Shell plc (SHEL) Earnings Call Transcript

Good morning. I'm Andrew MacKenzie, and I'm delighted to welcome each of you to the 2023 Annual General Meeting of Shell plc. It's a real pleasure to chair this year's AGM and a real honor to do so at our first AGM with our new CEO. We've heard your point. You've made it several times over. If I would ask you to sit down, and so we can listen to the views of other members of our shareholder community who would like to listen to their views. I have asked you to sit down so that we can hear from other people. If you're not prepared to sit down, well, then I would ask you to leave the meeting, please, so we can carry on and hear the views of others. I have been listening to you for 5 minutes. Everybody else has been listening to you for 5 minutes. I ask you once more to sit down or a I will have to have you removed from the meeting. But you have said your peace many times, and we would now like you to sit down and listen to the views of others, please? We have a proper Annual General Meeting to construct, where we are interest -- you have been able to come here and express your views. Would you please sit down and listen to the views of others? I do indeed. I want to hear the views I think many of our shareholders have come here to listen to myself and the CEO, and also to ask their own questions and hear our responses to them. *** People with similar perspectives to you, perhaps, and people with different perspectives to you because we live in a democracy, and we like to have civilized debate. Excuse me. Will you sit down, please? Okay, okay, okay. We've heard you loud and clear. Can I ask you to sit down, so that we can have the discussion and the debate that is important to the other members of our shareholder community? Please, will you sit down? If you are not prepared to sit down, I will have no option but to ask you to be removed from our meeting. As you have not sat down and let other people speak, can I ask security now to remove you from the meeting so we can conduct our affairs? I'm sorry, everybody, for this disruption. Hopefully, we'll get back to our meeting soon, and I appreciate your patience and understanding. Madam, we have had this point many times now. We would like to have a civil debate about this and about the issues that other people have made, but you're preventing us from conducting a proper Annual General Meeting. Please sit down and ask your question later, or I'm afraid I'll have to ask the security people to remove you from the room. Yes, we've heard your message. Madam, if I could say to you and to everybody else who still wants to stand up, you are simply repeating messages we've already heard, and there will be a time for questions. If you're prepared to sit down, you can ask your question. And if not, I'm afraid you'll have to be removed from the meeting, and so will everyone else who chooses these tactics. That's me. But excuse me, this is not the time for questions. If you could sit down, you can stay in the meeting. But if you continue, you'll have to leave.

[indiscernible]

I'm sorry, I can't hear you. You've got quite a soft voice. If you wait until question time, you can ask me the question then. Why don't you wait until a question time, and then you can ask the question then? And then we'll give you a microphone. But Madam, we want to have a civilized debate. I can't hear what you're saying nor can a lot of other people, so if you were prepared to -- I'm sorry, if you assist in disrupting the meeting, I'm going to have to ask security to remove you, please. Madam, I've asked you to wait until questions. If you're not prepared to wait until questions, I'm afraid you -- and sit down, I'm afraid you'll have to be removed from the meeting. Are you prepared to wait until questions? Are you prepared to wait until questions? Are you prepared to wait until questions? I think that means that we have to remove you from the meeting. Please, security. We can have this debate over questions when we can hear you. But if you're not prepared to do so, I'm afraid you have to leave the meeting now. Please, security. I'm afraid this is something we've heard many times. Please, I'm afraid you have to be removed from the meeting. Your intention is clear. Now this is going on an awful lot. I'm afraid I'll have to ask you to be removed from the meeting. And anybody else who insists on standing up and disrupting the meeting will have to leave the meeting. Please sit down and wait until questions, or I'm afraid we have to remove you from the meeting. Can I just comment that if there's anybody else in the room who intends to make this kind of protest, I would rather you wait until questions? But if not and you continue this form of protest, then security will remove you. I would like to continue with our meeting. I do apologize to everybody about this disruption. And I do expect the other people who will try to disrupt in this way, anybody who stands up and continues this form of protest will be quickly removed. If you stay seated, you'll have a time to ask questions. Once again, shareholders, I do thank you for your patience, and it's good to see so many of you here and so many of you who want to continue the very important debates that we have to have. I would like to thank you, of course, for your understanding for the heightened security. We can have a discussion about this if you wait until questions. If not, you have to be removed. Could you please remove that gentleman? I'm afraid this tactic is continuing to disrupt our meeting, and it's not about asking us a question. What's that? Sorry. You're asking us to start the meeting. I apologize. Well, please stay. I think you can understand my confusion. Well, we've had that request. We can talk about that in questions. Yes, I'm afraid -- please, why don't you wait until questions. If not, I'm afraid you also have to be removed. I'm sorry, it's taken so long for us to get going. And I do appreciate your patience. And to the gentleman over there, I apologize for my misunderstanding, but thank you for saying what you said. Look, I would like to thank you for everybody in the room for their understanding of the heightened security and the checks, obviously, we had for today's event. Please remove this individual, security. I'll just make a general comment before, hopefully, we now get going is that -- I mean, clearly, this is a coordinated attempt to disrupt this meeting rather than to involve us in debate. And I'm happy to involve them in this debate. But if anybody chooses to carry on this way rather than wait to questions and have a debate, so opinions can be heard, then I will actually, in the interest of our shareholders, ask for them to be removed immediately as example. Please, could we remove the individual? Please, would you wait until questions or you have to be removed. I'm sorry, you have to go. I will try and continue. I was really wanting to express my concern for all of you and your safety. That's partly why we had all the checks and restrictions because, based on our intelligence, we did think there was going to be kind of -- these kind of threats to our shareholder meeting and others. So I continue to say that if people continue to use this tactic, then we will ask security for you to be removed, and I prefer you to wait until questions. So just back to the meeting, I mean, this -- as last year, it's going to be a fully hybrid shareholder meeting, and it provides a platform for shareholders to vote and ask questions, both in the room and virtually. So the Board and I extend a special welcome for all of you virtually attending or simply following the webcast. I'll pause there while this individual is removed. I apologize if my preambles have been a bit broken up. I just wanted to let you know as well that not only is this meeting open to shareholders, we're also webcasting this meeting. So we're opening it to the general public and any other interested stakeholders because we want the debate. So therefore, we also warmly welcome those of you who are watching the meeting in this way. I'll take a pause there while we have this individual removed. Please remove this individual, security. I'll keep trying to move on to our proceedings, and maybe I'll start with just a brief description of the process of today's meeting. When I'm finally able to formally open the meeting, we'll move to your questions. And following that, we will conclude to a voting outcome. And for those shareholders wanting to ask questions, if you're participating online, could you refer to the guide on the Lumi platform, please? Look, if you're in the room and have not already registered the question you'd like to ask, please, if you would go to the registration desk at the back of the room, and one of our team will help you. I'll pause again. Madam, I'm afraid you'll have to leave the meeting. We're trying to have a proper debate, including some of your reviews, and you and other people seem to be against us having this discussion. So in the interest of good orders here, I suggest you leave the meeting, please. We'll have those discussions later if you would wait for questions. But meanwhile, I think you must leave. I know you're probably really struggling to follow me, and I'm trying to keep up myself. But when you are asking questions or making any comment, please state your name and the name of any organization you represent. Just, Madam, I would like to open the meeting properly. I'm afraid -- it's very sad because I would like us to have the debate with you in the right way, but I'm afraid you're going to have to leave the meeting. Please remove her. Well, but you -- I am outlining the process of the meeting that you're choosing to ignore. And therefore, you've disrupted this meeting, and therefore, you have to leave. Please remove her. So as I was saying, Tjerk Huysinga is our Executive Vice President of Investor Relations, and he's going to support the question portion of our meeting and also read out any questions that are submitted on the Lumi platform. We may moderate some questions to avoid unnecessary repetition and to make sure it's an orderly meeting. I'll do my best, and Tjerk will balance the online questions with those on the phone or those here in the room. So please understand as we kind of handle both -- all of those together. This meeting will focus solely, though, on the formal business that we set out in our notice of meeting. So I think with that introduction, I confirm that we now have a quorum present. As I was saying, we have a quorum present, and so I now declare the Annual General Meeting formally open and suggest, with your permission, the notice convening the meeting is taken as read. In accordance with the company's Articles of Association and as stated in the notice of meeting, the meeting is going to be held in English, and I respectfully request that you ask your questions in English, please. And for those watching via the Lumi platform, voting will be open throughout the meeting and will remain open -- clearly, we are still trying to have the debate and discussion that I think is appropriate for an AGM. Obviously, that last incident went a further stage than we experienced in the first part of today. And I would only say that if anybody attempts to move towards the stage again in the manner that was chosen, we will remove you right away for everyone else's safety. Madam, I'm afraid you're continuing this protest. Please, would you leave the meeting? We can have these discussions and questions if you have chosen to wait for that. Please remove that individual. Everybody interrupting will be immediately removed, as you have seen, because we have to get to the business of the meeting, which most people have come to have a civilized debate about. Okay, I'll attempt to continue. Those of you who are watching via the Lumi platform -- please remove that -- I mean, but I would like to have a discussion. You clearly don't, so I'm afraid you must leave the meeting. Please remove this woman. I'm sorry, if you would wait until questions, we could have had this discussion. This is -- please, I'm afraid this is not an acceptable way to conduct the Annual General Meeting of Shell. Well, we're about to get started, and I didn't complete some of my comments, please. So back to those on the Lumi platform, just to let you know, your voting will be open throughout the meeting, and it will remain open for 15 minutes following the conclusion. Once you've voted, by the way, you can change your vote. And when the voting closed, your last choice will be submitted. I have to take another pause. Wouldn't it be nice if you could wait and we could have this debate rather than saying the same thing again and again? I'm afraid you have to leave the meeting. So I am getting there, and I just -- in accordance with the company's Articles of Association and as we outlined in the notice of meeting, I now call for a poll to be taken on each resolution. And for this to happen, I'm appointing -- excuse me, I would love to listen to your views in the right way that this Annual General Meeting is expected to be conducted, but you've chosen not to, so you have to leave the meeting. Please, you must leave the meeting. Please, you must leave. We would -- so I was saying that I call for a poll to be taken on each resolution, and I will appoint the company's registrars, Equiniti, to act as our scrutineers. I would like, therefore, to start by proposing each of the resolutions numbered 1 to 26, which are set out in full in the notice of the meeting. Resolution numbered 1 to 18, 22, 24 and 25 are proposed as ordinary resolutions. I'll pause there while -- again, wouldn't it be great if you could wait for questions, and then we could discuss this. But you -- as I was saying, resolutions numbered 1 to 18, 22, 24 and 25 are all proposed as ordinary resolutions and, therefore, each require a simple majority of votes cast to be in favor in order for them to be passed. While, with resolutions 19 to 21, 23 and 26, they're proposed as special resolutions, and therefore, each of these resolutions requires at least a 75% majority of the votes cast to be in favor in order for them to be passed. So with that, the poll is now open, and voting may begin. [Voting]

Now many of you -- well, we -- I have some comments to make on that in my speech if you were prepared to wait and conduct the proceedings as we outlined. Now many of you will have already sent in your proxy cards and therefore don't need to vote again. I'd -- just let you know that proxy votes submitted in advance of today's meeting amounted to 4.16 billion votes, and that represents approximately 61% of the company's issued share capital. I'm now going to take a break and ask Caroline, our company secretary, to explain the voting procedure.

