Hi, and welcome to the final day of BP Week. I'm Gordon Biro, and I'm hugely proud to lead BP's production and operations organization, and I have a real sense of excitement about what's possible from this team. On day 1, you heard about BP's energy outlook and how we plan to reimagine energy and reinvent BP. On day 2, we outlined how we plan to rapidly scale in low carbon electricity and energy and how we intend to drive growth in convenience and mobility. We also explained the important role played by 2 of our integrators in enabling this growth.
Today, we will explain the importance of another of our integrators, digital and innovation, and we'll say more about the financial frame and investor proposition. But first, I will talk about resilient and focused hydrocarbons. I hope that video gave you a sense of delivery, scale and quality of our hydrocarbons business. The production and operations organization will play a leading role in delivering resilient and focused hydrocarbons, the 3rd of the 3 strategic verticals you see here. In this role, I'm responsible for our operations across oil, gas and refining and for the financial results of our oil production business.
Joining me later in this session will be Dev Sanyal, Executive Vice President for Gas and Low Carbon Energy. Dev will be discussing the links between our equity gas production and the low carbon electricity and energy strategic theme he covered yesterday. But I want to open this session by highlighting that this is an exciting time for us. Production and Operations is a new organization, bringing together all our hydrocarbon operations with a renewed mission. We will aim to eliminate life changing injuries and the most serious process safety events and reduce emissions aligned with BP aims, while delivering the energy the world needs, transforming operations and cost efficiency and creating a more resilient portfolio through investment efficiency and high grading.
We expect the result to be the growth in EBITDA to 2025, making resilient and focused hydrocarbons a key contributor to BP's transition from IOC to IEC. This slide from our presentation on the 4th August sets out the aims of our hydrocarbons business for the next decade, How we will implement the BP strategy and achieve the mission I just shared, it's structured into 3 focus areas. These focus areas will be the framework for the remainder of the presentation. Firstly, continued rigor in safety and operations secondly, consistent with our aims, driving emissions down and thirdly, we aim to focus our portfolio and drive further discipline into our investment choices. But before we dive into each of these areas, I want to spend a few moments talking about our new organization and the operating model.
For the first time in BP's 111 year history, we've brought all our hydrocarbon operations together, and I see production and operations as much more than the sum of its powers. Bringing these teams together will allow us to learn faster and drive a safer, agile and resilient business. For example, our oil and gas project team is currently supporting Gelsenkirchen Refinery to deliver a major integrity project by bringing their recent brownfield experience to bear. And we expect that sharing of experience and knowledge will flourish in the new operating model we are implementing, built on the following three new ways of working. First, what we call BP solutions.
These teams will be centralized resources, putting our very best expert rapidly and effectively to work on our biggest risks and biggest opportunities. This approach is a natural evolution of our existing functional organization, and there's plenty more running room in this concept. One place we will apply this approach is in managing facility turnarounds. We currently have several teams for oil and gas and one team in every refinery using different processes to manage the same scope. These teams will be replaced with a single team and a single best process that we will apply to delivery of each turnaround.
And in our offshore operations, imagine experts from many countries coming together in a digitally enabled way to design and deliver our most challenging wells with improved safety and efficiency. That's actually real and happening now. We'll show a short video later with this in action supporting our Indonesian drilling campaign. 2nd, all our teams in production and operations will be digitally enabled. We're investing to give our teams access to highest value data and using digitally enabled workflows to give them structure and access to the right expertise and information at the right time.
Again, a real example, maintenance and inspection is being planned centrally using digital trends to visualize the worksite remotely. And when the work is carried out, connected employees use mobile and wearable technologies to implement the plan and access up to date information and remote expertise. And third, we're adopting an agile organizational structure. By agile, we mean small, cross functional, digitally collaborative teams solving problems rapidly using agile tools and techniques. I believe we're the 1st energy company to organize in this way, and doing so has performance benefits that will significantly differentiate us from our peers.
We started in our Azerbaijan organization. A pilot at scale has delivered impressive results, a more motivated workforce with an expected 20% improvement in productivity, solving problems ever more safely. We've already provided training in agile practices to 2,500 staff in the production and operations organization. Across BP, over the past 2.5 years, we have supported nearly 900 agile projects with around 70 agile coaches, And we're taking this opportunity to build our new organization with Agile at its heart. These three new ways of working, which will underpin delivery of the cost and revenue improvement programs, I will discuss shortly.
Now to go deeper into the 3 focus areas. The first is rigor in safety and operations. In our industry, accidents can destroy lives and damage environments. This is why safety is a core value, and our focus on this is unwavering. The left hand graph on this slide shows the number of people each year who were injured seriously enough that they could not report for the next shift.
Year on year, fewer people have been injured in our operational activities, which is a great outcome, and this looks set to continue for 2020. However, as we look at these graphs today, we must remember that each number is an individual who came to work and was injured.
So we
have more to do before everyone is returning to their homes and families safely. The graph on the right shows the quarterly occurrence of our most serious process safety events. These are the unplanned releases of hazardous material with a potential for severe consequences. The trend has been downwards, but it's now plateaued and, if anything, has seen some deterioration recently, and this is not acceptable to us. Our ambition, therefore, is to eliminate the most serious process safety events and life changing injuries.
This would represent a major step forward towards our ultimate goal of no accidents, no harm to people and no damage to the environment. Our strategy to deliver on this includes creating a single safety culture based on care, trust and transparency transforming how we learn through digitally enabled interactive learning applying more engineering barriers to reduce reliance on people and minimize the likelihood of human error using real time data and analytics to dynamically manage our biggest risks, and predictive asset integrity techniques so we can identify and fix issues before they can result in an accident. We will continue to systematically improve our operating management system, OMS, which defines the standards we strive for and how to achieve them. It is foundational to how we operate. So it's a big agenda, but I want to make it real by giving you one example of a simple change that we're making.
Bringing all our operations together has given us opportunity to harmonize what we call our safety leadership principles, which in part define our safety culture. We are embedding the behavior of care and trust, which promotes a speak up culture and helps us learn and improve. This harmonized approach to safety leadership will help us achieve our goals. Our focus on safety will remain core to everything we do. Turning from safety, we are strengthening 4 programs which underpin our focus on operational excellence.
Together, they will enable us to drive lower cash costs and increase revenue. Firstly, oil and gas production management secondly, refinery business improvement plans thirdly, improving work preparation and execution and finally, reimagining our approach to the entire facilities inspection program. These programs are heavily underpinned by digital solutions, and you'll hear more about the investment in innovation and engineering from David Ison later. I will now go into each of these 4 programs in a little bit more detail. The first two programs, 1 in oil and gas production and 1 in refining, are focused on growing volume and margin revenue but also have cost benefits.
First, on production management in our oil and gas assets. Across the industry, the lost revenue every year from deferred production, that is oil and gas shut in for many reasons, is a huge prize. A 1% improvement in our overall operating efficiency was worth around $150,000,000 to $200,000,000 of pretax revenue in 2019. We want to capture as much as possible of that deferred revenue. Global and remote collaboration centers known as GCCs or RCCs, are at the heart of our approach.
These centralized, co located teams will provide integrated real time support to on-site operations teams by continuously monitoring and optimizing our facilities worldwide. They will have access to real time digital field data, world class simulation and optimization tools and specialized expertise. Our wealth collaboration centers are already operating and delivering substantial benefits. The video I'm going to play now shows how we used our wells remote collaboration center in Sunbury to support a very successful drilling campaign in Indonesia.
I'm Russell Morris. I'm the Vice President for Wells for Asia Pacific based in Jakarta, and I'm responsible for the safe and efficient execution of wells in the region. In Indonesia, we're delivering the Tangu Expansion Project. It's quite a difficult drilling environment that we deal with.
My name is Punky Arianto. My current role is deputy Wells Engineering Manager in Tangu, Indonesia. Our location is very remote, so it make our logistics very challenging. So we have to have a good turnaround of equipment maintenance. We are looking for the best practices that we can implement in our operations.
We need to make sure the team are set up for success.
My name is Robert Patterson. I'm the RCC team leader. We have 2 remote collaboration centers in BP, one here in summary and a similar facility in Houston. Our role is to support the regional teams deliver safe and efficient wells. The RCC operates 24 hours a day, 7 days a week.
