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CNBC Transcripts: CNBC Broadcasts Live Interviews from CERAWeek by IHS Markit Today, Tuesday, March 12

CNBC's Brian Sullivan Reports for the Network

Following are the unofficial transcripts of CNBC interviews that aired across CNBC's business day programming today, Tuesday, March 12th, live from CERAWeek by IHS Markit in Houston, TX including: Joe Kaeser, Siemens AG President and CEO; John Hess, Hess Corp CEO; Mike Wirth, Chevron CEO; Mohammad Barkindo, OPEC Secretary General; and Bob Dudley, BP CEO.

For a roundup of all CNBC's coverage of CERAWeek by IHS Markit, go to: https://www.cnbc.com/ceraweek/.

All references must be sourced to CNBC.

First On CNBC: CNBC Transcript: Joe Kaeser, Siemens AG President and CEO on CNBC’s “Squawk Box”

Video: https://www.cnbc.com/video/2019/03/12/siemens-ceo-on-a-potential-european-slowdown-the-us-china-trade-talks-and-whats-in-the-pipeline.html

JOE KERNEN: Growth in Europe looks at for, what could be a slowdown. That’s according to a new forecast from the European Union and the ECB. Growth targets were slashed for all the major economies in the region including Germany, France, and Italy. For more on the Euro economy, let’s welcome Joe Kaeser, Siemens AG President and CEO. Joe, thanks for joining us today. Is that –

JOE KAESER: Good morning.

JOE KERNEN: Are you in the middle of what -- as you look around at Siemens’ business, do you see indications that there’s a slowing in the general economy in Europe?

JOE KAESER: Well, we haven’t seen it in our business yet. I actually like what I see in terms of automation, industry, and health care. So, we’re doing well there. But, as a matter of fact, the economy has been slowing down. If you look at the biggest industrial sector, such as automotive -- ultimately the tool making environment has been slowing down. Not unexpectedly because we have been at the peak of the site—I could definitely see that, you know, it’s getting a bit slower.

JOE KERNEN: Yeah. Is that China-related, and is it due to the skirmish between the United States and China at this point? Or there’s got to be other factors involved. But is that part of it, would you say?

JOE KAESER: Well, I believe the world today is not really mono-causiac anymore. Although, I mean, if the two strongest economies in the world have their different way of thinking about things, it definitely does slow down the global trade. I think that’s clear. And we have not only seen deceleration of growth in Europe, we’ve seen it in China. The latest forecast also for the U.S. tell us that it’s going to go south. So, we try to be mindful about, you know, what we can do. The best thing I’ve always done, honestly, is, in those the type of uncertain situations, I talk to my customers. Because they pretty much know what their demand is, what their customers think. That’s always a reliable way of managing a company through a slowdown.

JOE KERNEN: So Joe, you operate in China. You have for a long, long time. You’ve got a lot of employees there. You’re a technology company. If I were to ask you to pick a side, United States or China, in the discussions that they’re having, do you have similar concerns to the Trump administration and the way China conducts business or are you going to give me a very -- an answer to not ruffle feathers anywhere? Can you pick a side?

JOE KAESER: No. I wouldn’t. Why should I? Look, the United States of America is our biggest country, it’s twice as big as the next one, which is, by the way, Germany and then followed by China. We’ve got more than 50 thousand people here in the U.S., we’ve got – we’ve invested more than $40 billion in the next 15 years. So that’s the United States. Which is, we are here today and I feel good about it. And then China, I mean, it’s been about 60 years, with 40 thousand people, about $10 billion. They’re our customers. And so, what we don’t like is if people talk about each other. You always like to have people talk to each other and find a common ground and get the differences out of the way. That’s what we have been as a company. And it’s been around 170 years. So, what I would really like to encourage people is talk to each other. Find a way. There are natural disputes. I can see that. You know, if there is unfair trade, we need to go fix it. If trade deficits result from the fact that, you know, people confuse the lack of competitiveness with unfair trade, then innovation and productivity is the key here and not additional tariffs. Because at the end of the day -- and you see that -- we’ve been all suffering from a global slowdown.

