Many have taken the time to come here. Of course , busy days for all of us, and it makes the day much more exciting for us when we see a lot of interest. It's up to me to start giving a short overview of where we are as a company, and I'll start that in a minute. It's quite strange, but when we started to do the Capital Markets Day in 2012, we did it based on feedback that we were an obscure company that nobody really understood, and we were doing strange things and not giving full information.
Then you come to realize that you feel that you give all the information, and then we made the first day in the attempt to enlighten everybody, and you realize that in one day we can't even cover the whole company. Today I will also give a little bit of insight to two of the business units that where we don't give full presentations. It's Kim's APM Terminals and Maersk Drilling, where Claus is here, and of course, they're available for questions and so on. But it's simply because there's a lot to talk about in the other units. We hope that anyway, you leave here with a good impression. We've been looking forward to this day.
Of course, it's a huge booklet, but it actually gives us a good opportunity to get all the ducks in a row and getting a clear overview of what we're actually trying to do as a company. Even for us, sometimes it can be difficult to keep the overview. Let me jump into it, and I'll start by talking a little bit about where we are. We've, of course, had a great start to the year. Profits, stated or headline profit, as I guess they're called, up from $1.6 billion to $3.5 billion.
Those of you who've been crunching the figures a little bit know that is not the same as the underlying profit, because in there, we had the $2.8 billion gain from the sale of Dansk Supermarked, and also the $1.7 billion impairment for the Brazilian oil fields, which is of course, for the latter, unfortunately not, and for the first, unfortunately not, and for the latter, hopefully not, recurring events. This is then translating into an underlying profit improvement from approximately $1.7 to $2.4 billion, which we're of course very pleased with. The cash flow is somewhat down compared to last year in the first half. There are a number of reasons for that.
It's less cash flow in Maersk Oil. It's also Maersk Line, where increased turnover and higher rates give rise to increased outstandings, and so on. We have higher investments, but a very good progress in the first half, which led us to increase our guidance for the year from $4 billion-$4.5 billion, and are no changes to that today, fortunately. If we look across the businesses, it's for us, it's comforting that the progress is seen across the business.
We have very good progress in Maersk Line, where the profits is up from $660 million to a little bit more than $900 million in the first half. Great progress. We also see good figures, someone will come with a lot more details on that also, and Jakob and the rest of the team with more details on this. The fundamental reason behind that is, of course, continue to be cost reduction, but we also grew in the first half, a little bit ahead of the market, not planned for, but it just happened, and of course, we're happy with that. Good progress in Maersk Line. Maersk Oil also had good progress.
The two or three drivers for that, the good ones are increased production and slightly better pricing than we had the year before. Oil prices actually developed better in the first half than we had in our plan. At the moment, that situation is changing a little bit, but in the first half, very positive. As Jakob will allude to later, we are reviewing our whole exploration strategy. That means that we have had not a full pause, but a reduced speed in the exploration activities in the first half. That means that all in all, the progress in profitability has been very good and actually also ahead of plan for that.
APM Terminals grew also very nicely in terms of profits up $100 million. Very good long-term stable improvement process in that company. Common for the four or those three big businesses that are progressing on results are that they are also growing in terms of volume. We are growing our businesses. In some cases, rates put downward pressure on the top line growth. Generally, we're talking about three businesses that grow very nicely. We have Maersk Drilling, and Maersk Drilling is down compared to last year. I think it shouldn't be a surprise to anybody.
We've talked about this since the middle of last year because the program we are running at the Maersk Drilling, and I'll come back with a couple of slides on it later, is a significant expansion. Almost, I would say we're moving the company to a different level of activity. As a consequence of that, we have a high number of downtime or yard stays this year, and we have a lot of startup costs for six new rigs. It's all following plan, but it is going down compared to last year. Services and other shipping, which is our new business, where Morten will talk quite a bit about what goes on in that. Gives you.
Hopefully shed more light on the activities in services and other shipping. Maybe also come with a surprise on the name. That is all fine as long as they deliver $500 million in 2016. Then back to or just to remind you of the strategy, we launched the main components of this strategy in 2012. What has been unchanged also during the crisis has been the ambition and the vision to create four winning strong global businesses. Which is, of course, Maersk Line, which is, I'll say the signature business of the company, the business we're known for. Where we have no changes to the strategy we launched in 2012.
Self-funded growth, growing in line with the market and maintaining an EBIT margin, which is at least 5% above the average of the industry. They've achieved that, also ahead of plan. Maersk Oil, we launched the vision already back in 2011 to create an oil company with a daily production of 400,000 barrels a day. This remains our vision. Since then, of course, the oil market has changed. We're seeing at the moment a declining oil price. We're seeing all the big oil companies reviewing their plans, and so are we, of course. The 400,000 remain our vision. Also, always assuming that it can be done in a profitable way.
This is not a headless expansion plan we are embarking on, but something that has to create a profitable company also, when the oil price may not exactly be as everybody were dreaming of, two or three years ago. We have APM Terminals. APM Terminals, here the vision was, since a number of years, to create a business that would have an OPAT of $1 billion a year. I'll present a couple of slides on that later, but we are well on track to creating this global leading terminal company, and also delivering the $1 billion in underlying OPAT per year. Maersk Drilling is a company that has been a lot in the focus.
The whole industry has been in a lot of focus in the last quarters, because basically we're seeing a slowdown in oil companies' exploration and development activities. In line with this review everybody have to make when they suddenly realize that the oil price can go in other directions than up, as we also have discovered. At the moment, we're seeing a small pause, but we expect the market to come back, and we're still confident that we can deliver the $1 billion OPAT in 2018. It doesn't mean that we will be immune against falling rates or a changed market situation, but we have a very good contract coverage with good customer relations. We have great assets.
We're confident that we will be among the winners in this industry. Last year, what we added as the fifth leg was the four smaller core businesses. We added them in one division in order to create a lot of advantages, and Morten will come back to that later. Here, the ambition is still to reach a profitability level of $500 million. We do believe that we have now created the growth momentum in the big four business units to also invest additionally here. For now, the strategy remains that we want to grow using the resources that are in there.
It's up to the management team to reallocate assets and create the best possible fourth, fifth leg. The name we'll talk about later. Where are we? This is not trying to preempt what my colleagues will talk about later. I'm not running the business, I can say that Maersk Line has achieved most of the ambitions, and if not all, and they're rightfully proud of it, and they will present a lot more details in a minute. There's one, of course, adjustment to the presentation we did last year. There it was the objective to implement the P3. Now we've changed that to the 2M for reasons of government approvals and.
Lack of them in China, but this is also a very good plan. We have also a report on Maersk Oil today. The good news here are that the small and slow increase that started from second quarter or third quarter last year has continued, and we produced 6% more oil in the first half than we did in the same period last year. That is very positive. I think you will also get Jakob and his team will give you a good presentation on progress on the key projects, which is really what we need to keep focus on now in order to see how we actually profitably create the growth in that business.
APM Terminals on track, as I said before. I'll give you some slides on it. A number of activities in portfolio optimization. The latest one was the divestment of Virginia, giving us a couple of hundred million dollar profit. This is something we've been doing for years. Of course also, I'll give you some more details on that, a number of new projects that will enable us to continue growing this business. Maersk Drilling, I've talked about it already. We have this extensive new building program, and we are on track. The only thing we're not on track with is getting contracts for the last two drilling rigs. We'll also talk a little bit to that later.
Of course, the most important thing in running a successful conglomerate, and we take pride in being conglomerate, we're not shy about that, is that you have to be successful in managing the individual businesses. We've, over the last years, put a lot of effort into investing in the right way into the businesses, putting in place performance management, getting the right people in place, getting the right business strategies in place. We're today in the fortunate situation that actually five out of our eight core businesses are today in the quartile where you want to be, which is the quartile where you generate returns above your WACC, and you outcompete the competition.
The latter is very important for us because we believe that if we don't outcompete the competition, the risk of volatility increases, and we want to be acting as industry leaders, at least in most of the businesses where we are. It's a combination of profitability and volatility, and also making sure that you win really long term. We have also outperforming the industry to the left top, but below WACC in 2013 we had Maersk Line. Maersk Line last year clearly outperformed the industry, but the industry was doing so badly. Even doing that, we still didn't generate the WACC. Good news is that we probably will move to the right this year. We'll talk more about that in a few minutes.
In that, we will have Maersk Drilling probably dropping below the top quartile for 2014. That's where we are on the winners in our portfolio. We have Maersk Tankers and Damco being in the quartile where you do not want to be, which is where you underperform the industry and also do not generate the WACC. Fortunately, we have good plans for improving that situation. Morten will talk about that. A major restructuring is taking place in Damco. There are also a lot of thinking that has been done on Maersk Tankers to create a winning business out of that. The next thing that you need to do in order to be a successful conglomerate is capital allocation.
We've been pretty consistent on that in the last years. That is what lies behind or what is a consequence of our strategy to create the four big business units. That is that from the picture you see today, which has already changed compared to a few years ago, you see Maersk Line being around 40%, and you have Maersk Oil, Terminals, and Maersk Drilling being around 36%. This will change going forward. Maersk Line's share of the invested capital will go down, not because we don't have ambitions to invest. We will invest significant amounts of money in Maersk Line going forward in order to grow with the market, in order to get technological leadership.
We will invest a larger part of the increased capital that we're going to put in to grow the invested capital with around 30%. A larger part will go into the businesses Maersk Oil, APM Terminals, and Maersk Drilling, probably in that order, so that these three businesses together should make up 45%-50% of our invested capital when we come to 2017. All subject to markets not changing dramatically, of course. I promised you, and this will be very poor because it's just a couple of slides, but just giving you a little bit of insight into how the situation is in APM Terminals. APM Terminals continue on its growth agenda.
They continue to successfully reduce cost, and they continue to expand the number of terminals around the world so that we grow our footprint and create a bigger base for business. Of the 8% growth we achieved in the first half this year, 2% was actually coming from new openings. If you look at the figures up here, you'll see that we have seen a stable or almost stable growth in ROIC. So we have today an infrastructure business yielding more than 14% return on invested capital. I think surely not bad.
We've also, with the exception of 2009, we've had steady growth in the volumes based on a combination of better utilization of capacity and a constant lookout for new projects. You'll see just a small impression of the projects that we have been embarking on here. This is since the beginning of 2012 or middle of 2012 when we had the last or the first conference. It's just a huge list. This is what needs to be done in order to keep growing and improving our footprint in the developed markets. As I said before, we also have done this year something in the portfolio cleanup. It's not because we didn't like the Virginia terminal.
It was a great terminal when we opened it. For market reasons, we were just the owner and not the operator, and that's why we decided to divest that. Maersk Drilling going through, and probably best illustrated here with the number of rigs, going through this year a huge expansion program, bringing in six new rigs. They are very, very big rigs, so it's not just sort of. You can not just take the number of rigs and then assume it's just one-third growth. This is really a change of dimension for the company. Fortunately, so far, the running in of the rigs we've gotten delivered, which is four this year, is going well. The yard stays have been managed well.
We're through the most, you can say, on the technical side, the most troubles for the year or the most worrying things for the year, and that is good. Then we have two drill ships that we order on speculations. And there we work, and we'll get the first delivery in October, and then the last one around the end of the year, where we will, of course, try to secure contracts. The market is not easy at the moment, and there is a risk that we don't get contracts, but it's, of course, something that a company our size can easily live with.
Just not getting contract for those two drilling rigs doesn't mean that we'll come back next year and say, "Well, we had a bad year in 2014 because we had new rigs coming in, and this year's bad because we didn't contract the two new drill ships." We are on a good track there, and we have a good coverage compared to the rest of the industry. Then again, I've covered all this already, because it has been something that we've been quite preoccupied with during the year. The execution is going well, and I think it's also worth mentioning that the uptime in Maersk Drilling already last year, but even better this year is world-class.
We're up to 98, at least 98% uptime, on average. So pretty good or very, very good work there. I also didn't mention before that we have divested the Venezuela barge business, and I think this is actually speaking a little bit to what I'm going to say on this slide, that we will, of course, continue, even if we have defined our eight core businesses as core businesses. We will, of course, continue our portfolio optimization. There will be room for divesting assets within the core businesses and investing in others. One example is Maersk Drilling, where we divested now the Venezuela barges. As I said before, what we are focused on is creating a premium for conglomerate.
Most important of all is performance of the individual businesses, making sure that they become world-leading and winning in their industry, so that you feel comfortable when you invest in our business, that we are pretty good at managing our different business units. It's also very important to be successful as a conglomerate, that you do the Capex allocation well, that you continue working with the portfolio optimization also when you have defined your core businesses as a stable part of the business, and then continued performance management. Then, of course, also on Trond, well, when I end here, we'll talk about dividends and financial policies and introducing the concept of sharing what we earn with you.
That is what we're doing by trying to continue to lift the payout. Of course, always, as long as the underlying business will support it. Given the cash and the strength of our balance sheet that we have at the moment, we've also decided to embark on the first share buyback. At least the first organized share buyback in the company's history. That is also, I think, a positive sign that if we can't find fast enough good returning investment opportunities, then we will look at our capital structure. Thank you very much for listening. There'll be time for questions later. I'll pass the word over to Trond, who'll talk a little bit about our financial strategies and a lot of other things.
Thank you, Trond.
Thank you, Nils. It's not often I get the machine that actually keeps A.P. Møller - Mærsk under control. Thank you, Nils, for 10 minutes at least. I'll go through, as you understand, we have defined the word premium conglomerate to our making, basically, going forward. The way that we have defined it is really internally, we have defined it in the four bullets to the left. That is world-class business unit performance and customer delivery. It's value-creating portfolio management. It is an ambitious and an inspiring home for our businesses, and it's, of course, living our values that we have created for 100 years, and it's by driving those values for the next 100 years. In my financial part, I will, of course, focus on the two first ones.
What that requires of us, this premium conglomerate, is really down to consistent delivery, that we manage that we have premium capital allocation process and decisions, and that we actually share the value creation with our shareholders. That is really what I want to go through today. When it comes to the consistent delivery, historically, if you look at our what we try to visualize it to the left here, on the upper left, it's basically on the horizontal, it's the return on invested capital. On the x-axis, it's the invested capital, and it's relative. As you can see that for two years, that has changed slightly. You see Maersk Line is relatively the same level as it was two years back, but the return were quite lower.
As you can see that the return of a major part of the invested capital is coming up in the second quarter. You see that basically that lifts the return of the whole group as such. Oil and gas has been high all along, slightly reduced in relative weight in the invested capital. As you also gonna see later, terminals and drilling is increasing and keeping their level, terminal slightly increasing and drilling slightly decreasing as a result of the ramp-up on the returns. That is really where you can see the lift of the return requirements and the deliveries over this last two years have trended steadily towards the higher return level for the whole group.