My name is Claire Horstman. I'm a drilling engineer in the RCC. An engineer in the RCC will interpret real time data coming in from the wells. We provide engineering solutions back to the regional teams to help improve performance and reduce risk. We can help drill the wells safer and more cheaply as well.
My name is Vic Young. I'm a senior well engineer for Connexus. Connexus is 2 things. We provide engineering and operation solutions to the region and we're also the home to validate and trusted knowledge. All our cases are stored in the Connexus digital platform.
It's searchable, it's categorized, and tells people what cases we've been working on and who the connections are in the organization that have solved these problems. It's constantly updated with the latest lessons from the region.
What's unique about the RCC is we provide a bespoke risk based solution for every well that's being drilled. We use artificial intelligence,
we use predictive analysis,
so that we can get an insight into what's happening
on the rig. Analysis so that we can get an insight into what's happening on the rig. One specific example would be in Indonesia.
It's very difficult drilling there. There's a lot of caverns that they have to drill through. So for us, in the RCC, we focused on equipment reliability and also anti collision. Because we see the real time data, we can see that if there's a problem developing downhole, we'll reach out to the engineering
team. We had an example with the casing shoe. It was blocked, and we needed a design change. The engineer can look at Connexus, validate whether his design of the casing shoe matches the lessons that we have learned in the past. Over the past year, working with Indonesia, we have significantly reduced the non productive time in that region, and we better manage their well construction risk.
We have transformed our performance in Tangu from what was quite a difficult start in 2019 to 2020 when we've delivered 4 top quartile wells and actually 2 best wells in the basin, so our performance exceeded any previous benchmark. This has now been rolled out globally, so all regions are using them.
Benefit for me, with current U. S. Of working make me easier in managing priorities and decision making process. For my team, they are working more agile and improve collaboration as one team. The most important thing is the region learning process now is becoming more systematic.
Being able to transfer the knowledge and experience around the world means we're able to share the knowledge with the rest of the teams, so to
try and avoid these problems occurring multiple times. You have this safety net around you. It is an outstanding piece of technology that we're applying globally, and we'll continue to deliver exceptional business results for the years to come.
Start. Our next step is the establishment of production management global collaboration centers. The Gulf of Mexico is already online, and the North Sea and Azerbaijan will be in place by the year end. These centers will help us make progress on the huge deferrals prize I quoted earlier. 2nd, long established refinery business improvement plans.
They've delivered sustained improvements in competitiveness of our assets. They focus on cost efficiency, reliability, improvement, advantaged crudes, intelligent operations and commercial optimization. Our aim is to deliver more than 96% refining availability, 1st quartile net cash margin in our portfolio and 2nd quartile or better non energy cash costs as measured by Solomon. Our refining teams have robust plans to improve our cost efficiency through procurement savings, improved productivity and focused initiatives to reduce maintenance spend whilst improving reliability. The business improvement plans have helped us deliver over $1,000,000,000 of underlying earnings growth since 2016.
One of the big success stories in refining is the turnaround of reliability at Whiting Refinery, which has improved from 94% Solomon availability in 2014 to more than 96% for 3 consecutive years since 2017. Turning to Programs 34, both of which are currently focused on oil and gas production but have applicability to refining. We spend around $3,000,000,000 per year gross on inspection and maintenance activities in our hydrocarbon business. More than 400,000 maintenance and inspection work orders across the business every year are executed. That's a big spend, but also a big opportunity to deliver cost efficiency and higher revenues.
I know from personal experience how important this is. As a young engineer We got the job done in the end, of course, and things have improved since then. We got the job done in the end, of course, and things have improved since then, but our teams are sometimes still held back by many of the same issues. Let me give a couple of facts on why this matters. First, around 40% of the work we do has to be replanned, and the likelihood of an incident increases when plans change.
2nd, on average, even with current levels of reliability and availability, we have around 35,000 barrels per day production shut in because of problems we can fix, but we haven't got to them yet. That's more than $1,000,000 of missing revenue per day. Of course, these problems aren't unique to BP, but we intend to get after them. Our 3rd program, work preparation and execution, will see us undertake design of work, planning and prioritization centrally using standardized work scopes. We will use new digital tools to make execution of that work much more efficient.
For example, digital workflow tools that allow site managers and operators to track a defect from identification to elimination. They can plan, create work orders and order parts in a single digital tool. Connected workers, I mentioned this earlier, brings mobile, wearable and voice technologies to the working environment, making work activities such as inspection effective and efficient. A pilot in one of our refineries showed positive results with a projected 3,500 hours of annualized productivity savings. 3 d worksite visualization.
These are digital twins that allow central teams to plan maintenance, identify obstructions, collect measurements and define the steps to do the job without ever setting foot on the site. And the last of these 4 programs, reimagining inspection. To give you a sense of scale, we have around 21,000,000 individual locations across our business that have to be inspected regularly. Getting this right draws on 2 enablers, which I've already mentioned in relation to work preparation and execution: centralized prioritization and standardizing scope and the 3rd leg of our inspection program is new technology, often deployed with robots or autonomous vehicles. Using sensing technology, we've moved from manual internal inspection of pressure vessels to 85% of those inspections being executed with the vessels still operating.
That reduces disruption to operations and production deferrals. We're starting to use the big data gathered by these types of sensors and machine learning to target our inspections and give us higher find rates based on past results. We've already had some significant successes piloting this in the North Sea. Additionally, we are in the early stages of using machine processing of inspection images instead of relying on the human eye. We see potential to greatly improve accuracy, increase processing capacity and reduce costs.
And we're increasing our use of robotics, firstly, for inspection in remote locations like over the side of an offshore platform secondly, for maintenance. For example, robots in the Gulf of Mexico are now working on our platforms doing routine jobs like painting. And we're already making significant use of autonomous vehicles underwater, on the surface, in the air to inspect our facilities. So our new organization, combined with the 4 programs I've just described, will drive cost efficiency and reliability and grow value. First, we expect to deliver $1,500,000,000 of annual cost savings from our hydrocarbon business by 2023.
This will be generated through synergies driven by cost reductions from the simplified organization, 0 based budgeting, digitization and supply chain efficiencies. 2nd, we plan to grow value by driving reliability improvement across our oil, gas and refining operations. On the left of this slide, oil and gas plant reliability reflects the impact of unplanned processed plant downtime on our production rate. Between 2014 2019, we improved plant reliability by 1 full percentage point. That's equivalent to nearly $200,000,000 of additional revenue in 2019 compared to our 2014 performance level.
And our goal is to increase plant reliability by a further 1.6% to 96% by the middle of the decade. In the middle, well reliability reflects the impact of unplanned well downtime on our production rate. The 3% improvement over the same 5 year period contributed nearly $600,000,000 of incremental revenue in 2019 alone. Our goal is to maintain that same high level of well reliability out to the middle of the decade. Lastly, refining availability.
A 1% improvement in availability is equivalent to $50,000,000 to $100,000,000 gross margin per year with our current refining portfolio. Our average Solomon availability since 2016 is around 95%. 4 out of the 8 operated refineries delivered an average of more than 96% availability across 2018 2019. Our ambition is to achieve 96% Solomon availability across the portfolio by 2025. And we'll pursue this through rigorous deployment of defect elimination, integrity management and intelligent operations as laid out in the business improvement plans.
So I believe these 4 programs will reduce cost, improve revenues and make our hydrocarbon business significantly more resilient. Moving to the 2nd focus area, driving emissions down. I spoke to this area at length on day 1, but I want to reemphasize that reducing emissions and support of a wider sustainability framework is core to resilient operations. We are focused on achieving our targets under aims 1 and 4. Aim 1, a 20% reduction in our operational emissions by 2025 aim 4, applying our methane measurement approach by 2023, pursuing a 50% reduction in methane intensity based on that measurement approach and as an interim step, targeting 0.2% methane intensity or better by 2025, again using that measurement approach.
I outlined on day 1 our strong track record of delivery on AIM-one and AIM-four activities. We will build on that track record to further underpin our 2025 emissions reduction targets. I'm going to turn now from reducing emissions to look at the 3rd focus area, our hydrocarbon portfolio and investment approach. We have a strong asset portfolio with 3 key elements: firstly, our strategic investment in Rosneft secondly, a diverse and balanced portfolio of high quality oil and gas assets and thirdly, an advantaged refining portfolio. So we're building from strong foundations.