JOE KERNEN: Hey, Joe. For years we’ve always talked about Siemens and General Electric not only as being, you know, competitors, but also as being similar in terms of the asset mix. Has GE -- have their -- the troubles at GE, has that helped Siemens? Or has it illustrated to you that maybe the conglomerate business model or power or whatever, you know, parallels you want to draw, maybe you’ve learned from that. Has it helped Siemens or have you actually learned that maybe you want to do things differently than GE?

JOE KAESER: If you want me to pick sides here, that’s a bit simpler than between China and the U.S., obviously. But look, I’m not commenting on my competitors’ challenges. It’s obvious that they need to go fix things and they have a strong CEO in the meantime, so I believe they will get their way. The question actually is, to us, first of all, I tell my people, ‘Take your head down,’ you know, ‘Focus on your customers. Be innovative.’ By the way, we just today announced Siemens is the number one on patents in Europe, way before all other companies including the Huawei’s and the others in this world. So, innovation is the key to be successful; definitely, it has always been the life blood of companies. But I think the lesson learned for our conglomerates struggling is that in today’s world, focus matters much more than synergy, adaptability of corporate cultures matters much more than size. And I think that’s the lesson learned. And if you look at what we have done in Siemens in the last five years was a significant, a significant focus on the business. And there is going to be more. So, people should watch our capital market and just see that the focus is going on in Siemens and we focus the company even more on industry and health care.

JOE KERNEN: Joe, we’re out of time, unfortunately. Because I was going to ask you to take a side in the Brexit, EU vs the UK. But I know you would -- you’d be very tactful in that too, but we’re out of time, so you’re saved by the bell here, Joe. Joe Kaeser, please come back and give us an update here. Good to have you. Thanks.

JOE KAESER: Thank you.

CNBC Exclusive: CNBC Transcript: John Hess, Hess Corp CEO on CNBC’s “Squawk Box” with CNBC’s Brian Sullivan

Video: https://www.cnbc.com/video/2019/03/12/investment-is-key-challenge-for-oil-and-gas-industry-says-hess-ceo.html

BECKY QUICK: Key players in the energy world are gathering in Houston this week to talk about the biggest issues facing their sector. Brian Sullivan joins us right now from the annual CERAWeek Conference with a special guest. Hey, Brian.

BRIAN SULLIVAN: Hey Becky, Joe and Andrew. It’s a name and guest that you know very well. John Hess. He of, yes, the toy truck at Christmas time, Andrew. We might get to that. Thank you very much. John Hess of Hess Oil. Great to see you, John. Thanks for being with us.

JOHN HESS: Great to be here. Thank you.

BRIAN SULLIVAN: You know, it’s funny. Because Jim Cramer has noted very adjointly that the stock market is in some ways controlled by the price of oil these days.

JOHN HESS:That’s right.

BRIAN SULLIVAN: Is $53 to $55 a fair price for oil right now?

JOHN HESS: Well, Brian, the key challenge for the oil and gas industry is investments. And we’re simply not investing enough in oil and gas to grow supply and keep up with demand to offset production declines. The International Energy Agency has made very clear that that number should be $580 billion a year. Three years ago, it was $350 billion. Two years, $370 billion. Last year, $410 billion. And this year $420 billion. So the price has to be high enough to encourage that investment.

BRIAN SULLIVAN: But I don’t need to tell you that if you’re a shareholder in a company like a Hess or any other and you start spending a bunch of money on exploration, I’m going to be upset. Because I want free cash flow. I don’t want to hear about E&P. I want to hear about ‘What’s my dividend? What’s my cash flow?’ How does that balance out long-term? Or does it, and the price of oil goes back to $100?

JOHN HESS: Actually, that’s a great question. Investor expectations in the last year have changed along the lines you’ve talked about. I’d say investor expectations a couple years ago was ‘Drill, baby, drill.’ Now it’s, ‘Show me the money.’ What does that mean? The focus used to be on production growth. And now, it’s on return of capital. And what’s interesting in the last year, a number of shale producers, actually most of them at the prices we’ve had the last three or four months, their spending actually is starting to go down in response to the pressure from investors to say, ‘Hey, look, we want you to have capital efficient growth but we want you to live within your means and return some of the capital along the way.’ So, I’d say the investor proposition, the hearts and minds of investors have to be regained and we’re going through that. What’s interesting is last weekend, I know Becky interviewed Darren Woods-- great company, ExxonMobil, they’re plowing ahead in the Permian. Chevron’s plowed ahead. So the major oil companies are accelerating their growth. What’s interesting is the majority of shale producers are actually tapping the breaks, cutting back so they can live within cash flow.