That is really, as you can see on the comments on the right side, it's really the drivers that are actually gonna give us the actual return. If we manage to do this consistently and consecutively over a period of time, we're of course gonna be affected by cycles. We of course are gonna be affected by market short-term, but longer term, driving us to a steady delivery above the 10% level over the cycle. Going to the capital allocation part. The last two years, we have been focusing much on growth on the four major core areas. That is really driving it.
As you can see on the cash flow for the group since 2009, out of these graphs, you can see that four years we have spent more money than we make, and two years we have not spent more money than we make. Over time, we see that the focus on growth and primarily going in that direction, that is also why we have high ambitions on finding the growth. As we have said this year, we see around $10 billion of Capex, and I will come back to that. Actually, I'll come back to that right now.
Because if you see on the first half year, this year, we spent about $4.5 billion of the total commitments that we have going forward on Capex for the future period at June 30 is about $10 billion, and out of that, $3.7 billion is for 2014. We're at June 30, approximately close to $8 billion for 2014, and we expect some add-ons during the last six months on that. Going continuously on the capital allocation, because a lot of the capital allocation drive is the portfolio optimization. We have been driving optimization for this group for the last few years. We have sold off businesses, but the mindset that we have embedded is really visualized to the right.
Basically, as you see on the map that we have. The mindset is really, if you say to the north, it's the high attractiveness of the underlying business. South is low attractiveness. To the east and west, you have the asset positioning, whether it's low or advantageous. It's really coming down to have that view, both for the group, for the business units, and for each entity. It really is about optimization, the value driver all through the organization. As you can see for the non-core, it really is a matter of what kind of assets you have on a non-core business and how much value creating they are in itself, whether. But it all comes down to a timing of divestments.
When it comes to the core on the right side, it really is a matter of for the good assets, it's of course keep and grow. For the underperforming assets, it's a question of fix or divest. I do think that when we have looked at our assets, and I do think that the last period, we have shown that very well in a few good examples with selling off Virginia and selling off the barges in Venezuela. It's in the core of what we do. When we actually look at the assets, the type of the assets, and how we wanna grow and keep growing the businesses, they didn't really fit in. This is a thing, this is an evaluation we actually gonna continuously do throughout basically the whole year, throughout the future.
We have to look at this to optimize our return going forward. That doesn't mean that all the businesses are gonna get enough cash because we are a growth companies. We want to reengage the money that we actually get from these divestments to actually grow the businesses, the core growth businesses going forward. If we look at what we spent the money on the last few years, you can see from the top left that basically Maersk Line and Maersk Oil is getting the most money. As you can see on the bottom graph, it's actually a decline in invested capital in Maersk Oil, and it's basically a balance in Maersk Line. What we have invested in Maersk Line is basically a substitution relative to the capacity.
In addition to that, Maersk Line have reduced capacity throughout the period as a result of optimizing the fleet. The reduction in oil, the majority of that, is driven by the write-down of our Brazilian assets. That's basically why it hasn't picked up. We're still waiting for the higher investment level in Maersk Oil that will come as a result of Tyra, Chissonga, and Johan Sverdrup. You also see that we have invested heavily in drilling and terminals, and you can see that the relative weight and the growth in invested capital in those businesses are coming up. That is, of course, the reason to go for the delivery of the $1 billion respectively in 2016 and 2018 for APM Terminals and Drilling.
That is really the foundation that we actually have to deliver on these goals. I'm coming to sharing the value creation. We have developed over time a prioritization of capital in the group. How we have defined this is really the pyramid, meaning that the foundation for this group is to have a certain risk, and it also defines our financial flexibility. We have said that foundation is basically a proxy for that is our rating level, high investment grade BBB+ level. That is basically where we are comfortable in saying that our financial risk position is well-placed for A.P. Møller - Mærsk. On top of that, we are a growth company. We want to maintain the investments going forward. A balance to that is of course our ordinary dividend.
Our ordinary dividend statement is the same as we have been using the last few years, that we want to grow the nominal dividend supported by earnings growth. When you actually look at that and look at the potential and opportunities for growth investments, and look at our balance sheet and our balance sheet strength, that of course comes to a question of how much cushion do we need or cash, if you like to, relative to when the timing is of finding those opportunities for growth investments, relative to say that you have excess capital. To say that you can actually take a calculator and do that every year, you probably wouldn't get the right answer every year. It's judgment calls in there, and that has to be the case.
As of now, we have said that when we actually look at this and look at our growth potentials relative to the strength of our balance sheet right now, we have come to that conclusion that right now we see the potential of having or we have excess capital for the time being. As a result of that, we have embarked on the buyback plan that I'll come back to. That is really what we see as the structure of our capital prioritization going forward. We see it as, basically, as the way the thinking is gonna be in the future. Going just to underline the sharing of the value creation. The graph shows you the nominal buildup of the dividend.
I do think that this graph basically shows that we're keeping to the word that we have been saying of the nominal increase as long as the earnings growth is coming. A lot of what has happened, because when I showed you the balance between operational cash flow and investments, as I said, four years we spend more money, two of the years we spend less money. That means that the strengthening of the balance sheet really has come as a result of the sales proceeds over the last few years. That has driven sort of the element of coming into the decision of a share buyback. The buyback, just to recap, the elements of that, it's around $1 billion. The reason for saying around is that it's denominated in Danish kroner.
It's DKK 5.6 billion in a period over 12 months, and we started it first of September. The first period goes for about three months. It's an amount of $400 million approximately, and we're in the midst of the process. I think that the status last week was that we bought approximately DKK 550 million in shares. The amount corresponds to about a bit short of 2% of our outstanding shares. If you take the volume weighted part, you know, the volume is about 5%-10% of our volume over a year period. All in all, I think it's a good start on the program. It's balanced relative to the historic volumes.
I think it's a good way to start fulfilling our share of value creation. Having said that, the payback to the shareholders in addition to the dividend have then almost doubled or increased with a very high number, 90%. As a result of that, the payback, total payback to shareholders is then coming up to almost a double. Just to summarize, it really comes down to the three elements of consistent delivery, the capital allocation, and sharing the value creation.
I think we have placed the group in a very good position to actually achieve our return requirement over the cycle and growing world-class businesses. We have in the capital allocation been very fair, very disciplined and have a very good process on allocating capital to the different business unit and how we see the opportunities for growth. We are a growth company. Our primary decision will be to actually be that growth company when it takes allocation decisions going forward. Of course, we will have the view of making sure that the nominal dividend keeps according to our dividend statements. If we then come to a decision that we will have a view on a recurring basis, then of course, we will also have a view of releasing the possibility of another buyback program in the future.
With that will end my part of the presentation. As Henrik said, we'll come back to the Q&A at the end of the day for the whole management. We figured you might use a coffee this early in the morning. We'll have a 15-minute break.
We have more seats, down here.
Yes, we are ready for the next presentation of Services and Other Shipping. Before handing over to Morten Engelstoft, I would like to give a brief introduction to his first presentation towards the financial markets. Morten joined A.P. Møller - Mærsk 28 years ago. Half of his career, he had leading positions in United States, Asia, and in Europe outside Denmark. Before his current position, he was Chief Operating Officer in Maersk Line for six years. His responsibilities included network design, cost savings, and reliability. Later today, you will hear about the financial impact from the operational team performance in that period. With that introduction, I'll leave the stage to you, Morten.
Thank you, Henrik, and good morning. Some of you may be wondering what exactly Services and Other Shipping is or even why are we in the four businesses under our scope at all. What I'll address in my presentation here today is exactly these questions. I'll also talk about how we intend to generate value to the overall Maersk Group. Significant value I may add, compared to what is currently the case. The overall objective of Services and Other Shipping is to enable our four businesses under our scope to deliver an underlying net results of half a billion dollars by 2016. That will not be a walk in the park, clearly, but it is absolutely doable, and I'll describe how it is that we intend to do so.
Before I go into the actual presentation, I would like to mention that we have actually decided to rename our business leg from Services and Other Shipping to APM Shipping Services. That is the name that we will be using going forwards. There are several reasons for it, with the main one being that we wanted to use the APM name to emphasize that this is a core part of our group. We also felt that shipping services describe quite well what our four business units they do. APM Shipping Services is the name that we're using for internal and external communication going forwards. Our four business units in our scope will of course continue to use their current strong brand names in their respective industries, so there'll be no changes to that.
As Nils mentioned, our priority is very clear in terms of delivering the $ half billion target. There'll basically be three main themes of my presentation here today. First of all, I'll talk about what is APM Shipping Services and what do we cover to give you a brief background on the business units under our scope. I'll then talk about why is APM Shipping Services established. Finally, but not least, how it is that we intend to add value to the overall group. I'll do that part by going through the main points of the strategies and focus areas in each of our four business units. First of all, what is APM Shipping Services and what do we cover?
What we cover is four business units that each are leading companies in their respective industries. We have Maersk Tankers, which is one of the largest product tanker companies in the industry, carrying gasoline, diesel, jet fuel, naphtha as the main products. We have Maersk Supply Service, which offers a wide range of offshore support services to oil companies, drillers, and contractors with a main focus on the high-end subsea support vessels and anchor handlers. In Svitzer, we offer harbor and terminal towage at container, LNG and oil terminals, and we offer salvage and rescue services to vessel owners globally. Finally, in Damco. Damco is a top 10 global logistics company with a particularly strong presence in 4PL services and also a quite significant size within air freight and freight forwarding activities.
If we combine these four business units together, we get the business leg APM Shipping Services with a quite significant turnover of about $6 billion, with more than 20,000 employees and with an invested capital just around $5.5 billion nowadays. To put the size a little bit in perspective of the group, in the sense of looking at our share of the revenue, and invested capital and net result in 2013, then I'd say that whilst APM Shipping Services is the latest addition as one of the five core business legs in the group, we're actually a fairly significant part of the group.
If you look at revenue, then in 2013, we had 13% of the total group turnover, with only Maersk Line and Maersk Oil being larger. If you look at it in terms of invested capital, then we were in 2013, 12% of the total invested capital, with only really Maersk Line being significantly larger. It's only when we talk about our share of the net results that we are relatively small and that is obviously the most important and exactly one of the reasons why APM Shipping Services has been established, namely to make certain that we in the future also will be a significant part of the net result in the group in line with our share of the invested capital. Right now, there are basically five main challenges that I'm really focused on.
First of all, of course, to deliver the half billion dollar targets in underlying net results in 2016, which means that we need to improve our results by close to 70% over the next, a bit more than two years. That's our overall challenge also leads to the other four main focus areas, because they are fundamental for us being able to deliver our half billion dollar target. In Damco, we have lost significant money over the last year and a half, and over the next six to nine months, we need to complete large parts of the fundamental restructuring program that we have put in place so that we can return to a more normal business situation and focus in the company there.
In Maersk Supply Service, we will see a substantial increase in the size of the company, based on a significant increase in investments in Maersk Supply Service over the next five years, and we need to make certain that we do that successfully. In Maersk Tankers, we need to significantly improve our returns and enable ourselves to be a top quartile performer in the product tanker industry. Finally, we have Svitzer. In Svitzer, we have 43% of our investments in Australia, where we currently are facing cost and competitive pressures, which we are working to address. A number of key challenges, but there are also opportunities for us. As mentioned, each of them are fundamental for us to be able to deliver on our half billion dollar target in 2016.
That was a bit about the background of our companies. That takes me to the why part of the presentation. The reason why APM Shipping Services has been established is to create a structure that allows more focus on developing and improving the returns of our companies. We see a good potential for result improvements in all the four businesses, and it's obviously very important that we deliver on this potential. This is also the why. As we heard, the Maersk Group has a target for all its businesses to deliver a 10% return, and that target has not been met by our companies in the recent years, where it's really only Maersk Supply Service that has done that on a consistent level.
In the early years, also Damco, due to the asset-light nature of the business. Overall, in the last three years, our four business units have delivered an average of less than 4% return. Delivering $500 million in 2016 will take us to an approximate 8% return. Ultimately, we also for these businesses here, we need to meet the 10% target of the group in line with the other parts of our company. As I mentioned, we see a good potential for results improvements in the four businesses. Most of them are also in markets that are quite attractive in terms of a growth level in the 4%-6% growth estimation, with only really the tanker market expected to grow less than that.
Some of the markets are further attractive to us. As an example, the offshore support industry, we have issues like crew capabilities and performance track records being very important for our customers and, given our performance track record in the industry, that is a benefit for us as well. What is our baseline currently? Currently we are delivering approximately at the $300 million level, and that is obviously quite some way away from the target that we have in 2016. In 2016, our target is an underlying net results of half a billion dollars, and we are totally committed to and focused on delivering that, while also putting in place a basis whereby we have long-term healthy and sustainable companies.
We need to be self-funded, which means that our investments will be limited to the cash flow that we generate. Overall, there are, you could say, three levers or areas that we are focusing on to deliver on our targets. First of all, we have strategies in place in each of the four companies backed by specific initiatives and investment plans to enable progress in each of the four companies. We have the APM Shipping Services structure with rigorous performance management and a close follow-up to ensure that we deliver on our targets. In addition to that, I'll mention that there are a number of key focus areas that will help take us from our $300 million current performance level to the half billion dollar that we need to deliver in 2016.
First of all, in Damco, we have, as I mentioned, been losing money, and we aim to make money and return to black figures in 2015 and 2016. We will be taking out costs equal to an annualized impact of somewhere around $40 million-$50 million. In Maersk Tankers, we are currently around the break-even level, and we need to exchange that into a profit, and we'll do so mainly backed by cost savings, where we have good control of what we do in that respect and a good track record in terms of performance delivery. In Maersk Supply Service and Svitzer, we currently are delivering quite decent returns in those two businesses, and we wish to grow the business and the bottom line in the two companies.
In Maersk Supply Service, we'll have at least three new vessels delivered by 2016. In Svitzer, we expect to have at least seven more large terminal towage projects up and running. There'll be more to come from that, and four of them have been secured already. We have a number of we say high-level areas that we're focusing on, and I'll give you more detail on these specific points as I go through each of the business unit strategies in just a moment. The way that we are executing on our responsibilities is through a lean setup, where I am the CEO of APM Shipping Services, and I'm then also the CEO of Maersk Tankers, and then I have a chairman role towards the other three businesses.
In the other three businesses, we then have individual management teams and organizations in place, and they're led by CEOs as you see them here on the slides. In Maersk Supply Service, Carsten Plougmann Andersen has been the CEO for 10 years and has a deep insight and experience from the industry. In Svitzer, Robert Uggla has headed the company for a bit more than two years and has broad experience from, among others, the liner and tanker industries. In Damco, Hanne Sørensen has been the CEO since the beginning of the year, and she has, among others, good experience from restructuring tasks in other parts of the Maersk Group. Overall, that, if you will, is the senior leadership team under the APM Shipping Services umbrella.
