Alastair Syme

Alastair Syme asked about Chevron's reserve replacement ratio (Triple R), noting the benefit from Hess but also a drop in reserve life, and questioned the metric's suitability as a guide for investors.

Answer

CFO Eimear Bonner acknowledged Triple R as an important metric but not the only one for assessing inventory depth and portfolio quality. She noted that 2025 saw a strong Triple R from both inorganic (Hess acquisition) and organic additions, emphasizing that Triple R can be lumpy and should be viewed over longer terms. She stated Chevron leads its peer group in both 5-year and 10-year Triple R.

Alastair Syme noted that Chevron's reserve replacement ratio (RRR) benefits from the Hess acquisition but reserve life has dropped, asking about the suitability of RRR as a metric and its guidance for investors.

Answer

CFO Eimear Bonner acknowledged RRR as an important metric but not the only one for assessing inventory depth and portfolio quality. She explained that 2025's strong RRR included both inorganic growth from Hess and organic additions. She noted that RRR can be lumpy, and Chevron looks at both 1-year and longer-term trends, leading the peer group in 5- and 10-year RRR.

Alastair Syme asked about the results of the first exploration well in Namibia, inquiring why it failed to find hydrocarbons and if the company remains interested in further exploration in the region.

Answer

CEO Mike Wirth explained that the well, while not finding oil and gas, was successful in providing valuable geological data that confirms a working petroleum system. He stated that Chevron remains interested in the basin and noted the well was drilled efficiently, which is encouraging for future, cost-effective activity.

Alastair Syme of Citi asked about the performance of Chevron's non-operated royalty interests in the Permian and whether a "two-speed" operating system is emerging in the basin.

Answer

CEO Mike Wirth stated that Chevron has seen strength across all three components of its Permian business: company-operated, non-operated JVs, and royalty interests. He did not see a significant enough variation in development approach between Chevron's program and its partners' to describe it as a "two-speed" system, noting that many royalty interests are in highly attractive sweet spots.

Alastair Syme asked about Shell's portfolio strategy in a down cycle, specifically how deep the cycle needs to be for attractive opportunities to emerge, and whether new positions would be in new geographies or by deepening existing ones.

Answer

Shell CEO Wael Sawan noted an increase in interesting M&A proposals compared to a year or two ago, indicating lower break-even expectations, though none have yet met Shell's high bar. He emphasized looking for opportunities that create long-term value at attractive price points, particularly where Shell can create incremental value beyond current owners, often by deepening existing positions where its comparative advantages (e.g., deep water, integrated gas, marketing) are strong.

Alastair Syme asked about the Shell Polymers Monaca asset, inquiring how far it is from profitability and why a joint venture partner would improve its performance. He also sought reflections on the paused Rotterdam biofuels project and Shell's broader biofuels strategy one year on.

Answer

CEO Wael Sawan explained that Shell is not the 'natural owner' of the standalone Monaca asset and that a partner with a broader portfolio could create optimization and synergies. On biofuels, he noted the Rotterdam project remains under review in a challenged market, but Shell's trading desk continues to perform well, and the company is being selective about where it deploys capital in that value chain.

Alastair Syme asked about the path to profitability for the Shell Polymers Monaca asset and the rationale for seeking a JV partner. He also requested an update on the paused Rotterdam biofuels project and overall biofuels strategy.

Answer

CEO Wael Sawan explained that while the Monaca asset is advantaged, Shell is not its "natural owner" as a standalone facility, and a partner could unlock scale and synergies. On biofuels, he noted the Rotterdam project remains under review in a challenged market, but Shell's trading desk continues to perform well, and capital deployment remains selective.

Alastair Syme of Citigroup Inc. sought clarification on the baseline for the 2025 CapEx guidance and asked how Shell is preparing its LNG business for the wave of new global supply expected in the coming years.

Answer

Executive Sinead Gorman confirmed the 2025 CapEx range will be below the previous $22-$25 billion guidance. Executive Wael Sawan noted that near-term supply growth is modest while latent demand is strong, and Shell is focused on its long-term leadership position in a robust market, preparing to integrate new volumes from LNG Canada and Qatar.

Alastair Syme of Citigroup returned to the topic of M&A, asking if ExxonMobil feels limited by scale and whether its focus is on bolt-on deals or potentially larger transactions.

Answer

Chairman and CEO Darren Woods clarified that while scale is important, the primary focus is on unique value creation where ExxonMobil can contribute something that results in a better outcome for all shareholders, rather than just buying volume. VP of IR & Treasurer Jim Chapman added that the company's long-term growth plan to 2030 does not rely on any M&A, positioning it as a purely opportunistic activity.

Alastair Syme of Citigroup asked for an update on the status and expected timeline for resolution of the litigation ExxonMobil filed against the European Union's windfall tax in 2022.

Answer

Chairman and CEO Darren Woods responded that he did not have a specific update or timeline. He characterized the situation as one where the 'wheels of justice turn slow' and expects the case will continue to wind its way through the legal process over time.