Thank you, Chair, and good morning, ladies and gentlemen. Please cast your vote...

Maybe, Caroline -- she would like to talk about how we're going to run the meeting, which, if you sat down, you could remain. But you've chosen to stand up, so I'm afraid you have to leave.

I'll resume explaining how to cast your vote today. So please cast your vote by completing your white paper poll card handed to you at registration. If you agree with the resolution, place an X in the box marked for. If you do not agree, place an X in the box marked against. If you wish to abstain, place an X in the box marked vote withheld. However, please note that the vote withheld option is not a vote in law and will not be counted in the votes for and against the resolution. The scrutineer will establish from the register how many shares you hold and will assume you wish to vote all your shares in the way you have indicated. If you wish to split your vote, please speak to a member of staff at the registration desk. If you have lodged a proxy form, you do not need to complete a poll card, unless your proxy is not present or you wish to change the way your shares are voted. Please remember to sign your card and add today's date, May 23, 2023. Please note, if you do not sign your card, your votes will not be counted. Please deposit your card in one of the ballot boxes, which you will see clearly marked as you leave the auditorium. And these boxes will be removed 15 minutes after the conclusion of the meeting or earlier if I'm satisfied that the voting process has been completed. The final results of the poll votes, including the tally of votes cast by shareholders attending online today, will be sent to the Amsterdam, London and New York Stock Exchanges and filed with the U.S. Securities and Exchange Commission and shown...

Sorry. Caroline was about get to end her remarks, and that was inappropriate for you interrupt. I'm afraid you have to leave the meeting.

As I was saying, the final result of the poll votes will be sent to the Amsterdam, London and New York Stock Exchanges and filed with the U.S. SEC and shown on the Shell website tomorrow morning or later today, if time permits. Thank you for your time, and thank you for your votes. Back to you, Chair.

Yes. Thank you, Caroline. Look, before I would -- I introduce the other Directors, please remember that for shareholders wanting to ask questions, if you're participating online, refer to the guide on the Lumi platform. If you're here in the room, please see one of the ushers at the question points. And to allow sufficient time for other shareholders wanting to ask questions, please keep your questions and comments short, to the point and relevant to the business of today's meeting. As with those here in the room, for those that chose to ask a question via the teleconference facility, if I believe your question or statement is excessively long, please understand that I may ask you to bring it to a close. And I do intend that, where possible, all questions or comments of a similar nature are grouped together, because grouping questions and comments this way will help avoid repetition and make sure we address as many issues as possible. However, I also request your patience if there's a lot of interest on any one particular issue, and we may take longer on that. So as you've seen, as the Chair of the meeting, I have a duty to make sure today's proceedings are conducted in a proper and orderly manner, not done so well so far. Well, I will continue to do my best to make sure all shades of opinion are given a fair hearing. And to help me fulfill this, I'd ask you that you respect our procedures and the order of the meeting. And for those watching the meeting via the Lumi platform, a copy of the notice of the meeting can be found on the Documents tab, which is on your screen. And those of you on the webcast, you'll have to look it up in the General Meeting section of our website. So now let me start by introducing your Directors who are seeking election and reelection today. Their biographies are provided within the notice of meeting, which was duly circulated to shareholders on April 18 and added to our website on the same date. So starting on my right, Wael Sawan, who is succeeding Ben van Beurden. Now although he's not present today, I would like to thank Ben for his years at the head of Shell. He led us through the pandemic and the global financial turmoil that followed, and he led the historic move of our headquarters to here in London. In addition, in the face of the humanitarian disaster, which was created by Russia's invasion of Ukraine, he took the swift decision along with the Board to start the process of pulling Shell out of Russia. We're very grateful to Ben for his leadership, through some of the most difficult challenges that any CEO could face. And with Wael, Shell is in excellent hands. Wael has been at Shell for more than 25 years. He has held roles across all of Shell's businesses and has worked in Europe, Africa, Asia and the Americas. Wael. Then we have Sinead, Sinead Gorman, who's our Chief Financial Officer. And as you've already heard, on my left is our Company Secretary, Caroline Omloo. If I proceed with our Directors or -- one more, sorry, on Caroline's left, we have Euleen Goh, who is our Deputy Chair and Senior Independent Nonexecutive Director. And Euleen is a member of the Nomination and Succession Committee and the Remuneration Committee. Now Euleen will step down from the Board at the end of this meeting, having reached a tenure of almost 9 years. And Euleen, on behalf of the Board and all shareholders, we would like to thank you for your distinguished service to Shell. So now behind me, on the right, my far right is Catherine Hughes. Catherine is Chair of the Safety, Environment and Sustainability Committee, and she is also a member of the Remuneration Committee. And subject to her reappointment at the end of this meeting, Catherine will become a member of the Audit Committee and stand down from the Remuneration Committee. Next to Catherine is Cyrus. Cyrus Taraporevala, who is one of our 3 new nonexecutive Directors, and he has been appointed as a member of our Audit Committee. Cyrus will bring a deep understanding of global financial markets and sharp insights into the needs of shareholders. One moment, please. Well, we'd like to have that debate with you. I would have that debate with you happily if you wait until questions. But unfortunately, you have chosen to disrupt the proceedings, and you must leave. So as I was saying, Cyrus will bring a deep understanding of global financial markets, sharp insights into the needs of shareholders, all thanks to a very successful international career in asset management, which span over 30 years. Then alongside Cyrus, we have Leena. Leena Srivastava is also one of our new nonexecutive Directors. And Leena is a leading global authority on climate science and has decades of experience on energy, environment and climate change policy, and expertise in sustainable development. And Leena has been appointed as a member of the Safety, Environment and Sustainability Committee. Next, right behind me is Neil Carson. Neil is the Chair of our Remuneration Committee and a member of our Safety, Environment and Sustainability Committee. And next to Neil, Jane. Jane Holl Lute is a member of the Safety, Environment and Sustainability Committee. And subject to her reappointment at the end of this meeting, Jane will become a member of the Remuneration Committee. Moving on next to Jane is Bram, Bram Schot, a member of the Safety, Environment and Sustainability Committee and the Remuneration Committee. And then we have Ann Godbehere, Chair of our Audit Committee and a member of our Nomination and Succession Committee. And then finally, we have Sir Charles Roxburgh, the last of our new nonexecutive Directors here today. Sir Charles brings a wealth of experience in economics, financial market and government, and I know he will make a great contribution to the Shell Board. Now Dick Boer, who is a member of our Audit Committee and our Nomination and Succession Committee is sadly not able to attend today for personal reasons. But subject to his reappointment at the end of this meeting, Dick will become Deputy Chair and Senior Independent Director, taking over from Euleen, as well as a member of the Remuneration Committee. Also not present today is Martina Hund-Mejean, who is watching our proceedings online. As we announced in February, Martina is not seeking reelection here today. Martina, we would like to express our gratitude for your sound advice as a Board member. Your expertise has been invaluable. Ladies and gentlemen, this is your Board, and now I'd like to move on to the business of the meeting and starting with some remarks from myself, which I'm going to do from the lectern. So first of all, a bit more about Wael. In a moment, you'll hear from him. We are delighted to have such strong leadership at Shell. And I have no doubt that Wael will build on Ben's great work before him. Strong leadership is important. Strong financial results are important, too. And since last year's AGM, we have delivered strong results. In 2022, we returned around $26 billion to shareholders through share buybacks and dividends, and that was more than 35% of our cash flow from operations. And we delivered strong results again in the first quarter of 2023. During our last AGM, I said that affordable, secure and reliable energy cannot be taken for granted. One year on, economic conditions are still challenging. Oil prices are volatile. The war in Ukraine continues to disrupt global trade. How to obtain a secure supply of energy is still a concern to many. Russia cut gas exports to Europe by 80% in the run-up to winter. As it turned out, milder temperatures, lower demand from China and a lot of hard work meant that further problems were avoided. And Shell's contribution was to supply 194 cargoes of liquefied natural gas, or LNG, to Europe in 2022. This was almost 5x our usual average. Yes, at Shell, we have done our best over the past few years to keep -- past year to keep energy supplies flowing. At the same time, we've continued to make significant investments in solar and wind power, biofuels and hydrogen. I'm afraid your numbers are not quite correct. But anyway, I would still prefer that you leave the meeting rather than -- if you're not prepared to have it -- have this debate in question time. Well despite -- look, I was about to, in some way, address these issues, but I'm afraid you choose to do it in a different way. I'm afraid you have to leave the meeting. I might beg to differ. I think Shell has made good progress on its climate change kind of targets. We have met our carbon emissions targets for the second year running, in line with the most ambitious goal of the Paris Agreement on climate change, which is to limit the increase in the average global temperature to 1.5 degrees Celsius above pre-industrial levels. We reduced carbon emissions from our own operations by 30% by the end of 2022. That's compared with 2016, which is our reference year. And it's more than halfway towards our target of a 50% reduction by 2030, the end of the decade. Also by the end of 2022, the net carbon intensity of the energy products sold by Shell had fallen by 3.8%. This is also compared with 2016. And this 3.8% fall is within the 3% to 4% target that we set ourselves for 2022, which is itself consistent with the goals of the Paris Agreement. And over the same time, the carbon intensity of global energy system fell by slightly more than half, 2% at that time that we achieved at Shell. So we want to continue to make progress and show leadership when it comes to reducing carbon emissions, but also when it comes to capital disciplines to further address strength in our business. And Wael and his team are going to go into that in a lot more detail at our Capital Markets Day next month in New York. For more than 100 years, we have built up large-scale businesses in oil and gas that deliver the energy the world requires and create great shareholder value. Now we want our low-carbon businesses also to create great value for shareholders, which means they must also achieve a large enough scale, and that's why we invest in low-carbon businesses that we believe have the potential to grow quickly and profitably. Businesses like the Danish firm, Nature Energy, which we acquired this year for $2 billion, making us Europe's largest producer of biogas, a low-carbon fuel made from organic waste. Biogas can be used in the same way as natural gas, either as a complete replacement or as a blend to reduce our carbon impact. And we see much potential for growth in the biogas market, especially in regions that have favorable policies and strong demand, like here in Europe and the United States. And Nature Energy has around 30 projects planned to do just that in these places. To get to net zero emissions by 2050, the world, including Shell's customers, requires many more low-carbon businesses like this that can grow in scale. This demand is great innovation. As a fellow of the Royal Society and Chair of U.K. Reception Innovation, I'm very fortunate to spend a lot of time around brilliant scientists with clever ideas. It can be difficult to get a clever idea in the laboratory to the marketplace. And that's partly why, at Shell, we've built technology hubs, where ideas can become easier to scale, so that we can help our transition -- transition of our customers to lower carbon faster. So over the past year, I visited 3 of these hubs in Houston, Amsterdam and in Bangalore. We have some very bright people here, and they take ideas from concept to customer, particularly in decarbonization. Now one excellent longer-term example, I would say, is a commercial flight partially by sustainable synthetic kerosene or jet fuel, which a team from Shell created in our laboratory in Amsterdam. They produced this synthetic kerosene from hydrogen, water and captured recycled carbon. And Shell worked with KLM, Schiphol Airport and Rolls Royce, among others, to make sure this type of e-fuel works in practice. And in 2021, in a world first, a passenger aircraft successfully flew from Amsterdam to Madrid with 500 liters of the same synthetic jet fuel or e-fuel blended with traditional kerosene. Now I know 500 liters is not a lot considering an average passenger plane needs thousands of liters of fuel. But it shows 2 things. First, scaling a new technology does take time. And yes, synthetic kerosene still has a long way to go. But second, had we not worked together with scientists and other business partners, that flight would not have been able to take off. So that brings me to collaboration. We have seen time and time again that collaboration helps scale a good idea into a good business and speeds up innovation. So we must collaborate with governments, with other businesses, and we must attract more customers who want low-carbon products. There is the millions of people who drive their cars every day, our business customers that own airlines are those that run huge industrial processes. At Shell, we work with all our customers to help them reduce their emissions. And we collaborate with companies, like Microsoft and C3 AI, to pioneer new ways of working. For example, we use artificial intelligence -- I would like to answer that question in the question section, but not at this moment. And if you can't wait till then, I'm afraid you must leave. I can handle that in questions if you chose to wait. So I was talking about artificial intelligence and how we use that to monitor valves around the clock to improve our operational efficiency, save money and prevent accidents and cut carbon. And this is useful in our many large upstream integrated gas facilities and manufacturing facilities, which are thousands of valves. Over time, they suffer wear and tear. But using on-site sensors, AI can detect problems and raise the alarm often before anything actually goes wrong. And we wait a wee bit. Well, as I said, we want to build scale through innovation and collaboration to strengthen our businesses for today and for the future. Our shareholders, many of whom have held our shares for a long time and plan to keep them, I certainly hope for even longer, are a very important part of that future. And that brings me to follow this. Our climate change give us direction. And as you've heard, we've made good progress. But progress against our climate targets may not look the same every year. Just as the energy transition itself is not a unique process, you'll make breakthroughs and pause, and we'll make breakthroughs. So getting to net zero emissions is more likely to come in an uneven way, or what I would call progress that is more lumpy than linear. And this means that, while, as you've heard, we continue to power innovation and welcome more demand for low-carbon solutions and the factors that will create that demand, the speed of change will vary. And we have to allow for this variation and to follow this resolution does not. It asks us for absolute Scope 3 targets, which we believe would weaken our business. It would force us to reduce the numbers of customers we serve and, most important, who we hope to decarbonize. And it would reduce our ability to help the world through our decarbonized products to cut carbon emissions. With strong businesses that can scale up using innovation and collaboration, we feel we are on the right path to deliver our powering progress strategy, while we work to become a net zero emissions energy business and seek to grow shareholder returns. I urge you to support the progress that we've made in the last 12 months and not to vote for the damaging change to our strategy, which Follow This have called for. And I hope, again, we can count on your support. Thank you. I should say it's now Wael's time, so that I'll welcome Wael to the lectern. It'd be good if you could hear the Chief Executive's speech, and then we'll have time for questions. No, well, I'm afraid you'll have to leave the meeting. We can handle all these in questions if you chose to ask them in the right way, but I'm afraid you're not, so you must leave the meeting. I'm sorry about this. Obviously, I'm sure many are keen to hear, I think we all are, what Wael has to say. And I'm certain that we'll address many of those points, but do continue.