And in this section, we will set out how we intend to strengthen it further over the next decade by focusing our assets and maximizing value through margin expansion and investment efficiency. Taking Rosneft first, this is an investment we're proud of. It's a strong strategic partnership. Rosneft Production has a very low cost of supply, making it resilient to the energy transition. And the Russian tax regime also adjusts effectively to allow its fields to be developed.
Like BP, Rosneft is committed to a more sustainable approach to oil and gas development. Rosneft has committed to the UN Sustainable Development Goals. It has delivered 3,000,000 tons of CO2 equivalent reduction to date, with particular focus on energy efficiency and is making strong progress on reducing fugitive methane emissions. Lastly, our Rosneft investment is material for BP. The track record on dividends paid to BP, the production that underpins that dividend and the reserves hopper speak for themselves.
Next, I want to spend some time speaking to the other parts of our hydrocarbon portfolio, including our approach to capital allocation. Our financial frame has us, on average, spending 30% less per year over the 5 year period to 2025 than we did in 2019. But we're absolutely not starving the business of investment. We can do this because we're coming off a period of high investment in oil and gas hubs, and our focus can now shift to more efficient tiebacks, infill drilling and other near hub options. Combine that shift in chosen options with a strong track record of improving project delivery and capital productivity will improve significantly.
Each of the projects we sanction will be tested against our new price deck, including a revised carbon price for operational emissions. They will need to meet the strict payback hurdles we show here as well as addressing the other criteria in our investment framework. Murray will talk much more about this later. Focusing now on oil and gas production and our resource hopper. We have just under 6,000,000,000 barrels of proved developed reserves booked at the end of 2019, and we have 16,000,000,000 barrels of options currently in our business plan, roughly fifty-fifty oil and gas, at a point forward development cost of around $9 per barrel.
That development cost is 40% lower than our 2019 unit depreciation rate of $16 per BOE. The options in our plan are equivalent to over 20 years of investment choices focused on the most margin accretive options with a 5 year average payback and high returns. So we have quality through choice. It means we don't have to explore, although a focused exploration program can deliver higher margin barrels displacing other options. We don't need to acquire resources, and we have considerable flexibility on divestment.
And we plan to manage our total proved reserves to production ratio down to around 8 years, which maintains a healthy balance. Reflecting our net zero ambition and aims, we have taken a hard look at the role of exploration in our oil and gas business. We've been clear that point forward, we don't intend to enter new countries for exploration. Our exploration and access capital spend has already reduced from a peak of roughly $4,600,000,000 in 2010 to around €800,000,000 in 2019. And over time, we expect it to reduce further.
But as I've just said, exploration can still deliver high quality resilient projects. So we will continue to selectively explore for new hubs in core regions while focusing most of our exploration spend near to our existing hubs. Our track record shows that discoveries from these near hub wells will typically yield high quality, low cost resource, which makes effective use of our past investments. We currently have a risk hopper of near hub exploration of around 400,000,000 barrels net to BP, and that's a hopper we regularly refresh. As an example of this approach, over the past 3 years, we've carried out a very successful program of near hub exploration on the Naquica asset in the Gulf of Mexico.
This is an asset with a capacity of around 130,000 barrels per day, but production was down at 40,000 barrels per day. Since then, our technology led exploration efforts have generated 6 commercial discoveries with an over 85% success rate and a finding cost of less than $2 per barrel. To achieve this, we use technologies such as advanced seismic algorithms to improve image quality, full waveform inversion models and machine learning to predict rock and fluid properties. We expect Nakika to be close to 100,000 barrels per day production by 2025 and these technologies to be used throughout the portfolio. I now want to say a little more on the major projects underpinning our profile.
We're still on track to deliver 900,000 barrels equivalent per day from major projects by the end of 2021. And as we said before, these are high margin barrels, with cash margins roughly 35% higher than the base business we had in 2015. We expect to sustain that level of production from our major projects out to 2025 at least. Since we last spoke to you, Atlantis Phase 3 has started up successfully on time, on budget, So we now have 25 major projects online, a great example of the sort of fast payback, high return tieback opportunities, which will be at the heart of our project hopper going forward. Before the end of 2020, we expect to start up Raven in Egypt, and we're planning for the accelerated start up of Gazir in Oman.
As a result of COVID-nineteen, we now expect Mad Dog 2, Katya compression in Trinidad and Tangu expansion project in Indonesia to start up in 2022. And turning to BP's integrated capability. In the future, we will be deploying our project capabilities across the group on low carbon projects. In fact, we've already started doing that. I'd now like to show a short video that illustrates how we are thinking about development concepts for our next wave of projects.
The SIP installation in Trinidad and Tobago is a great example of how a radical approach has led to a lower cost, safer, lighter, cleaner platform design. The team will share our overall thinking on this, and we'll talk about that installation specifically.
We're thinking with a different engineering and science based mindset now to the one we've deployed for the last 110 years. The vision is to create new resilient hydrocarbon facilities that are lower cost, lower carbon and make cleaner energy for the world. So we'll be focusing on nearer hub tiebacks, both oil and gas in incumbent regions like the Gulf of Mexico and Trinidad. These are shorter cycle this new facility we've designed and are beginning to execute now in Trinidad, and it's resulting in about an 88% reduction in the amount of greenhouse gas emissions.
SIP is the next generation, the next evolution of normally unmanned platforms or installations. It's the way we're going to take the next step towards the Reinvent BP agenda and look at how we can make simpler, safer, greener oil and gas development facility. One of our biggest risks in oil and gas is the transit of personnel back and forth to the installations. And SIP doesn't have a helidex. So we completely avoid the once a week helicopter flights in order to get personnel to the installation for maintenance.
So it's much, much safer transportation. SIP will be greener because we basically are designing in a reduction in our greenhouse gas emissions per year. Previous installations were well over 1200 tons of CO2 emitted per year. SIP is going to be less than 200 tons of CO2 emissions per year. Fundamentally, I think it's about making sure that we remain competitive in all the regions that we operate, in particular, Trinidad and Tobago.
It's about ensuring that we bring work and viability back into the Trinidad and Tobago region with respect to the fact that we're building the platform entirely in country. It's about being overall simpler with respect to the amount of hit that's on the facility. It's about being safer to make sure we keep people out of harm's way. And it's about being greener, which lines up to our gas agenda, which is very important for our organization.
I think that's a great example of how we are thinking differently about our new facilities. These are concepts that combine cost efficiency with a more sustainable approach while reducing risk to our teams. There is enormous potential to leverage this approach across our portfolio of future near hub developments. And we have confidence in future project delivery. I'm very proud that our project teams have been recognized within IPA's Upstream Industry Benchmark Consortium as best in class on the metrics that test readiness for project execution, front end loading, setting cost and schedule targets.
So great preparation supports great outcomes. So where do we see the next wave of oil investments? This chart identifies some of the oil opportunities we intend to evaluate for progression into our major project scope as well as areas with significant fast payback infill drilling. Dev will show the equivalent gas list just in a minute. For oil, almost all of the strongest opportunities that would fit within the capital frame are tiebacks or infills.
There is also a heavy weighting to highly resilient regions like the onshore and offshore U. S. Although other regions also exhibit good options, particularly around infill drilling. So as you can see, we have plenty of choice, around 8,000,000,000 barrels of oil options in our plan and other options being evaluated. This demonstrates the opportunity we have to apply strict return and payback hurdles to our capital allocation process and deliver increased cash margins.
I'm now going to pass you over to Dev Sanyal for a few minutes. Dev is going to share some insights on the role of gas production within our portfolio and how it connects to his low carbon electricity and energy strategic theme. Over to you, Dev.
Thank you, Gordon. As I highlighted yesterday, we believe gas has an important role to play in the energy transition. We spoke about how we are building a business to capture downstream customers, taking advantage of our resource positions and combining this with our trading capability. We see a partnership between gas and renewables to create firm and affordable energy. Over time, the decarbonization of gas will also enable the creation of hydrogen markets.
