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1 Copyright of Royal Dutch Shell plc 13 March, 2014
BALANCING GROWTH & RETURNS MANAGEMENT DAY 2014
13 MARCH 2014 ROYAL DUTCH SHELL PLC
2 Copyright of Royal Dutch Shell plc 13 March, 2014
DEFINITIONS & CAUTIONARY NOTE
Reserves: Our use of the term “reserves” in this presentation means SEC proved oil and gas reserves.
Resources: Our use of the term “resources” in this presentation includes quantities of oil and gas not yet classified as SEC proved oil and gas reserves. Resources are consistent with the Society of Petroleum Engineers 2P and 2C definitions.
Organic: Our use of the term Organic includes SEC proved oil and gas reserves excluding changes resulting from acquisitions, divestments and year-average pricing impact.
Resources plays: our use of the term ‘resources plays’ refers to tight, shale and coal bed methane oil and gas acreage.
The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate entities. In this presentation “Shell”, “Shell group” and “Royal Dutch Shell” are sometimes used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, the words “we”, “us” and “our” are also used to refer to subsidiaries in general or to those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company or companies. ‘‘Subsidiaries’’, “Shell subsidiaries” and “Shell companies” as used in this presentation refer to companies in which Royal Dutch Shell either directly or indirectly has control, by having either a majority of the voting rights or the right to exercise a controlling influence. The companies in which Shell has significant influence but not control are referred to as “associated companies” or “associates” and companies in which Shell has joint control are referred to as “jointly controlled entities”. In this presentation, associates and jointly controlled entities are also referred to as “equity-accounted investments”. The term “Shell interest” is used for convenience to indicate the direct and/or indirect (for example, through our 23% shareholding in Woodside Petroleum Ltd.) ownership interest held by Shell in a venture, partnership or company, after exclusion of all third-party interest.
This presentation contains forward-looking statements concerning the financial condition, results of operations and businesses of Royal Dutch Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Royal Dutch Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as ‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’, ‘‘intend’’, ‘‘may’’, ‘‘plan’’, ‘‘objectives’’, ‘‘outlook’’, ‘‘probably’’, ‘‘project’’, ‘‘will’’, ‘‘seek’’, ‘‘target’’, ‘‘risks’’, ‘‘goals’’, ‘‘should’’ and similar terms and phrases. There are a number of factors that could affect the future operations of Royal Dutch Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this presentation, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for Shell’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developments including potential litigation and regulatory measures as a result of climate changes; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; and (m) changes in trading conditions. All forward-looking statements contained in this presentation are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional factors that may affect future results are contained in Royal Dutch Shell’s 20-F for the year ended 31 December, 2013 (available at www.shell.com/investor and www.sec.gov ). These factors also should be considered by the reader. Each forward-looking statement speaks only as of the date of this presentation, 13 March, 2014. Neither Royal Dutch Shell nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this presentation. There can be no assurance that dividend payments will match or exceed those set out in this presentation in the future, or that they will be made at all.
We use certain terms in this presentation, such as discovery potential, that the United States Securities and Exchange Commission (SEC) guidelines strictly prohibit us from including in filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC website www.sec.gov. You can also obtain this form from the SEC by calling 1-800-SEC-0330.
3 Copyright of Royal Dutch Shell plc 13 March, 2014
BEN VAN BEURDEN CHIEF EXECUTIVE OFFICER
ROYAL DUTCH SHELL PLC
4 Copyright of Royal Dutch Shell plc 13 March, 2014
EXECUTING A CONSISTENT, LONG-TERM STRATEGY
Unrelenting focus on HSSE
Technology, integration and scale
Disciplined capital investment by strategic theme
Growth in cash flow through-cycle
Competitive shareholder returns
Shearwater platform North Sea, UK
5 Copyright of Royal Dutch Shell plc 13 March, 2014
AGENDA
Ben van Beurden Chief Executive Officer
Simon Henry Chief Financial Officer
John Abbott Downstream Director
Marvin Odum Upstream Americas Director
Question & answer session
Panel break-outs:
Projects & Technology + Upstream International
Upstream Americas
Downstream
6 Copyright of Royal Dutch Shell plc 13 March, 2014
FOCUS ON SAFETY 2013 UPDATE
Goal Zero on safety Injuries – TRCF/million working hours
Spills - operational Volume in thousand tonnes
Energy intensity - refineries Energy Intensity Index (EEITM)
million working hours
Working hours (RHS) TRCF
HSSE priority
Performance + transparency
Process safety trend Number of incidents
Tier 1 incidents Tier 2 incidents
7 Copyright of Royal Dutch Shell plc 13 March, 2014
Balancing risk and reward
Strict investment hurdles and price screens drive returns
ASPIRED PORTFOLIO
ATTRACTIVENESS
Growth & returns
Opportunity scale
RESILIENCE
Risk, performance &
uncertainty
PORTFOLIO MANAGEMENT
STRATEGIC INTENT
RESULTS & PAY-OUT
8 Copyright of Royal Dutch Shell plc 13 March, 2014
FUTURE OPPORTUNITIES
RESOURCES PLAYS
DEEP-WATER INTEGRATED GAS
UPSTREAM DOWNSTREAM
INVESTMENT PRIORITIES + STRATEGIC INTENT
1 Iraq, Nigeria onshore (SPDC), Kazakhstan, heavy oil, Arctic
