Repsol Sa Sp/Adr

And good morning to everyone joining us today. Welcome to REPSOL's fourth quarter and full year 2025 results presentation. Today's conference call will be hosted by Josue Jonimath, our chief executive officer, with other members of the executive team joining us as well. At the end of the presentation, we will be available for a Q&A session. Before we begin, let me remind you that during this presentation, we may make forward-looking statements based on estimates. Actual results may differ materially depending on a number of factors, as indicated in our disclaimer. With that, I will hand the conference call over to Joshua.

Thank you, Pablo. Good morning, and welcome to everyone. 2025 was a year of strong execution for Repsol. underscored by solid strategic delivery and progress on our path of disciplined growth. In a complex geopolitical and macroeconomic backdrop, we continue to advance our strategic priorities, enhancing the returns to our shareholders, strengthening the portfolio, and maintaining a consistent approach to capital allocation. Operating in a lower and volatile oil price scenario, performance remains robust across all four divisions. In the upstream, we continue to improve the business by bringing new growth projects on stream and optimizing the portfolio. In the industrial division, we continue advancing on the transformation of our sites, developing an scalable low-carbon platform within our Iberian hinterland. A positive refining momentum, especially in the second half, helped us to overcome the disruptions generated by the Spanish blackouts in the first part of the year. In customer, we leverage our brand scale and integration to develop an ambitious multi-energy offer, grow electricity retail, and reinforce profitability. And in low carbon generation, we continue to execute our business model for renewables, rotating assets to crystallize value and limit our exposure. All of this combined with the achievement of our key decarbonization target for 2025, as set in 2021, delivering a 15% reduction to the carbon intensity indicator. Other targets, such as methane emission intensity and routine flaring reduction, were met as well. Our capital allocation framework continues to prioritize shareholder remuneration, underpinned by a strong balance sheet and the delivery of disciplined and transformational capex. Last year, we increased the dividend by 8.3% to 975 euros per share. Total shareholder distributions were 1.8 billion euros, comprising 1.1 billion in cash dividends and 700 million in share buybacks to reduce capital, placing us at the higher of our strategic cash flow from operations distribution range. As we look ahead to our capital markets day next month, the same key strategic principles will guide our update roadmap to 2028. Ensuring a predictable and growing dividend complemented with buybacks will remain fundamental to the strategy. Let me underline this point. For 2026, under our planning scenario, distributions will continue improving with the cash dividend growing around 8% to 1.0 5.1 euros per share, and buybacks in line to 2025. Moving on to results as detailed in the documents you have in your hands released this morning, Repsol has implemented a new group reporting model by business segment. I know that that is complex, but let me say that the aim is to be fully transparent and adapting this reporting model to a new perimeter where we have minoritarian shareholders in some of our businesses, and that is pushing us to change to give you, in a transparent way, the more simplified information we can. The revised framework aligns our reporting with how the company currently manages and evaluates business performance. reflecting both the incorporation of strategic minority shareholders in two of our divisions and the increased relevance of joint ventures within our business model. In addition, the company seeks to align all its financial information with the financial statements prepared under IFRS, which are not impacted. The reporting segments remain unchanged. However, under the new model, The contribution of joint ventures previously integrated by proportionate consolidation is now recognized using the equity method. Upstream production and reserves will continue to be reported based on Repsol's effective interest in its joint ventures. The main measure of segment performance is the adjusted net income. Presented net of the income attributable to minority interest and excluding special items. For 2025, adjusted net income was 2.6 billion euros, a 15% decrease over the comparable figure in 2024. Cash flow from operations rose 5.4 billion euros, 8% higher year over year. Net capex stood at 2.7 billion euros, which compares to a 5.1 billion net investment in 2024. including the rotation of outposts announced in December and cash in this month, in February, net capex was 2.5 billion euros. Net debt closed at 4.5 billion euros, a 0.5 increase over 2024, and a 1.2 billion reduction over the third quarter of 2025. Excluding leases, net debt closed at €1.6 billion, so roughly 5% of the capital employed of the company. Year-end ratio stood at 14% by year-end, as I mentioned now, 5.5% excluding leases. Under the previous reporting model, full-year cash flow for an operation reached €6.1 billion, slightly ahead of guidance announced last time in October. and 13% higher over 2024. Net capex was 3.5 billion euros under the previous reporting model, so the former one, in line with guidance, and at 3.3 billion when we are including the outpost rotation that, as I mentioned, was catching this month in February. Looking briefly at the evolution of the main macroeconomic indicators in 2025. Brent price averaged $69 per barrel, 15% lower year on year, driven by OPEC production increases, geopolitical uncertainty, and commercial tensions. The Henry Hub averaged $3.4 per million BTU, 48% above 2024 figures, driven mainly by the continued ramp up of North American LNG exports, And in Europe, the TTF reference was 12% higher, mostly due to better demand and tighter inventory levels. Repsol's refining margin indicator increased 20% year-on-year, mainly due to stronger middle distillate differentials. And the exchange rate, the dollar, weakened against most major currencies, including Europe, averaging $1.13 per euro, a 5% depreciation versus 2024. Continuing with upstream performance, 2025 saw a strong delivery across the business as we continue to high-grade the portfolio with new projects and optimizing our legacy assets. Full year adjusted net income was 957 million euros, 7% lower year over year, reflecting lower oil realizations, a weaker dollar divestments, and a lower contribution from equity affiliates, partially offset by higher gas prices. Production averaged 548,000 barrels equivalent per day at the higher end of guidance and 4% lower than in 2024. The higher volumes in Libya and the UK were more than offset by divestments and natural decline. Excluding disposals, 2025 production was 2% higher year on year. In Libya, the stabilization of the country allowed us to reach our highest production level since 2012, exceeding 300,000 barrels per day in gross terms. In unconventional, representing around 30% of our volumes, we continue to accelerate activity in Marcellus and Eagle 4 as the markets evolve into a more bullish outlook for US gas. Development activity across the portfolio focused on the efficient delivery of projects for which we took FID in recent years. In Trieste and Tobago, the CIPOR and MENTOR projects reach first gas in April and May, respectively. In the Gulf of America, Leon Castile delivered first oil in September. In Brazil, Lapa Southwest is nearing completion and is expected to start up before the end of this quarter. And in Alaska, development of the first phase of PICA is close to full completion and expected to begin production in March. This flagship project with meaningful growth potential will contribute to reverse the great state of Alaska's production decline. Together, these G5 projects are expected to contribute 80,000 barrels of low break-even, low CO2 intensity barrels in 2027. With respect to portfolio management, we continue to strengthen our fundamentals through active management of our assets, making the business more resilient, transparent and profitable. Last year, we completed our exit from Indonesia and Colombia, consistent with our strategy to concentrate operations in more material and better margin geographies. In the UK, we completed a strategic agreement with New Energy to combine our assets in the North Sea, and in december the partners agreed to incorporate total energies uk to the venture repsol will own a 24 percent stake of the resulting entity to be called neo next a plus and the new company is projected to produce around 250 000 barrels a day in 2026. this alliance will allow us to unlock value by combining operational synergies with discipline financial execution Completion of the deal is expected in the first half of this year, 2026. In our upcoming CMD, we will have the opportunity to discuss in detail our next steps in this division. For 2026, our focus will be on Alaska's ramp-up to ensure we reach 80,000 barrels of gross production by the third quarter, the preparation for the liquidity event, and the resumption of operations