Welcome to the Royal Dutch Shell 2018 Q3 Announcement. There will be a presentation followed by a Q&A session. As a reminder, today's conference is being recorded. And I would like to introduce the first speaker, Mrs. Jessica Uhl. Please go ahead.

Thank you. Ladies and gentlemen, welcome to the Shell Third Quarter 2018 Results Call. Before we start, let me highlight the disclaimer statement. In 2016 we made a set of commitments to strengthen our balance sheet and increase shareholder returns. With today's results, we demonstrate that we're continuing to deliver on these commitments. I would like to update you on our progress, and I will start with the results from this quarter. Shell's cash flow from operations excluding working capital movements in the quarter was $14.7 billion, making Q3 one of our strongest ever. Free cash flow was $8 billion. Our strong financial performance allowed us to cover the full cash dividend, interest payments, share buybacks, and to further pay down debt. We remain committed to pulling the levers necessary to complete the $25 billion share buyback program by the end of 2020. We bought back over 60 million shares for a total of $2 billion; this completes the first tranche of our program. And I'm pleased to announce that we will initiate the next tranche from today with our commitment to purchase up to $2.5 billion of additional shares. As we deliver on the buyback program, we also continue to reduce net debt. We reduced our gearing from 23.6% to 23.1% during the quarter and we have line of sight to 20% gearing. And we continue to optimize our portfolio. Our $30 billion divestment program, new project delivery, and a disciplined approach to capital allocation has reset the cash flow profile and resilience of our portfolio. Our strategic ambition to reduce the net carbon footprint of our energy products is important in supporting our license to operate and for us to thrive through the energy transition. In September Shell announced a target to maintain methane emissions intensity below 0.2%…

Thank you. And we will now begin the question-and-answer session. And we will take our first question from Christyan Malek with JPMorgan. Please go ahead.

Hi. Thank you. So just two questions, if I may. The first is regarding what appears to be an ongoing dislocation between cash flow and earnings and partly through the non-cash charges in the Upstream as you see high oil prices. Jessica, is there any way you can guide more proactively on non-cash and working capital movements from quarter-to-quarter in order to better reconcile earnings and cash variances? And I know you helped explained it through the summary, but just what I'm trying to get my head around is how cash flow can vary so much from one quarter to next more than any of your comparable peers despite a fairly muted macro environment over the same time period? Maybe it has to do with things that hit you on (21:58) a $1 per barrel movement of your cash flow. And the second question is it's great to see energy transition targets front and center of your quarterly slides. And I was wondering if you can expand on how you and the management saw for investing in New Energies and lowering your carbon footprint while maintaining a rate of return that's competitive not least for your oil and gas business? Just trying see if those two things don't really work hand-in-hand. Thank you.

Thank you, Christyan for the questions. We have framed our strategy, our financial framework, and our commitments around cash flow and we've done that for a reason. We think it's frankly the more kind of transparent way of understanding the underlying performance of the business. A company with our scale and scope and operating in 70-plus countries can be subject to relatively unique or one-off accounting and reporting matters which you see in our results from time to time, and then certainly it's the case in this quarter as well. As you mentioned, the change in REPETRO legislation, the unitization impact in Brazil were significant. That impacted earnings by some $400 million for the quarter, and those are in our clean earnings. So a part of this is a bit of the nature of our business. And Christyan, we are looking hard at it in terms of ensuring we provide adequate disclosure to the market and certainly want to have the highest level of transparency that's appropriate in terms of what to expect from the business. But we've been very clear in terms of focusing on cash. And if you look over the last two years, I think we've produced more cash than anybody else in the sector and that cash flow trajectory has been increasing steadily over time. We've provided in the materials insight in terms of going from Q2 to Q3, what brought that $3 billion step-up in cash. First of all, it's underlying performance of the business, increased production in the Gulf of Mexico. We've had a very strong focus on the growth agenda in the company on our new projects. Again, you see that coming through in our cash flow in Q3 and providing transparency in terms of what more to expect over the next year,…

Thank you very much.