Engines
Free cash flow businesses
Maintain competitiveness
Asset integrity + selective growth
Growth Priority
Global leadership established
High-grading our rich opportunity set
Longer Term
Major potential; managing non-technical risks
Slower pace + capital allocation
Credible, competitive, affordable Investment choices driven on a global thematic basis
1
9 Copyright of Royal Dutch Shell plc 13 March, 2014
FINANCIAL PERFORMANCE TRACK RECORD
Earnings $ billion CCS
Cash flow from operations $ billion
Total capital investment $ billion
Payout $ billion
Dividend declared Buyback Organic capital investment
Upstream Downstream Corporate Identified items
Acquisitions
10 Copyright of Royal Dutch Shell plc 13 March, 2014
FINANCIAL PERFORMANCE COMPETITIVE POSITION
EPS on reported CCS basis
Earnings per share growth – 3 years % growth 2010-2013
Cash flow per share growth – 3 years
Total shareholder return – 3 years 2013 ROACE
ROACE: earnings on reported local GAAP basis
Shell Competitors
% growth 2010-2013
% growth 2010-2013
11 Copyright of Royal Dutch Shell plc 13 March, 2014
Changing emphasis in 2014
2014 PRIORITIES
Returns and cash flow
Competitive returns for shareholders
Take hard choices on new options
Increase asset sales
Reduce pace of growth investment
Major deep-water start-ups in 2014
Integrate 2013 acquisitions
Deliver new projects
Enhance our capital efficiency
Improve our financial performance
12 Copyright of Royal Dutch Shell plc 13 March, 2014
IMPROVE FINANCIAL PERFORMANCE: RESPONDING TO NEW MARKET DYNAMICS
North America resources plays Oil Products
Geelong refinery, Australia Groundbirch, Canada
~$80 billion capital employed
Financial performance not acceptable
Multi-year turn-around Priorities: Portfolio restructuring + potential write-downs Cost reduction + margin improvement Invest for financial resilience + selective growth
13 Copyright of Royal Dutch Shell plc 13 March, 2014
IMPROVE FINANCIAL PERFORMANCE CONTINUED DRIVE ON COST EFFICIENCY
Enterprise framework agreements (EFAs) cumulative # EFAs negotiated
Price positioning of EFAs EFA prices vs. range of quotes received from market
Supply chain efficiency:
~$65 billion / year spend
Standardisation + replication:
Platforms, subsea equipment, facilities
Drilling efficiency:
Rig contracts
Repeatable wells + design
EFA price
%
14 Copyright of Royal Dutch Shell plc 13 March, 2014
IMPROVE FINANCIAL PERFORMANCE IN UPSTREAM ENGINE
Production decline halted
focus on up-time
reservoir development
sub-surface dynamics
Innovative EOR schemes
2012-13 impacted by high levels of maintenance
2013 maintenance downtime 50 kboe per day (vs. 35 kboe per day downtime in 2012)
Address late life assets: fix or divest
PDO Oman
UK North Sea kboe per day, Shell share kboe/day, Shell share
2012:117kboe/d
2013: 91kboe/d
Actual production assumed production with continued decline
15 Copyright of Royal Dutch Shell plc 13 March, 2014
IMPROVE FINANCIAL PERFORMANCE DRIVE TO FURTHER ENHANCE INTEGRATED GAS PROFITABILITY
Includes LNG + GTL; earnings excluding identified items
Increasing Shell’s managed sales Total LNG volumes in mtpa
Shell’s LNG portfolio
LNG Peru
Altamira
Baja
Nigeria
Hazira
NWS Pluto
QG-4
Elba
Spain
Prelude Gorgon
Atlantic LNG
Oman
Sakhalin
Malaysia
Brunei
Cove Point
LNG supply
Under construction
Regasification
Trading flows
2014
2013 >25 mtpa
>30 mtpa
2017 ~40 mtpa
$ billion
Integrated Gas financial performance
Earnings ~400%
Earnings CFFO ROACE (RHS) JV marketed Shell directly managed
QG4 Pearl GTL
Pluto LNG North Rankin
Repsol LNG Elba Gorgon T1-3 Prelude FLNG
North West Shelf Sakhalin
16 Copyright of Royal Dutch Shell plc 13 March, 2014
2014 PRIORITIES
Returns and cash flow
Competitive returns for shareholders
Take hard choices on new options
Increase asset sales
Reduce pace of growth investment
Major deep-water start-ups in 2014
Integrate 2013 acquisitions
Deliver new projects
Enhance our capital efficiency
Improve our financial performance
17 Copyright of Royal Dutch Shell plc 13 March, 2014
DECONSTRUCTING OUR PORTFOLIO
2013 $ billion CCS earnings CFFO
Organic capital
investment
Capital employed ROACE
Engi
nes
5 8 5 64 7%
6 10 7 17 36%
Gro
wth
Prio
ritie
s 9 12 6 57 17%
3 5 9 23 15%
Long
er T
erm
(4) 0 6 25 (12)%
1 3 5 32 3% FUTURE
OPPORTUNITIES1
RESOURCES PLAYS
DEEP-WATER
INTEGRATED GAS
UPSTREAM ENGINE
DOWNSTREAM ENGINE Mature + drives free cash flow
Profitable + growing
Returns impacted by growth spend
CCS earnings excluding identified items; ROACE based on CCS earnings excluding identified items 1 Iraq, Nigeria onshore (SPDC), Kazakhstan, Arctic, heavy oil
18 Copyright of Royal Dutch Shell plc 13 March, 2014
ENHANCE CAPITAL EFFICIENCY TAKE HARD CHOICES
FEED FID On stream
Explore
Feasibility study
Identify & Assess Select Define Execute On stream
12 billion boe 7 billion boe 11 billion boe
Hard choices on growth projects: US GTL Alaska LNG FID pause in Asia Pacific
AOSP debottlenecking Wheatstone Cove others
~$8 billion capital investment ~$27 billion capital investment
Low cost options + Early high-grading Increase predictability Flawless execution of major spend
2014
19 Copyright of Royal Dutch Shell plc 13 March, 2014
ENHANCE CAPITAL EFFICIENCY MAKING OUR PLANS CREDIBLE, COMPETITIVE, AFFORDABLE
~150 performance units implemented
Targeted growth spend
Address underperforming assets
Increase divestment of non-core positions
Sharpen our focus:
Asset sales
Wheatstone LNG
BC-10 dilution
UA resources plays
Nigeria onshore
Norway DS
Italy DS
Australia DS
Others
Resilience
Attr
activ
enes
s
Keep and grow
Fix or divest
Exit
$15 billion divestments 2014-15
20 Copyright of Royal Dutch Shell plc 13 March, 2014
IDENTIFY/ASSESS
US GTL - CANCELLED Gorgon LNG T4 - PAUSE Sunrise LNG - PAUSE
ENHANCE CAPITAL EFFICIENCY CAPITAL CEILINGS + OPTION SET DRIVE HARD CHOICES
Integrated Gas
EXECUTE
