japan. I'll talk more about this exciting new area shortly. At the same time, we are continuing to execute our growth strategy to meet the need for affordable energy of the world's expanding population. Despite the crisis, we successfully completed the largest acquisition in our history, with the purchase of 70% stake in SABIC, transforming our company into a major petrochemicals player. In gas, we are proceeding with the development of the Jafurah unconventional gas field in the eastern province of Saudi Arabia, the largest non-associated gas field in the Kingdom. In oil, we are proceeding with implementing the government's directive to increase maximum sustainable capacity, or MSC, to a new high of 13 MMbpd. It has been a year to remember for many reasons beyond the pandemic. Let me now turn over to Khalid to provide more details on our financial performance. Thank you, Amin, and good afternoon, ladies and gentlemen. As Amin has said, 2020 was a remarkable year in many ways. This includes the fact that it was our first year as a publicly listed company, one of the most significant changes in our 87-year history. Our people rose to the challenges of becoming one of the most valuable quoted companies in the world. Critically, in a year when a number of major energy companies cut their dividends, we declared a payment of $75 billion, which is the highest amongst any publicly listed company in the world. The confidence of investors in our performance in our first year as a listed company was clearly shown in our share price, which significantly outperformed the other international oil companies and by the high demand for our bond issuance. We are proud of the trust shown to us by the investor community during such a turbulent year and the confidence they have shown in Saudi Aramco's future, as evidenced by an oversubscription multiple for the bond of 10x, and the largest-ever demand for the 50-year tranche for any company in history. Moreover, our people were publicly recognized with more than 70 awards in fields including technology deployment, digitalization, sustainability, and operational excellence. Turning now to particular financial and operational achievements in the most difficult year for the industry. This slide shows just a few of the metrics which demonstrate how differentiated Saudi Aramco is from its energy industry peers. We were the only major energy company to remain profitable in 2020, with a net income of $49 billion. Our return on capital employed remained in double digits despite the most challenging business environment for a generation. This resilient financial performance supported a dividend almost twice that of the five major international oil companies combined. Safety, operations, the environment, and technology are at the heart of what we do, and we lead in those areas as well. While these numbers are impressive, we will never rely on past success, and we will continue to drive further improvements. I would argue that cash is one of the most important metrics of strength for any company, and this slide shows how our cash moved between the end of 2019 and the end of 2020. As you can see, our cash balance actually rose during the year, despite the pandemic, the SABIC acquisition, and our $75 billion dividend. This strong outcome reflects a number of steps which we took. Implementing optimization programs to reduce our capital and operating expenditures, successfully raising external debt, including the $8 billion bond, as well as maintaining zero credit losses from customers. Our goal, as you know, remains to maintain a strong balance sheet, healthy cash balances, and a top credit rating. I will now turn to our capital spending where we exhibited discipline and flexibility. In March 2020, we indicated that we expected that 2020 CapEx would be in the range of $25 billion-$30 billion. It is worthy to note that we ended the year at $27 billion. This amount is significantly below the original guidance of $35 billion-$40 billion for 2020 we gave at our first investor meeting in Bahrain at the start of the IPO journey back in 2019. Our ability to show such flexibility in our spending reflects our core strength of very low costs. We reduced our upstream costs even further in 2020 from SAR 7.5 per BOE to SAR 7 per BOE, and our upstream capital intensity from SAR 4.7 per BOE to only SAR 4. We now expect 2021 capital spending to be around $35 billion. This $35 billion guidance figure is an indicator and not a target, and may of course be flexed up or down depending on circumstances. I hope you will agree that our 2020 results show that we are building a strong track record of delivering shareholder value. Resilient financial performance and agility across cycles are two key pillars of our success, and both have been demonstrated in 2020, which was probably the most difficult year in our industry ever. The confidence of the investment community in our long-term prospects was shown not only by the resilience of our share price during the pandemic, but also by the significant 10 times oversubscription for our bond issuance and in particular, the historic record demand for the 50-year tranche. While we believe that our financial performance was exceptional in an extremely difficult 2020, you can rest assured that it is our ambition to build on this success going forward. Before I hand back to Amin, I would like to remind you of our focus on sustainable and growing free cash flow to support dividends to shareholders over the long term. The three pillars of free cash flow growth are shown in this slide. Liquids, gas, and the downstream. We aim to deliver that growth sustainably by leveraging technology and innovation to optimize our crude and gas production unit costs, by integrating our refining and chemical activities, while at the same time maintaining our low carbon intensity. Ladies and gentlemen, our results for 2020 are clear demonstration of the value of resilience. Throughout our long history, we have continued to evolve and learn from the challenges we have faced, and this latest crisis is no different. We have emerged stronger and well-placed to benefit from the improving environment we are now seeing. Thank you very much. Amin will now provide some closing remarks. Thank you, Khalid. In closing, I would like to update you on our approach to sustainability. I believe that