Senior Analyst at Sanford C. Bernstein
Irene Himona is a Senior Analyst at Sanford C. Bernstein specializing in European Oil & Gas Exploration & Production equities. She covers major integrated and exploration-focused companies such as Galp Energia, TotalEnergies, and Shell, and is noted for impactful investment calls including sector upgrades and stock recommendations that have shifted consensus on large-cap energy names. Himona has a Ph.D. and rejoined the sell-side at Société Générale in 2010 before moving to Bernstein, having previously held analyst roles at other prominent firms; her research is widely recognized by institutional clients for depth and independent thought. She is known for industry expertise and holds applicable professional credentials expected for a senior equity analyst in Europe, including compliance with regulatory standards and financial industry qualifications.
Irene Himona asked for an approximate timeline for BP to make concrete announcements regarding further portfolio simplification and restructuring.
Murray Auchincloss (CEO, BP) stated that the portfolio review, led by Albert Nucher, is driven by recent exploration success, including 12 discoveries this year. He indicated that updates would be provided as decisions are made, citing recent actions like the Tiber sanction and Killeen field divestment.
Irene Himona asked for an approximate timing for concrete announcements regarding BP's further portfolio simplification and restructuring.
Murray Auchincloss (CEO, BP) explained that the portfolio review is ongoing with Albert Manifold, driven by significant exploration success, including 12 discoveries this year. He emphasized a focus on value and returns, allocating capital to high-quality opportunities. BP will provide updates as decisions are made, citing recent examples like the Tiber sanction, Killeen field divestment, and stopping the Rotterdam Biofuels refinery.
Irene Himona from Bernstein commented on the impressive $500 million Q1 cost reduction and asked for examples of where these savings are coming from. She also questioned if the large Q1 adjusting item related to the U.K. energy profits levy was a one-off event or if more charges were expected.
Executive Katherine Thomson confirmed the U.K. levy charge was a one-off accounting adjustment for the full extension of the EPL, which was enacted in Q1. Regarding cost savings, she credited progress across all businesses, particularly in customer and products and corporate functions. She highlighted the removal of around 3,000 contractors and the use of technology to review thousands more roles as a key driver of the reductions.
Irene Himona from Bernstein requested a breakdown of the bioenergy EBITDA, specifically the split between biofuels and biogas, and whether Archaea's performance improved despite weak biofuels margins.
CEO Murray Auchincloss confirmed that Archaea's performance is improving, with 12 new plants established, though progress is about 12 months behind schedule. He acknowledged that biofuels, particularly in Europe, remain challenging, leading to caution on sanctioning new plants.
Irene Himona asked about the unit depreciation charge in Norway, specifically if the Q3 level represents a new normal, and sought clarification on Equinor's decision to become an active shareholder in Ørsted, including the envisioned industrial cooperation and areas for improvement.
CFO Torgrim Reitan explained that the increased unit depreciation charge in EPN was due to new assets like Johan Castberg coming on stream, with a gradual reduction expected. Regarding Ørsted, he stated Equinor's participation in the rights issue was a recommitment, aiming for an active board role to provide long-term industrial perspective and leverage Equinor's project development and risk management competencies. He emphasized limiting new significant capital commitments to offshore wind in the current challenging environment, focusing on existing projects like Empire Wind, Dogger Bank, and Baltic.
Irene Himona from Sanford C. Bernstein & Co., LLC inquired about the 13% increase in Equinor's unit depreciation charge in Norway from Q2 to Q3, asking if this represents a new normal. She also sought elaboration on Equinor's decision to take a more active role, including a board seat, in Ørsted, and the envisioned industrial cooperation.
Torgrim Reitan, CFO, explained that the higher unit depreciation in EPN was driven by new assets like Johan Castberg coming on stream, with a gradual reduction expected. Regarding Ørsted, Mr. Reitan stated Equinor's recommitment as a supportive shareholder, aiming for closer industrial and strategic collaboration to create value for both companies, while emphasizing caution on new offshore wind capital commitments in the current challenging environment.