Global gas demand is expected to grow by 1.1% per annum through 2,035 in the rapid scenario, which Spencer described on Monday. We have material equity gas positions with approximately 120,000,000,000,000 cubic feet of net discovered resources and close to 8,000,000,000 cubic feet per day of production in 2019. This will remain a resilient source of EBITDA. Our gas positions are balanced across hubs, LNG and domestic markets. Today, our portfolio is split onethree across each of these.
This diversification creates resilience to different price environments. In addition, it enables us to optimize across the global portfolio. Our portfolio has a competitive cost of supply on average. Our domestic gas positions, like in India, have strong demand growth and represent the most attractive alternative to internationally priced LNG imports. We also have an equity LNG position of 15,000,000 tonnes per annum managed by Carole's team.
This provides access to global markets and enables us to optimize our customer supply. On this map, you can see the investment options in our hopper. We will take investment decisions with 3 important lenses: firstly, advantaged access to existing infrastructure, which leads to a low cost of supply secondly, opportunity for integration into new downstream markets and thirdly, the potential to decarbonize. Let me now describe in more detail some of our positions and the next wave of opportunities. In Indonesia, through our Tango project, we are the largest LNG producer in that country with 37% of Indonesia's production.
Our 2 trains, soon to be 3, provide material cash flow from an advantaged base. For the future, we have low cycle time options to build on existing infrastructure. Oman is a material resource base with stable cash flows. It has a low cost base, which will improve further as you bring Gazia online, increasing production by 50% but only increasing costs by around 15%. We have further options that will support our 1,500,000,000 cubic feet per day plateau over at least the rest of the decade.
In Australia, we have a material position in the North West Shelf with 5 energy trains producing 3,000,000,000 cubic feet per day. This is an important cash generator. We intend to optimize existing infrastructure through a combination of infill drilling, near hub exploration and 3rd party gas. In Egypt, we have an established position in a market that continues to grow. Further exploration opportunities will continue to capitalize on existing infrastructure, and we will continue to seek options to reduce operating emissions from future projects.
You will see the example from SiP in Trinidad earlier. We spoke about the balance in our portfolio through exposure to different price environments. This provides stability and predictability with exposure to international price upside. We will seek to maintain this balance. We'll also seek to maintain the balance of oil and gas production at roughly fifty-fifty.
Finally, I'd like to reiterate 3 messages. 1st, we expect gas demand to keep growing and play an important role in the energy transition. 2nd, our portfolio is balanced and resilient, delivering strong EBITDA. And third, we have a strong set of options that capitalize on existing infrastructure and are connected to growing markets. I'll now hand back to Gordon to talk about oil.
Thank you, Dev. And to finish off the last graph on this slide, we have underlying liquids production on the right hand side, broadly flat from 2019 to 2025, although we do expect to divest some lower margin volumes in line with our overall intent on portfolio focus. But I do want to highlight the growing absolute liquids volumes from high margin regions like the Gulf of Mexico and BPX. Speaking of which, let me turn now to one of our key assets, BPX Energy, our Lower forty eight business, where our post acquisition transformation is ahead of schedule. It's a good asset to close this section on because it exemplifies some of the key attributes we're looking for: flexibility on pace and timing of investment fast paybacks on individual wells material contributions to oil and gas with ability to flex between them.
And we are achieving early success expanding our resource base, for example, through delineation and appraisal of the underdeveloped Wolfcamp B and Austin Chalk horizons. And the team are applying rigorous investment hurdles. The team's robust capital allocation process identifies opportunities which exceed 30% after tax rate of return at $45 per barrel WTI crude price and $2.50 per MMBTU Henry Hub gas price. They currently have nearly 2,000 economic drilling locations which meet or beat those hurdles. Capital efficiency improvement was a major focus of the BPX team in 2019.
Relative to 2018, 2019 unit development costs fell nearly 60%, including around a 40% reduction in well costs, complemented with a 40% improvement in expected ultimate recovery from our wells on average. They're also ahead of plan delivering the acquisition synergies we previously set out, and our divestment program allows us to focus our capital on the highest margin and most resilient resources. Considerable flexibility over the pace of investment is a clear benefit. For example, to preserve cash in the current challenging price environment this year, the team went from 14 rigs operating to a single rig within a 3 month period. And they're working to reduce the environmental impact.
Permian flaring intensity has been cut from 16% in 2Q 2019 to 7% in 2Q 2020, and there's more to be done. I know the team are focusing on achieving 2% to 3% flaring intensity or better. All this leads to a business that plans to breakeven at $35 per barrel WTI crude price and $3 per MMBtu Henry Hub gas price in 2021. So we're making real progress in a great asset. So to summarize these oil and gas building blocks, you can see in this plot our total production comparing 2019 to 2025.
We expect to sustain underlying production broadly flat to the middle of the decade at around 2,600,000 barrels per day. And we intend to divest around 600,000 barrels per day by 2025, of which nearly 200,000 barrels per day are from already completed divestments. We expect managed decline in base production to stay within our 3% to 5% guidance out to 20 25. And overall, we expect a favorable evolution in the production mix, creating a more resilient portfolio. Turning to our refining portfolio.
As I said earlier, we are pleased at the performance and progress of our operated refineries. In the 2018 Solomon review, 5 out of 8 of our operated refineries were in the top quartile for net cash margins. And we have plans to move our refining portfolio as a whole to top quartile net cash margin by 2025. In a similar way to our oil and gas assets, we intend to high grade the portfolio over time through divestment of assets to focus on delivering earnings growth and decarbonization. That means we plan to reduce refining throughput from roughly 1,700,000 barrels per day currently to around 1,500,000 barrels per day by 2025.
So I hope you'll see that we start from a strong platform. We have already delivered 2 consecutive years of record throughput in 2018 and 2019. We will continue to grow commercial value through campaign planning and margin improvement, together with investment in digital and feedstock processing capabilities. These actions are all taken in collaboration with Emma's customer and products team and Caro's trading and shipping team, organizations to make sure we grow earning across the fuels value chain. Our refineries are configured flexibly so they can process advantaged crude.
For example, Whiting Refinery has both capability and access to process advantaged heavy grade crude. And Rotterdam Refinery has access to waterborne crudes and proximity to equity barrels with significant logistics advantages. We're also leveraging digital technology to improve almost every aspect of our decision making. We've recently completed upgrading the digital software and models used by the traders and refinery planners to make swifter decisions on crude selection. To give you some perspective, we buy and process more than 100 grades of crude in our refineries in a year.
So this tool enhances our analysts' ability to buy crudes that generate the most commercial value within the safe operating limits of our assets. We are also developing digital solutions focusing on 3 key themes: world class productivity, optimized production and plant availability. And we've been running pilots on these areas over the last 18 months. As an example, we've deployed a digital solution that improves predicted crude quality characteristics and will help improve our refinery utilization. Finally, we will leverage our refining assets to process hydrogenated vegetable oil and waste oils to produce low carbon distillates, biodiesel and biojet.
Biocoprocessing is one of the key platforms to scale up advanced fuels for our marketing businesses. We will leverage trading and midstream to source cost advantaged feedstocks. We will also make selective investments in fast payback capability that maximizes co processing margin. We plan to grow processing volume by nearly fourfold by 2025. These commercial optimization actions will underpin the delivery of 1st quartile net cash margin of our refining portfolio.
I want to summarize by showing how each of the elements that I've covered today come together to make a more resilient, higher margin portfolio. On the left hand side, the graph shows how we expect average oil and gas unit margins over the first half of the decade to increase as a result of our investment choices, portfolio choices and cost and operating efficiency improvement. And on the right, the changes within our control drive growth in EBITDA of around 20%. We expect further growth as the impact of COVID eases at BT price and margin assumptions with leverage to price upside. After offsetting divestments, we still see growth in EBITDA to 2025, and that brings me back to the mission I described at the beginning of this session.
I'm going to close with a couple of slides now. This slide summarizes the 2025 metrics which underpin our financial frame, and it serves as a reminder of where we aim to get to in 2030. I'm not going to repeat these. They were all set out in our 2Q strategy presentation. At the start of this presentation, I said I was confident that this new production operations organization could deliver a renewed mission.
I hope that over the last hour, I have demonstrated why, but most importantly, how. To reiterate what I said at the beginning, we will aim to eliminate life changing injuries and the most serious process safety events and reduce emissions aligned with BP the energy the world needs, transforming operations and cost efficiency and creating a more resilient portfolio through investment efficiency and high grading. As I said at the beginning of this session, we expect the result to be growth in EBITDA to 2025, making our hydrocarbons business a key contributor to BP's successful transition from IOC to IEC. Thank you for your time and attention today. I'm now going to hand over to David Aitken to talk about digital and innovation, an important enabler for my business.