Gorgon LNG T1-3 Prelude FLNG Wheatstone - SOLD MMLS LNG (Elba)
SELECT
Arrow LNG - REDESIGN Browse LNG - REDESIGN Abadi LNG ph2 LNG Canada Sakhalin T3
DEFINE
Abadi LNG ph1
ON STREAM
Atlantic LNG Brunei LNG Malaysia LNG Nigeria LNG Northwest Shelf Oman LNG Peru LNG Pluto Qatargas 4 Sakhalin LNG
MTPA: 17.6 MTPA: 0.9 MTPA: 7.5 MTPA: 26.1 START
UP FID
Shell share equity liquefaction capacity in mtpa
21 Copyright of Royal Dutch Shell plc 13 March, 2014
ENHANCE CAPITAL EFFICIENCY 2013-14 CAPITAL SPENDING
Total capital investment $ billion
Future opportunities Resources plays
Downstream (incl. Corporate)
Europe Deep-water Africa/Middle East/CIS
Asia Pacific Americas
Upstream Integrated gas Upstream engine Downstream (incl. Corporate)
Strict capital ceilings
More competitive returns
22 Copyright of Royal Dutch Shell plc 13 March, 2014
2014 PRIORITIES
Returns and cash flow
Competitive returns for shareholders
Take hard choices on new options
Increase asset sales
Reduce pace of growth investment
Major deep-water start-ups in 2014
Integrate 2013 acquisitions
Deliver new projects
Enhance our capital efficiency
Improve our financial performance
23 Copyright of Royal Dutch Shell plc 13 March, 2014
PROJECT MANAGEMENT + BENCHMARKING
IPA – Independent Project Analysis by Industry Benchmarking Consortium
IPA project benchmark Upstream project status Construction time elapsed %
1Q 2Q 3Q 4th Quartile
Upstream cost Downstream cost
Oversight and accountability
Track record
Construction time elapsed %
24 Copyright of Royal Dutch Shell plc 13 March, 2014
Perdido Singapore: Chemicals North America: tight gas Gbaran-Ubie Gjoa AOSP-1
West Qurna Schoonebeek Raízen North America: tight gas Qatargas 4 LNG Pearl GTL Qarn Alam
Harweel Caesar Tonga ph1 Gumusut-Kakap (early
production) Pluto LNG North America: tight gas Eagle Ford
Majnoon FCP BC-10 ph2 Kashagan Basrah gas comp. North Rankin Amal steam AOSP debottlenecking
Repsol LNG acquisition Mars B Petai Cardamom Gumusut-Kakap others
DELIVER NEW PROJECTS TRACK RECORD 2010-14
Gumusut-Kakap
Raízen
2010 2011 2012 2013 2014
Key Upstream project start-ups: Pearl GTL
Consistent delivery of new projects
2013 impact: $9 billion CFFO from 2010+ start-ups
Production growth from key start-ups
kboe per day $ billion
Production Cash flow from operations (RHS)
25 Copyright of Royal Dutch Shell plc 13 March, 2014
CONVENTIONAL EXPLORATION PORTFOLIO + THEMES
Increased focus in our exploration spending
Spend including deals
($ billion)
Resources/potential added1
(billion boe) Oil & gas split (%)
2011-2013 2011-2013 2013 performance
ARCTIC ~2 0 Alaska drilling pause
FRONTIER Under explored basins
~4 0.9
(95% oil, 5% gas) Albania: Shpirag-2 Brazil: Libra access
HEARTLANDS New plays in Shell producing basins
~8 2.6
(25% oil, 75% gas)
GOM: Vicksburg Australia: Kentish Knock Nigeria: Zabazaba appraisal
NEAR FIELD High value
~1 0.4
(35% oil, 65% gas)
19 near field discoveries Nigeria (SPDC), Oman, Egypt,
Netherlands, Brunei, Australia
Prospect size
(million boe)
Time to development
(years)
15+
10+
3+
<3 5-50
50-250
>250
>500
1 includes acquisitions
26 Copyright of Royal Dutch Shell plc 13 March, 2014
GLOBAL RESOURCES PLAYS BUILDING CAPABILITIES IN LONG TERM OPPORTUNITY
Total resources plays capital investment
E&A On stream
Gas Liquids Rich
2013 production 0.3 mboe/d
2014 exploration spend $3 billion
2013 exploration and appraisal success
$ billion
Resources + potential
Future potential
On stream
Execute (under construction)
Select/Define
14.4 billion boe
Americas International
Liquids rich shales (underlined)
ACCESS Tunisia
EXPLORATION Pembina Turkey Colombia Russia Sichuan Germany Ukraine
APPRAISAL/PILOT Argentina Kaybob Permian Appalachia Changbei 2 Oman
DEVELOPMENT Early Groundbirch
Mature Pinedale Haynesville Foothills Deep Basin Changbei
Western Canada
Colombia
Argentina Neuquen
Lower 48 USA
Germany Ukraine
Turkey
Oman Sichuan
Changbei
Arrow
Changbei 2
Russia
Future potential = discovered + prospective resources
Tunisia
27 Copyright of Royal Dutch Shell plc 13 March, 2014
SIMON HENRY CHIEF FINANCIAL OFFICER
ROYAL DUTCH SHELL PLC
28 Copyright of Royal Dutch Shell plc 13 March, 2014
FINANCIAL FRAMEWORK AND PRIORITIES
Priorities for cash
1. Debt service
2. Dividends: growth policy
3. Capital investment: disciplined through cycle growth
4. Return surplus cash: buy-backs
CASH PERFORMANCE
CFFO drives investment + payout
INVESTMENT
Affordability, profitability, portfolio
PAY-OUT
Dividend linked to business results
BALANCE SHEET
0 – 30% gearing through cycle
Conservative balance sheet underpins financial framework
29 Copyright of Royal Dutch Shell plc 13 March, 2014
UP STREAM
DOWN STREAM
CASH FLOW AND PAY-OUT
Cash generation $ billion
Dividend track record $ billion
Strong balance sheet $ billion
Cash flow from operations Asset sales
Capex + equity acc. investments
$ billion 2011-13 2013
UP STREAM
DOWN STREAM
Acquisitions
Dividend and buy back
Gearing range
Net debt
Dividends declared
Gearing (RHS)
12 months rolling
Strong balance sheet
Generating surplus cash
Dividend track record
30 Copyright of Royal Dutch Shell plc 13 March, 2014
CASH FLOW + RETURNS
ROACE %, 4Q rolling
Cash flow from operations $ billion, 4Q rolling
Shell
peer group peer group Shell
ROACE: earnings on reported local GAAP basis
31 Copyright of Royal Dutch Shell plc 13 March, 2014
DECONSTRUCTING OUR CAPITAL INVESTMENT
2014 organic capital investment
$ billion
Balancing growth + returns
Exploration + pre-FID
Key growth projects
Care + maintain
Smaller growth projects
Preparing new options
Driving new upstream growth
Maintaining competitive cash generation
32 Copyright of Royal Dutch Shell plc 13 March, 2014
SEC PROVED RESERVES POSITION
1 Excludes acquisitions, divestments and price impacts 2 Reserves attributable to Royal Dutch Shell shareholders
2013 Reserves performance
2013 RRR 131%
2011-13 RRR 91%
Reserves life at end 2013 ~11.5 years
