Good day, ladies and gentlemen. This is Maria Vittoria Tsingoni, Director of Investor Relations in Brussels. On behalf of our company, I would like to thank you for taking the time to attend this conference on Rexall's 2nd quarter results. The presentation will be conducted by Mr. Miguel Martinez, our COO and Fernando Ramirez, the CFO is joining us as well.
Before we start, I invite you to read our disclaimer note. We may make forward looking statements, which are identified by the use of words such as will, spec and similar phrases. Actual results may differ materially depending on a number of factors as indicated on the slide. I now hand the conference over to Miguel Martinez.
Thanks, Mavi, and good day to all of you. And thanks for attending this conference on our 2nd quarter results. This quarter, we are releasing a strong set of results with an important improvement on a year on year basis. CCS adjusted operating income of EUR 1,300,000,000 is 162% higher than the same quarter last year. On a sequential basis, we are maintaining the results presented in the Q1 this year.
The main factors that explain the good performance in the quarter are the improvement in the market environment with higher international oil and gas references and a stronger dollar against the euro, a better performance in the integrated refining and marketing business, the improvement in chemical margins and the continued improvement of our business in Argentina as well the decisions made on cost control in all the areas and the optimization of the chemical business. Let me develop in further detail how these factors have influenced results in the quarter. Starting with the market environment, our oil realization prices increased a 33% compared to same quarter last year. Traditionally, our realization price underperformed the market. However, due to the improvement of our sales mix with larger weight of XEMFI and Libya in the oil basket, it's currently in line with Brent and Texas West Texas variations.
Our gas realization price is higher year on year and experienced a better improvement than the market due to our limited exposure to the hand we have. Regarding exchange rate, the dollar has appreciated against the euro 87 percent to 1.27 dollars per euro versus $1.36 on average same quarter 2009. Going in detail into how the specific characteristic of our businesses have helped results, the integrated refining and marketing margin has performed well, showing the recovery path started at the beginning of the year. The integrated margin for the quarter was 7.38 dollars per barrel at very good levels compared with the $3.95 per barrel a year ago. Regarding refining margins, they increased more than 6 times from a low $0.5 per barrel in the Q2 of 2009 to $3.3 per barrel this quarter, with a sequential improvement of 57% as well.
This is one of the major improvements in the European sector and is the consequence of our refining scheme with important volumes of heavier less feedstock and with high middle distillates yields. As a result, any market recovery and hence, spreads aperture positively affect our refining business. This effect is going to be even more important next year when Cartagena and Bilbao get on stream. Both projects execution remain on time and on budget. The marketing business continued to release strong results.
Even though palm sales have experienced a slight 3% drop, cumulative year on year, robust margins more than offset that effect. In the chemical business, there was an improvement of the market conditions, mainly due to margin recovery as a consequence of the worldwide pulling demand. Additionally, a good cost management and a selective operation of plants concentrating production in the most efficient units, thereby the real in operating results returning to positive ground this quarter. In Argentina, diesel and gasoline prices beat the currency devaluation and the palm price continued their improvement towards import parity in dollar terms, giving continuity to the trend we started 2 years ago. Let me go through our activity in the quarter.
Starting with production, our liquid production improved 30% on a year on year basis. Gas production decreased 8%, affected mainly by maintenance in Trinidad and Tobago and some production sharing contract effects in Algeria, partially offset by the startup of the Peru LNG project. Overall, we have the same level of production compared to the same quarter 2,009. However, we keep on improving the oil gas mix. Regarding drilling activities, we continued this quarter with a very active drilling campaign, finishing 2 appraisal wells and 1 exploratory well during the period.
Regarding the appraisal wells, in Brazil, we finished drilling Piracucar 2 with positive results. In relation to panoramics, the well target a separate reservoir. And even though we feel with the AMP hydrocarbons discovered, it did not deliver the expected outcome. This result contributed to define the limit of the accumulation and does not affect our previous estimates for Panoramics. Regarding exploration, we finished Creality with encouraging results, and the operator is currently working on the next steps to further evaluate this structure.
We are currently dealing 2 exploratory wells, Malteq in Block Speedu Santo 29 and Asterix 1 in block Santos 55 in Brazil. Guara 1 is currently being conditioned for the extended well test scheduled to start flowing in October after the reception and testing of the FPSO in September. Continuing with our exploratory activities and regarding exploratory acreage, we keep up in opening up new frontiers for our growth. We have been awarded 3 blocks in Indonesia, and we have farming in a block in North Sea, PL 356. During this quarter, final investment decision was made for the 1st phase of the Margarita field development in Bolivia, and most of the gas will be delivered to Argentina at a price linked to oil prices.