Thank you very much, Sir Andrew, and good morning, everyone. Thank you, all of you, our shareholders, for joining us today. This is my first AGM as Shell's CEO, so allow me a moment just to introduce myself. I'm Lebanese-Canadian, and I started my career at Shell more than 25 years ago as an engineer. And truth be told, I wasn't the best engineer in the history of Shell. My first job was to lay pipes in the Omani desert. I tried my hardest, but I just couldn't get the pipeline to work. Still, I was a stubborn young man with a simple strategy, work hard and try to become better. And thankfully, my managers kept believing in me. In fact, they convinced me I could go further than I thought possible. Today, I try to do the same. I try to find my team member strengths and encourage them to accomplish more than they think is possible. So I've learned that with the right strategy, the willingness to improve and by focusing on your strengths, there are no limits to what people can achieve. And I believe this is true for me, for my team members, for Shell and for the world at large. That brings me to today, because there is a lot the world needs to achieve. The world needs a secure supply of affordable energy, so economies can develop, businesses can function and people can continue to live their lives. The world also needs to make the transition to a net zero emissions energy system to tackle climate change. It cannot be one or the other. The world needs to cut emissions, and it needs enough reliable energy that people can afford. Since we need both, the transition to a low-carbon energy system needs to be balanced, and the last year has shown us what can happen if that balance is upset. The war in Ukraine disrupted the flow of energy. Gas became harder to get hold of. Prices went up, and countries turned back to coal for energy, especially in South Asia and Europe. This is the opposite of what the world needs because, on average, coal emits around 50% more carbon emissions than gas when used to produce electricity and a third more when providing heat. To give just one example, in 2022, the growth of Chinese domestic coal mining was more than Shell's total oil and gas production in the world. The disruption was the consequence of less than a 1% drop of globally available energy since Russia's invasion of Ukraine. Achieving a net zero emissions energy system requires the world to replace not just 1% of energy, but most of its current supply of energy. So for me, it's clear what energy companies such as Shell need to do in today's world. We must deliver a secure supply of energy that is affordable and increasingly lower carbon. And Shell can achieve this by following the right strategy, by allowing -- by always allowing ourselves to work harder to become better and by focusing on our strengths. Let me start with our strategy. As we have seen over the past highly volatile year, Powering Progress is still the right strategy to become a net zero emissions energy business by 2050 purposefully and profitably. Our current operating plans will have to change to achieve this target, and this change will have to be balanced with investments in low-carbon energy and in oil and gas. You see across the world, oil and gas fields declined by some 4% to 5% every year on average. This means significant investments in oil and gas are needed just to keep production at a constant level, let alone to meet the growing demand. Not investing enough in oil and gas could create supply shortages for the future, and we have seen how that can lead to higher, not lower emissions. It is also clear that the world is under-investing in low and zero-carbon energy. We need some $3 trillion to $4 trillion of investment a year in this part of the energy system. The world is far away from that amount. This is a risk for the world and for us because if society does not achieve net zero emissions by 2050, Shell also runs significant risk not to meet this target. So again, I think our role is clear. At Shell, we are investing, both in low-carbon energy and oil and gas, all in a disciplined way, because they make the most impact in helping the world achieve a net zero emissions energy system. Shell needs business models that are profitable and scalable. Put simply, we invest where we see a clear path towards commercial success. Even with this disciplined approach, we are one of the biggest investors in the world in low-carbon energy. In 2022, we invested $8.2 billion in low-carbon energy and nonenergy products, around 1/3 of our total cash expenditure of $25 billion. Of that, $3.9 billion was invested in nonenergy products. These are products like chemicals and lubricants. Since these products are not burned in an engine like petrol or diesel, they don't produce carbon emissions when used. And we invested $4.3 billion into low-carbon energy solutions. This includes big investments in solar and wind power, biofuels, hydrogen and charging for electric vehicles. The remaining 2/3 of our capital investment in 2022 went to maintaining supplies of oil and gas that the world needs today. Production at our Vito floating facility in the U.S. Gulf of Mexico started in February, for example. Vito combines everything we want from an oil and gas platform. It has the potential to add 100,000 barrels of oil equivalent per day, producing amongst the lowest greenhouse gas intensity barrels in the world. It was built 70% cheaper than originally planned, and we plan to use this project as an example for future projects. That brings me, besides having the right strategy, to the second thing we need to succeed in the energy transition, the determination to become better. We aim to improve our performance in every part of Shell, and we aim to demonstrate progress, not through words, but through actions and results. We will also continue to simplify our organization. One example of this simplification is our more focused senior leadership. Since this year, we have fewer leaders, including on the Executive Committee. This brings greater accountabilities and faster, more decisive actions. Doing better also means being more disciplined about the capital investments I just mentioned and also about cutting emissions. Sir Andrew already talked about the progress we made last year against the carbon targets that we set in 2021, but I'll repeat the key details here because they are important. We reduced our emissions from our operations and the energy we use to run them by 30% by the end of 2022 compared with 2016 on a net basis. That's more than halfway towards our reduction target of 50% by 2030. Also by the end of 2022, the net carbon intensity of the global energy system had fallen by 2% compared with 2016. Over that same period, the net carbon intensity of the energy products sold by Shell had fallen by 3.8%. That's almost double. And we have set short, mid- and long-term net carbon intensity targets covering all Scope 1, 2 and 3 emissions. This means all emissions from our operations, from the energy we use for these operations as well as from our customers when they use the products we sell. So yes, I think we are making good progress, and we will continue to play our part in the energy transition, while we supply the world with the energy it needs. And that brings me, after having the right strategy and the determination to become better, to the third reason why I believe Shell will be successful in a balanced energy transition. We focus on our strengths. Strengths like our deepwater oil and gas assets, such as Vito, where we always try to find ways to produce barrels with higher value and lower carbon emissions. Strength like our world-class liquefied natural gas business that is both profitable and helps deliver energy to places where it is needed most. And strengths in low-carbon energy, that Sir Andrew already mentioned, like scaling of new businesses, using innovation to work more safely, efficiently and profitably, and our ability to collaborate with governments, other businesses and our customers. I just mentioned Scope 3 emissions. As I said, these emissions, which we don't control, are dependent on our customers and how they use the energy products we sell them. One way to bring down Scope 3 emissions is if our customers increasingly buy energy products with low emissions. Our decade-long experience in working with our customers means we understand the obstacles they face. So we can help find solutions to overcome them, and we have the infrastructure, such as terminals, carriers and pipelines to make these solutions work in real life. And we are focusing on those low-carbon energy products that play into our strengths, products that we think will have commercial success, like sustainable aviation fuels for planes, electric charging for cars and trucks and, a bit further in the future, hydrogen for heavy industry. By focusing on our strengths, both in conventional and low-carbon energy, we will have a path to achieve our target to become a net zero emissions energy business by 2050 and, equally, a path to do this in a profitable way. This helps our customers, the planet and our shareholders. And that brings me to Follow This. Let me start by saying where we see common ground with Follow This. They want us to achieve net zero emissions, so we share the same goal. But I don't believe the resolution is the right way to achieve it. In Lebanon, there is a proverb that says and I quote, "Some men will build a wine cellar when they have found just one grape." It seems to me this is what Follow This is doing. They have one idea, and that idea is that the world can quickly and easily replace all oil and gas by targeting companies like Shell. This is simply wrong. Quickly reducing oil and gas from international energy businesses, like Shell, creates more volatility and drives higher production from coal producers and national oil and gas companies. Those are 2 very large groups of energy suppliers that Follow This does not target. A quick global oil and gas reduction also prevents the energy transition from happening at the pace that allows for the right balance. As we have seen, only 2 well over the past year. Cutting supply, while demand remains unchanged does not work. It adds shocks to the system and drives up prices. For a balanced transition, the type of energy people use needs to change. Supply and demand of energy both need to change. And changing energy demand can only happen with the help of governmental policies and shift in society. It would help if Follow This would contribute to this change, but they continue to focus on the supply of energy. In doing so, the Follow This resolution fails to provide a clear course of action for our business. It does not allow us to help our customers. It is against the interest of our shareholders, and it does not help to mitigate climate change. You see the resolution calls for an absolute Scope 3 emissions reduction target. To meet such a target, Shell would have to stop selling our oil and gas products to our customers. I already told you we want to bring Scope 3 emissions down by working with our customers, helping them find low-carbon energy solutions. This resolution would not allow us to help our customers, especially in sectors that cannot easily switch from oil and gas to renewable electricity, like aviation, shipping and heavy industry. What's more, if we stop selling our oil and gas products to our customers, while there is no reduction in demand or readily available and affordable alternatives for oil and gas, our customers will not switch to low-carbon energy. They will just buy oil and gas products from our competitors, and total worldwide emissions would not go down at all. Handing over customers to our competitors would damage Shell's financial strength and limit our ability to generate value for our shareholders. So adopting the Follow This resolution will not help reduce total worldwide carbon emissions. It will not help our customers. It will not help you, our shareholders. I propose instead to do something else. Let us support the world in achieving a net zero emissions energy system. Let us help our customers. Let us grow our business and let Shell continue to create value for our shareholders. Our Powering Progress strategy lets us do all these things and more. We are more than 2 years into the strategy that is comprehensive, flexible and now tested through tough circumstances. And with determination and focus, I am sure we can make Powering Progress work even better. So today, we ask you to vote in support of the progress we have made in the last 12 months and not to vote for the highly unhelpful change in our strategy that Follow This have called for. I hope we can again count on your support. I thank you.

