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Royal Dutch Shell April 16, 2018

Royal Dutch Shell plcApril 16, 2018

Responsible Investment Annual BriefingSocially responsible investors

#makethefuture


Definitions and cautionary note

This presentation contains data and analysis from Shell’s new Sky Scenario. Unlike Shell’s previously published Mountains and Oceans exploratory scenarios, the Sky Scenario is targeted through the assumption that society reaches the Paris Agreement’s goal of holding global average temperatures to well below 2°C. Unlike Shell’s Mountains and Oceans scenarios which unfolded in an open-ended way based upon plausible assumptions and quantifications, the Sky Scenario was specifically designed to reach the Paris Agreement’s goal in a technically possible manner. These scenarios are a part of an ongoing process used in Shell for over 40 years to challenge executives’ perspectives on the future business environment. They are designed to stretch management to consider even events that may only be remotely possible. Scenarios, therefore, are not intended to be predictions of likely future events or outcomes and investors should not rely on them when making an investment decision with regard to Royal Dutch Shell plc securities.

Additionally, it is important to note that Shell’s existing portfolio has been decades in development. While we believe our portfolio is resilient under a wide range of outlooks, including the IEA’s 450 scenario (World Energy Outlook 2016), it includes assets across a spectrum of energy intensities including some with above-average intensity. While we seek to enhance our operations’ average energy intensity through both the development of new projects and divestments, we have no immediate plans to move to a net-zero emissions portfolio over our investment horizon of 10-20 years. Although we have no immediate plans to move to a net-zero emissions portfolio, in November of 2017, we announced our ambition to reduce our net carbon footprint in accordance with society’s implementation of the Paris Agreement’s goal of holding global average temperature to well below 2°C above pre-industrial levels. Accordingly, assuming society aligns itself with the Paris Agreement’s goals, we aim to reduce our Net Carbon Footprint, which includes not only our direct and indirect carbon emissions, associated with producing the energy products which we sell, but also our customers’ emissions from their use of the energy products that we sell, by around 20% in 2035 and by around 50% in 2050.

Also, in this presentation we may refer to “Shell’s Net Carbon Footprint”, which includes Shell’s carbon emissions from the production of our energy products, our suppliers’ carbon emissions in supplying energy for that production and our customers’ carbon emissions associated with their use of the energy products we sell. Shell only controls its own emissions but, to support society in achieving the Paris Agreement goals, we aim to help and influence such suppliers and consumers to likewise lower their emissions. The use of the terminology “Shell’s Net Carbon Footprint” is for convenience only and not intended to suggest these emissions are those of Shell or its subsidiaries.

The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate legal 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 Royal Dutch Shell plc and its subsidiaries in general or to those who work for them. These terms are also used where no useful purpose is served by identifying the particular entity or entities. ‘‘Subsidiaries’’, “Shell subsidiaries” and “Shell companies” as used in this presentation refer to entities over which Royal Dutch Shell plc either directly or indirectly has control. Entities and unincorporated arrangements over which Shell has joint control are generally referred to as “joint ventures” and “joint operations”, respectively. Entities over which Shell has significant influence but neither control nor joint control are referred to as “associates”. The term “Shell interest” is used for convenience to indicate the direct and/or indirect ownership interest held by Shell in an entity or unincorporated joint arrangement, after exclusion of all third-party interest.

This presentation contains forward-looking statements (within the meaning of the U.S. Private Securities Litigation Reform Act of 1995) 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 “aim”, “ambition’, ‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’, ‘‘goals’’, ‘‘intend’’, ‘‘may’’, ‘‘objectives’’, ‘‘outlook’’, ‘‘plan’’, ‘‘probably’’, ‘‘project’’, ‘‘risks’’, “schedule”, ‘‘seek’’, ‘‘should’’, ‘‘target’’, ‘‘will’’ 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 regulatory measures addressing climate change; (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. No assurance is provided that future dividend payments will match or exceed previous dividend payments. 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 risk factors that may affect future results are contained in Royal Dutch Shell’s 20-Form for the year ended December 31, 2017 (available at www.shell.com/investor and www.sec.gov ). These risk factors also expressly qualify all forward-looking statements contained in this presentation and should be considered by the reader. Each forward-looking statement speaks only as of the date of this presentation, 16 April 2018. Neither Royal Dutch Shell plc 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.