Also during the quarter, the first gas liquefaction plant in South America in Pampa Amechorita in Peru was inaugurated. The plant is part of the Peru LNG project and was finished both on time and on budget. We have been asked lately how the Gulf Mexico moratorium is affecting our business in the area. Regarding Shenti, we had 2 inspection of the MMS in which we comply with all requirements and production flow was not significantly affected. At present, the platform is producing under regular conditions.
In the case of Bakhtin, we might suffer a delay in the appraisal of the well, which is scheduled for the year end. But it's way too early to evaluate how this moratorium could affect the first oil from this field. To finish, during the quarter, as I've stated in the F 2020, we announced to the government of Iran the decision to abandon the South Par Fields project as a portfolio approach. Moving now into 2nd quarter results. The CCS adjusted net income was EUR 523,000,000, 60% higher year on year and at the same levels on a sequential basis.
Main reasons have been explained before and no major extraordinary events have happened in the quarter. Let me quick review the valuation business by business. In the upstream, the adjusted operating income was EUR 370,000,000, which compare to Q2 2019 result of €172,000,000 so more than 100% higher. The €198,000,000 year on year by region is mainly result of the following factors. Oil realization prices net of royalties had a positive impact of EUR 160,000,000 Increase in sales volumes had a positive impact of €105,000,000 Higher exploration expense higher exploration expenses resulting from better activity decreased results by EUR 51,000,000.
This was mainly due to higher seismic expenses for our operations in Norway, Morocco, Libya, Indonesia and Gulf of Mexico. The appreciation of the dollar against the euro increased our operating result by €26,000,000 And lastly, higher depreciation charges as a result of superior production volumes in the U. S. And other minor items explain the remaining difference. Regarding downstream, we have had better results both on a year on year basis and sequentially.
The EUR 260,000,000 year on year increase is mainly the result of the following factors. In refining, as mentioned before, the margin of the quarter was $3.3 per barrel, which compared to a $0.5 per barrel a year ago and 2.1 per barrel from Q1 has gone through a good improvement. The utilization rate of our refining system in Spain improved on a sequential basis and was at a similar level of the same period a year ago. Both factors have increased results by €94,000,000 The positive performance of the marketing business increased operating income by EUR 22,000,000 supported by the maintenance of strong margins. In Chemicals, we have had good news, achieving a positive result this quarter for the first time since the beginning of 2,008.
The margin was almost double of what we obtained last year. And this improvement, along with tight cost controls, contribute to improve the results by €81,000,000 Last, the dollar appreciation and the good behavior of the rest of the businesses, except LPG, with narrower bottled margins due to the time line effect of the new price formula account for the rest of the differences. Regarding YPF, YPF has had an improvement in results comparing the €95,000,000 we had in the Q2 last year with the €441,000,000 we had during this semester. Even though the production volumes have declined compared to the same period last year, the management approach of focusing in improving the chain value rather than the volume growth has proved successful. The most significant year on year variations, which resulted in a EUR 346,000,000 increase in adjusted operating income are as follows.
Higher dollar prices for liquids at the pump in the domestic market had a positive impact of EUR 253,000,000 on operating income. Higher revenues from exports and from products sold domestically, but linked to international prices, had a positive impact of €159,000,000 Decreased liquid sales volumes had a negative effect of €76,000,000 In relation to gas, higher prices, especially in the industrial sector, were able to offset lower volumes, resulting in a positive valuation of €19,000,000 Other effects, mainly the positive impact of Petrobras explained the remaining variations. The production in Argentina declined 3.9% in oil and 10.5% in gas. The difference in declining rates between liquids and gas sorry, is due to the emphasis on liquid projects, which are currently delivering better economics. Regarding 2nd quarter last year because of the consolidation of Unia and Fennersoft.
Let us cover now our financial situation. We are maintaining a robust financial situation. EBITDA, situation. EBITDA, ex gas not generated in the period, was 7.2% higher than in the Q1. Our liquidity position, cash and outstanding credit lines increased from EUR 6,500,000,000 in the first quarter up to EUR 7,300,000,000 in this quarter, showing consistency in our conservative liquidity approach.