That was a bit of information about why APM Shipping Services has been established, and now that takes us to the how part of the presentation. How is it that we will deliver on our half billion dollar targets? That is what the rest of the presentation will focus on.
We have in the four businesses, as I mentioned, strategies in place with clear specific action plans, which when executed successfully, will enable us to deliver a half billion dollar in underlying net result in 2016 and will put in place a basis for long-term healthy and sustainable companies. We will, in this part of the presentation, mainly focus on Maersk Tankers, where we have a new strategy in place, and on Maersk Supply Service, where the majority of our investments will be placed in the coming years. Carsten Plougmann Andersen, the CEO of Maersk Supply Service, will join me for that part of the presentation in just a moment. I'll of course also add comments on the key parts of the strategies in Svitzer and Damco as well.
First of all, Maersk Tankers, we, as mentioned, have introduced a new strategy here earlier this year, with the ambition to take us to a top quartile performance level in the industry. I'll start with some key facts and figures about the Maersk Tankers. We have a long history and heritage in the industry dating back all the way to 1928. Our first product tanker was delivered in 1965, and nowadays we have 3,800 employees. We operate 174 vessels, where we own a little bit less than half of them. We now, after recent divestments, have an invested capital of about $1.7 billion. Last year, we delivered a small underlying profit in the company.
What you have here is an outline of the overall oil and gas value chain, and this is now the playing field of Maersk Tankers, where we are focused on the product tanker segment of the industry. The way the industry works is so that oil and gas is explored and produced, then often moved as crude oil in large VLCCs, typically to refineries in Europe or in the U.S., where the crude oil is refined into products like gasoline, diesel, jet fuel, naphtha, and so on. These products are then moved on product tankers to other locations where further distribution then takes place. As mentioned, we are now in Maersk Tankers focused on the product tanker parts of the industry.
Let me give you a few words on how we got to that point, where we are now. A few words on the recent developments in Maersk Tankers. We used to be active in all major parts of the tanker industry and operated close to 300 vessels just two, three years ago. We in the years before 2009, we made a lot of money in Maersk Tankers. After the significant losses from 2009 to 2012 and some question marks regarding the future potential in the industry, we decided to reduce our exposure overall to the tanker industry, and subsequently the gas and the crude oil segments have been divested.
That has also reduced our invested capital in Maersk Tankers from close to $5 billion some years ago, including our leases, to now a level around about $2 billion, also including the leases. The $1.7 billion is excluding leases. We now have a focus on the product tanker segments. This is where we wish to be. The main reason why we believe that the product tanker segment is the most attractive of the segments in the tanker industry going forward relates to the expected changes in the locations of the refineries. We can see that new refineries are coming up, upgrades are taking place in Asia and in the Middle East, while older refineries are closing down in Europe.
That means that in the future, to a greater extent than today, crude oil will be refined closer to production, which will help increase the demand for the transport of refined products in product tankers. We will, along the way, invest in our fleet to make certain that we are relevant and competitive. We do not expect any further major divestments, nor do we expect to significantly increase the size of the fleet. We have the focus and the size that we wish to have now. As mentioned, we now have a new strategy in place, focus on the product tanker segment, and let me give you a few details on that.
Taking the Lead is what we are calling our new strategy, which focuses on three main areas that all have significant impacts on our bottom line. The three focus areas are cost leadership, active position taking, and third-party services, which we intend to execute on while also keeping key focus on our safety performance with a target of having zero incidents. Let me give you a few more details on these three focus areas in Maersk Tankers. The first focus area is cost leadership. In an industry like the tanker industry, which is quite commoditized, it is fundamental to be cost leaders, and we have the ambition to become the cost leaders in the product tanker industry.
Our analysis in connection with our new strategy indicated that we still have a good potential for cost savings, and we expect to take out another 12% of our cost base by 2019 or equal to annual cost savings of at least $50 million-$60 million. Internal and external benchmarks indicates that there's a potential across all the different cost segments, with the main potential being in the daily running costs and bunker consumption areas. The efforts that we are taking now will take us a step or two or three above what we have done so far. To give you an example, in the bunker consumption area, we have reduced in our tankers our consumption from 2010 to 2013 by close to 20%.
From last year to the end of this year, we expect to have taken out another 4% of our consumption. This will continue to be a key focus area for us, where we have a good track record in terms of delivering on the targets that we are setting. We have strategy delivery teams in place for all the strategic focus areas, including cost leadership, and we have now built a good part of the catalog of the specific savings initiatives that we are executing on in the coming years. We have already progressed quite a bit in that respect. The second focus area is active position-taking.
Every single day, we take numerous commercial decisions, which cargo we select from our customers, where we position our vessels, how do we price our services, and that gives us access to an enormous set of data which we can use to optimize these decisions and avoid leaving money on the table. What we have as a key component of our strategy is to use data and analytics in a much more structured way compared to what we have done so far, and making data available in an for easy access and easy insights, combined with the experience and the finger on the pulse of our commercial organizations will create a powerful combination that we strongly believe will lead to better decisions and to competitive advantage in the industry. Because use of data in that way that we target is not very prominent today.
Greater use of data will apply both for the day-to-day decisions, but also for longer-term coverage decisions and whenever we are buying and selling tonnage. The third and final focus area is third-party services. We are today operating our fleets in pools together with other companies in the industry. We manage the pools, and for that, we receive fees. Currently, we manage somewhere between 50 and 60 third-party vessels. We intend to generate additional income from attracting more third-party vessels to our pools and thereby generate additional service fees. We strongly believe that the efforts that we're taking in this respect will benefit Maersk Tankers because service fees is you could say a good asset light supplement to our business.
Also, by managing the pools efficiently and at a top five top quartile performance level, will be a benefit for our third-party customers and partners as well. The levers that I just talked about in terms of cost leadership and in terms of active position-taking will help us attract more third-party business to our pools. Just a few final remarks to summarize on Maersk Tankers. We are one of the largest product tanker companies in the industry. We have the size and the focus that we want to have. We have a clear strategy in place with three specific action items or focus areas that we are confident will bring us to a top quartile performance in the industry and towards better returns going forward. That was my comments on Maersk Tankers.
Let me now give the word to Carsten Plougmann Andersen to give a few more facts and figures about Maersk Supply Service.
Thank you very much, Morten, and good morning. I've been with Maersk Supply Service for a long time. I've been granted 15 minutes to tell you about one of the most exciting business units in the group. One of those who have perhaps been the smaller ones, which has, at a time, been core opportunistic. We are now fortunate to be part of APM Shipping Services. We are providing both shipping and services, so it's very appropriate that we actually are in the fifth leg. I will show you where we are at the moment and what we are doing to make sure that we can actually contribute to the $500 million target that we have set ourselves in the fifth leg.
Well, Supply Service at a glance were established in the late 1960s when the group got the concession to search for oil in the North Sea. It was only a natural next step that we actually serviced the rigs that were drilling in the North Sea at that time with our own vessels. We have about 1,900 seafarers and we have 250 colleagues onshore. We have 60 vessels in the fleet and invested capital of $1.7 billion. Revenues have been fluctuating over the past couple of years, as you will also see later on. Fundamentally, we have been able to generate over the cycle 10% or more with a few mishaps in between. We have always been able to deliver profit to the group. Our long-term target is for sure to deliver at least the required 10% returns on the invested capital.
What is it that we are doing? We are fundamentally servicing the deep water part of the industry, fundamentally up to 2,500 meters today. There are drilling and exploration taking place in 3,000 meters of water. That is fundamentally dynamic position rigs that are doing that business. We are not that keen on that because that does not help our anchor handlers. For sure, we have quite a variety of services to provide to the industry from the lower water out to what we call ultra-deep water. What type of vessels do we do it with? We have historically been involved in anchor handlers and platform supply vessels. In recent years, we have also expanded into subsea support vessels. A brief lesson in the offshore industry. The platform supply vessels are the trucks of the business. They run cargoes. They run drill pipes.
They run equipment to and from the rigs and the platforms. The anchor handlers can do the same as the PSVs, but also support the rigs in a sense that they can move the rigs around. They can do the anchor handling of the moored rigs. They can support the rigs while they're doing exploration and production. The anchor handlers, as with the subsea support vessels, can also support the industry when we are constructing production facilities, be it on the seabed or be it in the form of platforms. The anchor handlers are very versatile in the business. The subsea support vessels, which we are venturing into now, is more specified vessels towards oil field construction more than exploration and production. Brief glance at a cost. Today, building a PSV, $50 million. An anchor handler, $100 million. Subsea support vessel, $130 million -$150 million.
That's pretty much at a glance the capital cost that you will have to spend entering into the market. We are focusing on what we believe is the high end of the market, where we also believe or we know that the barrier to entry is higher than in the lower segments of the market. We are trading worldwide. We are trading in an industry which is $11 billion-$12 billion. As you can see from the map here, we have our turnover relatively evenly distributed over the globe. We are not in the Persian Gulf. That is benign waters. That is not really waters suited for our sophisticated vessels. We are not in the U.S. Gulf. The country of free trade still have Jones Act. That's for Americans. That's the way they run their business. That's their decision.
We do work for a lot of internationals, also American oil companies. Not listed in any particular orders. These are fundamentally our prime customers. Of course, with Petrobras for many years having been our single most important client at between 15%-20% of our turnover. Our strategy is quite simple. Zero incidents and 10% return of the invested capital in our business. We want to grow the opportunities in subsea support vessels. We want to maintain our strong market leader position in the anchor handlers. We want to divest the run-of-the-mill PSVs, as we call them. If we can find opportunities to do special jobs for PSVs in Brazil or Angola or other areas where we have strongholds already, we will also invest in that. Fundamentally for now, it is the subsea support vessels and the anchor handlers.
As Morten alluded to, safety and our crew's performance are at least 50% of what we are selling, especially after the recent disasters in the U.S. Gulf. Every time we have an unfortunate event like that, the focus increases on safety. We have over the years managed to improve, fortunately, our safety record. Not that it's a direct comparison, but our LTI frequency is on par with what we understand is the frequency for Danish school teachers. We are trying to keep a relatively safe working environment for our people offshore. We have those 2,000 seafarers of many different nationalities because our business is protectionist. 1,000 of the 2,000 seafarers are Danish or Brits.
The rest are basically hired on the locations where we are working because there is an increased requirement from authorities and governments to increase local content, be it in Angola or Brazil or Canada, everybody is focusing. We have huge training programs for our crews to make sure that whether you get a Maersk Supply vessel in Angola or one in Canada, that you get the same standards. Physically, it's the same vessels, but we also want to make sure that the crews are actually also up to the same performance, whether you are in Brazil or in Australia. We use our training facility in Svendborg to a large degree, getting all our crews through a specific training matrix to make sure that we actually have the right people at the right place. What is it that we want to do?
We have, at the moment, firm orders for four subsea support vessels, one cable laying vessel, and one anchor handler. We are, as we speak, in discussion with shipyards about additional vessels. Unfortunately, I can't tell you whom or for what, but I expect within the months that we will be able to conclude further deals. This represents investments to the tune of around $750 million, and that is quite a lot for a business where today the invested capital is $1.7 billion. We are really looking at increasing our presence in the group. On top of the hardware, we also need to make sure that the organization and our systems are in place. We are increasing our focus on how we actually sell to our customer.
With entering into the subsea support market, there is gonna be a different way of selling. It's gonna be more project-oriented than we're used to. Vessels empowerment means that we would like to push more decisions out to the vessels. We are, after all, putting our masters in charge of equipment worth $150 million, so we would like them also to be able to take more decisions themselves on the spot. We have historically been focusing on bringing perhaps a little too much decision onshore. ERP, historically, Maersk Supply Service have been brought together now as a business unit with a number of different departments coming with a lot of different systems, a lot of different IT background. We are streamlining that, and as we speak, we're actually going live with our first vessel in our new ERP system.
We are making a soft start, taking one vessel as a trial. It is always a difficult thing to get new IT systems introduced, so we want to face it in a proper fashion. We also need to be better actually at playing the asset market. Historically, ship owners fall in love with their equipment. We tend to hang on to our vessels perhaps a couple of years too long. The average age for our fleet today is 13 years. That was the same three years ago. We have even though we have not had new buildings delivered in those three years, we have actually sold vessels so that we actually still have the same average age of our fleet. The future looks bright. Some will say the growth is perhaps a little bit iffy the next couple of years.
That seems to be the consensus in the industry. It is, after all, still a growth industry. I think I won't speak for Jakob for later, but I think it's fair to say that a lot of the oil companies are actually in dire need of actually increasing their reserves, and they may be repositioning themselves at the moment, but eventually, we will have to see an increase in the activity, of course, strongly linked to where the oil price is. We are protected in the sense that we are not necessarily involved in the ultra deep water, and our perception is that where the possible reductions may first come will be on projects in the ultra deep water. It is our belief that we can maybe stay a little bit under the radar in that respect when the markets soften.
Historically, Morten was talking about returns. We did have a single year in 2012 where we didn't live up to the 10%, but otherwise, over the cycle, it's been pretty healthy returns in the industry. We certainly intend to return to the 10% return also this year. We have fallen in number of vessels from the height of 66, 67 vessels. Today, we are 58 vessels. When we are selling a vessel at $10 million and getting a new vessel in at $130 million, I do not have ambitions of growing our fleet to 100 vessels. If we can come back to 60 or 65, that sort of level, but shifting the profile of the fleet to a more expensive, higher vessel grade, so to speak.
Going forward, to eliminate the possible softening of the market, we have covered 60% of next year's revenue. At the same time last year, we had only covered 40% of 2014. We have put in an extra effort to make sure that we are better covered for 2015, where we do expect some softening. In conclusion, we will continue to grow. We have, at the moment, invested firm new buildings for $750 million. We also on the lookout for second-hand opportunities. The market has not been bad in the sense that there has not been any casualties, so there hasn't been any cheap second-hand tonnage to pick up yet, but that is still an opportunity. We have a leading record in safety, which is bringing us business.
We are part of a group where we get the support financially. We get new buildings delivered from 15 onwards. Organizationally, we are ready to meet the challenges in a supposedly globalized world, which is, however, also getting more and more protectionist. That was my 15 minutes. Thank you very much for your attention.
Thank you, Carsten. Let me turn to Svitzer and go through the main focus areas in the company that we have there. First, a few facts about Svitzer. Svitzer was established 181 years ago and became a formal part of the Maersk Group back in 1979. We operate more than 400 vessels. We have 3,500 employees in Svitzer and with an invested capital of $1.5 billion. Last year, we delivered a quite decent return in the company of 9% based on an underlying net result of $135 million. Svitzer is a leading company in harbor and terminal towage, as well as in salvage and rescue services.