Alastair Syme of Citigroup asked about the biofuels market, specifically if there is a political debate in Europe about the high cost of renewable diesel and SAF, given the slow legislation of RED III.

Answer

Patrick Pouyanné, Chairman & CEO, noted that the biofuels market is more impacted by regulatory changes, such as allowing co-processing of used cooking oil in refineries, which has a very low marginal cost. He explained that this technological shift and varying national interpretations of EU directives create uncertainty, causing the company to postpone a third biorefinery investment while it navigates the evolving, heavily regulated market.

Alastair Syme of Citigroup asked for perspective on the competitiveness of renewables opportunities, specifically questioning the rationale behind a recent winning bid in a German offshore wind auction.

Answer

CEO Patrick Pouyanné defended the bid as competitive, explaining the strategy is to create development synergies with an adjacent block acquired previously. He emphasized that the business model is not about standalone renewable profitability but about creating an integrated power portfolio in Germany. This involves combining renewables with flexible assets like batteries and gas plants to deliver high-value 'clean firm power,' which is why the company's Integrated Power segment achieves a ROCE above 10%.

Alastair Syme from Citi inquired about the earnings contribution from Spain within the Integrated Power business and its sensitivity to low Spanish power prices. He also asked for the rationale behind comparing Namibia's potential to Guyana's.

Answer

CEO Patrick Pouyanné clarified that Spain is not a major country for their Integrated Power business, with more focus on Germany and the U.K. where the gas and renewables model is more attractive. Regarding Namibia, he explained the comparison to Guyana refers to the potential of the entire Orange Basin, which could host numerous FPSOs from multiple operators, rather than a single project's scale.

Alastair Syme of Citigroup Inc. questioned the reasoning behind labeling the upcoming strategy update a 'fundamental reset,' asking if it was driven by the macro environment or board discussions.

Answer

CEO Murray Auchincloss attributed the 'fundamental reset' phrasing to the significant portfolio actions taken over the past 12 months, including new projects, country entries, and the decapitalization of renewables. He explicitly stated the change was not driven by external macro factors.

Alastair Syme of Citi asked if any external factors, such as a call from the White House for higher domestic production, would incentivize the company to accelerate its Lower 48 business beyond its current efficiency-driven pace.

Answer

Chairman and CEO Ryan Lance responded that the company is not looking to change its approach, which is focused on driving efficiency. He stated that the most impactful government action would be permitting reform to accelerate infrastructure build-out (for power and gas) and a return to more timely approvals for drilling and rights-of-way on federal lands. Lance believes these actions, rather than a call for more volume, would create a better investment environment and lead to more efficient and sustained production growth.

Alastair Syme asked for perspective on why ConocoPhillips's Lower 48 production is outpacing the industry and whether the broader industry slowdown is due to takeaway constraints or natural maturity.

Answer

Chairman and CEO Ryan Lance attributed their outperformance to the scale and scope that allows them to operate at a stable, efficient pace, unlike smaller operators who may be forced into 'ramp-up, ramp-down' cycles. Nick Olds, EVP of Lower 48, added that they observe this slowdown in their non-operated portfolio and see it as a typical seasonal pattern for the industry to reduce activity in Q4.

Alastair Syme pressed for the strategic rationale behind the Orsted investment, asking if it stemmed from a shortfall in Equinor's own portfolio and why the company chose to acquire a stake rather than pause its renewables strategy.

Answer

Executive Torgrim Reitan defended the investment as a value-driven, countercyclical move to gain exposure to renewables more cheaply than through organic development in the current high-cost environment. He stated that when a good opportunity to invest in a leading company at a reasonable price arises, Equinor will pursue it for long-term shareholder value.

Alastair Syme sought clarification on the future of Enilive, including the possibility of an IPO and Eni's long-term stake, and asked if the Azule venture could be used for acquisitions in Namibia.

Answer

CFO Francesco Gattei confirmed an IPO remains the ultimate goal for Enilive but said it was 'premature' to define Eni's final ownership percentage. Executive Claudio Descalzi firmly stated that Eni's strategy is the 'dual exploration model' (explore and sell down), not acquiring assets discovered by others, noting Azule's recent entry into an exploration block aligns with this organic growth approach.

Alastair Syme of Citi asked for the reason behind the reduction in the Plenitude equity stake sold to EIP, from 9% to 7.6%. He also inquired about the rationale and value context for Eni's reported stake reduction in an Abu Dhabi gas project.

Answer

Executive Francesco Gattei explained the reduced Plenitude stake was a decision by the buyer (EIP) based on their funding capacity, not Eni's choice. Guido Brusco, Head of Natural Resources, clarified the Abu Dhabi stake reduction was a strategic move to rebalance capital allocation across Eni's growing pipeline of upstream projects, driven more by forward CapEx management than immediate value realization.