Thank you very much.
Thank you, Gordon, and hello, everyone. My name is David Iton, and I lead Innovation and Engineering in BP. In the course of their presentations, my colleagues have described the contributions that digital and innovation are making to their businesses. I'd like now to pull together those threads in demonstrating how we play a central integrating role in enabling value creation across BP. The four main points I hope to leave with you are as follows.
Firstly, we understand that our license to innovate is based on our license to operate safely and securely and we'll continue to invest in this. Secondly, we have created a single organization to provide innovation as a service to BP and its customers, driving higher returns and lower carbon. Thirdly, we plan to double capital investment in digital to around $1,500,000,000 gross on average per annum out to 2025. We expect this to enable around $1,000,000,000 net reduction in BP's operating costs by the end of 2023 and to provide access to a price of around $1,000,000,000 net in enhanced revenues by 2025. And lastly, our aspiration is to create around 10 more new digital businesses in the launch pad by end 2022, focused in intelligent sensing and intelligent commodities and each with $1,000,000,000 potential.
You have by now seen this slide a number of times, the contribution to value creation across BP from digital innovation has 4 sources. The first two relate to digital investment in existing businesses to transform core operations and extend customer access. The third comes from reducing carbon emissions related to BP's operations and products. And the last from investing in new digital businesses, which are adjacent to BP's existing businesses. By innovation, we mean capturing ideas from across BP's global innovation ecosystem, incubating these to create an early stage product, which can be tested and validated, and finally scaling from early adopters to the mass market, both internal to BP and external.
2020, we plan to spend around $3,000,000,000 gross in innovation and engineering, at which about half this cost is for operating our digital estate. The other half comprises capital and revenue expenditure in research and development, digital systems, venture capital and new business building. The costs and benefits of these activities are largely streamed to the businesses and hence reflected in the presentations you have already seen. While my focus today is on digital and innovation, the solutions we create must be safe and secure. We will continue to invest in this.
For example, our digital security team protects BP by assessing some 5,000,000,000 events per day of many different kinds. And although such events are increasing in number, I'm glad to report that to date those impacting BP have remained very low. We're also making our infrastructure more resilient by migrating to the cloud. We closed 2 of our 8 mega data centers and now 40% of our digital estate sits in the cloud. Not only has this enabled our geoscientists, engineers, traders and technologists to work productively and securely from home during the pandemic, it also enables us to collaborate across the world at pace.
This is an integrated energy company in action. The remainder of my presentation focuses on investments we plan to make in digital and low carbon capabilities to grow value in existing and new businesses. And I will also talk about our track record of delivery and the key success factors in executing this strategy. I'll start with the impact of digital investments to transform core operations and extend customer access. Firstly, we expect new digital investment to enable around $1,000,000,000 net reduction in BP's operating costs by the end of 2023 and to provide access to a potential prize of around $1,000,000,000 in enhanced revenues by 2025.
Through to 2025, 80% of these incremental earnings are expected to come from our resilient and focused hydrocarbon business, leveraging prior investment in digital systems. Over time, we'd expect capital investment to increasingly be focused on revenue enhancement in customer facing businesses, with the total potential prize in 2,030 being double that in 2025. Now in order to deliver this, we plan to double capital investment in digital to around $1,500,000,000 gross on average per annum out to 2025. We believe that this investment will generate some of the highest incremental returns in BP's portfolio. We intend to deliver this through a rigorous and disciplined investment approval process in which the benefits and investment are planned, agreed and monitored with the relevant businesses.
The sources of cost efficiency include the centralization and automation of work planning, management and monitoring in well operations, oil and gas production and refining and in our back office, consolidating digital technology platforms and using robotic process automation to automate manual processes. And the sources of revenue enhancement include those the use of machine learning and advanced analytics designed to optimize entire systems from the reservoir to refineries, enable intervention ahead of predicted equipment failure, optimize supply and demand functions through trading and shipping and last extent customer assets and improve service levels. I'll turn now to value creation by reducing carbon emissions. Whilst digital innovation can play a role in carbon reduction, BP's science and engineering capabilities are also engaged in delivering scalable new technologies that can reduce carbon emissions both in BP's operations and across the lifecycle of our energy products and in line with BP's aims. Hence, BP's research and development spend of around $350,000,000 per year will be increasingly oriented towards reducing carbon.
Examples of this include modifying our refineries to run tallow and vegetable oils, thereby lowering carbon emissions of our products and combining these with active technologies in our ultimate fuels to improve engine performance co engineering lubricants and coolants designed for wind turbines, hybrid and electric vehicles and battery systems develop a conversion and carbon capture technologies, which can drive down the cost of decarbonizing fossil fuels as well as reducing the cost of electrolysis to make green hydrogen competitive. And lastly, trialing and deploying a range of local low and high altitude sensors to detect and measure methane emissions and then identifying the best ways of mitigating those as part of the approach, which Gordon has already mentioned. The last option for value growth is in areas adjacent to our core businesses, which we can access through our venturing and business building capabilities. We call the latter Launchpad. These unique components of our innovation engine give us access to high value options, which we believe can grow at pace whilst also delivering short term value to our core businesses.
Our venture capital team seen here was established in 2,006. Like any VC, we aim to deliver a healthy return on equity investment, but we also invest and only do so if we can extract strategic value from these investments. That is incremental value we create by deploying products and services from these start ups into our assets. In this way, our investment acts much like leverage research and development because every dollar we spend for every one others invest on average $7 We're investing around $100,000,000 per year in both our existing portfolio and new companies focused largely on digital and low carbon. At the end of 2019, BP Ventures had invested around $650,000,000 of which around a quarter was in companies that play into our core hydrocarbon businesses.
We've received exit proceeds of around $100,000,000 so far. And when combined with strategic value, we are well on target to deliver a return of more than 25% on this activity set. Over the past 2 years, we've built our new business scaling factories Launchpad. We're using this to scale new digitally led businesses adjacent to BP's core. All of these businesses must have the potential to exceed $1,000,000,000 in enterprise value within a period of 5 years and have majority BP control.
Launchpad was created in 2019 and is already building a track record focused on aggressive revenue growth, which provides some early confidence in the model. Today, there are 4 companies in LaunchPad, 2 of which have been spun out from BP and the other 2 acquired from our ventures portfolio. The first is Stride, which offers ultra low cost, high quality onshore seismic. It's won its 1st commercial contracts and has a multimillion dollar sales pipeline including options in the mining and geothermal sectors. The second is Light, a fiber based subsurface analytics company built on BP's proprietary algorithms.
In 2019, Lite added over $400,000,000 of gross revenue to BP's upstream operated assets. More recently, we've added Fotek, which is complementary to light targeting the smart cities sector. The 2 companies are working together to build integrated fiber optic and advanced analytics solutions for a range of sectors. And lastly, On X Insight provides predictive maintenance for wind turbines with around 40% year on year growth to the end of 2019 and is still growing in 2020 despite COVID-nineteen. We expect Launch Pad's portfolio to be between 10 15 companies by 2022 focused on intelligent sensing that is using advanced sensing and analytics to optimize value chains and operations and intelligent commodities building new virtual exchanges for differentiated emerging commodities linked to supply chain provenance.
As these companies mature, they will graduate from LaunchPad, and we expect some to move back into BP as new operating businesses. In combination, we expect the Launchpad and Ventures portfolio to return net cash to BP from 2025 onwards. We don't just talk about innovation in BP. We do it. And we've been doing it for many years.
We have a track record that gives us confidence that we can deliver further transformational value aligned with BP's strategy. And here are five examples from different parts of BP. Firstly, in our upstream business, we set out a vision in 2017 to become the leading digital upstream company. 3 years later, we're certainly one of the leaders, due in large part to our collaboration with Palantir, our investment in common data platforms and the application of advanced analytics and data visualization tools that we have deployed widely. And here are some examples.