Thank you, Wael. So we've now come to that part of the meeting where we have the opportunity to ask questions or you have. And you may have seen in the notice of meeting that most of the resolutions are of a mainly routine nature for a listed PLC, with the exception of the 2 climate-related resolutions, which both myself and Wael have made reference to. The first of those is resolution 25, which is proposed by the Board and presents an advisory vote on Shell's progress against its energy transition strategy. And your Directors strongly believe that Shell's energy transition strategy is in the best interest of our shareholders as a whole and wider society, as both of us have just explained. Equally, the Board and management also believe it's important for all shareholders to have a vehicle to express their views on whether our strategy and progress against it is reasonable in the current environment. So the advisory resolution is designed to be that vehicle and, for clarity, doesn't shield or abdicate the Board's or management's legal obligations under the U.K. Companies Act, and nor does it ask shareholders to take responsibility for formally approving or objecting to Shell's energy transition strategy. That legal responsibility continues to remain with the Board and the executive committee. The other climate-related resolution is resolution 26. Now as a reminder, and we've talked a lot about it, but this is a special resolution, which has been requisitioned by a group of shareholders represented by the organization Follow This. And for reasons that we both expressed and previously expressed and outlined in detail in the notice of meeting, your Directors have unanimously recommended that shareholders vote against this resolution. Now we're going to shortly hear from Mr. Mark van Baal, who will tell you more about his resolution -- or this resolution, I should say. And to make sure of an orderly discussion, I'm going to take questions in this order. So for all questions or comments of a general or operational nature, including those about climate change or the energy transition, and all questions or comments about our strategy, including those about resolution 25 and our energy transition strategy, we'll go first with them. And we'll then take all questions regarding the remaining resolutions. If I could remind you, do keep your questions to the point, short, preferably about 1 to 2 minutes, so we can get through as many as possible here today. And for those asking questions on the teleconference facility, and I've seen some of them coming through, but I would ask you that you give your name, and if you represent an organization, the name of that organization when you're making a question or a comment. So let's now start with questions and answers. And may I start with Mr. van Baal? Mr. van Baal, maybe you have a short statement that you would like to make about your resolution. Yes.

Thank you so much. Good morning to you all. Yes, Mr. Chairman, Directors, fellow shareholders and, of course, a warm welcome to center stage, Wael Sawan. Thank you for the opportunity to speak. Let me start by saying science is very clear. To limit global warming to 1.5 degrees C, as agreed by 140 -- 194 countries in Paris in 2015, the world must almost half emissions by 2030. That's what science tells us. Our company, one of the largest emitters in the world, according to its own carbon disclosure product reporting, has no targets that will lead to substantial absolute emission reduction -- emissions reductions by 2030. No targets that lead to that what we need to achieve Paris. So our Board, dear fellow shareholders, is determined to cling to fossil fuels, to the carbon-based business model as long as possible with the excuse that the profits in renewables are not as handsome. Your Board ignores that the excessive profits in turning hydrocarbons into petro dollars will be over soon, as soon as fuel companies will pay for climate damage. Your Board refuses to use the current windfall profits to explore new business models at scale. As PGGM, one of the Climate Action 100+ lead investors point out, there's no independent third-party source that shows that Shell is Paris aligned by 2030. And let's face it, if Shell has Paris-aligned targets for 2030, the Board would not urge their shareholders to vote against shareholder resolution 26. Shareholder resolution 26, let me remind everybody of that, request no more and no less than a Paris-aligned Scope 3 targets for 2030. So therefore, I will not waste any more time -- I will not waste anyone's time today in trying to convince the Board. Instead, I will address our fellow shareholders. Dear shareholders -- let me try to address the shareholders in a better way then. Dear shareholders, your Board is only determined to cling to hydrocarbons because you, shareholders, allow them to do so, because you, shareholders, continue to vote against change. And they do that because they think -- so they only cling to fossil fuels because they think that, that's what the shareholders want. And your Board will only choose a different direction if you vote for change. You can do so by voting for shareholder resolution 26, requesting 2030 Scope 3 emission reduction targets in line with the Paris Climate Agreement. Today, when the votes of this AGM are shown, we will show how many shareholders are real stewards of the global economy and how many shareholders enable Shell to continue to cause climate breakdown and jeopardize the long-term future of your company. Because, ultimately, it's in the Board's and the shareholders' best interest to pursue the opportunities the energy transition presents. This will only -- this will also preempt risks of losing access to capital markets, job markets, policy interventions, litigation, liability for the cost of climate change, disruptive innovation and stranded assets. As long as shareholders enable big oil to cause climate breakdown with their votes against Paris alignment, all majors will hang on to their fossil fuel business model as long as possible, investing in fossil fuel extraction far outside the boundaries of the Paris Climate Agreement, lobby against climate legislation, refrain from -- no, that's not enough, I'm just getting started, refrain from investing in alternatives at scale and even ignore court rulings. Let's face it, Shell is largely ignoring the court ruling in the Netherlands. The court ruling asked them to reduce all emissions this decade. An important effect of the Follow This climate resolution is to provide clarity. First, clarity that your Board does not want to drive down emissions this decade. They want to only make promises for 2050. Second, clarity, which investors are determined to drive down emissions this decade by voting in favor and which investors enable Shell to postpone emission reductions by voting against. So today, we thank all investors who voted for change. For example, Dutch Investors MN and PGGM, the leading investors in the Climate Action 100+, almost all large Dutch investors, if they haven't divested, we thank them for their leadership. And we hope other investors will follow their leadership in the future. The only decision, dear shareholders, you have to make is decouple short-term profits from long-term risk. And for your clarity, I will ask the Chairman one question. Mr. Chairman, the question, of course is, and you are well prepared, can Shell be Paris-aligned without large-scale emission reductions, without -- let me rephrase it, can Shell be Paris aligned without large-scale absolute Scope 3 emissions reductions by 2030?

I'm going to pass it over to Wael for a more detailed response to your remarks, but you did ask me a direct question. I think we can be Paris aligned, and we are. I mean, you glossed over, in many ways, the tremendous progress we've made with our Scope 1 and 2 absolute emissions, and I would make the same points about the progress that we've made on cutting methane emissions. As you know, that's a very important greenhouse gas as well that often doesn't get mentioned in all of this. But the other part of being Paris aligned is to enable the whole of society to change. And we enable the whole of society to change towards a lower carbon, where being, by owning customers and by working with them, in the way I mentioned in my speech, to offer them lower and lower carbon alternatives to the fuel that they require to go about their lives or to do their business. By blending in new materials like biogas, like sustainable aviation fuel, potentially in the future hydrogen, that will allow us to move our customers to a much lower carbon base over time. I think we also enable Paris by our advocacy, not just our marketing with our customers, of course, backed up on the technology and innovation we do, which is also enabling, but also the way in which we talk with governments as to how they can provide a much greater move towards lower carbon alternatives to society at large. Because then there will be the demand, and with that demand, we will find ourselves with -- and the need to meet that demand with a very profitable, and I have to come back to that word, yes, and good return investments in those areas. So I think we are strongly aligned with Paris, and we're also strongly enabling. But there are some other things you said in your speech, and I'm sure that Wael would like to come back to you on.

Thank you, Chair. Mr. van Baal, thank you very much. And thank you for being here, and thank you for the warm introduction. Let me say a few words and maybe just start with correcting some statements you made, starting with your statement around us not having targets before 2050, which is incorrect. We, indeed, as Sir Andrew said, had a very clear Scope 1 and 2 target of a 50% reduction by 2030, of which we are 30% reduced compared to 2016 already, and we have very clear plans to achieve that. From a Scope 3 perspective, which is the emissions from our customers, we have short-, medium- and long-term targets. So for example, last year, our target was 3% to 4%. We achieved a 3.8% reduction. Next year, we'll grow to 4% to 6% and so on and so forth. So we do have targets. Your other statement around us ignoring the court ruling is also a misleading statement because, as you know well, the court gives Shell and its management broad discretion to be able to achieve the requirements of the court by 2030. Of course, we are appealing that judgment and look forward to engaging in that discussion going forward. But at the heart of it, I think your statement that we are not in line with Paris is flawed because what we are trying to do is trying to follow the IPCC 1.5 degrees scenario that sees us continue to reduce our emissions in line with the targets we have set for ourselves. Once again, what I will say is we do not disagree with you on the destination. We have a different view as to how we get there. The idea that we should sacrifice our customers in the hope of achieving our pathway towards net zero is a flawed concept. We believe that actually spending time understanding our customers, offering them multiple energy options, lower carbon options, such as wind, which we are investing in; solar, which we are investing in; hydrogen, green hydrogen, which we are investing in; biofuels; EV charging, all to the tune of north of $4 billion just last year, I think, speaks testament to this Board's commitment to the energy transition. And therefore, I continue to be convinced as, I think, Sir Andrew said, unanimously, the Board is also convinced that this is the wrong resolution for our shareholders. It's not in their best interest, it's not in the interest of our customers, and it's not in the interest of the planet.

