Repsol, S.A. (REPYY) Q4 2022 Earnings Call Transcript

Repsol, S.A. (OTCQX:REPYY) Q4 2022 Earnings Conference Call February 16, 2023 6:30 AM ET

Company Participants

Ramón Álvarez-Pedrosa - Head, Investor Relations

Josu Jon Imaz - Chief Executive Officer

Conference Call Participants

Biraj Borkhataria - RBC

Joshua Stone - Barclays

Michele Della Vigna - Goldman Sachs

Irene Himona - Societe Generale

Alessandro Pozzi - Mediobanca

Giacomo Romeo - Jefferies

Sasikanth Chilukuru - Morgan Stanley

Henri Patricot - UBS

Matt Lofting - JPMorgan

Ignacio Domenech - JB Capital

Henry Tarr - Berenberg

Maurizio Carulli - Carbon Tracker

Ramón Álvarez-Pedrosa

Thank you, operator. Good day and invited to Repsol’s Fourth Quarter and Full Year Results Conference Call. Today’s telephone will beryllium hosted by Josu Jon Imaz, our CEO pinch different members of nan executive squad joining america arsenic well. Before we start, fto maine tie your attraction to our disclaimer. During this presentation, we whitethorn make forward-looking statements based connected estimates. Actual results whitethorn disagree materially depending connected a number of factors arsenic indicated successful nan disclaimer.

I will now manus nan telephone complete to Josu Jon.

Josu Jon Imaz

Thank you, Ramón. Good day to everyone joining america successful this convention call. In our today’s agenda, I’ll commencement pinch nan cardinal messages earlier moving to nan business capacity and financial results. And astatine nan end, I will supply you pinch our champion outlook for 2023. After nan presentation, of course, we will beryllium disposable to reply your questions.

Starting pinch nan cardinal messages, past year, nan power paradigm was wholly altered by nan consequences of nan warfare successful Ukraine. Energy information emerged arsenic nan main privilege of our companies and governments requiring a associated consequence to guarantee nan businesslike transportation of power products. This has intensified a dilemma of really to supply astatine nan aforesaid time, affordable, reliable and decarbonized power to society. Our group activity difficult to guarantee a due level of supply, uncovering alternatives to mitigate nan summation of power costs, adjusting commercialized margins to alleviate nan load of precocious prices to our customers. At macro level, for nan first clip successful galore years, possibly ever, each nan main drivers of nan business, lipid and gas prices, refining situation and speech rates contributed to nan aforesaid affirmative direction. Considering each nan uncertainties, we enactment committed to a disciplined superior approach, maximizing worth and allocating nan other rate according to our strategical priorities, accelerating our transformation, expanding shareholders’ remuneration and reinforcing nan equilibrium expanse of nan company.

The group’s nett income reached €6.7 cardinal and nan accumulated rate travel from operations stood astatine €8.9 billion. Both Upstream and Downstream businesses contributed powerfully to nan results. These results were generated successful a script of utmost volatility successful nan world markets, and I’m afloat alert of nan societal statement astatine times induced by governmental liking generated astir firm results successful nan discourse of geopolitical situation and inflation. Our results will ever beryllium volatile because we don’t person regulated tariff that ensures profitability. In nan 4-year play since we assumed nan patient committedness to go Net Zero, nan affirmative results of 2021 and 2022 person not yet afloat compensated nan losses incurred during nan pandemic. Net indebtedness was reduced by 61% year-over-year to €2.3 billion, balanced to a nett affirmative rate position if we executed leases. Our committedness to reenforce nan equilibrium expanse has been recognized by standing agencies arsenic reflected successful nan upgrades by Standard & Poor’s and Moody’s.

Total shareholder remuneration was aligned pinch our nonsubjective to administer betwixt 25% to 30% of nan rate travel from operations done a operation of dividends and stock superior reduction. We accrued nan dividend by 5% to €0.63 per share. We canceled a full of 200 cardinal shares anticipated successful 3 years, each nan buyback commitments defined successful our strategical scheme until 2025. We person nan patient committedness to proceed expanding nan distributions to our shareholders nexus it to rate procreation of course. In our 3rd 4th convention call, we announced nan Boards connection to summation nan 2023 dividend by 11%. And this morning, we person announced a caller $35 cardinal buyback programme pinch nan volition of canceling astatine apical of 50 cardinal shares successful this half of nan year.

Going backmost to nan reappraisal of 2022, nan translator of our portfolio reached important milestones pinch nan strategical partnerships for america successful upstream and renewables. Repsol will make mixed proceeds of astir €4.3 cardinal pinch these transactions, which helped america digitalize worth successful this portion of nan cycle, leverage superior to accelerate nan displacement to debased c and strengthens our financial position. At nan operational level, nan Upstream section continued precocious grading its portfolio focusing operations connected geographies and plays wherever we are much competitive. In parallel, we approved our number of caller strategical projects that will lend to nan sustainability of our rate generation.

In nan Industrial division, we captured nan favorable refining situation while progressing successful nan translator of our sites. The elasticity of our strategy allows america to quickly accommodate operations to maximize nan output of middle-distillates, maintaining precocious utilization rates and replacing costly earthy state pinch different alternatives. The commercialized businesses, we anticipated to competitors and besides authorities measures by voluntarily applying discounts to our clients to soften nan effect of precocious power prices. These initiatives penalize results that let america to summation marketplace stock and accelerate nan maturation of our integer loyalty program. Finally, successful renewables, we proceed holding caller megawatts connected their cognition and unlock worth done further plus level rotations. In addition, precocious successful nan year, we reached an statement to get Spanish renewable company, Asterion Energies, incorporating a portfolio of much than 7 gigawatts to accelerate our maturation and diversification targets.

At this point, fto maine return a look astatine nan improvement of nan main macroeconomic indicators successful 2022. I want to underline that nan elevated power prices we salary coming person not told maine nan consequence of nan warfare successful Ukraine. That’s not true. European dense dependence connected imports precedes nan world. And nan precocious prices are, for nan astir part, a consequence of erstwhile governmental decisions. Looking astatine nan lipid price, Brent crude averaged $101 per barrel, astir $30 higher than nan twelvemonth before. Supply concerns whitethorn astatine each scope its highest level since 2018 earlier starting a downward inclination owed to fears of a imaginable economical recession successful nan world. The Henry Hub scale mean is $6.6 per cardinal BTU successful 2022, its highest level successful nan past 14 years and 69% summation compared to 2021.

European state markets were, fto maine opportunity particularly impacted by an aggravated title to pull LNG imports. In refining, our separator parameter was good supra mid-cycle levels. The spot of middle-distillates and wider dense to ray lipid – crude differentials much than compensated nan summation of power costs. Daily values of parameter scope betwixt $0 and $35 astatine different points of nan twelvemonth showing nan utmost volatility of nan refining situation successful 2022. Finally, nan U.S. dollar recovered by 11% against nan euro underpinned by nan fto maine specify arsenic fierce liking complaint argumentation of nan Federal Reserve.

Now fto maine return a elaborate look into nan capacity of nan Upstream division. Full twelvemonth net is €2.3 billion, €1.3 cardinal higher year-over-year, driven by higher realization prices, partially offset by higher costs and little production. Net accumulation averaged 551,000 barrels of lipid balanced per time successful nan 4th quarter. Full twelvemonth mean stood astatine 550,000 barrels per day, 22,000 barrels beneath 2021, mostly owed to nan effect of state exits successful Libya, and PSC effects. The effect of divestments was astir 35,000 barrels per time compared to 2021. Remember that a portion of these divestments were executed successful 2021.

Strategically, we achieved an important milestone pinch nan statement reached pinch EIG to incorporated them arsenic a number partner for Upstream division. Under nan position of nan agreement, EIG purchased 25% of our exploration and accumulation business for a full information of $4.8 billion, including indebtedness and Repsol will person proceeds of $3.4 billion. With this transaction, we are incorporating a starring world investor pinch proven capabilities to thief america maximize nan worth of our E&P business. Repsol will support power and proceed to consolidate nan Upstream section successful its accounts and nan closing of this transaction is expected successful coming weeks.

Further to this, past year, we made important advancement successful nan rationalization of nan Upstream portfolio. Working on nan lines of our worth complete measurement strategy, we reduced nan number of countries successful which we run and summation our position successful spot wherever we person much competitory advantages. On nan 1 hand, we complete nan exit of our position successful Ecuador, Malaysia, Russia and Greece. And we divested lipid producing assets successful Canada. On nan different hand, we accrued our position successful Marcellus. And aft 4th end, we reached an statement to incorporated caller producing assets successful Eagle Ford, nan aggregate accumulation effect of each nan divestments completed since we presented our strategical scheme successful November 2020 is astir 67,000 barrels per day.

Furthermore, took important steps guardant successful nan improvement of our task pipeline, approving 4 of nan cardinal projects defined successful our strategical plan. In Alaska, we took nan FID for nan first shape of Pikka pinch first lipid expected successful nan extremity of 2025, nan opening of 2026. In unconventionals, we went up pinch a 3rd improvement shape successful Eagle Ford, leveraging 1 of nan astir elastic parts of our portfolio. In nan Gulf of Mexico, we took nan FID for nan associated improvement of nan Leon and Castile discoveries, accumulation will beryllium handled from nan caller Salamanca FPS installation and first lipid is expected successful 2025. In Trinidad and Tobago, nan Cypre offshore state task was sanctioned successful September, pinch first state expected successful 2025. These 4 projects tin presume will lend to an mean astir 57,000 nett barrels of debased breakeven and debased emissions accumulation successful nan 2024 to 2030 period.

Moving now to nan capacity of nan Industrial division, afloat twelvemonth adjusted nett income was €3.2 billion, mostly driven by nan publication of refining and trading. This consequence compares to nan €0.6 cardinal achieved successful 2021. In Refining, nan separator parameter averaged $18.90 per tube successful nan 4th quarter, making for an mean of $15.6 successful nan year. Compared to nan erstwhile year, margins use from stronger merchandise spreads, particularly middle-distillates and nan wider discount of dense lipid that offset nan higher power costs and higher CO2 price. The pursuing years of capacity rationalization, nan needs we person successful Europe to switch Russian exports, aggravated successful immoderate way, nan tight business of nan integer marketplace that was antecedently already stretched by nan extremity of 2021 erstwhile we were successful Europe exiting from nan pandemic. The premium generated successful our portion CCS separator complete nan parameter was $2.9 successful nan 4th and $1.6 successful nan year. Full twelvemonth mean utilization of nan distillation capacity was 86% and 95% for nan conversion units.

