Morning, welcome to this annual results call for A.P. Møller - Mærsk. My name is Nils Smedegaard Andersen, and I'm the CEO, and I'm here with Trond Westlie, our CFO, and a bunch of other people ready to answer questions once I've done the presentation. If we just start with the overall statement while you read the statement on the forward-looking or all the precautions you have to take on our forward-looking statements on page two. Just giving you sort of our general opinion about the results. We're very pleased that we present the highest result in the company's history with $5.2 billion.
We did make a number of impairments and value corrections during the last quarter, so some of you may have expected a slightly higher figure on this. We're very pleased with it. It's a very good result. The underlying result of the company with $4.5 billion is also very good. It's in line with our expectations, and represents an improvement of 33% compared to last year. We continued our efforts to focus the conglomerate on shipping and oil-related activities.
With the sale of Danske Bank and handing back the income from the sale or the total sale price as dividend to the shareholders, we believe we meet a wish from the shareholders, minority shareholders to get a more focused business. We think we deliver that. We also want to signal here that we are, of course, taking action on the cost side as a consequence of the drop in the oil price. We're running cost programs and CapEx reductions and also exploration cost reductions in the oil and oil-related businesses.
We are on a way forward in the oil business. We just approved the build-out plan for the Johan Sverdrup field in Norway, committing $1.8 billion. We're also expecting to commit to the build-up of the Culzean gas field in the U.K. North Sea during the first part of this year. We are even if the oil price gives us, of course, challenges in those industries, still on the way forward. Having said that, let's go into the figures. If we start on page three, the strategic highlights.
As I just said, we have taken a number of portfolio optimization steps during the year, divesting the 20% ownership in Danske Bank and handing out the proceeds as dividends to our shareholders. We divested at the beginning of the year, Dansk Supermarked with a little bit remaining. 19% have been kept in order to enable the transaction, and they will be divested by 2019 . Maersk Line improved its competitive position, and the start-up of the 2M vessel sharing agreement has gone well. It started by the first of January. We grew our production in Maersk Line, in Maersk Oil in line with the plan.
We did commence the operations in Maasvlakte II in APM Terminals and divested the Port of Virginia as part of the ongoing portfolio review in terminals. Maersk Drilling did execute. We got five, and the last of the six rigs were delivered at the beginning of 2015. We're through this major upgrade program on plan and very happy with that. In APM Shipping Services, we divested the VLCC segment, so we've over the last years reduced our exposure to the tanker business in general. We carried out a review of all businesses, resulting in a number of impairments and write-downs that you'll see that have affected the fourth quarter result of the year.
Let's go to the purely financial highlights on 2014 on page four. The group result was up from $3.8 billion to $5.2 billion. There was a number of movements, Danske Bank gains, other gains on other sales as well, and as well as a number of impairments, the largest being the second quarter impairment in Brazil of our oil business there. The underlying profits came out with $4.5 billion, up from $3.4 billion, so it's a 33% increase in the result, which we're very pleased with. The free cash flow went down a bit, as investment went up.
The cash flow from operations was unchanged compared to last year. If we go down in the underlying profits by activity, then, of course, here you see very good progress in Maersk Line, a 50% growth in result, so can only be pleased with that. Also the fact that we maintained our very strong lead compared to the average of the industry for a number of quarters now. We delivered actually double-digit returns for the fourth quarter in a row. Things are moving very well in Maersk Line, and the fourth quarter result, we'll come to that in a minute, was surely helped also by the falling oil price.
Maersk Oil, in spite of the dramatic drop at the end of the year, came out with a result only slightly below the last year result underlying. Of course, the headline number is affected very strongly by the write-down in Brazil, and there's been a few other impairments during the fourth quarter that I'll come to in a minute. APM Terminals, underlying result up with $150 million or $140 million. Continue a good trend in business, so we're pleased with that. Maersk Drilling down a little bit compared to last year, only $50 million, which is actually better than we expected.
We have, I think, guided very clearly to this decline, since we knew that there was a number of very large rig stays, as well as a very large sum cost related to the phasing in of new rigs. All in all, this is a very pleasing result, and you'll also see in our guidance that we guide for drilling to go up next year. APM Shipping Services still not delivering great results, but there is progress compared to last year, mainly because of progress in the tanker business. Let's move to page four, which are the newest developments, quarter four developments.
Here you will see that the headline profit is down quite a bit, compared to last year due to $836 million one-offs after tax that are specified on the right side. It's an impairment of Maersk Oil in U.K. assets, around $200 million. These are producing assets where we have had to adapt the value, because we know that in the short term, and these assets are not long-term assets, we could get less money for the oil we sell. We have impaired in APM Terminals in our investment in Global Ports by $100 million. Not dramatic, but that's just a calculation outcome of a slower than expected business in Russia.
