Welcome to Saudi Aramco's half year 2021 earnings conference call. We'll be holding a question and answer session following the presentation. I'll now hand over to Fergus MacLeod to begin. Hello, welcome to this audio webcast discussing Saudi Aramco's half year 2021 results. I'm Fergus MacLeod, Saudi Aramco's Vice President of Investor Relations, and it gives me great pleasure to be joined today by Amin Nasser, our Chief Executive Officer, and Ziad Al-Murshed, our new 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 an hour. I'd like to remind you that this webcast and conference call are being recorded. Before we start, I'd just 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. Please also refer to our regulatory filings and website for more details. With that, I'll now hand over the call to Amin. Thank you, Fergus. Welcome, ladies and gentlemen, and thank you for joining us. I am pleased to report that our performance in the first half of 2021 demonstrates the growing confidence of the energy markets in a strong recovery after the lows of 2020. While there is still some uncertainty around the length and depth of the challenges posed by COVID-19 variants, we have shown that we can adapt swiftly and effectively to changing market conditions. Our strong results reflect the strong rebound in worldwide uncertain, and we are heading into the second half of this year more resilient and flexible as the global recovery gains momentum. It is my great pleasure to now introduce Ziad Al-Murshed, our new Chief Financial Officer. Thank you, Amin. Welcome everyone to the first half earnings call. I hope you're staying safe wherever you are in the world. Before we get started, I'd like to briefly introduce myself. I joined Aramco 30 years ago. My career has taken me across the business, from frontline operational roles in upstream and downstream to a variety of commercial and leadership roles. It's been an exciting journey. I've had the pleasure of seeing our company's enormous strengths firsthand, our performance, our reliability, our focus on scale and cost, and above all, our people. I know I have a tough act to follow from my predecessor, Khalid Al-Dabbagh, whom many of you know. I'm honored to be stepping into the role of CFO as the company continues its remarkable journey. What I'm hoping to do today is share with you the underlying story behind the dashboard of numbers that you've seen in our reports and how Aramco's story is evolving amidst the operational and financial performance figures. As you've seen since the start of the pandemic, Aramco has been both resilient and flexible in the face of this once-in-a-lifetime demand disruption. We've stayed the course, and I believe our hard work for decades in building resilience is paying off. As vaccination rates pick up with billions of vaccines administered globally, economies are reopening and returning gradually to pre-pandemic levels. As a result, demand is returning, and we're in a strong position to capture the upside as recovery gathers pace. Of course, we will supply the affordable and reliable energy that the world needs to support global economic recovery, and we'll do so at low carbon intensity. We've also achieved key strategic milestones across our business, in upstream, in downstream, in portfolio optimization, and in financing. None of this is possible without a fit and healthy workforce. Let me begin by providing an update on our ongoing pandemic response. Our first priority is the well-being of our people and their families. It is why we rapidly rolled out our own vaccination program for employees and their dependents at the start of this year. Takeup was high, and I am proud to announce that nearly 98% of our 70,000 strong workforce and more than 70% of their dependents have now had a vaccine, which helps keep our people safe and ensures the continuity of our operations. Even with the vaccine rollout, we remain vigilant. In line with the guidelines from the Saudi Ministry of Health, we continue to strictly enforce social distancing and mask-wearing throughout our offices and facilities, and we offer working from home for those who are medically vulnerable. I pay tribute to everyone at Aramco for the patience and adaptability they have demonstrated throughout the pandemic. We are proud that despite all of the challenges and disruption, our operations have remained uninterrupted with 100% reliability. With that, let's look at the market context. Last year, of course, saw one of the biggest collapses in oil demand since the Second World War, but it's now clear that the global economy and oil markets are starting to recover. Widespread COVID vaccination programs have resulted in the easing of restrictions, and combined with the ongoing stimulus measures, are fueling a robust economic recovery with tailwinds for oil demand in the second half of the year. As you can see in the blue bars of this chart, forecasts call for a recovery in global oil demand to pre-pandemic levels by next year. We are confident in the outlook. Looking back at the first 2 quarters of the year, we clearly see the recovery in oil demand, and more importantly, with discipline and supply, we saw a significant increase in oil prices and downstream margins. Now let's focus on the first half and the progress that we've made in delivering Aramco's strategic objectives and continuing to maximize shareholder returns. In our upstream business, we completed the Ain Dar and Fazran crude oil increments in the Ghawar field. These increments are targeting a combined production capacity of 175,000 barrels per day. Looking forward, the Marjan and Berri crude oil increments are now in the final stages of detailed engineering, and we expect them to come on stream by 2025 with a combined capacity of 550,000 barrels per day. In our gas business, the Hawiyah Unayzah Reservoir gas storage program is also in its final engineering phase. It's planned to provide up to 2 billion standard cubic feet per day by 2024, adding further flexibility in meeting the domestic demand. In the downstream, we safely started up Jazan Refinery, and we are on track to reach its targeted capacity of 400,000 barrels per day. We're also making strong progress in the integration of SABIC. Our achieved synergies are ahead of plan, and we've optimized our go-to-market strategy for all products. I'll take you through those activities in more detail in a moment. We remain committed to the global energy transition, and we view renewable energy as a complement to our own energy products, not least in the kingdom with its vast solar and wind resources. With that in mind, we're evaluating potential projects with partners to make investments in renewables. We will also continue to pursue our long-term plan to unlock and redeploy capital, and we'll continue to reinforce our balance sheet to optimize capital structure and maximize shareholder returns. As part of this plan, we recently completed the lease and leaseback transaction of our crude oil pipeline network, which raised $12.4 billion and we will continue to pursue other potential opportunities that unlock capital to enable long-term shareholder value creation. We also continue to diversify funding sources and expand our investor base, and we're delighted with the global investment community's positive response to our international dollar sukuk. This gave us access to about 100 new investors looking for Sharia-compliant financial instruments. Last, but certainly not least, we are focused on developing people and on the workforce of the future. Earlier this year, we launched Altamayyuz Finance