Utilization rates remained precocious done nan past portion of nan year, completing connected schedule nan planned move astir of Tarragona. The elasticity of our strategy allows america to incorporated caller crude varieties to switch Russian lipid successful Eurotek, we are presently processing each month, 1 cardinal barrels much of Maya than astatine nan opening of past year. In addition, nan return of Venezuelan crudes fits very good pinch a precocious complexity of our SIM having our refining framework, having processed 5 cargoes of Carabobo crossed successful 2022, astir 5 cardinal barrels. This elasticity was besides utilized to arbitrage betwixt different alternatives to trim earthy state consumption. By nan 4th quarter, we were capable to little nan intake of earthy state by almost 50% compared to humanities levels.

Moving concisely to Chemicals, nan capacity successful 2022 was intelligibly a crippled of 2 halves, demonstrating nan relationship of this business pinch nan economical rhythm successful nan world. During nan first portion of nan year, margins remained solid, though not arsenic precocious arsenic successful 2021, trading prices bespeak nan summation successful nan value of earthy materials and energy. But since July, world margins started to suffer arsenic little request reduced nan utilization of our plants and trading prices couldn’t sorb nan precocious power costs. Now I reviewed nan advancement made past twelvemonth successful our main transformational projects that will thief america decarbonize liquids and gases produced successful our business sites. In nan past, I person stressed my belief that our governmental leaders should attack nan power modulation pinch a higher attraction connected exertion and little successful [indiscernible].

I find encouraging that nan transformational routes we are promoting successful Repsol person been recognized and supported by different bodies of nan European Union, opening nan C43 precocious biofuels works successful Cartagena. We expect to commencement up operations successful nan 2nd half of nan year. The EIB, nan European Investment Bank has supported nan task pinch a indebtedness of €120 million, making Repsol nan first institution successful nan manufacture to get this type of financing.

In Renewable Hydrogen, nan 3 electrolyzers successful Cartagena, Tarragona and Bilbao person entered engineering shape pinch a imaginable mixed capacity of 350 megawatts. The electrolyzers successful Cartagena and Bilbao person been qualified by nan European Union arsenic strategical and of wide liking being prioritized successful this measurement for nationalist backing for their development. In SAF, sustainable aviation fuels, we reached immoderate important milestones arsenic Iberia Airlines operated successful business pinch Repsol its first long-haul flights utilizing biofuel produced from discarded successful our refineries. I mean, from Madrid to San Francisco, from Madrid to Dallas, from Madrid to Washington. I mean, and we are proud of this collaboration pinch Iberia.

In Chemicals, we became shareholders of Enerkem which brings america entree to each starring gasification of nonrecyclable discarded pinch technology. Both companies, Repsol and Enerkem, we are besides partners successful nan Ecoplanta task successful Tarragona that was selected by nan European Commission straight and past from nan European Commission to beryllium funded done nan Innovation Fund ample standard program.

Turning now to nan Commercial and Renewables segment, afloat twelvemonth adjusted nett income was €550 million, €2 cardinal earlier – sorry, €2 cardinal beneath nan fig we person arsenic a consequence successful 2021. The amended results successful debased c procreation compensated nan little consequence successful nan commercialized businesses, dragged by nan discounts applied successful Iberia. In mobility income successful our work stations successful Spain were connected mean 10% higher than successful 2021, and income recovered successful nan 4th fourth to pre-pandemic levels of 2019. This mostly will enactment successful pre-pandemic levels besides successful nan aforesaid income level we had successful January 2019. Since nan opening of 2022 nan discounts applied by Repsol represents further savings of much than €500 cardinal to our customers.

Our Waylet integer mobility app reached much than 5.5 cardinal users arsenic of December, helping america accelerate nan deployment of our loyalty strategy successful our way to reaching 8 cardinal integer clients successful 2025. The effect of discounts successful margins successful Spain was partially compensated by a higher marketplace share, acknowledgment to nan successful acceptance of our eager loyalty campaigns and nan wide usage of Waylet.

Retail energy and state was negatively impacted by grounds energy prices successful Spain, regulatory interventions and accrued competition. Nevertheless, we closed 2022 pinch much than 1.5 cardinal clients successful Iberia, improving our results year-over-year and expanding by 8% nan measurement of energy commercialize.

Moving to renewables, nan powerfulness generated by Repsol reached 8.7 terawatts hour, 55% higher than successful 2021. The business remains focused connected delivering its eager semipermanent targets, successfully managing a precocious ostentation script to protect nan profitability of nan projects. In June, we incorporated Crédit Agricole and EIP arsenic strategical partners pinch a 25% number stake. Repsol has received €986 cardinal from nan statement implied, a valuation of €4.4 cardinal for their 100% of nan business, including debt. This has allowed america to crystallize value, bringing successful 2 knowledgeable investors pinch our semipermanent position of nan business. They are, successful immoderate way, fto maine say, acquiring and committing besides pinch nan maturation communicative connected nan maturation roadworthy representation we person successful this business for coming years.

In parallel, we proceed progressing successful nan improvement for task pipeline having reached 1.9 gigawatts of installed capacity betwixt Spain, U.S. and Chile. We besides completed 2 plus rotations. You cognize our strategy of disposing 49% of nan task aft nan consequence successful them for a full of 3 betwixt 2021 and 2022, incorporating partners done nan Kappa. Kappa is star task successful nan southbound of Madrid successful Ciudad Real and Valdesolar task successful nan Southwestern Spain successful Extremadura. Finally, successful December, we announced nan acquisition of Asterion Energies for €560 million. And pinch these transactions, we are incorporating a portfolio of 7.7 gigawatts chiefly successful Spain and Italy, chiefly Spain and a portion successful Italy, reinforcing our ambition to scope 6 gigawatts of installed renewable capacity by 2025 and 20 gigawatts by 2030.

In this slide, we person seen now you whitethorn person a summary of nan financial results that we person discussed erstwhile reviewing nan capacity of our businesses. For further nan case, I promote you to mention to nan complete documents that were released this morning. And pinch regards to nan fiscal publication of Repsol successful 2022, it reached humanities levels, a consequence of nan bully capacity of nan businesses.

Last year, Repsol paid €17 cardinal successful taxes, of which 70% successful Spain. And these amounts don’t see nan precocious approved impermanent power taxation approved successful December to beryllium satisfied by definite operators of nan power marketplace for 2 years. It will taxation 1.2% of nan nett revenues coming from nan operations carried retired successful Spain successful 2022 and 2023. The taxation corresponding to ‘22 activity to beryllium paid successful February and September 2023 is estimated astatine €450 million. According to nan guidelines stock by nan Spanish marketplace authority, they telephone CNMV, nan taxation corresponding to 2022 operations must beryllium accounted for connected nan 1st of January of 2023.

I mean, successful our opinion, I mean, it’s difficult to understand that for me. This is not accordant pinch nan underlying characteristics of nan tribute now pinch nan principles that must guideline nan elaboration of financial information. But of course, we person undertaken nan registry of nan taxation arsenic prescribed by nan regulator. But successful immoderate case, nan effect connected 2023 results wouldn’t beryllium worldly because its early rate travel effect was already factored successful nan refining impairment trial of 2022. So, owed to this effect of including nan rate travel effect of our businesses and successful this case, of nan refining business successful nan impairment trial of 2022. I whitethorn opportunity that successful this case, nan P&L effect successful a main portion of this levy is included successful 2022. But having said, we person registered nan taxation arsenic prescribed by nan regulator. Repsol, successful accordance pinch its soul and outer advisors finds this taxation – this levy incompatible pinch nan Spanish constitution and nan European Union rule and it will travel nan due ineligible channels for its enrollment.

And successful that case, nan refund of nan amounts collected. I will underline that Repsol remains committed to nine done its fiscal contribution. Currently successful its highest humanities levels I person discussed before. The societal statement connected firm profits must beryllium put into perspective. And my constituent is, and I judge that trying to resoluteness nan power trilemma pinch much taxes is not only discriminatory and demagogic, it’s besides detrimental. It will only disincentivize investments, which is precisely what we don’t request to little power prices. We request investment. We request much accumulation and that is nan measurement to push prices down, not pinch this benignant of unpredictable levies and taxes.

At this point, I want to return you done our outlook for 2023. We person built our fund assuming astir $80 Brent and $4 Henry Hub. And pinch those basis, we expect to make astir €8 cardinal of rate travel from operations successful nan year. The full group’s integrated CapEx is estimated astatine astir €5 cardinal factoring for nan 25% number partners successful upstream and renewables, nan moving liking finance for Repsol this twelvemonth successful 2023 will beryllium astir €4.3 billion, successful statement pinch nan fig we put successful 2022.

Production is expected to mean astir 610,000 barrels per day. Thanks to nan publication of caller wells successful unconventionals, higher volumes successful Trinidad and Tobago and nan higher expected uptimes. Year-to-date, accumulation has averaged much down location 590,000 barrels per time successful nan first 6 weeks of 2023. The nonstop fig is 593,000 barrels per time arsenic of today, developed truthful that intends that it’s a clear way of maturation successful this figure. Development activity will attraction connected nan businesslike transportation of our maturation projects, expanding investments arsenic a consequence of nan caller FIDs. Moreover, we expect to o.k. a group of caller projects that could lend further 70,000 nett barrels connected mean successful nan play from 2024 to 2030. In Brazil, nan FID for Lapa Southwest was taken successful January. And arsenic nan twelvemonth progresses, we expect to o.k. among others, a 3rd improvement shape successful Marcellus and an eventual further shape successful greater Epson if nan business and prices are there, of course. In refining, we person factored for an mean separator parameter of $9 per tube supportive of nan ongoing marketplace times. What we person seen truthful acold is confirming this anticipation pinch refining separator parameter averaging astir $18.2 per tube year-to-date. So I mean, that is nan existent figure. We person had complete nan first 6 weeks of nan year, $18.2 per barrel.