And our next question comes from Lydia Rainforth from Barclays. Please go ahead.

Thanks and hi, Jessica. A couple of questions, if I could. Thank you for giving that bridge chart on free cash flow out to 2020. Can I just check the – if I'm thinking about the rolling 12 months that we've just had, the CapEx number has been below that level of the $25 billion, at the low end. So if I take in the top end of that CapEx guidance, you actually end up going to a slightly lower number from that $25 billion to $30 billion organic free cash flow number. Am I doing the math right on that? And then secondly, as you talked about the digitalization program and you talked about substantial economic benefit, is there an actual sort of number that you're thinking about that or kind of what does substantial actually mean? Thank you.

Great. Thank you, Lydia, and thank you for your diligence on the free cash flow numbers and making sure that we're not kind of missing something. There are various ins and outs. We're trying to provide the most kind of material movements and transparency. But indeed, when thinking about the CapEx level we've had to-date, they are trending lower. That adjustment has been made, so we've normalized in the calculation to reflect the expectation of CapEx around $25 billion. So we could walk you through in more detail for all the various ins and outs, but that has been recognized in the numbers and so you still end up in the same place of the $21 billion plus $7 billion that's in the chart. And for digitalization, we think there is a tremendous amount of value in this space of course. And I would safely say that for us it could be in the billions of dollars and we are treating it with that level of seriousness and expectation in the organization and bringing that level of management focus to it. But of course, we want to prove it to ourselves and demonstrate it and have it come through our numbers before we start putting any kind of firm numbers out. But indeed, I think there is a material potential and opportunity for us with digitalization that we're just starting to realize now. Thank you.

That's brilliant. Thank you.

And we will take our next question from Michele Della Vigna from Goldman Sachs. Please go ahead.

Thank you. It's Michele here. I have two questions, if I may. The first one is about IFRS 16 and the impact that you estimate is going to have on your accounts in 2019, and particularly if you would then adjust the 20% gearing target according to how the new accounting would change your reporting of the net debt? And then the second one, staying on the subject of clean energy, I was wondering you completed the First Utility acquisition in February. I was wondering what you have discovered since then in terms of your ability to build a larger customer base there and the profitability of the business in the first month that you've consolidated it? Thank you.

Great. Thank you, Michele. IFRS 16 is a substantial change in accounting and we're working that hard in the organization to set up for implementation at the beginning of next year. As most of you are aware if not all of you are aware, it will affect the P&L, the cash flow, and the balance sheet and we will provide more insight on the magnitude of the impact in the first quarter. What we'll do for 2019 is to continue to report our metrics, our key metrics and certainly does that we've tied commitments to on both bases, so it'll be both on how we currently account for things and then under IFRS 16 till now line of sight between our original targets and the original way things were accounted for. And then thinking about potential change to the metrics, we're going to leave that to MD, our Management Day 2019 in June where we think that's the right opportunity to reset these things. But indeed, we're maintaining our commitments to the financial metrics as we've set them out previously and we'll provide transparency on both bases next year to make sure that it's clear. We remain committed and we will achieve the commitments as we've set them out. In terms of clean energy and First Utility, we're pleased with the acquisition and the integration. We had the CEO of First Utility, Colin Crooks, with us a few weeks ago going through the performance of the company. I'd say overall we're very pleased. We think there's actually a lot of opportunity for Shell to bring value to the business. And from an integrated perspective, working with our Trading business, we saw some of that upfront; we continue to believe that's the case. We believe there's going to be further synergy across our customer base and working with our retail business. So the original strategy and premise that we had we believe remains valid. Of course, it's very early days. It's only been I think less than a year that we've had First Utility. But, indeed, we think it's a good platform for us to start developing new business models, looking for ways to thrill our customers, and provide a better power service to our customers in the UK. Next question.

Thank you.

And our next question comes from Jon Rigby from UBS. Please go ahead.