BRIAN SULLIVAN: You know, I love the interview, too, you said about Darren Woods with ExxonMobil, right? And everybody here guys is talking about the Permian.

JOHN HESS: Yes.

BRIAN SULLIVAN: What about the Bakken up in North Dakota? You guys have a rather unique portfolio. You’re in Latin America. You’re in the Bakken of North Dakota. Do you feel like investors don’t give you enough credit because there’s so much attention on the Permian, that we’ve kind of forgotten about the other areas?

JOHN HESS: There are three major oil shale basins in the United States. One is the Bakken, one is Permian, and one is also the Eagle Ford. What’s important to know is we have a 15-year inventory of drilling locations in the Bakken. And we’re growing our Bakken 20% to go to 200,000 barrels a day. And then we’re going to do what investors want shale producers to do. We’re going to run it to be a cash generation machine. I think the key thing about our portfolio is that it’s a balanced portfolio and it’s the best rocks for the best returns. We have the best rocks in Guyana, where we participated in one of the largest oil discoveries in the last five years. And we have over 5.5 billion barrels of oil equivalent reserves that we’ve discovered there. Exxon is the partner. We have 30%. And we also have the best rocks in Bakken. So, it’s about generating the highest returns. By doing that the key point for us is that we can grow our cash flow 20% out to 2025. And our production, we can grow 10% a year out to 2025. Any business where you can grow cash flow at twice the rate of the top line is a business you want to invest in. Most shale producers can grow, but not generate free cash. Major oil companies can generate free cash, but they can’t grow. In Hess’ case, we can do both. And investors are starting to notice it in our side--

BRIAN SULLIVAN: -- Yeah, and it is really a, guys, it is a cash flow story. And the one thing – and I know they’re going to work on your ear piece, just give it a second here if we can, John – which is everything is about costs now, guys. A couple of years ago, and I think this is my tenth year at this conference, it was all about growth. To your point, ‘Drill, baby, drill.’ Now it’s, ‘Show me the money.’ I love that line. I might steal it, by the way, John.

JOHN HESS: It’s okay.

BRIAN SULLIVAN: Which is, keep your costs down. Be profitable at $40 a barrel. You guys at Hess were able to extract $2 a barrel, nearly, in costs, in a year.

JOHN HESS: Yes.

BRIAN SULLIVAN: I mean, pretty impressive.

JOHN HESS: Thank you.

BRIAN SULLIVAN: But how low can that honestly and realistically go? How many more costs are there to take out of this?

JOHN HESS: It’s probably about another $3 a barrel. We are able to reduce our costs from 2017 to 2021 by about 30%. We are about halfway there. And it’s—

BRIAN SULLIVAN: Are you profitable at 40?

JOHN HESS: We actually are going to make our portfolio so it’s resilient at $40, Brian. We’re on that pathway now.

BRIAN SULLIVAN: John Hess CEO of Hess Oil. What is the car this year? Can you reveal?

JOHN HESS: It’s a special secret. I can’t even tell my kids or my wife. So, it’s a top secret –

BRIAN SULLIVAN: It’s that secret?

JOHN HESS: It is that secret. I want them to be surprised, just like you and your kids.

BRIAN SULLIVAN: We will. John, thank you very much. We appreciate you joining us.

JOHN HESS: Thank you.

CNBC Exclusive: CNBC Transcript: Mike Wirth, Chevron CEO on CNBC’s “Squawk Alley”

Video: https://www.cnbc.com/video/2019/03/12/watch-cnbcs-full-interview-with-chevron-ceo-michael-wirth.html

MELISSA LEE: The 38th Annual CERAWeek Summit bringing together the biggest names in energy. Brian Sullivan is there with exclusive access. He joins us now from Houston with another exclusive interview. Brian?