Shareholder distributions will proceed to beryllium aligned pinch our nonsubjective to administer 25% to 30% of nan rate travel from operations. As antecedently announced, nan Board will propose to nan adjacent AGM an 11% summation of nan dividend to €0.70 and we will complement distribution pinch buybacks. To statesman pinch nan visibility connected nan rate procreation for nan twelvemonth that we are seeing successful this first shape of nan year, complete this first 6 weeks has [indiscernible] was to denote this greeting our caller stock buyback programme for up to 35 cardinal shares. The shares repurchased done nan programme together pinch different 15 cardinal shares, coming from shares we person successful our treasury banal position, we let america to cancel 50 cardinal shares earlier nan extremity of July, taxable to nan approval, I mean nan Board is going to coming this redeemed to nan adjacent AGM. Looking forward, we expect further buybacks to scope our target operating rate travel distribution range.

At this point, fto maine elaborate a spot much connected nan superior spending connected nan year. We expected a beardown rate travel procreation successful 2023 should let america to support accelerating nan execution of our strategical plan, progressing successful investing either successful our bequest assets and besides transforming our portfolio while improving shareholder remuneration and keeping a very comfortable giving rate. Out of nan expected €5 cardinal integrated CapEx, astir half, 47% I think, will beryllium invested successful nan Astron business and adjacent to 35% successful low-carbon initiative. When I’m talking astir low-carbon initiatives, I americium talking either successful renewable powerfulness procreation aliases successful nan precocious biofuels aliases hydrogen investments successful our Industrial division.

The stock of nan full finance successful OECD countries reaches 86% chiefly Iberia and North America for nan full CapEx fig of Repsol. In nan Upstream, having advancement successful nan rationalization of nan portfolio during nan first 2 years of our strategy now is simply a move to put connected watercourse nan caller barrels that will support early volumes. Around 70% of E&P finance will beryllium deployed successful projects pinch nan FID taken. And successful total, much than 80% of this Capex will beryllium focused connected accumulation growth. By geography, 63% of [indiscernible] CapEx will beryllium invested successful North America. Around 23% of CapEx will beryllium deployed successful nan Industrial division, we attraction connected boosting our runway aliases substance platforms for illustration nan C43 plant. I mentioned before, successful Cartagena, precocious biofuels, 250,000 tons per twelvemonth that is going to commencement its cognition successful nan 2nd half of this year. And besides successful nan translator of nan chemic business, retrieve nan Sines task wherever we are getting for a much – we are baking successful favour of a much integrated petrochemical business, expanding nan margins of this business and nan electrolyzers we person connected track. In Renewables, we look guardant to doubling our finance compared to 2022. This year, we expect to adhd complete 1 gigawatt of caller installed procreation capacity. CapEx will beryllium astir divided astatine 50% successful nan Spain, 40% successful nan U.S. and nan remainder successful queue.

So to summarize main cardinal takeaways. 2022 I must opportunity was a twelvemonth of a beardown strategical transportation for Repsol. As we sewage nan astir portion of our supportive macro script to maximize value, allocating rate according to our well-defined priorities. Even pinch each uncertainties we suffer, this has allowed america to accelerate our modulation to debased carbon, summation nan distribution to our shareholders and reenforce our financial position. The outlook for 2023 looks progressively solid. Probably not without commodity situation arsenic affirmative arsenic successful 2022, but bully capable to let america to move confidently into nan maturation look primitively defined for nan 2nd half of our strategical plan.

Next year, we will make an integrated important finance effort. We will summation investments pinch a clear attraction connected worth creation, ever pinch a limit - wrong nan limits of our disciplined superior policy. We are going to ore Upstream spending connected precocious approved projects, galore of them we person already taken FID. And we are going to summation nan CapEx successful renewables. We are besides going to put successful our business capacity to execute a modulation that ensures nan proviso of affordable energy, defense business jobs and guarantees nan sustainability of our products and operations.

In nan past 15 years, Repsol has invested to an mean €1 cardinal per twelvemonth successful its business assets, including present nan 1 short finance we did successful Cartagena and successful Petronor. Thanks to this finance successful Spain, we person an businesslike refining strategy that has secured nan level of proviso erstwhile different countries were astatine consequence of merchandise shortage. I judge governmental leaders crossed nan committee should attack nan power modulation pinch a higher attraction connected technology. The acceleration of nan modulation towards ambiance neutrality requires this exertion to beryllium conscionable – a conscionable modulation for everybody for all. This nonsubjective will beryllium amended achieved by guaranteeing information of proviso and affordability and based connected invention and manufacture improvement that, successful turn, beforehand employment and societal advancement successful our countries.

With that, I americium fresh to reply your doubts and questions. And now I manus complete nan level to Ramón. Thank you.

Ramón Álvarez-Pedrosa

Thank you very much, Josu Jon. Before moving connected nan Q&A session, I would for illustration nan usability to punctual america of nan process to inquire a question. Please operator, spell ahead.

Question-and-Answer Session

Operator

Thank you. [Operator Instructions]

Ramón Álvarez-Pedrosa

Thank you, operator. Let maine now move connected nan Q&A session. Our first mobility comes from Biraj Borkhataria astatine RBC.

Biraj Borkhataria

Hi, acknowledgment for taking my questions. I had a few, please. The first 1 is conscionable connected nan payout ratio that you reaffirmed today. You person sewage immoderate very important divestment proceeds coming done and your equilibrium expanse is beardown sitting connected nett cash. In your macro scenario, you don’t really request nan divestments to money maturation successful debased c aliases nan Upstream aliases otherwise. So could you conscionable talk astir what your plans for nan uses of those proceeds are? And past nan 2nd mobility is connected nan upstream CapEx plans. It’s weighted to nan U.S. and immoderate of nan U.S. assets are much gassy and state prices successful nan U.S. person been rather weak. So really overmuch of that measurement maturation successful ‘23 comes from U.S. gas? And person you hedged immoderate of that? And if I could inquire a 3rd speedy clarification, erstwhile you’re providing nan CapEx figure, I conscionable want to make judge I heard you correctly, should we presume it’s €5 billion, but past we should backmost retired nan 25% number for nan Upstream divestment arsenic you complete that transaction?

Josu Jon Imaz

Thank you, Biraj. Having spell into your first question, our superior allocation argumentation remains arsenic we specify successful our strategical plan, I mean, we are going to perpetrate nan CapEx that could create worth successful our institution astatine nan aforesaid time, shifting nan translator of nan institution successful maintaining nan CapEx successful our bequest assets that are going to guarantee nan accumulation successful our EMP for coming years. I mean, pinch nan FIDs, we are taking successful nan E&P business, we are reducing, we are – sorry, maintaining nan accumulation targets, thing betwixt 600,000 and 650,000 barrels per time complete nan full decade and taking into relationship that we person a rather sound financial position successful nan company. We are going to summation default to administer nan proceeds for our shareholders.

In this sense, I mean, nan committedness we are taking, Biraj, is to redeem 50 cardinal shares, caller 50 cardinal stock superior simplification earlier nan extremity of July, 50 cardinal shares coming for our existent treasury banal position and 35 cardinal coming from nan buyback programme we are launching today. I mean we are successful February, Biraj. That intends that we are doing that because we person seen a rather sound rate travel procreation complete these 6 weeks, but I mean nan twelvemonth is going to beryllium very long. We person 12 months. That intends that beryllium judge that pinch a precocious probability, complementary stock buybacks program, are going to travel complete nan full year. We are going to execute pinch nary uncertainty this fig of 25%, 30% of distribution for our shareholders imaginable comparing pinch nan rate travel from operations we are going to person complete nan year. And retrieve that past year, successful 2022, nan fig was 29.3%. That intends that we are successful nan higher scope of this 30% of nan rate travel from operations. And beryllium judge that this year, this distribution is going to beryllium person to 30% than to 25%. So we are afloat engaged successful delivering worth to shareholders done an charismatic distribution successful Repsol via defined by this guidance. Of course, astatine nan aforesaid time, we are facing an eager translator – a travel of transformation, and we are maintaining this equilibrium expanse is strong. I’m saying that, I mean, it’s possibly excessively early to opportunity that, but successful lawsuit of having a affirmative macro situation position complete nan year, I’ll beryllium fresh to see and to propose to our Board astatine nan extremity of nan twelvemonth owed to our debased indebtedness level, moreover a distribution evolved is 30% of nan rate travel from operation, depending connected nan improvement complete nan full year. So but it seems to maine you could expect much stock buyback programs complete this twelvemonth 2023. And I deliberation that it’s besides important to travel nan macro script complete nan full year.

Going to your 2nd mobility related to anemic state prices. I mean first of all, successful January, we person had Henry Hub astatine astir $4.5 MBTUs, much aliases little arsenic average. And nan marketplace cardinal script is, I mean, person to $4 MBTUs than to immoderate different figures for nan year. It’s existent that these days of February, what we person seen is importantly lower. I mean, I deliberation that immoderate of nan champion things we person successful our portfolio is flexibility. I mean, successful lawsuit of not seeing these state prices successful Henry Hub terms, beryllium judge that we will beryllium prudent and we will hold immoderate finance determination pinch nary uncertainty astir that.

Saying that, I mean, you cognize that from our production, nan full accumulation of Repsol much aliases little 40%, 45% lipid and a portion of nan state is related to Brent and West Texas. So it’s not related to state prices. And moreover this half of nan accumulation that is related to state prices, only much aliases little 25% – 20%, 25% of nan full accumulation of nan institution is related to Henry Hub and precocious state prices. Remember, that we person besides a ample vulnerability to JKM. We person an vulnerability to NBP. Some parts of nan state is related to nan value of ammonia, different portion to nan Spanish substance price, different portion to TTF – different portion successful immoderate places successful nan world is linked to fixed price. That intends that is – I mean, nan effect is only connected a portion of our production. That could beryllium successful nan lawsuit of nan USA, nan Marcellus, much aliases little astatine astir 50,000, 55,000 barrels per day, much aliases less. We don’t person hedges this twelvemonth and successful 2022 from our American production, we person a hedge much aliases little of 60% of nan full state accumulation successful nan States and astatine 20% of nan lipid accumulation successful nan country. I mean we are not hedging our accumulation for this year.

Going to your past question, Biraj, your constituent is right. This 25% doesn’t see nan divestment of 25% of nan number partners. That intends that we return into relationship nan nett CapEx for Repsol, nan fig is not €5 billion, it’s astir €4.3 billion. That will beryllium nan nett finance for Repsol aft reducing, fto maine say, 25% number stakes either successful nan renewable business aliases successful nan E&P. So nan quality betwixt nan €5 cardinal and nan €4.3 cardinal that is fitting successful this model pinch nan CapEx, we person had successful 2022 is owed to this 25% number divestment. Thank you.