sustainability is at the heart of long-term value creation. With our transformation into a publicly traded company, the world has gained unprecedented insight into Aramco's story. What this company is made of, the spirit of our people, and the principles that guide us. The same scale, capability, and commitment that power our world-class performance today also enable us to address a range of complex global challenges on the path to long-term sustainability tomorrow. I consider this more than just an opportunity. It is a call to action. In response to our assessment of the sustainability issue most important to our stakeholders, we have developed a four-bar framework as shown on this slide. This framework sets out the focus area which hold the greatest potential for positive impact. These are climate change, minimizing environmental impact, accelerating human potential, and growing societal value. You can rest assured that our interests as management are aligned with our stakeholders with sustainability KPIs included on the corporate scorecard, which is used to assess management remuneration. Of course, we realize that for some, the idea of an oil and gas company contributing positively to the climate challenge is a contradiction. Our belief is that our relentless dedication, knowledge, technology, experience, and expertise accumulated over eight decades mean we are uniquely placed to deliver innovative solutions and drive change. It is a responsibility that we take very seriously. Although I believe we have a unique role to play in addressing climate change, we also recognize that we will not be able to do this alone. We believe that this is the right time for us to articulate how a robust and inclusive approach to sustainability defines our strategy. Success in sustainability is essential to ensuring that Aramco continues to deliver in the long term, and that we remain the world's largest integrated energy company throughout the global energy transition. As you know, we are starting this journey in a very strong position. Our barrels have a lower overall carbon intensity than others due to their low upstream carbon intensity, which is a result of practices embedded in our operational DNA for decades, and long before the inception of the term ESG. This slide compares our 2020 performance in upstream carbon intensity and upstream methane intensity versus 2025 OGCI targets. As you can see, we are already well ahead of the rest of the industry's 2025 goals. Turning to the future, our vision is to be a leader in future decarbonized and affordable energy. We have a number of key potential advantages in delivering this ambition, particularly in the area of carbon capture and storage and in production of hydrogen. These advantages could allow us to be a world leader in these two rapidly growing areas. For example, we have a large gas resource base currently focused on meeting domestic demand, but with the potential for conversion to blue hydrogen that could be exported in the form of blue ammonia. For carbon capture and storage, including the carbon associated with the potential large-scale blue hydrogen production, we have the scope to be a world leader in both size and cost due to our established infrastructure, world-leading scale, and the same advantaged geology that has given us many of the best reservoirs on the planet. We have already delivered proof of concept when in September last year, we delivered the first-ever shipment of hydrogen to Japan in the form of blue ammonia for use in power generation, paving the way for potentially rapid growth in the use of hydrogen in the energy system. We are very excited about the potential of this new business. In closing, and before we take your questions, let me say a few final words. We are at a moment of great change, unprecedented for our industry as it faces the need to move to a lower carbon future and for our company, as we see an increasing need to be ready to produce more energy than ever before to meet demand, but with lower emissions. We are positioning Aramco, already a leader, for that even lower carbon future, while still offering the world the growing supplies of affordable, reliable, and abundant energy it needs. This will be developed with the most advanced technology and delivered by a more diverse and inclusive workforce than ever before. The agenda of diversity and inclusion is one I feel especially strongly about. We have particular goals to increase the representation of women in our workforce and in our leadership. Indeed, I hope one day to see the first female CEO of Aramco. Thank you very much, ladies and gentlemen. Khalid and I look forward to answering your questions, which will be moderated by Fergus. [audio distortion] If you'd like to ask star followed by one on your telephone keypad now. If you change your mind, please press star followed by two. Phone is unmuted locally. Thank you, Jordan. We'll now go to our first question, which I believe comes from Karen Kostanian at Bank of America. Karen, could you go ahead, please? Yes, thank you very much, Fergus. Gentlemen, thank you very much for the presentation and congratulations on the very robust free cash flow generation in such a difficult year. My first question relates to your CapEx guidance. As you say, $35 billion. We saw that in 2020, CapEx for the upstream fell drastically. What will be the priorities of this CapEx increase for 2021? Is it upstream, downstream, or perhaps gas development? Second question related to that, should the oil prices go higher as we saw in the first quarter, where would you see your priorities in this free cash flow, whether that will be increasing CapEx, reducing leverage to your target, or perhaps the distribution of dividends? Thank you very much. First of all, Karen, I'd just say thank you very much indeed for those kind words. I think two questions there, as I understood it, which is in terms of the capital spending guidance we've provided for 2021, what are the priorities from the increase from the $27.9 that we spent in 2020? Is it between the upstream? Where is the mix of that $35 and the increase relative to 2020? Second, I think you described a very nice problem to have, which is if the oil price was high or production was growing, and we had excess free cash flow, what are our priorities for the deployment of residual free cash flow? Thank