We have 130 operations globally, distributed in 40 different countries. Harbor and terminal towage is the vast part of our business today. In particular, in the harbor towage sector, we have a strong presence with almost 100 operations, and we're gradually working to increase our presence in the terminal towage segment, where the contracts are longer term of nature, often 15-25 years of duration. As mentioned, we also have salvage and rescue as a part of our portfolio, but that is today a fairly small part of our business.
Svitzer has been through a turnaround in the last couple of years with a focus on raising safety standards, improving the returns of our current business, and then also on streamlining the portfolio of our businesses. We have in the mature markets, as mentioned, quite some competitive pressures which we are addressing through efficiency initiatives and new working models where possible. In terms of growth, I'll say that Svitzer is very well positioned to take advantage of the growth that we see, particularly within terminal towage in the emerging markets, and in particular, within LNG and oil terminal towage.
Svitzer has had a very positive development in returns over the last two years, mainly due to divestments of non-core and underperforming assets, as well as contribution from new activities. As I mentioned, we are facing challenges in the mature harbor towage segments. That is in particular the case in Australia, where we're working closely together with the unions to find more flexible working models so that we can increase the productivity levels that we have there. We're also working closely with our customers, and Svitzer is in that market the only one offering multi-port performance-based contracts overall.
We continue to work on the efficiency of our business and to take cost out to counter the pressures that we are facing. In terms of growth and business development. We are, as mentioned, working to increase our presence in the longer term terminal towage contracts to get a better balance in our portfolio. We are already the global leaders in LNG towage service and marine support contracts, where we are present in 19 terminals currently. Over the last year and a half, we have secured new projects worth $45 million in EBITDA, which will materialize over the coming years.
There's more on its way because we have a quite large portfolio of projects, more than 50, where a good part of them, 30 or so, are longer-term terminal contracts, which we will be bidding for in the coming years. So far, we have a very good track record in terms of winning terminal towage business. We have a 40% track record, which is quite significant. That is to a large extent due to our safety performance and due to the performance track record that we have demonstrated in the markets for many years, which as you can imagine, are very important, in particular, in the long-term contracts that we are talking about here. That was a few words on Svitzer. Let me then turn finally to Damco.
Damco is where we probably have the largest immediate challenges and also where we are taking action with urgency to turn around the results from 2015 onwards. Again, first, a few facts about Damco. Damco evolved from Maersk Line and was established as a separate business unit as Maersk Logistics back in year 2000. Year 2009, we renamed the business unit to Damco. We are nowadays more than 11,000 employees, and we have a turnover of more than $3 billion. But in the last year and a half, we have been delivering an underlying negative net result. Looking at the logistics value chain, Damco is present in most parts of the value chain with a particularly strong position within 4PL services.
4PL is integrated logistics solutions or supply chain management, where we typically are working with large global companies, where we are operating and managing large parts or the whole of their global supply chains. We also have a quite significant presence in air freight and freight forwarding activities as well. What is making us unique in 4PL services is that we first of all have a long history and experience within that part of the logistics market. We typically organize around our customers, which is a different approach compared to our competitors. Damco or Maersk Logistics actually was created based on 4PL or supply chain management solutions, whereas most of our competitors started out with fairly basic freight forwarding activities and are now expanding into 4PL services. We have a strong position, in particular, within 4PL logistics.
Damco currently has three main challenges. First of all, our costs are too high compared to the business that we have, somewhere between 5% and 15% compared to comparable companies in the industry. Secondly, our gross margins on air freight and freight forwarding are too low, also again, compared to what is the norm in the industry. Finally, we have currently limited global standards and thereby cooperation between the different parts of Damco. A number of clear challenges in Damco right now, which we are focusing on as we go forward. These challenges are exactly what our fundamental restructuring program that we call One Damco focuses on. One Damco consists of six overall components, which we have been executing on since last year, and where we expect to complete most parts of the rollout by mid next year.
What One Damco gives us is, first of all, a global scalability and visibility of our operations, which is critical in the logistics business, where we have hundreds of thousands of transactions going through the systems. We will go from more than 300 operation centers to 50. We'll introduce one global freight forwarding system and will enable a scalable sales organization and methodology, all of it backed by lean management, to ensure that we have an aligned approach across the organization and a continuous approach to improving our processes as we move forward.
Together with One Damco, we are also working on a significant organizational restructuring, which we initiated just before the summer break. The aim here really is to take out as much cost as we can as fast as possible, and at the same time, enable a more agile and slimmer organization to enable easier cooperation across the different parts of the company. In that process, we will take out to the tune of $35 million in an annualized effect. We expect that a good part of that will take effect from the beginning of next year. That concludes the overall outline of APM Shipping Services and the four business units.
Let me just briefly summarize that we now have established APM Shipping Services as one of the 5 core business legs of the company. We consist of four interesting, attractive business units, each with a good result improvement potential, but also each companies that are facing competitive markets and changing market conditions, which we are addressing through the strategies and action plans as I just mentioned here. We believe that grouping these four businesses into one business leg with independent management in that structure will actually enable a faster and more profitable growth for our four companies. Let me leave it at that and open the floor for questions. Good afternoon. It's my privilege and pleasure to talk about Maersk Line for the next 90 minutes together with Jakob Stausholm.
Jakob will start out by reviewing how we have done in the last 12 months since we had the Capital Markets Day last year. He will also discuss some of the key drivers behind the results that we have achieved. Then I'll move on to look forward, discuss the challenges that we have, what our strategy is towards dealing with those challenges, and then also, you know, end with a small glimpse of our growth agenda. Since we last met 12 months ago, we moved more than 9 million FEUs in Maersk Line.
We're growing the business 8% year-on-year, and we're continuing to fulfill our mission of making the world a smaller place, facilitating trade and supporting global economic growth. In the 12 months, we have also been able to make progress on our scorecards. I think one of the things that interests you the most. We are now delivering best-in-class financial performance. In fact, in the last five quarters, Maersk Line has been leading the industry in terms of margins. We delivered in the first half of 2014 a 9% margin gap to the average of the industry. In the last seven quarters, Maersk Line has been above our stated target of 5% margin gap to the average of the industry.
We're growing with the market, in fact, slightly faster than the market, but it's not by design. We are generating significant free cash. The big news since last year is we've also managed to get our return on the invested capital north of the target that was defined last year's Capital Markets Day of 8.5% return on invested capital. All in all, we are pleased with the progress we have made, but also clearly, we have more to do. When you leave today, I would really like you to leave with four key messages. The first one is that we are building a track record, a track record of stable earnings in Maersk Line.
The second one is that we continue to expect conditions to be challenging for Maersk Line and for the industry, but that we are building a business that will be able to deliver a profit under challenging conditions. Third key message is that we have made good progress, but we have more to do and that we have a plan for what to do, one that we can execute on and that is largely within our control. Fourthly, that we have a growth agenda for Maersk Line in line with our strategy that we have stated for the last couple of years in terms of growing with the market. Now let me hand over to my colleague, Jakob Stausholm, who will start with the results of the last 12 months.
Thank you, Søren. Good afternoon, ladies and gentlemen. We in Maersk Line have now had nine quarters of profits in a row. All quarters in excess of $200 million. Seven out of nine quarters in excess of $300 million. We are creating a more stable performance in Maersk Line. We have I believe stuck to the guidance we gave you last year when we first time presented to you at Capital Markets Day and have performed according to that with a positive development. I will now review briefly our performance, but I really spend most of my focus and time on trying to explain to you the underlying reasons for how this result has been achieved and why our results have become more stable.
Our performance is more stable now, but we do have seasonality in our performance. I should say normally, we have our peak season in the third quarter generating the best results of the year, the peak and the trough around Chinese New Year in the first quarter probably gives the weakest part of the year, and therefore, I tend to look a lot on the last 12 months' performance, eliminating the seasonality. I hope you can see, after the initial turnaround from 2012 to 2013 or during 2012, we got stability in the earnings in 2013.
We're particularly pleased with the fact that we managed to get it a notch up with a good Q1 and Q2 results this year, which have enabled us to strengthen our guidance or our outlook for 2014, now twice this year. When we met last year at the Capital Markets Day, it was against Maersk Line that had performed to a return on invested capital of 6.3% in the first half of 2013. At that day, group management revealed a target externally of 8.5% medium-term for Maersk Line. We are therefore proud to stand here in front of you today having delivered 9.9% in the first half of 2014. Cash flow have improved much more than earnings.
Obviously, the stronger earnings have helped our cash flow a lot, but we have also become much more disciplined in our spending of Capex. In 2012, we took delivery of many new vessels, and we invested a lot in containers. We have, in 2013 and 2014 so far, basically only received relatively few new vessels, the Triple-E's, and we have pushed ourselves quite hard to try to utilize our containers more, increasing the turn of the containers, and therefore we have had less need for buying new containers. That means that today we are by and large in round numbers, we have over the last 12 months generated cash of $3.8 billion, and we have invested around $1.7 billion.
The vast majority of $2.1 is actually free cash flow to the group. Our profit and loss statement, whether you look from the first half last year to the second half, from the second half to first half this year, there are very simple conclusions to extract. First of all, volume is up. We have said repeatedly, we grow with the market. Freight rates are down. The revenue is flat. We are improving our earnings and our return on invested capital, and we have achieved that through lower unit cost. If we look at our performance against competition. Over a long time, Maersk Line has performed better than the average of the industry. For quite a long time, we have had the target of performing, we should perform like five percentage point higher EBIT margin than the average of the industry.
We entirely believe that that is doable. You can see an industry with quite a significant variation in performance, and we have recently been well above the 5%. Although we have been close to the 5% earlier, we were not best in class. The last at least one and a half year, we have been the container liner in industry that has performed the best. If you look at first half this year, you can see that there are very few container liners out there that actually earns money. It is a tough business environment and some container liners are actually performing fairly close to cash break-even.
We still believe that the 5% percentage point gap to peers is the right level long term, and I'll explain in the coming part of my presentation why we have exceeded over the short period of time. Let me stop here explaining our recent track record and try to dive into the underlying reasons behind this. First of all, the top line is challenged, as I said earlier, with the freight with the falling freight rates. Even growing with the market, we are struggling to get to record the same revenue levels as we had two years back. When you're faced with such a market condition, such a tough market condition, you have to put yourself under pressure.
The only response that we could see is have a conservative outlook and distill a deflationary mindset in everything we do in Maersk Line. As we say in Maersk Line, cost leadership is a lifestyle. It's not a diet. It's not something that is going to go away. We will continue with that. That strategy has so far delivered for us. We managed to take out significant absolute cost from 2012 to 2013, and we managed from 2013 to 2014, while growing the volumes quite a lot to keep it at the new lower level. That led to a fairly stable decline in our unit cost. You can see over the year, the yearly reduction in unit cost is to the tune of 7%-8% a year.
Now, there is one factor which we can't control, and that's the bunker price. It has gone down a little bit. If you really take that away and say, what is the real underlying cost improvement, then it has been to the tune of 6% a year. How has that been achieved? We are an asset heavy business. Our network cost is two-thirds of our cost. That is the key. How can you optimize that? I think one of the great things we have learned here is that opposite to many other asset heavy business, the network is actually something you can trim, you can adjust as you go on, and that is critical for profitability in this business. Firstly, active capacity management is very, very important, and I'll review that in a moment.
Secondly, our size and scale means that we have continuously a lot of opportunities to improve our network design. I'd say over the last two or three years, we have learned a lot to become even better at designing networks. Søren will later on in his presentation give you some example of why we keep on seeing new opportunities to further improving. The final one, and that's a lower bunker cost, but it's really not a stand-alone thing. Bunker cost, in a way, is the outcome of a zillion of different initiatives on how you run your vessels, how you keep your vessels, retrofitting them, how you slow steam, how you design your network, et cetera. It's a really good performance indicator whether a number of initiative works for you.
Again, Søren will dive much deeper into our toolbox of optimizing our network. Let me examine a little bit further in detail capacity management. If we look over the last two years, and now I have indexed it to Q2 2012, so it's two years, so there's no seasonality. Over the last two years, Maersk Line's volume has grown by 10%. Our nominal capacity in that period of time have only grown by 3%. In fact, we have been very active to both take vessels out of the network and invested them into slow steaming, i.e. putting more vessels on the string. Secondly, we have been very active on blanking sailings, et cetera.
If you look at the capacity that we actually offer to the market, it has not grown by 3%, it has actually been reduced by 2%. Now, the impact of growing your volume by 10% while reducing your offered capacity by 2% is, of course, a significant increase in our utilization. That makes a huge difference to the possibility of Maersk Line. I was thinking a bit about how could I illustrate this not with numbers, and I think I can't do it better than with this picture here. This is Mary Maersk. Isn't she beautiful. On a sunny day in the Mediterranean this summer, carrying a record-beating 17,600 TEU. That's utilization.
Now, the sharp analysts, and I know there are many in this room, will be able to see that there are still a couple of things that can be improved, and therefore, I'm particularly proud to tell you that two days ago, another Triple-E, Mary Maersk, carried 200 TEU more than Mary carries on this picture here. That's utilization. Now, another way of looking at our capacity management is to just look at our fleet. We have since the beginning of 2012 till now, reduced to the tune of 50 vessels in total. On top of that, we have taken the 31 out and reinvested in slow steaming. It's actually quite sizable.
We have had quite a lot of churn in our vessel portfolio in that period of time, and we have taken delivery of new vessels which we own ourselves. We have actually increased our ownership share. If you look at the number of vessels, then the number of vessels we own, we have increased our ownership share from 42% to 47%. Now we tend to own the bigger vessels, so if you look at it in capacity-wise, we have increased our ownership percentage from 56% to 59%. I'm demonstrating this because despite the tight capacity management, we have actually done quite significant high grading of our vessel portfolio over the last couple of years. We are an outlier to the industry.
The industry has over the last two years grown its nominal capacity by 11%, while we have grown by 3%, and the market has grown by 7%. As you can see, just looking at the 15, the top 15 carriers in industry, there are really only a couple who has not had double-digit growth. We believe that that is a significant part of the reasons of the earnings gap we see in industry. People tends to say to me, "Of course, you are performing better, Maersk Line, because you got bigger vessels." I think I have to say to you in the name of transparency, it's not true. I mean, our average vessel size is the average of the industry. There's really not a lot of difference there.
We have to, and the industry have done over decades, continue to increase the average vessel size as the whole market for containerized transport grows. We have actually, over the last couple of years, grown slightly faster than the market by almost 9% a year, whereas the industry have grown by 6% its average vessel size. We've done that without receiving a lot of new vessels, but it's really just mainly the ability to take out subscale vessels, because typically we have them on time charter, and we can push them back to our tonnage providers. Now, as I said earlier, bunker cost is an outcome of many things.