Biraj Borkhataria

Thank you. Appreciate it.

Ramón Álvarez-Pedrosa

Thank you, Biraj. Our adjacent mobility comes from Joshua Stone astatine Barclays.

Joshua Stone

Hello. Can you perceive me?

Ramón Álvarez-Pedrosa

We perceive you.

Joshua Stone

Yes, sorry. Two questions, please. Firstly, conscionable a explanation connected nan CapEx guidance, truthful this morning, nan merchandise suggested a benignant of greater than €5 cardinal CapEx, while nan descent coming is benignant of saying astir €5 billion. So could you conscionable explain that CapEx get higher than €5 billion? And is your longer-term fund of €19.3 cardinal to 2025 still valid? And past secondly, connected your disposal of nan Upstream, are you – arsenic to what’s your latest position connected really overmuch of a dividend will beryllium paid from nan upstream to minorities aliases to nan only number and nan timing of that costs arsenic well, please?

Josu Jon Imaz

So convey you, Joshua. I mean, going to your first question, I mean, our CapEx, I mean, nan guidance is €5 billion. Let maine opportunity that location is – I mean, it’s a guidance. There is room for immoderate changes, of course, I mean, successful my erstwhile reply to Biraj for instance, I said that successful lawsuit of seeing, North America, little state prices than expected. I mean we could return nan determination of our assembly early aliases hold immoderate of our finance successful nan country. But today, I mean, pinch nan anticipation we person that is $80 per tube lipid and $4 per cardinal BTUs Henry Hub price. I mean €5 cardinal is nan much meticulous fig we could person arsenic CapEx guidance for nan year. Again, this is simply a gross fig that will beryllium €4.3 cardinal nett successful lawsuit of including nan minoritarian liking of our partners successful nan renewal and successful nan E&P business. In nan case, could you repetition your mobility related to nan disposal of nan Upstream, Joshua?

Joshua Stone

And besides for that whether your longer-term CapEx fund of €19.3 cardinal is still valid. And past nan 2nd mobility is connected nan number costs – number dividends. So what dividends do you expect nan Upstream to person to salary nan number station disposal? What’s nan argumentation apt to be? And erstwhile would that dividend beryllium paid?

Josu Jon Imaz

Yes, Joshua. Let maine opportunity that Repsol and EIG, I mean, I don’t want to expect thing because you cognize that we are engaged successful nan process of closing nan transaction that is going to travel successful immoderate weeks. But connected that question, I’m judge that EIG and Repsol, we are going to beryllium afloat aligned connected what to do successful our E&P business because we are going to effort to maximize nan free rate travel of nan business arsenic overmuch arsenic imaginable successful position of maximizing nan dividend either for Repsol aliases for EIG. That is going to beryllium an important liking for Repsol and it seems to maine that it would beryllium besides absorbing for EIG. Sorry, regarding this question, beryllium judge that we are going to beryllium afloat aligned trying to maximize nan free rate travel of this E&P business. In this context, we are now doing nan awesome finance effort pinch nan FIDs, we person took complete this past year. I mean, successful this sense, fto maine opportunity that, I mean, portion of nan full CapEx we person successful our yearly fund successful 2023, our projects, we person already taken nan FID for astir €3.5 cardinal pinch affirmative and important returns germinate astatine 20% successful nan lawsuit of nan E&P and a maturation of 13%, 15% successful nan business commercialized activities of Repsol and pinch nan double-digit equity return successful nan renewable business. So I mean, we are investing successful profitable CapEx. And successful nan lawsuit of E&P that is going to guarantee this production, thing betwixt 600,000 and 650,000 barrels per time complete this decade. And successful this context, nan liking of some partners is going to beryllium to maximize nan dividends and nan free rate travel of nan E&P business. Thank you, Joshua.

Joshua Stone

Okay.

Ramón Álvarez-Pedrosa

Thank you, Joshua. Our adjacent mobility comes from Michele Della Vigna astatine Goldman Sachs.

Michele Della Vigna

Thank you very overmuch for taking my question. I really wanted to inquire you 2 things. The first one, you’re intelligibly expanding your walk successful North America, which makes cleanable consciousness successful this portion of nan cycle. I conscionable wanted to inquire you really galore incremental projects you could mature location because of nan Inflation Reduction Act? You look to beryllium very good positioned to beryllium capable to do cleanable hydrogen, c capture, renewables, but besides bioenergy there. And I was wondering which opportunities are opening up? And past connected nan different side, I wanted to inquire you astir a imaginable European consequence to nan IRA. There is simply a batch of talk of that successful Brussels. What do you deliberation is really materializing? And really tin that use your low-carbon walk successful Europe astatine nan moment? Thank you.

Josu Jon Imaz

Thank you, Michele. So I mean, Michele, we are afloat committed pinch nan power modulation successful this company. We want to accelerate nan power modulation doing that successful a clever way, but fulfilling nan targets of power trilemma, guaranteeing nan information of supply, making it imaginable for families and industries to person an affordable energy. I mean, to salary their bills of power month-after-month, and astatine nan aforesaid time, decarbonizing nan world. And it seems to maine that we person 2 different strategies successful nan 2 sides of nan pond. I mean nan main driver of European strategy is to instrumentality – I mean utilizing banning, having complexity successful nan regulation, making things difficult.

And IRA is conscionable nan other pinch existent [indiscernible]. IRA is predictability, I mean a clear model for investing successful nan power modulation is simplicity. I mean, I’m capable to understand nan American rules. It’s a spot much difficult for me, sometimes knowing European rules. I’m chemist, I’m specialized connected polymers. I cognize nan biofuels, but I’m afloat mislaid betwixt nan FQD, nan Repower Europe, nan fresh for 55, nan caller programme now, I mean, each that is complex, and that is not good. And connected apical of that, I deliberation that location is simply a caveat. I mean taxation incentives to put successful nan U.S.A. So I deliberation that successful Europe, I mean, complaining astir nan IRA is not nan champion strategy for regulators. I deliberation that it is amended to effort to study from nan Americans because otherwise, they are going to accelerate nan power modulation and we are going to person problems successful Europe. So saying that arsenic an investor successful nan U.S.A., arsenic we are, I work together pinch your point, we are going to return advantage of this reality. We person very important projects successful nan States that now we are investing successful and talking, for instance, nan Jicarilla 1, Jicarilla 2 successful New Mexico, Outpost, Frye [indiscernible] successful Texas. I mean nan fig I person successful mind that each these projects that are connected track. I mean [indiscernible], we are preparing nan FID for nan project, but nan remainder are successful way astatine 1 of nan Jicarillas is producing could beryllium germinate 2 gigawatts of accumulation and – only nan – I mean we approved this task pinch a rather sound beautiful good expected return connected equity. But acknowledgment to nan IRA, we expect to summation successful 1.1% nan full return of these projects we are investing in.

We person connected apical of that to return into relationship that we person liking successful Hecate, that Hecate is processing pipeline twelvemonth aft year. You cognize that we person nan correct – nan correct of first connection up to 2 gigawatts per year. So this business is giving america connected this context, nan opportunity to put in. And connected apical of that, we are besides analyzing nan anticipation to nutrient hydrogen successful nan States. We could spot opportunities there. I mean saying that, I don’t – I want to underline nan value of investing successful Spain and not only because we are Spaniards, that would beryllium a bully reason, but I mean that is not important successful business. I deliberation that we person a clear competitory advantage successful Spain. I mean each clip we are investing successful hydrogen successful Spain, we are improving nan profitability of our business assets, wherever we person an fantabulous position successful nan country. We are producing precocious biofuels that are supported successful this lawsuit by European regulation. Every clip we are processing a renewable powerfulness activity aliases procreation successful Spain. We are not only getting precocious returns, we are besides expanding nan possibilities of our commercialized unit powerfulness business to grow, acknowledgment to this integrated position we are expanding nan competitory advantage of hydrogen.

So investing successful Spain is very important for Repsol. And we are going to spell connected doing that because we person each this competitory advantage, but saying that, Michele, this IRA is simply a awesome opportunity to put successful North America. If we – if you return Iberia and nan States, you could spot that nan full fig of CapEx is supra nan 80%, 85%, 86% of our full CapEx. And that is very important successful position of opportunity. So we are going to springiness this consequence arsenic Repsol to nan IRA. And it would beryllium awesome to spot nan European politicians and regulators trying to do thing akin successful Europe changing and shifting from instrumentality to nan current. It will beryllium important for companies, for European citizens and besides for nan power modulation successful our continent. Thank you.

Ramón Álvarez-Pedrosa

Thank you, Michele. Our adjacent mobility comes from Irene Himona astatine Societe Generale.

Irene Himona

Thank you. Good afternoon, Josu Jon. Can you perceive me?

Josu Jon Imaz

Perfectly, Irene. Good afternoon.

Irene Himona

Thank you. I had 2 questions. So first, relating to your guidance for €8 cardinal of rate travel this year, for simplicity, if I presume 30% is returned to your investors, past pinch astir €1 cardinal being nan costs of nan dividend, we would beryllium looking astatine existent prices astatine thing astir 90 cardinal shares for nan buyback for nan afloat year. Today, you announced a 50 cardinal buyback by July. I’m conscionable not clear really connected nan clip statement here. When should we expect you to denote what happens next? Is it pinch nan Q2 results successful July aliases could you do it successful May? What is nan process basically? And past my 2nd question, you disclosed coming a taxonomy aligned CapEx past twelvemonth of 21% and a further 9% for eligible. So 30% successful total. You person told america earlier that ESG investors comprise a large proportionality to your shareholders. So I’m conscionable trying to understand if 30% is simply a bully number. Do you person a consciousness of whether that 30% intends that you are wrong immoderate period that would promote much ESG costs to ain Repsol aliases not? Thank you.

Josu Jon Imaz

So I mean, going to your first question, Irene, I mean, €8 cardinal of rate travel from operations, arsenic you mentioned, is under, I mean, immoderate conditions that are fundamentally $80 per tube Brent price, $4 cardinal BTUs Henry Hub state value and $9 per barrel, our refining separator this year. I mean, you cognize really each 1 of this metric has evolved complete nan first 6 weeks of nan year. So we person to hold astir nan evolution. And that is going to dangle connected nan macro scenario. And fto maine opportunity coming macro script beryllium volatile. We person still immoderate concerns, and we are going to travel arsenic you arsenic analysts, investors and Repsol arsenic a company, what is happening successful China aft nan post-COVID period, are we going to spot a caller turn? I mean, a abrupt maturation successful China aliases not? I mean, it’s going to dangle connected that.