in Venezuela. In this regard, last week, the US administration issued licenses that provide the legal framework we need to resume our oil and gas operations in the country. Continuing now with industrial, a full year adjusted net income was €963 million, €484 million below 2024, mainly due to a lower contribution from refining, chemicals, and the trade investment. The blackouts that impacted the Iberian Peninsula in April had a material impact on results. In the refining business, uncertainties around tariffs deteriorated the market environment in the first part of the year. A stronger diesel, gasoline, and NAFTA spread supported the gradual recovery of margins towards year end, with indicator reaching in November its highest level in more than two years. Repsol's margin indicator averaged $7.9 per barrel, $1.3 higher than in 2024. The premium of our indicator was $0.7 per barrel. The utilization of distillation capacity averaged 83%, which compares to an 88% rate in 2024, negatively, as I mentioned before, impacted by the consequences of the blackouts. And the conversion units operated at 95%, which compares to a 100% utilization rate in 2024. In 2026, the indicator has averaged $5.5 year to date. We expect margins to remain healthy, supported by improved economic activity, higher structural gasoline demand, and low inventories. In chemicals, Repsol's margin indicator was 20% higher than in 2024, mainly driven by lower feedstock prices. Even so, the business incurred a loss as market conditions remain challenging in Europe with flat demand, higher relative cost comparing with some other regions in the world, and large product imports. On this environment, we remain committed to our strategy of reducing break-evens, and expanding margins through differentiation. In this direction, the expansion of CNES in Portugal is expected to start operations in the second half of 2026. With regard to the transformation of our facilities, we continue to drive key initiatives in renewable fuels. Starting with Porto Llano, the retrofitting of a former gas oil unit to produce HVO is expected to commence operations next quarter. This facility will join our advanced biofuels plant in Cartagena to reach 0.5 million tons of production capacity per year between both plants, and a total of 1.5 million tons biofuel capacity at group level. A potential new retrofitting project is currently under evaluation. In Tarragona, construction of the EcoPlanta received approval at the beginning of last year, 2025. and the project moves ahead towards starting production in 2029. Repsol has already secured its first off-take contract for the renewable methanol to be produced in this facility. Finally, in renewable hydrogen, we took the final investment decision for our first two large-scale electrolyzers to be constructed in Cartagena and Bilbao with a capacity of 100 megawatt seats, and construction of a third large-scale electrolyzer in Tarragona progresses towards FID approval in coming months. Moving now to customer, full-year adjusted net income was €754 million, 17% over 2024, thanks to a higher contribution in all business segments. EBITDA reached €1.4 billion, a 20% improvement year-on-year, This implies achieving our 2027 strategic target two years in advance, perfecting the resiliency of our core legacy business, and also let me underline the increasing contribution from power and gas retail and our multi-energy offer to our customers. Immobility sales of road transportation fuels were 11% higher than in 2024, being now at the level of the pre-pandemic sales. The non-oil business delivers a robust contribution margin growth in Spain, up 12% year-on-year, and in aviation results benefit from sustained demand growth. Let me add that approximately 60% of our Spanish network already provides multi-energy solutions, with more than 1,500 service stations offering fuel that is 100% renewable. The number of digital clients reached 10.1 million by year end in December, a 16% increase over 2024, contributing to an increase of business to customer sales in service stations. While the app, you know, that is our app leading the Spanish retail businesses, keeps on growing in users and in transactions, reaching 89 million transactions in 2025, 10% evolve 2024. Finally, in power and gas retail, we add more than half a million customers, reaching a record figure of 3 million clients by December. Repsol has maintained a steady growth trend since we entered in this business in 2018, almost multiplying by four our customer base since the acquisition that year of Viesco. Turning to low carbon generation, we continue to execute our renewable strategy, bringing new projects into operation while rotating assets to crystallize value, maximizing returns and limiting our financial exposure. The adjusted net income reached 53 million euros, 77 million higher compared to 2024, supported by higher low carbon production. The average pool price in Spain was 66 euros per megawatt hour, 4% higher than in 2024. The power generated by Repsol reached 11.6 terawatts hour, 49% higher year over year. Renewable generation was 7.7 terawatts hour, 34% higher year on year. We add 2.2 gigawatts of new capacity under operation this year, 2025, achieving our objective for 2025 and bringing total capacity to 5.9 gigawatts by year-end. As of today, installed capacity has reached 6 gigawatts of renewable power. We were able to rotate 1.8 gigawatts through three different transactions in the U.S. and Spain. In the U.S., we divest a stake in a solar portfolio that included Frye and Jicarillas and reached an agreement to divest a stake in Outpost Solar Firm, including around 200 million tax equity. In Spain, we divest a participation in a 400 megawatt renewable portfolio in the first part of the of 2025. And let me say that since 2018, Repsol has developed and brought 5.1 gigawatts of wind and solar capacity into operation. One hundred percent of the more than three gigawatts fully commissioned have already been successfully rotated, with an average equity IRR above 10 percent. To date, 2.7 billion euros of capital has been captured through a combination of asset-level debt, tax equity investment, and value-accretive asset rotation strategies. Of the remaining capacity, 1.4 gigawatts are close to commercial operation date. Around 79% is currently at an advanced stage of negotiations. And to finalize, let me highlight that last year we had a new 805 megawatt wind pipeline for a Spanish portfolio with the aim of hybridizing production at our combined cycle in Escatron in Aragon, securing the power supply for the future data center to be built in this area by a third party. Regarding our Outlook, in our capital market day, we will provide the regular guidance for the period together with projection to 2028. For 2026, our planning assumptions are based on a rent price of $60 to $65, a Henry Hub of $3.5 to $4, and a refining margin indicator between $6.5 and $7.5 per barrel. In the upstream, we are expecting a higher production in a range from 560,000 to 570,000 barrels per day. Under this scenario, shareholders' distributions will continue improving, including cash dividends and share buybacks. The first buyback program was approved by the board yesterday. for up to 350 million euros and will start in coming days. Regarding our decarbonization pathway having delivered on the short-term commitments set for 2025, we will modulate medium-term goals while keeping long-term objectives according to the current regulatory and business framework. To summarize, 2025 proved to be another year of solid delivery for Repsol, with a strong progress across the priorities defined in our previous strategic update two years ago. And let me enumerate some of these progresses. First, between 2024 and 2025, we have allocated a total of 3.8 billion euros to remunerate our shareholders at the higher end of our cash flow from operations distribution range. We have increased the dividend per share by 39%, and we have reduced our capital by 9%, canceling 112 million shares. We have evolved our EMP portfolio into a more profitable business, which is now more resilient and predictable, and we have transitioned to more normalized capex levels. In industrial, we are accelerating efficiency and competitiveness, reinforcing the role of free cash flow generating trading business, and building an advantage low-carbon platform to reinforce our leading position in Iberia. In the commercial side, we are developing an ambitious multi-energy proposal that will strengthen Repsol's competitive position in our core markets. And in renewables, we continue developing a pipeline, rotating assets in early stage of production to deliver or require rates of return under the principle of unlimited capital exposure to this business. Considering this significant progress towards our targets and in light of changes to the macroeconomic regulatory and geopolitical backdrop next month in March, we will refresh our strategic framework. The core principles are growing and predictable remuneration, a strong balance sheet, and discipline growth will remain at the basis of our plan. We will share with you further details in less than three weeks, so see you then. With this, I'll turn it over to Pablo as we move on to the Q&A today. Thank you very much.