Okay. Thank you, Wael.

So you maintain that you can be Paris aligned without large-scale emission reductions by 2030. That's a clear answer, so thank you for that. But Mr. MacKenzie, Mr. Sawan, you know this is not true. The world must almost half emissions by 2030. And you maintain that Shell, one of the highest emitters in the world, doesn't have to cut emissions. You are not only misleading your shareholders. You're really insulting their intelligence. And as PGGM said, no independent third-party source shows that Shell is Paris aligned by 2030. Dear shareholders, dear shareholders, I hope you take this answer -- you remember this answer when you cast your vote next time because fellow shareholders, your company will only change if you vote for change. Thank you.

Okay. I think we need to open it up to more questions now. So over to you, Tjerk.

Thank you, Chair. I just checked, we have no questions on the telephone line. So we will go first into the room, and I will invite Mr. Gerben Everts from the VEB to ask his first question. So Gerben, you can go to the telephone -- to the microphone there and ask you a question. [Operator Instructions] Thanks.

My name is Gerben Everts, Executive Director of European Investors, the Dutch Shareholder Association. We represent shareholders, including retail investors, Dutch and European, with 30,000 members. For the majority of our members, Shell is one of the largest funds in their investment portfolio. Thank you, Mr. Chairman, for leading the AGM in such a calm and considerate way. I do understand the concerns expressed this morning regarding the methodology used, the questions on effectiveness can and need to be raised. Shell, with all its technical, human and financial assets will play a crucial role in the transition to net zero. No one ignores the need and challenge to stop further climate change. At the same time, the world is energy dependent, committed to be less dependent on dubious regimes. The global reality cannot be ignored either. I have 4 crisp questions on the future strategy, I think, especially addressed to Mr. Sawan. Mr. Sawan, you were very clear in your presentation and the opening remarks in the annual report, and I quote, "In my first annual report as CEO, I want to be clear. Shell is a great company, and we are changing to ensure we become a great investment to." At his appointment in 2014, former CEO, Ben van Beurden, used almost the exact same words, and I quote, he phrased, "Our strategy is to deliver a world-class investment case." So my first question, please, could you elaborate on this statement and share the reasons why Shell was apparently not a great investment over the past years and what you will do differently compared to your predecessor, and which areas provide the most room for improvement? That's the first question. The second question, the investments in Renewable and Energy Solutions increased substantially over the past years. However, for outsiders, it's very difficult to assess how green this business reality is. Retail gas sales are, for example, part of the Renewables and Energy Solutions business. Could Shell commit to further improve the level of segment disclosures? Overall, how does Shell reflect on these investments? Shell guides for USD 2 billion to USD 4 billion CapEx in '23, which is in line with the CapEx spend of USD 3.5 billion last year. And given Shell's transition plan, we expected a step-up in investments. Why is Shell guiding stable CapEx for its renewable business? Third question, Shell mentioned in its -- in reviewing its decision to reduce oil production by 1% or 2% annually until 2030. In various meetings, you also mentioned the importance of longevity. For instance, in the fourth quarter call. Longevity is a core part of our focus, you then mentioned. Our question, due to divestments, especially in the Permian, with a decline of over 10%, the 2030 target is essentially already realized. What does this mean for upstream production going forward? And my fourth and last question, on our math, even at substantially lower energy prices, Shell will generate substantial excess cash flow. Given the already strong balance sheet, should shareholders expect high dividends and buybacks or higher investments? In your annual report, you remarked R&D expenditure on projects have contributed to decarbonization stood at around USD 440 million, representing about 41% of total R&D spend compared with around 40% in 2021. On the face of it, the absolute R&D budget for low carbon seems remarkably low for a company the size of Shell, also taking into account the technical challenges related to the decarbonization of our energy system you and Mr. MacKenzie referred to earlier this morning. Why doesn't Shell raise its green R&D budget? So those were my questions. Let me come back on the Resolution 20 and 25 and 26 in a second round when others had the opportunity to speak as well. Or do you want me to chip in on that right now?

No, let's pause because we've got a lot of questions in the room, and if everybody takes as long as you, we'll be here until 5:00. So that's not a model of asking a question, if I may say, about 1/10 of the length. But you made some very interesting points. I'm going to hand them to Wael, but I would answer you very strongly. Of course, we're going to play a crucial role, a very crucial role in the energy transition through decarbonizing our customers, but also in the way in which we balance finance with carbon. And we are one of the few companies -- in fact, one of the only companies, I think, which actually allocate carbon and dollars at the same time in trying to actually steer ourselves through this in a way that cuts carbon and actually grows returns. Wael and the team are going to do a big exposure in all of this stuff in less than a month in New York. So he may not be able to be fully candid with his answers because we want to save it for them. But I'm sure there are some things he can address now, Wael?

Thank you, Sir Andrew. Mr. [ Edwards, ] thank you very much for those questions. Starting with the first one around Shell becoming a great investment case. I think firstly to recognize how far we have come over the past few years under [ Ben's ] leadership. We have sharpened our focus as a company. We have embraced the powering progress strategy that I think is one of the leading strategies in our sector towards the energy transition. When I talk about becoming an even better investment case, it is also about making sure that we are competitive with our peers where we have lagged against others. There are 3 key areas I focus on. Number one is performance, irrespective of whether that comes in conventional energy or new energy, for us to be able to continue to earn the right to steward your capital, we need to make sure that we are spending that capital wisely and delivering the outcomes that you expect. Secondly is discipline. We just need to continue to be disciplined in the way we approach opportunities, in the way we deploy capital and in the way we deploy the allotted carbon budget that we share with our teams. And then thirdly, I would say simplification. We are a large company. We have over 90,000 people. We are in over 70 countries. The size means we can become sometimes slow, and therefore, we are very much focused on how we can become more agile in a world that is going to require us to be more agile if we are to succeed in the energy transition. To your second point around renewable spend. I think for avoidance of that, let me clarify. We spent last year, $4.3 billion in low-carbon energy. Our spend in low-carbon energy does not simply sit in the renewable and Energy Solutions segment. It's also in areas like marketing. It also sits actually in upstream, where we invest, for example, in carbon capture and sequestration. We also spent $3.9 billion in nonenergy products. So 1/3 of our total investment was in nonhydrocarbon spend. The other 2/3 indeed goes into hydrocarbon spend because, as I mentioned earlier, you need to invest just to stay still in a lot of this because of the 4% to 5% decline rates. And so people compare the spend in new energies versus the spend in hydrocarbons. I think the hydrocarbon spend is just very capital intensive. And actually, in the new energies, we find it is very OpEx-intensive as well. In terms of disclosure, we will continue to create transparency in all of our disclosures to help you, our shareholders, appreciate where we are putting our money and to be able to hold us to account on the performance that we make. On your question around the decline, you're absolutely spot on. We have indeed achieved what was our 2030 target on production already. And I have talked about longevity of the cash flows to be able to continue to pay our dividends and to distribute to our shareholders to deleverage and to have the opportunities to invest in low carbon energy. The specifics of forward-looking production, I will save for Capital Markets Day in June. And then your last question around R&D and in general, the substantial cash generation by Shell and how we are deploying it? We are being very thoughtful in the way we deploy those funds. With the Board, there are discussions around the right balance of deleveraging, shareholder distributions and reinvesting in the business. But we reinvest in our businesses in a way that is clear on the returns we need to deliver to you, our shareholders. There are challenges. There are inflationary pressures we see in certain markets. We see supply chains being challenged, in particular in some of the lower carbon energy space. So you would not want us to spend that capital and realize low returns, which will remove the right to be able to continue to spend that capital in the future. We will be thoughtful and we will be careful with your money, and we will pivot into the energy transition in a way that allows you to achieve some of those gains, including in how we spend in R&D. We spend in R&D, not just in our own labs, but we also spend significantly with multiple academic institutions to make sure that our money is having a multiplier effect in the discovery of new opportunities for the energy transition, and we will continue to find that right balance. Thank you.

Thanks, Wael. And I mean just to -- I really appreciate those questions, which ask us to just be even more transparent and disciplined about how we disclose things. We don't want to hide. We want to be available to be held to account. We talk about our targets, but also let's talk about delivery. And we'll also talk about that with Scope 3 as well. So count on us as being as transparent as we can. If we don't get it right, push back and we will improve.

May I make one remark to thank you for the response. There are different types of shareholders. And I think whether the investments in green might not be the, let's say, the most welcome allocation of our funds. I think the CapEx investments on being really net zero in 2030, 2050, you really need to invest in whether the return in the first year will be a bit lower. For us shareholders, not so much an issue. Thanks for your commitment to make things more transparent, especially the segment information. We try to compare businesses. And if Shell is doing better than Chevron and the others, totals, et cetera, also in the green transition, of course, will make a meeting like this far more easy. So many thanks for that, and we look forward for Capital Markets Day.

All points taken.

Thanks, Gerben. I'd like to go for a next question here in the room. I invite Christian Schubert from PFA to come to the microphone. And then we go for an online question. Christian?

All right. My name is Christian Schubert. I'm representing PFA pension, the largest commercial pension fund in Denmark with around 1.3 million customers and EUR 80 billion under management. We acknowledge Shell's commitment to our Paris-aligned energy transition as well as the complexities around this as we value our ongoing dialogue with you as a company, tackling the dilemmas and all these matters. We also understand that you're currently reviewing your climate transition strategy. And in that regard, we would recommend and hear the Board's perspective on [ Shell ] becoming more transparent towards 2030 targets and the reduction target in 2040 both when it comes to forward-looking CapEx investments into renewables, but also what types of minimum climate, minimum criteria as you set, for investing in new oil and gas exploration and production. Thank you.

That's great input. And as you know, this year, we're voting simply on whether or not we're following the strategy we cut 2 years ago, but next year, we have to have a new strategy, and you can be sure that this Board and his executive team will be working very hard on that between now and the beginning of next year when we publish it. So that input was very worthwhile. Thank you.

Okay. I'll go with a question online now. It's from [ Dennis Anacoff from DBS. ] First, he has a statement. Shell has been involved in a project of building an LNG terminal in Batangas in Philippines, which is very close to a highly sensitive biodiversity area, Verde Island passage. That's his statement. His first question is, can you provide information on the current plans for CapEx for the Renewables and Energy Solutions division in 2023 and possibly a production up to 2030? The second question is, when can we expect Shell to align this capital expenditure plans with the Paris Agreement objective of limiting global warmings to 1.5 degrees C, sorry.

I'm not quite sure how -- I'm reading this again.

I would just answer the question.