For that reason, we for illustration coming to beryllium prudent to motorboat a 50 cardinal shares redemption programme coming pinch 35 stock buyback. Be judge that successful lawsuit of having a rather akin business successful July aft aliases successful nan midst of nan position of nan results of nan 2nd half of this year, 2023, we will astir apt motorboat a 2nd programme that will beryllium logical, seeing nan rate procreation we are seeing today. And fto maine opportunity that depending connected nan afloat forecast for nan full year, and we are going to person a clear hint astir that successful nan past week of October, successful nan position of nan results of nan 3rd quarter, we could person astir apt room for launching aft stock buyback program. But again, depending connected wherever we are successful position of getting much aliases little 30% of rate travel from nan operations devoted to our shareholders.

Going to nan taxonomy question, I mean, pinch – you cognize that nan existent reference of nan taxonomy is not easy. It’s complex, moreover nan mentation of this taxonomy. The CapEx 2021, 2025 that you cognize that is going to beryllium a 35% devoted to low-carbon activities, debased c assets could beryllium translated much aliases little to thing adjacent to 28%, 30% arsenic aligned pinch nan taxonomy. We besides – fto maine say, Irene, that could beryllium pinch nan existent reference and nan existent mentation of nan taxonomy. We besides expect that nan taxonomy to amended its meaning pinch clip complete this period. And I nexus this reflection pinch what I said earlier successful position of much carrot and little instrumentality and much technological neutrality because – I mean, nan IRA is betting successful favour of galore sources to decarbonize America.

In Europe, we effort to put ideology complete exertion wherever we person to specify galore of these targets. So I expect that this taxonomy could beryllium improved, it’s meaning pinch time. But pinch nan existent knowledge we person of this taxonomy, this 35% of debased c CapEx successful nan full 2021, 2025 play could beryllium translated to thing adjacent to 28%, 30% align pinch taxonomy. Is it a period for much ESG costs to come? I mean, we will do our best. You cognize our existent committedness to toggle shape nan institution to decarbonize our activities sometimes moreover erstwhile we person to be, fto maine say, politically and correct erstwhile we person to springiness our sentiment astir nan champion measurement to decarbonize our society. And successful this line, Repsol is going to make a awesome effort to beryllium a leader successful nan lipid and state assemblage successful this ambition. Thank you, Irene.

Ramón Álvarez-Pedrosa

Thank you, Irene. Our adjacent mobility comes from Alessandro Pozzi astatine Mediobanca.

Josu Jon Imaz

Alessandro?

Alessandro Pozzi

Yes. Hi, there. Sorry, I mislaid you for a second. So I conscionable person a mates of questions. The first 1 is connected nan Upstream, of course, I wholly get really you are crystallizing nan worth of nan portfolio done nan seller to – of nan number stake. But I want to spell backmost to your remark astir precocious grading. And I was wondering erstwhile are we going to spot grounds of nan precocious grading successful nan portfolio. How should we deliberation astir arsenic a lowering of nan breakeven for nan task successful nan portfolio? If so, tin you springiness america an update connected that arsenic well? And besides if you tin springiness america possibly an update connected nan breakeven for nan earthy state accumulation successful nan U.S. because you mentioned nan Henry Hub exposure, but pinch nan Henry Hub truthful debased compared to your assumption, I deliberation it would beryllium bully to spot wherever are your accumulation costs for nan accumulation successful nan U.S. And also, I judge nan guidance – accumulation guidance is 610,000 barrels a day. But arsenic of today, it’s almost there. So possibly location is not a immense magnitude of caller accumulation coming connected watercourse for nan remainder of nan year. And I was wondering if you tin corroborate that?

The 2nd mobility is connected nan renewable acquisition Asterion. And besides much broadly, you person a equilibrium expanse that is overmuch improved 8% giving – tin you usage nan little indebtedness to really regear nan equilibrium expanse and prosecute much inorganic opportunities successful 2023? And if so, I guess, it’s going to beryllium chiefly debased c opportunities. And I was wondering whether geographies could beryllium but wherever surface science are you much willing in? And also, I deliberation I was a spot amazed from Asterion because Spain is your location ground, and I thought you would person grown their organically, but possibly to get a ft measurement successful France and Italy arsenic well. So possibly your information astir nan rationale down nan acquisition would beryllium awesome arsenic well? Thank you.

Josu Jon Imaz

Thank you. Glad you made it, Alessandro. I mean I deliberation that complete nan past 2 years, we person developed a awesome effort to high-grade nan portfolio of nan Upstream. I mean we person exited Russia, Ecuador, Malaysia, Vietnam, Papua New Guinea, Iraq, Australia, Bulgaria, Greece, Angola, Libano – sorry, Liberia and Gabon successful exploratory terms. I mean, we person reduced almost to half nan number of countries wherever we are successful nan E&P, and that is simply a portion of this high-grading of nan portfolio, trying to beryllium successful countries wherever we person a materiality wherever we will person much competitory advantages. And successful this sense, it’s important to effort to ore our accumulation successful places wherever we person a worldly production. I mean successful nan States, we spot important and bully opportunities. For instance, I mean, a portion – an important portion of accumulation this year, is going to beryllium developed, nan accumulation aliases pinch nan CapEx present successful E&P is going to beryllium devoted to nan Gulf of Mexico. I mean nan Leon/Castile, nan Buckskin, nan Shenzi North task work. We person debased breakevens beneath successful immoderate cases, $45, $50 per tube successful nett coming worth terms. That intends that we are getting those prices – nan expected return of these products. I mean, you could ideate that astatine these prices, we are making money successful these projects.

In Alaska, again, we person a debased breakeven task pinch a very bully ore successful position of [indiscernible]. Eagle Ford, you cognize that we person taking into relationship lipid compensates could beryllium a 60%, 65% of our full production. So we are very limited connected liquids connected Eagle Ford for our economics. And nan dependence connected gas, you mentioned arsenic description to Henry Hub is fundamentally successful nan Marcellus. And successful nan Marcellus, you cognize that we person a bully Tier 1 position successful nan area. And nan breakeven successful rate position aft CapEx successful nan Marcellus is successful thing betwixt $2 to $2.5 per cardinal of BTUs. That intends that we person nan possibility, nan opportunity successful nan Marcellus to make money successful this context.

Going to nan cost, I mean, nan profitability depends connected cost, depends besides connected CapEx, depends connected nan realization prices and besides depends connected nan taxation of nan country. And successful this sense, it is prudent successful nan U.S.A., we are seeing chiefly successful nan unconventional summation successful costs successful position of inflation. I deliberation that much contained this 2023. But successful 2022, we saw – I mean, if you analyse nan full OpEx per tube of Repsol, I deliberation that nan OpEx successful nett position could beryllium astatine astir $10.3 per tube much aliases less. And nan summation successful OpEx I mean, we have, past year, successful 2022, an summation successful $1.3, $1.4 of expanding nan OpEx per barrel. But I mean portion came because of nan little production. You cognize that we’re reducing 10% accumulation past year. And now 590,000, 610,000 barrels per day. I mean, portion of this effect is going to beryllium diluted. But it’s existent that we person much aliases little $100 million, $150 cardinal of costs ostentation successful OpEx past twelvemonth and an important portion of them came from North America.

Going to your mobility astir nan accumulation guidance, nan main maturation that is going to travel complete nan year, again, I repetition today, not today. I mean that is not worldly – not important versus today’s production. I mean nan mean from January 1 arsenic coming is 593,000 barrels per day. That intends that we are expanding successful a important measurement nan accumulation we person successful nan 4th fourth of nan year, saying that, we are giving this guidance because we are seeing a maturation successful nan unconventional, Marcellus and Eagle Ford. You cognize that we person now nan drilling campaigns, 3 rigs successful nan Eagle Ford, 2 successful Marcellus. And nan third, I mentioned before, is going to dangle arsenic you besides taken your interest astir state prices, depending connected this evolution. That intends that we person elasticity to put €5 cardinal to beryllium beneath this figure, taking advantage of this flexibility. Trinidad and Tobago acknowledgment to nan Cassia C compression caller projects and nan caller wells is going to summation its accumulation successful nan year. We are expanding our accumulation successful Norway. In Libya, we are – past year, it seems to maine that we person a nett accumulation astatine astir 24,000, 25,000 barrels per time complete nan afloat twelvemonth because we person immoderate events unit majeure successful Libya, and we are producing successful a existent normal measurement complete nan year. We are moreover readying this twelvemonth immoderate imaginable caller wells successful Libya and an exploration run that is going to summation nan accumulation successful nan state we’re for illustration connected nan state and connected nan assets we person successful Libya. In Peru, nan unrest business that nan state knowledgeable successful nan past 4th of nan twelvemonth and nan tensions generated aft nan law succession process without societal unrest that had an effect successful position of nan TGP pipeline and nan activity connected nan cognition successful Pampa Melchorita, nan LNG works and truthful on. I mean, nan business successful nan state is amended and is much unchangeable and is much communal than it was successful nan 4th fourth of nan year. And each that is going to beryllium nan main driver of this accumulation increase. I mean connected apical of that, you person to return into relationship that we are going to suffer immoderate barrels chiefly nan divestment of Chauvin and Duvernay successful Canada that is going to reduce, I person successful mind nan fig of thing adjacent to 8,000, 7,000 barrels per time this year, but I mean I had to cheque this figure.

Going to nan imaginable inorganic opportunities, I mean, we are unfastened to measure immoderate anticipation that whitethorn support our translator travel and boost besides nan power modulation strategy of nan institution and besides to summation nan worth of our bequest assets for either successful nan E&P aliases successful nan business site. And we are fresh to do that some successful integrated and inorganic position that I mean, if you expect a large acquisition successful Repsol. I mean, I’m going to beryllium very crystal clear. That is not going to happen. I mean you cognize that my purpose is astir apt to beryllium nan astir boring CEO successful nan world, but nary surprises, not large acquisitions, but being boring, fto maine say, is compatible pinch mini and mean acquisition to thief america either to toggle shape aliases to accelerate immoderate businesses. In fact, Asterion is simply a bully illustration of that, Hecate, Enerkem, nan acquisition aliases partial acquisition successful Acteco, nan Spanish institution master successful recycling plastics. I mean, you tin spot these benignant of things, mini things, to effort to accelerate nan worth creation and nan translator of nan company. But nary surprises, nary large acquisition, nary uncertainty astir that. Thank you, Alessandro.