and Accounting Excellence Academy to help in the growth of financial services in the region and form a highly skilled talent pool. This is a first-of-its-kind collaboration between leading international and domestic accountancy firms and global investment banks, partnered with one of the top business schools in the world. Let's now dive into more detail about our progress integrating SABIC into the Aramco group. As a member of SABIC's board of directors, I see value levers being used not only from the Aramco group perspective, but also from the SABIC perspective. Our controlling stake in SABIC accelerates our downstream strategy by helping us leverage petrochemical growth opportunities and generates considerable value in the form of synergies that impact our bottom line. We expect to capture value of between $3 billion-$4 billion of annual recurring synergies by 2025, with the majority of this value coming from procurement, sales and marketing, supply chain,down stream integration, feedstock optimization, and maintenance. So far, we're well ahead of our plans, but nevertheless, we're intensifying our efforts to expedite execution even further and to identify additional opportunities. With that overview, let's look at some of the numbers for the first half of the year. In H1, we generated net income of $47.2 billion and free cash flow of $40.9 billion. This strong performance and high level of free cash flow generation supported our dividends of $37.5 billion for the first half of the year. Looking at the details, we see that net income more than doubled from H1 of last year, with improvement in both upstream and downstream. Upstream delivered an EBIT of $85.4 billion in H1, which is a 63% improvement over H1 of last year, mainly driven by an increase of around $27 a barrel in realized oil prices, partially offset by lower production. Our downstream delivered EBIT of $9 billion, mainly due to higher margins, performance improvements, the consolidation of SABIC's results, and favorable inventory effects. This strong performance led to strong cash delivery in H1, with our cash balance rising by $12.3 billion to end H1 with a balance of $67.6 billion. Three key elements to note. The strength of operating cash flow is driven by our ability to capture higher crude oil prices, as well as downstream and chemicals margins. As you can clearly see from the charts, H1 cash flow from operations more than covered CapEx and dividends. Net proceeds and borrowings of $9 billion mainly included $12.4 billion from the crude oil pipeline transaction and $6 billion from our inaugural international sukuk issuance. This was partly offset by the scheduled payment of $5 billion to PIF for the second installment of the SABIC acquisition. Finally, despite this borrowing, our gearing further reduced from 23% at the end of 2020 to 19.4% at the end of June. Our financing framework is clear and has three pillars. Prudence to maintain sufficient capacity in the face of price and volume volatility. Optionality and execution flexibility, which is achieved by diversifying our financing sources and expanding our investor base and, of course, efficiency, which is achieved by working across the group to optimize financing cost. The objective remains to maintain an optimum capital structure, a diversified and expanded investor base, a strong balance sheet, healthy cash balances, and a strong credit rating. Let's zoom in a bit on CapEx, where we continue to exercise financial prudence and discipline when it comes to capital allocation while investing for the future. We continue to demonstrate the flexibility in our capital program. As you can see, after being able to flex down our capital expenditures last year in response to the market downturn, we were able to quickly flex up with signs of economic recovery. This is one of our competitive advantages as we bring incremental supply from our high-quality, low-cost and low-carbon intensity resources. We continue to expect 2021 CapEx to be approximately $35 billion, which is a 30% increase from 2020 at a time when the industry has reduced capital investment over the cycle. Given that we are the major producer with lowest upstream carbon intensity and lowest cost, it makes both environmental and economic sense for incremental global oil demand to be met by Aramco. As we optimize our capital program going forward, we have a unique and significant opportunity to accelerate our growth in line with our strategy through the participation in the Shareek Program, which was recently announced by the government of Saudi Arabia. The word shareek in Arabic literally means partner, this win-win public-private partnership is intended to drive economic growth and job creation by offering incentives for large companies to invest. We're thankful to the government for this program that could offer attractive incentives for a range of our strategic investments, thereby enhancing their economics and accelerating our strategic growth. As we deliver long-term sustainable growth of our core business, we're focusing on upstream liquids and gas and on downstream. First and foremost, we're increasing our Maximum Sustainable Capacity from 12 million barrels per day to 13 million barrels per day. This will allow for volume growth of the low-cost, low carbon intensity oil the world needs. We're also growing our gas business to meet the growing captive domestic demand at commercial rates of return and to provide feedstock for our blue hydrogen plants. In the downstream, we're focusing on improving performance through SABIC's integration, assets transformation, and expansion of our global trading business. We're also focusing on further de-risking our upstream position through expanding dedicated outlets for our crude oil that have high conversion rates into chemicals. As we grow, we will continue to optimize our portfolio and unlock and redeploy capital while retaining control of operations. We are also continuing our focus on affordable low-carbon energy. As I mentioned earlier, we have the lowest upstream carbon intensity of any major producer. Our upstream carbon intensity of 10.6 kg of CO2 emissions per barrel of oil equivalent in 2020 is around half that of the OGCI 2025 target, which is 20 kg of CO2 emissions per barrel of oil equivalent. This is the result of decades of long-term reservoir management and de-leveraging advanced technologies. We are proud of this leadership and determined to maintain it, as we believe it is a significant competitive advantage in a lower carbon world, especially with our high-quality prolific reservoirs and the advanced technologies we deploy in these reservoirs. At the same time, we're intensifying our focus on affordable low-carbon energy, especially the potential rapid growth in hydrogen demand, again, taking advantage of our high-quality reservoirs to develop large-scale, cost-competitive carbon capture and storage opportunities. Before we take your questions, let me summarize. Our strategy is on track to deliver value to our shareholders, and we remain positive about the prospects for future growth. We've demonstrated our resilience once again, and we now see positive and growing momentum in earnings and cash generation. We are effectively executing our portfolio optimization program to unlock and redeploy capital. We continue to diversify our funding sources and expand our investor base in line with our financing strategy. We declared a dividend of $37.5 billion for the first half of 2021, which, combined with our CapEx, was more than covered by our free cash flow. Thank you for listening. Thank