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    Martijn Rats • Morgan Stanley

    Martijn Rats's questions to Shell PLC (SHEL) leadership

    Martijn Rats's questions to Shell PLC (SHEL) leadership • Q2 2025

    Question

    Martijn Rats asked for Shell's perspective on the state of global oil demand, noting the strong marketing results seemed to contradict broader market softness. He also inquired whether potential 'anti-involution' measures in China could provide relief to the challenged chemicals market.

    Answer

    CEO Wael Sawan noted robust year-to-date oil product demand growth of around 1 million barrels per day. He emphasized that Shell's investment thesis is increasingly non-price dependent, focusing on controllable factors like structural cost reductions, capital discipline, and a strong balance sheet. Regarding China, he acknowledged the reports but stated Shell is focused on its own interventions as market changes have not yet materialized.

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    Martijn Rats's questions to Shell PLC (SHEL) leadership • Q2 2025

    Question

    Martijn Rats asked for Shell's perspective on the state of global oil demand and inquired if potential policy changes in China could bring relief to the challenged chemicals market.

    Answer

    CEO Wael Sawan noted robust year-to-date oil demand growth of around 1 million barrels per day but highlighted uncertainties for the second half. He pivoted to Shell's investment thesis, emphasizing a focus on non-price-dependent value creation through cost cuts, capital discipline, and buybacks, which form the core of its 10% FCF per share CAGR target.

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    Martijn Rats's questions to Shell PLC (SHEL) leadership • Q1 2025

    Question

    Martijn Rats asked about the current market conditions for asset disposals and requested an update on the LNG Canada project startup and its expected earnings impact.

    Answer

    CEO Wael Sawan noted that with major disposals like Nigeria Onshore and Singapore completed, Shell is not under pressure to sell and can focus on its organic growth plan. Executive Sinead Gorman confirmed LNG Canada is on track for its first cargo in mid-2025, but emphasized the sizable earnings and cash impact will be more apparent towards the end of the year as the project ramps up.

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    Martijn Rats's questions to Shell PLC (SHEL) leadership • Q4 2024

    Question

    Martijn Rats of Morgan Stanley questioned the long-term strategy for Shell's shrinking refining portfolio, asking if it still holds critical mass. He also requested an estimate of the lease obligations associated with the pending Pavilion acquisition.

    Answer

    Executive Wael Sawan stated that Shell has no plans to exit refining, as the remaining assets are strategic to its leading trading business and provide 'asset-right' infrastructure. Executive Sinead Gorman indicated the lease obligations from the Pavilion deal are expected to be in the $1-$2 billion range, pending completion.

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    Martijn Rats's questions to Eni SpA (E) leadership

    Martijn Rats's questions to Eni SpA (E) leadership • Q2 2025

    Question

    Martijn Rats from Morgan Stanley sought to reconcile the potential for an increased share buyback with the guidance for pro-forma leverage to rise back to the 15-20% range. He also asked for a refresher on the timing of incoming disposal proceeds.

    Answer

    CFO Francesco Gattei explained that the 15-20% leverage range is wide and based on conservative assumptions for oil prices and downstream margins. He stated that the potential for a buyback uplift and the leverage guidance are fully compatible, as there could be upside from business performance and unannounced portfolio opportunities, making the current view prudent.

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    Martijn Rats's questions to Eni SpA (E) leadership • Q2 2024

    Question

    Martijn Rats asked if the shareholder payout structure for 2024, specifically the 30-35% of CFFO plus 60% of the upside, could be applied to the company's 2027 CFFO guidance of €17 billion.

    Answer

    CFO Francesco Gattei responded that it is 'premature' to commit to a specific percentage for 2027. However, he affirmed that the underlying logic of the distribution policy is to improve the payout percentage as the financial strength of the company grows, suggesting a 'natural consequence' of their successful evolution.

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    Martijn Rats's questions to TotalEnergies SE (TTE) leadership

    Martijn Rats's questions to TotalEnergies SE (TTE) leadership • Q2 2025

    Question

    Martijn Rats from Morgan Stanley asked for clarification on the refining outlook, questioning the cautious long-term view despite strong current margins, and requested an update on the Mozambique LNG project.

    Answer

    Patrick Pouyanné, Chairman & CEO, explained that strong diesel prices, driven by structural changes in Russian flows and a lighter global crude slate, are supporting current refining margins. On Mozambique, he emphasized that the company is working to ensure a 'very strong alignment' between the government and investors, which he deemed absolutely necessary before re-engaging on the major project.

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    Martijn Rats's questions to TotalEnergies SE (TTE) leadership • Q1 2025

    Question

    Martijn Rats inquired about Europe's real appetite for Russian pipeline gas over the next 12 months and asked for clarity on the Q2 LNG price realization guidance, particularly the outlook for Q3 given recent spot price declines.

    Answer

    CEO Patrick Pouyanné stated he would be "very surprised" to see a significant return of Russian gas to Europe in the next 12 months, citing political will and a focus on security of supply favoring U.S. LNG. On LNG pricing, he explained the Q2 guidance of $9-$9.5/MMBtu accounts for spot uncertainty. He confirmed that the Q2 drop in oil prices will impact Q3 results due to contract lags and agreed that a drop to the $8-$8.5 range was a "reasonable" possibility, though the market remains fluid.