Thank you, Josion. Before opening the Q&A, I anticipate there is a lot of interest on the details of the Capital Markets Day to be unveiled in March. As you can imagine, at this point we cannot share details, so please adjust your questions accordingly. I would also kindly ask participants to limit yourselves to a maximum of two questions. If time permits, we will try to cover more in a second round. To begin, I would like the operator to remind us of the process to ask a question. Please, operator, go ahead.

Thank you. To ask a question? please press star, one, one on your telephone and wait for your name to be announced. To withdraw your question, please press star, one, and one again.

Thank you, operator. Let's get started. Our first question comes from Michele de la Viña at Goldman Sachs. Thank you very much.

I'm looking forward to the capital markets day. Looks like quite a few countries that have been difficult to operate in are offering better fiscal terms and opening up more to companies. You certainly had the example of Venezuela, of Libya. I was just wondering if you could lay out what you think could be the opportunities there in Venezuela to get paid for your normal activities, which I think would be around $250,000. million euros, but also to potentially ramp up production and in Libya if you're seeing an opportunity to grow production there. Thank you.

Thank you very much, Michele. I mean, let me say that Venezuela now is in a significantly better situation than Venezuela was two months ago. I think that a new window opportunity for a better future is opening in Venezuela. And it's also, I mean, let me say, a better situation for our sector in that country. And I think that it's now time to help consolidate this improvement, strengthening the social stability and economic development in the country. You know, Michele, because we have talked about that for years, that Repsol has consistently been a responsible operator in Venezuela. Our commitment to the country's future has been clear. And now we are fully dedicated to contributing to this brighter future. You know that we were supported by the... the licenses over the last days that are going to assist and allow Repsol to work in this framework. We appreciate the American support and the American approach to our role and our operations. And we are working also closely with Venezuelan authorities and our partners at Televesa to move all that in a positive direction. But let me say that our initial contribution, and we are, of course, we have, let me say, and we received this open flag five days ago, so now we are preparing everything to restart and to resume our operations in a direct way in the country. Our initial contribution will be to continue supplying gas to stabilize the country. providing the gas that the national power system needs. We will resume a regular dynamic in gas supply, and the process of lifting contractual condensates and oil cargoes will restart to pay for the gas supply. So we are preparing everything to start lifting these contractual cargoes. At the same time, we are also preparing the bottlenecking project to increase gas production in Venezuela to a plateau of 640 million cubic feet per day from the current 580, so an increase of 10%, rather speaking. Regarding the oil production, we will also restore normal operations. That includes, and we are starting to engage our team in the operations, investing in production facility renewal, such as pumps and some other facilities, considering the introduction of a rig in the area and working to reverse the decline in oil production. And simultaneously, of course, we will restart the commercial lifting of oil cargoes within the framework of our contracts in Petrochiriquiri, exporting oil from Venezuela to Spain, the U.S., or any other suitable destination that is allowed by the license framework. Additionally, we are also preparing a plan for the Petrocarabobo oil field, where also we see potential to increase this quick green initial production leverage in the existing infrastructure. So, it's early, perhaps, Michele to provide specific figures, because as I mentioned, we are in the first days of this new dynamic. But let me say that my view is optimistic about Venezuela, about the country, about the evolution of the political, social and economic environment in the country, and optimistic about the hydrocarbon sector that has to play a significant role in this stabilization and growth of Venezuelan society and Venezuelan country. We see now that we could be able to increase oil gross production in Venezuela by more than 50% over the next 12 months. We have the ambition and we see plenty of room to get this target of multiplying by three the production within three years. But I think that what is important is to put the focus in the short term. So a 50% of oil production increase in coming 12 months. And we are confident that the cash flow from normalized commercial activities that is going to be resumed in the short term under the 16 contractual framework is going to finance this effort. So we are confident that a normal commercial relationship will be able to finance this win-win approach, because the country is going to get more production, more revenues coming from royalties and from taxes. We are going to have more cargo, more cargoes to pay for this operation. And of course, we remain open to exploring other opportunities for the future. And I mean, as Pablo said, I understand that you want to have all the figures about that, but as I said, step by step is probably too early and further details will be provided in three weeks in the Capital Market Day event. But again, let me say that I remain optimistic that I see that a new opportunity is opening in Venezuela, and we see room to start a normalized operation and a commercial activity pushing in the direction of increasing the oil production in the country. And Repsol is fully committed to this pathway that was open five, six weeks ago. Going to Libya, I mean, I also have a positive view. I mean, we rely on Libya. We see it as stable. We see more security on the ground. As I mentioned in our last call, I think that, I mean, we underlined the important contribution of Marshal Haftar and the Libyan Army in this positive evolution of the country, thanks to the force deployed over the last years to combat terrorism. That is important, of course, for Libya, but let me say that it's also an important contribution of the Libyan army to European security that has to be recognized. And, I mean, last year, 2025, we had a production that, I mean, in the quarter, averaged a figure of about 300,000 barrels a day gross. that could be 39,000 barrels net reps sold. But the production, thanks to new wells that were spotted in 2025, 27 wells, achieved a maximum peak of 326,000 barrels at the end of the year. We are continuing with this in-field drilling campaign, and we expect to have a production at the end of this year, 2026, close to 350,000 barrels a day. That, roughly speaking, will be a figure close to 40,000 to 43,000 barrels a day net reabsorbed. But, I mean, we also rely on the future of the country. We go on in the exploration campaign. We are exploring the two areas, the NC-115 and the NC-186 areas. On top of that, you know that in February we were awarded with two new exploration blocks. One of them is onshore in the Sirte area. and the other one is offshore in the northern part of Benghazi. So, positive evolution in social and economic terms in the country and in security terms, production growth and the full commitment of offshore with the country. Thank you. Grazie mille, Michele.