Hi, thank you. Hi, Jessica. Two questions. The first is on Integrated Gas. It looks to me, and maybe it's just issue of my modeling, but the third quarter results looks like you may have under-earned a little bit and I just wondered whether that was a function of some stellar historic performance in the first few quarters of this year leveraged off the LNG market or whether it was particular issues in the quarter which are somewhat temporary and may reverse, and I say that in the context of what looks like a good LNG earnings quarter for some of your peers as well, and obviously you're the leading player. So I just wondered whether you're able to sort of lift the lid a little bit on IG and maybe sort of flag up any issues that we ought to be aware of. The second just is – sorry, it's very picky. On Brazil, obviously we've had an election and the real has strengthened again. So given that it looks like real weakness is being a driver of some of the deferred tax changes, the non-cash ones that are sort of, as referenced earlier, have annoyed a lot of people in terms of creating a bit of noise around your numbers, is it potentially the case that if the real stays where it is you'll see some positive adjustments flowing back through Upstream in 4Q? Thanks.

Thank you, Jon. Integrated Gas, overall, has continued to perform very strongly over the last year, let alone the last quarter. It's been a very good performance from our trading organization and the optimization we've been able to achieve with our portfolio, our shipping, and our trading capability, and those numbers continue to come through. I think we have tried to hint in the prior quarters sort of we didn't want that to become kind of the new normal, but they continue to perform very, very well and frankly a bit above our own expectations. So I think there is a bit of over-delivery in the last couple of quarters that perhaps people are thinking that will always happen. I think it's been just a very, very good performance from our trading organization and optimization of our LNG portfolio which they continue to do going into Q3 as well. Indeed, within the business, however, there was some maintenance that took place in the third quarter that did that affect production, and you see that in the production numbers of the business. In Pearl and in Sakhalin there was maintenance issues, and that contributed to the somewhat lower production levels that also flowed through in terms of cash flow for the quarter, so it's those elements. Production is somewhat soft because of some maintenance activities that is not steady-state. Trading business making up for some of that, if not most of that, and that's probably slightly high performance but I'd be more than happy if that did become the new normal. And we're certainly encouraging the business for that to be the new normal. But I would recognize that they've had some pretty exceptional trading circumstances that they've been able to take advantage of. Brazil and the FX movements. Indeed, given our position in Brazil, the largest IOC in the sector, a very important position for us, movements in foreign currency do often flow through, do have an impact on our P&L and you've seen that in the past. John, I wouldn't want to provide as an offhand rule of thumb of what to expect, because there are a lot of moving parts. This quarter, what happened was more around the impact of the change in the REPETRO legislation. That was what drove the impact for deferred tax liabilities and that was entirely non-cash movements. So I think I would like to provide upfront to the market more insight in terms of what to expect when foreign currencies move. It's a real challenge just given the scale and scope of our business, but happy to try and provide more insight kind of offline if that's helpful.

Thanks very much.

Thank you. Next question.

And our next question comes from Martijn Rats from Morgan Stanley. Please go ahead. Martijn Rats - Morgan Stanley & Co. International Plc: Hi. Hello, Jessica. Hi, I've got to if I may. First of all, I wanted to ask you about CapEx. I noticed that on your slides CapEx is formulated at $25 billion to $30 billion until 2020, and until very recently the labeling was usually 2019 to 2021. Now, I don't want to read too much into this but I was wondering if there's any sort of change there and if this reflects the idea that perhaps by 2021 the guided CapEx range might not be entirely applicable anymore. And the second thing I wanted to ask you about is related to the North Sea. I noticed that in your North Sea operations you recently went from a sort of shift schedule that went from three weeks onshore, four weeks offshore to now three weeks onshore, two weeks offshore, effectively halving the time offshore per week and onshore. And I'll be honest, that sounds like a relatively expensive move, and Total for example went right the other way. I was wondering if you could talk a little bit about why you've put this through and what the thinking is behind it and what it does to your operating cost.