you, Ziad. I would like to say a few words in conclusion before we take your questions. Our financial performance is strong, but even more importantly, we are making good progress in delivering our strategy. We are beginning to accelerate our future growth, increasing investment in sustainability and the supply of low carbon intensity, low-cost energy that the world needs as it recovers. This acceleration in growth will be supported by the Shareek Program. We are achieving our downstream integration and expansion goals and maximizing the value of our assets by redeploying capital to higher return areas. For all these reasons and many more, my team and I remain optimistic about the future and the value that we can create for society and for our shareholders. Ziad, Fergus, and I now look forward to taking your questions. As a reminder, ladies and gentlemen, if you'd like to register a question, you may do so by pressing star followed by one on your telephone keypad. If you change your mind, please press star followed by two, and when preparing to ask your question, please ensure your phone is unmuted locally. I'll now hand back to Fergus. Thank you, Jordan. I think I see the first question coming from Mazen Al-Sudairi at Al Rajhi Capital in Riyadh. Mazen, please go ahead with your question. Thank you. Congratulations on the good set of results, and thank you for the opportunity to ask a question. My first question is on the Shareek Program. Could you outline Aramco plan for the Shareek Program in term of size and outline and incentives for Aramco, if you can? Second question is, in global supply of oil, global investment in oil and overall supply is declining. Is Aramco planning actually to use this opportunity to revise the strategy of CapEx or to maintain it? Could you please share your thoughts around this? Thank you. Thank you, Mazen. I think there are two questions there. One's about the Shareek Program, the partnership program. Are we yet ready to talk about what scale our participation in that program might be and what of support we might expect from the government to accelerate some of our growth programs as part of that overall scheme? The second one is that many commentators believe that the global industry may be under-investing in new sources of hydrocarbon production. Do we share that view, and do we believe that that creates an incentive for us to move more quickly in that area? Thank you, Mazen. With regards to the Shareek Program, first, it's a voluntary program, and the purpose of the program is to basically increase the participation of the private sector and local economy by creating incentives. It's a win-win for the government and the private sector. We are participating in the Shareek Program. We are currently reviewing a lot of projects, benefit out from these incentives. These incentives could be either in terms of infrastructure, regulatory frameworks that are required or financial or taxation or tax incentives that might be offered. All of these are being put on the table, reviewed by Saudi Aramco. I would say it's a once in a lifetime opportunity, which we intend to make the maximum use of it. We are really thankful to the government for this win-win public private partnership that will help us accelerate our strategic growth. As I said, details are still under development, and so is the incentives that are currently being negotiated. We have put a dedicated team diligently evaluating candidate projects, focusing on localizing our supply chain, other sustainability projects like crude to chemicals and hydrogen, blue hydrogen, both programs that are important for us to continue to maintain our leadership position globally when it comes to emission and diversify our income over the long term. These projects require some incentives, and this is what we are doing right now, in participation with the government. With regard to oil supply, as highlighted by Ziad earlier, we are the lowest cost producer and the lowest in terms of emission. We see a lot of drop in investment when it comes to crude oil supply in the mid and long term, as highlighted by a lot of the analysts. We are capitalizing on the opportunity by first increasing our MSC maximum sustained capacity from 12 to 13 million barrels. We are currently working on the front-end engineering. This is an opportunity. Of course, we are trying to benefit out of the lack of investment by major players in the market by putting investment in this sector. Okay. Well, thank you again for that question, Mazen. Thank you very much. Very clear. Thank you. Yeah. Next question comes from Alastair Syme at Citigroup. Alastair, please go ahead if you're on the line. Thanks, Fergus. Thanks for the opportunity to ask you questions. Again, congratulations on the results. Can you talk a little bit, again, about Shareek, just follow on from that question, from your first question, specifically around the renewables sustainability part? I did note that the government did award PPAs to seven projects back in April under the second phase of the National Renewable Energy Program. Clearly some developers seem to think the economics are already pretty good for this sort of investment. Just trying to understand why more incentives might be needed or where could incentives enhance the rate of growth. Thank you. Thanks. Thanks, Alastair. I think the question is, again, just to dig into the renewables issue and how does that relate to Shareek. I think as the CEO mentioned, sustainability is a big focus. Accelerating investment in sustainability is a big focus of the projects that we're examining for participation in Shareek. Specifically, I think your question is about renewables, and does it need incentivization? Thank you, Alastair. We are partnering currently with PIF and ACWA Power with regard to the renewable program, seeking opportunities in the renewable program. The government announced a plan to be 50% of the utility sector will be on renewable and 50% will be on gas. Basically, the utility sector now, it means a lot of liquid that is currently going to the utility sector will be replaced either by renewable or by gas. In both cases, it will avail that liquids for export markets at a much higher price, and at the same time, it will help us to increase efficiency and reduce emission as a kingdom. The Shareek Program also looks at, for example, if I give you an example on the hydrogen, blue hydrogen. Blue hydrogen is also require a lot of carbon capture and sequestration, and this is where we look for incentives. If I give you two example of that, they sort of mimic what the Shareek intention is the maritime complex in Ras Al-Khair, the King Salman Maritime Complex and King Salman Energy City. Both programs were close to completion. Basically, it will help us to build tankers, platforms, fix our barges, and maintaining our fleets, boats, engines, manufacturing. It will increase our reliability. Reliability is very important and critical to Saudi Aramco. Before the Shareek program, the kingdom, in order to facilitate and support these programs at Ras Al-Khair, King Salman Maritime Complex, and the energy city, we brought the biggest player in the energy sector to that energy city, is supported the infrastructure, built the infrastructure. Aramco gave the funding required for Aramco to build the infrastructure, where the partners did not incur any cost in terms of availing that infrastructure. Basically, the government helped a lot in this by bringing all of these major players from around the world to the kingdom. At the same time, we benefited as Aramco by being partners with a