Thank you, Michele. Our next question comes from Alessandro Posi at Medio Anca.

Hi there. Thank you for taking my questions. I have two. The first one on cash flow guidance for 2026. I'm not sure if you want to give some guidance for the Capital Markets Day, but I was wondering if you can perhaps give us some color on the moving parts under the new reporting model for cash flow from operations and CAPEX. The second question also, always on cash flow, is on asset rotation. I was wondering if you can maybe share us thoughts in terms of asset rotations for 2026 and maybe potential preparation for the liquidity event for your U.S. assets. We have heard about a potential combination with another American player. So I was wondering if you can give us your thoughts on the progress there. And maybe a final question if I can squeeze in a last one. Customer has grown a lot, the gap between customer and industrial or upstream, not as much, not as big as in the past. Can you give us your thoughts about the growth potential for customers? Thank you.

Thank you, Alessandro. I mean, believe me that Pablo is looking at me and saying don't enter in the cash flow guidance for 2026, but I mean... I'm going to break a bit my deal with Pablo. So I'm not going to talk about the 27, 28 path, but I think that it's fair to talk about the guidance for 2026. So the assumptions I mentioned before, Alessandro, in the speech, that means A Brent price, something in between $60, $65 a barrel. A Henry Hub, $3.54 per million BTU. A refinery margin, something in between $6.5, $7.5 a barrel. The cash flow under the new metrics of the new reporting model expected as guidance for this year, 2026, will be in the range 5.5 and 6 billion euros. Let me say that this figure compares with under the same reporting model metrics with 5.4 in 2025. And let me also remind you that in 2025, the metrics in terms of commodity prices and environment were higher. So higher rent price and higher refinery margin. That means that in an environment that is not going to be so good as it was in 2025, we see that the cash flow for operation is going to be significantly higher this year, in 2026. Why is that? Because, I mean, it's not something magical. It's because, first, in the EMP, we have new production, more production, and more projects. I mean, Leon Castile, Alaska, and so on. In the industrial side, we have the chemical business improvement with Sines, with a high molecular weight polyethylene plant of Puerto Llano that is going to start operations in the second quarter of 2026 we have significantly better margins for biofuels and we have a higher production of hbo comparing with 2025. on top of that as you mentioned in your last question alessandro the customer business is improving its position comparing with 2025 and the I mean, all that is behind this cash flow production. On top of that, the renewable power production is also contributing to this cash flow growth, and that is what is behind. Going to the CAPEX, and again, sorry for, I mean, comparing both reporting models and so on, but I will try to be clear, simplifying things. If we consider and we take the net capex figure in 2025 under the new IFRS model, €2.7 billion, what we expect in capex terms this year, net capex terms in 2026, is the same figure, €2.7 billion. Let me say that I think that last year the gross capex under these figures was 4.1 billion euros in 2025. And this year, the gross capex is going to be lower. That means that this year we rely a bit less on disposals. I mean, clearly speaking, there are not any significant disposal in our budget this year. And what we have is a normal dynamic in terms of rotation of our renewable assets. under this principle of contained financial exposure to this business. I mean, growing in some way, being self-financed by the dynamic of the business. In this sense, let me underline that we already had a cash-in of 230 million euros in February coming from outposts, and now we are in the last part, in the advanced last part of the process, to dispose or rotate 700 megawatts in Spain. So we are comfortable with the figure of 2.7 billion euros as net capex figure under the new reporting model for 2026. Going to the liquidity event, I know, Alessandro, that probably I'm going to be boring repeating the same message I launched in the last... in the last course, but now it's even clearer than before. I mean, our upstream today is better than the upstream we had three months ago. And three months ago, the upstream was better than the upstream we had six months ago. So why Venezuela is crystal clear? We could understand that that is a clear upside to the figures I mentioned before, because let me say that we are not including Venezuela in the cash flow from operation I mentioned before. I mean, we are not that probably we could, I mean, check some figures before the capital market day, but Venezuela will be an upside for the figures I mentioned before. And let me say in this sense that, I mean, we are not in a hurry to prepare or to jump, better said, into this liquidity event. We are preparing the company. We are going to have, in coming weeks, next month, Alaska in operation. Leon Castile, the production is growing. Before the end of this quarter, we are going to achieve 20,000 barrels a day net production in the Leon Castile project. We are going to work hard to have the ramp-up of Alaska producing 80,000 barrels a day gross by the third quarter. So we are in some way improving our portfolio, improving our upstream. And let me say the later, the better in some way. So open, of course, to this improvement of our upstream, these potential opportunities we could have for the liquidity event But again, as I mentioned, improving this business. And I think that the customer growth potential for this year, I already answered your question, Alessandro. And perhaps for coming three years, we will talk about that in the Capital Market Day.

Thank you very much.

Thank you very much, Alessandro. Our next question comes from Alejandro Virgil at Santander.

Hello, thank you. Thank you for taking my questions. In line with the previous comments, and also very interesting to understand the net debt position of the company, because looking at 25 versus 26, which could be the booming part, and also to understand that in the reporting, we have some data about the net debt level in the subsidiaries, $6 billion in the abstinence and $3.2 in the low-carbon businesses. if you can elaborate in the whole picture of the company in terms of net debt. And the second question is about refining. I see you relatively, or I would say constructive about refining margins, looking at the scenario you are discussing this morning, if you can elaborate in the moving parts as well in this view. Thank you.