If there's one thing we are really, really proud of, then it's our bunker efficiency chart, where we over two and a half years have taken out 28% of fuel consumption per container transport. 28%. That is by any standard, a massive amount. Sea freight is by far the most energy efficient transport form in the world. But the transport, the freight is of course significant, and therefore we are consuming a lot of fuel, bunker fuel. In fact, we are consuming more than the total fuel consumption of Denmark. Therefore reducing by 28% it does a significant difference to the environment as well. If you just take from 2012 to 2013, in absolute terms, in absolute fuel consumption, we consumed 1.3 million tons less.
That is the same as 20% of the total fuel consumption in Denmark. On top of that, we have been a bit lucky with the bunker price. Actually our total fuel costs have gone down almost by 40% in that period of time. Turning to another part of our cost structure, which is a small part of our cost. It's only 8% of revenue, our SG&A cost, our administrative costs, sales, general and administration costs. You could say it does not make a lot of difference. We do believe that well-run companies always focus on SG&A costs, and we have improved in that area. We have improved to the tune of 7% on a unit basis over the last couple of years.
We do benchmark ourselves against industry, and this is an area where we are not best in class, and quite frankly, we see that as something positive because we see it as an opportunity to improve further. We will continue to work on this. It's not something you change from one day to another. You need to invest in IT, getting better IT, getting better processes in place. But there are opportunities for us to further improve in this area. Now, so far, I have only spoken about what we have done and what impact has it had on the profit and loss statement. Does this have an impact on the balance sheet? Yes, it does. What impact does it have? First of all, we have actually made our business more capital intensive because when you do slow steaming, you have more vessels on each string.
Secondly, as I demonstrated before, we have increased our ownership share. In a way, we have handed back off balance sheet vessels and taken vessels back on the balance sheet. Those two factors, you would expect that our invested capital would have gone up. It has not. It has gone down by 1% or on a unit basis to the tune of 5%. That's really back to our capacity management that we have constrained ourselves. That's the one part on the vessel side, and also we have improved the utilizations of our containers. We also reduced net working capital, but that's a smaller part of it. Let me summarize here. I think the conclusion from our side is we have been delivering, if not exceeding our targets and our guidance given last year.
It is important to say there are risks in our business. We are operating in a volatile market, but I hope with this presentation you can see that, although we are an asset-heavy business, we have many levers to pull. Really what we are trying to do is making our business model a little bit more agile. When you do that, you can generate both profitability and much more stability in our earnings as you go forward. We believe that these are the main reasons why we have also been able to outperform the industry to the tune of 8%-9% over the last quarters. Long term, though, the right target is still to perform to a level of 5% above the industry.
Now, I restrained myself only to talk about what has been done over the last couple of years. I'll now hand back to Søren, who will talk about how we see the market outlook, our strategic challenges, and how we will respond to it.
Thank you, Jakob.
Thank you.
As I said, when I started, one of the key messages we want to leave with you is that we have made good progress in the last couple of years, and I think Jakob very adequately explained that. Also that we have more to do and want to share with you the four challenges that I spend most of my time worrying about when I think about Maersk Line. The first one is the industry continues to be plagued by overcapacity, by an imbalance between supply and demand built up over many years, and we have to build a business that can sustain that.
Obviously, this is very closely linked with the next one, that our prices are falling and the top line is under pressure, or at least very difficult to grow in line with volumes. We have to also here build a business that can survive and thrive in a deflationary rate environment. Third challenge is the East-West trades. Those are the traditional old trades between Asia and Europe, Asia and North America, and Asia and Transatlantic. A big part of our business. They are structurally unsound, and we need an answer for that. Finally, we're seeing increased pressure on our strongholds in the North-South trades that we ourselves would like to grow in, and so would our competition.
Those are the four challenges, and let me dig into each of them in a little more detail before we get to the answers, what we're gonna do about it. Now, we have a long history of growing capacity faster than demand in our industry. If you look back over the last 10 years, we've had long periods where capacity has significantly grown, outgrown demand growth, and in particular, in the period from 2004 to 2011. We don't actually think that this trend is gonna, or at least we're not very optimistic that this trend is gonna change anytime soon. Last year, a total of 11% of the existing order book was ordered. Enough for two years of growth.
This is into an industry which has performed pretty poorly in terms of returns to the investors for the better part of a decade. Why is this going on? We decided to bring back just one chart from last year's Capital Markets Day presentation because it's a chart that describes very well our view of the industry. We call it the vicious circle of container shipping, and you can start the circle wherever you want, but if you start in the upper left-hand corner, we have continued pressure on prices. They have dropped two percentage points per year for the last 10 years. That, of course, means that everybody's out there looking, what can you do to take out costs?
In our business, the simple and most easy way to take out cost is to build a bigger ship. As a rule of thumb, if you increase or if you double the size of the ship, you reduce the unit cost by 25%, assuming, of course, that you can fill it. That leads everybody to order a lot of ships. So far, you, at least those of you that are bankers, have been very willing to support that game. That's at least one thing where you can help yourself. For the last decade, we have had an average of 11% new capacity ordered every year. That has come into a market that has grown 6% in terms of demand.
We have had the nominal capacity growing by 10%, demand growing by 6%, obviously pressure on prices, so they're falling. We take another turn around this wheel. That's the long-term reality that we are looking at. Short-term, we're a little bit more positive. Since 2012, the industry has actually grown capacity in line with demand. Nominal capacity has grown in 2013, 8%. If you look at the effective capacity growth, it's more or less been balanced with demand growth of 4% because a lot of tonnages have been invested into slow steaming.
If we look forward, as Maersk Line to 2015 and 2016, then what we see is that demand is likely to grow. Supply is likely to grow more or less in line with demand. The positive is that the gap is not widening, and the negative is that the gap is not closing either. A small positive could be that the pressure on, downwards pressure on prices in the next couple of years would probably lessen a bit. It does not, however, change our long-term view of the business. If we look back in history, as I said before, 10 years to 2004, prices have come down 2% per year.
If you look to 2008, they've actually accelerated, or the trend has accelerated, so come down by 5% per year, and so on. What it means for us as Maersk Line is that we cannot build a business on the hope that prices will go up. There's absolutely no historic basis for having such a hope, and hope, in our view, is not a strategy. We have to build this scenario into our strategies. Third challenge for Maersk Line is the structurally unsound East-West trades. On this chart behind me, you can see that the margins in East-West, and these are Maersk Line's margins, and I don't have reason to believe that anybody in the industry is doing better.
Margins have been low 2% per year for four and a half years, for the last four and a half years. That means you're not making any money. Also, growth has come down 3%. Why is growth an issue here? It is because 50% of the global fleet that is on order are ships that are larger than 10,000 TEU. They're all designed to come into the East-West trades. Yes, if we're very disciplined about taking our older capacity out, we might avoid a disaster, but there's nothing coming from the market that will help this picture anytime soon as we see it. Last challenge, the fourth challenge, North-South, we see increased pressure on those trades coming from two areas.
One is that there's a lot of ships that have to cascade out of the East-West trades. The seven, eight, nine thousand TEU ships that used to be the workhorse of Asia-Europe, they have to go somewhere else. They can only go one place, that North-South. That puts pressure on. On top of this, there are a number of competitors that are seeing this market as a growth opportunity. Certainly for Maersk Line, this is a problem because this is a stronghold of ours, and these are markets where we, as we showed you last year, have higher margins and higher growth, and we want to, clearly, we want to protect that. Summing up on market outlook, we expect volumes or demand to grow more or less with supply.
We don't think there's much evidence that prices will go up, and therefore, we have to continue to have a deflationary mindset when it comes to cost. Now let me turn to strategy. What are we gonna do about it? In terms of the first one, supply and demand imbalance, we're gonna continue to do what we are doing, stay the course in terms of being very disciplined with deploying new capacity. Our strategy will continue to be to grow with the market. In terms of declining freight rates, in our view, there's only one strategy that works in this type of scenario environment. That is that lowest cost will win, and we're gonna continue to drive out cost, continue to having a deflationary mindset. Third challenge, we are implementing on the East-West market, we are implementing 2M, hopefully.
I'll explain what that will do to our profitability in those markets. Finally, we are absolutely committed to protecting our position in the North-South trades by being lowest cost, having the best product, and having the best organization on the ground to facilitate our customers' needs. Let me talk to each of these in a little more detail. Cost. I very often get asked the question by colleagues and by other stakeholders, can we continue to drive out costs in Maersk Line? Is that realistic? I have one very simple answer to that, and it's a clear yes. Yes, we can continue to drive our cost. We have a vast toolbox to do so, and I'd like to actually spend a little bit of time on this slide.
First of all, in the upper left-hand corner, network rationalization. I'll give you a few examples on the next slide, but this is a very powerful tool for us to continue to drive our cost, designing the networks smarter and utilizing them better. Second one, speed equalization. We've started with slow steaming back in 2008, invented in part by my colleague Morten Engelstoft, who spoke before the lunch break. Then it went to super slow steaming, so that basically meant slower than slow steaming. The next generation of slow steaming, that's actually speed equalization. What do I mean by that? The way we have implemented slow steaming, what has been that in the head haul, we've gone fairly fast, and then we've gone very, very slow in the back haul.
From a fuel perspective, it's actually more efficient to go more even speed, so reduce the speed on the head haul and increase it slightly on the back haul. That's speed equalization, and that's the next generation of slow steaming. We expect a lot of savings from that. We are gonna continue to drive towards improving our utilization. Jakob showed you how we effectively have improved our utilization of the network by 10 percentage points over the last two years. We will continue to grow capacity slightly less than volumes going forward. Next line down, improving procurement.
There's a lot we have learned about procurement in the last five, eight, 10 years as a group, and we are using all those learnings and getting a lot of help from our group procurement unit in getting better at negotiating contracts and so on. We have a long tail in Maersk Line of small contracts. We are operating in 120 countries, and obviously, not every single contract can be negotiated by group procurement. We need to apply professional procurement practices all the way out in the long tail of small contracts that we have. We're gonna continue to use the VSA tool. I'll talk about the VSA with MSC on the East-West trade shortly.
The VSA as a tool is a very powerful concept that allows us to improve the product and take cost out at the same time. We can get better at container efficiency. This is one of the things that we as a management team don't really believe that we have cracked. We have been able to increase the container turn per year, but we're kind of stuck at a level that hasn't improved for five, six, seven years. This is one thing that we need to, in 2015, figure out how to get better at. The same goes for inland optimization.
We think we're doing a good job, but when we benchmark ourselves to people that are really big in this business, like Kuehne+Nagel, I mean, I'm talking about trucking, and DSV and companies like that, then we can see that we're not as professional as they are. We need to work with it. We're gonna be deploying larger ships, and that helps as well. I think Jakob showed a pretty important graph in terms of illustrating that all the cost benefits that Maersk Line has delivered in the last couple of years have not been driven by deploying Triple-E ships. You know, 10 Triple-E ships in between 500-575 actually don't move the average very much. It's part of what we are doing, and it will also contribute to lower cost in the coming years.
Finally, we are retrofitting a number of ships. We are spending significant investment dollars on that. Basically, very simply cutting the house in half, lifting the bridge, so that we can have more layers of containers on deck. It's a very inexpensive way to get more capacity with very fast payback on the investment. In my view, we have a very, it's not called a waste, but a vast, I was reminded yesterday by the British speaking. A vast toolbox of cost-cutting initiatives in front of us. I'm committed, and so is the rest of the management team in Maersk Line to continue to drive out cost. Just a couple of examples from the network optimization and slow steaming to illustrate what we are really doing.
On network optimization, we have a service that went from North Asia down through South Asia and then onwards to South Africa. We had another service that went from South Asia up through North Asia and then over to the west coast of South America. As you will understand, there are overlaps in the Asia legs from north to south in both directions. By adding the two services together, we save the overlap. It allows us to take out one ship. We call a lot less ports. We save the fuel, and there's a $20 million annual benefit. That's a very simple network optimization exercise that we are doing, but that is what we're doing all the time looking for these kinds of opportunities and also finding them as our network grows. On slow steaming, mechanics are very simple.
We add a ship that prolongs the weekly rotation by seven days, i.e. three and a half days in each direction if we have speed equalization. In the case of transatlantic, going from five to six vessels saves us $10 million a day, a year. In terms of the Middle East to U.S. East Coast, going from eight to nine also saves us $20 million. Those are some of the initiatives that we believe that we can continue to drive in Maersk Line in the coming years. Turning to 2M.
We believe that with the deal that we have done with MSC, we have a full good answer to the chance we got after the P3 was not approved by the Chinese government. It's a ten-year deal which replaces all the existing agreements that we have in the East-West trades. Why are we doing this as a ten-year deal? Because that's what it really takes to allow us to get all the network efficiencies out of this. It's expensive to phase in. It takes a long time to drive all the costs out. Therefore, we believe a cooperation of this nature, as complicated as it is, we need a long time to make it work and take all the benefits.
We have filed the relevant places where we need to file, and there's only one suspensory filing, and it's in the U.S. We'll get a reply one way or the other by the eleventh of October. There's one opportunity that the U.S. can ask questions and then we will have a period to answer and then another 45-day period before we get the final answer. That's the status as we have it now. We'll get two benefits out of 2M. We'll get better products, and we'll get lower costs. Let me talk first about lower costs. We will all things equal, deliver a cost reduction in the East-West trades of $350 million as a yearly run rate.
For 2015, that means actually $250 million because we will have 10 months of benefits, and we'll also have some phase-in costs in the early part of the year. The savings are coming out of three buckets. The first one is that we are increasing the average, we are reducing the number of ships, and we are increasing the average vessel size deployed by about 2,000 TEU from around 9,500 TEU to around 11,500 TEU per vessel. Secondly, we are gonna be able to deploy our Triple-E vessels better than what we would have been able to do ourselves.
If we had, with the volumes that we today have from Asia to North Europe, had to deploy our Triple-E ships as Maersk Line alone, we would have had to reduce the number of strings that we deploy from Asia to Europe, i.e. reduce our frequency. That was, from a commercial perspective, a problem for us. Finally, we are gonna reduce bunker costs. We're gonna take this opportunity to design a new network with slower, slightly slower speed. Has significant impact, both because we have fewer ships and also because we have lower costs. Jakob touched upon our bunker story, and I'd like to repeat just a few headline numbers because we think they're really good.
In 2012, we consumed 10.1 million tons of fuel in Maersk Line. In 2013, 8.8 million tons of fuel, so that's the 1.3 that Jakob discussed. This year, we're gonna be slightly less again in absolute terms. In the meantime, we're growing volume. With the implementation of 2M, we will also next year be able to deliver an absolute bunker consumption that is, you know, on par with what we are doing today, despite the fact that business continue to grow from a volume perspective. In terms of product, we're gonna get an upgrade in the frequency, in particular on transatlantic, where our product frankly is not great. We're gonna go from three to five strings in the transatlantic services.