Ramón Álvarez-Pedrosa

Thank you, Alessandro. Our adjacent mobility comes from Sasikanth Chilukuru astatine Morgan Stanley.

Josu Jon Imaz

Sasi? Is he there? Next one, please.

Ramón Álvarez-Pedrosa

So adjacent mobility comes from Giacomo Romeo astatine Jefferies.

Josu Jon Imaz

I deliberation we person a problem pinch nan telephone line.

Giacomo Romeo

Can you perceive me?

Josu Jon Imaz

Yes, yes. Sorry. Giacomo?

Giacomo Romeo

Okay. Perfect. Good afternoon. Thank you for nan question. Two for me. First is you – convey you for nan – for giving nan CapEx fig ex minorities. Just wondering if you tin springiness america a consciousness of what would beryllium nan CFFO if you return distant nan number stock of that CFFO. The different mobility is relates to what I wanted to inquire is astir nan benignant of nan returns that you’re seeing successful renewables, considering benignant of truthful nan changes that person happened successful nan marketplace during nan people of 2022, and whether those are still accordant pinch your strategical plan? And past possibly if you tin springiness america a hint of benignant of what benignant of returns you were capable to fastener successful pinch nan early divestments you made astatine Kappa and Valdesolar? Thank you.

Josu Jon Imaz

So convey you, Giacomo. I mean, very clear and short answer. The operating rate flow, we return this number stakes, they don’t person because we spell connected controlling and consolidating some companies, location is not immoderate effect of these minoritarian stakes, neither successful nan EBITDA nor successful nan rate travel from operation. The effect is successful nan adjusted nett income and successful nan adjusted income. That intends that nan full fig we return to cipher nan rate travel from operations to cipher nan shareholder distribution is simply a large one. It’s a bigger one. It’s a gross figure. I mean, nan only one, fto maine opportunity nan rate travel from cognition because we are not reducing nan rate travel from operations because of nan minoritarian stakes our partners, they person either successful nan renewable business aliases successful nan E&P business. So fto maine say, it’s much room for nan distribution for our shareholders.

Your 2nd question, I mean nan mean of nan projects we person developed astatine nan infinitesimal that are working, and they person been moving complete nan past year. So we person a clear unit astir nan returns that are Delta 1, 330 megawatts much aliases little of upwind farms successful Spain, successful Aragon. Valdesolar 250 to 260 megawatts star successful Spain and Kappa, 130, 140, 150 megawatts of star successful Spain is supra 20% connected equity terms. So that is nan existent return of these projects, supra 20%. I person to punctual you that these returns are – they were sewage aft successful nan 3 cases, disposing of 49% of nan stakes successful 2 cases to Pontegadea successful nan lawsuit of Delta 1 and Kappa, and to nan British funded TRIG, I think, Valdesolar astatine 49%. So aft disposing nan consequence successful nan asset, nan return complete nan equity of Repsol is supra 20%. In general, arsenic a wide rule, Giacomo, because I mean, these figures are really, fto maine say, immense are okay.

We are ever aiming to person a 10%, a double-digit of return successful our assets. Sometimes, I mean, we could person this benignant of upside and sometimes we could beryllium astir this figure. But nan projects successful operation, that is simply a existent return, we sewage complete nan past year. So we will spell connected successful this inclination and saying that this project, they could have, arsenic I mentioned before, further upsides. I mean nan capacity to springiness america room to turn successful our unit powerfulness business successful Spain, and to make a much competitory hydrogen business successful our business activity successful nan Spain. Thank you, Giacomo.

Ramón Álvarez-Pedrosa

Thank you, Giacomo. I deliberation we person backmost Sasikanth Chilukuru astatine Morgan Stanley. Sasi, are you there?

Sasikanth Chilukuru

Sorry, I had immoderate relationship issues previously. I had 2 questions. The 2nd 1 is much of a confirmation to beryllium honest. Just wondering if you could supply immoderate much colour connected nan existent refining environment, you’ve utilized your refining reference separator of $9 per barrel, and you’ve highlighted it’s $18.2 per tube parameter separator year-to-date. Just – but I wanted to understand really nan European lipid products market, particularly nan middle-distillate marketplace is evolving pursuing nan imposition of nan EU embargo connected Russian lipid products. What are you seeing correct now successful position of nan lipid marketplace there? The 2nd one, apologies if this has been highlighted and I benignant of missed. I conscionable wanted to understand nan accumulation fig that you’re utilizing for this $8 cardinal rate flow. Can you corroborate what that was? And looking into 2024, 2025, you highlighted nan 600,000 to 650,000 barrels per day. Is that nan scope that you’re looking astatine for 2024, 2025 arsenic well? Thanks.

Josu Jon Imaz

Thank you, Sasi. I mean, going to your first question, I mean, first of all, facts, nan refining separator parameter past 4th was $18.9 per barrel. This year, we are successful $18.3 aliases $18.2 per barrel. And I mean that intends that nan separator is beautiful positive. And we are capturing, I mean, absorbing separator complete this year. We expect that nan utilization complaint this twelvemonth is going to beryllium higher than what we had past year. We are much aliases little – we deliberation that we will person a level of adjacent to 88%, 89% of utilization complaint this year. In this sense, complete nan full twelvemonth successful 2022, nan utilization complaint was 86.1%. And past quarter, 82% that intends – that because nan turnaround run this twelvemonth is going to beryllium a spot later than we had past year, nan utilization complaint is going to beryllium higher. Saying that, what would beryllium our anticipation for nan full year? I mean, it’s not easy.

Going to your 2nd question, this rate travel from cognition is calculated nether nan presumption of $9 per tube separator parameter and 88.7%, arsenic I mentioned before, of utilization rates. So what we person successful our budget. That intends that nan accumulation will beryllium somewhat supra nan accumulation we person successful – nan accumulation successful nan lawsuit of nan refining. Going to what you mentioned – you mentioned successful nan E&P, nan ground for this €8 billion, nan accumulation is 610,000 barrels a day, of course, successful position of E&P production. What could hap pinch – and going backmost to your first question, I mean, I deliberation that what we are seeing, arsenic I mentioned successful my first presentation, successful nan integer market. I mean, it’s related to nan Russian situation, nan embargo and truthful on, but it’s not nan only facet we are seeing. I deliberation that nan pandemic downsize of nan world refining business put much unit connected nan margins of diesel. I mean, accumulation has been rather level and nan request has grown successful a important measurement successful nan world aft nan pandemic. And that could hap astir apt successful a much important measurement aft nan opening of China.

Of course, nan outbreak of nan Russia-Ukraine conflict is putting much vulnerability connected this tight industry. And successful this sense, I mean, successful Europe, we person phased retired 600,000, 700,000 barrels per time of cardinal location proviso coming from Russia. It is successful that constituent of view, I mean, nan inventory to respond to nan business were built complete January. So this day, astir apt margins are going a spot down because this erstwhile effect of building inventories. But my cognition is that nan diesel tightness is going to support going successful 2023, astir apt is going to gradually easiness complete nan full twelvemonth because – I mean, nan uncertainty connected markets could beryllium a spot reduced. And successful immoderate way, we person besides taken into relationship that China is going to be, for me, nan cardinal driver this year. I don’t person a crystal ball. I don’t cognize what is going to hap pinch China. But nan communicative and nan reality of nan twelvemonth 2023 is going to dangle mostly of – nan improvement of China aft nan station pandemic. In lawsuit of seeing China going backmost to precocious growth, opening system and truthful on, I mean we could spot tighter diesel and LNG markets successful nan world and successful Europe and that is going to effect successful these margins. In lawsuit of seeing China pinch much problems to retrieve nan maturation successful that case, astir apt we could spot thing flatter successful position of cracks aliases spreads. I mean – but again, I don’t person a crystal ball, but it is our champion approach. Thank you.

Ramón Álvarez-Pedrosa

Thank you, Sasi. Our adjacent mobility comes from Henri Patricot, UBS.

Henri Patricot

Yes. Hello, Josu Jon. Thank you for nan update. Yes. I person 2 questions, please. The first one, a follow-up connected inflation. Could you springiness america a consciousness of what benignant of ostentation you facet successful for 2023 erstwhile it comes to some OpEx and CapEx? And past secondly, much of a high-level question, I for illustration your comments astir nan value of exertion for power transition. Can you talk a small spot astir wherever you spot nan exertion fundamentally bringing immoderate much worldly improvements, which areas of this power modulation you deliberation could beryllium accelerated things to immoderate exertion improvements aliases breakthrough? Thank you.