you, Karen. I'll take the first question. Khalid will be taking the second question. With regard to your question regarding the guidance and where is this going to go in terms of capital spending in 2021, you are absolutely right. We cut our CapEx in 2020. Most of the reduction was from upstream. In 2021, most of the increase will be dedicated for both oil and gas. Approximately 25%-30% will be for the downstream. The rest will be dedicated for oil and gas, almost half and half between oil and gas. We are expanding our development in both oil and gas. Khalid. Thank you, Amin. Hello, Karen. Good to talk to you again. That's a good question. Where we're going to spend the excess free cash flow. Actually, as Fergus said, it's a nice problem to have excess free cash flow. You're right, these are the three main drivers for our thinking process, CapEx, reducing debt, or pay dividends. Every quarter we meet with our board and we deliberate, management deliberates with the board to determine how do we deal with the excess free cash flow that we have. Based on this deliberation and based on market condition and based on the calls that we have after having satisfied all our obligations, we will definitely make the call at that time. Keeping in mind that historically, we have paid the majority of our excess free cash flow, as we always like to reward our shareholders with the excess cash that we have. Thank you, Karen. Thank you, Karen. Thank you. The next question, I believe. Thank you, Karen. The next question comes from Mazen Al-Sudairi at Al Rajhi Capital. Mazen, very great to have you on the call. Please go ahead with your question. Yes. Mazen- Apologies, we've lost connection with Mazen. Well, hopefully we're going to get Mazen back in a moment, but as we wait to get him back, we're going to go to Christyan Malek at JP Morgan. Hello? Hello? Oh, Mazen, are you back on the line? Yeah. I'm on the line. Do you hear me? Fantastic. We can hear you loud and clear, Mazin. Please go ahead with your question. Yeah. Thank you. I'm Mazen from Al Rajhi Capital. Thank you for taking my question. First, what is your target gearing ratio now? What sort of leverage you are comfortable with? Second, is there any update to the pipeline stake sales? Okay, Mazen. The question is, where do we stand on the gearing range? We've had a major transaction, obviously, in 2020 with the acquisition of a 70% interest in SABIC. Where do we feel about and what are we thinking about gearing moving forward from that? Secondly, speculation, I believe you're referring to press speculation about potential transactions. We did set up a new corporate development organization towards the end of last year. You'll have seen the press release on that. I think you're asking about, are there any particular transactions in the pipeline, no pun intended? Yes on that. Okay. Thank you, Mazin. I'll take the second question with regard to our portfolio optimization, and Khalid will be taking the first question regarding our gearing ratio. This is a work in progress. We do have many assets and items in our portfolio that currently our portfolio optimization team is working on. As you know, since these are currently in discussions and under negotiation, we cannot really declare anything until these come to completion. There is a lot of items and assets that are being looked at under the portfolio optimization for Saudi Aramco. Khalid. The gearing question is at the center of management focus. As you are aware, we have declared a cross-cycle 5%-15% gearing, and cross-cycle is put in there for a good reason. That reason was put to the test in 2020, where we were faced by sort of a perfect storm of prices collapsing and having to complete the highest and the most expensive acquisition in our history, and indeed, one of the highest acquisition in the industry. We were able to weather the massive collapse in pricing, and we were able to complete that extremely large acquisition because we have strong and pristine balance sheet. I agree, our gearing have gone up. As we always declare, hopefully with the increase in free cash flow, where we have a massive machinery, given our production, our level of production, our low cost of production, and whatever prices out there, we will be able to drive that gearing down over time. Take care. Thank you, Mazen, for that question. I think the next one we're going to go to is Christyan Malek at JP Morgan. Christyan, are you on the line? I'm on the line. Thanks, Fergus, for having me on. Congratulations on a great result in a very tumultuous year for oil and gas. I guess first question is more broadly, just thinking about how you expect the outlook, not just for demand growth over the next two years, but in the context of that, what's your thinking around the oil market, oil prices? Clearly, your CapEx is slightly higher than what we would have expected. I wonder to what extent are you planning for or positioning for a deficit in the oil market through how you think about capacity and using that capacity. Just thoughts on the broader oil market and whether you are constructive. That segues to my second question, which is around spare capacity. In a scenario where you do have a more conducive oil market, would you think about or consider expediting growth in your spare capacity or reaching a 13 million barrel MSC earlier than the target as a mid-decade, so around the 2026, 2027 level? Timing around your capacity plans, particularly if there is a stronger argument to use those barrels sooner rather than later. Thank you. Thank you again. Thank you for those kind words, Christyan. I think the two issues there you're raising are our thoughts, our management's thoughts about the outlook for the oil market in general, and in particular, whether we see a pull on the 3.9 MMbpd of spare capacity that we currently have with maximum sustainable capacity of 12 million MMbpd. Where are we on the potential to deliver on the request that we've had to increase maximum sustainable capacity to 13 MMbpd, and is that tied into the planned increase in upstream capital spending in 2021? Thank you, Christyan. We are very optimistic about the market. We are looking at 92-94 MMbpd today. Our expectation and other agency looking at around 99 MMbpd by the end of the year, end of 2021. If you look at the market, China is even higher than pre-pandemic