The strong liquidity position we have been maintaining in the last years give us sufficient slack to focus on improving the financial cost. This is the reason why we did not renew the €945,000,000 bond, which maturity was in May and made the decision to issue a short term line under the European Commercial Paper Program with a very competitive cost of capital that allow us to manage short term opportunities. The results of this operation resulted in a lower cost of capital for the company. The EBITDA generated during the quarter was sufficient basically to cover net investments, payment of taxes, dividends and interest. Net debt ex Garnetuel Reynosa at the end of the quarter reached EUR 5,000,000,000 slightly higher than the one of the previous quarter.
As a conclusion, we have had a very good result in the quarter, not only because the market conditions were in favor, but also because we are proving quarter after quarter that our integrated downstream business advantages and the way we are handling the Argentina situation have proven effective. I'll be pleased now to answer any questions you may wish to ask.
We have first question from Bruno Silva. Bruno, please go ahead.
Hello, everyone. Thank you for taking my questions. I actually have 3. Number 1, an update in terms of corporate development, if you don't mind, in terms of Brazil capital increase, as you had mentioned earlier in your strategic presentation as well as the status of the potential investment of a stake in YPF? Number 2, if you could clarify on the non recurrence in E and P and whether or not they are related with the reported operating incidents, I think, in Trinidad and Tobago.
And what is the current situation, if it is going to affect further in the upcoming quarters? And finally, regarding the Chemicals business, if you could give more color on the drivers of the business, what is really changing in that operation to justify the great results in the quarter? And that's it. Thank you very much.
Thanks, Bruno. Well, let's start by the third one. I mean, in Chemicals, what we have done is practically review the whole business. And as a consequence of this process, we have shut down some of the plants we had and we are reviewing, I would say, in a minute by minute basis margins in each of the product lines. This is the internal work that has been done.
On top of that, the cost control, which applies for the whole company, it's a must, especially in chemicals. But this is only part of it. You also have to account that there has been some recovery in the demand. So despite the fact that we are reducing volumes, think that we are focusing our production only in part of the product. So in those products in which we're selling and we are selling now, we start to see some recovery in the demand.
And finally, there's also a variable which has to be mentioned, which is naphtha price, which logically is affecting the recovery of the chemical units. Regarding the nonrecurring GMP, the whole thing we have there is the write off of our way out of Iran. So basically, we are including EUR 86,000,000 from our way out. EUR 53,000,000 of those are in the E and P line, 33 in the LNG. And also not included as our recurrent, we are writing off some rights we have in Iran for about EUR 8,000,000,000 which are included under the depreciation of exploration.
And moving yes, there's everything is normal in Trinidad. So I don't know where you production has been a little done, but that's it. No, nothing unusual. Production has been a little down, but that's it. No, nothing unusual and nothing is under the non recurrent line.
And finally, regarding the corporate issues, starting with Argentina, we keep working and we still maintain the transactions to sell out 15% of the company. Probably the process is delaying a little more than we initially expected. But YPF, it's a symbol in Argentina. So transactions with part of the shares really take more time and are by far more difficult than, I would say, regular asset. But we are still optimistic at the present time.
And let's see if we are able to fulfill our goal of reducing our exposure to Argentina as was mentioned in the strategic plan. Regarding Brazil, we continue working on the IPO. Our initial idea is to go to the markets behind Petrobras. And if Petrobras really delay their process, our goal is to aim for the last quarter this year to be in the market. And I think I have answered your question, Bruno.
Thank you very much.
You're welcome.
We have next question from Houtan Hazari. Houtan, good afternoon. Please go ahead.
Good afternoon, everyone. Two questions, if I may. First of all, can we please start with YPF and how much further in terms of pricing upside do you feel you have? How much flexibility do you have to keep raising prices through to the end of this year? And secondly, there have been some press reports coming through on Bloomberg suggesting that you have authorization from the ANP to sell 60% stake in BMEF 29, which I believe contains the Malbec well.
Can you comment as to why you would consider such a move? Is that an indication that the well is not proving to be as lucrative as you thought? Or is it just simply portfolio optimization? Thank you.
Okay. Regarding the first one, I think that the upside in YPS is still large. 1st, because we have been focusing and working on the liquids. And right now, on average, you can say we are obtaining something as a 72% more or less of the international parity. So in liquid, there's still room, but we still have the gas.
And in gas, we are really way behind the I would say a reasonable price for a country that is importing gas not only from Bolivia but also as LNG. So I'm optimistic. And basically it. And regarding your other question, I think that Okay. And regarding your question, I think that I think it's there might be something of a confusion here.
