Welcome everyone to BP's third quarter 2026 financial results call. I'm joined by Meg O'Neill, Chief Executive Officer, and Kate Thomson, Chief Financial Officer. We'll be focusing today's call on the third quarter performance and our disclosures and video that I hope many of you will have seen by now. Before we start with questions, let me hand over to Meg for a few opening remarks. Meg.

Thanks, Craig, and thank you to everyone joining the call. I'll keep my opening remarks brief so we can get to your questions. This quarter, we maintained upstream production at around 2.2 million barrels oil equivalent per day, with improved upstream plant reliability compared to the second quarter. Underpinned by good refining utilization, our refining business delivered a very strong result, which alongside the higher trading contribution highlights the value of our integrated oil and gas business. The improved operational performance across the business enabled us to effectively capture the higher commodity price environment. Strong earnings and cash flow resulted in a significant reduction in our net debt, which is now below our targeted range. structural cost reductions delivered are now within our target range and we have line of sight to delivering the remaining two of the four primary targets ahead of the end of 2027. While this is good progress, our financial obligations remain too high and strengthening the balance sheet further continues to be our number one priority. Last week, we announced an important step with the agreement with the state of Louisiana to accelerate the delivery of our Deepwater Horizon settlement commitments. Our intention now is to prioritize the use of excess cash flow to address our remaining Deepwater Horizon liabilities in full. Deepwater Horizon was a tragedy. Eleven men lost their lives, and communities and the environment across the Gulf Coast were impacted. We will never forget. It changed BP. Its legacy guides us in how we operate today, with safety at the heart of everything we do. We are also moving at speed to simplify BP's portfolio, focusing on assets that best fit our integrated model and deliver the most competitive cash and returns. In the quarter, we agreed the sale of our Austrian mobility and convenience business, we completed the sale of the Gelsenkirchen refinery, and announced plans to market our North Sea and Arkea businesses. We expect the Castrol transaction to close imminently. We've also de-risked exploration and production prospects in Brazil, the Gulf of America, and Iraq by bringing in partners. And in Venezuela, we signed agreements to advance an offshore gas development. As we move forward, we will continue working with urgency to turn this strong set of results into strong performance quarter after quarter. We have much more to do on the five priorities we have set out to deliver a step change in performance and realize the full potential of BP. The strategy and outlook update in December is an important milestone in updating the market on our next steps to deliver a simpler, stronger, and more valuable BP. Back to you, Craig.

Thanks, Meg. So we have around an hour for Q&A. As usual, I'm going to ask everybody to poll for one question, please, per person so that everyone gets a chance to ask. And then with the time remaining, I'm sure we can cycle back to follow-up questions. So with that, let me turn to Alejandro Vigil at Santander for the first question. Alejandro.

Yes, thank you for taking my questions and congratulations for the strong results. My question is about the divestment process. It's basically just the cultural divestment you mentioned is imminent, but if you can elaborate about how you see the momentum on the other divestments you have in your pipeline. Thank you.

Yeah, thanks, Alejandro. So as I said, Kestrel closing is imminent. As we announced in the quarter, we're divesting the Austria mobility and convenience business. We expect that to close this year as well. And then other processes that we've announced continue to be in flight. So that includes the divestment of LightSource BP, the UK North Sea business, and Arkea. So all of those processes are underway.

Thanks, Alejandro. We'll turn next to Doug Leggett at Wolf. Doug.

Good morning, everyone. Or good afternoon, I should say. I'm looking at your slides, Meg. Slide seven and your comment about the financial obligations still being too high. It would seem if I just eyeball that you're suggesting you need to be somewhere in the range of your competitors to be not too high. Is that the right read? How do you get there and what is the right level of obligations that you see within that target?