We're gonna add another string from Asia to Europe, so we go from nine to 10. On Pacific, our product will be largely unchanged. In terms of direct port pairs that we serve, i.e. port pairs where we can go directly on the same ship from one to the other and not have any transshipment, we are growing by 30%. There will be 10 decidedly new ports in the network that we don't cover in any manner today, and we will have 79 port calls more per week to sell. All in all, a very good improvement of our East-West product on top of the significant cost savings. Now, ending with the last challenge, I wanna be very clear, we want to defend, not only defend, we also want to grow our position in North-South.
We have some really important positions. We are number one in Africa. We are number one in West & Central Asia, which for practical purposes is India and Saudi Arabia. We are number one in Oceania, and we are, with a new deal that we have done with Kotahi, the biggest freight forwarder in New Zealand, behind the big exporters of Silver Fern Farms, the meat, and Fonterra, the dairy products. We're gonna grow, be number one and grow our position in Oceania. We are number two with a 19% capacity share in Latin America. We're gonna defend using three-legged strategy. First of all, we're gonna continue also in here to drive for cost leadership, having the biggest ships that we can have in each trade and the lowest possible unit cost.
We're gonna have excellent product. It's very difficult to differentiate on the product side, the physical product frequency, transit time, geographic coverage, and so on in the East-West trades because of the big global alliances. In North-South, there's still quite some differentiation to be had on the physical product side when it comes to these things. We wanna have the best product in each of these trades in terms of the port coverage, the frequency, the transit time, extensive feeder network, and so on. The third part of our defense strategy, that's our boots on the ground, the organization that we have. Maersk Line have a long-established organization in Latin America, in Africa, in all these markets.
Having our colleagues on the ground is extremely important when we go out and sell to the customer because everybody understands that, you know, you're trading on Africa. We might sell a product, but stuff is gonna go wrong and what decides whether you're a good provider or a great provider is how well you handle the situations where things are not working in accordance to plan in places like Africa. That's where we have an advantage with the people we have on the ground. North-South is not just about playing defense for Maersk Line, it's actually also playing offense. That's why we have decided to establish a new business in Intra-Americas and revive the Sealand brand. We've had significant success in the intra trades with our two sister companies or daughter companies, Seago Line for Intra-European and MCC for Intra-Asia business.
Now we want to replicate that model to Intra-Americas. The model is very simple. We have a standalone organization, its own brand, and focus only on that trade. Of course, leveraging the scale benefits of Maersk Line to the fullest extent in that theater. With Sealand, we have an opportunity to replicate that model in Intra-Americas. This is a trade where we are decidedly underweight when you compare our market share in Intra-Americas to our global market share. We're carving out 250 colleagues from Maersk Line and putting them under the Sealand brand. They'll have a very nice headquarters in South Florida. There was a long list of volunteers to go there.
We'll be ready to launch this in the early part of 2015. Now, as I said in the beginning, I'll also give a small glimpse of our growth agenda and our investment plan. When we met last year in the Capital Markets Day, we said that we were gonna make new investment decisions in Maersk Line under a few conditions. First of all, we needed to deliver return that was better than cost of capital, and I believe we're doing that now. Secondly, we will invest in line with growing with the market. We said last year that we would be able to grow with the market towards 2015 based on our current order book at the time, with the Triple-E's coming.
In fact, as we have been able to improve utilization as much as we have, we have actually been able to extend that period through 2016 as well. We are growing with the market based on investment decisions that we did back in 2011. Where we are now is that by 2017, we need new capacity, and we need to take investment decisions about that within the next year. We need, due to our size, 425,000 TEU to be delivered in 2017 through 2019. That's equal to about 30 14,000-TEU ships. We have an investment plan in Maersk Line which is around $3 billion per year on average for the next five years.
That's covering the ships, the retrofits, and of course, the containers, some IT, and other stuff. It's a big amount, $3 billion, but I would like to put it in the context that our cash flow from operations last year was $3.7 billion, and Jakob showed a run rate of that at that level as well for this year. We'll be investing in big ships. That means ships that are larger than 10,000 TEU. We believe there's a well populated and liquid charter market for ships of 10,000 TEU and smaller, and we'll make use of that wherever we can. There's one exception to that, and that is that we are considering to build ships for Seago for trading in North Europe.
As many of you know, new and stricter legislation will come into place next year for sulfur emissions in the so-called ECA areas, emission control areas. For Maersk Line, that means that we'll go from burning heavy fuel to burning what effectively is diesel. That has a significant cost impact, about $200 million per year that we plan to pass on to the customers in the form of a new tariff. We are spending, of course, a lot of time trying to figure out whether there's technology we can put to work towards reducing our sulfur emissions. We're looking at the scrubber technology, and we're looking at LNG technology.
We may decide if we can find a workable solution that can achieve the sulfur regulation, the stricter sulfur targets, then we might decide to make an investment in this space as well. As I said, that's the exception. Our key focus for investment will be larger ships. It's time to wrap it up. We are, as a management team, committed to continue to deliver towards the scorecard that we saw last year or was defined last year. Being a top quartile performer, delivering on the margin gap of 5% more than the average of the industry, to continuing to grow with the market funded by our own cash flow and delivering a return on invested capital north of 8.5%.
Yes, I do know that we're doing better than that right now, and I can assure you that the target will not stop us from doing better if we can.
Welcome to the Maersk Oil section of this Capital Markets Day. Maersk Oil is on a journey from being a highly profitable shrinking company with dropping production to be a growing company, still highly profitable. At the Capital Markets Day two years ago, we gave you quite some detail for those of you that were here on where we were on the journey. Today we're gonna give you an update, especially focusing on our operational performance, on how we are progressing on the projects that are gonna form the core of our growth up to the end of this decade, and then on our long-term growth plans. Together with me today, I have our Chief Financial Officer, Graham Talbot, and our Chief Operating Officer, Gretchen Watkins.
Both Graham and Gretchen joined us within the last year and both bring a wealth of international experience to Maersk Oil. Graham, from most recently a role with BG Group in Australia, and before that, a long history around the world with Shell. Gretchen, from Marathon Oil, and before that, a long history with BP. A lot of new inspiration and new leadership in the team. We also have other members from the Maersk Oil team here in case you, during the Q&A, wish to ask questions that Graham, Gretchen, and I can't tackle. There are three key messages of our presentation, and these messages really illustrate that we are basically executing on the plan that we laid out some years ago. We are moving forward.
Of course, we're not moving forward without challenges, but we are, in broad terms, following our plan. First and foremost, our production is increasing. 6%, since we bottomed out in Q2 2013. 6% doesn't sound like a lot, but considering that none of our major projects have come on stream, 6% is actually pretty good because it essentially comes out of our operational performance of improving our operational game. It's a battle for every barrel, and it's successful. This is the way it's gonna look going forward, up until we get our big projects, Chissonga, Culzean, and so on stream. It will be a bumpy ride, but overall, we will see an increase in our production going forward. The second point is that our projects are by and large progressing on plan.
We expect to sanction the big projects within the foreseeable future, and thereby add substantial reserves to our reserve space over the next two to three years, around 300 million barrels, we expect. The last point is that we maintain our ambition of 400,000 barrels a day in 2020. It is an ambition, and it is value over volume. The profitability, the return, double-digit returns on this is essential. We rather back off projects and lighten our demands to production than entering into unprofitable projects. These are the three points that we will give you more detail on during the presentation. Just a few more introduction words about Maersk Oil. Maersk Oil is among the 30 biggest operating companies in the E&P industry. This is a very good platform for growth.
We're actually quite sizable. Of course, not the size as the super majors that you see on the left-hand side of the chart, but still a sizable company. On the bottom, you have the nine peer companies that we use for external benchmarking, companies that have more or less the same size as us and that disclose information that we can use for quite detailed benchmarking. You have some salient information about Maersk Oil on the upper right-hand side. Notably, we have increased our footprint in terms of the number of licenses around the world. We have also increased the number of employees in our organization leading up to execution of the large number of major projects we have during the rest of this decade.
A couple of other headlines for Maersk Oil. We are delivering solid financial results and expect to stay there. We are, as I said, on track with our major projects. With respect to Qatar, that I'm sure you are all sitting there waiting for comments on, we are in a very positive dialogue with Qatar Petroleum and the government. We are moving ahead discussing the next steps. There's room for a lot more investment in the Al Shaheen field in Qatar, but obviously we can't kick off these investments without an extension. These dialogues are continuing. Our exploration performance has been challenged. We have a plan, and we're gonna go through that plan with you.
Of course, there's the impairment on our assets in Brazil, that was a real disappointment for us. We have taken the learnings from that going forward, and you will hear a little about that as we move ahead too. We will, at the end of today's presentation, inform you about our growth strategy for longer-term sustained profitable growth for Maersk Oil. These are the four sections of our presentation. I'll give you a few insights into how we look at our market, what the dynamics are. Graham Talbot will tell you about our near-term value creation. Gretchen will talk about the three pillars of our business, the operations part, project delivery, and then the long-term growth in the form of exploration and acquisitions.
Finally, I'll round off with some remarks about our strategy. Let's dive into the market dynamics. The last couple of years in our business has been remarkably unsteady with a lot of changes happening around the world, mainly because of things happening specifically to our business. Increasing costs, capital costs around the business, increasing complexity of projects, both because the industry has tried to make safer projects, more operable projects, and of course, environmentally more friendly projects. Also access to reserves and resources around the world has changed, and we have seen some game changes, the unconventionals in the U.S., the gas offshore East Africa, and so forth. A lot of things going on. Of course, also, the geopolitical situation that is changing rapidly, day by day influences our business.
All these things have formed the headlines of our business over the last couple of years. Then, of course, we have the oil price, which remains an uncertainty in our business. We come from a period of time where we have had pretty steady oil prices hovering around $110 a barrel to a situation where most forecasters predict softening oil prices as we move ahead. We do see a declining oil price based on the supply-demand forecast, based on especially the dynamics on the demand side, a shift over to gas, and so on. At the same time, we see.
At the same time as we have had the steady oil price and maybe falling going forward, we see that the capital costs have come up substantially in our industry, both because projects become more complicated, more expensive, more demanding, and because the supply chain has been under pressure. The supply chain essentially has been overheating, not able to deliver what it took. The change in behavior is that a lot of projects have been stopped, mothballed, or alternatively, they have run over costs or run over time or both, and that has eroded the profitability of projects. There's a big change in the industry at the moment towards capital discipline. Essentially right now, that means, in general, stopping projects.
We see also as a response significant portfolio rationalization, where many players sell off parts of their portfolio, maybe even country exits, in order to be able to raise capital for dividends, for example. This, we believe, will lead to a correction of the cost in the supply chain. Probably not a big correction, but at least a slowdown in the significant increase in the supply chain costs that we have had up until now. Another key dynamic is the boom in the U.S. unconventionals. The U.S., as you know, is becoming more or less self-sufficient on energy. What we see is a rush, especially from a lot of U.S. companies to take part in the U.S. unconventionals.
That again gives divestments of large parts of portfolios in Europe and elsewhere in the world outside the U.S. We believe that that could give interesting acquisition opportunities for a company like Maersk Oil. We are not in the onshore U.S. unconventionals, but we are interested in looking at opportunities within the parts of the world we're in already. Finally, we do foresee that that gas will be of increasing importance in the energy mix, that plays well, for example, with our Culzean gas discovery offshore U.K. Of course, we are watching this trend carefully as we move ahead. Let's have a closer look at how this looks for our peer group.
On the left-hand side, you have the total capital expenditure over the last nine years for our nine-company peer group. As you can see, there's been quite a substantial growth up until 2013, where it actually started shrinking, and that's a trend of capital discipline. There has been an average of 11% per year growth in Capex. Now, that growth has only led to a 4% increase in their production. A relatively high spending for relatively low production. You can see on the right-hand side what has happened to the return on invested capital for these companies. Basically, at the point of the financial crisis, the ROIC collapsed, and it has not recovered since then.
Now, our peer group is hovering around 7%-8%, which is not really satisfactory for companies with the risk profiles in our industry. In 2013, just to compare, our ROIC was 16%, so we are well above our peer group, but there's a big challenge in the industry. If we take a look at where the majors are, this is what we call the nose plots. I'll just take a few minutes to explain to you what it shows. It's actually pretty interesting. The Y-axis is the total Capex of the eight super major companies per year, the total annual spending on projects that are gonna increase their production. The X-axis is the total production in million barrels of oil equivalents per day.
Then the yellow line is a kind of a timeline, starting from 2001 and ending in 2013. As you can see, the first years from 2002 and onwards are fine. Capital spending around $50 b illion -$70 billion a year, and growth in production. Then in 2006-2007, something happens. The spending comes up, but the production starts coming down. More money for less production. Shrinking companies that have a higher capital expenditure. Of course, that has caused a reaction from these companies and various reactions depending on which company. Certainly, optimizing portfolios, divesting non-core parts of portfolios again.
Again, a very sharp reaction from these companies. Here, we have a couple of sound bites from the classic reactions in the industry on the divestment side from Anadarko and Apache and Statoil in the press over the last years. You know, what is being said is that there's assets for around $300 billion-$400 billion in the divestment, in the M&A market at the moment. It's a very substantial market. Of course, that may create opportunities for a company like Maersk Oil out there. On the capital discipline side, mothballing projects, looking for smarter ways of maturing and execute projects on the right-hand side. Of course, we are not, as a company, immune to these increasing costs in the industry.
We also feel the cost pressure, and we also react to it. We have a good starting point, though, because we have a steady financial performance better than our peers. Of course, also helped by the strong balance sheet of the group when we look at the massive investment period that we're entering into now as we sanction the big projects that are gonna give us the growth over the next years. We have a very robust portfolio. We have substantial low unit cost assets in Denmark, in Algeria and Qatar. So our producing portfolio generates very substantial value, and we have a strong project portfolio which is spread across a large range of geographies and geologies, if you like, which gives us a good, robust portfolio.
We have the technical abilities to mature and execute our project portfolio and drive the maximum value out of it. We are blessed with a strong demographics of our workforce. When I visit the frontline, for example, in Denmark, we have a lot of young people which is quite rare in our industry, that are capable and very enthusiastic about creating value and about the industry they're in. We are in a strong position. It's not easy. It's not an easy situation for the industry. Of course, we have a major growth agenda. We are looking at value over volume for our growth, but we have a strong starting point. With these words, I would like to hand over to Graham to tell you about our near-term business value.