Maersk Drilling impairment in EDC and our oldest rig up in the fleet in total is a little more than $70 million. This is basically reflecting the fact that we believe that older rigs are losing value now, where we expect a lower activity level in the oil industry in general. Fortunately, overall, Maersk Drilling has a very modern fleet, but these are some of the oldest assets that we've decided to impair. Then we made a large goodwill impairment in Australia of $360 million. The reason, the background for that is a lot of cost pressures from very active, very expensive unions, as well as also increasing competition in the ports. We've decided to take that impairment.
Danske Bank, as you recall, also made an impairment in the fourth quarter. We had impairment that we reversed as a consequence of that. The net effect for us is $120 million negative impact on the books. If we exclude all these one-offs, the profit in the fourth quarter is up significantly from $610 million to $1,025 million. That is mainly driven by Maersk Line, but very good progress. The free cash flow was also good. Of course, free cash flow in the quarter is not so significant, but the outcome is good.
Underlying profit by activity in the fourth quarter, Maersk Line up very, very strongly, helped by good growth. First and foremost, a decline in cost helped to a large extent, I'll come back to that in a minute, by a decline in the bunker price. Maersk Oil down $150 million, and this is in spite of higher production, exclusively an effect of the oil price. APM Terminals up underlying, so was Maersk Drilling now where we have the most of the new rigs in action in operations, and APM Shipping Services was up as well, but still negative in the fourth quarter for a number of reasons.
The big other news of the day is of course the divestment of the 20% ownership on page six in Danske Bank, where we'll dividend the entire proceeds out to shareholders in cash. It's a bit complicated, the whole distribution scheme, but all the shareholders will have the choice between getting a cash dividend and at the same time buying shares with the cash or but up to nine shares per Maersk share, up to nine Danske Bank shares per Maersk share. The mechanism is described here. I'll not go into all the details.
The pricing of the shares is going to be decided on the average share price during the week from the 20th to the 26th of March. That will be the fixing point and that will also fix the size of the dividend. It's a little bit complicated, but the net effect is that the shareholders receive the whole proceeds from Danske Bank as a dividend. Going to Maersk Line results. Of course we are very satisfied with those results. The fourth quarter is very strong, more than double the Q4 2013 result.
As I said before, cost has helped a lot, but also good development in volumes. ROIC improved to 13%, from 6%. It was last year 6.2%. That marked the fourth consecutive quarter of reaching our midterm ROIC ambition of 8.5%. For the year as a whole, we will be above our long-term target of 10%. Volume increased by 9.8%, mainly driven by good growth in north-south and intra-trades. Our east-west trades were stable in the fourth quarter. We continue to reduce the unit cost. They went down by $197 per FFE, and -7.2%.
That more than absorbed the average rate decrease of $81, or 3%. A very good dynamic here. The fleet capacity decreased by 12%, which is a little bit ahead of our volumes, and also ahead of the market. Quite an important part of that was that we got a little faster delivery of the Triple-E's in the fourth quarter. We also went to the time charter market to get vessels for the startup of the SeaLand activities for Latin America or the Americas. Good free cash flow generation, $872 million.
The EBIT gap was significantly above the 5% target we have set, and was on the level that we now had for a number of quarters. As I said before, a good start to the 2M activities. We also in our guidance named this as something we expect will give a positive effect for the full year result for Maersk Line. Page eight, we have a description more in depth of the cost reductions in Maersk Line. We had a 1.9% cost increase totally, but against the volume increase of 9.8%, considering that terminal cost and vessel cost of course to a large extent are variable.
This means that the underlying cost picture continued to develop very positively, partly due to the reduction in bunker or mainly due to the reduction in bunker cost, of which a big part came from the price. The price went down 11%, but we also continue to use reduced consumption. No change really in that picture, but we reach now the lowest cost level per FFE transported for the last many years. Very positive. I think just to make that clear to everybody, there's been a lot of speculation in speeding up of the networks. We've done calculations on this, of course also, but our conclusion is that it does not make any sense to speed up the network. We don't expect to do it.
You can say the additional capacity that will be added in will probably be less than people expect, because with the larger ships also the port stays get longer. That's a very significant part of the increase in the travel time. We don't see a lot of potential in speeding up, and it's not something that we plan to do. Maersk Oil's result underlying good, of course not so good in the fourth quarter, with a decrease by 50% to $150 million. This is caused by the low oil price, which of course we have limited impact on. It was partly offset by more production and also a decline in exploration costs, and we also started reducing costs already in the fourth quarter last year.
We'll continue on that trend. We had an impairment charge related to the U.K.. I explained that before, $188 million, and this is producing fields. This is basically just reflecting the immediate lowering of the oil price. Production increased in the fourth quarter to 275,000 barrels per day. This was expected, but of course was stronger than expected even because of the low oil price, which does impact our take in Qatar. We had less exploration costs. That's good news. The bad news is that we also did not find any oil in the last quarter. We had good progress on the Culzean and Johan Sverdrup projects.