Gracias, Alejandro. Thank you. I mean, going to a net debt position, I mean, again, comparing figures, the beginning better said at the end of 2024 the net debt of the company was 4 billion euros under including leases of course under the new reporting model at the end of 2025 is a 4.5 billion euros so theoretically an increase of 0.5 billion euros let me elaborate to say that this net debt has been flat over the year. I try to explain that. Because we have two financial effects that are not really associated to a net debt change over the year. First, remember that after the closing of NeoNext, we have an increase of the financial debt in 1.1 billion euros. I mean, because that was formerly in the decommissioning commitments of the company or balance sheet, but due to the new structure, passed to be part of the financial debt. So one increase of 1.1. And because the combined effect of hybrids, remember that we issue a hybrid in the last quarter, 700, 725 million euros I had in mind, minus the purchasing part of 100 of a former hybrid. So all in all, we improve the net debt in 600 billion euros because this financial hybrid effect. I mean, these two effects, they had an increase of net debt of 500 million euros. That is exactly the figure of the increase of net debt over the whole year. So for that reason, I elaborate in some way that we are going to, we have a flat debt over the year. Saying that, we also expect, I mean, under the assumptions I explained before, that at the end of this year, we are going to have, roughly speaking, a debt that is going to be probably flat, comparing with the debt we had at the beginning of 2025. Going to the subsidiaries, I mean, let me stress the fact, Alejandro, that the debt of the company is the debt I mentioned now. What we try to do, of course, is to try to optimize in financial terms the debt that every company subsidiary in the group could have as a debt in its structure. But all this combined debt is included in the total debt of the group, in the total debt of the company. So the figures are the figures I mentioned before. Of course, we try... agreeing with our partners in every business to optimize the debt of these subsidiaries we have in some cases in the upstream to ensure the investment grade of the vehicle as we demonstrated in the emission of bonds in summer and so on. And in the E&P business, we are also preparing the business for the liquidity event. And that is quite logical, taking into account the target I mentioned before. Going to the refining margins. So, crystal clear about what is happening today. As of today, the indicator has been 5.5 this year, 2026. Comparing with last year, 2024, that in this period was 5.5. $6.4 a barrel, the indicator. These days, the margin is at $6.5 a barrel. The premium over the... You remember that we have in our budget $1.4 a barrel as a premium for the refining margin for the whole year. As of today, the premium is at around $2.5 a barrel. That means that the margin capture as of today, over this year, 2026, is at $8 a barrel in our refining margin. Saying that, I mean, we have a probably positive view about refining margins for this year. Why? First, I mean, if we go to the fundamentals, What happened over the last year? What has happened, sorry, over the last year? First, the shutting down of refineries in the whole world were at around 1.1 million barrels a day of capacity, mainly Europe, US, Japan, and Australia, and China. New capacity has been at around 1.1 million barrels a day. The increase of demand worldwide is at around 850,000 borrowers a day. So there is some kind of pressure coming from the demand on that capacity that is not growing. If we go to the current capacity, I mean, my view is that Dangote in Nigeria is going to achieve in coming months a normal production, I mean, fulfilling the expectations they have. So this part in some ways included in the increase. In Olmeca, in Mexico, probably they are going to need more investment in infrastructures to be able to get the expected production they forecast. If we go to the fundamentals, the demand and pressure on gasoline margins is very high in our markets in Europe. Going to the diesel, we see that because the shortage we have in Europe, this diesel is very dependent and has a strong upside depending on two factors. The first, the sanctions enforced for products coming from Russia and refined in some other parts of the world entering European markets, so that's in some way putting a pressure on diesel margins. And because this, let me say, lack of strategic autonomy in Europe related to diesel, any geopolitical event has a direct impact on diesel margins in Europe. So I don't have to elaborate today the potential geopolitical risks we are seeing in the world. So for all that, I mean, being present, we are quite comfortable with the refining margin indication we are guiding, forecasting, or elaborating.

Thank you, Alejandro.

Thank you very much, Alejandro. Our next question comes from Guilherme Levy at Morgan Stanley. Please go ahead with your question.

Hi, hello. Thank you for taking my questions. I have two, please. Firstly, if we could start with refining, could you comment on the fire that you had in the Catahena refinery this year? How quickly do you expect the topping unit that is currently down to return? And what should we have in mind in terms of financial impact related to this incident? Apart from the lower utilization impact itself, is there any sort of capex that needs to be made for it to be active again? And then secondly, still in the downstream theme, in January, we had the announcement that two of your downstream competitors in Iberia are staging a potential merge of their refining and distribution operations. And I was keen to pick your brain on the potential impacts that that transaction could have to your marketing business. in Portugal and Spain. And if it comes to a point in which they are requested to sell down some stations in Portugal, would you be interested to further increase your presence there? Thank you so much.

Obrigado, Guilherme. Going to the Cartagena fire, I mean, I don't know if everybody knows what happened, but we had on January 25th, 26th, a leak in an atmospheric crude distillation unit in one of them in Cartagena that I mean affecting the the bottom pumps of this of this distillation unit we had a fire and the fire was fully extinguished using internal resources and with no personal injuries reported I mean Let me say that the rest of the units of the refinery, excepting this distillation unit, work and are working in a normal way. So that means that the conversion units are fully operational in Cartagena. We are going to have an effect in terms of the repairing of this distillation unit that is going to last at around eight months. because we have a combined and integrated system. And you know that our distillation is not at the 100%. It's not usual. What we try is to cover and to fulfill the conversion units. We are solving in logistic terms the normal operation of the conversion using the products from other refineries. So from the point of view of the market, from the point of view of conversion, from the point of view of operation, the situation was fully normalized in the first days. And there is an economic impact, as you mentioned, because, I mean, logistic costs and so on. Roughly speaking, the cost is going to be at around 6, 8 million euros per month during three months, because all the rest is covered by insurance companies and so on. So we could have something in between 18, 25 million euros, all in all, as an impact of this incident. Roughly speaking, that is with the best information we have today, the impact of that event we had on January 26th. On top of that, let me say that this merge first is indicating the attractiveness Spanish and Portuguese market for this business. And that is, let me say, positive. And let me say with my whole respect, both of them, they are good competitors and having a strong competitor and a good competitor in your market, I think that is good news for the market and it's good news for Repsol. We like competition. And let me say that probably it's too early to talk about what could happen after the closing of this merging process and so on. But I think that it's positive to see dynamism in the service station market in Spain and Portugal. That is in some way fruit of the positive momentum and experience we are seeing in our markets in commercial terms. Thank you, Guillermo.

Perfect. Thank you. Thank you, Guillerme. Our next question comes from Irene Jimona at Verstein Societe Generale.

Thank you very much, and congratulations on a successful year in terms of your asset rotation program. In the upstream, you exited, you sold assets in Indonesia and Colombia last year. You also reported a CO2 emissions reduction of nearly 300 000 tons i wanted to ask if you can give us a sense roughly what proportion of that emissions reduction was organic if you like versus emissions sold please and then my second question is on capital allocation priorities and thank you for guiding on 2026 cffo and net capex at your new scenario. And I don't know if you want to leave these for the CMD, but I wanted to ask about 2026 upside and downside to your base case, given the near impossibility of getting the commodity right. So the balance sheet is strong. in a higher $70 brand scenario and in a lower $50, let's say, stress scenario, should we assume that your key lever would be the share buyback or would you also look at changing gross capital expenditure? Thank you.