BRIAN SULLIVAN: Hey Melissa, thank you very much. We’re pleased to be joined by Mike Wirth. He is the CEO of Chevron. Mike, thanks very much for joining us. I’m going to look around because we’re in Texas. I’m going to be careful here. Because the Permian Basin has been getting so much attention. I wonder, does the Permian sort of suck all of the air out of the room in some ways? That people look at Chevron and say, ‘Well, you’ve got this great Permian spot.’ Do they kind of ignore or forget about the other assets you have?

MIKE WIRTH: Well, that can happen because the Permian is kind of the newest thing in our industry, And, it is terrific. And we’ve got a really large position there, and it’s a very attractive position and we’re growing fast. It’s the fastest growing asset in the portfolio, but it’s far from the only thing in our portfolio. So, we are, you know, a global company with positions around the world all of which are important to us. The Permian is, but certainly, not be the only thing.

BRIAN SULLIVAN: It’s funny, because you like to talk about, and I’ve heard Melissa actually ask on “Fast Money,” her show, ‘What’s the next Permian?’ Can we export that shale technology? When I look at your portfolio, I’ve talked to a couple of analysts, and they’ve said, ‘Ask him about Argentina and the opportunities for sale there.’ Why?

MIKE WIRTH: Well, because there’s a basin there, called the Vaca Muerta Basin, which is quite large. And we are producing there, in a joint venture with YPF, the Argentine company, And it has many characteristics in common with the Permian Basin. So, the geology looks quite similar. And as we’ve applied some of the things we’ve learned in Texas down in Argentina, we’ve seen the productivity of this asset emerge in a way very similar to the Permian Basin. So, it is promising for Argentina and there are other places in the world you could see similar kind of things evolve.

BRIAN SULLIVAN: Where do you stand in Argentina? I mean, where is the process? We’ve heard about shale technology, also in Saudi Arabia, of all place. Are there other Permians out there?

MIKE WIRTH: Well, there are certainly other basins with unconventional geology. They are each a little bit unique. And what makes the Permian quite so special is there are so many layers of stacked resource that it is just prolific in terms of size. Argentina looks similar to this. We’ve got a position in Canada that’s very attractive. So, there are a number of other places in the world where we could see similar things evolve. It is early days and the Permian is most advanced, but for us the economics and productivity and some of these other assets look quite similar.

BRIAN SULLIVAN: I’m glad you mentioned Canada. Canada was the hot thing ten years ago. Everything was about the oil sands. Then the price of oil collapsed. It is very expensive. But there’s something new happening in Canada that I understand with you guys. Is Canada about ready to have a second act, if you will?

MIKE WIRTH: Well, we’ll see. What we are producing in Canada in Duvernay is used really a diluent, so it works with the heavy oil as opposed to upgrading it in an upgrader there. Canada is a resource-based economy. They have a tremendous endowment on natural resources of all types. And we’ve had a long history there. So I think you’re going to continue to see our industry be a great partner in Canada, and I think it will be a big part of the Canadian economy.

BRIAN SULLIVAN: Climate change, getting more focus here, as it should, but now some members of Congress calling, Mike, for a so-called ‘Green New Deal.’ There are people who would like to see a petroleum-free world. Last time I checked, you guys sold some petroleum. Is a Green New Deal possible?

MIKE WIRTH: Well, I think the Green New Deal is an attempt to try to have a different conversation. And if that leads to an honest conversation about how we balance energy supply for a growing world, economic development, and the environment, I think that’s a good conversation to have. Brian, there are 7.5 billion people on the planet today, a billion of whom have no electricity. Twenty years from now, there will be 9 billion people and a world that’s growing both from a population standpoint and an economic development standpoint. That needs more energy, we need reliable, affordable, and ever-cleaner energy to support a growing population.

BRIAN SULLIVAN: Melissa.

MELISSA LEE: Michael, you announced $20 billion in CapEx in 2019, which is the first increase in CapEx in about four years, after four years of declines in that area. We heard much the same from the ExxonMobil CEO at its investor day I think a week ago, or two weeks ago, that they want to lean in while others are pairing back. And I’m wondering if there is a competition out there developing for assets and how you plan to use that 20 billion?