Josu Jon Imaz

[Foreign Language] So nan inflation, ostentation had an effect successful 2022 successful CapEx position successful Repsol that we person evaluated much aliases little for nan full institution and thing adjacent to $250 million. I mean portion of that coming from nan E&P business. And we person besides taken into relationship that nan CapEx of 2022 was besides impacted because nan – a portion of – chiefly our CapEx successful Upstream are a forecast successful dollars, and we person a stronger dollar than expected complete nan year. So we will person an further effect connected that. Going to nan 2023 year, my constituent is that nan effect is going to beryllium importantly little than it was successful 2022. First of all, because nan ostentation effect is going to beryllium lower. I mean, we are – we have, I mean, a level business wherever we are, fto maine say, successful immoderate measurement factoring successful a amended way, what would beryllium nan costs and nan CapEx complete nan full year. And secondly, because we besides launched 2 years, 3 years ago, our procurement programme that is trying to optimize and amended nan costs of purchasing crossed each nan worth chain, either CapEx and OpEx. And I mean, what we are doing is not only, fto maine say, depreciating pinch contractors. We are analyzing nan specification level we person for each finance we have, for each cognition we have. We effort to transportation in, out, markets trying to observe opportunities, further speech pinch suppliers. I mean my constituent and our target is that this programme is going intelligibly allowing america to trim almost to make eligible nan effect connected ostentation – of nan ostentation of this twelvemonth connected nan operations of Repsol. So, we are still seeing successful 2023, of course, immoderate benignant of costs pressure. But nevertheless, this unit is going to beryllium lower. For instance, successful Spain, nan estimated inflation, arsenic I mentioned nan walk because you cognize that successful our core, but yet has and an impact, nan estimated ostentation successful our budget, successful our costs successful nan Spain owed to ostentation is astatine astir 3.7%. So, I americium seeing immoderate benignant of inflation, but importantly little that nan effect we had successful 2022. I mean going to your question, that is rather broad, but I americium going to effort to beryllium very specific. I mean I americium going to put an example. We person to stake to – stake successful favour of each technologies. I mean and if we person to create hydrogen that has to beryllium retired of immoderate CO2 emission, I mean we person to beryllium neutral successful technological terms. And we person to research nan electrolyzers to person what is called nan hydrogen, atomic to make a large hydrogen, c seizure to make bluish hydrogen because I mean I americium chemist. I studied retired of years ago, nan hydrogen molecule and I could guarantee that hydrogen molecule has sewage immoderate colour is hydrogen. It’s only H2. So, nan only interest and value has to beryllium to guarantee that this hydrogen is not emitting CO2 erstwhile it is produced. So, that is simply a bully illustration of technological neutrality. Another one, if we person successful Europe, nan combustion motor that is fresh to nutrient and we are fresh to nutrient precocious biofuels utilizing nan conception of simpler system pinch a little c footprint that immoderate electrical vehicles could person erstwhile we return into relationship nan full picture, nan full footprint of nan artillery produced successful China, of nan mining effect successful Asia and truthful on, I mean we person to beryllium unfastened astir nan usage of technologies successful Europe because nan target is not to prohibition our exertion aliases nan other. The target has to beryllium to trim arsenic overmuch arsenic imaginable nan number of CO2 we are emitting successful Europe and successful nan full world because sometimes successful Europe, we are sweeping nether nan carpet, nan CO2 emissions. We are making, fto maine usage nan term, greenish washing operation. We opportunity that successful Europe, we are reducing CO2 emissions and galore times, it’s not true. What we are doing is exporting these CO2 emissions to immoderate different parts of nan world. We are exporting industries. We are exporting jobs, and we are exporting CO2 molecule. So, erstwhile I opportunity that we request little ideology and much exertion successful Europe, I americium talking astir that because we person a superior problem. A batch of European families, they can’t spend nan power bills and a batch of European industries are shooting down their operations because they can’t spend nan power cost. So, we request a broader attack to this power transition...

Ramón Álvarez-Pedrosa

Thank you very overmuch Henri. Next mobility comes from Matt Lofting astatine JPMorgan.

Matt Lofting

Hi gents. Thanks for taking nan questions. Just 2 clarificatory ones near related to your outlook and guidance. First, conscionable to beryllium clear, I deliberation you person referenced a mates of times during nan call, CapEx of €5 cardinal gross and €4.3 cardinal nett of minorities. I understand nan constituent that you are making, I deliberation Josu Jon, arsenic you said earlier, Repsol stated it will proceed to afloat consolidate some nan upstream and renewables businesses, successful which case, could you corroborate that nan €5 cardinal CapEx number is really nan number connected a afloat consolidated ground that is like-for-like pinch nan €8 cardinal CFFO guidance that you person fixed for ‘23? And past secondly, connected nan €8 cardinal rate travel guidance, does that see aliases exclude nan €450 cardinal outflow expected for Spain windfall taxes that you referenced earlier? And also, does it see immoderate assumed moving headdress changes? Thank you.

Josu Jon Imaz

So Matt, you are afloat correct astir nan first one. I mean this €5 cardinal CapEx is afloat consolidated. And nan number arsenic acold arsenic nan number of OCF €8 cardinal is consolidated. My constituent was that, I mean nan nett fig is nan aforesaid fig we had past year, because I mean we are incorporating caller partners, not to trim our effort to put and to create value. I mean we are expanding our effort of transforming nan company, and we are maintaining nan erstwhile finance effort that a azygous Repsol half. So, nan gross figure, that is nan existent figure, nan fig this afloat consolidated number is €5 billion, arsenic you mentioned. You are right. Going to nan 2nd one, yes, nan €8 cardinal rate travel from cognition includes nan windfall taxation and immoderate changes successful moving capital. Starting from nan moving capital, it seems to maine that this twelvemonth astatine $80 per tube and $4 cardinal BTU, Henry Hub, we are not going to spot immoderate important moving superior alteration complete nan full year. In immoderate case, this €8 cardinal is including immoderate alteration successful moving capital. Going to nan windfall tax, I said I don’t understand nan position of nan Spanish marketplace regulator because it’s not fair, it’s not meticulous because this effect of this levy was produced successful 2022. So, my work is to take sides nan clarity and transparency successful nan accounting of nan company. I don’t understand nan reasons of nan Spanish regulator, but saying that, I mean I person to use wherever nan Spanish regulator is selling. So, we are going to see this €450 cardinal this twelvemonth successful our accounting. But remember, because we had to return into relationship past twelvemonth successful June, erstwhile we calculated nan early flows, rate coming from nan refining nan impairment trial nan effect of this tax, you are not going to spot immoderate worldly alteration successful nan accounting successful P&L this year. You astir apt will spot adjacent quarter, I mean a simplification of proviso €360 million, €370 million, thing adjacent to this fig and a antagonistic effect of nan €450 cardinal that is, I mean growth, nan regulator is saying, and we are going to apply. Of course, saying that, you are going to spot a rate effect for this €450 cardinal successful 2 payments complete nan full year. And this forecast of this rate costs is already included successful this €8 cardinal fig successful bid to cipher nan rate travel from nan operations. Thank you, Matt.

Matt Lofting

Thank you.

Ramón Álvarez-Pedrosa

Thank you, Matt. Our adjacent mobility comes from Ignacio Domenech astatine JB Capital. Ignacio, are you there?

Ignacio Domenech

Yes, apologies. Sorry I couldn’t perceive you. So, conscionable 1 speedy mobility connected your distribution framework. Maybe if you could punctual america what’s nan narration betwixt stock buybacks and rate dividend and really we should beryllium reasoning going guardant fundamentally pinch what level of stock buybacks are we comfortable with? Do you person immoderate circumstantial target? My 2nd question, coming backmost to nan refining outlook, I was wondering if you person immoderate visibility of nan number of cargoes being expected from Venezuela, is this factored into your outlook? And possibly if you could quantify what’s nan effect connected nan $9 refining separator expected for nan year? Thank you.

Josu Jon Imaz

Ignacio, convey you. I mean starting pinch nan first one, nan rate dividend has accrued 9% to 11% for this year, 2023. This is €0.07 per share. And that is going to enactment this year. Of course, we talked astir nan rate dividend for 2024 successful October aft nan reflection successful our Board astir that. What we are going to do is, I mean I americium comfortable taking – nan rate travel from operations and taking nan 30% of this rate travel from operations and taking nan higher scope of that, arsenic I mentioned before. And this rate is going to beryllium this 30% distributed to our shareholders. So, that intends that much aliases little nan summation of rate applied successful nan stock buyback for us, nan rate dividend will beryllium fitting this fig of nan 30% of nan rate travel from operation. And today, I mean that is going to depend, arsenic I mentioned before, of nan improvement complete nan year. I mean, successful lawsuit of going connected successful nan existent rate procreation we are seeing now successful our businesses this twelvemonth that astir apt we launched – we announced a imaginable caller programme successful July, presenting nan results of nan 2nd quarter, and we will person to spot successful October, if location is room for assets [ph] aliases no, depending, arsenic I mentioned before, nan improvement of nan macroeconomic scenarios complete nan year. I mean going to Venezuela, you cognize that we person had past cargoes complete this twelvemonth 2022. I mean we entered past May aft nan alteration of nan EU administration, I mean allowing nan presumption of Repsol’s lifting operations from Venezuela pinch this costs successful benignant for nan deliveries we do earthy gas, I mean we participate a caller scenario, a caller arena. It seems to maine that location is room and location is abstraction to spell connected complete nan full year. In this caller dynamic, we started successful nan midst of May 2022, I mean successful our array to specify retired really galore cargoes and truthful on. But nan constituent is that, I mean we are connected track. We are moving successful and we commencement a caller pathway successful May that pinch a precocious probability strategy is going to spell on. The effect connected nan parameter refining margin, I mean possibly is simply a technicality, not precisely an parameter refining separator because, I mean successful nan lawsuit nan refining separator is going to enactment depending connected nan spreads of these preferences successful nan market. But if we are capable to process much dense lipid than expected, we are going to person a higher premium complete this refining margin. Remember that this 4th quarter, nan summation connected this separator has been supra $2.9 per tube figure. It seems to me, and if I americium making a correction because nan fig I person successful mind yesterday analyzing successful our Board, nan capacity of January this premium was complete $4 per barrel. The premium complete nan fig I mentioned earlier of $18.3 per tube of refining margins. That intends that successful lawsuit of having much dense oil, Venezuela will be, of people bully news. But of apical connected that, sorry, we are capable now to process much Maya that we were processing earlier because we person much entree to Maya dense oil, we are getting immoderate different dense oils from Canada, from Latin America, Colombia, from Brazil, from Africa and truthful on. I mean we are opening these possibilities, and that is bully news because nan capacity we are going to person to stake nan worth separator to beryllium supra this fig and to person a higher premium this twelvemonth are going to beryllium higher. Muchas Gracias, Ignacio.

Ramón Álvarez-Pedrosa

Thank you, Matthew. Our adjacent mobility comes from Henry Tarr astatine Berenberg.

Josu Jon Imaz

Henry? Are you there?

Henry Tarr

Hi. Can you perceive me? Yes.

Josu Jon Imaz

Yes. Hi. Good afternoon.

Henry Tarr

Good afternoon. Thanks for taking my question. Just 2 speedy ones, actually. Are you seeing immoderate effect connected workplace down economics from rising rates successful nan renewables business? I conjecture that’s nan first question. And past nan 2nd 1 would beryllium conscionable connected nan EU funding, nether which strategy was nan finance for nan C43 works delivered. I conjecture you are still looking for backing for nan electrolyzers and nan Ecoplanta project? It’s sometimes reliable to spot really nan money from nan various parts of nan EU are benignant of flowing done aliases not to businesses. Thank you.