2011-13 Reserves average performance
Organic1 additions ~1.4 billion boe
Production ~1.2 billion boe
Organic reserves replacement 112%
Reserves Replacement
SEC proved reserves
Major reserves additions
2011-13 Reserves additions
2011-13 2013
Organic 112% 123%
Organic incl. price effects 95% 127%
Net Reserves2 91% 131%
(billion boe) 2011 2012 2013
Organic reserves additions 1.5 1.0 1.5
Production 1.2 1.2 1.2
Net Reserves2 14.2 13.6 13.9
33 Copyright of Royal Dutch Shell plc 13 March, 2014
Carmon Creek ph1&2 Rabab Harweel Erha North ph2 BC-10 ph3 Stones Groundbirch
billion boe
RESOURCES UPDATE
Longer-term upside
2009 2010 2011 2012 2013
On stream Execute (under construction)
Select/Define Production
NWS Gas NR2 BC-10 ph2 Amal Steam Majnoon FCP
Vito BMS-54 Zabazaba Appomattox Permian
Converting resources to production… 2013 resources by theme
Deep-water Integrated gas Upstream engine
Resources plays Future opportunities
Rebuilding on stream resources 2009-13
34 Copyright of Royal Dutch Shell plc 13 March, 2014
Start-up 2013 start-up 2014-2015 2016-2018
Bukom ECC debottleneck Bukom cogeneration Jack St.Malo pipeline Singapore LOBP
Westward-Ho pipeline
Amal Steam Corrib
Clair ph2 Schiehallion Redevelopment Tempa Rossa Rabab Harweel integrated
project
North Rankin 2 Gorgon LNG T1-3 Prelude FLNG MMLS LNG (Elba)
BC-10 ph2 Mars-B Cardamom Gumusut Kakap Sabah Gas KBB Bonga North West Petai
BC-10 ph3 Malikai Stones Erha North ph2
North America tight gas + liquids rich shales
AOSP debottlenecking Kashagan ph1 Majnoon FCP Basrah Gas Company
Southern Swamp AG Gbaran-Ubie ph2 Trans Niger loopline Carmon Creek ph1+2 Forcados Yokri
Peak production (kboe/d)
200 335 560
NEW START-UPS 2013-2018
29 major projects
Strong project flow
Production @ $80 Brent scenario; Shell share at peak
Bonga North West
Gumusut-Kakap
Shell operated FUTURE
OPPORTUNITIES
RESOURCES PLAYS
DEEP-WATER
INTEGRATED GAS
UPSTREAM ENGINE
DOWNSTREAM ENGINE
35 Copyright of Royal Dutch Shell plc 13 March, 2014
BALANCING GROWTH + RETURNS
Outlook assumes 2013 macro; ROACE CCS earnings excluding identified items
Positive outlook for ROACE + CFFO
Near-term growth: deep-water, upstream engines, future opportunities
Integrated gas growth 2016+
Restructure resources plays + downstream
ROACE (%)
Downstream engine Upstream engine
Integrated gas Deep-water
Resources plays Future opportunities
Bubble size represents 2013 capital employed
CFFO in billion $ 2013 ROACE
2013
2015/16 potential
36 Copyright of Royal Dutch Shell plc 13 March, 2014
JOHN ABBOTT DOWNSTREAM DIRECTOR
ROYAL DUTCH SHELL PLC
37 Copyright of Royal Dutch Shell plc 13 March, 2014
DOWNSTREAM STRATEGY
Developing and sustaining competitive advantage through…
Advantaged feedstock +
supply
Improving our footprint
Differentiated Products +
Customer Offer
Distinguished Brand
Priority to improve our financial performance
38 Copyright of Royal Dutch Shell plc 13 March, 2014
DOWNSTREAM MACRO LANDSCAPE
1 Ethylene + propylene + benzene
Oil Products
Structural refining overcapacity
Liquids rich shales changing the dynamics
Efficiency and mogas displacement in transportation fuels
Challenging competitive landscape
Chemicals
Chemicals demand growth robust
Significant feedstock price movements
North America re-emerges as chemicals exporter
Growth opportunity
Excess industry refining capacity million bpd
Base1 chemicals growth potential Domestic demand in million tonnes per annum
Spare capacity Global average refining margin (RHS)
North America Europe South America Middle East Asia Others
$/bbl
39 Copyright of Royal Dutch Shell plc 13 March, 2014
DOWNSTREAM OPERATIONAL EXCELLENCE CONTINUOUS IMPROVEMENT
Port Arthur expansion included from 2013
Focus on HSSE continues
Injuries – TRCF/million working hours
Capital discipline $ billion
Operating performance % unplanned downtime
Brand Global brand preference
million working hours
Refining
Working hours TRCF
Chemicals Shell Other majors
Source: Ipsos – Global Customer Tracker (covering 30+ markets)
Non-growth Oil Products
Growth Chemicals
40 Copyright of Royal Dutch Shell plc 13 March, 2014
DOWNSTREAM FINANCIAL RESULTS
CCS earnings excluding identified items
Earnings + cash flow $ billion
Capital employed + ROACE $ billion
Free cash flow $ billion
CFFO excl. WC movements Working capital movements
Capital investment Acquisitions
Free cash flow (RHS)
Improved Chemicals performance
Challenging Oil Products results
Priority to improve ROACE, CFFO & FCF
2012 2013 2011 2010 2009
% $ billion
Potential
Potential
Asset sales
Earnings CFFO
CFFO average 2011-13
Capital Employed ROACE (RHS)
ROACE average 2011-13 (RHS)
41 Copyright of Royal Dutch Shell plc 13 March, 2014
DOWNSTREAM COMPETITIVE LANDSCAPE
Earnings excluding identified items; peer group: XOM, LBI, DOW, BP, RDS
Downstream ROACE
Chemicals ROACE
2009 2010 2011 2012 2013
Shell Chemicals Peer group range
Earnings on local GAAP basis adjusted for inventory valuation differences and excluding identified items; peer group: Chevron, Total, BP, XOM, RDS
Peer group range Shell Downstream
Chemicals turn-around
Legacy asset positions
Complex competitive drivers
42 Copyright of Royal Dutch Shell plc 13 March, 2014
CHEMICALS TURNAROUND
Restated for IAS19, 2008 ROCE, CCS earnings excluding identified items
Investment in advantaged feedstock
Refocused on strong core + concentrated footprint
Performance units management
Returns recovery + growth opportunities
Shift to advantaged feedstock Improving ROACE $ billion
Capital employed Chemicals ROACE Chemicals (RHS)
Advantaged liquids Advantaged gas
Generic liquids Generic gas
2007 2013
%
ROACE average 2011-13 (RHS)
~16%
Shell Chemicals:
Base chemicals + derivatives
Advantaged feedstock
Bulk sales to industrial customers
Major improvements delivered
43 Copyright of Royal Dutch Shell plc 13 March, 2014
OIL PRODUCTS PERFORMANCE