lot of companies by increasing our reliability. You have seen in the attacks in Abqaiq and on Khurais during the pandemic, where a lot of manufacturing facility was shut down. We benefited a lot by maintaining our reliability by relying on our local suppliers. Having these major industry manufacturing hubs in the kingdom helps to maintain Aramco reliability. We are enjoying today 100% reliability. Even during the attack, we were at 99 point something. It shows how much is that our local content and having all these industries in the Kingdom help the Company to maintain a high level of reliability. Thank you, Alastair. Can I ask a quick follow-up, please? Yep. Please go ahead. It was just on the blue hydrogen. Do you anticipate the blue hydrogen being primarily for the domestic market, or do you see the export opportunity is starting to grow? Well, we are looking at export opportunities, in terms of blue hydrogen. Currently, blue hydrogen require, in addition to the ammonia as a transport media for it and all of that and shipping it to markets, it require a lot of carbon capture and sequestration. We are doing a lot of work in terms of front-end engineering for carbon capture and sequestration to avail that. We are also engaging with different markets around the world in terms of offtake agreements. We are doing all that what's required to avail blue hydrogen. At the same time, we are in discussion with different markets. The major markets that you're looking at today in terms of demand is Japan and Korea in terms of demand for blue hydrogen. As these markets grow, it will increase the availability for us to and the opportunity for us to produce more blue hydrogen for export market. Thank you very much. Thanks, Alastair. Next question, I think is coming from Karen Kostanian from Bank of America. Karen, are you there? Yeah, I'm here, Fergus. Gentlemen, thank you very much for the presentation. Congratulations on great results. Mr. Al-Murshed, welcome to your inaugural call with us. Thank you. Thank you. I'm going to be unoriginal. I'll also ask a question about the Shareek Program here. Am I understanding correctly that the $35 billion CapEx guidance for this year does not include the Shareek Program? If it doesn't, would you also consider stretching your potential leverage targets of 5%-15% to accommodate the Shareek Program? That's my first question. My second question is that back in the day when Aramco IPO'd and the world was normal, you also considered potential progressive dividend policy, and now as the world returns to normal, whether you plan to revisit that policy. Thank you. Two questions there, I think. One of them is about, is there anything for Shareek in 2021 capital spending guidance? Would the incorporation in the future cause us to think again about any of our leverage targets, the leverage targets that were talked about some time ago? I think you used the word normal about 2019. It seems a long time ago now, we did give capital spending guidance at that time of $ 40 billion-$45 billion. I think the suggestion perhaps in your question was whether that's an indication of the direction of travel from the $35 billion of guidance that we've provided for 2021, if I understood you correctly, Karen. Yeah, that's right. My second question was about the dividend. Yeah. How that relates then to the dividend. Yeah. Okay. Thank you first, Karen. I will take the first question, and Ziad will address the second question. Yeah, $35 billion does not include anything from the Shareek Program yet. As I said, we are currently working in identifying the opportunities for these programs. It is very important and critical for us because it is not important for growth only. It is important for sustainability because we are looking at a lot of projects that will help us to diversify, at the same time reduce our emissions. Case in point is the crude to chemicals and blue hydrogen. The previous guidance about leverage, I think you are talking about the 5%-15%. It will all depends on the opportunities that we are looking at right now. We have always capital prudence and strong balance sheets. As you highlighted by presentation by Ziad, you've seen the cash balance by the end of the year. We are in a very strong position going forward. With the right incentives, it should help us really to meet our aspirations, not only in terms of growth, but more importantly, in terms of maintaining and leading in carbon emissions in the long term. Ziad, if you want to address the second question. Yes. Thank you, Amin. Thank you, Karen, for the question. On the 5%-15% gearing range, we look at that as a general range. It is cross cycle that we're looking at, and obviously it's a general range. We have a lot of considerations that we have and a lot of factors to balance. We basically have a financing strategy that looks at three main things. Prudence to maintain sufficient capacity with the price and volume volatility. Optionality and flexibility, which is why we are diversifying our financing sources and expanding our investor base. Of course, efficiency, working across the group to optimize financing costs. The objective, as opposed to having a hard gearing range, is to maintain an optimum capital structure, diversified and expanded investor base, a strong balance sheet, healthy cash balances, and of course, a strong credit rating. That closely ties to how we look at the pecking order on our cash. I want to make sure that you understand that the Shareek Program is coming offering a lot of opportunities, but that does not mean that we will not continue our tradition of financial prudence and capital discipline. We have clear priorities for cash that have not changed, and we don't anticipate them to change soon. First, of course, is looking at or addressing and catering for sustaining CapEx. We then maintain the ordinary dividend. After that, we look at growth opportunities, again, exercising the financial prudence and capital disciplines that you're used to from us. Then finally, we look at a mix of additional distributions, further deleveraging, or a combination of both. I just do want to remind you that historically, the company has distributed special dividends. Of course, 2020 was not a good year for the industry, so you didn't see that. If you go earlier in our history, not much earlier, we have actually distributed. Thank you. Yeah. Thank you, Karen. Hope that addresses your question. Next question I think is coming from Martijn Rats at Morgan Stanley. Martijn, go ahead, please. Yeah. Thanks. A lot of questions about the Shareek program. I also have one. If you look at the returns that are available for you to invest in under this program, including the incentives, I was wondering if you could say something about how those returns would compare to the returns that are available to you in the upstream. Of course, historically, the returns in the upstream have been very compelling, and I was wondering if they are a sort of benchmark or a threshold for you to meet elsewhere too, or whether the return requirements in investments under this program are somehow lower because they are of a different nature. The return comparison, that's one thing I was very interested in. Secondly, I was wondering if you could say a few things about the increase in the MSC to 13. In principle, the logic is relatively straightforward. You have low emissions barrels and a lot of them at low cost, and the rest of the world is not really investing all that much. The history of those types of expectations, I can say from experience, I have to admit, has been mixed at best. For