Thanks, Doug. And look, I fully appreciate the investment community. The market is very interested in this. And maybe if I speak first, Doug, to the philosophy. So we produce commodities over which we have no control of the pricing. And whilst the pricing is strong now, we know that the price of oil and natural gas will drop at some point in the future. Thank you very much. And, you know, I might also point you to look at the sources and uses of cash slides. So, you know, we continue to have too much cash that is allocated to servicing financial obligations. We need to pull that down to ensure that we are more resilient in a low-price environment. So that's the thinking that underpins our philosophy. Shareholder returns obviously are at the heart of the design, and we need to make sure that we are able to consistently deliver dividends through the cycle. So the dividend is the first call on capital. We need to be able to continue to invest in the business so that we can cover an increasing dividend over time. And then we, of course, have the opportunity when we get our balance sheet in better shape to be able to reward shareholders with increased share of the rewards through things like share buybacks, which is an important tool in the toolkit.

Thanks, Doug. We'll turn next to Michele Della Vigna at Goldman Sachs. Michele.

Thank you and congratulations on a quarter of exceptional delivery. If I could ask a question more relating to your trading business, we are seeing extraordinary freight rates at the moment, especially in the crude tanker market. Having effectively long-term rates on tankers is like a goldmine at the moment. And my understanding is that you've got quite a few that are under long-term lease. I was just wondering if you could help us understand what is the makeup at the moment of the contracts behind your fleet and how helpful that can be to continue to sustain exceptional trading profits in your oil and oil product business in the fourth quarter. Thank you.

Yeah, Michele, hi, it's Kate. Let me take that one. So, yes, we have seen elevated freight rates since the beginning of March, particularly the sustaining in the crude area. The product tanker rates are a little bit more muted. And as we observe, LNG tankers are pretty much back to pre-conflict level. We run a combination of operated, chartered and spot vessels and we manage that as a portfolio. This is the value of our trading business being utterly integrated with our refining business and then all the way through to our customers' business. We have opportunities to optimize our access to a portfolio of different ways to supply both equity and third party barrels into our refineries. And of course, we work that really hard. And I think we've done a great job so far. and then if you think about our U.S. refineries, I would position those as particularly advantaged with regard to their ability to access significant input crude from pipelines. So that feels good. I guess the way I would hold it is when you look at the level of earnings we have been able to generate in the third quarter in our products business, which is refining and trading, for me that's the demonstration of the amplification impact you can have Thank you, Craig, and good morning, everybody, and thanks again for the results. A very, I'll say a quick one, but...

I think, Emeka, in the slides you talk of the need for more rigour in the investment process and partly so that we can finally avoid the write-downs. Can you just talk through what, if anything, has changed in the process in which you look at projects, whether you look at those decisions going forward? Thanks.

Yeah, thanks, Lydia. So obviously, anytime you take an impairment, that's a signal that you've made a decision that has not yielded the returns that were expected and have not delivered value for shareholders. So we absolutely need to be more rigorous in how we make our investment decisions, how we stress test those decisions, how we make sure that decisions we make are leading to a BP as a I'm a big believer that we need to be data-driven in all of this. We need to look at the numbers and we need to be asking ourselves every time we make an investment or a divestment opportunity, is this the right decision? Is this a decision that is going to strengthen BP? I'll invite Kate to comment because Kate's been part of the organization for a bit longer and she can share some examples.

Yes, thank you, Meg. The way I feel we're moving towards is a far more data-driven way of making decisions, and in particular, working hard to stress test the downside. So how could these investment decisions play out in a way that doesn't deliver the value that we expect? Thank you very much. Thanks, Lydia. We'll turn next to Biraj at RBC. Biraj.