We may have used certain terms, such as resources, in this presentation that the United States Securities and Exchange Commission (SEC) strictly prohibits us from including in our 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.

2


Panels

Osagie OkunborManaging Director SPDC

Monika HausenblasEVP Safety and Environment

Rupert Thomas VP Environment

Harry BrekelmansDirector Projects and Technology

Angus Gillespie VP CO2 (transitioning)

John MacArthurVP CO2 (transitioning)

PANEL 1 PANEL 2

Nigeria Net Carbon Footprint

3

Royal Dutch Shell April 16, 2018 4

Nigeria panel

2017 >70% reduction operational spills (volume) from 2016

Clean-up and UNEP progress

Collaboration and progress under MOU (Bodo)

HYPREP2 $10 million take-off grant, and project coordinator appointed

Reduction of oil spilled to environment from operational spills

Theft and sabotage continues (increase in 2017), long-term trend improving

0

50

100

150

200

0

5

10

15

20

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Thousand tonnes

SPDC JV1 spills

Volume of operational spillsVolume of sabotage spills

Operational spills >100kg Sabotage spills >100kg

Production and theft

0

200

400

600

800

0

20

40

60

80

2012 2013 2014 2015 2016 2017

SPDC JV production (RHS)

Number

Thousand barrels per day Thousand barrels of oil equivalent per day

TheftCap and pile attachment to avoid repeated sabotage

1 SPDC JV = 30% Shell, 55% NNPC, 10% Total, 5% Agip; all data on 100% basis unless otherwise stated

2 Hydrocarbon Pollution Restoration Project – this body was established under the Nigerian Ministry of Environment, aimed at the sustainable clean-up of Ogoniland


Net Carbon Footprint panel

1 Net Carbon Footprint measured on an aggregate “well to wheel” or “well to wire” basis, from production through to consumption, on grams of CO2 equivalent per megajoule of energy products consumed; chemicals + lubricants products are excluded. Carbon

Footprint of the energy system is modelled using Shell methodology aggregating lifecycle emissions of energy products on a fossil-equivalence basis. The methodology will be further reviewed and validated in collaboration with external experts

2 Potential society trajectory includes analysis from Shell scenarios estimate of Net Zero Emissions by 2070 and IEA Energy Technology Perspectives 2017; Potential illustrative Shell trajectory

3 Scope 1,2,3 emissions limited to activities associated with bringing energy products to the market, Scope 3 emissions only includes Category 11: Use of sold products

WtW gCO2e/MJ1

Ambition to reduce Net Carbon Footprint1

of our energy products by around 20% by 2035

Covers full range of emissions from energy products (Scope 1, 2 and 33)

Additionally, includes emissions produced by customers when they use the energy products we sell

Seeks to drive strategy over time in step with society

5-year reviews

Reductions estimated based on our expectation of societal trajectory to meet Paris goals

Ambition for Net Carbon Footprint1

Society trajectory2 Shell trajectory2

Shell “business as usual”

~20% reduction by 2035

In line with society by 2050

Ambitions: Reduce Net Carbon

Footprint1 of our energy products by ~20% by 2035

Be in line with society Net Carbon Footprint by 2050

5

Emissions from energy products included


Royal Dutch Shell plcApril 16, 2018

Responsible Investment Annual BriefingSocially responsible investors

#makethefuture


Definitions and cautionary note

This presentation contains data and analysis from Shell’s new Sky Scenario. Unlike Shell’s previously published Mountains and Oceans exploratory scenarios, the Sky Scenario is targeted through the assumption that society reaches the Paris Agreement’s goal of holding global average temperatures to well below 2°C. Unlike Shell’s Mountains and Oceans scenarios which unfolded in an open-ended way based upon plausible assumptions and quantifications, the Sky Scenario was specifically designed to reach the Paris Agreement’s goal in a technically possible manner. These scenarios are a part of an ongoing process used in Shell for over 40 years to challenge executives’ perspectives on the future business environment. They are designed to stretch management to consider even events that may only be remotely possible. Scenarios, therefore, are not intended to be predictions of likely future events or outcomes and investors should not rely on them when making an investment decision with regard to Royal Dutch Shell plc securities.