Argus is our repository of all operated wells, historical and real time drilling data. Integrating data for improved business insight has added 100 of 1,000,000 of dollars in value. And in optimizing production through Apex, a digital twin of our production systems, we've added 100 of 1,000,000 more. And more recently, we worked with Palantir on upstream facilities optimization through a new system we call Vertex. This transformation of our core operations has delivered nearly $1,000,000,000 net cumulative incremental pretax cash over the last 3 years through a combination of production uplift and cost reduction.
However, it's not been an easy journey. While Argus, Apex, Vertex are working well, we have failed with other partners. For example, we embarked on a project to deliver predictive analytics across our upstream production facilities. And after 2 years of work, we realized that technology was too immature and ultimately would not scale across all our production platforms. Failures like these offer opportunities to learn.
For example, we now treat digital systems deployment as a business transformation, and we've embraced agile technologies, methodologies and scale iteratively. Secondly, we've extended customer access through several digital solutions in our retail, mobility and lubricants businesses. As example, we are partnering with over 75,000 business customers in India with Castrol Fastlane. Dealers can log in to order Castrol products, access promotional schemes and track their sales progress against targets as well as access invoices and order history. This is a first of kind solution for the lubricants industry.
Now the next 2 are examples of innovations which reduce the carbon emissions from our operations and those of our customers' operations. The first is back to Onex, which is one of our LaunchPad businesses. Onex reduces the levelized cost of energy produced in the wind sector using predictive analytics. Over the past year, On X has helped increase its customers' wind capacity and efficiency by more than 2 25 gigawatt hours, reducing carbon dioxide emissions by around 100,000 tons based on grid average carbon intensity in the relevant locations. And secondly, we're leveraging our venture investment in the waste to fuels company Fulcrum Bioenergy.
Fulcrum uses Fischer Tropsch technology, co developed by BP and Johnson Matthey. Fulcrum has developed and demonstrated a reliable, clean, efficient and scalable thermochemical process for producing low cost, sustainable biojet from municipal solid waste. Fulcrum's first plant, designed to produce 11,000,000 gallons per year of renewable biojet fuel capacity is under construction near Reno, Nevada. Construction of the next $33,000,000 gallon per year plant is planned in Gary, Indiana. Sustainable fuels provide a great example of gas and low carbon energy, customers and products, trading and shipping, and innovation and engineering all working together as an integrated team to deliver low carbon, cost effective solutions to BP's customers.
And the 5th and last example is of an adjacency complementary to our trading activities in digital commodities. BP Ventures invested $5,000,000,000 in start up Finite Carbon in 2017. Finite Carbon is now the largest supplier of forestry offsets in the United States of America. Our trading business has enabled this growth by placing over 50,000,000 tonnes in carbon offsets with customers. And meanwhile, BP Ventures has just acquired a stake in another startup, Satellytics, which specializes in analysis of satellite data and its potential ability to accurately verify forestry density remotely could potentially complement Finite Carbon's business.
The last topic I want to cover is how we compete, building on our track record of value delivery from innovation. Delivering on our aims requires excellence in execution. We believe three factors are fundamental to put BP in a winning position: people, platforms and partnerships. The first P is people. Around 3,000 of BP's leading scientists, engineers, entrepreneurs, new business builders, both physical and digital, have now been brought together in a single innovation and engineering team that can take an idea, incubate it and scale it.
This represents a major and very deliberate organizational change for BP that we believe can be differentiating. It enables us to pull capabilities, prioritize work and execute it using agile methodologies in a way that was not previously possible, delivering integrated solutions to our customers, both internal
and external.
We are building this team with world class talent, people who can sense the game changing possibilities and are inspired by BP's net zero ambition and want to reimagine energy for the world. We're also attracting talent. There's work for companies like Uber, Tesla and the start up community, people like Marco Ryan, Fran Bell, Justin Littis and Megan Sharp here, who have recently joined BP's leadership. The second P is platforms. Over the next 5 years, we're going to transform BP digitally to enable platform business models.
Earlier, I asked Marco Ryan, our Senior Vice President for Digital Customers and Markets to explain this. Marco joined BP late last year from Wartsila, a maritime and energy company where he built platform based businesses. I asked him, what does a platform based business model look like and how far are we on the journey?
Thanks, David. You've heard from Emma that we expect to increase our customer touch points from 10,000,000 per day to more than 20,000,000 within a decade and from William that partnerships are critical to our ambition. Platform thinking can enable all of these objectives, expanding customer access while reducing costs and enabling partner solutions. For BP, the move to platform based business models means that we can build modular products and services on top of cloud based platforms, which can be reused multiple times to drive integration, security, scale and cost efficiency. As we develop products at pace and extend them to customers, the data we collect delivers new insights about their needs.
This enables us to optimize our supply chains to achieve economies of scale and offer better pricing and more tailored products built to delight customers. More users, better products, better prices delivered an ever accelerated pace and a lower cost to serve, the flywheel in action. And we've already started. We've consolidated our finance and accounting systems from 92 in 2018 to 67 today, and with plans to reduce further to 18 by 2023. We're progressing customer solutions.
For example, our BP. Me app and reward program. Today, we sell $200,000,000 of fuel per year through BP Me, and we reward our customers with access to loyalty programs like earning Qantas frequent flyer points in Australia and the redemption of Kroger fuel points in the U. S. But you can expect a lot more.
As we start to integrate and reuse the services across multiple different products and solutions, It will allow us to increase the cross selling of services across all of BP's customers, something we find challenging technically today, but with which we are starting to experiment. For example, we're offering a seamless and reliable customer experience through our BP ChargeMaster charging solution to help our fuel customers to transition to electric vehicles. And although the platform consolidation and convergence has just begun, we are embarking on a journey that will take time. The good news is that with other investments in digital, the payback tends to be quick and can be significant.
My thanks to Parker. The 3rd P is partnerships. BP cannot deliver its ambition by itself. Partnerships are critical to feeding our innovation pipeline, challenging our thinking, driving pace, building capability and accessing new markets. And the partnerships I am talking about are strategic, collaborative and mutually beneficial.
You've heard about some partnerships from my colleagues and there are more. Partnerships with customers, research institutions, start ups and other large companies. For example, Johnson Matthey supplies many of BP's catalysts. Together, we've co developed the Fischer Tropsch technology being used by Fulcrum Bioenergy and we're exploring with them other technologies related to synthetic low carbon fuels. Beyond Limits is a leading start up at the cutting edge of cognitive computing, which is using AI based software to codify BP's expert knowledge.
We have funded the Carbon Mitigation Initiative at Princeton University, which Gordon mentioned on Monday, for 20 years. It is focused on understanding climate science and its mitigation. And lastly, Castrol is working with Jaguar to enable electrification. Every Jaguar I PACE is born with Castrol e transmission fluids onboard. While each of these factors alone are important, it is end to end integration across our innovation engine that will create real differentiation.
And this will always be a work in progress, but I'm confident that our reinvention will result in a step change in value delivery. So to conclude this section on digital and innovation, we know the world is on an unsustainable path, but BP's net zero ambition is unequivocal. This means we must change and innovate at pace and scale to deliver both lower carbon and higher returns. At the start of my presentation, I said there were 4 messages I wanted to convey to you. The first is that everything begins with safety and security.
Our license to innovate is predicated on our license to operate, and we will continue to prioritize and invest in this. Secondly, we are reinventing how we provide innovation as a service to BP and its customers, driving higher returns and reducing carbon. Our research and development spend of around $350,000,000 per year will be increasingly oriented towards reducing carbon emissions, for example, through low carbon fuels, transport electrification, hydrogen and carbon capture utilization storage and methane management. Thirdly, we plan to double capital investment in digital to around $1,500,000,000 gross on average per annum at 2025. We expect this to enable around $1,000,000,000 net reduction in BP's operating costs by the end of 2023 and to provide access to a prize of around $1,000,000,000 net in enhanced revenues by 2025.
As part of this, we expect to migrate 80% of applications to the cloud by 2025, and we plan to transition BP to a platform based business model. And fourthly, through Launchpad, we are building new businesses of the future. And by the end of 2022, our aspiration is to create around 10 more new digital businesses focused on intelligent sensing and intelligent commodities and each with $1,000,000,000 potential. Let me end by saying that BP's ambition inspires us. Our track record gives us confidence as do the distinctive capabilities we are building.