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    Martijn Rats's questions to TotalEnergies SE (TTE) leadership • Q2 2024

    Question

    Martijn Rats of Morgan Stanley questioned the rationale for providing specific Q3 European gas price guidance and asked for an update on the potential move of the company's primary listing to the U.S.

    Answer

    CEO Patrick Pouyanné clarified the $8-$10/MMBtu gas price guidance reflects the typical summer season with high storage levels and is not extraordinary, though still a good price historically. Regarding the U.S. listing, he reiterated the plan is not to move the headquarters but to transform the ADRs into ordinary shares cross-listed in Paris and New York to improve liquidity and attract more U.S. investors. He noted technical progress is being made.

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    Martijn Rats's questions to TotalEnergies SE (TTE) leadership • Q1 2024

    Question

    Martijn Rats of Morgan Stanley asked if the quarterly share buyback could increase from its $2 billion base level given higher oil prices, and also questioned the strategic rationale behind the SapuraOMV acquisition in Malaysia.

    Answer

    CEO Patrick Pouyanné confirmed that if higher cash flows from sustained oil prices materialize, the company would consider increasing buybacks, with a decision likely mid-year or in September. Regarding SapuraOMV, he explained the deal provides a material, operated gas position in a prolific Malaysian basin, with production priced as a netback from LNG, strengthening its partnership with Petronas and its overall strategy in Southeast Asia.

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    Martijn Rats's questions to Equinor ASA (EQNR) leadership

    Martijn Rats's questions to Equinor ASA (EQNR) leadership • Q1 2025

    Question

    Martijn Rats asked about the risk of missing the offshore installation weather window for Empire Wind and the potential NPV impact of a one-year delay. He also inquired if tax losses from the project could be consolidated and used to offset profits in Equinor's U.S. E&P business.

    Answer

    Torgrim Reitan, an Equinor executive, emphasized the situation's urgency, stating the project is in a critical phase with the installation window happening "now." He noted the complexity involves more than just weather, including contractors and financing. He confirmed that a common U.S. corporate structure is in place, allowing tax losses from Empire Wind to be available to the upstream business.

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    Martijn Rats's questions to Equinor ASA (EQNR) leadership • Q3 2024

    Question

    Martijn Rats requested an update on the Rosebank project, focusing on the ongoing court case and tax uncertainties, and asked if the 2024 CapEx reduction could extend to future years.

    Answer

    Executive Torgrim Reitan described Rosebank as a robust project but acknowledged risks from potential tax changes in the U.K. and a pending judicial review on Scope 3 emissions. He explained the 2024 CapEx reduction stems from project phasing, currency effects, and lower renewables spend, adding that future guidance will be provided in February.

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    Martijn Rats's questions to Equinor ASA (EQNR) leadership • Q2 2024

    Question

    Martijn Rats from Morgan Stanley inquired about the quarterly impact of overlift and underlift on volumes and revenue, and asked for an update on the recovery of European industrial gas demand.

    Answer

    Executive Torgrim Reitan explained that overlift and underlift effects fluctuate quarterly and do not carry forward, noting the recent overlift was related to assets in Norway, Angola, and Azerbaijan. He confirmed that European industrial gas demand has continued to grow by approximately 10%, but highlighted that demand from Asia, particularly China, and weather patterns are more significant drivers for LNG pricing.

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    Martijn Rats's questions to Equinor ASA (EQNR) leadership • Q2 2024

    Question

    Martijn Rats of Morgan Stanley questioned how Equinor's shareholder distributions can be competitive if its CapEx as a percentage of CFFO appears higher than peers. He also asked if the company might shift from an annual to a quarterly buyback guidance framework.

    Answer

    EVP & CFO Torgrim Reitan addressed the CapEx comparison by explaining the distorting effect of the Norwegian tax system. With a 78% tax deduction on NCS spending, the after-tax CapEx is significantly lower, making the ratio more comparable to peers than it appears. On buyback guidance, he stated that any potential changes to the annual communication framework are not under discussion and would be announced at a major event like a Capital Markets Day.

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    Martijn Rats's questions to Equinor ASA (EQNR) leadership • Q2 2024

    Question

    Martijn Rats of Morgan Stanley questioned how Equinor's distributions can be competitive if its CapEx as a percentage of CFFO appears high relative to peers. He also asked if the company might shift from annual to quarterly buyback guidance.

    Answer

    EVP & CFO Torgrim Reitan explained that direct comparisons of CapEx to CFFO are distorted by the Norwegian tax system, where the 78% tax deductibility of CapEx makes the after-tax investment significantly lower and more comparable to peers. He stated that any changes to the buyback communication policy are not a topic for discussion today and would be addressed at a major event like a Capital Markets Day.

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    Martijn Rats's questions to BP PLC (BP) leadership

    Martijn Rats's questions to BP PLC (BP) leadership • Q1 2025

    Question

    Martijn Rats of Morgan Stanley asked for guidance on two often-overlooked line items crucial for modeling: minority interests and adjusting items, which have been significant. He also questioned whether the imported platform for the Kasquita project in the U.S. would be subject to an import tariff and its potential economic impact.

    Answer

    Executive Murray Auchincloss stated that the Kasquita platform, as a finished good, is not expected to be subject to a tariff. He noted that providing guidance on volatile 'adjusting items' is difficult due to their nature. Executive Katherine Thomson explained the recent increase in non-controlling interests (NCI) was due to pre-issued hybrids, but the associated costs are largely offset by interest income. She expects the NCI level to remain stable until the hybrid stack is potentially reduced.

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