Restated for IAS19, 2008 ROCE, CCS earnings excluding identified items
2008 – 2013
Reduced footprint + costs
Port Arthur expansion
Added Brazil biofuels + East marketing growth
Returns remain under pressure
Portfolio restructuring ROACE remains low $ billion
Capital employed ROACE (RHS) Refining capacity Marketing
-10%
-20 %
%
ROACE average 2011-13 (RHS)
Million b/d Million b/d
~6%
-0.4 Mb/d
-45 countries
44 Copyright of Royal Dutch Shell plc 13 March, 2014
PORTFOLIO SEGMENTATION + PERFORMANCE
Downstream businesses 2013 CFFO ($ billion)
2013 ROACE (%)
New segmentation into >80 performance units
Action plans to improve returns + CFFO or exit
Focus on cost efficiency
Targeted investment
Bubble size = capital employed
-5% 10%
-20% >40% Chemicals
Merchant refining
Integrated refining
+ marketing value chain
Fuels marketing
Biofuels
Lubricants
ROACE based on CCS earnings excluding identified earnings
45 Copyright of Royal Dutch Shell plc 13 March, 2014
SHARPER FOCUS ON UPGRADING OUR PORTFOLIO
Downstream asset sales $ billion
Portfolio change
Resilience
Attr
activ
enes
s
Selective Growth: Chemicals China LNG for transport Premium fuels + lubes Biofuels Refinery crude flexibility
and product slate others
Fix: Motiva Singapore fuels Pernis + Rheinland others
Exit: Italy Norway Australia others
Optimise footprint + potential impairments
Integrated value capture
Selective investment in growth markets
Capital discipline and project delivery
agreements year-to-date
46 Copyright of Royal Dutch Shell plc 13 March, 2014
IMPROVING PERFORMANCE OF KEY ASSETS
Bukom – performance turnaround Scotford – building on sustained performance Refinery unplanned downtime in %
High margin refinery
Integrated upstream + downstream
Integration value: $4/bbl upstream + $3/bbl chemicals
New debottlenecking potential
Over-supplied fuels market
Improving efficiency; advantaged liquids feedstock; energy costs
Cogeneration + cracker debottlenecking projects 2015
Unplanned downtime 3-year rolling average
47 Copyright of Royal Dutch Shell plc 13 March, 2014
OIL PRODUCTS GROWTH IN KEY MARKETS
Largest IOC retail network in China
> 1000 sites in multiple joint ventures
Largest IOC by lubricants market share
Shell’s 2nd largest lubes market globally
Leading lubes brand among IOCs, with #1 brand share preference for Shell Helix and Rimula
Growth potential
Shell branded retail network ~4800 sites
Brazil’s #1 sugar-ethanol player
Global #1 sugar-ethanol player (sugarcane based)
Growth opportunities Operational excellence Brown field expansions Production of 2nd generation ethanol
China marketing growth Brazil - Raízen JV billion litres million tonnes billion R$ (local curr) #
Number of operating sites Fuels volume
Volume (million litres)
Fuels volume sold Sugarcane crushed NIBIAT
48 Copyright of Royal Dutch Shell plc 13 March, 2014
DOWNSTREAM STRATEGY
Developing and sustaining competitive advantage through…
Priority to improve our financial performance
Renewed focus on upgrading our portfolio
Returns + free cash flow improvement
Advantaged feedstock +
supply
Improving our footprint
Differentiated Products +
Customer Offer
Distinguished Brand
49 Copyright of Royal Dutch Shell plc 13 March, 2014
MARVIN ODUM UPSTREAM AMERICAS DIRECTOR
ROYAL DUTCH SHELL PLC
50 Copyright of Royal Dutch Shell plc 13 March, 2014
UPSTREAM AMERICAS STRATEGY
Major OECD growth potential for Shell
Substantial and diverse resources base
Deep-water Industry leadership
Heavy Oil Mining and in-situ
Resources Plays Portfolio repositioning
Integrated Gas Monetizing gas
Arctic Long-term potential
Profitable + competitive today Potential
Priorities to deliver our deep-water and heavy oil growth projects
Establish resources plays and integrated gas profitability
Drive sharper cost focus and capital efficiency across our operations
51 Copyright of Royal Dutch Shell plc 13 March, 2014
UPSTREAM AMERICAS PORTFOLIO SUBSTANTIAL UNDEVELOPED UPSTREAM RESOURCES
Resources
Deep-water Resources plays
Heavy oil
On stream Execute (under construction) Select/Define
11.7 billion boe
Production million boe per day
Deep-water Resources plays Heavy oil
Capital investments $ billion
Deep-water Resources plays Heavy oil
Pre-FID/other
+2% -20%
Resources Plays
Deep-water
Gas monetization options
Heavy Oil
Western Canada dry gas
Appalachia dry gas
Carmon Creek In Situ
Stones, Appomattox, Vito
Libra
LNG Canada
Gas-to-chemicals
Elba LNG
Major undeveloped resources
52 Copyright of Royal Dutch Shell plc 13 March, 2014
UPSTREAM AMERICAS PORTFOLIO FINANCIALS DIVERSE BUSINESSES & MATURITY
2013 $ billion Earnings1 CFFO Organic capital
investment Capital
employed ROACE
1 3 6 15 10%
2 3 2 19 9%
(3) (0) 5 24 (10)%
(1) (1) 1 3 n.a.
(0) (0) 0 0 n.a.
RESOURCES PLAYS
DEEP-WATER
HEAVY OIL
INTEGRATED GAS
ARCTIC
1 Earnings excluding identified items; ROACE based on earnings excluding identified items
Growing + competitive
Delivering new growth 2014+
Future Potential
Restructuring resources plays
Growth options
53 Copyright of Royal Dutch Shell plc 13 March, 2014
UPSTREAM AMERICAS FINANCIAL DRIVERS
Earnings excluding identified items
Earnings 2011 to 2013 Balance sheet $ billion
On stream Under construction
Resources plays Deep-water
Non productive leases Heavy oil/Arctic
LRS
$3.7 billion clean DD+A 2013
$ billion
GAS
2013 CFFO $5.3 billion
Earnings + balance sheet impacted by growth portfolio
2013 clean DD&A Upstream Americas $6.3 billion, of which $3.7 billion in resources plays
2013 2011
- 0.9
-1.4
0.5
- 0.5
- 0.3
- 0.6
- 0.8
3.4
- 0.9
Long term growth
- 0.3
54 Copyright of Royal Dutch Shell plc 13 March, 2014
NORTH AMERICA RESOURCES PLAYS PORTFOLIO & STRATEGY
North Americas capital investment $ billion
Dry gas Acquisitions LRS Divestments
-50%
-20%
Portfolio
Established in gas plays
Liquids rich shales exploration
Restructuring and redefining growth
Portfolio and spending reduction