Hi, thanks for taking my question. I wanted to ask about the Gulf of Mexico payments and liabilities and your comments this morning about using excess cash to pay those in full. Just trying to understand what you mean here and how this works. Would you need to negotiate a new payment schedule with individual states or is it a case of putting a pile of cash into an SPV and then moving that liability off balance sheet? Just trying to understand

Thank you for the question. Meg's already referenced the nature of that event and how tragic it was. Of course, it shaped how we operate. It also had a profound financial impact on us as a company. Thank you very much. I'm not going to go into the whys and wherefores of how we will execute. As we execute and put it into place, we will then update the market on exactly what have we done and how will we disclose it moving forward. And that will give you the transparency I think you're after. As you allude to, Biraj, there are a number of different ways we could choose to execute this. But you should rely on us doing it in a way that is going to deliver the best value possible. At the end of the day, this will create a more financially resilient company going forward. If you remember, it's probably the last 10 years now that at every second quarter we've had to talk of in excess of a billion dollars leaving the company to fund remaining liabilities on Deepwater Horizon. So it will be an important improvement in our resilience and in our breakeven moving forward.

Thanks Kate, thanks Biraj. We'll turn next to Fergus Neve at Rothschild. Fergus.

Yeah, good afternoon everyone and thank you very much for taking my question. I just wanted to touch on the structural cost reductions. It's great to see that you've now delivered reductions which are within the target range. I was just wondering whether you think there is still more to deliver there? and whether perhaps we should expect an update for the target beyond 2027 at December's event. Thanks.

Yeah, thank you, Fergus. It is good progress. It's clear that we've now delivered another one of our key targets out of the four that we put out in February 2025. I think, though, the way I hold it is the bottom line performance is key here and as you can see, there's not enough impact coming through to our absolute cost reductions. So, since 2023, we have delivered the $4 billion of structural cost reductions, but that has gone to offset a number of headwinds. So, we've had inflation running at about 2.5% per annum, that's 1.5 billion. We've chosen to acquire assets, which has brought in cost base of about $800 million. and we've made activity choices. So that's around 700 million and one example of that I could give you would be around BPX production. But at the end of the day, our group production is flat. So whilst we may be bringing in costs to drive higher production in BPX, we're not offsetting that with lower costs in assets where our production is declining. So it requires continued focus. So the way I would describe it for you is we are focusing Thank you very much. So hopefully that helps and we'll update you any further in terms of how we think about cost in December.

Thanks, Fergus. We'll turn next to Josh Stone at UBS.

Yeah, thanks, Craig. Meg, in your press release comments, you made a comment that BPX Energy has a culture of ownership driving stronger returns, which I thought was quite a striking comment because one of the features of BPX is it's been carved out from the wider conglomerate. So I wonder if it begs the question of whether you think there could be other parts of your company that could benefit from being separated out, or is it the case that actually BPX is a more unique situation in that regard? Thanks.

Yeah, thanks, Josh. Look, I think it's important to acknowledge that whilst BPX has some different attributes to the rest of the upstream, at the end of the day, it very much is part of the group and benefits from being part of the group. Thank you very much. We see other great examples where parts of the business are showing that culture of ownership. Drilling is a great example where you've got tremendous ownership. You've got strong commitment to deliver on commitments and deliver on the plans that have been laid out and drive that continuous improvement. We just need to get that culture embedded across the business. So that's the real opportunity for us is to take what we've done in BPX and embed it everywhere else.

Thank you, Josh. We'll turn next to Al Saim at Citi. Al.

Thanks, Craig, and hi, Meg and Kate. Can I just ask about what you're seeing in retail sales? If I look at the data, you're sort of showing the 2% reduction in U.S. and 8% reduction in Europe. I'm just sort of wondering, in terms of refined products, I'm just wondering if that's a... Thank you very much.

I think what we're seeing largely is customers just adjusting their habits, so whether that's reducing the discretionary travel or changing how they fuel up and where they choose to fuel up. What I would say is that the fuels retail network is still pretty resilient. The way it's performing, we're comfortable with it. It's holding up very nicely against the market volumes that we're seeing across the regions in which we operate. So I'm pretty pleased with how the business is performing in terms of volumes.

Thanks, Al. We'll turn next to Martin at Morgan Stanley. Martin.