MIKE WIRTH: Well, we’ve got a very strong portfolio which gives us the ability to have a balanced approach to investment in our business where we’ve got growing production, less risk, and discipline spending, which leaves plenty of free cash for shareholder distributions. So we are able to balance shareholder distributions with growth in a way that is really underpinned by the very strong and attractive portfolio.

BRIAN SULLIVAN: Any deals on the horizon, Mike? Exxon did a big deal a few years ago. BP did a big deal. Where’s the Chevron M&A?

MIKE WIRTH: Well, you’re always looking. Because no matter how strong you feel your business istoday, we are in a depleting resource business, and so, you want to add things to the portfolio and you’re always looking to get better. So, we’re always looking but we’ve got a really strong position today, we don’t need to do anything. So, you only look for things that make you -- better.

BRIAN SULLIVAN: Do you think U.S. assets are overpriced, if you did poke around?

MIKE WIRTH: You know, I think the capital markets have begun to withdraw a little bit of the flow of funds into some of the smaller companies, which for a long time enabled them to pursue growth without necessarily delivering the financial results that the market was expecting. So we have seen a bit of a shift with some of the E&P companies.

BRIAN SULLIVAN: Following up on Melissa quickly, would you have a better deal, if you would, buying overseas? Does international assets look more attractive than U.S. assets right now? From just purely a return on invested capital basis?

MIKE WIRTH: You know it all comes back to the rocks and the underlying geology. And so, really what we do is we go where the resource is good and the economics and fiscal terms look good. And we have to manage risk, because there’s risk everywhere we do business. A big part of our business is understanding and mitigating those risks. So those are things that drive us. There’s a more complex situation than simply the price.

BRIAN SULLIVAN: Mike, we appreciate your time with us here at CERAWeek for CNBC. Thank you very much. I’ll send it back to Contessa Brewer. Contessa.

First On CNBC: CNBC Transcript: Mohammad Barkindo, OPEC Secretary General on CNBC’s “Fast Money Halftime Report”

Video: https://www.cnbc.com/video/2019/03/12/opec-secretary-general-on-saudi-arabias-oil-production-venezuela.html

SCOTT WAPNER: OPEC Secretary General just finished speaking at CERAWeek down in Houston. Our Brian Sullivan is with him, live, with breaking news. Brian?

BRIAN SULLIVAN: Yeah, Scott, thank you very much. Pleased to get a few minutes here with Mohammad Barkindo. He is the Secretary General of OPEC. Mr. Secretary General, thanks for spending a little time with CNBC. First and foremost, I’m sure you’re getting daily updates. What is the current status of oil output from Venezuela?

MOHAMMAD BARKINDO: Thank you very much Brian for having me. The situation in Venezuela is of concern. Not only to producers around the world but also to us in OPEC. As a founding member of OPEC, as the country that holds the presidency of OPEC this year, we are following with great attention developments in this very important country.

BRIAN SULLIVAN: Do you believe they are below a million barrels a day right now, though, Mr. Secretary General?

MOHAMMAD BARKINDO: I’m not in the position to give you exact number. We are meeting in Baku, Azerbaijan and the Joint OPEC-non-OPEC Ministerial Monitoring Committee that evaluates data from member countries and data provided by second resources, and Venezuela will be in attendance. And hopefully we will be able to get the full picture.

BRIAN SULLIVAN: Who are you actually dealing with, sir? Because the, as you said, the Venezuelan Minister Quevedo is the President of OPEC this year but yet the government is not being recognized by more than 50 nations. Who are you actually speaking with? The current Oil Minister or a new Oil Minister under the Guaido administration?

MOHAMMAD BARKINDO: OPEC is not a political organization. What has kept us going in the last almost 60 years is our ability to the depoliticize oil, our ability to isolate the organization from geopolitics. We remain focused on our principal objective of working with producers to maintain the stability on sustainable basis. We are also an inter-governmental organization that is registered with the United Nations. So in addition to our statute that guides us, we are also cognizant of the charter and principles of the United Nations.

BRIAN SULLIVAN: Have you spoken with other OPEC nations about their ability to pick up capacity, should Venezuela continue to shrink its output?