Josu Jon Imaz

So convey you, Henry. I mean going to your first question, yes, we are seeing impacts connected renewable business. But fto maine opportunity that this effect successful wide position are affirmative for Repsol. I mean are affirmative because unit companies aliases unit developers will find much difficult to create and money these projects. So, that – each that is going to put unit connected their capabilities to rotate these assets because I mean, they are going to person much financial difficulties for that. So, sponsors and companies pinch our robust financial position arsenic Repsol has today, I deliberation that we could use from this business pinch entree to financial markets. And successful immoderate way, fto maine opportunity that it’s existent that we are besides to person a higher financial costs, but astatine nan aforesaid time, we are seeing higher PPAs because of nan existent power situation. So, all-in-all, fto maine opportunity that we are not having difficulties to get nan ambition successful position of nan return of projects we have. And astatine nan aforesaid time, we person seen caller opportunities to get pipeline astatine rather bully prices that is going to let america to create our ain project. So, it’s true, we are seeing effects, but we are not seeing immoderate antagonistic effect for Repsol. Going to your 2nd question, I mean it’s rather analyzable because we person – successful nan lawsuit of nan C43 task is done. We person European Investment Bank loan. I deliberation that is simply a 60% much aliases little of nan full figure. That is simply a fig I person successful mind of nan full investment, thing adjacent to €120 million, I think. In nan lawsuit of Cartagena and Bilbao, what is called nan IPCEI these days, fto maine say, nan model for nan financial of this hydrogen successful Europe, they are – they person been chosen to beryllium portion of this program. That intends that, that is not automatically giving them a nonstop subsidy, but is opening nan doorway to beryllium – I mean to person a privilege successful nan eligibility of support to these 2 projects, Cartagena and Bilbao. Going to nan Ecoplanta, Ecoplanta is simply a Tarragona’s task wherever we are going to return nan wastes, organic, plastic, insubstantial and truthful connected from nan area of Tarragona municipality wastes, and we are going to gassify them to nutrient methanol, either a feedstock for nan cracker aliases to nutrient fuels. In that case, this task was qualified successful nan model successful Brussels of nan invention fund, I mean technically successful Brussels arsenic 1 of nan European prioritarian successful invention position successful nan power modulation and it has nonstop equity subsidy that is astatine astir 30%, 35%, thing for illustration that, of nan full investment. That is nan fig I person successful mind, but I person to cheque it. Something adjacent – I americium going to adjacent nan figure, truthful yes, €107 million, excuse me, that could beryllium thing beneath nan 30% of nan full CapEx, nan fig I had successful mind was a spot higher. And that is nan afloat image astir nan backing from nan European Union. The important point is not only money, is that – I mean, Repsol is starring successful Spain, nan eligibility of projects that are going to lead nan power modulation successful coming years, and we are proud of that. And of course, this support is going to thief america to get successful projects that immoderate of them will person immoderate benignant of method consequence to get nan returns we expect. Thank you. Thank you, Henry.

Ramón Álvarez-Pedrosa

Thank you, Henry. Our adjacent mobility comes from Maurizio Carulli astatine Carbon Tracker.

Maurizio Carulli

Thanks for taking nan question. First of all, I person 2 questions, if I may. The first 1 relates to what you person already said astir nan returns connected renewables. You mentioned that existent returns connected equity will beryllium supra 20%. And also, you gave an denotation that nan existent returns connected equities for nan assets successful general, should ever beryllium supra 10% successful your finance framework. The mobility is, tin we get a consciousness of what existent return connected equity you are going to get connected nan electrolyzer plants and besides connected biofuels, if possible? And ideally, besides to person immoderate denotation of what would person been nan return without nan use of nan debt? So, that is nan first question. The 2nd mobility is connected emissions. Can we get a consciousness of what nan simplification successful emissions you tin person for your biofuels pinch respect to nan balanced accepted substance successful percent position successful your ain plans? Thank you.

Josu Jon Imaz

Gracias, Maurizio. I mean going to your first question, returns to renewable, nan target we have. And we are ambitioning and we are getting, I mean arsenic of today, successful each nan cases is 10% connected equity. That is, successful immoderate way, our committedness internally to return nan finance determination successful these assets. As I mentioned before, erstwhile we return nan 3 first assets we person successful operation, 1 twelvemonth aft being successful operation, reality of nan return has been 20% complete nan period. So, that’s successful immoderate way, target and reality. Going to nan biofuels plant, what we expect from nan C43, nan return we expect from C43 and that was successful nan ground we took erstwhile we took nan FID of nan task is astatine astir 30% of nan investment, successful nan lawsuit of nan C43. Going to nan hydrogen, I mean we person to return nan FIDs of those projects. We are analyzing that carefully. We person to return attraction of what is going to beryllium nan regularisation supporting for nan usage of this hydrogen successful our refineries, nan European directive, chiefly nan renewables, nan Red III directive and nan transposition of this directive successful Spain owed to what is called nan Delegated Act aliases thing for illustration that, that is simply a transposition of this Red to nan Spanish market. I mean taking each these factors we will analyse these electrolyzers. And of course, our determination would beryllium to put connected them if we are capable to beryllium supra nan costs of superior of Repsol and knowing that location is besides an further effect connected nan competitiveness of our business existent refineries owed to these imaginable electrolyzes. But again, we person to return nan FID of these electrolyzers and we will return into information each these figures because I americium not going to person you, Maurizio. It’s going to beryllium a existent situation to make these assets competitory successful nan existent arena pinch nan existent powerfulness prices and truthful on. But we will do our champion because we judge successful nan needs of decarbonizing system and decarbonizing not only done energy that is okay, but decarbonizing besides nan business assets of our state and of Europe. And successful position of emission, I mean nan study we have. And of course, if you want to you could cheque that successful our gathering pinch our group from nan power modulation area and truthful connected pinch sustainability area. And erstwhile we return nan precocious biofuels coming from [indiscernible], successful nan lawsuit of nan C43, we spot a simplification of nan full c footprint of nan substance aft being – I mean nan full c footprint aft being burning and truthful connected of thing betwixt 70% and 90% of simplification comparing pinch nan minerals complete nan full life of nan product. But of course, we are fresh to cheque and to person a opposition complete these figures. Thank you, Maurizio.

Maurizio Carulli

Thank you, Imaz for nan afloat answer.

Ramón Álvarez-Pedrosa

Thank you, Maurizio. Our adjacent mobility comes from Biraj Borkhataria astatine RBC.

Biraj Borkhataria

A speedy follow-up. For your refining section this year, could you conscionable locomotion america done nan planned attraction schedule and what – which quarters are heavy, which quarters are light? Thank you.

Josu Jon Imaz

Yes. Biraj, I americium checking nan figures present I person successful beforehand of maine nan full program. I mean, nan turnaround programme is going to beryllium a spot lighter what we had past year. The astir important turnarounds, I could spot they are successful nan 2nd quarter, we are going to person either Cartagena and Coruña, nan hydrocracker aliases hydro curen units. In nan lawsuit of Coruña, I mean a rather ray turnaround programme of 8 days of nan coker. This first 4th is 34 days, thing akin successful Bilbao, successful nan first quarter, besides nan hydro curen unit. And that is marginal because you cognize that substance lipid is not our main production, but we besides person 2 programs for nan breakers of Tarragona and Bilbao this first quarter, taking advantage of nan existent marketplace business for nan fuel, truthful all-in-all, a rather ray turnaround programme for 2023. We don’t person nan ample turnaround attraction programme we had successful nan 3rd 4th successful Tarragona past year. Thank you, Biraj.

Biraj Borkhataria

Alright. Thank you.

Ramón Álvarez-Pedrosa

Thank you, Biraj. Our adjacent mobility comes from Giacomo Romeo astatine Jefferies.

Josu Jon Imaz

Giacomo, are you there?

Giacomo Romeo

Hello. Can you perceive me?

Josu Jon Imaz

Yes. Perfectly.

Giacomo Romeo

Okay., Sorry, a hold again. Just a speedy follow-up connected nan respective questions that person been asked astir nan timing of imaginable further tranches of nan buyback. Already successful 2022, your buyback was heavy skewed towards nan 2nd half, I deliberation complete – astir 80% of your buybacks were executed successful nan 2nd half. What – and it sounds – by nan sounds of it, we whitethorn really extremity up successful a very akin business this twelvemonth pinch perchance a 2nd tranche successful July and past a 3rd 1 astatine 3Q results. So, conscionable trying to understand what nan rationale of ending up pinch specified a concentrated buyback connected nan 2nd half alternatively than trying to administer much nan buyback passim nan year? Just trying to understand a small spot much nan reasoning astir this.

Josu Jon Imaz

Yes. Giacomo, I mean what we are committing coming are 50 cardinal shares. And growth, I americium – fto maine opportunity because I cognize that immoderate of you, you were expecting, I mean a higher programme for today, thing adjacent to, I don’t know, 70 cardinal aliases 75 cardinal shares and truthful on. I mean and that is okay. But I deliberation that from my broadside is much prudent to hold to nan 2nd half of nan year. Why, because I mean, if you – we person successful lawsuit of having, and I americium going to spell to a cardinal scenario, we person €2.4 billion, I mean a 30% of €8 cardinal of rate travel from operation, we person €2.4 cardinal astatine nan extremity of nan year. And if you return that we person – 0.9 for nan rate dividend, but you person much aliases little €1.5 cardinal that could fresh much aliases little pinch €100 cardinal of shares that could beryllium nan cardinal scenario. In lawsuit of seeing, fto maine say, a beautiful bully refining separator arsenic we are seeing now and truthful on. Probably successful July, we could person successful conditions to motorboat a 2nd programme and probably, astatine nan extremity of nan year, why not our programme moreover overcoming nan fig I mentioned before. But each that is going to dangle connected nan rate procreation of nan company. And fto maine opportunity defining that connected February 16th, pinch nan volatility we spot successful nan each scope of markets and successful nan midst of our successful Europe could beryllium possibly not very prudent. I prefer, and I americium going to beryllium much comfortable taking this announcement after, of course, approving successful our Board successful July wherever astir apt we could motorboat a 2nd 1 and depending connected nan rate generated complete nan year, possibly different 1 aliases possibly not successful October. But I americium going to beryllium much comfortable doing that successful nan 2nd half of nan year. Thank you, Giacomo.

Ramón Álvarez-Pedrosa

Thank you, Giacomo. That was our past question. At this point, I will bring our 4th fourth convention telephone to an end. Thank you very overmuch for your attendance.