Josh Stone

Josh Stone asked about the estimated initial impacts of the Italian energy reform on Eni's businesses and the company's thought process regarding buybacks, including the oil price deck used for the 2026 buyback program.

Answer

Guido Brusco (Chief Operating Officer of Global Natural Resources and General Manager, Eni) stated that the Italian energy bill's impact is slightly negative but marginal due to Eni's diverse industrial presence in the country. He confirmed that the 2026 buyback program would be based on a $62 oil price deck and reiterated that buybacks serve as a variable component to share upside with investors, with full details to be provided at the Capital Market Day.

Josh Stone inquired about the initial impacts of the Italian energy reform on Eni's businesses and the company's thought process regarding buybacks, including the oil price deck used for 2026.

Answer

COO Guido Brusco stated that the Italian energy bill's impact is slightly negative but marginal due to Eni's diverse industrial presence. He confirmed that the 2026 buyback reference is based on a $62 oil price deck, emphasizing that buybacks are a variable component designed to share upside with investors, with more details to follow at the CMU.

Josh Stone from UBS questioned BP's integrated model, specifically if BPX (BP's US onshore business) could be considered for a spin-off or similar transaction to unlock strategic value, given BP's recent satellite ventures.

Answer

Carol Howle, Interim CEO, affirmed BPX as a core part of BP, citing its strong production forecast and valuable onshore expertise. She stated that any decision on divestment would be based on maximizing value for BP and shareholders, even if it means foregoing trading value. Gordon Birrell, Executive Vice President of Production and Operations, emphasized BPX's core status, strong performance, and integration value, stating no intention to sell it.

Josh Stone from UBS asked about BP's integrated model, the potential for more satellite ventures (like offshore wind, Lightsource, Kirkuk), and whether BPX would be better as a consolidated business or an independent company.

Answer

Carol Howle, Interim Chief Executive Officer, stated BPX is a core part of BP, with a strong production forecast and onshore expertise. She emphasized that divestment decisions are based on maximizing value for BP, even if it means sacrificing trading value, if proceeds can be used more wisely. Gordon Birrell, Executive Vice President, Production and Operations, highlighted BPX's 7 billion barrels in place, strong performance, and high NPV per acre and reserves per foot drilled, confirming it's a core part of the company with no intention to sell.

Josh Stone asked about the attention BP pays to its gearing ratio (net debt to capital or equity), considering the impact of asset sales on the asset base and potential impairments, in contrast to the absolute net debt target.

Answer

Kate Thomson (CFO, BP) emphasized financial resilience and BP's focus on its net debt target of EUR 14 billion-EUR 18 billion by end-2027, representing a EUR 10 billion reduction from the current EUR 26 billion. She explained that BP considers total liabilities, including Deepwater Horizon payments (EUR 1 billion/year, two more by 2027) and hybrid pre-financing (EUR 1.4 billion), projecting a EUR 13 billion-EUR 14 billion reduction in the total liability stack. She confirmed BP does not have a gearing target, prioritizing the net debt target.

Josh Stone asked about BP's focus on its gearing ratio (net debt to capital or equity), considering that asset sales reduce the asset base and the potential impact of impairments, despite the company's absolute net debt target.

Answer

Kate Thomson (CFO, BP) clarified that BP prioritizes financial resilience and an absolute net debt target of $14 billion-$18 billion by end-2027, representing a $10 billion reduction from the current $26 billion. She emphasized reducing total liabilities, including Deepwater Horizon payments and hybrid pre-financing, rather than focusing on a specific gearing target.

Josh Stone asked about the decision-making process behind Shell's latest share buyback program, specifically whether the company's strong balance sheet, higher oil prices, and increased share valuation influenced the decision to maintain the buyback amount.

Answer

CFO Sinead Gorman explained that capital allocation is a conscious quarterly decision, noting that Shell has bought back approximately 25% of its shares over the last three years at an average price 20% below current levels. She reiterated the sacrosanct 40%-50% CFFO distribution target, which was 52% this quarter, and affirmed that buybacks remain value-led given the strong balance sheet with 20% gearing.

Josh Stone inquired about the decision-making process for Shell's share buybacks, specifically whether the strong balance sheet, holding oil prices, and rerated share price made the decision to keep buybacks flat a close call.

Answer

CFO Sinead Gorman explained that capital allocation is a conscious quarterly decision. She highlighted that Shell has bought back approximately 25% of its shares over the last three years at an average price 20% below current levels. Gorman reiterated the sacrosanct 40-50% CFFO distribution target, noting that buybacks are still considered value-led, supported by a strong balance sheet with 20% gearing.

Josh Stone followed up on the Q4 outlook, asking about the conservative integrated gas forecast despite expected liquefaction volume increases, other factors, and the potential headwind from hedging impact. He also inquired about Shell's plans for exploration drilling in Namibia next year, targeting areas, and willingness to add more capital.

Answer

Shell CFO Sinead Gorman explained that while Q4 integrated gas expects strong operational performance and ramp-up of LNG Canada, market arbitrage opportunities are less pronounced than in Q3. She confirmed that legacy hedging positions are still expiring through 2025, though less pronounced. Shell CEO Wael Sawan stated that Shell continues to have appetite to invest in Namibia at levels meeting high hurdles, assessing an appraisal well for a new horizon, and expects a decision in coming weeks. He also mentioned looking at other differentiated basins like the Porter.