the next 2 years, it doesn't look like the underinvestment is so obvious. The world still has a lot of spare capacity. The U.S. rig count is coming back. What gives you longer-dated confidence that the world indeed will need 13 million barrels a day of MSC from Aramco? Thank you, Martin. I think the first one is about, what are the expected returns for projects under Shareek? Could they ever be competitive with the returns in the upstream? I think we've said publicly in the past that it's very difficult for anything to compete with upstream returns in oil, which are very high indeed. There are other aspects of the upstream, the gas, for example, which has been very successfully invested in, which doesn't have the same returns as oil. What are the expectations for Shareek returns? Your second one, I think, is about how can we feel confident that the world's going to need 13 million barrels a day of our low carbon, low cost production capacity. I'd just remind you one thing, Martijn Rats, I think we talked about during the IPO, that you don't have to be producing constantly at that level for it to deliver very good returns. The optionality that comes with the ability to flex upwards when the world has a supply disruption elsewhere can itself be extremely valuable. I think we had gauged some numbers during the IPO on that. I just caution that you don't have to believe 13 million on a sustained basis in the near term to believe that that would be a very good investment. Anyway, I believe those were your two questions, Martijn Rats. Okay. Thank you, Martijn. I will address the second question and allow Ziad to go through the first question. With regard to the 13 million, yes, if you look at the next two years, and in terms of what MSC capacity of 12 million and markets and how much of that we will utilize, you might be right. Don't forget, it will take you almost a good number of years to bring that capacity to the market. Front-end engineering alone takes two years. You didn't do anything on the ground, just front-end engineering, approximately two years. We do our plan, we look at the long term. I always cautioned the international markets about what is coming ahead of us. There is a need for additional capacity, it's not going to come easy. Any increment, it takes five to seven years at least. Some increments, they take eight and nine years to bring them to the market. For us, just front-end engineering, the next two years, you are looking at front-end engineering. You start the construction. You take a good number of years, five to seven years, just to bring these facilities on stream. You have to plan for the long term. You will need to put the investment and anticipate the growth that you will see in the future, considering that you are the lowest cost producer and you have the lowest emissions, so you have the biggest opportunity in terms of placing that in the markets. Not to mention our aspiration and how much we will put crude to chemicals and all of that. We need that additional capacity for these projects that we are planning in the future. I'll just say a little bit about it. There is nothing much upstream. If you compare downstream to upstream, no, they are not the same. However, when we do any downstream investment, we look for healthy returns, matching any investment anywhere in the world. We always plan for healthy returns for our downstream investment, and this is part of also the incentive program as part of the Shareek that we are looking at and discussing. Ziad? I just want to say that, again, reminder, financial prudence, capital discipline is not changing with or without Shareek. Like Amin explained earlier, Shareek is a voluntary program. We're looking at this as an opportunity. We're looking specifically at the projects internally within the company. Management's going to treat those exactly like any other projects. We're still going to go through the gated process. We're still going to be disciplined on what types of projects we're targeting. Like Amin explained earlier, we're talking about strategic projects. We're focused on localizing our supply chain. Not only to improve the response times of our contractors, but also long-term to help reduce our costs when our suppliers are nearby. Amin spoke about sustainability projects, but we're also focused on crude oil to chemicals. Just keep in mind that crude oil to chemicals is strategic for us because it de-risks our upstream barrels by converting a big percentage of them or the molecules into chemicals. As we explained earlier, and I explained in the presentation, the specific projects for Shareek are still under development. We're still working out the numbers and the priorities, but a good idea to keep in mind is that we're looking for double-digit returns. What those will end up specifically being, we're still working on the numbers. All right. Thank you. Thanks. Thank you, Martijn, for your question. The next one comes from Michele Della Vigna from Goldman Sachs. Michele, please go ahead. Thank you so much, and congratulations on the strong results. Two questions, if I may. The first one is on the potential increase to the 13 million barrels per day of available capacity. I was wondering, as you start the engineering process for that increase, how do you think it's likely to come in terms of enhanced processing facilities and drilling versus potentially the development of new fields? Where do you think that the highest return opportunity to enhance the capacity comes from? Then going back to your low carbon investments, you've been a leader, effectively, in low carbon oil production for decades. As you start to think about blue hydrogen carbon capture, do you see breakthroughs in that technology that could make it more attractive from an economic perspective than what we've seen until now? Thank you. Thanks, Michele. Two very interesting questions. Are we at a point where we can talk in more detail about what the optimum economic strategy for the expansion to MSC 13 will be? What's the best way to bring that forward in terms of the balance of new increments, new fields, or from existing? Secondly, on the blue hydrogen, do we see any sort of technical frontiers that might accelerate the economics? I think there's a big push globally in terms of trying to improve the economics of decarbonized hydrogen, and what are we thinking about that? Thank you, Michele Della Vigna. The increase from 12 million to 13 million will mainly come from offshore expansion, while maintaining our low depletion rates strategy. That is a strong, very important element for the company, to maintain a low depletion rate in our fields when it comes to production. Majority for the time being is going to come because we have the highest and biggest reserves, that is remaining reserves, is in the offshore. We also bring some from the onshore development. With regard to the low carbon, R&D or technologies, you are absolutely right. Most of our research, we have nine centers out in the kingdom, three centers. A lot of it is focused on how do we capitalize on technologies to reduce our costs and shift more of our, for example, gas to hydrogen, while at the same time reducing costs. If you look at chemicals, for example, crude to chemicals, it will help us a lot reduce our emission, maximize value by going down the value chain, and also diversify our income over the long term. A lot of technologies are being developed by Aramco. For example, thermal crude cracking and catalytic crude cracking, that helps us to shift 70% of the barrel to chemical, while at the same time reducing our