Additionally, it is important to note that Shell’s existing portfolio has been decades in development. While we believe our portfolio is resilient under a wide range of outlooks, including the IEA’s 450 scenario (World Energy Outlook 2016), it includes assets across a spectrum of energy intensities including some with above-average intensity. While we seek to enhance our operations’ average energy intensity through both the development of new projects and divestments, we have no immediate plans to move to a net-zero emissions portfolio over our investment horizon of 10-20 years. Although we have no immediate plans to move to a net-zero emissions portfolio, in November of 2017, we announced our ambition to reduce our net carbon footprint in accordance with society’s implementation of the Paris Agreement’s goal of holding global average temperature to well below 2°C above pre-industrial levels. Accordingly, assuming society aligns itself with the Paris Agreement’s goals, we aim to reduce our Net Carbon Footprint, which includes not only our direct and indirect carbon emissions, associated with producing the energy products which we sell, but also our customers’ emissions from their use of the energy products that we sell, by around 20% in 2035 and by around 50% in 2050.

Also, in this presentation we may refer to “Shell’s Net Carbon Footprint”, which includes Shell’s carbon emissions from the production of our energy products, our suppliers’ carbon emissions in supplying energy for that production and our customers’ carbon emissions associated with their use of the energy products we sell. Shell only controls its own emissions but, to support society in achieving the Paris Agreement goals, we aim to help and influence such suppliers and consumers to likewise lower their emissions. The use of the terminology “Shell’s Net Carbon Footprint” is for convenience only and not intended to suggest these emissions are those of Shell or its subsidiaries.

The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate legal 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 Royal Dutch Shell plc and its subsidiaries in general or to those who work for them. These terms are also used where no useful purpose is served by identifying the particular entity or entities. ‘‘Subsidiaries’’, “Shell subsidiaries” and “Shell companies” as used in this presentation refer to entities over which Royal Dutch Shell plc either directly or indirectly has control. Entities and unincorporated arrangements over which Shell has joint control are generally referred to as “joint ventures” and “joint operations”, respectively. Entities over which Shell has significant influence but neither control nor joint control are referred to as “associates”. The term “Shell interest” is used for convenience to indicate the direct and/or indirect ownership interest held by Shell in an entity or unincorporated joint arrangement, after exclusion of all third-party interest.

This presentation contains forward-looking statements (within the meaning of the U.S. Private Securities Litigation Reform Act of 1995) 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 “aim”, “ambition’, ‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’, ‘‘goals’’, ‘‘intend’’, ‘‘may’’, ‘‘objectives’’, ‘‘outlook’’, ‘‘plan’’, ‘‘probably’’, ‘‘project’’, ‘‘risks’’, “schedule”, ‘‘seek’’, ‘‘should’’, ‘‘target’’, ‘‘will’’ 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 regulatory measures addressing climate change; (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. No assurance is provided that future dividend payments will match or exceed previous dividend payments. 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 risk factors that may affect future results are contained in Royal Dutch Shell’s 20-Form for the year ended December 31, 2017 (available at www.shell.com/investor and www.sec.gov ). These risk factors also expressly qualify all forward-looking statements contained in this presentation and should be considered by the reader. Each forward-looking statement speaks only as of the date of this presentation, 16 April 2018. Neither Royal Dutch Shell plc 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.

We may have used certain terms, such as resources, in this presentation that the United States Securities and Exchange Commission (SEC) strictly prohibits us from including in our 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.

8


Donny ChingLegal DirectorRoyal Dutch Shell


Year Event1

1998 Malabu awarded licence for OPL 245

2001 Shell Nigeria Ultra Deep (“SNUD”) farms in

2001 Federal Government of Nigeria (“FGN”) revokes the Malabu Licence

2002 SNUD bids for and is awarded OPL 245 by FGN and later signs a PSC with Nigerian National Petroleum Corporation (“NNPC”)

2002 Various litigations follow

2006 FGN settles litigation with Malabu and reallocates licence to MalabuMalabu and SNUD now have competing legal rights to the Block