Thank you, Irene.

I mean, first, let me elaborate that because in the reporting of scope one and two emissions, we only consider operating assets. The inorganic disposals in the upstream, I mean Indonesia and Colombia, they don't have any impact in this scope one and scope two emissions reported. So the improvement comes mainly from the continuous efficiency effort coming from the industrial area, refining and chemical, that in some way has been offset this year, partially by the increase of the activity of the CCGTs, the combined cycles in Spain. You know that after the blackout of April 28th, the Spanish power grid operator, Red Electrica, dramatically changed the operation rules, opening or giving more role to the CCGTs to avoid frequency and tension volatility in the grid. And for that reason, I mean, the operation level for CCGTs since April has been higher than before. So the net is an improvement with a real improvement coming from more efficiency, you know, refineries and chemical plants and more emissions coming from the CCGTs because the activity for this operational mode in the Spanish electric system has been higher. So if we go to our capital allocation, But first, let me say that when we talk about Brent, our central scenario goes from $60 to $65 a barrel. As of today, the Brent has been over this year at $66 a barrel as average, and today the price is around $70, $71 a barrel. I see more room for, with the current information, of course, things could change, as you perfectly know, Irene, but I see more room for upside than downside. As I mentioned before, we have upsides that are going to come for this prime price, probably. Secondly, from Venezuela, as I mentioned before, the metrics of cash flow from operations in Venezuela, this potential improvement is not included in the range I mentioned before. We have to look at the impact that the extremely cold winter, January and the part of February in North America, is having on our gas business. gas downstream business in North America, plus the Enrehab price, because remember the indication of price I gave before, and in case of having, let me say, $50 a barrel in the stress scenario, that, I mean, now is not the central scenario, but that, of course, could happen. I mean, you know that we have the capacity in the oil side of the unconventional to reduce a bit the capex. In the gas side, of course, it's going to depend mainly from the Henry Hub. And let me say that our distribution guidance and our distribution priority is going to work under any scenario, positive or acid scenario. Thank you, Irene.

Thank you very much.

Thank you very much, Irene. Our next question comes from Viraz Borkataria at AirBC.

Hi, thanks for taking my question and looking forward to the CMD. Just two questions. The first one's on asset rotations. You mentioned the smaller gap between gross and net capex this year. Is that a function of your view on the market and when it's best to transact, or is it just a function of you having done a lot in the last couple of years and so there's less assets going through the system? And then the second question is on the customer segment marketing. That business has done exceptionally well over recent years. You've sold, this is more for the CMD, but you've sold minority stakes in the upstream and renewables in order to provide those sort of value markers. Would you consider doing something similar for that segment? Thank you.

Thank you, Viraj. I mean, going to, as you said, the shorter gap between gross capex and net capex, the main reason is that in the EMP, I mean, we are not forecasting or seeing in our portfolio. I mean, that could happen. Of course, disposals or acquisitions depending on the dynamic of the market. But remember that we have a clear target in the first years of this plan to reduce the countries where we were present in the EMP business. And now with 10, 11 countries we are comfortable with. So we are not factoring any disposal coming from the EMP business. And if we go to the to the low-carbon or renewable generation business. I mean, our comfortability comes from two sides. First, because in Spain, as I mentioned before, we have, at the end of the road, a rotation of 700 megawatts. I mean, it's in the final part of the process, so we are comfortable with it. We already rotated in the US outpost and the caching came The tax list came just here, but the cash-in coming from the partner came this month in February. And I mean, that is the main reason for having, let me say, a shorter gap. First, the answer, we are not considering any minority divestment in this segment of of marketing or customer-centric business. I mean, we see that, I mean, we are in the Iberian Peninsula with our industrial and customer businesses. They are in some way fully integrated. We have a common view about our leadership in the Iberian Peninsula in energy terms. And what we are seeing is that there is room for growth in this customer-centric business. So, we'll talk about that in the Capital Market Day, but we anticipate that two years, the growth forecast by 2027, in 2025, but we are going to go on in this growth roadmap. Our mobility business, including the non-oil part, is growing. And it's going to go on in this sense, growing in results. Our retail power business is clearly growing in number of customers and in cash flow from operation. Our lubricants is also performing the right way and growing. The aviation segment is very positive. I mean, let me say that that is a quite interesting reference because I mean, it is, of course, the work of our team and the good performance of our team, and also taking advantage of the place where we are. This year in 2025, we sold the 10% of the total SAF sold in Europe. And that is, I mean, first, because we have a strong position in Iberia, but because Iberia has a strong position in aviation terms, in Europe and in the world. We received last year more than 100 million visitors, tourists in Spain. I mean, the second country in the number of visitors after France and the second one in revenues after the US. So, I mean, all that is pushing our mobility businesses up and that is going to go on in coming years. So in this context, we prefer to go on in this advantage we have we are leading in terms of brand in terms of digital support for these businesses with this multi-energy offer and we are going to go on growing in this business let me say that it's quite hidden because we are always talking about cmp refining and so on and that is okay but if you check the figures and the figure i have in mind probably perhaps i'm wrong but this business had a free cash flow of one billion euros in 2025. I mean, that's growing. So, no, we don't have any intention of considering any minority divestment in this segment. Thank you, Villas.

Thank you.

Thank you, Villas. Our next question comes from Ignacio Domenech at JV Capital.

Yes, thank you for the presentation. Two questions for me. The first one is just wondering if you could provide an update on North America upstream? Okay, what are the plans for 2026 in terms of adding rigs in North America? And my second question is related with the blackout in Spain in 2025. I was wondering if the company's planning or what is the possibility that the company could receive a compensation? from the economic loss of the blackout in the industrial operation. Thank you.