Irene Himona from Bernstein sought clarification on the new 10-installment tax payment schedule in Norway and questioned if the company's gearing, now at the low end of its 15-30% range, should have a tighter target given market volatility.
EVP & CFO Torgrim Reitan detailed that the new tax schedule spreads payments evenly with five installments in H2 2024 and five in H1 2025. Regarding gearing, he stated the 15-30% range is not a target but a guide consistent with rating ambitions, and the company has no plans to change it. He emphasized a commitment to a robust balance sheet and competitive distributions, noting there is no direct mathematical link between gearing and buybacks.
Irene Himona from Bernstein sought clarification on the new Norwegian tax payment schedule and questioned if the 15% gearing level, at the low end of the target range, suggests a preference for a tighter 15-20% range for setting distributions.
EVP & CFO Torgrim Reitan explained the new tax system spreads payments more evenly, with five installments in H2 2024 and five in H1 2025. He stated there is no intention to change the 15-30% gearing range, emphasizing it's not a rigid target but a guide for rating ambitions, and that capital distribution is not mathematically linked to it, allowing for balance sheet flexibility.
Irene Himona asked about the drivers behind the substantially higher unit EBITDA in Lubricants on flat volumes and its sustainability. She also requested a breakdown of the moving parts in Mobility's record-high margin and whether that performance can be sustained.
CFO Sinead Gorman attributed the strong Lubricants performance to a focus on premium products, stable base oil pricing, and disciplined OpEx control. For Mobility, she highlighted the contribution from premium fuels, which were up over 1% quarter-on-quarter, and a country-by-country strategy to maximize value. CEO Wael Sawan added that he believes there is 'more to go' in the Marketing business turnaround.
Irene Himona inquired about the drivers behind the materially higher unit EBITDA in both the Lubricants and Mobility businesses and asked about the sustainability of these improved margins.
CFO Sinead Gorman attributed the strong performance to a focus on premium products, stable base oil pricing in Lubricants, and a country-by-country value extraction strategy in Mobility. CEO Wael Sawan added that he believes there is "more to go" in turning around these underperforming businesses and unlocking further value.
Irene Himona of AllianceBernstein asked if the high-grading of the Mobility portfolio could lead to further margin improvement and questioned the below-90% asset availability in the Upstream segment, asking if it indicated an underlying issue.
Executive Sinead Gorman confirmed that the strategy of divesting lower-margin sites while acquiring high-margin ones is expected to support further margin growth. Executive Wael Sawan explained that the Upstream metric is availability, which is impacted by planned turnarounds, and that the company sees significant opportunity for improvement through technology and operational excellence.
Irene Himona from Sanford C. Bernstein inquired about the cancellation of the German biofuels plant, asking whether it was driven by technology or market conditions. She also asked for Shell's outlook on its Integrated Gas business amid a potential global LNG oversupply and spot price weakness.
CEO Wael Sawan explained the decision to pause the biofuels plant was a combination of market conditions, including softening mandates, and project-specific engineering and execution challenges. Regarding LNG, he expressed long-term bullishness, stating that market cycles create opportunities for a player like Shell to leverage its global portfolio to manage supply and demand, and that the company is well-balanced with a mix of long-term and spot exposure.
Irene Himona of Bernstein asked for a timeline on when the Plenitude satellite is expected to become cash flow neutral. She also requested details on the near-term materiality of the new Indonesian upstream satellite, specifically its impact on 2026 production and CFFO.
Stefano Goberti, CEO of Plenitude, explained that as a growth company, Plenitude will turn cash flow positive before 2035-2040, once its renewable production can serve its retail client base. CEO Claudio Descalzi described the Indonesian project as transformational but stated that specific financial and production uplift figures for 2026 would be disclosed in the February full-year plan.
Irene Himona of Bernstein asked how much cash from recent disposals is expected to be booked in the second quarter. She also inquired if the sequential improvement in underlying E&P EBIT margin is a structural trend that can continue through portfolio high-grading.