As I said before, we have commissioned one, and we expect to commission the second in the first half of this year. The Chissonga project is still challenged by the low oil price, and we're still considering how this can be done. We're still working on it. But with the present oil prices, it is very challenged. We'll keep you updated, but we don't have any news on this, and we also don't have any urgency to get to a decision here, as we have the other two projects where break-even costs are clearly below the present oil prices. Golden Eagle and Jackdaw came on stream as planned in the fourth quarter.
On page 10, just a few statements on what we're trying to do to mitigate, and that is in Maersk Oil, to mitigate the impact of the lower oil price. We do expect to reduce the OpEx cost in Maersk Oil by a double-digit percentage. We expect by 2016 to reach a 20% reduction in this area. We're also looking at the production portfolio. Of course, we're also negotiating terms in both on ongoing OpEx, but also of course as under the CapEx terms of CapEx cost and so on. We get the best possible deals and the most possible reduction of cash flow out as a result of the drop in the oil price.
Exploration and development, we will cut back on, continue to cut back on exploration. Clearly, be very careful on work we spend money on. We, as we already did say before, we are scaling back our U.S. Gulf of Mexico exploration, and we have decided not to explore further in Brazil. Going to APM Terminals results on page eleven. Not a lot new to say. The headline number is down due to the impairment, mainly due to the impairment in Russia. The underlying result is up from $171 million to $221 million.
The good progress in Maersk, in APM Terminals, continues, and the underlying ROIC again improved, so it is up now at 15%. Very good. We're very satisfied with this. Operating cash flow decreased by 39% in the quarter. This is due to increased tax payments and also working capital. There's still some room to improve, and they're working on that. Invested capital declined due to divestments and impairments, but we continue with a high level of investment in APM Terminals, and we also continue to be quite bullish on opportunities in this exciting area. Maasvlakte II, the most modern terminal in our network, commenced operations in Q4, as planned.
Maersk Drilling, we've been, well, I've alluded a little bit to this already. There's a profit decrease in the fourth quarter by 37%. This is only due to impairment. The underlying profit is up with approximately, or $45 million to be exact, because of the fact that we now have more rigs in operation. Hopefully, a good start or good ending to the year. That should give us good hopes for 2015. We have a good forward coverage of 80% for 2015.
That result doesn't mean that we don't have work to do to close contracts, but the coverage is good both for 2015 and also for 2016. The delivery of the fourth drill ship took place at the beginning of 2015. We still don't have a contract for this and the third drill ship. We're working on it and hope we can come with solutions in the near future. They are not on long-term contracts at the moment. The two remaining jack-ups. One was delivered at the beginning of the year to Statoil against a long-term contract.
We have one more coming in 2016, and they will be, that is also against a long-term contract. We're quite confident that we're on a good track here. Of course, Maersk Drilling has also initiated a cost review, and we'll take a number of measures, some of which have been published already, in order to reduce this cost base. APM Shipping Services results, it's up on the year but negative for the fourth quarter, mainly a result of impairments in Svitzer and Damco. Also the activities or the underlying activities in Damco continue to struggle in the fourth quarter, and we're now waiting for the cost reductions to take effect in 2015. That brings me to the end of my first part and over to Trond, who will take you through the figures again.
Thank you, Nils. Good morning, ladies and gentlemen. I'll start on page 14 of the presentation on the performance. As you can see, we're delivering a return in 2014 of 11% on an investment capital of just short of $50 billion. That is, of course, affected by some impairments as well as some gains. The net effect of the one-offs is just short of $600 million. It's not really sort of tremendous effect, even though it has an effect on the net numbers.
All in all, we see good progress in Maersk Line this year, delivering 13% in the fourth quarter and also 11.6% for the year, which is of course ahead of both our long-term as well as our medium-term guidance and also ambition for Maersk Line. We're doing very well there. The effect on Maersk Oil is of course the impairments. The underlying return is still okay, but the impairments is affecting the returns in the year as well as in the fourth quarter. Terminals and Drilling delivering well, terminals delivering very well during this phase, and drilling delivering slightly lower than last year due to the startups and of course the yard stays.
Under Shipping Services, Damco and Svitzer is delivering high negative numbers. Both of them are affected by write-downs and impairments. The underlying delivery from Svitzer is slightly declining from last year, but still remains on a positive. Damco is of course the challenging part in the shipping services industry. All in all, a good year. A slow fourth quarter as a result of impairments, but underlying a very good progress as we see it. Going to page 15 on the strong financial framework. Starting on the upper left, we started the year with a net interest-bearing debt of $11.6, and we are ending up at $7.7.