levels. East Asia in general is very close to pre-pandemic level. Europe and the U.S. still lagging in terms of demand. However, with the deployment of vaccination picking up in Europe and in the U.S., we are expecting the economy to recover faster. With that, we have expectation to see more demand. We are very bullish about demand going forward. You are absolutely right. There is a significant cut in terms of spending by the energy industry during 2020. You see different forecasts, more than 30% decline in spending. That is a concern, and we have highlighted that before. If this continue, we should see an impact in the midterm in terms of supply. That level of cut in spending will have an impact at a certain point, because we are expecting demand to pick up, and therefore supply need to pick up with it. With regard to spare capacity and accelerating our 13 million production MSC, Maximum Sustained Capacity, as highlighted, we have received a request from the Ministry of Energy to build capacity to 13 million. We are currently doing the detailed engineering for the 13 million. Of course, as you appreciate, that will come in increments that will be put over time. They don't have to come all in one shot at 1 MMbpd. These are a number of increments that will become over time during the next few years. We do have plan. We can accelerate if the market call for it. For the time being, the work is currently at detailed engineering. Thank you, Christyan. Hopefully, that answers your question. Thank you. The next one. Thank you. Is from Alastair Syme at Citigroup. Alastair, can you go ahead, please? Yes. Thank you, Fergus, and thanks for the presentation to everybody. You completed a major transaction in 2020 with SABIC. Can you maybe talk about the ambitions now as you look to further integrate this business? You had talked previously about some quite strong ambitions in crude to chemicals. I just want to know where you stand on that thought process. My second question is, as you look towards the downstream, you had talked previously around potential major transaction with the Reliance Industries. I just wanted to get an update on where that potential transaction might stand. Thank you. Great. Thanks, Alastair. An update on where we stand on SABIC integration. I guess you're probably also interested in potential synergies, things like that, and also how it plays into our overall downstream strategy, including crude to chemicals. Second, where are we on the speculated upon Reliance transaction? Thank you, Alastair. As highlighted before with regards to when we had acquired SABIC, we expect to generate between $3 billion and $4 billion of synergy forward as a result of this acquisition. SABIC is very important and integral part of our ambition to be a global energy and petrochemical company. SABIC has a great technologies, great footprint when it comes to chemical globally, and the integration of Saudi Aramco with SABIC business globally will give us a lot of added advantage. If you look at our investments today, we are looking at refineries with a lot of integration into petrochemical. A lot of what we are reviewing currently. SABIC presence with their understanding and also their investment, because we would like to have one investment together rather than Aramco do its own investment when it comes to petrochemical and SABIC. There is a lot of synergy when it comes to the capital. This is synergies in procurement, sales, and marketing, and others. There is a lot of synergy in terms of optimizing our capital spending between us and SABIC because we are in the same markets. We are in the US, we are in Asia, and we operate in the same market. There is a lot of benefits to coordinate and integrate Saudi Aramco and SABIC. Crude to chemical is very important element of our strategy. We have big investment when it comes to crude to chemical in different markets, including the Kingdom. SABIC will play a major part in our partner, and it will be playing a major part in our crude to chemical program. Just a little bit, and maybe Khalid can add a little bit about Reliance. We are still in discussion when it comes to evaluate Reliance and existing business opportunities with our potential partners. We will update on any business milestones that will be made as and when appropriate. No, that's fine. I think you covered it. Thank you. Yeah. Jonathan. Okay, next question, I believe comes from Goldman Sachs from Michele Della Vigna at Goldman. Michele, could you go ahead, please? Thank you very much, congratulations really on an exceptionally resilient delivery in what was a uniquely challenging year. I had two questions, if I may. The first one is, on LNG, that's been an area that has been of interest to you in the past, in many ways, you have the unique advantage here that you can effectively leap that transition technology and move directly to clean hydrogen and to clean ammonia. Do you still think it is worth building a global LNG positioning for the transition period? Do you prefer to go effectively straight to the next technology of clean hydrogen, where you have clear competitive advantages both on the blue and on the green side, and where effectively there's no competition yet because it's a rising market? My second question, if I may, on carbon capture, another area where you can have clear leadership on a global basis. Do you mainly see it in the shape of traditional carbon capture that is from a industrial process? Or do you think direct air carbon capture also could have a tremendous positive impact and become an important decarbonization profitable business in the long term? Thank you. Thank you, Michele. Thank you again for the kind words and two very interesting questions. The first one is, if we look at gas exports, the potential for gas exports, would LNG make sense or would it make more sense to go directly to potentially blue hydrogen as per the trial cargo that we shipped to Japan late last year? Secondly, what are the avenues on carbon capture and storage? Is it directly into reservoirs, and do you like the traditional way that you describe or into products? Or could you actually start to think longer term about technologies involving everything up to and including direct air capture? Again, that's something we're extremely interested in. I think those are your two questions. Okay. Thank you, Michele. With