capital cost by 25%-30%. carbon capture and sequestration is also an area of interest because the biggest cost element in converting gas to hydrogen is carbon capture and sequestration, and how much you can reduce the capital spending by capitalizing on new technologies. There is a lot of development in that area that we are currently working with our partners to help reduce the cost further and maintain the leadership for blue hydrogen. Because at the end of the day, you have to compare blue hydrogen with green hydrogen. Today, blue hydrogen in terms of cost is lower. How green hydrogen is achieving a lot of development in terms of reducing the cost over the long term. Similarly, the advantage for us is blue hydrogen. We have also similar advantage, by the way, here in the kingdom for green hydrogen. It's an area of interest as well. However, we are working on both and looking at how can we reduce our cost, because the capital cost is the key. How do you reduce? Even similarly, reservoirs. Today, if you look at carbon capture and sequestration, how do you identify the best reservoir with the highest porosity and the highest permeability? Because that will reduce your cost. It will reduce your compression requirements. How do you identify fields for sequestration that is close to your existing plants that can take advantage of these high volumes of CO2 that you will be sequestering? Just maybe add to that- Thank you. we are working or utilizing SABIC's capability in ammonia production as well as some value chain in that product. Now, in terms of cost optimization, we optimize not only when we bring the increments in, but as we're producing. We have one of the top 10 most powerful computers in the world to use in simulation just to optimize production. We're closely looking at production costs from different fields and constantly optimizing where that cost is, or how to optimize that cost. But again, like Amin said, we're doing the detailed engineering. We're taking this one step at a time, and I'm sure a lot of adjustments will be made along the way. Thanks for the question, Michele. It's a very exciting area, as I'm sure we all believe. Next question is from Gordon Gray at HSBC. Gordon? Thank you. Thanks very much for the presentation and the opportunity to ask questions. Two quick ones really, if I could. The first one is you've talked about dedicated outlets for oil to petrochemicals, and on that subject more specifically, it's probably two years on now from when we started to hear about the link-up with Reliance Industries. I wonder if you could update us on if there's any progress there that you can talk about. The second one is a broader question about portfolio optimization. You've just had the very welcome $12.4 billion from the pipeline deal. Wondering in general terms, if you can talk about What may be considered not core? What sort of things are you looking at for future optimization of the portfolio? Thanks very much. A broad question, I think about the whole issue of integration down the value chain, whether that's crude to chemicals or replacement and the specific opportunity potentially in India of Reliance. The second one is the criteria for portfolio optimization and scale. How do we make those decisions as to which assets are candidates for that program? Thank you, Gordon. Because of our large scale, it requires our presence in all enclaves. We do have a diversified customer base with presence account in all major markets. We are meeting our commitment to the highest reliability. Of course, India is very important market. China and India are very important markets. We are working on the due diligence in terms of that acquisition with Reliance. As you appreciate, because of COVID-19, we experienced some delay in terms of completing that due diligence and completing the work required and such. We are catching up, but it is an important area and the work is still on. Divestment is an important part for portfolio optimization. The objective of the program is to unlock capital and redeploy it to generate higher value for our investors and support our strategy of execution. Our plan are progressing well. The oil pipeline deal that you highlighted is complete. We are developing other great potential or great deals. We will be announcing them in due course. this year and in future years. That program will continue. We will be, as you saw in the oil pipeline deal, it's a lease and lease back for 49% for 25 years. We are looking at potential assets for other deals that we are currently in negotiation, let me put it that way. Ziad, do you want to add something? Yeah, Gordon, one thing to keep in mind is that you've seen in the oil pipeline deal that we've retained control. The way to think about this is not core versus non-core. The way to think about it is where do we have capital that's tied up that we can unlock and move it or redeploy it to somewhere where we can generate higher value? Since we're retaining control in most of these, whether it's core or non-core is not the key determinant. That's very clear. Thank you very much. Thank you, Gordon. Our next question is from Biraj at RBC Capital Markets. Biraj, are you on the line? I am. Can you hear me? Very clearly. Yeah. Thanks for taking my question. quick question on SABIC, actually. you expect to generate $3 billion-$4 billion of annual synergies by 2025. What are the main factors making the synergies realization moving within that range, and how substantial is COVID at risk, especially when it comes to supply chain and procurement aspect of this synergy realization? That would be my only question. Thank you. Thank you. That's clear. The question is, we've talked about the $3 billion-$4 billion of synergies by 2025. What gives us confidence? I think we may have said in the prepared remarks we're ahead of schedule, but what gives us confidence, and is there any risk from the pandemic that might actually slow us down? At the moment, we're going faster. Biraj, thank you for the question. When we look at the SABIC synergies, there are two aspects to look at, the amount of the synergies, the $ 3 billion-$4 billion, by 2025, and the second is the timeline of these. The fact that we will reach end state, we expect to reach end state by 2025. On the amount, we actually started planning for these synergies, as soon as we signed the share purchase agreement. Throughout the year and a half or so that it took to do all the regulatory approvals, we were busy jointly developing a lot of these synergies. We started, of course, before signing the agreement with a top-down estimate. After signing the share purchase agreement, we actually bottomed up all of these. We have great visibility and a relatively high level of confidence that we will be able to achieve these. I want to say that those synergies are two types. Combinational synergies, which normally in acquisitions of this size, you would have most of the synergies being combinational synergies because of usually high overlap in the product portfolios of both companies. In our case, however, the overlap was not as high as some of the other deals. We had also a very high percentage of transformational synergies. These are where we just completely look at what is the best way of doing business in a certain function, and we change the way that both companies actually do business. Very roughly half and half are between combinational synergies and transformational synergies. When it comes to the timeline. Because we have such a high percentage of transformational synergies, those take a little bit more time. This is why our