A lot of that is, of course, the effect of some of our divestments, but it's also a good underlying cash conversion in the business. When we see the total cash conversion in the EBITDA, from the EBITDA through the effect of the working capital, we're doing well throughout the year. All in all, $7.7 billion in net interest-bearing debt is not, as we see it, a high number for a business like us. Going to the top right, the portfolio management, you see the proceeds and the divestment gains coming in from 2014. We see a total of proceeds, and the number is high due to the fact, of course, the major contributor in that is Dansk Supermarked.
The other big contributor is or the two big contributors is the VLCCs in the tanker segment and Virginia Terminal in that APMT sold off last half of 2014. That's the three main contributors in that. Looking down to the left on the investment in growth, we see that the growth CapEx this year is getting close to the $9 billion. It's slightly lower than we had expected, but that is mostly due to the fact that the last drill ship were actually postponed delivery over to first quarter 2015. That made the sort of changes during November and December.
The operating cash flow this year were in the same level as last year, as Nils had mentioned, on $8.8 billion. The board are proposing an ordinary dividend of DKK 300, an increase of 7% from last year, from DKK 280 a share. As an increase relative to also the supported, as we have said, supported by the underlying revenue growth. But of course, as we have also said, on the extraordinary dividend that will be proposed as a result of the sale of the Danske Bank shares, we will, of course, have a very high dividend yield this year. Going to the number page, starting on the fourth quarter numbers.
Revenue slightly declining from short of $12 billion down to $11.7 billion, mostly driven by the decline, actually, in Maersk Oil and also Maersk Tankers as a result of going out of the VLCCs. The increase is coming from mostly Maersk Line. That means that we're delivering an EBITDA in line with last year on $2.6 billion. Depreciation increases quite a bit. Most of that increase is impairments. Approximately $900 million is the increase of impairments year-over-year. New assets is depreciation increase of approximately $120 million. That leaves an EBIT number of $459 million due to the fact of the impairments.
Finance costs coming down to $79 million, and tax coming down as a result of lower results in the oil, basically Maersk Oil. That's driving this decrease in taxes. This quarter, the profit for the period for fourth quarter is $189 million. Going in just to give you overview of the full year 2014 numbers. Delivering basically a small increase in the revenue base, very much driven by decrease in oil and tanker, and an increase in approximately $1.2 billion in the revenue in Maersk Line. Good growth in Maersk Line revenue. That leaves us almost 5% higher EBITDA from last year, with $11.9 billion as a result.
The depreciation is increasing from last year, but that is only due to impairments. The underlying depreciation is on the same level as in 2013. When it comes to gain on the sale of current assets, it's very much driven by the $600. The big contributor in that number is Virginia, which have been disclosed earlier. There are bits and pieces of other divestments that has come into this net gain of $600 million. That leaves an earnings before interest and tax on $5.9 billion. Finance cost of $606 million, down from the $716 million, very much driven from underlying interest costs, but also some interest capitalization because we have had quite a bit of assets coming in this year.
Tax coming down from 3.2% to 2.9%, leaving a profit for the period of continuing operations of $2.339 billion. Profit for the period of discontinued operations, that is basically literally only Dansk Supermarked with $2.8 billion, and that leaves us a profit for the period of $5.2 billion. Just for your information, in our annual report this year that we disclosed this morning, we have a table guiding you from the underlying result to the reported result, not only for the group, but also for the business unit, where you basically can see the effects for each one, so you can basically have a clear view of the development. I'm not gonna focus too much on the cash flows.
I've mentioned that earlier, but as you can see at the bottom of the pages, dividend per share, ordinary DKK 300 per share. The estimated number as of now on the extraordinary dividend per share is DKK 1,569, which is then dependent on both the share price of the Danske Bank shares, as well as the exchange rate between Danske kroner and dollars, of course. Sorry, not the exchange rates on dollars because it's gonna be in kroners. It's literally just because on the exchange rate on Danske Bank shares. Going to the guidance for 2015. We expect an underlying result slightly below $ 4 billion, which is comparable to $ 4.1 billion. Both of those numbers are excluding Danske Bank.
Just to give you the numbers, our underlying number for 2014, we report $4.532 billion. Of that, Danske Bank is included with $449 million, and that leaves basically the rounded number of $4.1 billion from 2014. We're saying slightly below $4 billion for guidance of 2015. Gross cash flow for capital expenditure, we expect to be around $9 billion. Going to Maersk Line, we expect a higher underlying result for 2015 than for 2014. We aim to improve our competitiveness through continuously improved unit cost reductions and also the implementation of the new 2M Alliance. The global demand for transportation in 2015, we expect it to increase with between 3% - 5%.