Great. Thank you, Martijn. On CapEx, there was no intention to send a signal of a change of intent or expectations on our capital investment going through to 2021. So I think that just happened to be how that number showed up. So there's no signaling. We continue to believe $25 billion to $30 billion allows us to achieve our strategy to grow the value of the company, and that remains true. I also would like to point out of course that our capital efficiency continues to improve, our development cost has come down by some 45% over the last couple of years. So we continue to get more value for every dollar we spend and that also enables us to do more with the same amount of money going forward. On the North Sea, that was an outcome of ongoing work we've been doing, engaging with a lot of different parties trying to find what we think is the right answer. An important element in that decision criteria is worker welfare, fatigue issues, and trying to find the right balance between what's good for our employees and staff and what's good for the business. And based on that pretty thorough review, the conclusion was to move to this shift schedule. With that... Martijn Rats - Morgan Stanley & Co. International Plc: All right. Thank you.

And we will take our next question from Thomas Adolff from Credit Suisse. Please go ahead. Thomas Adolff - Credit Suisse Securities (Europe) Ltd.: Hello, Jessica. Two questions from me as well. Firstly, in terms of production, overall it was better than your guidance for 3Q. And I've noticed a big jump in U.S. GOM volumes. So I wondered if you can provide a bit more color on the sequential trend and the sustainability of this level of production in the GOM. And then secondly, on CapEx you say $25 billion for 2018 which is in line with guidance. But can you just remind us again what the cash portion would be? And on the $25 billion to $30 billion range for 2019, presumably that range also includes potential M&A. And in terms of M&A, presumably given where the oil price is today I'm guessing it's becoming trickier to find opportunities. So are you looking more at renewables or still upstream LNG or U.S. shale? Thank you.

Great. Thank you, Tom. Indeed, Q3 was a strong quarter for our Gulf of Mexico operations. In Q2 there was a number of maintenance activities going on, so a part of that is coming out of that maintenance period. It's also the ramp-up of projects, things like Kaikias came on stream early and ramping up. Stones ramped up in the quarter and other assets that, again, were under maintenance in the second quarter coming out of that period and making an impact in the third quarter. We have more projects coming on stream, projects like Appomattox in 2019 which should contribute to continued growth in the Gulf of Mexico. In terms of our capital profile, $25 billion to $30 billion is the range. That does include M&A activity. The cash portion of that is a majority of it so, I mean, it depends a bit on when leases are capitalized. But let's say that'll be some – no more than $1 billion to $2 billion of that number, but that will vary a bit so I wouldn't be too sharp but that's kind of order of magnitude I think appropriate. There are M&A activities that we would consider across the portfolio. Again, that would need to fit within the $30 billion range. It could be in the Upstream business, it could be in our Integrated Gas business, and it could be in our New Energies business. Our guidance on New Energies remains the same of some $1 billion to $2 billion on average per year. Thomas Adolff - Credit Suisse Securities (Europe) Ltd.: Great. Thank you.

Thank you. Next question.

And we will take our next question from Rob West from Redburn. Rob West - Redburn (Europe) Ltd.: Hi, Jessica. I wanted to ask you about the digital strategy and just particularly the new agreement with C3 IoT. What was it about their offering that made it attractive to you and then what was it that you were looking to change in the way you're doing digital before? Just in the context that you've been hearing really good things about your condition-based maintenance program for a number of years now, so I'm wondering what step-up really is there and just a little bit more detail around it. The second question I wanted to ask you is it really feels like there's been a shale deal like every day this week either being announced or completing. I guess just I'm interested in your broad observations about the benefits of consolidation in that space and whether you're still very happy with the size of your unconventional portfolio. Thank you.