2007 Shell (SNUD) commences Bilateral Investment Treaty arbitration against the FGN for wrongful expropriation

2008 FGN seeks resolution, negotiations commence

2010 Negotiations now include ENI Settlement with FGN negotiated with Attorney General of FGN, Minister of Petroleum Resources, Minister of Finance and senior NNPC officials

2011Settlement achieved. FGN receives $1.3 bln: Shell releases signature bonus in return for the licence and pays $110.04 mln to ENI (NAE); ENI (NAE) pays FGN $1,092.04 mln for rights to the block; Malabu relinquished all claims on OPL 245 in exchange for payment from FGN of $1,092.04 mln

2017 Court of Milan decided that Shell and its four former employees should be remanded for trial

2018 Court of Milan decided that first hearing is postponed to 14 May

OPL 245

Fact recap

1 A full chronology of events is available in the additional information slides

10


OPL 245

No case to answer

Shell media statement:“Based on our review of the Prosecutor of Milan's file and all of the information and facts available to us, we do not believe that there is a basis to convict Shell or any of its former employees. If the evidence ultimately proves that improper payments were made by Malabu or others to then current government officials in exchange for improper conduct relating to the 2011 settlement of the long standing legal disputes, it is Shell’s position that none of those payments were made with its knowledge, authorisation or on its behalf.

“We believe the trial judges in Italy will conclude that there is no case against Shell or its former employees.

“Shell attaches the greatest importance to business integrity. It’s one of our core values and is a central tenet of the Business Principles that govern the way we do business. Shell has clear rules on anti-bribery and corruption and these are included in our Code of Conduct for all staff. There is no place for bribery or corruption in our company.”

11


OML 42

Criminal complaint

Shell media statement:“Based on what we know now from an internal investigation, we suspect a crime may have been committed by our former employee, Peter Robinson, against Shell in relation to the sale process for Oil Mining Lease (OML) 42 in Nigeria in 2011. We have filed a criminal complaint with the Dutch authorities and are considering other steps we could take.

“We were stunned and disappointed when we learned about this issue. Our Code of Conduct, our Business Principles and our core values of honesty, integrity and respect govern the way we do business. We work tirelessly to uphold these principles and we expect high standards of behaviour from everyone who works for Shell. Where those standards are breached we are committed to taking the appropriate action, and to learning lessons.

“Based on our current understanding, we believe OML 42 and OPL 245 are unrelated. On OPL 245, we continue to believe, from our review of the Prosecutor of Milan's file and all of the information and facts currently available to us, there is no case to convict Shell or its former employees.”

12


Ben van BeurdenChief Executive OfficerRoyal Dutch Shell


Strategic ambition

Thrive in the energy transition

World-class investment case

Strong license

to operate

2017

Year of transformation

Strong financial delivery and strengthened financial framework

Growth momentum

Resilient and relevant portfolio positioned long term

Reduce the Net Carbon Footprint of our energy products in line with society

14


ESG programme Key events

Responsible Investment Annual Briefing (since 2006)

2018: Board engagement day

Chairman roadshows

Remuneration Committee roadshows

Engagements with IIGCC1 (CA100+2)

1 Institutional Investors Group on Climate Change, 2 Climate Action 100+ initiative

www.shell.com/esg

15


Leading in transparency

RDS reporting2017

Announcement of Net Carbon Footprint ambition (November 2017)

2017 CDP Climate change score: “B”

Inclusion in the Dow Jones Sustainability Index

2018 progress

Disclosures aligned to Task Force on Climate-related Financial Disclosures (TCFD)

“Shell Energy Transition report” published

Annual report: additional disclosures on climate change risk and strategy

“Sky – meeting the goals of the Paris agreement” scenario published

16

Strategic ambition –Thrive in the energy transition


Hans WijersChair of the CSRCRoyal Dutch Shell


Corporate and Social Responsibility Committee

1 Hans Wijers stands down as a Director of the Company at the close of business of the 2018 Annual General Meeting to be held on May 22, 2018

2 On March 14, 2018, the Board appointed Sir Nigel Sheinwald as Chair of the Corporate and Social Responsibility Committee with effect from May 23, 2018

3 On March 14, 2018, the Board appointed Linda G. Stuntz as member of the Corporate and Social Responsibility Committee with effect from May 23, 2018. She will stand down as a member of the Audit Committee on May 22, 2018