MOHAMMAD BARKINDO: The rebalancing of the market is a continuous process. We have been able to achieve some major success, I believe, over the last couple of years through the Declaration of Cooperation. Going into 2019 because of the factors and 2014 fourth quarter was a little bit oversupplied, we are facing these challenges together as a group with the sole objective of ensuring that 2019 also remains balanced across the board.

BRIAN SULLIVAN: At $53 to $55 in WTI traded crude, many would not consider that balanced. Do you believe the Saudis will cut their output again ahead of the April or at the April meeting?

MOHAMMAD BARKINDO: Saudi Arabia continues to show leadership by example. They continue to lead the pack from the front which is highly commendable. Together, with all other parties, all other countries in the Declaration of Cooperation, we are determined to not allow the market to relapse into the equilibrium that we had seen.

BRIAN SULLIVAN: Do you think that was a mistake two meetings ago?

MOHAMMAD BARKINDO: However, I want to reiterate, despite the leadership position of the kingdom of Saudi Arabia, no one country can serve as the swing producer. We need to swing collectively.

BRIAN SULLIVAN: Last question. There’s a bill going through Congress right now. It’s called NOPEC. I know you’re familiar with it. It would outlaw organizations that they view that are engaged in price fixing for oil. It’s been floating around Congress for a while, but it’s gaining steam. Do you think the NOPEC bill has a chance of passing and if does, what will be your response?

MOHAMMAD BARKINDO: NOPEC is not in the interest of the United States, nor is it in the interest of the oil and gas industry that is thriving commendably today in the U.S., also of the rest of the world. We are beginning to see some important voices coming to bear, coming to reason. We are not a political organization. We cannot double into the legislative process in the United States or in any other country. But, the U.S. would best serve its interests without such a legislation. And it is unfair to proceed with such a legislation if it is targeted against an organization such as OPEC that had done exceedingly well in its noble objective of achieving and maintaining stability in which the oil industry in the United States and by extension the U.S. economy had also benefitted tremendously.

BRIAN SULLIVAN: Mr. Secretary General, thank you for giving CNBC a little time, sir, We appreciate that. Thank you very much.

First On CNBC: CNBC Transcript: Bob Dudley, BP CEO on CNBC’s “Closing Bell”

Video: https://www.cnbc.com/video/2019/03/12/bp-ceo-bob-dudley-on-climate-change-oil-production.html

CONTESSA BREWER: A new IAE report out this week says the United States is set to become the world’s biggest oil exporter in the next five years, surpassing oil giants like Saudi Arabia and Russia. Brian Sullivan is at the CERAWeek Energy Conference in Houston this week, and he joins us live with BP CEO Bob Dudley. Hi, Brian.

BRIAN SULLIVAN: Hey, Contessa, thank you. Yeah, rather good timing to have the CEO of one of the biggest companies in England while the Brexit vote is happening here. Before we get into why you’re here and oil and all this stuff, what is BP doing to plan for Brexit? How do you, as a CEO based in the UK, deal with this?

BOB DUDLEY: We deal with uncertainty all the time all around the globe.

BRIAN SULLIVAN: Not this kind.

BOB DUDLEY: Well, it is another big day, it’s another big vote. But every negotiation I’ve ever been in always goes down to whatever the last day is, the last hour of the deadlines. And I’m not sure this is it. We’ll see.

BRIAN SULLIVAN: But, you are going to stay in England, no matter what happens?

BOB DUDLEY: Yes. We will stay in England. We will --

BRIAN SULLIVAN: Because it used to be British Petroleum.

BOB DUDLEY: And now it’s BP.

BRIAN SULLIVAN: BP. But there was the British there at the first part, Bob.

BOB DUDLEY: Sure. That’s where we’re headquartered. We’re going to stay there. It’s a great place for us.

BRIAN SULLIVAN: But obviously, keen focus. I mean, Brexit. Big deal.

BOB DUDLEY: Well, it is in the country. We’ll see what happens. For BP, our revenues are in dollars. We pay our dividends in dollars. It has less of an impact for BP.