Exploration & appraisal in LRS sweetspots
Define gas monetization opportunities
Resources + potential
Future potential
On stream
Execute (under construction)
Select/Define
11.5 billion boe
Future potential = discovered + prospective resources
Haynesville
Elba LNG
LNG Canada
Groundbirch Deep Basin/Kaybob
Foothills/Pembina
Pinedale Gas-to-chemicals
Appalachia
Liquids rich shales Announced divestment
Gas monetization options
Rockies LRS
Permian
Eagle Ford
Mississippi Lime
Dry gas Gas/LRS
55 Copyright of Royal Dutch Shell plc 13 March, 2014
LIQUIDS RICH SHALES EXPLORATION AND APPRAISAL
Frontier exploration program since 2010
Move to more focused & segmented de-risking
Positive early results in Duvernay (Kaybob) and Wolfcamp (Permian)
Exit from non-material acreage
LRS production Thousand boe/day
Drilling focus in sweet spots Cumulative # of wells >1000boe/d potential
Rig count Number of rigs
Duvernay Permian Other Liquids Associated gas Permian Canada Announced divestments
Groundbirch Kaybob
Pembina
Rockies LRS
Permian
Eagle Ford
Mississippi Lime
Liquids rich shale Announced divestments
56 Copyright of Royal Dutch Shell plc 13 March, 2014
DRY GAS ASSESSING MONETIZATION OPPORTUNITIES
Gas production Rig count
Major resources position
Drill to maximize use of existing infrastructure
Addressing underperforming assets
Acquisition overhang
Scale & cost reduction
Retaining portfolio with cost and integration advantage
thousand boe/day Number of rigs
Gas Associated liquids
Pinedale
Groundbirch
Appalachia
Deep Basin
Haynesville
Foothills
LNG Canada
Groundbirch Deep Basin
Foothills
Pinedale Gas-to-chemicals
Appalachia
Gas Gas monetization options
Haynesville
Elba LNG
57 Copyright of Royal Dutch Shell plc 13 March, 2014
Resilience
Attr
activ
enes
s
0%
20%
40%
60%
80%
100%
0 20 40 60 80 100
RESOURCES PLAYS MAJOR REVIEW OF PORTFOLIO UNDERWAY
Staff reduction
Drilling cost learning curve Drilling costs
-30%
2013 2014E
Shell employees
Contractor
Reduction in Shell + contractor staff
Field office closures
Supply chain + drilling performance
Portfolio
Exit: Eagle Ford Mississippi Lime Rockies LRS
Fix or Divest: Appalachia Deep Basin Pinedale Haynesville Foothills
Grow: Permian Kaybob Pembina Argentina – Vaca Muerta Groundbirch
LRS Plays Groundbirch Eagle Ford Duvernay (Kaybob) Haynesville
Number of wells drilled
58 Copyright of Royal Dutch Shell plc 13 March, 2014
LNG CANADA PROGRESSING TO FID
2 x ~6 mtpa first phase
Kitimat site agreement
25-year export license secured (24 mtpa)
Environmental assessment process initiated
Joint venture: Shell (40%), Kogas, Mitsubishi, PetroChina
TransCanada Pipelines (TCPL) to build, own & operate
~700km pipeline
Filed environmental assessment application
Public consultation and open houses underway
Access to competitive supply
LNG Canada Coastal GasLink pipeline
59 Copyright of Royal Dutch Shell plc 13 March, 2014
HEAVY OIL DELIVERY & GROWTH
Delivery of production + financial step-up
Cost focus + footprint management
AOSP: Quest CCS development
In Situ: Carmon Creek FID 80 kboe/d
Oil Sands unit cost $/bbl
Net Production kboe/d
Cash operating cost excluding energy Energy Oil sands In Situ Aera
Assets
AOSP – JV ~225 kboe/d Shell 60%
In Situ – Shell ~20 kboe/d Shell 100%
Aera – JV ~135 kboe/d Shell 52%
-17% +22%
60 Copyright of Royal Dutch Shell plc 13 March, 2014
UPSTREAM AMERICAS INTEGRATION & POTENTIAL
Refinery/ chemical plant
Upstream positions
Midstream positions/capacity
Refinery with LTO capability
Gas monetization options
LNG Canada Carmon Creek
LRS
AOSP
Scotford
Western Canada gas
Proposed Energy East Pipeline
Sarnia Appalachia
Gas to chemicals
Elba LNG
Ho-Ho
Motiva refineries
Deer Park
Permian
Permian Express
Martinez
Puget Sound
Proposed midstream positions/capacity
End to end value chain linkage
Efficient evacuation route to market
Advantaged refining position
Mobile
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2013 downtime
Mars Corridor Auger Brazil
LEADING POSITION IN DEEP-WATER
Deep water unit operating cost (Gulf of Mexico) $/bbl
Capital investment
$ billion
Production
Kboe/d
Gulf of Mexico Brazil Other
Base Exploration*
Track record of delivery + cost performance
2014 project start-ups drive new growth
Divestments Growth
Source: Rystad *2013 includes Libra $1.3 billion
Unit cost range Shell unit cost
62 Copyright of Royal Dutch Shell plc 13 March, 2014
DEEP-WATER GULF OF MEXICO PROJECT DELIVERY
Payback achieved February 2014
First producer in the Paleogene (Lower Tertiary)
100 kboe/d (Shell ~34% operator)
First oil more than 6 months ahead of schedule
Shell’s 6th and largest TLP in GOM
100 kboe/d by 2016 (Shell 71.5% operator)
Perdido – 2010 start-up Mars B – February 2014 start-up
0
150 kboed
100
50
’10 ’11 ’12 ’13 ’14
63 Copyright of Royal Dutch Shell plc 13 March, 2014
DEEP-WATER GULF OF MEXICO NEW PROJECTS
Execute (under construction) On stream
Select/Define
Auger
Mars
Ursa Nakika
Brutus
Perdido
Vito ~100 kboe/d potential >300 million boe resources Shell 51.33% (operator)
Appomattox ~150 kboe/d hub potential Integrating Vicksburg A discovery Resources increased 100mmboe to >600
million boe Shell ~80% (operator) FEED started late 2013
Stones ~50 kboe/d FPSO >250 million boe resources Shell 100% (operator) FPSO under construction 2016 start-up
Caesar Tonga
Cardamom Deep
Mars B W.Boreas, S. Deimos
100 km Cardamom Deep ~50 kboe/d Shell 100% (operator) Tie back to Auger 2014 start-up
Stones FPSO
Growth outlook1:
178 kboe/d on stream in 2013 + Mars B start-up 2014
100 kboe/d under construction
170 kboe/d new options
FID Discovery
Cardamom
Stones
Appomattox/Vicksburg
Vito
Start-up
1 Shell share
64 Copyright of Royal Dutch Shell plc 13 March, 2014
Project flow 2013 2014 2015 2016/2017
Heavy Oil
Deep-water
Resources Plays
Integrated Gas
UPSTREAM AMERICAS OUTLOOK
S Carmon Creek
S Elba LNG
S
S Stones
S Vito
Cardamom
F F
Appomatox
BC-10 ph3