Together, my team comprises digital and innovation as a service, enabling BP and its customers to thrive in the energy transition to net 0. So thank you for listening. We will now take a break before Marie and Bernard come back to conclude the day's presentations.
Welcome back for the final session of BP Week. I'm Murray Auchincloss, BP's CFO. Over the last 3 days, you've heard a lot about our strategy and our business plans. On August 4, I explained how this strategy will be enabled by a resilient financial frame and why we believe that our strategy and our financial frame together create a compelling investor proposition. Today, I want to reinforce some important messages.
I will explain how our financial frame operates and why we believe it is compelling. I will outline how we expect to deliver competitive EBITDA and returns growth. And I will elaborate on our proposed financial disclosures to help you to monitor our progress from IOC to IEC. Let me start by explaining our financial frame, which comprises 3 firm principles and priorities: a coherent approach to capital allocation with a clear set of priorities for the uses of cash a resilient balance sheet with the target of maintaining a strong investment grade credit rating and a disciplined approach to investment within clear ranges. This financial frame, together with our 5 year business plan, is expected to result in 3 financial outcomes: strong growth in EBITDA per share, strong in improving ROEIC and a material shift in our capital employed.
Let me now look in more detail at each component of our financial frame, starting with capital allocation. We have a coherent approach to capital allocation with a clear set of priorities for the use of cash within 2 phases. 1st, funding a resilient dividend intended to remain fixed at $0.0525 per ordinary share per quarter. 2nd, deleveraging our balance sheet to protect our investment grade credit rating. The first step is to deleverage to $35,000,000,000 net debt and to maintain a strong investment grade credit rating thereafter.
3rd, allocating sufficient capital to advance our energy transition strategy, with this allocation intended to rise once our near term deleveraging targets are achieved. This includes organic and inorganic capital. 4th, investing appropriately in our resilient and valuable hydrocarbons business to generate sustainable cash flow. And 5th, committing to return at least 60% of surplus cash as buybacks after having reached $35,000,000,000 net debt and subject to maintaining a strong investment grade credit rating. We believe this is a compelling frame as it provides direct leverage to cash flow upside to shareholders and enforces investment discipline.
Now we consider a strong balance sheet to be the foundation to pay a reset dividend and advance our strategy. In the near term, we target deleveraging to $35,000,000,000 of net debt. Thereafter, our target is a strong investment grade credit rating. A good indicator for this is the cash cover ratio, which we aim to keep within the 30% to 40% range through cycle. This is not a target.
We believe our financial frame enables us to manage our average 2021 to 2025 cash balance point to around $40 Brent, assuming an average RMM around 11 and Henry Hub at 3 in 2020 real terms. If prices are lower, we can easily slow down onshore drilling to balance well below $40 Brent. Deleveraging our balance sheet will be supported by a target of $25,000,000,000 of divestment proceeds between the second half of twenty twenty and twenty twenty five. Half of this target has already been completed or been agreed and includes the recently announced petrochemicals divestment and the sale of our Alaska upstream business. As we execute this program, we will be focused on value.
We are not in a rush, and we will wait for competitive pricing. With our new strategy, we've also refreshed our investment allocation process to align with Reinvented BP. As you would expect, it starts with a core set of 6 investment criteria: balancing strategic alignment, returns, volatility, integration value, sustainability and risk. Resource allocation is done in a more agile way across our individual businesses. We have lowered our central case assumptions for oil, gas and RMM and increased our carbon price.
And we have set stringent hurdle rates. First, a payback of less than 10 years for all investments in upstream oil, refining and for fuels retail and mature markets. 2nd, a payback of less than 15 years for upstream gas. 3rd, we have a range of sector specific internal rate of return hurdles for transition and low carbon investments, between 10% 15%. And for renewable power, we look for returns of around 10% levered.
All of this is then optimized to make sure we're adequately trading off returns versus net present value, balancing the short, medium and long term value growth for shareholders. As Bernard said on day 1, some of you have questioned how we will manage the transition from IOC to IEC while maintaining a resilient financial frame. I have complete confidence in what we've told you over the past 3 days. These are deliverable plans. This slide shows how we plan to deliver growing EBITDA to 2025.
First, we expect operational growth in each of our strategic themes, most of which will be delivered by our legacy businesses. In resilient and focused hydrocarbons, we expect EBITDA growth from new higher margin barrels coming online. In convenience and mobility, we expect ratable EBITDA while generating double digit returns. And in low carbon electricity and energy, we don't expect a significant EBITDA contribution to 2025, instead building businesses for the second half of the decade. 2nd, we expect to achieve $3,000,000,000 to $4,000,000,000 of pretax cash cost savings by 2023 from our program to reinvent BP.
And third, our portfolio remains highly leveraged. And as you can see, the positive impact of our $50 to $60 per barrel price range assumptions. Together, these building blocks underpin our expected EBITDA CAGR of 5% to 6% on an underlying basis. Importantly, we also expect to grow EBITDA to 2025 after the impact of our planned $25,000,000,000 divestment program. Together with our share buyback commitment, this drives our expected 7% to 9% EBITDA per share CAGR.
Now turning to the second half of the decade. After growing our ROACE to 12% to 14% by 2025, we plan to hold it flat around this level to 2,030. Assuming constant prices, the EBITDA contribution from resilient and focused hydrocarbons is expected to decline from 2025 to 2,030 as we high grade the portfolio and maintain a strict capital framework. As described by Gordon, oil and gas production and refining throughput are expected to shrink to 2,030. We expect this decline to be more than offset by ratable growth in convenience and mobility and in low carbon electricity and energy where we expect EBITDA growth to accelerate as the capital we're investing matures and we begin to see the benefit of scale across the business.
Through this period, our disciplined capital allocation framework is expected to remain unchanged. Together, our continuing cash flow generation, leverage to price upside and focus on investment discipline means that we expect to generate surplus cash flow. Through our commitment to return at least 60% of surplus cash flow by share buyback, we expect this to drive per share growth at a similar rate to the preceding 5 years. And through the steady and disciplined allocation of capital, we expect capital employed in transition and low carbon to exceed 30% by 2,030. 2,030 is very hard to predict right now, but we think we have a deliverable plan, and we hope to do better.
Turning to our plans for cost savings. On Monday, Kerry spoke about our program to reinvent the company. And in other presentations, you have heard how this will drive efficiencies through our business. In aggregate, we expect this program $2,500,000,000 of pretax cash cost savings by year end 2021, rising to $3,000,000,000 to $4,000,000,000 by 2023 compared to 2019. This is underpinned by, 1st, a reorganization to drive centralization and remove duplication inherent in our old segment model.
In June, we announced a plan to remove 10,000 positions, most of this by the end of the year. And Gordon explained earlier today how we are moving towards an agile structure, improving cycle times and enabling delayering. This is unique in our sector. 2nd, investment in digital to drive efficiencies through centralization and automation, as David outlined very well in the last session. And third, driving operational efficiencies through a strategic approach to our supply chain, supported by the creation of a single production and operations entity and the application of 0 based budgeting.
These are important components of our plan to create a BP that is a leaner and faster moving company, and we are confident we will be able to deliver these savings. As I've already said, we have clear priorities for the cash that we generate. Assuming an oil price of $50 to $60 Brent and including divestment proceeds, this slide shows how we intend to pay a resilient dividend, deleverage our balance sheet, invest at scale in the energy transition, invest in our resilient hydrocarbons business and distribute at least 60% of surplus cash flow through share buybacks with the remainder of any surplus allocated according to board discretion. Focusing on an important component of this, distributions. Our first priority is a resilient dividend of $0.0525 per ordinary share per quarter that we intend to remain fixed at this level.
This is supplemented by a commitment to distribute at least 60% of surplus cash through share buybacks once our net debt target is achieved and subject to maintaining a strong investment grade credit rating. This creates direct exposure to the successful delivery of our business plan on higher commodity prices. The remainder of any surplus cash flow will be allocated at board discretion. Together, this creates a more flexible model for shareholder returns, resulting in comparable distributions at around $55 per barrel while also offering increased exposure to investment in the energy transition. We believe the combination of a resilient dividend and a commitment to share is unusual and will be highly valued.