Yes. No, no. But I mean there's no obvious question on what we're doing in the Philippines in that. Okay. Well, in which case, I think we just have to provide information on the current plans for CapEx for the renewables and energy solutions in 2023 and projections up to 2030. I think the way it was answered the 2022 question, I'm not sure there's much more we can add to that. I'll turn to Wael in a moment. But on question 2, I think we can go around the circle a lot. We do believe that we are -- our plans are aligned. There is no objective measure out there where we can all subscribe to us to what is in fully aligned with the Paris agreement. But we think as much as we can determine. If the world is going to hit 2050 with a temperature rise by 2,100 of less than 1.5 degrees above what it was in the pre-industrial era, then some of the things and all the things that we've laid out in our report are necessary, and we are pursuing them and they can be measured. I don't think there's more to add to that. I don't know Wael if there's anything you want to add on the -- on projections beyond this year and into next.

Very little other than to say, indeed, as I mentioned earlier, just north of $8 billion on low carbon and nonenergy products in 2022, we expect a similar amount to be spent in that category in 2023.

Thanks, Wael. Next question.

Yes. Next question in the room. I'd like to invite Laura Hillis of the Church of England Pension Board to come to the phone. Laura?

Thank you. So my name is Laurie Hillis, and I'm a representative of the Church of England Pensions Board. We are part of Climate Action 100+ and we're until 2021, the designated co-lead investor for the Climate Action 100+ engagement with Shell. In 2021, the Pensions Board attended this AGM and stated our support for Shell's climate transition plan, which was put to a shareholder vote for the first time at that AGM. We noted at the time that Shell was the first mover on a number of fronts, including on Scope 3 emissions, climate lobbying and was one of the first companies to offer a shareholder vote on a transition plan. While the plan was not perfect, it was positioning Shell as a constructive actor in shaping the long-term transition. However, today, I'm sorry to say we see a different path being taken, despite Shell posting record profits in 2022 and having the highest capital expenditure among its peers Its CapEx into renewables and low-carbon energy is far lower than would be expected by a company seeking to shape a future in the transition. These investments are lower than your most comparable peer BP. You were also investing the most of your European peers in upstream oil and gas production. While acknowledging the importance of your 2050 target, your short- and medium-term targets are misaligned with limiting global warming to 1.5 degrees according to all independent analysis. It has been widely reported and confirmed today that you're reviewing your plan to reduce oil output during this decade. And just this week, the chair of Shell Australia has spoken out against the more ambitious climate policy in that jurisdiction. Taken together, this is all deeply concerning. As a long-term institutional investor, our duty as a pension fund is to our members and their long-term interests as well as to the world they will retire into. These interests are not being served by the short-term approach the company appears to be taking. Although we were willing to support you in the past, today, we cannot, and it is with great regret that we have voted against the reelection of your Chairman and all Shell directors, and have also voted in support of the [ follow this ] resolution. Today, we have used our vote. But as we indicated in 2021, we are also prepared to restrict investment in the company if we do not see a change in direction. We believe this company has a choice. We would encourage the Board to reflect upon the future that society is demanding as set out in the Paris agreement and what role Shell is truly playing in shaping it. Therefore, my question to the Board of Directors and Chair is will you return to the path you were on, prioritize the long term and commit to phase out CapEx in oil and gas production, increase your short- and medium-term targets and double down on being a constructive actor in shaping an orderly energy transition.

Okay. Well, thank you for your input. And of course, we regret the decision you took quite publicly so in coming up to this AGM. I mean just as a matter of process, I mean the vote on our energy transition strategy this year was simply a vote on the strategy we agreed, and we thought we had alignment with you in 2021. The new strategy will take account of all the changes since then is not due till next year. So all we were asking shareholders this year was approval for the continuing strategy. And I think in all cases, we've met or exceeded the targets that we set out in that strategy. So that's why the Board recommended very strongly that people should vote yes, we're on track to deliver the 2021 strategy. And yes, you are right with the 2024 strategy, we need to take full account of the Chinese circumstances we find ourselves in. As I said in answer to other questions, that will be a big deep concern for the Board going forward. So we appreciate your input. And obviously, we'll be in touch with our next strategy. I think the only comment I would make is that it's quite -- and Wael reflected on that a bit. It's a little bit frustrating for us if everything is always compared on capital because we have, on the one hand, an upstream oil and gas business is quite capital intensive. And our downstream business, which is likely to be -- no, sorry, low-carbon downstream business, which is likely to be a lot capital intensive. And we have absolutely said that we don't want to invest in the upstream of that business in a big way. We don't want the capital-intensive part. We want the downstream part where we decarbonize our customers where more of the expenditure is going to happen in OpEx. So as you look at what we do in the future, I'd ask that you become a bit more nuanced and don't just do capital ratios between the old way of doing business and the new way of doing business and also don't compare capital ratios with other companies who have a strategy which is more biased to the upstream of lower carbon, which in itself is less capital intensive where ours was biased more to the downstream. But look, we look forward to the debate. We'd love to be collaborating with you again. We're really sorry we lost you this year. We felt we were on target with the strategy that we agreed with you in 2021. I think our numbers show that. But let's see what we come out with in 2024.

If I may, just to be clear, in 2021, when we did support the plan. We said that our support was contingent upon an increase in ambition in your short and medium-term targets, and that has not come through.

Okay. Fair news. Well, let's see what we do next year.

Thanks, Laura. I'd like now to invite [ Paul Rafbi ] for his question. [ Paul ], are you still here? Or have you left us. If you go to there and you keep it short, you can definitely -- and if you don't sing or dance.

Definitely no singing or dancing. This is a question in 2 parts. And excuse me, I'm not an economist, but I have some grip on what's going on. It's clear to me that the wealth of any civilization is and always has been dependent on 2 things. Natural Capital, which is the stuff that the Earth gives us trees, rivers, oil, whatever we extract from the natural environment, which supports our life. And secondly, human capital which are the farmers, the doctors, the teachers, all these people that do stuff for us. It appears to me that for at least 4 decades, oil companies, including yourselves, have known very clearly that your actions are destroying both those forms of capital, right? So the second part of my question, bearing that in mind is that a recent Guardian article states that oil companies, among which you are the foremost will be demanded under international law to pay reparations not only to us or globally for the damage done to the global environment, but specifically, to people in countries where extraction takes place. And we've had people standing up in the meeting this morning talking about different parts of the world where your extractive activities have caused grievous damage, not only to the natural capital bought to the human capital in those places. Could you please explain to the shareholders how these actions which are based on 40 years of denial and active hiding the truth from shareholders and from the world in general and actively skewing the media representation of your activities? How this is going to support shareholders in the future when you have destroyed the very basis of our prosperity, both as a business and as a global population?

Okay. Let me think about this a bit. I mean first off, it's very hard for us to -- me to deal with something as broad as that. We need to talk about specifics area by area to understand where the grievance might be. But for shareholders, I would commend them powering progress strategy, which is in which you can get off our website is reported on -- in our sustainability report, where we address all the issues you talk about. We had -- in addition, obviously, to big issue of any meeting of share at the moment about how we're dealing with climate emissions. We also have sections on powering lives, which is all about the whole issues of local populations as well, actually as well as the people who work for Shell and then we have protecting nature, which deals with clean water, it deals with clean air. It deals with the very important issues of biodiversity, which I think have come up the agenda more recently. I think we're on this stuff, and we have been thinking quite deeply about it. It does tend to get pushed to the back by the concerns about climate emissions. And I think then we have to come and look at the local examples where we can do something about it, but I don't accept everything that you say.

Well, if I may just come back to you on both of those points. One is, we've had a lot of fair words this morning. And I think if you really take a good look at the areas in the world where this damage has happened, that you would...

Give me an example?

Niger Delta.

Well, we can talk about that, but...

There are specific examples. And I think that you've also put a lot of the responsibility onto your customers for driving change. And you are big enough as a company to be a game changer.

No. I'm sorry, we're not putting the responsibility on our customers. That's not fair. What we're saying is that we will develop with our customers, low-carbon alternatives, and we hope that they will be encouraged to buy them through the work we do with R&D, with marketing and with governments to make them affordable and to make them investable. So we're not putting responsibility on customers. We own that responsibility as much as anyone.

Well, I think your lobbying has been so politically motivated that you actually have skewed government's decisions on climate change. And I think that you're one of the main drivers, actually, and I think you need to take a really good look where your power actually lies and how you're going to use it?

You're welcome to your opinion. Obviously, we disagree slightly with that. Again, if we could get to specifics, it would be easier.

Specifically then, specifically, you need to take your responsibility for the destruction of human lives and the destruction of our life support system seriously and decide that it is your responsibility to make a huge change. You have the opportunity. You have the power. You have the opportunity. You could own the motivation to do that and you could go down in history as somebody who did the right thing instead of a dissembling green washer, sitting there making excuses just to make more money while the world burns. Thank you.

Okay. Look, you're entitled to your opinion. I think if you read our powering progress strategy, you see the examples from our sustainability report, you will see where we have taken action and taken responsibility. And of course, we can always do better. Next question.

Thank you. I would like to invite [ Sunder Urbach ] to come to question point. [ Sunder? ]

Okay. Thank you. Dear, Mr. Chairman. Dear, fellow shareholders. My name is [ Sunder Urbach, ] and I'm here on behalf of MN PMT Dutch Pension Fund. I'm making this statement as part of the Climate Action Environment [ plus lead in Faster ] Group, also including PGGM Investments and the Phoenix Group. We aim to provide Shell with long-term support and critical feedback throughout its energy transition journey. I want to start by thanking Shell for the productive engagements that we've had over the past few years. We have especially appreciated the recent discussions with our Chair and CEO, with whom we've had an open and honest conversation. We also would like to publicly congratulate Mr. Sawan for his appointment as CEO of Shell. I would like to start with some acknowledgments before outlining areas for further improvements by our company. Shell is a leader among oil and gas companies in the energy transition. For example, it has set multiple intensity targets, including Scope 3 emissions, has acquired Europe's largest renewable and natural gas company and is building Europe's largest green hydrogen plant. However, the current energy crisis shows that decarbonization journey does not follow a straight line. And this journey is not Shell's alone either. The energy transition will only happen through joint efforts of investors, policymakers and energy-consuming companies alike. Nevertheless, we believe Shell can take further and bolder steps to enable the world's energy transition. We currently do not have sufficient evidence that your company's climate strategy is aligned with the goals of the Paris Agreement. We acknowledge the energy trilemma, but this should not become a Bermuda triangle, where the climate ambitions of energy companies finish. This leads us to 3 strong recommendations and questions for Shell in order to safeguard the long-term interest of our underlying pension beneficiaries we represent. Firstly, we encourage our management and Board to remain committed to the yearly announced expected reduction in oil production of around 1% to 2%. Shell has the flexibility to meet current energy demands without changing its course, and we trust you agree that maintaining these goals will strongly signal to the world that your company takes its commitment seriously. Secondly, we do request that you are more explicit about your low-carbon strategy, shows the capital and the know-how to supply and shape the demand for low-carbon alternatives to its customers and to help them transition as well. It's critical that you to close concrete 2030 targets for your chosen low-carbon areas, the relevant CapEx plan to support a projection of related sales energy mix and the commitment that your company will accelerate these targets over time. Lastly and thirdly, we encourage you to show to your shareholders, how your transition strategy contributes to a decline in absolute emissions in line with the goals of the Paris Agreements. Specifically, we request that you explain how the individual components of your current carbon intensity targets are contributing to reducing your company's overall absolute emissions, including upstream and downstream emissions. We kindly ask you to respond to these 3 recommendations. Thank you for your attention.