We have our direction, as we have previously stated, that Maersk Line aims to grow with the market. Coming to Maersk Oil, we expect a significantly lower underlying result for 2015 than for 2014, as breakeven is reached with an oil price in the range of $55-$60. We expect an entitlement production to be around 265,000 barrels a day, and exploration expenses are expected to be around $700 million. Terminals, we expect the underlying results to be around the same level as 2014 and to grow in line with the market. For Maersk Drilling, we expect a higher underlying result than 2014 due to more rigs in operation, good forward contract coverage, as well as cost reduction and efficiency program that has started.
APM Shipping Services, we expect the underlying result to be above 2014. The usual sensitivity guidance, we have given you some of our major sensitivities below on this guidance slide. I'm not gonna say too much about it, but just referring to that, we had the average oil price in 2014 was $99. We have said that +- $10 a barrel for Maersk Oil isolated will be effect of $0.25 billion. That will really guide you relative to the understanding of Maersk Oil results. With that, I'll give the word over to Nils for the final remarks.
Okay. Thank you, Trond. Thank you, Trond. I'll basically just close before we go to questions. We are, as I said at the opening, very pleased with the financial delivery of the year. It's not been an easy year in shipping and definitely very challenging, especially the latter part in the oil industry. Delivering a 33% increase in underlying profit, we consider very satisfactory. It's a result of a lot of focus on operations over the last years, and we are going to continue to focus on what we've been doing so far. That means improve the competitiveness of the businesses, making sure we grow when it's profitable and in a healthy way.
We'll also continue portfolio optimization. Not only can I promise you that it will not be as much as in 2014, but I can promise you that we will also continue to look at things within the different businesses. Continue to try to be as focused and disciplined and professional as we can on the capital allocation. We have pretty strong processes in place, and we do take a lot of care of our shareholders' money when we decide to invest them in the long-term assets that we operate. There will be nothing new under the sun in that sense. It's a lot, there'll be a lot of focus on implementation in 2015.
I appreciate that the yearly accounts for 2014 will be giving a lot of gray hairs when people try to understand them. There are a lot of moving parts, but this should be somewhat simpler as we move forward. We do, and I think that's a strong signal, dividend out the entire proceeds of Danske Bank, and we also increase the normal dividend. We did last year buy back shares, so that's another signal that we intend to share the benefits of our progress with our shareholders. We are in the last phases of the share buyback for 2014 that we published in August.
We will of course continue together with our supervisory board to look at our capital structure going forward. I think we'll all be very pleased to have a simpler and better overview when we close the first quarter this year. Thank you for listening, and we're ready for questions.
Thank you. We will now begin the question-and-answer session. The session will end at 10:45. If you have a question, please press star. Please press the hash key or the pound sign. There will be a delay before the first question is announced. If you're using a speakerphone, you may need to pick up the handset first before pressing the numbers. Once again, I remind you, if you have a question, please press star and then one on your touch tone phone. Our first question is coming from Mr. Dan Togo from Handelsbanken. Please go ahead, sir.
Yes, thank you. A few questions from me. First on oil. How do you review the oil business now? Is it time to invest or time to contract, so to say? Then also, I remember you saying previously in 2014, your long-term view on the oil price was around $90. Has that changed in any way? So in essence, if your long-term view is unchanged, is the time to invest, and where would it make sense for you to invest more?
Thank you, Dan. Starting with the forecast for the oil price, I think we've all gotten, I mean, we did foresee a drop. We did not foresee the size of the drop. Of course, that has made us a little bit uncertain about forecasting long-term. We think $90 is probably the upper range, upper end of the range, where we are looking at something between $70-$90 as a normalized oil price going forward. That's what we use in our calculations, and I would really not pretend that we are the most informed people about this in the world. Coming through, is it a time to invest or time to contract? I think it really depends on what you have in the pipeline.
What we have in the pipeline is investments in the North Sea, the Johan Sverdrup and Culzean, and they're both profitable at present oil prices. The answer is very simple, that we will expand those. Of course, we have the Chissonga project where we have to think really careful. We have to work very hard to see whether we can get the project cost down to a level where the breakeven will be. It cannot be above or even above the middle of the range I just indicated to you. We need to have an expectation to make money. I think that should be the healthy statement to come.
We are in a different situation than most oil companies being a conglomerate, so we're not in a cash flow squeeze or any kind of problems that forces us to think short-term because the oil price has dropped. You probably find us a little bit more willing to look at investment opportunities than many others in the industry. The areas we will look at will be low-cost production, and it'll be the North Sea and areas in the Middle East that we know well. We'll see what comes up of opportunities. Of course, it requires the sellers to bring down their price expectations to a reasonable level as well, so that we can make reasonable deals. We have no worry, but we do have the cash when the right opportunity comes up.
Thank you, Nils. Just one question on Qatar. Entitlement went up in Q4 to $116,000 per day due to the PSA. Is this the run rate we should look at going into 2015 if oil price stays where it is now?
I cannot comment on that. It becomes, it depends a little bit on what we call the R-factor, which specifies when you will come to certain points in paying down investment costs, so then it can change. But with the, I would assume that it would be not far from in the present oil environment.