timeline stretches to about 2025 for end state. So far, we're ahead of the schedule that we've put in place. You might have heard SABIC announce that we were ahead. They actually announced a specific number, I believe it was Thursday. We're also, if we look at the entire group, we're ahead of schedule. Like I said in the presentation, although we're ahead of schedule, we're continuing to look for ways to expedite even further and looking for even more opportunities that we can capture. Just to add to what Ziad said, everyone, and even in our capital spending, we do have lot of interest chemicals, especially crude to chemical in different enclaves around the world. SABIC also have the same interest. Before we acquired 70% stake in SABIC was competing with Saudi Aramco in the same enclaves. For these high-demand markets are of interest to all companies, Aramco and SABIC. Now, because of this alignment, we are able to optimize our capital spending in these markets by capitalizing on SABIC as the chemical arm for Saudi Aramco. Just maybe, sorry, you did ask about supply chain and the impact of the pandemic. We did see, of course, everything that all of these estimates were based on a baseline that we used. We're very disciplined in the baseline that we used, that we're comparing this value against. We're looking at the 2018 audited financials, all the costs that are in there to compare what we're actually realizing. The pandemic and the resulting impact on the supply chain and the cost of the supply chain did have an impact on the numbers. Both, actually, in Aramco and in SABIC, we're disciplined enough not to take that as an excuse. We went back to the drawing board, and we looked much harder for more synergies. We're still targeting the same level of synergies. Overall, we're very confident in the $3 billion- $4 billion annual recurring impact on EBITDA. 6 main functions, like I said, just to remind you. Most of the value is in procurement. We also have sales and marketing where we have completely integrated and synchronized our go-to-market strategies so that we have one face to the market. Also supply chain and stream integration, where we have a very high concentration of assets in two cities next to each other. We have a lot of Aramco facilities and right next door, literally across the fence, are SABIC facilities. There are a lot of opportunities to exchange streams and upgrade low-value streams into higher-value products. Then, of course, your regular operations and maintenance. Hopefully, that gives you a very clear picture, everyone. Next question, I think we'll cross the Atlantic, and we'll go to David Havens. If you're still there, David, from SMBC Nikko? No, I think we may have lost David. Next question then is we'll come back to Europe and I think to France and Henri Patricot from UBS. Yes. Thank you, Fergus, and hello, everyone. A quick follow-up around dividends and gearing, and thank you, by the way, for just laying out the updated priorities and the financial framework. My understanding previously around additional dividends was that Aramco would start to return more cash to shareholders if gearing fell below 15%. It sounds like you may be looking at more growth opportunities than previously. If we think of the point at which you would return, raise the dividends, a special dividend, would it still be this 15% level of gearing, or would that be closer to the lower end of the range of 5%? Just to get a better sense of how that is going to work out. Thank you. Henri, if you're suggesting that there was a relationship between the targeted level of gearing across the cycle, the 5%-15%, and dividend decisions. For the special dividend. Yeah. Yeah. No, thank you for the question. Like I said, 5%-15% is not a hard target for us. It's a good indicative target that is cross-cycle. We make the decisions, or our board makes the decisions on the dividend based on the dividend policy that I outlined earlier. The sustaining capital ordinary dividends followed by growth, and then a combination of distribution and leveraging. If I understand you correctly, you're asking about this fourth, the combination of additional distribution and de-leveraging, and how do we make the decision? Is it based on the 5%- 15% range? One of the considerations that we have is the gearing ratio. Also, we're looking at the different aspects of our financing strategy. Maintaining flexibility, expanding our investor base, keeping healthy cash balances and a strong credit rating. I do want to highlight the importance of the growth opportunities that we have. It's very important when we're making these decisions to keep in mind the specific growth opportunities that Aramco has that may not be available to other companies. We have to look at this decision a little bit differently, factoring not just a hard gearing number, but just holistic picture. If I may add to what Ziad said. Thank you, Henri. Our investors are definitely looking at sustaining and growing the dividend for the long term. I am sure they are also equally interested in also growth sustainability program. We have, as I said, when I highlighted, talked about the Shareek Program. It's a once in a lifetime in terms of hailing incentives that will help us to achieve some of our aspiration when it comes to sustainability and maintain our strong leadership when it comes to carbon emission. While we are sustaining and hopefully growing our dividend over the long term and monitoring our gearing ratio, we need to grow and do more of the sustainability project that we are targeting. Understood. Thank you. Hopefully that's clear. Thank you. Our next question comes from Matt Lofting at JP Morgan. Matt, could you go ahead, please? Great. Thank you, Fergus, for taking the questions. Thanks gents for the presentation. I had two, if I could. First, global oil demand. I recall you gave a positive assessment on the outlook during the full year results in March. It sounds like that's still very much the case today. I wondered if you could share any latest perspectives on notable regional trends that you're observing in key markets as vaccine deployment is rolled out. Then second, just coming back to oil spare capacity and the MSC. I think you rightly earlier referenced the company's capability to flex its growth program to capture opportunities. Given risks of industry under investment, assuming that the global demand continues the recovery trajectory you've projected, would you consider expediting further growth in capacity towards that 13 million barrels per day level? For example, accelerating the Marjan and Berri increments. Thank you. Oil demand outlook, two questions, I think, Matt. The second one is could we accelerate MSC? As Ziad's pointed out, we're doing the front-end engineering and evaluation of options to optimize the program at the moment. Is there a lever that we could pull to do that more quickly than might normally would be the case? I think Matt is asking if we can accelerate beyond the 15. Also, that as well. First of all, thank you, Matt. We remain confident in the outlook. We see a strong economic recovery underway resulting in demand rebound, especially in the U.S. and China. Our forecast, we look at today, we are looking at 97 million barrels in terms of demand. By end of the year, forecast is around 99. Our expectation will be by the end of next year is around 100 million barrels. Basically, we will be by toward the end of next year to pre-pandemic level in terms of demand. We are very optimistic and confident in the outlook going forward. MSC, as I highlighted earlier, people do not