Thank you, Mr. [ Urbach. ] I think from point 2 and 3, I'm going to suggest that these are partly been covered by questions that Wael and I have answered previously and will fully be -- well, fully -- will be attempted by us with our best foot forward to be addressed with our -- in our energy transition plan for 2024. So I take your input and the whole border here, we're listening to your input. And as we craft that, we will certainly have that in mind, which I think then leaves just with your question or I don't know if it's a statement on the 1% to 2% oil production reduction I mean, first of all, I hope you've acknowledged that we've way exceeded that target from when we first met. In fact, we've effectively delivered more than we were expecting to deliver by way of a reduction by 2030. And so that's an important frame as we look forward, and we look forward perhaps to what Wael may have want to say more of in the Capital Markets Day, but I don't know if you want to add to anything at this point.

Nothing.

So I think Capital Markets Day next month for question 1. Question 2 and 3, I think we'll deal with all your input when we actually form and publish our energy transition strategy next year. But thank you for your input, much appreciated.

Thanks, [ Sunder. ] I'd like to invite now Naomi Hogan. Okay. Naomi is not there. Then I'd like to invite [ Kushnacker ] -- Naomi, are you there? Sorry?

That's okay. Thank you.

Okay. Thanks.

Chair, I represent the Australasian Center for Corporate Responsibility, ACCR. We work with asset owners and managers, seeking to understand and manage investment risks relating to the energy transition over the coming decades. I have 2 questions with respect to your recent energy security scenarios report. In the scenario designed to explore how the world meets the goals of the Paris agreement, you [ chart ] oil supply dropping steeply from the early 2030s with low-cost OPEC producers gaining significant market share. This is also reviewed, shared by IEA scenarios. Your report says for the Sky 2050 scenario, having been burned in the past by overinvesting, only to lose out when prices fall. Companies prefer to generate cash for their investors rather than invest in additional production capacity. At what point would Shell as a higher-cost producer consider what your own energy securities report suggests and return cash to shareholders and investors over investing in additional oil production capacity? And my second question, your energy security scenarios report demonstrates a clear understanding of climate science, the diminishing carbon budget and the impacts of global warming including low lining nations going underwater. Your report also notes that the climate-related events witnessed as the planet warms will lead to increasing societal activism. In this context, do you see Shell's recent statements alongside significant ongoing oil and gas exploration outlays leading to growing backlash directed to Shell. And how are you actively managing risks associated with further societal activism targeting Shell, including new calls for financial reparations?

Okay. Well, thank you, Naomi. Of course, from my previous role, I know the ACCR very well. I mean I think the first thing I would point out is that as I just -- our production has been falling, and our returns to shareholders have been rising quite generously so. I mean 35% of our cash from operations was returned to shareholders last year. So I think in some respects, we're already meeting what you're asking us to do going forward. I think some of the other comments you make are related to obviously looking at some of the [ Shell ] scenarios, where we do expect that without greater change on the customer side to pull through a lot of the things that Shell are ready to provide of a lower carbon future, that inevitably, there will be a sudden backlash and some of the things that you've heard about and read in our scenarios will therefore give us the possibility for not a nice way but of actually selling more low-carbon-type activities. That's what I meant in my speech about things being lumpy. It can either be a technology development or it can be a social development. And of course, we're ready for that. That's why we're doing the work, we're doing research. We're working so hard in investing in many of the alternatives and have done. I mean, and as I think, as Wael said, in our investment last year, was almost double what it was the previous year in some of those low carbon alternatives. And I wasn't able to keep -- take notes on all your questions, but so I'm going to sort of call it for reinforcements now and ask if Wael would like to add anything to some of the things you've said.

Thank you, Sir Andrew. And Naomi, thank you for the question. And specifically, maybe the angle to touch on is your question around risk and how we manage risk and how we see it going forward? I think, firstly, to your point around activism, indeed, we mentioned that in the scenarios. And I think today is a demonstration of that earlier in the meeting. As society gets more and more frustrated by inaction. . I think you want to see more of this. What we are heavily focused on at the moment is what we can do to support governments, to support our customers and, of course, ourselves, invest in lower carbon solutions with the recognition that we alone will not be able to make the transition happen, but we can be a great catalyst for the transition. And so as that frustration boils over, we hope that we will be able to see the right policies, the right measures, and we are starting to see that, by the way. If I compare to where we were 5 years ago, elements like the Inflation Reduction Act in the U.S. is encouraging a significant amount of capital to move to the States. Similarly, we're seeing moves in Europe. So there is a lot of positive momentum that is happening that will allow companies like ourselves to invest your capital in a sustainable and in a profitable way as well. As we think about the broader risk profile, of course, we look at it from a global perspective. It is fair to say that the same AGM sitting in a place like Asia or in South America would have a very different focus, which is let's make sure that we provide energy to those who need it today, who have been starved of energy, including oil and gas for a long, long time to come. So we're finding that balance that satisfies the wide range of demands on energy and hopefully, through our strategy, supply the oil and gas the world needs today as well as the low-carbon solutions that the world needs urgently. Thank you.

Sorry, just a followup. Well, your reference there to other countries globally. Does that mean that you're hoping to grow market share in those economies in order to make up for lowering demand elsewhere or...

No, it doesn't. We are looking at how we can meet the demand that multiple countries, including here, for example, take the U.K., where if there is less development in the North Sea, we will need to make sure that we are delivering energy to the U.K. as we did in the most difficult period last year where we delivered record LNG. We processed 20% of the gas that kept the lights on in the U.K. We supported the businesses as they were trying to keep running through these difficult times. We've just invested in another project called Pierce that will deliver around 10% of the U.K.'s gas needs. So we will continue to invest where the opportunities are available, and we will continue to look at making sure the flows of electrons and molecules, get to those who need it around the world without necessarily choosing one location versus the next.

I think we need to cut it there. I mean we've got lots of questions, but I appreciate your comments and your input.

Thanks, Naomi. We've got another question in the room from [ Kushnacker ]. Just like to check whether he is here. Okay. Then we have another question in the room from Nawaz Haq. Nawaz, you're there? All right. Go for it.

Thank you very much. Sorry, just a moment. My name is Nawaz Haq. I'm an Executive Director of London listed SulNOx Group plc. We're a scientific company specializing in reducing the environmental impact of fossil fuels and beyond. Setting Paris-aligned targets covering Scope 3s paramount because they account for over 90% of Shell's total emissions. You stated you have short-, medium- and long-term targets in this respect. I can present an immediate proven unique, simple globally scalable, cost-effective solution that will lead to large-scale reductions in emissions and pollution. If Shell use this, it will reduce the equivalent of 20 million cars impact annually, and that's a conservative figure. Will Shell's senior Boards talk to me and engagement moving forward? This is a great positive opportunity deserving of senior Board's direct involvement. Surely, such potential impact cannot be ignored. Shell can control Scope 3 emissions, and I can share this with you with shareholders and with media.

Well, you're welcome to share it with us, of course. I mean I don't even know what you're talking about, just to know whether it's something that we're already working on. But for sure, I mean, if some of our Investor Relations people will connect you with our ventures guys, and we'll see if there's something we can do.

Okay. Thanks, Nawaz. Next question in the room is from Dr. Lynne Jones.

Thank you, [ Ben ]. I'm slightly shorter than the other speakers. Good morning. And thank you very much for letting me make my question. My name is Dr. Lynne Jones, and I'm a consultant psychiatrist. I do recognize it's been a slightly stressful morning. I'm also an Honorary Associate Professor at the London School of Hygiene and Tropical Medicine. And I've spent my professional life establishing mental health programs in areas of conflict and disaster for which I have been given an OBE. So I have actually spent my life representing my patients. I don't speak for any company or organization, just for the people I try to help. People like mothers who are mad with grief because they cannot stop their children dying of starvation in Chad or on the Somali border because of famine, which is caused by drought by desertification caused by the climate emergency, which you acknowledge, which is caused by digging out fossil fuels. Now these mothers are not going to benefit from a fast transition or the oil that you might sell or the gas they are being killed by it. And the children I see who are weeping over buried parents because of a storm surge from Hurricane Haiyan are afraid to go to sleep at night because of the crying of the wind, whether they're in Mozambique or any other part of the world, suffering from increasing weather events. They are not benefiting from your energy transition. What I want to know, and when I come here, by the way, in this country, I'm dealing with increasing numbers of neurodevelopmental disorders. We're seeing rising cases of dementia. These are associated with fossil fuel pollution, which still leads directly to my question, are you aware of the University of College London study that says 1 in 5 deaths across the globe are due to fossil fuel air pollution? That's 8 million people a year or 15 people a minute, just think how many have died from fossil fuel-related air pollution while we've been sitting here this morning. Does Shell recognize these impacts? And what is it doing now to address pollution? That is a medical question. But I do have a political one as well. If you just -- it's my last question. Yes, it's very short, I'm going to end. Just allow me to speak because I'm very curious, I work internationally for WHO, UNICEF, UNHCR and of course, the UN Secretary General is a hero of mine. He's an extraordinary man. And he says...

So what's your question?

He says, I want to know your response to his comments, Fossil fuels are global addiction. You have humanity by the vote. You have pedaled a big lie. Fossil fuels are a dead end. These are his words, not mine. How do you reply to him, I would like to know? Thank you for allowing me to speak Sir Andrew. I appreciate it.

Okay. I'm not sure there was much of a question in there, but I'll...

Can you mention about fossil fuel air pollution, please?

Well, I -- look, first of all, we take mental health very seriously in Shell, and we have a very effective program. And certainly, as a Chair looking in what these executives do, I'm incredibly impressed by I think you would be too. I think you're right that sometimes because everything is about climate change, we forget the issues of the quality of our air, the quality of our water and the quality of our biosphere. I think in an earlier answer, I mentioned that we do have programs for these things. I do -- don't recognize the study you spoke about there, but I recognize -- but I recognize similar studies that talk about it. They're not always uncontroversial, shall we say. But certainly, I think we could all enjoy cleaner air and cleaner water and so on and so forth. And that's part of what we have in our Shell Powering Progress strategy. So I mean I think in my answer to the question of the individual, of course, we understand there are sort of -- there are effects of fossil fuels, we'd rather we didn't have. But there were amazing benefits in terms of people's quality of life. And that's something that we now have to find other ways of achieving without the carbon and without the air pollution.