I mean, in Malbec, we are not moving anything. And probably you referred to Siad. Is that right or?
Well, I mean, yes, we did see the sell down in the SEAT. But just for you to know, there are reports on Bloomberg indicating that the block was BMES 29 not BM C 33.
I mean, basically, we are not selling anything. I mean, the whole assets will go into the IPO. Probably the news you are receiving are based on the fact that the national agency really was way too late to announce the farming we did to Petrobras by 30% or 40% about 10 months ago or almost a year ago. The SEAT just to remember that we drilled SEAT in the Q1 this year, we write it down in the Q1. So basically, I think it's you have received a new in which the national agency is collecting data from a year ago or so.
But we are not selling any assets under any means in Brazil. We are going for a capital increase through an IPO. And this is what we are going to move to. Furthermore, I mean, that will not make much sense in the middle of process as the one we are to sell part of it before going to the market. So no move there, no sale of assets and simply aiming for the IPO.
Okay, fantastic. Thank you for clearing that up. You're welcome, Houtan. Thank you, Houtan.
We have next question from Lydia Rainforth, Lydia, please.
Thank you very much. Just on Brazil and the IPO, can you just give an indication as to is it definitely going to be a listing on the markets there? Or are you still looking for potentially an industrial partner for the 40% stake in Brazil? And then just on the exploration expense being higher this quarter, is that something that continued into the Q3 and Q4? Or was that just a very specific situation for this quarter?
Thanks, Lydia. Regarding the first one, we're aiming for the IPO. And once we receive a price indication, then we will think out whether or not we'll go for it or not. But our idea is to go for the IPO initially. And if the price fits for us, we'll go ahead.
Regarding the second one, the exploration cost this month this quarter, sorry, were a little higher than 1st quarter. This is based in two facts. First, we write it down panoramics, which were $34,000,000 We also write down, as I mentioned before, some rights we have in Iran for €8,000,000 And then on the G and G, we have by far more expenses. We spent $57,000,000 in seismic. And regarding the future, I would say that probably for the whole year, the G and G expenses will reach something close to $275,000,000 So we're still running a little behind the planning schedule.
So the and this gracefully, there will be more charges in the 2nd part of the year in G and G. But for sure, it will also depend on how successful we are in exploration. We'll see where the final figure for all the exploration expenses will end. Okay.
That's perfect.
Thank you very much.
Thank you, Didier. We have next question, James Hrabok from Rensselaer. James, good afternoon. Please go ahead with your questions.
Hi, thanks. Two questions, please. Firstly, on the Brazil IPO, you were a bit more ambiguous on the last conference call in that the IPO is by no means at that stage the firm plan. So I'm wondering what has changed to make you put to the back of the queue the idea of selling some of the assets or swapping some of the assets and now definitely going with an IPO? And when you talk about IPO, are you talking about an IPO of a portion of all of your Brazil assets?
If so, what kind of portion are we looking at? And or is it just a select few assets just BMS9 for example? And then second question again on Brazil, just tying into the Gulf of Mexico oil spill, have you seen operationally any impacts from that? Are you seeing that it's taking longer to complete wells because you're having to undertake measures you didn't previously do. Do you see any read across from there from the Gulf of Mexico oil spill into your Brazil operations?
Okay. Thanks, James. Well, the first thing that has changed in the last quarter are 3 months. So and that represents that once we get closer, our ideas are clearer, so to say. But the basic remains the same.
I mean, we are always thinking on a 40% capital increase, and we were thinking that 3 months ago. So no changes there. We are thinking about all the upstream assets, all of them. So and this doesn't change. And think that the swap or the sale of part of the asset doesn't make sense fiscally talking.
So we have to go for a capital increase. Whether this would be the IPO or an industrial, we think that we should go first for the market because the perception of the price we can obtain there will generate more value for the company. But this is just the first impression based on how the markets look. At a given moment, at the moment of truth, the morning which we have to take the decision whether to go for it or not, it will be the moment to decide whether to follow the IPO, which is our existing idea or to shift into an industrial partner with a situation in which I think we will have a lot of candidates. And sorry, the second yes, Brazil and no, there has been no we haven't feel any reaction regarding the attitude of the authorities in Brazil.
Okay. Thank you.
Thank you.
Thank you, Usain. We have next question from Gordon Gray from Cowen Stewart. Gordon, please go ahead for your question.