Yeah. Hi. Hello. I wanted to ask you about the slide that shows the total financial obligations falling to 33 to 35 billion by the end of the year. That's about a $10 billion decline, sort of quarter on quarter. But But disposals are already seven of that, which means that the underlying increase is sort of like three. But in this quarter, we saw a $9 billion drop in obligations, and that had no meaningful contribution from either working capital or from divestment. So, look, a $10 billion drop quarter-in-quarter is nothing to be sniffed at, but and it's not that difficult if the macro environment stays broadly as it is, which is also what you're showing on the right of the slide in terms of assumptions, to get a number that is meaningfully lower than that sort of 33 to 35. It could even be in the high 20s. Now, I'm totally aware that forecasting commodity prices is horrendously difficult and that you would put on a slide like this with a degree of conservatism built in. But can I just ask, is it just conservatism built in or... Is there something in the fourth quarter in terms of a big outlay that I might have overlooked and that might be worth flagging?

Yeah, let me take that one, Martin. So as I bridge from 3Q to 4Q, I think we've given the market the key components of how to get there. And let me just step it through, right? So we're guiding to lower production. So we've... Thank you very much. Thank you very much. and then the last component of earnings before I talk about two other elements which we've highlighted is typically in the fourth quarter we would expect trading to be delivering a lower number. It's typically less volatile and what we have observed over the last few years is a fall in areas of the market in terms of liquidity. Now, I would say the market for the first month of the quarter has been less volatile than it was in 2Q and 3Q. I think it's incredibly difficult to predict what will play out. The trading team manage very carefully in terms of a disciplined deployment of risk through volatile moments. But we will be watching what happens to the liquidity in that market going forward. So, we don't guide forward on trading, as you know, because it's almost impossible to predict. But Thank you very much. all of those components. Sorry, it's quite a lot to step through, but that gives you the bridge.

Thanks, Martijn. We'll turn next to Henry Tarr at Berenberg. Henry.

Hi there, and thanks for taking my question. Just on the impairments, is there any sort of further colour on those? Obviously, they're quite substantial in the quarter. and then what's still held as capital employed in the low-carbon business at this point. Thank you.

I'll take that one as well. Thank you, Henry. You know my view on impairments. I won't reiterate it, but it's very much the fact that these investments have not delivered what our shareholders need us to deliver. We have taken a further $4 billion and we have been clear that that is primarily transition and primarily light source BP and offshore wind. Thank you very much. where we are seeking to exit certain areas of the portfolio. We will not be doing it in any rush to get out. I think that would be poor decisions. So we will continue to high grade the portfolio and make the right decisions for BP for the medium, long term and our shareholders. But I won't be able to guide you on forward impairments. We will update you as we step through.

Thanks, Henry. We'll take the next question from Matt Lofting at JP Morgan. Matt.

Thank you. BP published an update on the Tupin Amber well in Brazil earlier this week. I wondered if you could just expand on the status of drilling there, what you've seen to date and latest timing on the next steps in terms of moving the equipment across to Boomerangie. Thank you.

Sure. Thanks for the question, Matt. So we did announce that we have oil shows in the Tupinamba well. So just to give a little bit more color on technically what we're targeting. So there are two targets in this wellbore. One is shallower in the section. So if you go from the subsea mudline, the shallower section is what we've hit. That's post-salt, and that's where we've seen the oil shows, so that's certainly encouraging news. We're drilling ahead, so we will drill through the salt to the second target, which is a pre-salt target. So that's going to take a bit of time. Once we complete drilling this section of the Tupinamba well, we will then be able to move over to Boomerangie. and if all goes according to plan, that should happen by the end of this year, but we'll be continuing to watch very closely.

Thank you, Matt. We'll turn next to Mark Wilson at Jefferies.

Well, it's a perfect lead-in. Excellent progress on liability reduction, but I would like to ask on that boomerangy appraisal plan in Brazil, which will start up, I do recall, sitting at and a target of a concept select for Boomerangie by year end 27 was discussed. So could you give us a view of the appraisal program? Is it one well? Will there be this extended flow test? And indeed, is a concept select by year end 27 still possible? Thank you.