Thank you, Jakob. Good afternoon, ladies and gentlemen. Just in case you didn't pick it up, Graham Talbot, Chief Financial Officer for Maersk Oil, and I commenced with the group in April of this year. I'd like to start by going back to the key messages and ambitions that were communicated at the 2012 capital markets day, all of which remain largely unchanged. You've heard a number of times today already, I think, that we do still have a good line of sight on 400,000 barrels per day of production in 2020. You've heard the very clear message that we will not be shooting for that at any cost. To put it bluntly, our financial metric is delivering value, not barrels.
To achieve the growth that we're planning for, we expect that we'll be spending in the order of $3 billion -$5 billion per annum in Capex. This is quite a material step up from the $1 billion -$2 billion that we've been spending over the recent years. Our exploration is currently going through a complete sort of review and renewal. That's gonna take some time to rebuild. As we do that, our exploration expenditures are going to be vastly reduced. Throughout this growth phase and the heavy investment period we've got in front of us, one of our key parameters is to retain a double-digit return on our invested capital. That will be a challenge. We understand that, and I think, you know, Jakob's painted a very clear picture of the industry, which we are definitely part of.
On top of that, we do have a material capital investment to execute, which has got back-ended production in the decade. We don't underestimate that challenge. We do have a robust resource base, and clearly, the focus at the moment is taking our resource base through to reserves and then ultimately through to production. Once again, as Jakob mentioned, approximately 300 million barrels, progress from resource through to reserve over the next few years as we mature the big projects in our portfolio. Now, if we have a bit of a look at the production. Our production peaked in 2009, and that was on the back of major investments, primarily in Qatar. Since then, there's been gradual decline in a number of our fields.
That, as you were told this morning by Nils, bottomed out in Q2 2013 at around 226,000 barrels a day. Since then, a number of things have happened. We've put a lot of work and effort into our existing fields and improved our performance there. Plus, we've brought on new assets in Kazakhstan, Algeria, and the U.K. Then also in 2013, we had the Gryphon FPSO come back into service after a major overhaul. All of those sort of lead us to where we are today. For 2014, we're expecting to deliver in excess of 240,000 barrels a day.
Through the major projects we have in our pipeline, in our existing portfolio, there I'm referring to Culzean, Chissonga, and Johan Sverdrup, we do expect a fairly good line of sight through to the 400,000 barrels a day that we've been talking about for some time. As I mentioned, most of those projects will only come on stream at the back end of the decade, so there is a significant kick up in production heading towards 2020. Maersk Oil has and will continue to deliver a substantial return to the group. In this chart here, we've made some adjustments for major underlying events. In 2012, there was the large tax settlement in Algeria. Of course, this year we've had the impairment in Brazil.
After adjusting for those two items, you can see over the last five years, Maersk Oil has contributed approximately $7.5 billion to the group profits. Going forward, our forecast during the heavy investment phase we're entering into is that we will continue to deliver a consistent return of around $1 billion per annum. Once again, historically, we've delivered a very strong cash contribution to the group. I'll just take a minute to go through explaining this slide because there's a lot of numbers on it. At the top of each bar, we've got our cash from operations after exploration expenditure. Then the dark blue bar shows our development Capex, the light blue, our acquisitions, and that then leaves the yellow, which is our net residual cash flow.
Over the last five years, we've generated approximately $19 billion in cash. We've spent about $12 billion, which leaves a nice little piece of change for the rest of the group to spend. Going forward, clearly, we're going into a much heavier investment cycle than we have historically. If we look at the three to five, it's more likely that we'll probably be cash flow neutral, going forward. Also, it's likely that we do simultaneous execution of some of our major projects. In some periods, we will much have a higher spend. This is where it gets back to sort of trying to balance up our double-digit return while we're doing a fairly lumpy major capital investment program. Historically, we've delivered returns on invested capital far superior to our peer group.
Now, this is really driven by having a production base which has got quite low lifting costs. Also we've been quite lean in terms of the capital investments we've been making. Clearly, going forward, we're entering into new technologies in some new areas, and delivery of those barrels is gonna be costing a bit more. That being said, we're still firmly committed to an objective of double-digit growth and return, sorry. Although challenging, we think that through our capital discipline the way we screen our projects, and also through operational and project delivery excellence, that we can achieve those returns. Although our exploration results have been disappointing, you know, they have delivered a reserve and resource base which is quite robust. It's what they have delivered that we're now maturing into the projects that are fueling our growth.
Clearly, we plan to spend more on exploration and acquisition of exploration acreage going forward. The focus at this point in time is really maturing what we have here. You can see our 1P reserves to production ratio has improved by 14% from 2012 to 2013. Overall, our combined reserves and resources have increased by approximately 8%. All of our reserves and resource numbers are fully compliant with the Society of Petroleum Engineers standards. Consistent with that, we do not include any reserves or resource in here for Qatar post-2017, irrespective of what we say around the renewal of the licenses. In closing, I'd like to leave you with a few key messages. Firstly, you know, we will deliver substantial value-adding growth heading towards 400,000 barrels a day by 2020.
That'll be delivered from projects that we currently have in our portfolio. In addition, while we're doing that, we will continue to make a very strong contribution to the group of approximately $1 billion per annum in profits. Our objective is to try and retain at least a double-digit return during this period. I do believe that will be a challenge, and I'm grateful that it is a three-year average 'cause that will help us. As you can imagine, some of the years we will be investing quite a lot of capital, and we're not gonna be seeing production coming on for till the end, back end of the decade. Like everyone in the industry, we will be increasing our focus on cost.
Additionally, as we build to scale, we can see that there's quite a bit of value to be captured in terms of standardization and simplification in what we do. As we get bigger, the value that come from those sort of initiatives, become a lot more substantial. We are putting a lot more attention and effort into those sorts of programs. On that note, I'd like to thank you, and I'll hand you over to Gretchen Watkins, our Chief Operating Officer.
Thanks. Good afternoon. It's great to see you all here. Good to be with you. I'm gonna take a few minutes to talk to you about the three pillars of our operating strategy. Before I do, I wanna just talk about the foundation that those three pillars are really built on. First, safety and incident free, which is really all about keeping our people and our assets safe and running. Secondly, technology, where Maersk Oil holds a leading, industry-leading position in unlocking complex reservoirs around the world. Thirdly, people and leadership, where we build teams that unlock value around the world in our global businesses. Over the next few minutes, I'm gonna walk you through the three pillars, which are short-term delivery through operational excellence, second, midterm growth through project delivery, and then third, long-term growth through exploration and acquisition.
First, let's take a walk around the world. Our portfolio is made up of investments in 11 different countries. Our portfolio is actually quite diverse. We've got a mix of mature assets that are delivering high value, low cost barrels. Many of our mature assets have a lot of life left in them, a lot of development potential. We have a very robust portfolio of major projects where we're developing resources into reserves, and we'll talk about that in a moment.
Lastly, we have an exploration portfolio that as you've heard, we're in the process of resetting, but we'll spend a little time talking about what that looks like. If you do walk around the world with me, I'll just start in Denmark, where we were the first company to produce oil and gas from mainly tight chalk reservoirs by drilling long horizontal wells and implementing some really complex and unique completion technology. We produce about 70,000 barrels of oil equivalent per day, a net to Maersk Oil of entitlement production. We have, again, a very good mix of mature assets, of development opportunities, big major projects that are coming through our maturation process, and we are still exploring for new hydrocarbons there.
If you take the technology we applied in Qatar and move it to in Denmark, and move it to Qatar, we applied that to the tight carbonate reservoirs there and actually unlocked some potential that other companies hadn't seen as commercial. In Qatar, we're the single biggest oil producer. We produce 300,000 barrels of oil equivalent per day, gross and net to Maersk Oil of entitlement, it's about 100,000 barrels of oil equivalent per day. Again, a lot of development potential left in Qatar. Next, I'll talk about the U.K. and Kazakhstan, which again, both represent opportunities for production where we have low cost and high margin barrels. We're also developing new resources there and continuing to explore. Algeria represents our biggest production of non-operated barrels.
We don't operate there, but we do produce last year about 30,000 barrels of oil equivalent per day net to Maersk Oil, and this year it's ramped up to about 35,000, maybe a little bit more than that, for 2014. There are places where we are in the process of pulling major projects through the pipeline, and those are Angola, deepwater Angola, the deep waters of the Gulf of Mexico, Norway, Iraqi Kurdistan. What am I leaving out? I think that's about it. In Greenland and Brazil, sorry. In Greenland, we have a small exploration interest there. Good. Let's look at our portfolio through a couple of different lenses just to give you a sense of our growth strategy.
It's really more of an evolution rather than revolution, and I think you'll see the numbers here support that. First of all, in terms of hydrocarbon type, you can see we're quite a bit more exposed to oil than we are to gas. As we move towards the end of the decade, we will have more gas in our portfolio than we do now, which really supports what you heard Jakob say a moment ago. We see gas demand as remaining very strong, particularly because we see it as a strong transition fuel going into the next few years. The high-pressure, high-temperature gas project that we're developing in the United Kingdom represents the vast majority of that added gas there you see.
Secondly, in terms of location, we have traditionally been a shallow water operator, but over the next few years, we will be bringing on some very significant deepwater projects, which includes Deepwater Angola, the Chissonga project, Deepwater Gulf of Mexico in the United States, and towards the very end of the decade, Deepwater Brazil. Operatorship, we like to operate. You heard Jakob mention that as well. We like to be in control, particularly be in control of our spend. Holding operatorship allows us to do that, and we plan to remain a largely operated portfolio. Then lastly, OECD and non-OECD, we see that as a proxy for above ground risk, and so we plan to maintain a very healthy balance of that going forward.
Now we're getting into the first pillar, which is really around operations excellence and about short term, maximizing our short-term delivery. There's a couple different things on this graph, and I'm just gonna take a moment to explain them to you. First, on the left-hand side, you can see production in the Danish business unit. The blue on the graph represents production from 2013 all the way through about midyear 2014. The blue there shows a natural decline. Mature fields will be declining at a certain rate, and that's what you see there in the blue. We have an operations team in our Danish business unit that spend their full time looking at opportunities to both enhance production from existing wells, but also restore production from wells that may have stopped flowing.
They have over the last 18 months through executing the highest value opportunities in that portfolio, they've actually added 30% production on top of what would have been a natural decline curve. Really looking at arresting the decline of our mature assets, and these examples I can show you across all of our operated fields. The key thing to note here is that not only is it great to have more production, but these are very low cost barrels. Just to put that in a little bit of perspective for you, a barrel that falls in that yellow bucket there really costs us on average of about $9 a barrel. If we're gonna go out and drill a brand new well, it would probably be somewhere around $25 a barrel.
Truly a huge opportunity to do well interventions like this and restore low cost barrels. The second chart here really focuses in on one of the key aspects of running a mature set of assets really well, which is around maintenance and integrity. We do what we call planned shutdowns fairly routinely across our asset base. Shutdowns are performed so that work, maintenance and integrity work that needs to be performed when plants are not running can be executed. When we plan these, we really look at hitting three key targets really spot on. First of all, we plan the duration of the shutdown. How many days will we need to shut down? Secondly, we have a very well-planned scope of work that we need to liquidate while we're shut down.
Lastly, we look at how much production will we lose during those days that we're shut down. Across, if you were gonna have a perfect score, it would be at 100% on this chart, just to give you some idea of what this chart means. We set a range for ourselves, somewhere plus or minus 10%. Across all of our assets, we've actually taken 12 shutdowns so far this year, just in 2014. Across all of those 12 shutdowns, we've actually come within our target range, across our portfolio, which is something that we're very proud of, and certainly we'll continue to look for ways to improve on that and come closer and closer to our 100% target.
These are two examples of things that we'll continue to extend into the future as we continue to improve our game in operations excellence and short-term delivery. Under the same banner of operations excellence, we put safety and reliability. Safety is something that is truly aligned with the A.P. Møller - Mærsk values. It's really about protecting our people, protecting our assets, but it's also really good business value. We spend a lot of time in this area. As you can see over the last few years, we've done a real nice job of decreasing the number of injuries that we have on our assets. But over the last couple of years, since 2012, we've sort of plateaued, and we're starting even to maybe see a little bit trend upwards.
This remains an area of intense focus for us, and we plan, next time we see you, to show you a continuing trend down in that area. The other thing that we focus a lot on in this arena is our environmental footprint and what sort of an impact we make, as a neighbor in the communities in which we operate. I'm pleased to say that over the last few years, since 2007, we've actually reduced our CO2 emissions from flaring by 80%, a significant reduction. Overall, safety and the environment remains a key area of focus for us. Okay, that was the first pillar. Now we're gonna spend a few minutes on the second one, which is really about midterm growth project delivery.
This is a rather busy chart, and I'm just gonna spend a little bit of time on it. If you were here a couple years ago, you would have seen the same chart with just a few differences, and I'll explain what those are. This is really how we mature our projects, our project maturation process, and it takes our projects all the way from prospect stage, a prospect is what we call an exploration target before it's even drilled, all the way through to first hydrocarbon when production actually commences. As you move from prospect to discovery, to assess, select, define, execute, and all the way to production, each stage gate actually allows you to reduce the risks that you have in a project, but also really mitigate the uncertainties.
You wind up really honing in on the concept and the project that you wanna take forward. I'll just note that the gate between define and execute is something that is very important to us, and we call it the point of sanction or the final investment decision. Until you get to that gate, you actually have multiple off-ramps that you might take for a project that allow you to either recycle to look for more value or even cancel a project if the value indicators just aren't there. I'll give you an example.
Many of you might have read in the press this morning, Zidan, you can see there in select stage, is a non-operated project that we're invested in, and we very much support the operator's decision to take an off-ramp and go into recycle because that project actually needs better value before we actually take it through our final investment decision. That was a good use of our process there. A couple things before we flip to the next slide I think are worth noting. We've actually got three projects that are very close to first hydrocarbon. Jack, which is a non-operated deepwater Gulf of Mexico project, which should be on stream, will be on stream by the end of this year.
Golden Eagle, which is again, an outside-operated project in the United Kingdom, which will be first hydrocarbons before the end of this year. Tyra Southeast, which is right here in Denmark, Maersk Oil-operated, which will see first hydrocarbons next year. Three significant projects that since we met a couple of years ago, have moved significantly down the maturation process and are very close to that final investment decision or point of sanction we were just talking about. First, Johan Sverdrup in Norway. Second, the Chissonga deepwater Angola development that we operate. Third, again, another Maersk Oil-operated project called Culzean in the U.K. This is another slice of those projects that really shows you how, particularly those three projects I told you are nearing sanction, are significant contributors to our line of sight to 400,000 barrels.