regards to international gas, start with international gas, and then I'll go to our local gas program. Gas is growing at twice the rate of crude globally. It has a lower carbon footprint. Because of growth and carbon impact, it's very important strategic for Saudi Aramco. We continue to be interested in international gas and LNG in particular, depending on the opportunities. If we have a great opportunity, it is something that we will be interested in. However, you are absolutely right. We do have a huge advantage when it comes to the Kingdom. Our thinking is to focus on hydrogen. We have a low-cost structure when it comes to gas production resources, conventional and unconventional. We have great aquifer for storage. We have the economy of scale when you look at our facilities and their proximity to each other. We do have the advantage geology and an integrated operational platform. Having a large scale cost competitive carbon capture utilization and sequestration potential in the Kingdom is big for us. And looking at hydrogen in terms of utilization and exporting back with rather than going that to LNG profile. Our priority, of course, is to supply the Kingdom. That is our priority when it comes to the gas supply within the Kingdom. Depending on the requirements within the Kingdom, as long as we can satisfy the Kingdom requirement and in coordination with the Ministry of Energy, if there is an additional gas, and currently we are looking at that additional gas in terms of shifting it to blue hydrogen rather than LNG. We are looking at skipping one step. Instead of going to LNG, going directly to hydrogen. It is very important. As I said, we have all the elements to make it successful. We have the scale and the experience, and it makes a lot of sense for us to go on that route in terms of shifting gas to hydrogen. As I said, we are seriously looking at it. There is a lot of work ongoing right now and a lot of coordination also with the Ministry of Energy, which is the regulator for gas in the Kingdom. At the same time, you asked a question about carbon emissions and whether there is something else other than traditional carbon capture and sequestration. Yes, direct air capture is very important and something that we are investing in right now. Our R&D, working with projects right now for direct air capture. What we are aiming for, of course, is reducing the cost. The issue with direct air capture today, it costs a lot to achieve the right results in terms of reducing the emissions. We are working to reduce the cost, and with that, we can introduce more commercial direct air capture technologies. All very exciting areas. Again, for a company that's very technologically-focused, obviously you'd expect it to be a major focus area. The next question, I think, comes from Gordon Gray at HSBC. Gordon, are you there? Yes, good morning. Thanks for your presentation, and thanks for taking my question. It's a follow-up on free cash flow and potential cash distributions. Going back to the point you made a year ago about the gearing back to 5%-15%, that was obviously pre the SABIC transaction. The way you've accounted for debt with that transaction obviously takes the full liability on that front. In reality, on a sort of cash-out basis, your gearing is significantly lower. When we're thinking about the pace at which you want to de-gear the balance sheet, as you move into a sort of free cash positive post-dividend situation this year, would it be right to say that because of that reality, because you've sort of consolidated the whole liability, the 5%-15% band is not a kind of absolute limit that you have to get back within before you can think about additional distributions? Okay, Gordon. Yeah, again, another way of thinking about the balance sheet. You're quite right, of course, which is the principal reason for the rise in reported gearing in 2020 was the recognition of the deferred payment schedule for SABIC. That's on a schedule to 2028, so it's slightly different from conventional debt as you might think in most companies, because it's got that very specific payment schedule on it. Of course, we did draw attention to the cash balance in the presentation. You're quite right, the cash balance has actually improved during the course of 2020. I think it's another question about the balance sheet, Khalid. Yeah. Thank you, Gordon, for the question. You're correct. We took the appropriate, I wouldn't say the conservative, but the prudent way of consolidating the sort of the promissory note as part of our liability in the balance sheet, hence our gearing have gone up. Without it, the gearing would be in the low end of the range. You asked an interesting question, which is, would we have to go back to the 5%-15% before we distribute additional dividends? I'm not going to speculate in the future. Notionally, no. The answer is no. As I said before, every quarter we meet with our board and discuss in full detail the market conditions, the expected free cash flow coming into the next quarter and the quarter after, and the quarter after. After, of course, having fulfilled all of our commitments, and a decision is made there. Is there a sort of a gate that we are not going to distribute more dividends unless we go to 5% to 15%? My simple answer, no, that gate does not exist. That's very clear. Thank you. Thank you for the question, Gordon. Okay, next question, back in the Kingdom to Ankit Gupta at AlAhli NCB Capital. Ankit, are you there? Hi. Yes, I am here. Great. Please go ahead with your question. Okay. Gentlemen, congratulations on a great year. I have two questions. My first question relates to the shipment you have already done on blue ammonia. Just wondering if you can give us some initial color on the cost economics, given the advantages in the Kingdom, and are you assuming any major CapEx for this initiative in your 2021 guidance? My second question relates to your rationalization on CapEx. You have done a tremendous job reducing it from $40 billion- $45 billion to $35 billion guidance, which I assume incorporates SABIC CapEx as well. Just wondering if there are any particular projects which you are prioritizing, and are there any major projects which will be put on the back burner for now given the current stream of things. Thank you. Yeah. Again, thank you for the kind words, Ankit. I think what I heard