Thank you for both the questions, Rob. On the digital side, just perhaps a bit of a larger perspective, at the group level digitalization is one of the key agendas for us and we see opportunity in all parts of our business. We've got kind of a focus in four key areas. We have it on our asset management, on our subsurface, on customers, and on finance so those are kind of key focus areas at the group level. But frankly, there's the digitalization activity happening in many corners of our business, whether it be in our retail business in China to our shale business in the U.S, so there's also kind of bespoke activities happening by business as well. And the combination of all of that we believe can help us transform the company and the customer experience and the value we create. C3 IoT, this Internet of Things, so this is about how we get information about our assets and our equipment and use that to, as I said in the speech, hear weak signals and be able to understand and react more quickly and prevent things from happening, making for safer, more efficient operations. Our choices always are a combination of criteria, and this is a combination of that, and the Azure piece is important in terms of who we work with from a cloud computing perspective. And it's the quality of the offering, it's the ability to scale that's important for us, and we've been scaling that particular instance across our Upstream business over the last six months and expect that to grow exponentially over the next 12 to 24 months. But I think there's a tremendous amount of opportunity. Again, it's hard for us to put a firm number on it until we actually replicate…

Thank you. Next question.

And our question comes from Irene Himona from Société Générale. Please go ahead Irene Himona - Société Générale SA (UK): Thank you. Good afternoon, Jessica. I had two questions. Firstly, you've largely completed the $30 billion disposal plan, and congratulations for that, so we could think of the portfolio as a little bit more stable or completely stable now. I wonder in that context if there is any indication, any guidance, any direction you can provide to us for what happens to total production over 2019 and 2020? I realize there's no explicit target, but I think it's an opportunity given that you have completed the disposal. My second question, going back to the capital expenditure guidance – $25 billion to $30 billion – and leaving aside any potential M&A, just focusing on the organic part of that, I'm interested in the process. If you could possibly share with us the process by which in the next 60 days, let's say, you will determine whether you settle at the low, medium or high end of that range; I presume it's not the oil price. And in that context, if you could also talk a little bit about external inflationary pressures that you may be experiencing. Thank you.

Good. Thank you, Irene. So on your first question, the divestment program, indeed we've fined (48:58) transactions over $30 billion, we've closed $28 billion, and we've received cash of some $26 billion to $27 billion, so we're kind of inches away from fully delivering on the $30 billion program which we expect to do by the end of the year. We will continue to manage the portfolio though, so I wouldn't want to signal that we think we're done. We believe we need to continue to actively manage our tail and actively evaluate the return profile of our assets and continue to optimize. So we've indicated we expect some $5 billion of further divestments over 2019 and 2020 and just to say that that continues to be an active part of our management, ensuring that we've got the right assets frankly every year. In terms of guidance on production, we've tried to provide a lot of guidance in what we expect to happen with the portfolio in terms of growth, and in the materials I've talked to some of the key projects and then in the back you can see all of the production associated with those projects to give a sense of what you would expect to happen to production, if you look at those projects when they come on stream and the expectations around production. We talked about some 400,000 barrels a day of incremental production between 2018 and 2020 from these projects, so I think we've tried to provide that transparency. Importantly, we want to focus more on cash and value; this is a really important part of our story and our philosophy. As a leadership team, we want organization focusing on value. And if it's fewer barrels but more NPV, that's a good thing. And we've…

Sorry, and your last point around inflation. We are seeing some more inflation stress than perhaps one or two years ago. We don't think it's going to make a material difference to our free cash flow delivery and our ability to meet our commitments to 2020. However, it is putting pressure and we're going to have to work harder to offset that inflation and continue to drive a cost-competitive company. So the pressure's there, we're managing it, it's tougher than it was a couple of years ago but I don't think it's going to materially change our numbers at this point in time. Thank you. Irene Himona - Société Générale SA (UK): Thanks so much.

And our next question comes from Jason Gammel from Jefferies. Please go ahead.

Thanks very much. Hi, Jessica. I just wanted to come back to cash flow again. I think perhaps one of the reasons you're maybe not getting the credit for what's really a strong number on the quarter has to do with taxes, and essentially thus far year-to-date the cash payments on taxes is only about 70% of tax expense. So I'm probably greatly oversimplifying the situation here, but in the current commodity price environment would you expect your income tax expense, assuming no one-off items, to be greater than your cash tax payments simply because you're utilizing net operating losses that are shielding you from some cash tax payments? Then my second question is related to Canada LNG. You structured the contract in a way that appears to be essentially a lump sum contract. And so my question is do you feel that you've effectively transferred the risk of any cost overruns at the project to the contractor or are there elements of cost where you are retaining the risk of any overruns?