Three other projects that are quite close to first hydrocarbon and then a few others make up that total 400,000 barrel goal that we have. I wanna emphasize that, value is always gonna come first, value over volume. This greater than 10% return is really our indicator on that one. Let's just spend a few moments talking about some specifics around these projects 'cause they're pretty significant. These three here will see first hydrocarbon between now and the end of next year. We'll start with Golden Eagle, which is a non-operated project, which at full production rate will deliver about 20,000 barrels of oil equivalent net to Maersk Oil.
Jack in the U.S., which when it comes on stream, will be the largest floating production platform in the world, will be on stream around the end of the year, and again, will contribute about 8,000 barrels of oil equivalent net to Maersk Oil. Then lastly, Tyra Southeast, which is a Maersk Oil-operated project. I love this one because it was actually all the topsides and the jacket were fabricated right here in Denmark. We saw them sail out from the West Coast about June time, installed over the summer, and I was just offshore a couple weeks ago, and I saw the Tyra Southeast platform all set up there. We're in the process of doing the final hookups, and production will commence up to about 4,000 barrels net to us, probably sometime in the first half of next year.
Now the three big ones, which are all within about 18 months of final investment decision. Johan Sverdrup, which is an outside operated project that we invest in. The development concept for Johan Sverdrup is actually going to be executed in several phases. Phase I, concept selection occurred back in February of this year, and we anticipate final investment decision will happen probably in the first half of next year. Second, Chissonga in Angola, which is Maersk Oil operated. We actually discovered Chissonga back in 2009, and we're looking at sanctioning this project probably the end of this year or early next year. The concept here will be a tension leg platform in the deep water, and a floating production storage and offloading, an FPSO.
We've received the tenders back, and we're in the process of analyzing those right now, and we anticipate sanctioning this project as an economic and very value creating project for us. Then lastly, Culzean. This is a high pressure, high temperature gas development in the United Kingdom. We discovered it back in 2008 and anticipate that we'll see first gas on this project around the end of the decade, probably 2019. When Culzean comes on stream, we will see it produce approximately 5% of the total gas consumption of the U.K. It's a significant project for Maersk Oil and also for the United Kingdom.
In summary, you can see that our projects really remain quite faithful to the skills and competencies that we've excelled at over the years, but also represent a couple of step-outs for us, like deep water and HPHT gas. Exploration, this is the final pillar, the long-term growth, exploration and acquisition. Exploration is the most cost-effective and value-creating mechanism for an oil and gas company to grow. Maersk Oil has a long history of exploitation of very complex reservoirs, but which you see we've done in Denmark and Qatar, but also a rich history in exploration successes such as Chissonga and Culzean in the last few years. We can do better. Over the last couple of years, we've seen our finding costs go up quite significantly.
We've taken the decision, as you will have heard my colleagues reference, to step back, recharge our portfolio, fine-tune our ability to analyze the risk involved in pursuing certain prospects. While we're doing that, we will ramp back on our spend. While being able to still honor the commitments we made, we will spend less than we have in the past. When we do have this recharge, we anticipate that we'll be looking at opportunities to both expand our existing footprints but also enter into new areas, both organically and inorganically, which means we'll be looking at exploration licensing rounds as well as acquisition targets. When we talk about acquisitions, we'll really be looking at opportunities that fit within our skill set, fit within our portfolio, and where Maersk Oil is really the natural owner.
I thank you for your time today. It's been great to be with you, and I'm going to turn it back over to Jakob, who's going to walk you through our growth strategy. Thanks.
Well, thank you for staying with us this far. As Gretchen says, I'd like to give you some remarks on our strategy. It's hopefully quite clear to you that our midterm growth, so leading up to 2020, is completely dominated by operating our existing businesses safely and efficiently and driving maximum value out of these businesses in Denmark, Qatar, and so forth. That's the foundation. The growth is gonna come from value creating maturation, sanctioning, and execution of all the projects in our portfolio.
What I'm gonna do is to tell you a little bit about how do we position ourselves in today's landscape of oil companies in the challenges, but also in the opportunities that I talked about in my introduction, and how do we see ourselves positioned for the long-term growth. If you remember back to the slide I showed you where with Maersk Oil as the top 30 position among operating companies in the world, you would have noticed that it's pretty crowded in the region of oil companies our size. What I hope to make clear to you is how do we differentiate ourselves from the crowd and actually create a sustainable value proposition that works.
If we start with a few words on the longer term, and then I'll go back to some immediate actions that we are taking in response to what's happening in the market around us. This is kind of the longer-term view. The first, the orange pillar is to absolutely maximize the value from our existing assets. That's both through operational excellence. You saw the example from Gretchen with a 30% increase in production. There's a lot of low-cost barrels out there just in if we prove our operational excellence. It can add a lot of value. It cannot give us a big buildup, but it creates a strong foundation.
This is not only operation, it's also pursuing investment opportunities in our existing fields, such as the 2012 field development plan in Qatar, where we have gone in and invested, are investing, are executing right now $1.5 billion in in-field drilling in existing fields, in-field drilling of around 50 wells. There's a lot of further investment opportunities in our fields. Of course, within the countries we are in, we will also look for expanding outside our current assets if there are opportunities to grow, which we believe some of our existing countries do have. For example, the U.K., there's still substantial running room to sustain the materiality we are looking at there. Of course, high on the agenda is the renewal in Qatar.
I talked a little bit about it before. We are in very constructive dialogues with the government. We are delivering on our production day in and day out there. We believe we have a very strong position. Of course, we can't say exactly when it's gonna happen, but we are in a good position there. And that segues us from both short-term and long-term thinking in our existing assets into the yellow column, which is all about the countries where we have been successful but wish to build sustained materiality. Take, for example, Norway, where we have kind of leapt into material existence through the successful Johan Sverdrup discovery and our partnership there.
There, we will look for expanding to sustain the materiality and hopefully take over operatorship, because we do believe we come with a strong value proposition as operator. We are among the 30 biggest operators in the world, so we have a lot of experience. The growth in Norway and other countries can happen both organically through picking up exploration licenses and driving our exploration value proposition, once we are out of our exploration renewal, and it can come from inorganic growth, acquisitions. All this will be hinging on our capabilities. I know that the capability column on the right-hand side sounds awfully technical, but we are a technical business, and the technical work, the strong technical capabilities, they are right at the core of our value proposition.
We have a very strong history in the subsurface work, de-risking the subsurface, removing uncertainty through a detailed subsurface work. Take, for example, most recently, a four-dimensional seismic survey acquired and processed in Denmark over chalk. We're the first in the world to be able to actually resolve fluid movements in chalk, and actually map out where the bypassed oil is. That is kind of a world-class example. A discovery like Chissonga in Angola would not have been made without our subsurface imaging capabilities. Of course, there's a lot of work in staying sharp on that, and we are doing that work. With respect to the well solutions, most well-known probably is our horizontal and extended reach well technology. We're still really strong in that arena.
We can leverage that further. When it comes to technology deployment, we have always been fast movers in terms of deploying new technology. Now we are going a little deeper, for example, with the new research center that we have opened here in Copenhagen at the Technical University of Denmark, where the DUC partnership invests DKK 1 billion over 10 years in developing technology that can take us to the next step of value creation and recovery in our Danish fields. Technology development and deployment will also be at the core going forward. Finally, project delivery, an area where a large number of companies have really burned their fingers over the last years. We have also taken some experience, I would say, here and there.
By and large, we have delivered historically our projects on schedule, on budget, and with high quality. Of course, we intend to do that going forward. Having said that, the world, because of supply chain challenges, higher complexity, the world is becoming more challenging, and we are meeting these challenges. These will be the core of the capabilities that are gonna drive us forward and that will keep creating opportunities out there in the market. If we take this on the world map, then our heritage assets obviously include Denmark, Qatar, U.K., and Algeria, where we will look for opportunities to, first of all, maximize production from the existing assets, but also expand our business into other assets if it makes sense and it creates value.
We wish to strengthen our positions in the geographies where we have had success, but we don't have an asset base that is large enough to create sustained materiality. Of course, as you know, we have selected some countries where we say we'll take the foot off the throttle here. We may be happy with our positions in Brazil, U.S. Gulf of Mexico, Greenland, where we have a small position. But this is not the arena where we are gonna invest, especially, since these barrels are relatively high cost. In the current environment, it will be a challenge to meet our profitability targets these places. That leads me on to talk a little bit about which actions we have taken immediately, and focus is right at the top of the list.
When we talk about focus, essentially, we are looking at the portfolio of Maersk Oil, where we have a mix of assets that is dominated by low unit cost, highly value-generating, assets, but of course balanced by assets in deeper water, high pressure, high temperature, et cetera, that have higher cost. We are trying to keep the balance in this portfolio at all times, such that we don't get too high exposure to high-cost barrels. But at the same time, typically low-cost barrels have different risks. For example, say Iraqi Kurdistan, where the production costs are relatively low, but it has a different kind of above-ground risk picture. We need to keep a balance, and we will. We are managing, and we will manage our portfolio along these lines.
At the same time, the watchword of the industry, capital discipline, is also a watchword for us. This is not just about cutting off projects. It's also about being able to stop projects, not falling in love with our projects and actually stopping them if they're not value-creating. It's also about value engineering. Go in and optimize the projects that we have such that we make sure that they're really fit for purpose. I mean, we have a number of examples of that. One is the Balloch field in the U.K., which right now is a one-well development discovered a few years ago, close to the Global Producer III FPSO.
We were not aligned with our partner, so we bought our partner out, made a very simple one-well development, subsea completed, got it on stream quickly, and the well started off with a potential of 15,000 barrels a day. It's now at around 13,000 barrels a day. The well's closing in on 4 million barrels of production over a couple of years. That's a real simple, highly value-creating project, just as an example of how we can cut our projects such that they really make sense. There's a lot of work like that to do going forward. We have decided, as you well know, to de-risk, as we call it, our ultra-deepwater positions. That is Brazil, and it's the ultra-deepwater Gulf of Mexico. We will retain our current positions, and we have some good projects there.
Gretchen told you about Jack that will go on stream late this year. We have some value-generating positions there. In order to keep our portfolio balanced, we do not wish to expose ourselves much more in the ultra-deepwater. Capital risk management is a little bit along the same lines. The example here could be, for example, in Chissonga, where we have 65% stake at the moment. That has been a good stake in the exploration phase. Going forward, as we move into the project execution phase, we may wish to reduce our stake there, and redirect some of the funds to other places and thereby de-risk Chissonga a little.
Of course, you will say, "Well, Jakob, how does that then influence the road to 400,000 barrels a day?" Obviously, we will release some funding that we can invest elsewhere. We will make portfolio adjustments as we move ahead, if we believe that they are good for managing our risks and creating value. Finally, our post-2020 growth that has been sort of negatively influenced by our exploration performance the last years. We are right now fixing the exploration engine, rebuilding the portfolio, and while we're doing that, our investments in exploration, we have decreased those. We are looking for possible acquisition opportunities in the market. We are quite confident we can catch up.
Of course, it's not such that we haven't discovered any oil, but we are not happy with our unit finding costs. We are looking forward to come back on and fix. We have also created a new position in Maersk Oil's leadership team, reporting to me, a chief growth officer, we call him. This chief growth officer will be responsible for all the long-term growth in Maersk Oil. On first of January, Ebbie Haan, Mr. Ebbie Haan will start in this role. He comes from a position as managing director of Sasol's upstream business, and he has a lot of experience, both in exploration, in business development, new business acquisitions, but also with strategic thinking. We are looking forward to that.
All in all, the near-term actions we have made is to make sure to respond both to what's happening in the market. We still believe we are in a very attractive industry, but we need to respond to what's happening in the market, plus respond to our own performance over the last couple of years. Finally, I would just like to reiterate that it feels really good to be back in a growing company. The 6% growth is great for us. It's gonna be a bumpy ride going forward, but we are a growing company. Moving towards sanction of our big projects, we will add substantial reserves. The 300 million barrels does not include anything from Qatar. It's the other projects. It doesn't include anything from a Qatar extension.
We retain our ambition level of 400,000 barrels a day, but we are strict on value over volume. Thank you very much. Well, doesn't seem to be the case. Nils, I'll leave you for the final remarks.
Thank you very much for playing an active role during the day. I'd also take the liberty of thanking all the presenters for all the good work. I thought that was very interesting, at least seen from the front row. For the rest of you, thanks for the question, thanks for the interest, and thanks for coming, of course. What I hope you leave here with is an impression that, yes, we are working in difficult industries. We're not trying to create any impressions that we're not. We're also not.
We've also been quite open about sharing with you some of the concerns that we have in the different industries where we think things are changing, maybe potentially to the negative, which is, for instance, a dropping oil price, which influences both, of course, returns in the oil business, as well as also the risk in particular the deep water part of our drilling business. I think or hope we've demonstrated that we have pretty clear strategies for what we want to do. Those of you who've been following us for long will also know that during the financial crisis, I've usually said that tough times are good opportunities for businesses like us to excel and take advantage in the industries.
I think this also goes for times of change and times where things are not so certain as they sometimes seem. I believe we have strong plans in place for progressing where we are, where we're doing well, and for taking and dealing with the risks where we think things are moving in deep or unpredictable ways, in parts of our business. What we're trying to establish is the premium conglomerate, which I've said all these things up here. I was actually very pleased with the question on what do we do to be a group, because that's also very important. Thanks for that. Because what we try to add to this is also trying to keep up to speed on making sure our employees are motivated.
That's one of the reasons why we communicate with you today and with the press, because we think the difference between us and many privately held companies in the businesses we compete in are that we actually say things like they are. We try to get everybody around the globe involved and understanding what kind of company they work in, and I think that's a very important part of being an employee in this group. We try to not only work with the hard metrics, but also making sure that we spend resources on informing and motivating and educating our employees. I think that is also a very important part of being a successful conglomerate and hopefully one day a premium conglomerate.
We also continue working with our values, and I was joking a little bit about being low return and high assets, and I should probably have added to make it perfect also risks and volatility. What is important is, of course, that the values of the company and the way our people are schooled are also centered, like, around that. We work very hard to improve our safety performance. We work very hard to avoid accidents, not only physical accidents, but also trying to prepare ourselves very well before we do investments.
You cannot avoid mistakes, but you can try to prepare well, and these things are all within the values of the company, and I think that's also a very important part of being a conglomerate, apart from the physical working together. Thank you very much for joining us. I hope in a year's time we'll have the opportunity for another Capital Markets Day, and hopefully we'll have succeeded on a number of the things we put up in front of you. I'm sure there'll be areas that we've failed in, but that's just the way it is, and I hope the overall impression will be one of continued progress. We're quite upbeat and very enthusiastic about our businesses. See lots of opportunities going forward.
Thank you for coming, and we look forward to having a chat or a drink outside. Happy travels home, and good luck with all what you have to do in the meantime.