Well, thanks, Mark. So the plan after Tupinamba is to move over to Boomerangie. The appraisal campaign, one of the key pieces of data is understanding the dynamic data. So whilst we have the static information, we've got fluid characterization, we've got logs, we do need to understand how well do fluids move through this reservoir. So we will be doing flowback testing in the appraisal well, and that's really incredibly important data for us. We are likely to do a second appraisal well, but it'll depend to a certain degree on the results from the first. And all of that is going to get very rapidly fed into the engineering team's work. And the engineering team is working on two paths. One is looking at early production systems and what sort of opportunity might present itself to Accelerates revenue from this discovery as well as then the full field development. So it would be premature to promise a date on concept select. We really need to get the appraisal data. I mean, again, much to like. It's big. So big is a good starting point, but it's got technical complexity. And so we'll get the appraisal data. That'll be really important to shape both the early production idea as well as the full field development.

Thanks, Mark. We'll turn next to Chris Coupland at Bank of America. Chris.

Thank you very much. Can I ask on disposals? I, to be honest with you, don't quite know how long LightSource has been on the list of assets that you've been trying to sell. And I just wonder whether you can update us a little bit on whether Thank you.

Thanks, Chris. Look, I'd say LightSource BP has been in market for a while, and Kate might be able to elaborate how long. It is a big and complex business, and so finding a buyer who has the capability to take on the totality of the business has been challenging. I'll be up front with you. We would, I think, have liked to have moved faster, but we want to make sure we're getting good value, and so we've been taking steps to try to make sure that we can really maximize shareholder value as we go through this divestment. If I contrast it, the UK North Sea, for example, that process is well underway, very competitive. I'm very pleased with the level of market interest and I'm very pleased with the offers that are on the table. So I expect that one will move forward with a bit more pace.

Thanks, Chris. We'll turn next to Lucas Herman at BNP. Lucas.

Yeah, thanks very much, Craig. And Kate, probably one for you. Can you just remind me where we are in terms of the hybrids and the pay down of those and at what point you lose the equity status? And just aligned with that, going back to the chart on debt or your gearing position relative to peer, It started to talk much more about, I'm slightly surprised in ways that you should look at gearing rather than talk towards dead over FFO, particularly given the other observation around potential write-downs and the extent to which those have undermined, for want of a better phrase, cash flow relative to balance sheet value. So, Kate, any observations there, hybrids and use of a gearing metric?

Yeah, hi, Lucas. Let me deal with the gearing one first. So what we're trying to do on that slide is just demonstrate through a metric how the totality of our balance sheet liability stack is seen in comparison to that of our peers. And don't take it that we're trying to target the same as our peers, but I think as we design the right balance sheet for BP, it's important that we have a view based on our absolute and relative levels. So we will come back to that. With regard to hybrids, we have agreement from S&P that we can take our stack down to $9 billion without losing the equity treatment. Having said that, I think it's important where we are right now with the level of cash we are generating this year Thank you very much. We've already guided that we will redeem the 1.6 billion that matures in 2Q of next year. And then beyond that, we've got about 3 billion maturing in 29 and about 2.5 in 2030. So, over the next few years, there's around 7 out of 10 maturing. But look, I think it's important as we step through some of the choices on the deployment of excess cash that we are value driven and also opportunistic. So there may be moments in the hybrid market where it is sensible to contemplate buying back hybrids in advance of their maturity dates. But we just have to be on the watch for that because that can come and go quite quickly. It's a fickle market. But all of these decisions must be grounded in best value.

Thanks, Lucas. We'll take the next question from Jason Gableman at TD Cowen.

Thanks for taking my questions. Good afternoon. I think the market was a bit surprised, pleasantly surprised that you moved up or announced this strategic update before the end of the year. And so I'm wondering how much of that was driven by, you know, hitting your net debt target versus wanting to express a larger pivot within the business and kind of tied to that as you move forward. How much do you see the strategy as continuing to make the business both operationally and financially more efficient versus actually growing it, seeing some of the upstream resource opportunities you have in front of you? Thanks.