Hans Wijers1

(Chair)

Linda G. Stuntz3

Sir Nigel Sheinwald2

Catherine J. Hughes

18


Areas of focus

CSRC topics2017 2018

Approach to the energy transition

Methane

Greenhouse gas (GHG) metrics in remuneration

Nigeria

Groningen

Security

Net Carbon Footprint

Nature based solutions

Ethics and compliance

Groningen

Nigeria

Pernis refinery site visit, The Netherlands Afam VI power plant, Nigeria

19


Rewarding performance in line with delivery of strategy

GHG metrics in remuneration

The GHG metrics in the 2018 scorecard have evolved and coverage has increased to close to 90% of the Scope 1 and 2 operated emissions, compared to 60% in 2017

CEO personal performance agreement includes strategy and progress in new energies

Scorecard aligned for Directors and staff

Annual bonus scorecard design

Strategy drives change

Remuneration follows and supports strategy

Cash flow from operating activities Operational excellence Sustainable development

2017 2018

5% Process safety

5% Personal safety

10% GHG management

10% Environment

10% Safety

Scope expanded2:

Upstream and Integrated Gas GHG intensity in million tonnes CO2e (4%)

Refining GHG intensity measured in tonnes CO2e per UEDC1 (3%)

Chemicals GHG intensity measured in tonnes CO2e per tonne of chemicals production (3%)

5% Process safety

5% Personal safety

10% GHG management

20

1 Solomon’s Utilised Equivalent Distillation Capacity 2 Updated 24 October 2018: % reflect the weighting for 2017, the definition is for 2018. The weighting and full 2018 scorecard architecture will become available in the 2018 Annual Report


How the CSRC looks at climate change

Fully support the Paris agreement

“We believe that the need to reduce GHG emissions, which are largely caused by burning fossil fuels, will transform the energy system in this century.” (RDS Annual Report 2017)

Management of risks and opportunities

Managed in accordance with other significant risks through Board and Executive Committee

Supported by standards, policies and controls

Board and Board subcommittee involvement

Board strategy sessions throughout 2017 on changing global energy market, energy transitionand climate change

CSRC

Remuneration Committee

Audit committee

2018 priorities: Energy transition New energies

business strategy implementation

21


Ben van BeurdenChief Executive OfficerRoyal Dutch Shell


HSSE performance Injuries – TRCF/million working hours

Goal Zero on safety

Million tonnes CO2e

Upstream flaring

Volume in thousand tonnes

Operational spills

Number of incidents

Process safety

HSSE priority Performance and

transparency

million working hours Number of spills

0

200

400

600

800

0

2

4

2007 2009 2011 2013 2015 20170

250

500

0

5

10

2007 2009 2011 2013 2015 2017

0

5

10

15

2007 2009 2011 2013 2015 20170

200

400

2013 2014 2015 2016 2017

Working hoursTRCF Volume Number

Tier 1 incidents Tier 2 incidents

23


Embedding a

Culture of care Golden rules: comply, intervene and respect Protecting our reputation and driving competitive advantage

Social performance

Sustain societal license to operate

HR organisational effectiveness

Respect for people

Contracting and Procurement

Explicit recognition of care in how we do business

Diversity andinclusion

A diverse and inclusive work environment

Human performance and careCaring for individuals and their work environment

Care for people in projects

Programmatic approach to maximise worker welfare and performance in projects

Physical environment

Camp and office design supporting care

Safety leadershipBehavioural androad safetyIntentional and relentless focus on personal and process safety across Shell

Care

24

Better business outcomes


Performance

Nigeria Operational spill volume reduction >70%

Increased number of sabotage-related spills

Commenced Bodo spill clean-up under Bodo Mediation Initiative

The SPDC JV Afam VI power plant supplied ~15% of the nation’s grid-connected electricity in 2017

Oil theft and sabotageimpacts onshore operations

Livewire alternative livelihoods

Workers at the Afam VI Power Plant

25



Societal challenge

Sources: Population – UN World Population projections; Energy consumption: 2015 – IEA World Energy Outlook (WEO) 2017; 2070 outlook – Shell scenarios analysis from A better life with a healthy planet