BRIAN SULLIVAN: Let’s talk about dollars because you guys come through a tough time but, man, excuse me, you got me all choked up thinking about your earnings -- cash flow’s have been off the charts and you guys have reinvested in about $2, $2.5 billion. A lot of that going to the Permian Basin. Is there any feeling at all the Permian may be getting overdone in any way?

BOB DUDLEY: Well, it’s a really unusual, big oil field. There’s good parts, other parts that are less good, but it’s very, very thick. You have to run very fast to keep production up. But it’s a great place to produce oil and gas. So, we’re very happy. We have made $10 billion acquisition with BHP at the end of the last year. We just took over the operations on the first of March. Very pleased with it. And it shows confidence in it.

BRIAN SULLIVAN: Yeah. And also, offshore, you know, we were on an oil rig a couple of months ago, one of your competitors, sorry about that, and Thunder Horse, one of your rigs, about a billion-barrel equivalent expected discovery there. How much more money is BP going to put in offshore?

BOB DUDLEY: Well, we do quite a bit offshore, including massive investments in the Gulf of Mexico. We’re probably the largest producer in the Gulf, probably over 300,000 barrels a day. We do offshore in Africa. We do offshore in the UK. These are -- we had our accident. We focus on safety and reliability of those operations. But we have not walked away from water, all all.

BRIAN SULLIVAN: Paid tens of billions of dollars in restitution. Is that over with now or that’s almost over?

BOB DUDLEY: I think we pretty much have it all provisioned. We have up to -- the total cost of the build, $67 billio. That’s a lot to come back for. Now we can plan our obligations, they’re very clear to us and they’re at a lower level now and I think that’s behind us. It will never be out of our memory, though, in terms of how we operate things.

BRIAN SULLIVAN: And obviously, the technology has changed subsistently since then. Now, there is going to be increased cash flow once those payments are provisioned.

BOB DUDLEY: That’s right.

BRIAN SULLIVAN: Where is that money going to go, Bob? What’s the best use for the BP shareholder dollar right now?

BOB DUDLEY: Well, first thing with dollars, we’re going to remain disciplined. I think this is what our shareholders keep saying: ‘Even if the price of oil drifts up, are you going to go out and spend it on lots of capital?’ So we’ve said, very clearly: $15 billion to $17 billion of capital all the way through 2021. We said that in 2017. We’re going to stick with that. We are going to probably take -- notch down our debt. We need to bring that back down and then we have got options. We have got options of dividend increases. We are going to offset this thing called the Script Dividend in the UK so we don’t dilute our shareholders. I mean we’ve got a plan, but let’s see what happens. It’s not precise and it all depends on the actually cash flows that come in. Optimistic about that.

WILFRED FROST: Bob, thanks so much for joining us. I have got a question here from the Stock Exchange. I wanted to ask what you felt about President Trump’s attitude towards the broader oil industry. Is he a friend of the oil industry? Because of late he’s mentioning quite often about how much he’d like to see a lower oil price.

BOB DUDLEY: Well, I can tell you being in the industry, and it’s not just the oil and gas industry, infrastructure companies, industrial companies, there has been a notch back in regulations and decisions are made that is allowing more investment to come. The reduction of the tax rates have certainly led to more investment in oil and gas, including foreign investment in oil and gas. So, I think he understands the value of it as does Secretary Perry.

CONTESSA BREWER: And on that front, we look at news from The Financial Times with documents collated by Green Peace that show that despite BP’s stand on climate change and I know—I read that you’re expected to give a speech tonight calling for more action on the point of the oil industry on climate change, that instead you’re fighting methane regulation, that you’re lobbying the Trump administration to roll back some of the Obama-era environmental regulations. How do you coincide the public stance with what the company is doing?

BOB DUDLEY: Well, that’s a good question because I read that article this morning when I got up and I thought where did that come from, really. We are trying to be leaders on methane emissions, we’ve set targets of 0.2% methane reduction levels, not reductions, levels for the company, reducing our greenhouse gas emissions. I don’t know where that came from. We have been working with the administration. We support direct regulation of methane. We’ve been making investments all through the gas fields to reduce methane leakage. So, I think what we have been doing is working with the Trump administration, making sure that regulations allow for new technologies to come in, not being too prescriptive, but we support regulation on methane.