Thanks. Good afternoon. Just a follow-up question about gas in Argentina. Given that volumes are still declining fast, it's just whether you've seen any indication on either any further incentivization or moves towards them from the government ahead of next year's election or of any upcoming possible industrial deals under the existing Gas Plus system that would help stabilize gas volumes?
Thanks, Gordon. I think that the government right now is assessing the problem paying the difference between imports and the internal prices. But at the end, I agree with you that either the final price shift into a price that really generate value for the investors or the problem will keep growing. We have obtained price increases last year. You don't see it in this quarter because I think that on average, we have present realization price of $2 But you have to think that these $2 the compound of it, we have a 41%, which is huge on retail market, which normally on a yearly average, this 41% we have had this quarter shouldn't be more than a 25%, 26%.
So the quarter is really penalized by the world segment. But I agree with you. I mean, at a given moment, they will to increase the gas flows optionality. But they are probably short term, which is to pay the imports through LNG and we are building a second floating LNG regas plan is the shortcut and is what the authorities are aiming for right now. But long term, the situation will not last.
Okay?
Okay. Thank you. You're welcome.
Thank you, Gordon. We have now Barry McCarthy from RBS. Barry,
stop. Good afternoon. I wanted to ask about the comment you made on the, Bolivia de Margarita development and the price linkage of gas to oil there. And whether you as a partner in the upstream part will benefit from that linkage of price to oil prices? Or will you in fact have to accept some cost plus element which might be considerably lower than an oil and gas price?
Actually, oil price and actually the exact formula is products. So it's linked to products of oil, okay? But I mean, our production in Bolivia will be split. And part of it will go into the internal market, a small part. And then we have on that for Margarita, the internal pricing in Bolivia, which is not the exit.
But the part we will be exporting to Argentina, as mentioned, it will be linked to international oil product prices. And though the royalties we pay there and taxes we pay there account for an 80% more or less. So it's good, but at least it's sufficient enough to have a good return on Margarita, okay? Great. Thank you.
Thanks, Barry. We now have Alistair Syme from Nomura. Alistair, good afternoon. Please go ahead with your question.
Yes. Good afternoon. Yes, I wonder if you could it seems to me that sort of the markets got your downstream numbers completely wrong this quarter. So wonder if you could help us calibrate a little bit. You speak a lot about the sort of the year on year deltas, but maybe some sort of give us some sort sense of absolute level of earnings out of refining marketing and chemicals?
And then secondly, I wonder if you could just sort of comment specifically around what spreads you managed to get on your short term paper back in May.
I mean, regarding the first one, I think that within the quarter, the spreads we have were something in comparison with last year. We were suffering, I think it was minus $2 in gasoline per barrel, minus $10 no, minus $2 as well in fuels, while gaining $4 in diesel. And the spread we have between diesel and the other two products is totally heavy weighted on the diesel side. And this is the reason why our margin improved. On top of that, and there's a difference that probably the market is the one that is not well waiting, We have a distribution network, which is owned by Repsol, which is a difference with our companies that simply have dealers.
So we have the price control in basically all our sites. And we own 2 thirds of our sites, almost 3 quarters of our sites. And this is also an important help to the results. And finally, the gain of €80,000,000 in chemicals in comparison year on year is what puts you in this figure I gave you before. Think that basically, we the last quarter, basically, we produced something as 45,000,000 barrels.
So only chemicals give us more than $2 per barrel. So I think that's the reason. I mean, if what I offer is to have a more in-depth analysis with our people, our downstream people for you to get a better touch on how our figures evolve. But
Miguel, can I ask if Chemicals was negative 2nd quarter 2009 as a reference point?
I'll give you the series from Chemicals. I mean, in 2008, we lost EUR 300,000,000. And then quarter by quarter, starting by Q1 2019, the results were in euros. 97 all of them negative, okay? 97, 73, 53, 20, 25.
And in this quarter, we changed the sign and we made 4 positive. At CCS. At CCS, for sure. Yes. Okay.
So I think that we have passed the worst of it, which was 4th quarter 2,000 and 8. If I do not remember wrong, we lost in that quarter €350,000,000 And then as I mentioned, the path is slowing down. And finally, we have seen good fears. To give you some advance, the expected result for this month, July, would be something close to €12,000,000 So we will see. But the trend is good.
And let's hope we can keep that path till the end of the year.
Okay. That's helpful. Thank you.
Thank you.
And on the spreads, sorry.
Sorry?
The second question was just on the
credit spreads you got on the short term paper.