understand the market, that it takes a lot of time just to do the engineering and then start building these facilities. We are doing the 13 in spite of the decision on the 13, by the way, started in 2020. The government asked us to increase MSC from 12 to 13, and we capitalized on that opportunity. It's a government decision, we are seeing an under-investment in supply for sure. This is great opportunity for us to increase our low cost, low carbon intensity supply. We are focusing on increasing the 13 at the current stage. As I mentioned, we started front-end engineering. At the same time, if we get a request to go beyond that, we do have the reserve space to go beyond 13, if it's required. This is all question of time because this project takes, between engineering and construction, takes quite a bit of time. We do have the reserve space. As you know, our reserve is 260 billion barrels. It gives us the advantage to even go beyond that if the market or demand is there, and if we get a request from the government with regard to expanding the MSC. Very clear. Thank you all. Thank you. I think we've got two remaining questions. I want to thank them both for their patience in waiting. The second to last is Jason Kenney at Santander. Jason, could you go ahead, please? Well, thanks, Fergus, really appreciate it, and hope all is well with you and yours at Saudi Aramco. Just one question really. It's on hydrogen. A couple of the international energy majors have stated targets for double-digit market share of the global hydrogen market by 2035 or the middle part of next decade. I was wondering if Aramco had a figure in mind as to what kind of market share it could position for in global hydrogen, blue, green, all colors. Maybe a technical question on the back of that, just thinking about things, I was very interested in your oil thermo-cracking opportunity. Is there still a possibility you could look at in situ hydrogen production, the oxidation of hydrocarbons in the reservoir, so you don't actually have to produce them to surface and capture the carbon at surface? That's maybe a second technical question there. Sorry. Thanks. Well, thank you for the kind words, Jason. Yeah, so two hydrogen questions. One, do we have a market share in mind? Is there anything comparable to our market share in oil or Secondly, the technical issue about in situ conversion of hydrocarbons to hydrogen. Thank you, Jason. With regard to in situ carbon capture, we are looking, as part of our R&D program. This is an area that we are looking at. It is challenging, and the cost is an important element that we are looking at in comparison to sequestration, carbon capture and sequestration. This is part of the R&D work that is currently going on. As I said, a lot of our R&D work is around sustainability and reducing carbon emissions, and what can we do to capitalize on technology to reduce our costs, which will make these projects more favorable economically for us to pursue. Hydrogen, as I said, is a very interesting market for us, and we are, as I said, we are looking currently at the markets and basically, we're looking for offtake agreements from different markets. Our program now, right now, look at 2030, in terms of production. We anticipate that we can expand our hydrogen significantly in the future depending on these markets and the availability. The key is the availability of these markets. The kingdom and Saudi Aramco is benefiting a lot, as I said, from our advantage in terms of reserves and gas, advantage of our low cost of gas, the advantage of availability of structures for sequestration. We do have major, large, significant aquifers to sequester, and some of them very prolific in terms of porosity and permeability. We do have an advantage. Currently, we are looking at the markets and finding out the appetite for blue hydrogen. Based on that, we will be planning accordingly. Of course, we are similar to other. We're looking to capture big percentage of that market. As I said, we have an advantage. If you're looking for a hard number for a market share, Jason, we don't have one. I always like to go back and talk about our discipline when we look at projects. We're not going after necessarily market share, we're going after value. Like Amin explained, we have the competitive advantage to make us capture a big part of this market. This market is still emerging. We're certainly doing our homework in the parts that are in our control to be able to take advantage or capitalize on our competitive advantage to capture this growth. We'll see where this takes us. Again, fiscal and financial discipline, especially when it comes to capital investments. We are ready to grow our blue hydrogen capacity, provided that the market is there. Without offtake agreements, it will be difficult to expand that program significantly. We are going to be in much better position early next year in terms of mapping all markets and capturing these opportunities. Okay. Thanks. Great. Thanks very much for your time. Thank you, Jason. Very exciting area. The final question, a special thank you to you, Indika, for your patience, is Indika from Alistithmar Capital. Indika, if you're still there, please go ahead. Thank you very much. Yeah. Thank you very much, and congratulations for the very good, very strong results. I have two questions very quickly. One is recent announcement on the Qassim petroleum distribution technical issue. I just want to understand whether it is kind of a isolated issue Probably it requires maybe company-wide maintenance of all facilities? That's the first question. The second one, basically the progress of Aramco retail fuel business. Can you just shed some light on the progress right now? Yeah, thank you, Indika. The interruption in Qassim is a minor interruption that impacted the substation. I mean, a bulk plant that we have because of the control panel on a substation, took us less than 48 hours to resume full operation from the bulk plant after the issue on the substation. It is an isolated incident, and it did not have a major impact on our customers in terms of availing gasoline and diesel. We were able to quickly resume the operation in the bulk plant. Of course, retail business, we do have a joint venture with Total. It's going very well. We're progressing very in a speedy way in terms of capitalizing on the opportunity to have a retail business, where we have our Saudi Aramco logo on these retail stations within the kingdom. It is progressing very well as a JV with TotalEnergies. Do we have something, the planned number of stations, let's say, by 2025? Let me first remind you that we're actually in retail globally. We're in retail in the U.S. We've got a few thousand stations. We're in retail in China, where we actually co-brand with Esso and Sinopec. We're entering into retail in Saudi Arabia. We're actually already into retail, but we're introducing our brand over the next, let's say, quarter, or later this year. We'll introduce the first couple of stations with the Aramco brand. Do we have a target for the brands? We already have the retail network. We have a little bit over 200 or about 250 stations through this joint venture that we have with Total. We are rebranding. Slowly but surely introducing both the Saudi Aramco and Total brands in Kingdom through the joint venture. Again, we're disciplined even there. As the market, we're taking it a step at a time. We're choosing the best locations. We'll prioritize those locations to introduce first, and we'll adjust our plans accordingly when we see the market reaction to Appreciate it. Thank you.