CO2 emissions: 2015 – IEA WEO 2017; 2040 – IEA WEO 2017 Current policies scenario; 2070 – Shell scenarios analysis from A better life with a healthy planet

Challenge for more and cleaner energy

Reduction required in the carbon intensity of every unit of energy consumed

2015 2070

>10 billion7 billion

1000 Exajoules570 Exajoules

Net ZeroEmissions

32 gt CO2e CO2

43 gt CO2e current policies

2 0 4 0

Increasing population

Increasing energy demand

Need to reduce CO2 emissions

26


Sky – Meeting the goals of the Paris agreement

New scenario launched March 2018

EJ/year

World primary energy by source

GT CO2 /year

World total CO2 emissions from energy

0

200

400

600

800

1,000

1,200

2015 2030 2040 2050 2060 2070Oil BiofuelsNatural Gas BiomassCoal NuclearSolar WindOther Renewables

-10

-5

0

5

10

15

20

25

30

35

40

2015 2030 2045 2060 2075 20902015 2030 2045 2060 2075 2090

1 Nationally Determined Contributions; 2 Massachusetts Institute of Technology

Grounded in current energy system

NDC1 process ratchets aggressively to 2030

Progressively becomes goal-driven (‘normative’) to meet Paris aims

Unprecedented and sustained collaboration required

Deep electrification, global power generation grows by factor of five

Aggressive efficiency improvement

Liquid and gaseous fuels remain in hard-to-electrify sectors

Renewables largest sources of energy from 2050s

CO2 emissions peak in 2020s

Net-zero emissions by 2070

Sky scenario impact estimated at around 1.75°C

Additional potential from greater reforestation

Collaboration with MIT2

Assessed by MIT2 as limiting temperature increase to 1.75 °C

www.shell.com/scenarios

27



Driving to resilience and ambition

Demonstrating Shell’s approach across multiple time horizons

TIME HORIZON

SHORT TERMGHG

management

Focussed on operational action

Included in annual bonus scorecard

MEDIUM TERMStrategic positioning and

portfolio resilience

Disclosures aligned to TCFD recommendations

Demonstrate financial resilience of portfolio to energy transition and climate change actions

LONG TERMNet Carbon Footprint

methodology

Covers full range of emissions from our energy products through to consumption

1-3 YEARS 5-10 YEARS >10 YEARS

5% Process safety

5% Personal safety

10% GHG management

Sustainable

development

28


Resilience

Financial framework

1 Significant variations in oil and/or gas prices will potentially impact certain operating costs, or result in foreign exchange movements, the effect of which are not reflected in this price sensitivity; 2 Assuming oil price fell from around $65 per barrel today to $40 per barrel money of the day; 3 Assuming oil price rose from around $65 per barrel today to $100 per barrel money of the day

$ billion

CFFO excluding working capital Capital investment flexibility

Growing free cashflow

Capital discipline and flexibility

Strong balance sheet

Oil price $40-$100 per barrel range likely to 2030

$10 per barrel movement in Brent prices, around $6 billion cash flow impact indicative estimate1

At $40/bbl impact of -$15 billion on CFFO2

At $100/bbl impact of +$21 billion on CFFO3

$10 per tonne CO2 movement in global CO2 price, around $1bn billion pre-tax impact on cash flow

Applying more resiliency criteria to capital allocation

Lower break-even prices

Shorter payback periods

Improving project delivery

Average Brent oil price ($/bbl)

0

10

20

30

40

2014 2015 2016 2017

$99 $52 $44 $54

$ billion (per annum) 2018 – 2020

Oil products 4-5

Conventional oil + gas 4-5

Integrated gas 4-5

Deep water 5-6

Chemicals 3-4

Shales 2-3

New energies 1-2

Total 25-30

$#


Resilience

Portfolio

1 The forward-looking breakeven price for pre-FID projects is calculated based on all forward-looking costs associated with pre-FID projects in our development portfolio. Accordingly, this typically excludes exploration & appraisal costs, lease bonuses,

exploration seismic and exploration team overhead costs. The forward-looking breakeven price for pre-FID projects is calculated based on our estimate of resources volumes that are currently classified as 2C under the Society of Petroleum Engineers’ Resource