Great. Thank you, Jason. On your first question, let me give a bit of perspective. It's a rather detailed question and if I misinterpret it I might give you the wrong answer, and we can certainly follow-up on further detail as needed. In general, as our Upstream business grows and generates more income that tends to be in higher tax circumstances than, say, our Downstream business. And so all things being equal, you would see potentially a higher effective tax rate and higher cash taxes with that shift in earnings going more to the Upstream business rather than the Downstream business. So there's a bit of a portfolio piece. You need to consider what else is happening in the business. Indeed, we may have operating losses in some of the jurisdictions so that could impact cash taxes, so that would also be an influence. Because of that, it's difficult for me to give you one straight answer but the principle that with higher Upstream earnings you'll see higher taxes I think is a fair one. The other piece is of course our divestment program has also influenced our tax payments over the last couple of years, and that hasn't been inconsequential. That should quiet down as we get to a lower level of divestments and less significant shifts in the portfolio. But if you need more detail or more insight in how to think about our taxes going forward, please follow-up with the team. In terms of the contract strategy with LNG, indeed it was lump sum. The principle on a lump sum contract is that the risk is transferred to the counterparty, and so that's the principle at play and that's effectively how we're thinking about and how we're going to manage the contract. So I think I'll leave it at that. Thank you, next question.

And our next question comes from Lucas Herrmann from Deutsche Bank. Please go ahead.

Thank you very much. Good afternoon, Jessica. Thanks for the time. Point of clarity first, you mentioned earlier that some of the downtime at Pearl and Sakhalin. I just wanted to be clear as to whether Pearl was back on stream and perhaps whether there's any comment on what the issue was there. And secondly, just a broader question on demand, the world, what you're seeing at the present time. Markets are clearly very sensitive as things stand to global demand, oil markets in particular. Are there any observations that you can make? Thank you.

Great. Thank you, Lucas. With respect to Pearl, the plant's up and running so it's fully operational at this point in time and no particular kind of insight in terms of the events; kind of nothing overly noteworthy to mention. And in terms of demand, oil markets, what I would say is demand continues to be strong and I think the volatility is probably more a factor of supply and geopolitics than one around demand, so we expect demand to continue. I think the piece that's difficult for us to probably fully understand or predict in the same level of confidence is on the supply side and whether it be the pace of removing bottlenecks in the Permian to tension in the Middle East, Venezuela, other places. So I think it's more the supply side and how that might play out that is less certain and can lead to different outcomes from an oil price perspective. What we've done as a company, and I'll just take an opportunity to emphasize it, is we're not looking for any one price or a higher price to sanction projects to run our financial framework. We've reset the company to run in a much more resilient and robust way through our variety of range of price outcomes. We'll continue to maintain that mindset. Vito is a great example of projects at breakeven prices below $40. The next suite of projects will continue to have the same level expectations around breakeven prices. So we're going to continue to run the company thinking about resiliency and importantly about upside. And I mentioned that a bit before, making sure we continue to have upside in the barrels. And that's part of our portfolio shift towards Gulf of Mexico, Brazil, which allows that upside. And if we get the capital efficiency and the resiliency right, we think we've got a financial framework and a cash flow profile that is resilient through the full range of prices.

That's good. Thanks very much.

Thank you. Next question?

And our next question comes from Blake Fernandez from Simmons Energy. Please go ahead.

Hi, Jessica, thanks. My question is on buybacks. Based on our math, I think $2.5 billion per quarter is about the run rate you need to do in order to achieve the target on the program, and obviously this quarter you had excess free cash flow over and above that. So just trying to understand how to think about that in terms of is this program just going to remain fairly ratable and any excess funds just simply be used to bolster the balance sheet? And then the second question is if you could elaborate a little bit on production-sharing contracts, if there's anything in the portfolio that we should probably be aware of that could maybe hit production or cash flow, just really anything meaningful that might pop up. Thank you.