LRS asset sales
S F Start-up FID – final investment decision
F Carmon Creek
LNG Canada
LRS de-risking
S
Mars B
FEED – front end engineering & design
phase 1
F LNG Canada
Cost repositioning
Gas integration decisions
Pathways to growth for each strategic theme
S
BC-10 ph2
65 Copyright of Royal Dutch Shell plc 13 March, 2014
UPSTREAM AMERICAS STRATEGY
Major OECD growth potential for Shell
Substantial and diverse resources base
Deep-water Industry leadership
Heavy Oil Mining and in-situ
Resources Plays Portfolio repositioning
Integrated Gas Monetizing gas
Arctic Long-term potential
Profitable + competitive today Potential
Priorities to deliver our deep-water and heavy oil growth projects
Establish resources plays and integrated gas profitability
Drive sharper cost focus and capital efficiency across our operations
66 Copyright of Royal Dutch Shell plc 13 March, 2014
BEN VAN BEURDEN CHIEF EXECUTIVE OFFICER
ROYAL DUTCH SHELL PLC
67 Copyright of Royal Dutch Shell plc 13 March, 2014
2014 PRIORITIES
Returns and cash flow
Competitive returns for shareholders
Take hard choices on new options
Increase asset sales
Reduce pace of growth investment
Major deep-water start-ups in 2014
Integrate 2013 acquisitions
Deliver new projects
Enhance our capital efficiency
Improve our financial performance
68 Copyright of Royal Dutch Shell plc 13 March, 2014
QUESTIONS & ANSWERS MANAGEMENT DAY
69 Copyright of Royal Dutch Shell plc 13 March, 2014
KEY UPSTREAM PROJECTS UNDER CONSTRUCTION
Deep-water Integrated gas
Resources plays Future opportunities
Upstream engine
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PRE-FID UPSTREAM OPTIONS POTENTIAL 2014-2020 START-UPS
Deep-water Integrated gas
Resources plays Future opportunities
Upstream engine
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IDENTIFYING NEW CHEMICALS GROWTH POTENTIAL
Qatar chemicals Gas-to-chemicals US Saudi Arabia Iraq others…
2006 Nanhai
2010 USGC go-light strategy
Future options…
Current Potential
2010 Singapore
Portfolio + options
North America
Asia
Europe
Middle East
Al-Karaana petrochemicals complex (2050 ktpa)
2015+ Derivatives expansion in Jurong and USGC
Pennsylvania cracker + PE
Jurong derivatives (380 ktpa)
Shell Base Chemicals 2013 capacity
Strengthening our core
Growing our footprint
Crackers + derivatives
Scotford HCU debottleneck
China refining + chemicals
Sadaf expansion
72 Copyright of Royal Dutch Shell plc 13 March, 2014
DELIVER NEW PROJECTS 2014 START-UPS
Mars B, Shell 72%, 100 kboe/d Cardamom, Shell 100%, 50 kboe/d
Gumusut-Kakap, Shell 33%, 135 kboe/d Repsol LNG acquisition, 4.2 mtpa
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Production decline halted
focus on up-time
reservoir development
sub-surface dynamics
Innovative EOR schemes
IMPROVE PERFORMANCE IN UPSTREAM ENGINES OPERATIONAL EXCELLENCE: OMAN
PDO Oman kboe/day, Shell share
Qarn-Alam: enhanced oil recovery project: on stream 2011
Actual production assumed production with continued decline
74 Copyright of Royal Dutch Shell plc 13 March, 2014
IMPROVE PERFORMANCE IN UPSTREAM ENGINES IMPACT OF MAINTENANCE IN UK NORTH SEA
UK ‘000 boe per day, Shell share
2012-13 impacted by high levels of maintenance
2013 maintenance downtime 50 kboe per day (vs. 35 kboe per day downtime in 2012)
Address late life assets: fix or divest
2013 Clair, Pierce, Schiehallion, Brent, Gannet, Curlew
2012 Nelson, Anasuria, Shearwater, Pierce, Brent/Penguin, Curlew, Clair, Guillemot
2014 start-ups: Pierce, Gannet, Shearwater
2012: 117kboe/d
2013: 91kboe/d
75 Copyright of Royal Dutch Shell plc 13 March, 2014
ROBUST LNG MARKET DYNAMICS
Source: HH-Nymex, NBP-Argus, Brent-ICE, Japan Landed-CERA
LNG import countries
Regional gas prices $/mmbtu
LNG supply $/mmbtu
1990 2013 2020
Japan landed LNG price National balancing point (UK)
Henry hub (US) Brent
Importing countries (RHS) Exporting countries (RHS)
Volumes sold FID On stream
Shell
Nigeria LNG
Oman LNG Malaysia Tiga
North West Shelf Sakhalin
Prelude FLNG
Pluto
Malaysia Dua
Gorgon North Rankin 2
Diverse and growing market
Regional price variations
QG4
76 Copyright of Royal Dutch Shell plc 13 March, 2014
INTEGRATED GAS PORTFOLIO LEVERAGING SHELL’S SCALE AND MARKET GROWTH
* Includes feed gas from non-integrated ventures
Priorities
Integrate Repsol LNG acquisition
Deliver Prelude + Gorgon
Hard choices on next options
2013: ~0.7* mboe/d; 20 mtpa LNG
Capital investment $ billion
Shell global LNG growth Equity liquefaction capacity in mtpa Year end equity liquefaction capacity in mtpa
Liquefaction Regas
GTL
Hazira
Gorgon Prelude
On stream Under construction
2013 ~2020+ 2007
Under construction Options
On stream
Repsol LNG acquisition
Repsol LNG acquisition Repsol LNG acquisition Organic capital investment
Shell LNG leadership
2014
2013 2017 Repsol acquisition (2014+)
Elba (MMLS)
77 Copyright of Royal Dutch Shell plc 13 March, 2014
INTEGRATED GAS DEVELOPMENTS UNDER CONSTRUCTION: AUSTRALIA
3.6 mtpa LNG + 1.7 mtpa NGLs
Development drilling commenced Sep 2013
Hull afloat Nov 2013
Darwin supply base > 50% complete
Shell 67.5% (operator)
~15 mtpa: 3 trains
Expansion potential
Shell 25% (Chevron operator)
Prelude Floating LNG Gorgon
78 Copyright of Royal Dutch Shell plc 13 March, 2014
GLOBAL DEEP-WATER LEADING IOC DEEP-WATER PORTFOLIO
Established production leadership
Standardized developments & production technology
Frontier exploration potential
2013: 0.3 mboe/d
Organic capital investment
$ billion
Perdido Spar, Gulf of Mexico
On stream Under development Exploration
Gulf of Mexico Cardamom Stones
Brazil BC-10 ph3
Nigeria Bonga NW Erha North ph2
Malaysia/Brunei Gumusut-Kakap Malikai Sabah Gas
Kebabangan KBB Petai
79 Copyright of Royal Dutch Shell plc 13 March, 2014
IDENTIFY/ASSESS
Libra
ENHANCE CAPITAL EFFICIENCY MANAGING PROJECT FLOW
Deep-water
EXECUTE
Bonga NW Cardamom Sabah gas-KBB Gumusut-Kakap Erha North ph2 Stones BC-10 ph3 Malikai