Just one time question on Maersk Line. The lower bunker costs and the dynamics with rates. How much of the lower bunker costs should we expect being translated into lower rates during 2015?
Well, the rates are. We've seen a decline in the third quarter or fourth quarter of approximately 3%. I think it's realistic to assume that there will be a decline also during the year. It is, of course, a question of demand and supply. At the moment, we don't have a lot of idle ships, so maybe the situation will be that we can actually reduce rates less than the oil price drop. That would be our assumption, at least. We do expect a positive impact in the first period from the lower bunker price.
Good luck with that, and thank you.
Next question is coming from Christopher Combé from J.P. Morgan. Please go ahead.
Good morning, everybody. A couple questions here also. Looking at CapEx guidance, can you tell us how much of that relates to oil and gas specifically, and how much may be earmarked for opportunistic acquisitions? If we look at terminals, your highest returns business, you know, how much additional capital could be deployed over the next sort of 12 month-18 month period? On Maersk Line, after a couple months of 2M progress, can you give us some sense of how that's progressing? Are you more bullish or conservative regarding savings? Lastly, you talked about other areas looking in the portfolio. Is there any conceivable sort of day rate within the product tanker market where you would consider partial or full disposal? Thank you.
That was a lot of questions. Let me start with the 2M. It's too early, of course, to declare victory, but so far, the customers have received the new network very well. We have not had any run-in problems, so we don't expect any negative development from that. We've also included that as a positive in our guidance, so that looks good. The investment allocation over the businesses, we've actually guided for a number of years that we would invest between $3 billion and $5 billion in the oil business per year. We've so far never reached that level, which should comfort everybody, I guess. But probably an investment slightly below $3 billion in that business.
We've said that we will invest approximately $3 billion per year over the next five years in Maersk Line, in ships and containers and similar things. That's probably the best possible guideline I can give you now. In APM Terminals, it's gonna be a mix, of course, of investment and divestments, but we will be able to, we believe, deploy quite a bit of capital in port infrastructure over the coming years. Do expect that their share of invested capital to increase. In the oil services, we still have, of course, some payments that will go out, and they will impact us.
We're not planning really any new investments unless there's something that is really niche and where we have a special technology, then it may be relevant. In the present environment, we're not planning major investments in oil services. That's sort of a very quick tour de force of that. You asked about the potential disposal of the tanker business, and we've said that we wanted to focus the business on product tankers. That's what we've been doing. We don't have any plans to do anything dramatic on that business right now. If we had, I couldn't probably disclose it here.
Thank you. That's very clear.
Next question is from Neil Glynn from Credit Suisse. Please go ahead.
Oh, good morning. If I could ask a couple, please. The first one with respect to Maersk Oil. You've obviously highlighted you're targeting double-digit percentage cut on the OpEx level. Nils, could you give us a bit of insight in terms of how that should phase and how you think about key milestones to make sure you're on track to achieve that by 2016? A second question on Maersk Line. I'm not sure whether it's just timing, but obviously the time charter growth meant that utilization seemed to have fallen in the fourth quarter. Do you expect utilization to improve in 2015? Is that a key focus, as you think, to retain fuel price benefits in 2015?
Thank you for that. I'm not sure I understood your Maersk Line question very well, so let me start with Maersk Oil, and the phasing. We expect a 20% reduction in OpEx by 2016. Of course, it will take time to implement it. For simplicity, we are saying we will get to probably almost half during 2015. Projects that we are bringing through the funnel now and preparing for Culzean, there's still a lot of analysis work being done on Chissonga. We are on the way forward in our thinking in Maersk Oil, and that means that we actually have quite a lot of things to do.
If you pencil in a little bit less than 10% OpEx reduction in 2015 and 2016, I think you're probably pretty close. Then the utilization rate in Maersk Line, yes, we have taken in first of all, we grew unplanned. It wasn't really something we were aiming for, a little faster than the market in the fourth quarter. The fleet grew even faster. There's a lot of moving parts in that, but we don't really expect to have a lot of deployment problems in 2015. We have been running a very tight ship for the last years and probably a little bit too tight.
Taking in some extra charter tonnage for the SeaLand startup was absolutely necessary. We got the extra or the faster delivery of 2 Triple-E's at the end of the year. Nothing dramatic. It's just sort of when you look at it in the quarter, it looks like there's a little bit more movement than there probably actually is.
That's great. Thank you, Nils.
Next question is coming from Lars Heindorff from SEB. Please go ahead.
Good morning, gentlemen. A couple of questions from my part as well. Regarding the oil production guidance that you have, does that take into account any closures, which may be related to the aim of reducing the OpEx by 20%?