Thanks, Jason. It feels like you're trying to get to the punchline of December a little bit early. Look, a couple of comments. So hitting the net debt target was clearly a signal for us, and we know the market wants to understand how do we think about designing the balance sheet, how do we think about providing value to shareholders and investing to deliver sustained value growth through the cycle. So we know that that is imperative information that we need to get out to the market. Look, I'll Thank you for joining us. clarify how we see value generation through an integrated oil and gas company with upstream, downstream and trading all working together to deliver shareholder value over the long term and through the cycle. So those are some of the important things that we intend to discuss. Look, we really look forward to seeing everybody in December.

Thanks, Meg. Thanks, Jason. We'll turn now to Bertrand Odie at Kepler. Bertrand.

Yes, hello, thank you for taking my question. A question around trading performance so far this year. So I remember that Q1 for oil was exceptional, Q2 similar, Q3 similar. And in terms of trading, gas and LNG, it was average Q1, Q2, likely exceptional in Q3. So when I take all that... I can draw a line where your outperformance in terms of trading compared to average is roughly around $4 billion year-to-date on operating profit. Is that a ballpark right calculation or any comments you may have to that?

Hi Bertrand, let me take that one. Yeah, so if you go back to how we describe trading and we have now for six years delivered the 4% uplift on OAC over six years and year to date, I think you'd be right in saying we're trending above that. Thank you very much. Thank you very much. trading team have had ever since the end of February has been one of we prioritize contractual commitments for our customers and they have focused on integration with our refining businesses to be able to move products around the world to make sure that we were there for our customers and that's incredibly important in terms of the reputation of us as a company and us as a trading organization. I'm very proud of how the teams have showed up in that regard and So yes, they've done really well. Let's see how the fourth quarter plays out. As I said earlier, it's typically a lower volatility, lower liquidity quarter. So let's see.

Thanks for your question, Bertrand. We'll turn next to Kim Fusty at HSBC. Kim.

Hi, good afternoon, everyone. I just wanted to ask about portfolio and capex. Has your stronger balance sheet changed your willingness to retain higher equity interest in some upstream projects? and without really asking you to give any qualified guidance on capex, how would that affect your thinking about capital programs going forward?

Yeah, thanks Kim. So in the second quarter we commented, we made an adjustment to our capex guidance for this year and part of the decision there, part of the driver was we've delayed bringing a partner into our Gulf of America Paleogene projects And that is very much a value-based decision. And the strength of the balance sheet does give us a bit more room to be very disciplined. And I think that's a good example. Those assets, between the two of them, Kaskita and Tiber, call it circa $10 billion of investment in a very material resource that we view as having quite a bit of future running room. And so we want to make sure that if we farm down those critical assets, we will get fair value. So we've been disciplined on that. But perhaps I can point you to other places where we've brought partners in. So Iraq, Kirkuk, Tupinamba, and some Gulf of America exploration we've brought partners in. And the reason we've done that is to help manage the risk and the future capital exposure. So we'll be value-driven in all of these decisions.

Mike, if it would be okay to add one just quick comment on that, Kim. So we've created over the last 18 months or so a significant increase in our hopper of opportunities moving forward. And I guess the point I want to convey is that that doesn't necessarily lead to higher capital. What it does lead to is a higher returns threshold as we force everything to compete for the marginal dollar in terms of capex. And I think it's important you hold that in terms of how we think about it.

Thanks, Kim. I'm actually going to move to online. We've got Ahmed Ben Salem from Oddo who's asking a question. He says, hello, thank you for taking my question. With net debt already below your 2027 target range, what specifically needs to happen before you feel comfortable materially increasing buybacks?

Thank you for the question, Ahmed. As you can see from the slide in our materials today, our leverage is still materially higher than we want it to be. We need to drive to a balance sheet that is right for us as a company and that gives us the financial resilience going forward. It's incredibly important we remain focused on what we have started and finished the job with regard to deploying cash to the balance sheet. We'll explain in December Thanks for the question, Ahmed.