Thank you, Blake. So on the share buyback program, again, we've been clear in terms of our commitment getting into the $25 billion by the end of 2020. That gives us roughly 10 quarters left and so, indeed, you can do the math. For any given quarter, we're evaluating the circumstance, what the price environment is that underlines delivery of the businesses, and we'll continue to make sure we get the right balance in our decision-making. But again, we're setting up the company in terms of the cash generation to support our ability to deliver on that buyback program over the next two years. From a PSC perspective, I don't have anything of note to mention. If there is something on the horizon, we are trying to signal that in terms of our outlooks for the coming quarter if there's something of note that people should have in mind. Of course, around the portfolio there are license expiries that are under negotiation, there's PSCs that are maybe expiring or under negotiation. I think that's generally normal course of business. And should we think there would be something that's material or significant, then we would look to include that in our outlook or provide some other disclosure as appropriate.

Thank you.

Thank you. Next question.

And our next question comes from Thomas Klein from RBC. Please go ahead.

Thank you for taking my question. You were talking about LNG Canada just earlier. In that vein, do you expect to sanction any more LNG projects in the coming year? And if so, do you still see it as a generally favorable environment to do so? Thank you.

Thank you, Tom. So, indeed, we have a number of pre-FID projects in our portfolio and in our funnel. Through the 2020s I would expect we would bring more LNG capacity on stream. For us, the decision criteria is much like what we had for LNG Canada. Is the project itself generating the most competitive returns? Does it offer the most competitive supply option? And is it coming on stream at the right moment? And with LNG Canada, we solved that equation in terms of when the project is coming on stream with the right LNG price points and overall competitiveness of the project and returns. We'll apply the same criteria for further projects that we'll be considering sanctioning over the next couple of years. In terms of favorability, I think as I mentioned before, it's the criteria I just referenced. The world will need more LNG as we go into the 2020s. We expect a shortfall 2022-2023. So we'll be looking to bring online first LNG Canada and I expect further projects to meet the demand and to do so with the most competitive projects. Thank you.

And the next question comes from Bertrand Hodée from Kepler Cheuvreux. Please go ahead. Bertrand Hodée - Kepler Cheuvreux SA: Good afternoon, Jessica. Two questions if I may, two questions relating to project FID. In the summer of 2017 Shell made a very large discovery in the Gulf of Mexico called Whale. And when you announced the discovery early 2018, I felt there was an intention to fast track the project. So I am a bit surprised not to see this project in your pre-FID option. So can you update us on your thinking about this potential development? And my second question related to another project, which is certainly not fast tracked, it's Bonga Southwest. So we have been waiting for Bonga Southwest in terms of final investment decision I think over last 10 years. So can you update us and whether you have agreed on physical terms and on license extension, and do you believe this project will go ahead in 2019? Thank you.

Great. Thank you, Bertrand. Indeed, the Whale discovery was one of the most significant discoveries we've made as a company in recent years. We remain very enthusiastic about that opportunity and it's being actively worked. So, indeed, it is being fast tracked within the organization in terms of how we think about developing that project and bringing it on stream sooner, and I would expect you'll hear more about that project in the coming year. Bonga Southwest, actively working. We think it's a good project. It wouldn't be appropriate for me to kind of talk about the current state of discussions and negotiations on the term, but we remain committed to the project and are hoping to bring it to FID going into 2019. But again, we've got other partners and there's other stakeholders. All of that needs to be managed appropriately and hopefully we can come to a positive conclusion in the near-term. Thank you.

And our next question comes from Quirijn Mulder from ING. Please go ahead.

Yes, thank you. Jessica, I have two short questions. One is about inflation. You said some inflationary pressure. Is that only the onshore business or is there more you can tell us about the scope of the inflation at this moment? Is that also, for example, in deepwater? Then the second question is about the development of Chemicals. Can you give me some idea about what you expect about Chemicals given the somewhat disappointing result in the third quarter?