That's a very good question. It actually does not, because it will take time to make closures, you need to get approvals for it and so on. So it's quite a complicated thing. There's one area where we are still producing and still involved with Polvo which we in Brazil, where we expected to stop production or sell our shares, but that has not materialized. Apart from that, it does take time to close down production. So you won't see a lot of moving or effect this year from those things.
Okay. Can you give us maybe an indication of sort of the size of potential closures a bit further down the road?
I can't give you anything now, and I don't think it's really serious because part of it, you know, will just be that we invest less in certain mature fields because there's certain new developments that become unattractive. I'd rather not try to speculate in it. We have, of course, platforms like Janice that are quite old in the U.K. North Sea and other things that we'll look at.
All right. Still staying in the oil and gas business, you made another impairment here in the fourth quarter regarding some of the U.K. fields, as you mentioned earlier. I haven't been able to look through the entire annual report. You have to excuse me, but how much left do you have on the balance sheet in terms of concession rights, and what's the risk associated with that?
I have actually read through the entire annual report, but I can't remember that figure. In the U.K., I rather that we came back to you on that, because before I tell you something, but it's but there is of course a significant invested capital in the U.K., but the concession rights will be less than they used to be. This is not only, I would assume, concession right. I would assume it's also actually assets that we are impairing.
Okay. Regarding the liner business, you've been asking a few questions about that early on. The guidance of higher earnings in 2015 versus 2014, I'm sure you're gonna achieve a lot of savings on the bunker side, obviously. But you also mentioned there's quite a large element of pass-through on the rate side. I mean, if you assume that's gonna be close to 100%, I mean, what is sort of the basics behind which will drive earnings higher in a market which is still structurally oversupplied?
First of all, I mean, if you really analyze it, our earnings are very closely related and almost similar to the margin advantage we have over the remaining industry. That has been the picture over the last year. When we make a return on sales when our advantage is 9%, then we've been able to get also a 9% return on sales as profit, more or less, maybe 10%. That's the way the dynamic has worked so far. I think in general the industry will make a big effort to keep part of the bunker saving, and I think they will be successful simply because the market is actually at the moment not very oversupplied. There's incoming tonnage, but the oversupply situation is not too bad at the moment, and there's not a lot of idle ships.
Okay. All right. Thank you.
Our next question is coming from Stig Frederiksen from Nordea Markets. Please go ahead.
Hello, gentlemen, and congratulations with a strong report. A couple of questions from my side. First of all, your guidance when it comes to growth of 3%-5% in Maersk Line, and you're expecting to grow in line with the market. I'm just wondering about SeaLand. How does that play in? Is that part of what growing with the market? The second question on oil, your sensitivity, does that include the OpEx costs that you are referring to? Finally, on Chissonga, any timing issues, liabilities, anything that would force you to take a decision with the authorities? Thank you.
Yes, the answer to the first question, SeaLand is yes, that's included in our growing with the market strategy. The sensitivity in not including cost reductions. This is a mechanical, or rather mechanistic, calculation on what happens, everything else being equal, when the oil price drops or increases, assuming a certain pass-through of costs in Maersk Line. The last question I didn't get.
That was more referring to Chissonga. It was a year ago that you were expecting to sanction Chissonga. Now we have reached 2015. Are there any timing issues or any obligations that you have to take a decision in connection with the authorities?
Well, I mean, there are timelines in the contract, of course. Of course, the Angolan authorities also understand very well, and they're actually partners in the project, understand very well that you cannot sanction a project until you're relatively certain that you're going to make a profit on it. We don't have different interests there. I think they are very pleased with the work we're doing. They're doing it with us. I'm sure we'll be able to get beyond that. Anyway, we will not take a wrong decision and start up a project that we're not confident is a good investment because of a deadline.
Perfect. Many thanks.
Our next question is coming from Matthew O'Keeffe from Berenberg. Please go ahead.
Hi there. Just three questions from me, two operational, one financial. First of all, just to clarify on the bunker guidance. I mean, is there a particular proportion of the savings that you assume will be passed on to your end customers when you give that guidance as to the impact of lower bunker? I'm sorry, I'm aware you've been asked this question a number of different ways, but I wonder if there is any maybe rule of thumb you can give us to help us as we think about that. Second question on the oil business. I think in the past you've said $600 million was your sort of minimum exploration spend to keep your reserves ticking over.
Obviously you're talking now about spending $700 million, you know, after the oil price has halved. That seems quite a strong statement. My question there is perhaps why you haven't cut the exploration spend more aggressively. Then finally, on the financial side of things, you talked about the benefits, you know, from a yield perspective of the special dividend. I mean, I'm not entirely sure investors will see it that way. I suspect they may more likely regard the $5.5 billion as a windfall. My question here is why you didn't consider recycling the Danske stake via higher underlying dividend or perhaps even via the share buyback program. I mean, $5.5 billion is a nice problem to have.