you saying, they were lined slightly crackly, but what were the economics of the blue ammonia shipment that we made last year, are there any follow-on capital spending plans in the near term around that whole initiative that we took in supplying hydrogen in the form of blue ammonia to Japan? Secondly, are there any particular projects that would be prioritized within the rise in capital spending, in 2021? Did I understand that correctly, Ankit? Yes, sir. Just like in 2021, does it incorporate SABIC as well or it's excluding the SABIC? Thanks. It includes. Thank you. Okay. Thank you, Ankit. With regard to our project, it was a pilot program with the blue ammonia that we exported to Japan. We wanted to test the shipment. This is the first shipment of its kind of blue ammonia. We wanted to make sure it can be done, and it was done. It was used in the energy sector in Japan. We sequestered the CO2. We looked at the cost. As you know, this is a pilot program. We are looking at hydrogen or blue ammonia in a scale. When you look at it in a scale, big scale, the cost will go down. There are a number of elements also you need to consider. What is the cost of gas that will be the feed? What is the cost of sequestration? What is the scale that we are talking about? The proximity of the aquifers that we will be utilized for sequestration to the source. All of these elements right now are being looked at. Of course, the most important thing is the market. We're talking about big scale when you look at hydrogen. For that, you need to ensure that there is an offtake agreement for a long period to sustain these big investments. Any investment in blue hydrogen or green hydrogen, these are big, huge investments. If you think about the Neom project, it was almost a $5 billion project. That's almost the cost of that project. That is in the scale that we are talking about is small, that what Aramco is looking at. We are doing all of this work right now. Commerciality, it all depends also on the markets and the offtake agreements that will be done in different markets globally. I will answer just a little bit on SABIC. Yes, SABIC cost is incorporated on our financial statement. No, SABIC capital is incorporated in the SAR 35 billion. As we always say, the 35 is a target that could move up or down depending on market condition, depending on opportunities. We get opportunities all the time that we evaluate and subject to our own rigorous economic, commercial, technical, financial due diligence. If an opportunity proves to be viable and accretive to our free cash flow over the long term, we can always announce it at that time. Thank you though for your question, Gupta. Just to clarify, Ankit, of course, SABIC was only consolidated for six months in 2020. Part of the increase in capital spending in 2021 is a full year of SABIC CapEx, and I'm sure that was behind your question. The next question I think comes from Thomas Adolff at Credit Suisse. Thomas, could you go ahead please if you're on the line? Hi, guys. Thanks for taking my question. I've got two, please. Just going back to the MSC, the additional million barrels per day you're aiming to add. Correct me if I'm wrong, I think back in 2010, when you last increased your MSC by about 1.5 million, it took about six years, and you've done it all in one go. It went up by 1.5 million. Now you're saying in the next few years, we'll be adding a little bit, and eventually we'll get to a million barrels per day of extra volumes. What is different this time around versus the last time that it's more incremental? The second question, I guess, is just on the huge net asset base you have, about half a trillion dollars, and now you've got this new corporate development department that's looking into monetizing some of your assets. Obviously, at the time of the IPO, asset sales were not a consideration. You were able to fund your CapEx and your investment plans organically. This new strategy, is that purely a function of COVID? Our balance sheet is worse, and to fund potential future acquisitions, whether it's in refining or other areas, we will have to go through some of the asset sales planning. Thank you. Okay, Thomas. Two things there. I think MSC 13, the increase in maximum sustainable capacity. We're now to a level that it's never previously been at. Any more thoughts about timing and how it might differ from, as you said, the last increment. The second one, I think if I could summarize that, is what's changed? Well, why are we looking at potential divestment? Why have we set up this corporate development organization? What's the thinking behind it? Why wasn't this something that was part of what we articulated back at the time of the IPO? Okay. Thank you, Thomas. That 13 million, the 1 MMbpd, it comes in different increments because you talked about 1.5 million. We don't have an increment that comes, unless you bring a whole field like when you brought Khurais, it came at 1.2 MMbbl. That is one big increment. When we brought Manifa, it came at 900,000 bbl. For the 1 MMbbl, we are bringing a number of increments, let me put it that way. I'm not going to say the size of each increment, but that will come in increments, different sizes and different time frame for each increment to come. We are not going to bring the 1 million in one shot, let me put it that way. It will come over time, over the next few years With regard to corporate development organization, it was set to optimize our balance sheets. It's a principal criteria for our corporate development organization, is to do things that are fit within our strategy and business objectives, and also tries to create long-term value rather than specific target proceeds. It is something good. We are looking at optimizing our portfolio. We have certain assets that we are currently looking at and in discussion with others that we will be optimizing over the long term. It is something, as I said, to optimize our balance sheet. Thank you. Thank you, Thomas. Great question. The next one comes from Henri Patricot at UBS in Paris, I believe. Henri, are you there? Yes, sir. Thank you, Fergus. Hello, everyone, and thank you for the presentation. I have two perhaps on CapEx and then one on carbon intensity. The first question, just with the CapEx flexibility in 2021, can you give us a sense of the sort of macro environment in which you would