We'll come back to the phones. James West at Melius Research. James.

Thanks, Craig. I'm curious about your capital allocation towards exploration at this point. Your exploration team has been fairly busy the last couple of years and Curious to hear how you're thinking about pure rank exploration versus more exploration in plays that are at least somewhat understood and how you would look to add to resource as we start to think about the next decade of growth.

Thanks, James. Look, the exploration team has done well. We've had quite a few successful discoveries over the last year and a half. And as I've spent time with the team, I've been very pleased with the capability and the investment in technology that we've made. The strategy is to make sure we have a balance between call it ILX or near field exploration and greenfield. The successes that we've seen thus far of the 15 or so discoveries that we've made, about 10 of them are close to existing infrastructure. And the plus about that is it means you can go very quickly from discovery to cash and to bringing the production online. Now, we do always want to have a balance as well with some greenfields. Those are fewer, but pleased also with the success on that front. Boomerang in Brazil is probably the most notable example with 8 billion barrels of oil. Thanks, James. We'll turn next to Maurizio Carulli at Quilter. Maurizio.

Thank you very much for taking my question. And as a shareholder, congratulations for the strong results and genuine appreciation for continuing to implement a sound and disciplined strategy. I have a question on the settlement you reached on the Louisiana coastal restoration. I'm fully aware that the terms of the agreement are confidential. But is it possible to have some color on how complex or lengthy the negotiation process has been? Thank you.

Well, thanks, Maurizio. The Louisiana coastal litigation has been underway for years, and I'm going to look to Kate and Craig. I think it's probably close to a decade, but this is something where the individual parishes in the state of Louisiana and the state itself have have been bringing challenge to the oil and gas industry around coastal erosion. And I'm very pleased that we've been able to achieve this settlement. Between settling this matter and accelerating the Deepwater Horizon payments, it puts us in a place with the state of Louisiana, which is an incredibly important state for our business, between the Haynesville onshore business and support for our offshore, much of our offshore activity hubs out of Louisiana. It allows us to move forward. So pleased to have these two agreements in place and looking forward to starting things afresh with Louisiana.

Thank you, Maurizio, and thank you for the feedback. We'll cycle back now to some follow-up questions. Firstly, Martin, again at Morgan Stanley.

Yeah, I briefly wanted to ask you about Iraq, because it's quite intriguing. We've really seen quite a big recovery in exports from Iraq over the last couple of months. And of course, BP is in Ramallah, near Basra. You're now the operator of Kirkuk, which goes north. I was wondering if the general trend that we see in Iraqi exports is also something that we can project on BP, as in, is BP also able to Thank you for the question, Martin.

So you'd probably be aware when the conflict started, significant curtailment of production, and we provided some insights, I think, in the first quarter about the impact to our production, which was about 100,000 barrels a day impact. You know, largely with the fields that export through the Strait. Now, a portion of that has recovered, so pleased to see those barrels come back online. Kirkuk is actually quite interesting because it feels like we're really starting to get some momentum going in Kirkuk. And you may have seen, I think it was on some of our socials, we've now signed some agreements to set up the operating entity there. We have a rig in country, so we've just spud the first well that we're looking after in Kirkuk. We're taking steps to increase production out of that field through, you know, improved technology around reservoir management. So moving ahead, yeah, moving ahead with pace in Iraq.

Thanks, Martijn. We'll turn next to Chris Coupland again at Bank of America. Chris.

Yeah, thank you very much. Meg, I think you didn't mention Arkea earlier in your answer, so I think I've got to come back. By not mentioning the disposal process, does that mean it's equally complicated? As you mentioned, LightSource has been. and, yeah, I just want to ask the classic question again, if you don't mind. I think you've been very vocal about the value of the integrated nature of BP, so we'll park the ideas of a breakup, but can you remind us what your thoughts are around the valuation gap between European and US supermajors and whether you're contemplating a move wholesale Thank you.