Great. Thank you. In terms of inflation, I'd say that it's much like what we read in the news, that we're seeing kind of inflation occurring across different economies and affecting wage levels, affecting different parts of our supply chain. So I wouldn't say it's just onshore but it's not necessarily deepwater either. We benefit from a number of enterprise framework agreements in terms of how we manage our supply chain so during moments of inflationary pressure we're able to not be affected because of these arrangements that we have in place. So that's helping shield some of it and that certainly is the case in places like our deepwater business. So it's a bit of a mixed bag depending on where you are in the organization, the nature of the agreements that we have in place. What I'm trying to signal is that we are seeing it. It is a pressure but I don't expect it to have a material impact on our cash flow but just a signal in terms of as we look to continue to have a more competitive cost structure the environment is a little less friendly than it was in the last couple of years. In terms of the Chemicals business, we remain bullish on the sector. We believe that demand for Chemicals will continue to be very strong. It has outpaced GDP growth. Historically, we think that will continue to occur going forward. Q3 is a reflection of the current margin environment. There's new supply that's come on stream, so there can be some short-term softening of prices and that's a bit of what we've been exposed to, also some increased feedstock prices. And there'll be ups and downs both from a margin and cost perspective in a given quarter, but if you look at it over the long-term we believe the industry fundamentals are strong in terms of demand growth, we believe we've got a competitive position in terms of our portfolio and our differentiated strategy. And so it will remain one of our growth priorities. Of course, we've got a couple of projects that are being built and will come on stream in the next couple of years. It will also contribute to the CFFO growth, free cash flow growth that I mentioned. So, fundamentally, we believe in the Chemicals business, we continue to invest in it, and there'll be some ups and downs both from a margin and cost perspective. But the long-term trajectory, we believe it will be very attractive from a cash generation perspective and a returns perspective. Thank you.

Okay.

And we will take our final question from Henry Tarr from Berenberg. Please go ahead.

Hi there and thanks for taking the question. I guess when you look at the projects under construction, are there any trends you're seeing overall in terms of delivery and budget? So recently, things like Kaikias I guess have come on well-ahead of schedule and possibly under budget as well. You referenced a little bit rising costs but, overall, is delivery still surprising positively for you internally? And then the second question just quickly would be on the trading contribution in the IG segment which you said was strong in the quarter. Is it possible to quantify that or not really? Thanks.

Thank you, Henry. So in terms of project delivery and are we, on average, being positively surprised in achieving what we set out to achieve, I would say yes. So if you look at our project delivery over the last three years across a number of metrics, you can demonstrably see that our performance has measurably improved over the last couple of years, and so let me just talk through a couple of these areas. I mentioned the unit development cost has been down by some 45% in places like our deepwater and our unconventionals business. In absolute terms we've improved our projects cost, our capital efficiency. If you look relative to our commitments, so when we make/take FID, are we spending above or below our commitments? My team just did a look back on a number of projects. And if you look back over the last 10 years, what you see in the last couple of years is increasingly we are under budget and so, again, from a trend perspective our capital efficiency and our capital discipline, capital stewardship, and our project delivery are coming together to have lower capital outcomes. And then, if you look at it from a competitiveness standpoint, are we delivering projects and wells relative to industry in a competitive way both on cost and schedule, and again we took a look at this just recently and those trends have all materially improved over the last couple of years. So, indeed, I think we have structurally changed our delivery of projects within Shell. We've increased our capability. I think the quality of the decisions we're making in terms of the way we scope projects, the way we set the capital budget upfront has improved. And then when you move into execution, our execution capability has…

That's great. Thanks.

With that, that's our last question. Thank you all for joining the call today and for your questions. The fourth quarter results are scheduled to be announced on January 31, 2019, and Ben and I will talk to you all then from London. Thanks very much and have a good day.

And this concludes today's conference. Thank you for your participation and you may now disconnect.