address the SAR 35 billion upwards or downwards, and how much flexibility do you have here? Secondly, on CapEx beyond 2021, and irrespective of the macro developments, the deal price, should we expect CapEx to be going up after this year, from 2022, as you start to spend more on the MSC increase? Finally, good to see the focus on sustainability and the low carbon intensity. I was wondering if you have any ambitions to bring that carbon intensity down further, if you have any targets in both upstream and downstream to lower that even more. Thank you. Okay. Thank you, Henri. The questions, I think, are around the flexibility of CapEx. As you said, we demonstrated very significant flexibility in 2020. What would trigger pulling levers to flex it either up or down in 2021? How big could the flexibility be around that 35 number? The second one is, I guess you've got three here really, which is what are our views of our capital spending beyond 2021? The third one is, as you say, we've already got industry-leading upstream carbon intensity, the 10.5 kilos to a barrel of oil equivalent. Do we have targets longer term? What are our thinking about longer-term trends in upstream carbon intensity? Okay. Thank you, Henri. Khalid will answer just the first question, then I will. Thank you. Thank you, Henri. With regard to the capital flexibility for 2021, you're all aware that we have flexed down our CapEx in 2020 in response to the COVID-19 issues. As we are not out of the woods yet, but as things look much better compared to the second quarter 2020, let's say, and as international agencies forecasting higher demand, we have to bring back some of the investments that we have. We did not cancel, but we just slowed down and deferred. Hence, the increase in 2021 compared to 2020. Remember, at the IPO time, we have sort of had a range of $35 billion-$40 billion for 2021. It is slightly on the low end of that range. Now, for 2022, as you would expect, at this stage, we cannot provide that detail. However, we'd love to have a call on just before midnight, December 31st, to tell you what our 2022 plan CapEx is. Amin? It all depends on the market. It all depends on the market. Thank you, Henri. With regard to carbon intensity, our carbon intensity, even in 2020 compared to 2019, even though it shows 10.4 in 2019, going to 10.5 kilogram of CO2 per barrel of oil equivalent. In absolute terms, by the way, it went down just because we have lower production in 2020 compared to 2019. In absolute terms, in metric tons, it went down. Yes, of course, we do have plans to reduce our carbon intensity over the long term further. Our move to chemical is definitely is going to help us in that route. The hydrogen program that we have for our gas also is going to be a boost in terms of reducing our carbon in the future. We're looking at efficiency improvement through our R&D centers. We're working with auto industries in Europe and in the U.S. to have more efficient engines, better fuel formulation to reduce emissions. We're looking at technologies that will shift CO2 and convert it to useful materials. We're looking at non-metallics. Basically, this is a major program within Saudi Aramco. Most of the pipelines that we put currently on stream is from non-metallic. We are looking at non-metallic for construction, for the auto industry, and also direct air capture. It's something that we are highly, very interested on, and we have a lot of R&D work currently, and we're looking at investment in terms of direct air capture and making it more commercial over the long term. Yes, we do have a lot of programs that looks at emission. We are the leaders when it comes to carbon emissions, and we intend to be the leader over the long term. Thank you. Thank you for that question. Next one. Yeah, thanks, Wayne. Next one comes from Martijn Rats. Martijn, could you go ahead, please? Thanks for being patient. Yeah. Thanks. Hello, it's Martijn Rats here at Morgan Stanley. You've answered an awful lot of questions already, but I had one more left, which I hoped you could sort of shine some light on. The 13 MMbpd maximum sustained capacity, that does not cover the Neutral Zone, right? I was wondering if you could give us, more broadly, somewhat of an update on the Neutral Zone. It feels like it's been recently quiet in the last couple of months. Where do you expect Neutral Zone production to go? Okay, simple question. Does MSC include the neutral zone, and will MSC 13 be impacted? No, it doesn't. Thank you, Martijn. The 13 mmbbl of maximum sustained capacity, only Saudi Aramco does not include the neutral zone. Our share of the production from the neutral zone is small, approximately 50,000 to 60,000 barrels per day. It's a production of about 110,000, 120,000 bbl. It is ramping up. The capacity before the shutdown is around 300, approximately 300,000 it used to be. It's ramping up over time to reach that capacity. Our maximum sustained capacity, as highlighted, does not include the neutral zone. Okay. Wonderful. Thank you. Okay. Thanks, Martijn. Conscious of time, we need to move forward. There are some people waiting, and we're past the hour that we've indicated would be the time for the call. Quickly passing on to David Havens at SMBC Nikko in the U.S. David, are you there? Go ahead, please. Yes. Good afternoon. Thank you. First, you discussed your program to reduce capital and operating expenses, and obviously, you guys already have a significant cost advantage over your peers. Can you talk a little bit more about what efforts specifically you've been taking to cut the operating costs and to what extent those efforts will be structural versus transitional? Second, just expanding a little bit more on the gas to hydrogen. Can you expand on just the scope of your plans here? Specifically, are you looking to establish a merchant market, where you're shipping hydrogen outside of your own downstream system? Great. Okay. The questions are really, if you're already the world's lowest cost producer, how do you reduce it further? How do you manage OpEx? Is it something you can do structurally, or is it more of a tactical response to oil price changes? I think that was your first question. Your second question was more about the pathway from gas to hydrogen. What does it look like? What will the project look like? Yeah. What will the plans look like? Thank