Executive Francesco Gattei confirmed EUR 600 million from the KKR deal was already received in Q2, with the Vitol deal potentially closing in Q2 or Q3. He also noted the Plenitude stake sale process is advancing. Executive Guido Brusco affirmed that the margin improvement is structural, driven by a strategy of developing high-value barrels and divesting lower-value ones, a trend he expects to continue.
Irene Himona asked about the current oversupply in the biofuels market, the timeline for rebalancing, and the rationale for flagging a potential future increase to the share buyback program.
Enilive CEO Stefano Ballista described the current biofuels market as a challenging but temporary "transition period" due to oversupply, expecting a rebalancing in 2025 driven by new regulations like ReFuel Aviation and RED3. Eni Executive Claudio Descalzi added that Enilive's integrated value chain provided resilience. CFO Francesco Gattei explained the potential buyback increase is linked to the accelerated disposal plan strengthening the balance sheet, allowing a review in Q3 to potentially raise the shareholder distribution to the 35% CFFO ceiling.
Irene Himona from Bernstein asked about the performance of the marketing business within Enilive and the progress on integrating agri-feedstocks. She also questioned Eni's confidence in its ambitious four-year, €8-10 billion asset disposal plan compared to past achievements.
Executive Francesco Gattei expressed high confidence in the disposal plan, noting the previous €10 billion was achieved in a concentrated 4-5 year period and the current plan has more opportunities. Stefano Ballista of Enilive reported strong marketing performance, while Guido Brusco, Head of Natural Resources, confirmed agri-feedstock integration is ramping up as planned, with production growing significantly across projects in nine countries.
Irene Himona of Bernstein questioned the company's balance sheet strategy, asking for a reasonable normalized gearing range in a $70/bbl environment and seeking reassurance on the 2028 cash flow guidance for the Integrated Gas division, given its H1 decline.
Patrick Pouyanné, Chairman & CEO, stated that the Board is comfortable with a normalized gearing of 15% at $70/bbl oil. He expressed confidence in the long-term Integrated LNG cash flow guidance, attributing the recent slight miss to low volatility in European gas markets, which limited trading opportunities, and confirmed the growth trajectory from new projects remains intact.
Irene Himona asked if there is a specific normalized gearing level that would cause the Board to reconsider its $2 billion quarterly buyback and requested an update on the project timeline for the Namibia discovery.
CEO Patrick Pouyanné reiterated that the Board is comfortable with a normalized gearing of around 14% in a $65/barrel oil environment but would "obviously" revisit the buyback if prices fell to the $50-$55 range for a sustained period. Regarding Namibia, he confirmed visiting the country and noted that while the project holds significant resources (~750 million barrels), its deep-water and low-permeability nature presents challenges. He stated that reaching a Final Investment Decision (FID) depends on finding common ground with the government to ensure the project meets TotalEnergies' IRR targets.
Irene Himona of Bernstein asked for clarification on the underlying performance of the Marketing segment excluding the Couche-Tard disposal and questioned potential concerns regarding recent French political volatility.
CEO Patrick Pouyanné quantified the Couche-Tard disposal impact at approximately $60 million for the quarter, stating that underlying marketing performance was equivalent to the previous year. Regarding French politics, he expressed confidence, noting that a 'golden share' was previously ruled against by the European Court of Justice and that the company will engage with any new government, not expecting fundamental impacts.
Irene Himona from AllianceBernstein asked for specific details on the Venus discovery in Namibia, including the resource size for the 2025 FID, reservoir thickness, and flow rates from the recent appraisal.
CEO Patrick Pouyanné declined to share proprietary technical data but confirmed the company is targeting a development of 150,000 to 180,000 barrels per day. He emphasized that the project meets their profitability criteria, with a breakeven cost below $30 per barrel, and highlighted Namibia as a key future growth area where they aim to be the first producer.
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