Thanks, Chris. Kind of a lot in that. Look, the reason I didn't mention Archaea is that process is more nascent. So North Sea is well underway. Archaea is just getting started. So when we get to a point to update you more, we will. But it's kind of a lap behind in the race. Look, I know there's always a lot of interest in the valuation gap. One of the things that I look to is underlying business performance and resilience through cycle. And part of why we are so focused on tackling the balance sheet is to ensure that we are resilient through cycle so we can reward shareholders through cycle. And unfortunately, our track record is we've not been able to do that. So that's exactly the situation that we are trying to remedy. The second factor that's really important for us is to have, you know, kind of consistent, steady performance quarter in, quarter out. I think the third quarter was a great outcome. You know, we do have tailwinds, you know, fair call on that point, but the team delivered. So upstream, downstream trading really delivered and took advantage of the opportunity that was presented. We need to do that quarter in, quarter out. So I'm a firm believer that there's a lot of self-help we can do that will help address the valuation gap with some of our competitors.

Thanks, Chris. We'll turn to Henry at Barenburg again. Henry. You there, Henry?

Thanks for having me back on the call. I just wanted to ask about the LNG business and how it's shaping up for Q4. Pricing looks very favourable, obviously. Do you have cargoes available to take advantage from a trading perspective?

Yeah, good try, Henry. I'm not going to guide forward. We remain very confident in our LNG position globally. That team have done a really good job in the third quarter of capturing the price move. Prices are pretty high. They're not as volatile at the moment as they were last quarter. But look, I think the big unknowns through the fourth quarter are going to be two things. One, how does European weather play out? As everyone knows, the storage levels are very low. And the dynamic between European storage and China restocking is going to be the two big factors that determine what happens in the LNG pricing market. I'm not going to call that, but we remain well positioned in terms of our ability to optimize our cargoes.

Thanks, Henry. We'll go to Lucas again at BNP. Lucas.

Yeah, thanks very much, Craig. And sorry, Kate, another one for you. I'm just trying to understand the working capital moves, the permanent build of 2.8 billion, which is obviously a large chunk of your balance sheet value, actually. Please explain. It doesn't feel as though the business has grown that much that you'd be putting in 2.8 billion in a permanent build.

Yeah, so the 2.8 of permanent build is fairly straightforward to explain, Lucas. It's about $1.4, $1.5 billion of Deepwater Horizon, about $600 million, I'm going from memory now, of... Thank you very much. Thank you very much. of course you've seen seasonal volume and inventory draws play through but that's been offset by the price move up so it's incredibly difficult to determine exactly how this will play out. My best estimate as we sit here today is about a half a billion still to release from the remainder of our working capital but the realised crude and product prices are going to be the driving factors of where our working capital ends up at the end of the year.

Thanks, Kay. Thank you, Lucas. And the current final question we have is from Doug Leggett at Wolf Research.

Okay, I was afraid of that. Hi, everyone. Meg, you've been there now for about six months, and I hate to be so blunt about this, but there was an article in the last few days that the board had, some members of the board had considered or preferred a potential breakup of the company. I wonder if you could offer your perspectives and affirm whether that is now off the table if it was ever on the table. Thank you.

Well, let me start, Doug, by categorically denying any conversations of that nature. The discussions we've had with the board about the strategic direction really reaffirm almost the imperative of having an integrated oil and gas company where you have value generation from upstream, downstream, and trading. And the results this quarter show Thank you for joining us. and the machine in its totality generates more value than the component parts would. And I think that's very clear in the results. If you look at bottom line, we've really delivered this quarter and I think that's a very solid proof point around the direction we're headed next.

Thank you, Meg. I think it's a great place to close the call. Thanks so much for the questions to everybody. Thank you for dialing in. We're obviously looking forward, as Meg said, to seeing all of you who will be joining us at our Strategy and Outlook Update event in New York on the 15th of December. And IR will be sending out further details on that in the coming week. So thank you again for listening and we'll look to close the call now.