you. Thank you, David. Yeah. Some of what we have done in terms of cost cutting in our operation cost is structural. We have reduced the man hours by approximately 8%, and if you consider our supplemental man hours, it's 10%. We have also capitalized a lot on increasing productivity of our operation, and digitalization played a major role in also helping us to reduce our cost and taking that further for future years. What is the second question regarding? It was about the pathway on gas to hydrogen. The gas to hydrogen. The next steps for you. Yeah. Gas to hydrogen, as I said, we have a lot of work ongoing. I'm not at liberty to share all the details, but let me say, what we look at in terms of hydrogen is something with a big scale. It will all, as I said, what we are advantaged with here is the geology, is large cost competitiveness when it comes to our resources, abundance of resources, either conventional and unconventional. We do have the economy of scale. It will all depend also on the markets, because hydrogen, as you know, is something new. The only market that exists today is Japan. I mean, at scale. Even with that, considering that what we are looking at, we need to ensure there is an offtake guaranteed over the long term before you execute these programs. These programs is going to cost a lot of capital. In order to do them, hydrogen does not come cheap. It costs a lot because it requires a lot of sequestration. As such, we need to make sure that the markets are there for that blue hydrogen. We are currently doing a lot of work. We have been doing it for some time. We have the resources, as I said. We do have the aquifer for the sequestration, and we do have the appetite to produce hydrogen. As I said, we are coordinating our priorities, satisfying the Kingdom requirement when it comes to gas supply. This is very important and critical before we can export any gas out of Kingdom. It's a captive market for us. It's the best market for us when it comes to ensuring gas availability within the Kingdom, and we get a good rate of return when it comes to supplying gas within the Kingdom. However, blue hydrogen brings great opportunities, especially with our resource base and our competitive advantage, and we are seriously engaging as of right now looking at it. Thank you, David. I'm going to have to apologize. We've got still several people waiting, but we've gone significantly over the time we set aside. I'm going to take one last question, and then I promise we'll follow up with other people who polled to ask questions after this call. The last question we've got time for this afternoon is Erwan Kerouredan. I apologize if I mispronounced that, from the Royal Bank of Canada. Erwin, please go ahead if you're there. Thanks a lot, Fergus. Congratulations on the set of results, especially on the cash flow generation front. Thanks for clarifying on CapEx guidance. I've got a follow-up on the $3 billion-$4 billion synergies expected in chemicals. What factors, if any, could drive this number up? Perhaps on the revenue side, can you confirm your view on the outlook for chemicals, if you can, over 2021? If I have time for another question, perhaps on cash flow from operations. Besides the earnings and cash taxes, can you walk us through the biggest moving parts for 2021? If there's any form of guidance that you can give there? Thank you so much. Okay. Thank you, Erwin. I'll just say, first of all, thanks for the remarks. I think we'll probably leave your last one. We'll deal with that offline with investor relations. The first two, I think were about SABIC synergies and update there, including revenue synergies, and secondly, what are our feelings about the outlook for the chemicals market and for margins in 2021. Thank you, Erwin. As I said, we expect to generate $3 billion-$4 billion of synergy as part of this acquisition by 2025. This is for both Saudi Aramco and SABIC. This will come through optimizing the procurement, sales and marketing, supply chain, stream integration, and feedstock optimization. This is per year. There is additional benefits as a result of this acquisition in terms of capital optimization. As I said, there is a lot of capital programs for SABIC in different markets that we operate in, and we do have the same interest in terms of our crude to chemical, in terms of further integration into petrochemical and our refining business globally. Synergizing between us and SABIC, we will be able to optimize our capital going forward. $3 billion-$4 billion per year in terms of synergy, in addition to huge benefits through capital optimization for both companies. I guess the second. Chemical market you asked about our forecast. I think margins are improving. Yeah. With more improvement in GDP as economies start to recover more, chemical business start to perform even better. We are expecting better recovery going forward in terms of economies. With that, margin should start to improve gradually over time. I guess the second question, if I understood correctly, Erwin, is about OCF. What are the main drivers for OCF? That is the question then. It's primarily price followed by volume. Of course, when full integration of SABIC takes place and as Amin said, with the outlook or what the agencies out there are citing better demand for petrochemical products and margins. That would also be a significant contributor to our OCF. Thank you, Erwin. Thank you. Again, I'm afraid we're significantly over the time we indicated this call would last. We're going to have to leave it at that. Apologies to those still waiting to ask a question. We will follow up. We know who you are. I think we see you on the list. We'll come back to you later on today. I'd just like to hand over to Amin in case you'd like to make any final remarks. Thank you, Fergus. Ladies and gentlemen, thank you for joining us this afternoon for call and for your questions. No doubt, 2020 was a year that was beyond extraordinary by any means. We are optimistic that the outlook for 2021 is increasingly positive. We look forward to speaking to you again and updating you with our first half results in August. In the meantime, you can contact the IR team if you have any follow-up questions. Thank you. Thank you all and be safe. Thank you. Ladies and gentlemen, this concludes today's call. Thank you for joining. You may now disconnect your lines.