Perhaps you could just give us, you know, how you see the different options for returning cash to shareholders. Those are my three questions, please.
Right. Okay. On the bunker guidance, there is a percentage that we assume as a pass-through. I cannot exactly remember, but I'm sure it's written somewhere. Okay. We haven't written it anywhere, but I, as far as I recall, it's sort of 50%-60% pass-through. I'm not quite sure about that. And then on the oil, the $600 million is correct. That's what we stated based on the, actually I think an older production figure. The $700 million is above. It takes time to ramp down exploration even if we wanted to. Also, as I said before, we are looking forward here.
In the exploration figure, there is also production preparation and near field exploration that will give us growth opportunities in the short term. Then the question to the dividend, the answer is that we felt this was a fair and good way to do it. We don't need the cash on our balance sheet. It was a long expressed view or wish from the investors to get the Danske Bank stake sold and the dividend allocated out, and this is what we've done. We could have chosen a lot of other ways.
If we wanted to do share buybacks without impacting the share price dramatically, this would have taken years to recycle. We can't recycle $6 billion within a year without impacting the share price significantly. On top of that, we see this as a large one-off and you can say windfall. We will of course continue to pay good underlying dividends, normal dividends. We'll also continue to look at the balance sheet to see whether there's room for or it makes sense to do further share buybacks or other distributions. I hope that's okay. I mean, I appreciate that it could have been done in many other ways, but this was what we decided upon.
Super. Thank you.
Next question is coming from Christoph Sandner from MainFirst Bank. Please go ahead.
Yes, good morning. Two questions on the oil segment. If you would decide against Chissonga or any other large project, how would you communicate this timing-wise? Would you give an ad hoc message or just include it into the quarterly reporting that you decided against it? With respect to Chissonga, what could we expect as an impairment charge if you would decide against?
If we decided to stop Chissonga, so to speak, there would be an impairment charge of some hundreds of millions of dollars, of course, non-cash from exploration and production preparation costs that we have put on our asset list. It's not as much as you would see with other oil companies. We actually expensed most of our exploration drilling as we go. In terms of how we communicate, it's quite. If we decide to go forward or stop it would probably be at an ad hoc information. If we feel we have something important to inform our shareholders of, then we don't communicate or we don't wait till the quarterly.
Okay, thank you.
Thank you.
Our next question is from Casper Blom from ABG Sundal Collier. Please go ahead.
Thanks a lot. Just a couple of questions left from my side, please. Firstly, Nils, you said that you don't view slow steaming as a possibility for you guys. How do you view the risk of some of your competitors and maybe some of the smaller ones starting to do that, and thereby effectively releasing capacity into the global fleet?
We have done that analysis and of course, you can never exclude that people act in a way that's not good for their profitability. We don't believe that it would be an advantage for anybody also if they would be the only ones to do it. We don't see it.
A second question relating to drilling. As you say, you have a fairly good coverage looking into 2015, but then it looks a little more uncertain for 2016. Could you give an update on the whole environment at the moment? Is it at all possible to get new employment and at what rate compared to a year ago? Is that possible, if at all? Thank you.
Yeah. We don't view it as impossible to get contracts at all. There is still quite a bit of activity going on. We're not pessimistic on that. Again, don't forget that we have a very modern fleet. What usually happens during industry downturns is that it's the older, less effective rigs that are taken out, stacked or scrapped. We feel well prepared and we will have more idle rigs than we would have wished for probably. We're not seeing this as dramatic, and we feel confident that we'll continue to do contracts. In terms of rates, for the big floaters, probably rates are down 25% to the tune of that.
Perfect. Thanks a lot, Nils.
Our last question is coming from Nicolay Dyvik from DNB. Please go ahead.
Hello, guys. First question relates to [audio distortion], back in, or coming in to 2012 you effectively changed your [audio distortion] to the cheapest loans in the industry rates and now in 2014, your now changing it again. We are wondering whether this is then an attempt to knock pass on as much from the [audio distortion] or is it only a lagging effect we should expect from it?
Well, that is only relevant within the contract period. For instance now when we close contract its based on present bunker prices so potential bunker adjustment going forward would only impact from this basis, and actually last year if you look at the trend the oil prices have been increasing and prices have been falling. Over longer period you can not make that assumption, it is just to regulate within a given contract period
Okay, a couple questions regarding youe unit cost, in 2014, you were the most reliable line on global in terms of rate of reliability, your partner on the [audio distortion] is actually below the global average. Could this have an adverse effect on you ability to further take down unit cost?
We will continue to work very hard to be the most reliable carrier. Having a partner is maybe, gives additional work but we will continue our efforts in that direction.
That was the last question. I'd like to thank you for listening in and for calling in and for a very good dialogue. Once again, I apologize for the lots of moving parts we've had this year. We'll try to make it not less good, but maybe easier to understand as we move into 2015. Thank you for listening. Bye.