Through the next 5 years, we will be focused on 3 key measures as shown here. We expect growth in EBITDA per share, strong and improving ROACE and a significant increase in the capital exposed to the energy transition. These are financial measures by which our performance should be assessed. Turning finally to our financial disclosure. As we deliver this transition, we recognize the need to be transparent in our financial operational and emissions disclosures to allow you to assess our progress.
We will begin reporting under our new organizational structure from the 1st January 2021. The matrix here shows how the strategic themes we have discussed over the last 3 days will map to our new reporting structure. We also intend to provide some pro form a numbers to assist in modeling the new organization in early 2021. Disclosures from 2021 will include certain elements below the business group level in order to help our stakeholders to model and benchmark our business, although not necessarily each of the line items referenced in this slide. And reflecting on feedback from our stakeholders, we intend to move to post tax segmental reporting starting in 2021.
In conclusion, we believe that our strategy and financial frame will deliver a compelling investor proposition, a proposition that balances committed distributions, profitable growth and sustainable long term value as we transition from an IOC to an IEEC, all in service of delivering long term shareholder value. I'm excited. Now let me hand back to Bernard.
Thank you, Murray, for another excellent presentation and a good way, a great way, I think, to wrap up what we call the BP week, and it's only Wednesday. But 3 days and over 10 hours, I think, of screen time later, it's time to draw things to a close. And most of all, I want to say a very big thank you to every one of the, I think, 20 7,000 people who have joined us this week at some point. So thanks for giving us so much of your time, and it's great for us to see the interest that people have in what we're trying to do. And we've asked a lot of you, and we recognize that.
But it is because we know we can't be successful or we won't be successful without your support and your confidence in us. And for us to earn your support and to earn your confidence, you need to see and you need to hear and you need to be able to question us and you need to be able to challenge us. And that's why we've opened our doors probably wider than we've ever done before, and shared more information, I think, than we've ever done about our strategy and our plans. And that probably brings me to another thank you from me, which is to everyone on the BP team and the broader team actually who has played a part in pulling this event together. And what you've seen here on the screen, you can imagine from the graphics, the videos, the presentations, the publications, it's based on, I would say, an absolute mountain of work, and the team tell me, including 734 discrete pieces of proof pointed disclosure, 734 about our business.
So a huge thanks to that team. And then a final thank you before I go to give some concluding remarks From me goes to the leadership team. This was really their week, and it was your opportunity to meet the people who are going to lead and are leading our reinvention. And I have to say, I couldn't be prouder of them. I thought they did brilliantly.
Now you'll be glad to hear that I'm not going to attempt to recap on everything that we said this week. We've taken enough of your time, I think, and you can find the material and everything you need on our website on obviously on bp.com. But I would like to ask for just a few more minutes, if you don't mind, to briefly sum up 3 things. First, the conviction that we have in our strategy secondly, the confidence that we have in it and thirdly, our commitment to deliver it. So let me start with the reasons for our conviction, and that's because of several things.
The planet needs change, and the science is very, very clear on that. And we've been saying for a long time, the world is not on a sustainable path. And it's not just that. Society wants change. People everywhere, no matter where you go in the world, want energy that is cleaner as well as reliable and affordable and because of what our energy outlook and indeed other projections tell us about the energy transition.
Now no one knows the precise path. It's the future, and therefore, in many ways, we don't know. But the energy mix is changing, and oil and gas, as Spencer said, are going to be increasingly challenged, and other forms of energy are going to see incredible growth. And that is a likely outcome in each of the scenarios that inform our strategy and has really been reinforced by the pandemic. And therein lies huge opportunity for our company, rewiring and replumbing the global energy system for a net zero future is going to require 1,000,000,000,000 of dollars of investment.
And for a company like BP, with our reach, with our relationships, our capabilities, I hope I can say that, reimagining energy is an opportunity to create value, to strengthen our resilience and to help the world get to net 0. And all of this convinces us that reinventing BP is without question the right thing for us to do. And it's for our employees, it's for our shareholders and of course, importantly, it's for broader society. Now to confidence. And don't get me wrong, as well as an opportunity, we recognize, we do recognize that this is also an enormous challenge and so not without risks.
And of course, not everyone is going to agree that what we're doing is right, and that's okay. I also have no doubt that we'll make some mistakes along the way, and that's also okay as long as we learn. And therefore, I guess I would say we don't take this on lightly. We've been working on this for nearly a year now, and we're very, very clear eyed about what it will take. We have a new guiding purpose, which I hope you know is to reimagine energy for people and our planet.
We have what I think is a bold ambition to be a net zero company by 2,050 or sooner and to help the world get to net 0. In August, we outlined what I think is a clear strategy to transform from an international oil company focused on developing resources over 111 years to an integrated energy company focused on delivering solutions for customers. And that, as Murray said, is supported by a disciplined financial framework and what we believe and I believe is a compelling investor proposition. And it's being delivered by what I think is a diverse, a dynamic and a highly motivated team and whose leaders you've been meeting over the last 3 days. So in many ways, all of the pieces of the puzzle are in place, and all of this gives us confidence.
And now, of course, it's all about delivery, and we are committed to deliver that plan. And as I've said this week and some people in the media picked up on it, we now move from what I call a period of excitement to a period of execution, from excitement to execution, it's now all about delivery of what we've laid out. And then finally, to commitment, and I hope you got a good sense of our commitment this week and in many ways that we're already in action. My team told me that I came across a bit too stern in my opening remarks on Monday, so feedback's always welcome. And I hope I wasn't putting anybody off.
But it just I guess one of the things, we have to be who we are, and it reflects my own sort of deep personal commitment to getting this right for the company I love, for BP and for the employees and for the world. And as I said to someone this morning over breakfast, this is serious stuff. So we are reinventing BP to be leaner and flatter. We're saying goodbye to 10,000 colleagues, 10,000 great colleagues, great people who have served BP, many of them over 30, 40 years, and it's difficult. We're eliminating several tiers of management to bring that front line closer to leadership.
We've strengthened the balance sheet with our hybrid bond, and we've aligned ourselves better to future oil and gas prices. We divested our petchem business as it was no longer the best strategic fit for us. We've adjusted the dividend, a difficult decision, one that impacted lots of people, but we believed it was the right thing to do, and it gives us greater flexibility that we need. And we're building partnerships where we can create more together than we can on our own and partnerships with regions like Teesside here in the U. K, with cities like Aberdeen and Houston, both of where I lived, partnerships with world class companies, the Microsofts of the world, Equinor, the Ubers, Amazon.
And these are companies that increasingly want to work with us, not they have to work with us, they want to work with us. And we have others in the pipeline as well. So stay tuned, as they say. And I said in February that we had set the satnav, this concept of the satnav, and we'd set the satnav for net 0 by 2,050 and that there is no turning back. And I think and I hope that everything we've done since then proves that we are all in.
And as I said on Monday, and I hope you felt it this week from the team, we have a massive determination to make this work, and I hope you felt that. So in conclusion, we are convinced. We're confident, we're committed. But of course, the reality of life is we can't do it alone. And as good as our team is, and I think they're brilliant, we know that we all, myself included, have lots that we need to learn.
We'll need partners that complement our capabilities or, quite frankly, who simply do things better, and that's okay. As long as you recognize it, it's a strength to bring that partnership together. We need policymakers to incentivize lower carbon choices. We need civil society to challenge us, to constructively challenge us on our plans. We need customers to buy our products and our services, obviously, and we need investors to trust us, to trust us with their money, with their capital.
And in return, we intend to be and we need to be and we will be good stewards of their money, which is why we have underpinned our strategy with a financial framework that demands discipline and rigor from all of us. And as committed as we are to this strategic pivot, I can assure you that we will not compromise value by chasing volumes and nor, by the way, do we need to. We're going to do this in a very disciplined way. We're going to perform as we transform, as we said in February. And that leads me to be to my final point, and I want to be very, very clear on this.
For all of our conviction and confidence and commitment, this is not some form of altruism. This is not charity or ideology or blind faith. We're here to grow value for our stakeholders in a way and on a scale that we would be unable to do if we do not reinvent ourselves. And we believe that the timing is right. We believe, of course, that our strategy is right, and we believe that the opportunity, as I like to say, the opportunity is off the charts.
So this is exciting, and we look forward to working with all of you. If we get this right, and we obviously fully intend to, I think we all stand to benefit. So thank you so much for your time, and we look forward to hearing your feedback. Thank you.