SELECT
BMS-54 Bosi field development Vito Zabazaba
DEFINE
Appomattox Bonga Main ph3 Bonga North Bonga Southwest Geronggong
ON STREAM
Brazil Gulf of Mexico Nigeria deep-water Brunei deep-water Malaysia deep-water
~235 kboe/d at peak 2013: ~300 kboe/d
START UP
FID
80 Copyright of Royal Dutch Shell plc 13 March, 2014
IRAQ
Majnoon Basrah Gas company
First major green field development in Iraq in 30 years
Start-up in Q3 2013 - currently producing >200 kboe per day
Cost recovery triggered, following the successful completion of 90 day test run in 2013
BGC: largest flare reduction project in the world delivering gas to domestic market
On stream1 May 2013; 320 mmscf/day
Current processing capacity 500 mmscf/day
2 billion scf/day potential
81 Copyright of Royal Dutch Shell plc 13 March, 2014
NIGERIA
Bonga + Erha fields
Nov 2005: Bonga start-up; Nigeria’s first deep-water project
~90 kboe/day (Shell 2013)
2014: Bonga NW start-up
Shell 55%
Jan ‘14: delivered 3000th LNG cargo
4.4 mtpa (Shell 2013)
Atlantic markets with Asian optionality
80-100 kboe/d divestment program underway
Focus on gas
~180 kboe/day (Shell 2013)
Focados Yokri, Southern Swamp, Gbaran-Ubie ph2 and TNP loopline under construction
Deep-water Nigeria LNG Onshore (SPDC JV)
2010-12 divestments
SPDC OMLs
82 Copyright of Royal Dutch Shell plc 13 March, 2014
IN-SITU HEAVY OIL GROWTH CARMON CREEK
2013 FID on 80 kboe/d
1.5 billion barrels of resources
Vertical steam drive integrated with cogen
100% produced water re-cycled
100% Shell
Development overview Transportation options
Central Processing Facilities Site Preparation
Carmon Creek
Quebec
To USGC
Hardisty
Proposed and existing pipelines Proposed East Energy pipeline Tankers
Edmonton
200 miles
83 Copyright of Royal Dutch Shell plc 13 March, 2014
SHELL ARCTIC & NEAR ARCTIC
CANADA
RUSSIA
KAZAKHSTAN
NORWAY
GREENLAND
UNITED STATES
SALYM
KASHAGAN
SAKHALIN
NORTH POLE
ORMEN LANGE
BAFFIN BAY
NIGLINTGAK
CHUKCHI
BEAUFORT
KANUMAS
NORWAY BARENTS
Alaska, Chukchi
Greenland, Baffin Bay
Norway, Ormen Lange
Russia, Sakhalin
Russia, Salym
Kazakhstan, Kashagan
84 Copyright of Royal Dutch Shell plc 13 March, 2014
UPSTREAM AMERICAS HSSE
2013 performance:
Personal injury rate reduced by 30%
Process safety incidents reduced by ~50%
Add photo
Focus on HSSE continues Process safety Number of incidents Injuries – TRCF/million working hours million working hours
Working hours (RHS) TRCF Tier 1 incidents Tier 2 incidents
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0
1
2
2009 2010 2011 2012 2013 2014 2015
PROJECTS + TECHNOLOGY: COMPETITIVE PROJECTS
Cost benchmarking from IPA Upstream International & International benchmarking consortium
Standardization lead time: subsea trees Upstream/ Downstream IPA cost benchmark
$ billion cumulative
Value through standardization: subsea components
UA subsea spend w/o standardization UA subsea spend
Realized savings ~$200 million or 20%
1Q 2Q 3Q 4th Quartile
Upstream facilities cost Index Downstream cost effectiveness
Current mandatory benchmarking for major projects
Standardization and replication to hold down cost
Improvement in front end loading
Transfer of knowledge
Competitive projects performance
Peers EFA Standardization effect
months
6-12 months acceleration
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0
25
50
75
0 5000 10000 15000
PROJECTS + TECHNOLOGY: WELLS
Rushmore data
Average age of Shell fleet ~10 years
Declining to ~5 years by 2016
High technology fleet (dual BOP’s, Bully rig)
BOP R&D with Transocean
‘000 $/day Ultra deep-water rig rates Example: Malaysia drilling cost
Major IOC competitors Shell contracts
Competitive drilling costs
Well costs in $ million
Depth (ft)
4th quartile
3rd quartile
2nd quartile
Top quartile
Best in class
Competitors 2000-2012 Shell 2010 Shell 2013
87 Copyright of Royal Dutch Shell plc 13 March, 2014
CONVENTIONAL EXPLORATION PORTFOLIO + SPEND
Reloading our acreage portfolio
‘000 km2
Exploration spend
$ billion
Substantial dry hole costs in 2013
Exploration spend ~$4 billion 2014
Drilling 16 basins in 2014
2014 key frontier tests
Albania, Benin, Brazil, China offshore, Gabon
Exploration & Appraisal Acreage/deals
Turkey Black Sea Australia Norway Brazil Brunei Nova Scotia
South Africa Albania Benin China
Tanzania
New Zealand Indonesia Malaysia
French Guiana
GOM Greenland
Guyana Italy
Norway Alaska Colombia Australia
Albania, Shpirag -2 discovery
88 Copyright of Royal Dutch Shell plc 13 March, 2014
2013 CONVENTIONAL EXPLORATION HIGHLIGHTS
2013 entry into giant pre-salt discovery
2014: spudding 2 wells
Extended well test by end-2016
Shell 20%
Deep-water oil discovery
>100 million boe
Shell 75%
Part of a future Appomattox development > 600 million boe (was 500
million boe)
~30 mln boe discovered
Single well with 6 sidetracks
On-stream in 2013
Shell 50%
Frontier: Brazil, Libra entry
Heartland: GOM, Vicksburg “A”
NFE: Brunei, Iron Duke
89 Copyright of Royal Dutch Shell plc 13 March, 2014
EXPLORATION + APPRAISAL: KEY WELLS 2014-2015
Albania: follow-up exploration
US GoM: Mars Basin, Mesozoic, Miocene, Paleogene plays
Brunei Nigeria
Outer Canning + Exmouth
Neuquen LRS
China
Gabon: pre-salt
Ukraine
North America LRS
‘14 ‘15
Turkey Black Sea
Yinggehai
Malaysia
Tanzania
New Zealand
Oman LRS
Russia LRS
Arrow CBM South Africa Orange Basin
Canada: Nova Scotia deepwater
Denmark
Benin: transform margin
Egypt
Indonesia
Norway
Netherlands
Frontier Heartlands
Turkey LRS
Brazil including Libra
2014 drilling in 16 conventional basins + 9 resources plays
2014 conventional spend $4.2* billion (2013 $5.8 billion)
2014 resources plays spend $3.1 billion (2013 $3.5 billion)
Conventional
Resources plays
* Includes Alaska
90 Copyright of Royal Dutch Shell plc 13 March, 2014
BALANCING GROWTH & RETURNS MANAGEMENT DAY 2014
13 MARCH 2014 ROYAL DUTCH SHELL PLC
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