I'll pass that one to Fernando, okay? We have changed a
bond that was 4.5% cost annually by short term
eurocommercialpaper. We are issuing between the
Rebor Flat and the Rebor Plus 5.
Okay. Thank you very much.
Thank you, Alastair. We now have from HSBC for Spedding. Paul, good afternoon.
Good afternoon, everybody. One question on chemicals and one question on Repsol Brazil. On Chemicals, given people's concerns of potentially having a double dip, are you seeing any signs yet that the petrochemical recovery that you've talked about in terms of margins or volumes may be turning down? And the second question, I'd be interested on your thoughts on how Repsol Brazil would be funded going forward after the IPO. Clearly, you will raise a fair amount of money from the IPO itself.
But do you believe you will raise sufficient to fund the business through to all it turns cash positive? Or would you expect to resort to debt markets or possibly even further equity issues?
Regarding the first one, we haven't seen any slowdown in the chemicals either in margins or volumes. So the margins are growing well and the volumes are steady basically. So we haven't seen any signal of weakness in the business in this quarter. And regarding Brazil, I mean, we expect with the capital increase to really fund Repsol Brazil to cover all the investments required to develop all our records there and all our prospects. And this is the basic idea of the IPO to really close our door to further investments in Brazil and the company will be self sufficient to develop the whole assets there.
Thank you
very much. Very reassuring.
Thank you, Paul. We now have Tom Rigby from UBS.
Yes. Hi. Thanks for taking the question. Just a quick one. It's on going back to the decline rates of YPF and your discussion around the economics.
Presumably,
the sort
of 70% or so of oil price realization, the decline in oil is essentially geological. But if you were getting something closer to import parity for natural gas, what do you think the profile for natural gas production would look like, I. E, what would be the volume benefit as well as the margin benefit from a changed pricing? Thanks.
Thanks, Jan. Well, regarding Liquids, at least my perception, I'm not an expert, but my perception is that in liquids, the initial oil in place we had in Argentina was 25,000,000,000 barrels in our acreage. We have produced 5,000,000,000. So our recovery rate right now is at 20%. That give us rooming off.
If there's a bonus and a reward there to keep growing or at least maintaining our production in liquids. In gas, I think that the game is by far more complex. For sure, there is possibilities of tight gas, there is possibilities of shale gas, but the recovery of the fields in which we have been involved may be close to 55%. So we have less room in gas at the present time than the one we have in liquids. This is my perception.
And one point that I think is important, and I think that we do not do a good work putting the realization price in our results now. Probably next quarter, we'll not be there because the price realization of oil that we put in our note doesn't imply anything. At the end, being integrated, it's only an internal price. And really what matters is what you mentioned, the realization at the pump in comparison with the international price. So I take note of that and we will change our note next quarter.
Thank you. Thanks.
Thank you, John. We have now Mark Bloomfield from Deutsche Bank. Mark, please go ahead.
Good afternoon. Yes, two questions, please. First a follow-up to the last question. Argentine oil production, you're clearly investing heavily into liquids and production was still down 4% year on year. I just wondered when you would expect liquids production to begin to stabilize first?
Secondly, on the Petroleum Plus program, I just wondered if you can give us an indication of the benefit which you enjoyed in the Q2 and perhaps some guidance about the benefit you're expecting full year 2020? And whether you expect that to be a fairly stable level going forward given your new high level of investment in liquids? Thanks.
Yes. As a time rule and you will not be far away account for $50,000,000 per quarter. So it's 200,000,000 dollars per year. If we fulfill every quarter, so if at a given quarter, we run below the ruling that allowed us to gain this grant, then it will be €50,000,000 we lose in our way. And regarding the production thing that the figures we provide to the market includes the strikes.
So in the calculus you have to make to comply with the right and give to the administration to comply with the rights, those hours lost by strikes are not accounted. So basically, we are in breakeven even though the figures we presented show a 4% decline. Okay. Thanks. You're welcome.
Okay. We appear to have no further questions in the queue.
Okay. We don't have more questions. So thank you so much for attending the conference call. And do not hesitate to contact us whether you need further details. Details.
Well,
thank you for attending. I know that it has been a pretty busy day for you all today with the status oils, the shells and the excellent presenting results. So thanks a lot for attending. And I hope to see you in September in the field trip in Peru. I think that Mavi will prepare a good trip for all of us.
And also sorry for all those of you who will not attend because I think you're going to say a very good trip and it's going to be a very interesting one. Thank you for attending.