Gracias, Ignacio. Thank you. I mean, upstream of America, mainly three parts of the portfolio. Alaska. Alaska is going to start the first oil this quarter in March. And as I mentioned before, ARAMPAP achieving 80,000 borrowers a day gross. You know that we retain 49% of the stake in this project by the third quarter. So, and on top of that, I mean, I'm not going to elaborate now, but remember that in Alaska, we have a Pikachu, we have Quokka, we have a clear possibility of growth in this state. And of course, we are working in the direction of the feed and so on about the analysis of a potential future FID for Pikachu. But now, fully focused on the production. Second, the Gulf of America. There, we have the productions we already had before that are Backskin and Sensi. And we put in operation the Leon Castile project. I mean, perhaps I have a mistake, but Today, we have three wells connected. I think that we are going to connect the first one in May, June. And connecting the fourth one in May, June, we are going to achieve the net repsol of 20,000 barrels a day. Going to the unconventional, we put in operation a rig in Marcellus in September. This rig is operating and it's going to stay the whole year, 2026. In Venezuela, sorry, in Eagle 4, I was thinking, I mean, after so many questions about Venezuela, in Eagle 4, we put in operation a rig in October, I think, September, October, and we are going to stay there until the second quarter of this year. Because, you know, the oil price is not exactly at the point that the gas price is always... And again, someone could think that... perhaps we could be more aggressive, put in more rigs and so on. I mean, remember the history of the unconventional. If you are prevalent, if you are fully focused in maintaining your high productions and so on, you could be clearly free cash flow positive in these assets. If you start increasing in a dramatic way your capex, the risk of having inflation of cost in the area and so on, it's always there. So we have a fully positive view, but in the framework of this financial prudency in the area. The blackout, you know that there is still an ongoing investigation led by the regulator, CNMC. I mean, I prefer not to enter in the public debate about the origin of the blackout because I prefer to read this important analysis about what happened that day. You know the consequences for Rapsol. Let me split because remember that in April, May, June, we talked about three different events. One of them, nothing to do with the blackout. That was a problem with the distributor in Puerto Llano. And we had a secondary event in Cartagena that could be related to the origin of the blackout, but it's a different event. Going to the blackout, the big blackout of April 28th, the potential claim only of this event is around 125 million people. euros that we consider recoverable, not about the rest of events. And I mean, we are waiting for this report to have more clarity about the potential responsibles of these events. But in any case, we are going to start a claim in legal terms before the end of February in the in the time where, in legal terms, this claim is allowed. I mean, I don't know what is going to happen because I don't have a crystal ball, but let me say and let me remind you, Ignacio, that there was a resolution taken by the Spanish Supreme Court in 2022 ratifying a full compensation to Repsol's affiliate, Petronor, with 18 million euros for those those 12 minutes of blackout that we suffered at that time in Petronor, in one of our refineries, that of course provoked the full blackout and the shutdown of the refinery for days, and we were fully compensated. So, roughly speaking, 18 million euros is a figure very close to the impact of every of our refineries of the blackout we suffered in April, because we have to consider that we have five refineries three chemical sites, Porto Llano, Tarragona, and Sines in Portugal. So we are preparing this case, waiting for this report, attentive to that. But in any case, we are going to work in legal terms to have a fair compensation for this impact on our industrial plants. Thank you, Ignacio.

Thank you very much.

Thank you very much, Ignacio. Our next question comes from Fernando Abril at Alantra.

Hello, I'm John. A few questions, please, if I may. First, on upstream production, you close the year with 544,000 barrels and you go to 560 to 570. My question is how should we think about the production ramp-up through the year and where do you expect output to stand by year-end 26? Second, on refining margins, you've mentioned there are very strong refining margin premium year-to-date. So what are the main drivers and how sustainable – And additionally, what is the potential upside you see from the possible recovery of Venezuela and crude cargoes? And last, recent press reports mention about the federal Supreme Court ruling for GALP, and I think BP as well, regarding the regional hydrocarbon tax in Spain. I don't know if you have similar claims. I don't know if there could be also a material financial impact or recovery for you as well. Thank you.

Buenas tardes y gracias, Fernando. Thank you. Going to the upstream production, I mean, the main increase is going to come from, as I mentioned before, the ramp up of Leon Castile, that today could be Leon Castile in a production of net 12,000, 13,000 barrels a day. And as I mentioned before, it's going to go up to 20,000 barrels a day. Alaska, clearly speaking, is going to be one of the drivers of this growth. We have a positive impact that could be at around 10,000 barrels a day, roughly speaking, in the UK, due to, first, the effect of the merge with high-tech, creating NeoNext last year, plus the preemption process of CalAIM, the gas asset production that could have a production at around 40,000, 45,000 barrels a day, roughly speaking, gross, and was incorporated to the JV at the end of the year. So on top of that, Of course, you are going to see some natural declines and so on. And at the end of the year, we could have, after these ramp-ups, a production close to around 580,000 barrels a day. And the average of the year, because as I mentioned before, a part of this growth, Alaska, Leon Castilla and so on, is going to happen over the whole year. So you have to take the average of the year. The average of the year is going to be at around 560, 570,000 barrels a day. Refining premium, main drivers, of course, again, and take, Fernando, please, as an indication, my comment, because I don't have a crystal ball. But there are two solid fundamentals for this increase in the premium and for the sustainability of the premium. First is that we are seeing that in the market. So that is not something that is going to happen in the future. It's going to be increased in the future, but it's happening today. It's the supply of heavy oil in the Atlantic Basin. And Venezuela is going to change the game soon. in this sense. So, more heavy oil in the market means, first, a capacity to fulfill our conversion units, mainly cokers, that is higher, so a higher utilization of our conversion units, plus, I mean, more pressure on prices, pushing prices down in discounts, increasing discounts in the case of of heavy oil. So that is very important for our system and it's very important for the premium we could capture. On top of that, BIOS. Remember that last year, I can't remember the exact figure, but we could have a figure in average close to 550, maximum 600 dollars per ton as a margin of HBO minus UCO for the HBO and BIOS production. we were seeing for the whole year a figure close to $850 per ton this year. But the reality is that as of today, the figure is at around $1,200 per ton. That means that that is supporting also a higher premium. So on top of that, we have a Energy efficiency, we have a good operation on many things. But the main drivers for this, let me say, premium momentum are both I mentioned before. And for that reason, not having a crystal ball, I see them quite sustainable for the year. The potential upside for our recovery of Venezuela, as I mentioned before, I mean, the fundamentals are clear, are evident. We have had and we appreciate the full support of the American government and American authorities to push our activity in the framework of the licenses we receive. And that is, I think, a very positive step that I want to underline and to recognize. Secondly, we have a clear dialogue and a positive dialogue with the government of Venezuela in terms of Taking the contracts we have in the country to support these operations, we are going to increase. And the potential upside in figures terms, we talk a bit more, as I mentioned before, in the Capital Market Day. But the first upside is that we are going to enter in a normal commercial relationship. That means that we are going to be paid by this product. or for this product, sorry, we produce. And secondly, that we are going to have a clear commitment to invest in oil production, to increase the oil production of the country, because we think that that is important for the social and economic development of Venezuela, for the political stability of the country, and it's also very important in terms of building a green dynamic where more oil means more royalties, more taxes, more production for Repsol, and a better future for Venezuelan people. So we are fully committed in this dynamic, and as I mentioned before, the upsides are not included in the figures, in the guidance, in the economic and financial guidance I mentioned before. All that is upside. Going to the Supreme Court ruling, yeah, I mean, you know that As you mentioned, there were some Supreme Court decisions regarding as non-legal the Autonomic Hydrocarbon Tax in the past. We have a very similar claim. Probably, I mean, I'm not a lawyer, I'm a chemist, but I think that in legal terms could be certainly the same. And as happened In the case of GALP, BP, and some others, there was a first resolution, also for Repsol, coming from what is called in Spain the Audiencia Nacional, that was a dismissal negative related to our claim. And we are now waiting the Supreme Court decision. And the Supreme Court decision was positive for GALP and BP. I can't anticipate what is going to be the decision of the Supreme Court for Repsol, because, I mean, it's not in my hands. But, I mean, let me underline that the claim is almost the same or very similar. So I prefer to talk about recoverability and how to do these kind of things in the future, because now I think that we have to wait for a legal decision of the Supreme Court about that. Gracias, Fernando. Okay, thank you.