We've just checked there's no one on the phone at this moment. I'd like to go back into the room. I also like to urge you to keep your questions short as Sir Andrew has just said. Can I invite [ Norman Edwards ] to come to the microphone, please?

Right. I'll be pleased I've got 2 very short questions. The first thing, I think we're sort of encouraged by the transition by majors such as BP and Shell to energy companies. And it strikes to me is unfortunate that the government doesn't allow investment in renewables, to be allowable against windfall tax. I think that would encourage Shell to actually spend more on renewables. And I think that these people protesting should be asking the government to give more incentives to companies in the transition. My 2 simple questions is: one, would the Board consider going back into Russia, if there's a regime change in the future? And the second 1 is, what is the Board's current strategy in relation to Kazakhstan for the present and future investments?

I'm going to get Wael to answer the Kazakhstan question. I would acknowledge your comment on windfall tax and capital allowances around that. I think we're in the same place as you. I think it's just too early to say anything about Russia at this stage. I mean we obviously took a very quick decision to pull out and have quite rapidly thereafter extricated ourselves from almost all our connections with it. So obviously, it's going to be a very deep thought as to whether we ever return. I'm just going to look to Sinead, if there's anything she wants to add on Russia?

I think you said well, Andrew, we took quick action to exit. We have exited our upstream business. We have exited our gas business, and we've exited our downstream business, and we reserve our rights on gas, as you're aware, Nothing further, Andrew.

Okay. Wael on Kazakhstan.

Yes, very briefly, thank you very much for the question, Mr. Edwards. Kazakhstan, we have 2 major ventures there, 1 called Karachaganak and the second one called Kashagan. Both of them are producing -- each is producing around 400,000 barrels of oil equivalent per day. We have significant investment to support the sustenance of that production profile. We have projects in both ventures actually with multiple international shareholders. These are to extract more barrels out of the existing field. We continue to look at opportunities in Kazakhstan, including, for example, in gas because there's significant gas production there as well. But at this stage, nothing firm in our plans. Thank you for the questions.

Thank you.

Thank you, Mr. Edwards. We now got a question from [ Jenny Edwards. ]

Thank you. I'm [ Jenny Edwards. ] I'm an individual shareholder and I inherited my shares and decided to stick with the company and to engage with the company's strategies. And I think it's my job as a shareholder to challenge you on the strategies that are there. There are many things that I've heard today officially and unofficially here that I'd like to pick up, but I'm going to focus my question on one particular area following on from the reference to Russia. It was good to hear that Shell decided quickly to pull out of Russia, but there have been reports that last month, the Russian government announced it had approved a $1.1 billion bid from Novatek for Shell's stake in -- if I pronounced it correctly, Sakhalin-2 projects. So given that, that's been approved is Shell going to accept that bid and receive the proceeds. And if it is, the Ukrainian government has understandably said that proceeds from Russia should be redirected to reconstructing that country that as we see every day in our headlines is being appallingly treated and if people saw today's photos of [indiscernible], which looks like the Hiroshima bomb has landed on it, it's certainly going to need funds and as well as the humanitarian aid that it needs now. So I'd like to know what the intention is. And are those reports correct. And just to finish, I want to say that I will be supporting the shareholder resolution. And we've heard a lot of information from investors. But for me, as an individual, I simply heard the figure that 2/3 of our capital investment, accepting that's not all the investment goes still to fossil fuels. And we know that the situation that we were aware of and our scientists were aware of at the time of the Paris agreement has only got much worse. And every few months, we have another report from scientists saying, we are on the brink. Some say we have already tipped over the brink, and we're already seeing catastrophic change. So those 2 points together mean that I will support shareholder Resolution 26. Thank you.

Well, I'm sorry to hear about your second decision. I would just repeat that last year, we invested as well described, we invested over $8 billion in non and lower carbon solutions. We're a big company, hydrocarbons [ that are likely to be around ] for a while. And it's about security and supply of energy, but you've made your decision. We do feel the same way with you about Russia and Ukraine and our actions have shown that. We've already transferred over $78 million to Ukraine as part of our help for them there. But on the specific question on the cycle 2 transaction, I'm going to ask Sinead, our CFO, to comment.

Certainly. And thank you, Mr. Andrews. Not only have we continued to invest more than $70 million in terms of humanitarian donations in Ukraine. We've also continued to focus on keeping our staff safe there, including the continued operation of the fuel network, which allows the country to continue to operate, which is very key at the moment, as you say. With respect to Russia, I confirm we have exited, as you're aware, with respect to Sakhalin, which is the one you specifically referred to, we have seen the reports. We have not entered into any agreement and we cannot comment any further at this point in time. We have reserved our rights Mrs. Edwards. Thank you.

Thank you.

Thanks. We've got another question in the room here, Benjamin [indiscernible].

Yes. Thank you. My name is Benjamin [indiscernible] and I'm here on behalf of Justica Ambiental, Friends of the Earth Mozambique. Our concerns regarding new fossil fuel projects and their detrimental impact on climate change cannot be ignored. The consequence of climate change are already being felt globally with rising sea levels, intensified hurricanes and droughts, also experienced in Mozambique specifically. Besides the environmental repercussions, people from Mozambique are also troubled by the conflicts arising in the region. Around 1 million people already had to be lift somewhere else. Shell recently made the decision to cancel its plans for the gas to liquid plant in the [ fungi. ] However, we see clarity on the status of Shell 29 contract with Anadarko to purchase 2 million cubic meters LNG. With Total now leading projects, we would like to know the implications for Shell contractual obligations. Could you clarify that, please?

Yes. Thanks, Mr. [indiscernible]. Wael, do you have insight on that.

Yes. Thank you very much. So just to keep it brief. So indeed, as you say, we have an offtake agreement. We don't have any presence on the ground to build facilities or the like. That offtake agreement, of course, is dependent on the project being built, which is questionable at this stage. So we continue to observe and then there's all sorts of commercial rights that we have within that agreement, which we can choose to exercise or not at -- in due course. But at this stage, we don't really have much to share. Thank you for the question.

Thanks, Mr. [indiscernible]. We've got now a question from [ Anthony Collins. ] Can you come to the question point. Thank you.

I am sorry, I just want to apologize first. Oh! my god -- I apologize for the people behind me, I just ripped my trousers, went off inside, apologies for the view.

We enjoy lighthearted moments in the stage here.

Okay. So my question is specifically about your Western Australian interests. Obviously, you sold your share of Browse a few weeks ago. I'm interested to know how you came to that conclusion to what drives that decision, whether it was a matter of pre-FID funds being spent a little bit too quickly or whether it's that Browse just would have made climate targets impossible. And secondly, I'm here today partly on behalf of traditional owners who live close to the Northwest Shelf project, Karratha gas plant? And sulfur and nitrogen oxide pollution from this facility is eroding sacred and ancient rock art, which is 40,000 years old in the local area of Murujuga. Before a decision is made to extend the life of the North West Shelf, which I know is coming and it's attached to the Browse project. And as Shell as a joint venture partner in the North West Shelf. Can I ask that well, will you commit to allowing the North West Shelf with Karratha gas plant to wind down at the end of its current lifetime when the current fields dry up rather than allowing the pollution that comes from the Karratha gas plant to continue to destroy the cultural heritage of the local people? And again, sorry about the view, everyone behind me.

Okay. Well, thank you, Mr. [ Collins. ] So I think I'm going to turn to Wael for that. Obviously, I know they stay here quite well from my past role. I think it's worth pointing out that, of course, Shell are not the operator of this field, [indiscernible] of the operator. And so some of the decisions more rightly belong with them than the Shell but with that constraint, I wonder if Wael, there's anything you want to add?

I think on the Northwest shelf, thank you for making the point. We are indeed a joint venture partner, a minority partner, but take all inputs into consideration. So thank you for that. And there's no specific decision anytime soon. But when that comes, we'll take that into account. I think your first question around Browse, I talked earlier around performance, discipline and simplification. So we've been looking at our portfolio more broadly and saying what are the key projects that fit squarely into our strategic focus going forward and that fit into our carbon budget going forward. When we looked at Browse, in comparison to some of the other opportunities we have to be able to bring LNG to customers around the world. It did not rank from a returns perspective. It was also disadvantaged from a carbon perspective. So therefore, it did not fit into our strategic direction, and we chose to exit the project early on rather than prolong it. Thank you for the question.

Is there any indication on how much you got for it?

Can't share that. Maybe you can ask VP though.

Thanks, Mr. [ Collins. ] Good luck with trousers. I like to ask a question you on behalf of a shareholder. Can the Chair ensure an aviation fuel is not provided to questionable and/or illegitimate regimes like Burma?

Right. Well, I mean, I may just handle this one, but if Wael or Sinead would like to add to it, please do so. But really, it's very hard for a company like us to refuse to supply a product to any individual customer. You get it very quickly and particularly with something like this into issues of antitrust. Now I don't know how it applies in this particular case. Well, it's regimes more broadly like Burma., But you've heard how careful we've been about in our relationship with Russia. So where there is an appropriate moral cause, sure. But in general, this is quite a risky area from antitrust. Yes. Okay. Next question.

Thanks. I'd like to invite [ Paul Rosenberger ] to come to the question point.

Thank you. I'm private shareholder whose family have held shares for over 125 years of the company. Sadly, I felt a need to heavily reduce my holding.

I'm sorry about that.

So was I. According to Deutsche Welle, the German news channel, the Director General of the International Energy Agency, Fatih Birol, has stated that existing oilfields, gas wells and coal mines are more than enough if the world is serious about its climate goals. Shell continues to explore for more oil and expand its production. If the Board agrees with that statement from the International Energy Agency, why is Shell doing so? Alternatively, if the Board does not agree with the IEA? Could you explain why the Board considers the IEA to be wrong?

Okay. I wouldn't say they were wrong. We maybe think about it a bit differently. I think explore for oil, we've said that after 2025, we will not explore for oil in new frontiers. That's our existing strategy. And therefore, the production that we are expanding is not expanding production, as you've heard, we've more than met our targets for 1% to 2% fall in -- by 2030, and we beat that target ahead of schedule. So we're not expanding production, and we're not continuing to explore for oil. So I guess there's not a lot for us to talk about that. But one thing I would sort of take a small issue, if I may, with the IEA is that the [ north ] oil is different or gas is [indiscernible] the same. They're different. They occur in different geographies, and they are of different compositions and they have different carbon footprints when they're produced. And so given geopolitics and the possibility that certain supplies that may be required in the future may not be obtainable for -- from existing areas forever, there is a certain insurance in making sure you have a portfolio of possible production. And that's something that Shell can speak to. And also that, that portfolio should include options to produce oil and gas with potentially a lower carbon footprint than existing production. And that's another choice that we could give the consumer in the future. So we think it's just a bit more nuanced than that, that we want to think about geopolitics, and we want to think about the variation in carbon content of individual production. But our track record is that we're stopping to explore and our production has been falling.