BRIAN SULLIVAN: You think the article is inaccurate in some ways?

BOB DUDLEY: Well, I think it – yes. It seemed to me inaccurate and overstated. And we made a direct response to that article but that’s not what’s, of course, been repeated over and over.

BRIAN SULLIVAN: On the Brexit issue, I want to go back to what we started with, given that the vote is live right now. And Wilfred might have another question as well—he knows more about Brexit, by the way, he’s forgotten more about it than I know. But if we get a deal, if there is a deal, if there is no hard Brexit, do you think that’s going to benefit companies like BP? Not on the business side. Will it directly benefit your stock?

BOB DUDLEY: I don’t know. I don’t—

BRIAN SULLIVAN: -- a Brexit put?

BOB DUDLEY: I wonder sometimes when I look at all the FTSE 100 companies and we are traded at – we have as much traded on the New York Exchange as here, I’m not sure. But it can’t help but be a little bit of a lift when uncertainty is removed. I don’t know if I see a Brexit lack of premium in our shares. I don’t know if I see that. And again, we are regarded as like a resource company’s revenues in dollars, dividends in dollars, less affected by it. Certainly reduce uncertainty in the UK.

WILFRED FROST: Okay. We are just going to go to the result of this vote, Mr. Dudley. Thank you very much for joining us. Hopefully we’ll be able to come back to you in a moment. Willem, what’s the result?

WILLEM MARX: We’re just getting it in the next few moments, Wilf. If you want to take a listen to the live shot, you should get a good sense of it from them directly. It looks like a significant defeat, though, for the government based on the cheers I’m hearing behind me. In terms of the absolute number, I’ll get that to you in just a moment’s time. But a defeat of course for Theresa May. Very significant for her Brexit proposals. It will mean some real adjustment to what had been her plan to get this deal through the parliament. It will mean, in theory, that there will be a vote tomorrow whereby they have the chance, parliament behind me, to rule out no deal. I want to bring you the absolute numbers on this vote, once I can bring them up here. I’m not getting the live pictures right now. It does seem that this will be a very significant moment for the British parliament to assert its sovereignty. And I’m just going to – I’m going to have to hand this back to you, while we wait for the absolute numbers of this vote, Wilf.

WILFRED FROST: Willem, thanks very much. We’re definitely going to come back to you for a reaction on the ground in a moment. The numbers were 242 in favor of the government motion, 391 against. That’s a defeat of 149. Significant defeat again for the Prime Minister Theresa May. Bob Dudley is still with us. And Bob, if I may, I just wanted to come back out to you for the reaction. You said at the top of the interview to Brian that you deal with difficult political situations all around the world, in a lot of the countries you operate in. Where is the UK in your mind now in terms of business certainty on that scale? Is it right down there towards the bottom with some of the toughest emerging geopolitical hot spots you operate in? Has it lost its star over the last couple of years?

BOB DUDLEY: Well, uncertainty is clearly there and you read about it every day. I think it’s an unfortunate negotiation where I have sympathy for the Prime Minister who is trying to negotiate every day, everything in the press publicly and members of her own party that don’t agree. But I think, again, this isn’t over yet. I think we are not fully sure what the EU will do. It’s quite a negotiation. It will go on, I think, for a number of days here, at least. So, it doesn’t surprise me there’s no certain outcome.

WILFRED FROST: And to go on what you mentioned –

BRIAN SULLIVAN: Bob Dudley, it was a pleasure –

WILFRED FROST: Sorry, Brian.

BRIAN SULLIVAN: Sorry guys.

WILFRED FROST: Just—you are keeping your headquarters and listing in the UK regardless.

BOB DUDLEY: Absolutely. Absolutely. Doesn’t have anything to do with Brexit. It will absolutely remain in the UK.

BRIAN SULLIVAN: Keep the British in British Petroleum—formerly known as. Not Bob Petroleum.

BOB DUDLEY: It’s BP. And it’s not Brexit Petroleum. It’s BP.

BRIAN SULLIVAN: Brexit Petroleum. Bob Dudley, with a sense of humor in a very tough time, we do like that, thank you very much, Bob Dudley.

BOB DUDLEY: Thank you.

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