Thank you. Thank you, Fernando. Our next question comes from Matt Loftin at J.P. Morgan.

Hi, thanks for taking the questions. You've covered a lot of grounds. I'll just ask you two quick follow-ups. On Venezuela, I just wondered if there's any next or additional fiscal regulatory steps that Repsol thinks is required to support you putting forward the activity and investment that you talked about earlier on the call and how you're thinking about how prudently capital allocation towards Repsol needs to be managed within the group balance sheet. And then secondly, aside from the recent outage that you talked about at Cartagena, what kind of planned maintenance schedule you're anticipating on the refining system for 2026 within your guidance and any sort of notable weighting on that within the quarters. Thank you.

Thank you, Matt. I mean, again, as I mentioned before, I'm a chemist, I'm not a lawyer, but let me say that in general terms, and I'm going to add some comments later, but in general terms, the contractual framework we have today in Venezuela for our operations in gas and in oil, is fully valuable and is fully supported by the American government and the licenses we receive. Saying that, we have to adjust small things in the framework of these contracts. And what is positive is that what we have seen, a full cooperation behavior coming from the Venezuelan government to do that because, I mean, they are fully interested in that. We have a close relationship with them. And we have the full support of the energy dominance group in the White House and the full support of the Secretary of Energy and the Secretary of Interior in the U.S. to support our activity and support our operations in Venezuela. So we are... Our operational people and our lawyers, they are working together with them in order to adjust some small contractual terms. But, I mean, roughly speaking, the framework is fully valuable and is fully supported by the licenses we've received from the American government. The Cartagena, the maintenance, scheduling of refineries for this year, it's a year with, let me say... a medium-low turnaround program. This quarter, we have a conversion turnaround program that probably is going to enter some days in the second quarter in the smallest of all refineries in Coruña, that is going to impact mainly in the FCC and the cocker, so the main conversion units of the refinery. We have small units in Tarragona, so the beast breaker that is producing fuel, so it's not, let me say, nuclear, it's not coal in the refinery, in the first and the third quarter. The cocker of Petronor, 26 days this quarter, and I'm checking everything. I think that there is a catalyst change or something like that in Tarragona in the second and the third quarter. So, I mean, in general terms, it's quite a medium, low maintenance year. And on top of that, I mean, we have mainly concentrated in the first part of the year. And I mean, with small reformers, high-dose operation units and some small units over the whole year. But I mean, nothing more significant I mentioned before. Thank you, Matt. Yeah, it's okay. Thank you.

Thank you.

Thank you very much, Matt, for your questions. Our next question comes from Henry Patricot at UBS.

Hello, everyone. Thank you for the update.

Two questions, please. I come back to Venezuela. You mentioned earlier that you anticipate preparing to lift cargoes again for payment for the natural gas production. Would that be just for current production or do you expect that you'll get payment for the past production for which you were not paid for almost the past year? And then secondly, on the cash tax payment, which was quite low in the fourth quarter and the for year 25 as a whole. Just wondering as we look at the 2026 cash flow guidance that you mentioned, what sort of cash tax payments have you assumed? Thank you.

Merci, Henri. In Venezuela, I mean, my approach now is step by step. I think that now is time first to recover a normal commercial operation, so being paid by the production we have, that will be a significant step. I think that it's time to use a part of these proceeds to invest in the country and to increase the production. I think that The future of Venezuela is important, of course, for Venezuelan people mainly, but I think that it's also important for the operators that we are in the country, and Repsol has been there for years, and we have to be part of the recovery of Venezuela. So to do that, we are fully focused in recovering, normalizing, or assuming the normal commercialization framework, to invest to increase the production in a quick way in Venezuela. I mean, I personally even took a public commitment in an statement that we are going to multiply by three in three years the production in Venezuela. That was not blah, blah, blah, was fully checked with my team, was fully analyzed. And we see also room in the short term to increase in a 50% of production in one year in Venezuela. That is now our priority. I think that if we enter in a win-win dynamic, if Venezuela recover a normal production, if the economic development of the country is evolving in the right way, I'm sure that we are going to find frameworks and solutions to talk about the past. But now is not the priority. The priority is to recover a normal framework of operation and commercialization of the products in Venezuela. So that is not now on our agenda in the short term. It's of course in our balance and that is all right, but that is not in our agenda. And as I mentioned before, we are not including these figures now and we talk about that in the CMD. cash tax payments that we are assuming in 2026. I mean, the figure could be something in between the 15 or the 20% over the, I mean, refer to the cash flow from operations. I mean, as some kind of guidance of the volume of these tax payments that, of course, is before the cash flow from operations. I mean, between the EBITDA and the cash flow from operations, but as a guidance, it could be a figure close to a figure I mentioned before.

Thank you, Henry. Thank you very much, Henry.

Our next question comes from Paul Redman at ExxonBNP Paribas.

Hi, thank you very much for your time. Just one question. Your upstream operating income is down around 50% quarter on quarter. I just wanted to see if you could talk me through the main moving parts and then how we should think about that as we look into 2026. Thank you very much.

Thank you, Paul. I mean, it's true that there is a reduction of the operating income in the uptrend in the last quarter, and there are two factors for that. When you analyze quarter after quarter, it's the Brent price evolution that grows, I mean, clearly. uh lower that is the main reason the secondly i mean you also have to take into account that there are two disposals colombia and indonesia and probably what is more important is that there are 80 million probably speaking of exploration uh costs in the last quarter that are uh influencing the the result of of the of the after so the the main reasons i mean uh that is, I mean, the explanation, I mean, oil price, Indonesia and Colombia disposals, and probably what is the most important fact in numeric terms in the last quarter, that is that 80 million of exploration cost that we used to, I mean, because we don't have any expectation of develop these projects, and the

we pass this cost or factor this cost in our piano thank you paul thank you very much paul for your questions uh that was our last question today with this we will bring our fourth quarter conference call to an end thank you very much for your attendance