Leases

12 Months Ended

Dec. 31, 2023

The group leases a number of assets as part of its activities. This primarily includes drilling rigs in the oil production & operations and gas & low carbon energy segments and retail service stations, oil depots and storage tanks in the customer & products segment as well as office accommodation and vessel charters across the group. The weighted-average remaining lease term for the total lease portfolio is around 7 years (2022 7 years). Some leases have payments that vary with market interest or inflation rates. Certain leases contain residual value guarantees, which may be triggered in certain circumstances such as if market values have significantly declined at the conclusion of the lease.

The table below shows the timing of the undiscounted cash outflows for the lease liabilities included on the balance sheet.


		$ million
	2023	2022
Undiscounted lease liability cash flows due:
Within 1 year	3,038	2,348
1 to 2 years	2,177	1,728
2 to 3 years	1,386	1,232
3 to 4 years	1,139	740
4 to 5 years	947	632
5 to 10 years	3,045	1,909
Over 10 years	1,348	1,275
	13,080	9,864
Impact of discounting	(1,959)	(1,315)
Lease liabilities at 31 December	11,121	8,549
Of which – current	2,650	2,102
– non-current	8,471	6,447

The group may enter into lease arrangements a number of years before taking control of the underlying asset due to construction lead times or to secure future operational requirements. The total undiscounted amount for future commitments for leases not yet commenced as at 31 December 2023 is $5,507 million (2022 $5,360 million). The majority of this future commitment relates to the floating LNG vessel to service the Greater Tortue Ahmeyim project from 2025.


		$ million
	2023	2022
Total cash outflow for amounts included in lease liabilitiesa	2,904	2,200
Expense for variable payments not included in the lease liabilitya	27	27
Short-term lease expensea	657	482
Additions to right-of-use assets in the period	5,015	2,451

aThe cash outflows for amounts not included in lease liabilities approximate the income statement expenses disclosed above.

An analysis of right-of-use assets and depreciation is provided in Note 12. An analysis of lease interest expense is provided in Note 7.