Classification System. As these pre-FID projects are expected to be multidecade producing projects, the less than $30 per barrel projection will not be reflected either in earnings or cash flow in the next five years

Diverse business segments Geographic diversity Active portfolio management

Resilience from diverse and actively managed portfolio

Assessed risk of stranded assets as low

Marketing earnings

Chemicals earnings

Americas Asia EU + Africa

Operations across energy system

Strength of integrated model

Global business in more than 70 countries

In 2017, 19 countries accounted for 80% of CFFO

Focus on cost reduction

Improving CO2 performance

DEEP WATER

Projects waiting FID: average break-even <$30

SHALES

Permian direct field expenses -33% in 2017

INTEGRATEDGAS

Since BG, underlying operating expenses -11%

CHEMICALS

Pennsylvania ethylene cracker expected top quartile CO2 intensity

OIL PRODUCTS

INTEGRATEDGAS

CHEMICALS

SHALESNEW ENERGIES

Cash engines

Growth priorities

Emergingopportunities

DEEP WATER

CONVENTIONALOIL + GAS



Ambition – Net Carbon Footprint


Footprint of the energy system is modelled using Shell methodology aggregating lifecycle emissions of energy products on a fossil-equivalence basis. The methodology will be further reviewed and validated in collaboration with external experts

2 Potential society trajectory includes analysis from Shell scenarios estimate of Net Zero Emissions by 2070 and IEA Energy Technology Perspectives 2017; Potential illustrative Shell trajectory


WtW gCO2e/MJ1

Ambition to reduce Net

Carbon Footprint1 of our

energy products by around

20% by 2035

Covers full range of emissions from

energy products (Scope 1, 2 and 33)

Additionally, includes emissions

produced by customers when they use

the energy products we sell

Drive strategy over time in step with

society

5-year reviews

Reductions estimated based on our

expectation of societal trajectory to

meet Paris goals

Ambition for Net Carbon Footprint1

Ambitions: Reduce Net Carbon

Footprint1 of our energy products by ~20% by 2035

Be in line with society Net Carbon Footprint by 2050

Society trajectory2 Shell trajectory2

Shell “business as usual”

In line with society by 2050

~20% reduction by 2035


Scope of our Net Carbon Footprint

1 The ‘lifecycle’ calculation tracks the energy molecules end-to-end but does not include emissions associated with construction or decommissioning of facilities


3 CCS: Carbon Capture and Storage, NBS: Nature based solutions

Emissions from energy products included within the Net Carbon Footprint framework

Full lifecycle1 of ourenergy products, including consumption

Sales

Sales

Sales

ProcessingLiquefactionGas-to-liquid

Refining

Renewable Energy

Oil and gas Extraction

Oil

Natural gas

LNG

GTL

Third-party crude

Third-partyproducts

Third-partyproducts Net of CO2

sinks such as CCS, NBS3

Key2

Emissions from bringing own products to the market (Scope 1,2)Emissions from bringing third-party products to the market (Scope 1,2)

Emissions from use of own products (Scope 3)Emissions from use of third-party products (Scope 3)Contributions included in bringing products to market (Scope 1,2)

Biofuels and power

Third-partygas Third-party

products

Processing


Our Net Carbon Footprint ambitionmoves in line with society

Shell cannot predict society and government future actions

Therefore: aligned to society’s progress

In step with society’s drive to align with Paris goals

Reassess progress every five years linked to NDC1 process

Shell’s approach goes further than shareholder resolution requests

We include emissions from:

(The production of) Shell’s energy products

Energy products from third parties, processed in our facilities

Energy products from third parties, sold by us, and

The use of these energy products

Potential business activities identified, such as growing new energies business

Shareholder resolution –response

1 Nationally Determined Contributions

Shell’s approach is wide-ranging and progressive

33



Case studies

Pilot facility operating in Bangalore

Meets GHG reduction mandates, to be considered advanced biofuels

Can use a broad spectrum of forestry, agricultural and sorted municipal waste as feedstock

Biofuels R&D: IH2® Adapting our retail network

Multiple opportunities to offer low-carbon fuels

‘Shell Recharge’ electric vehicle (EV) charging in UK and The Netherlands

Partnered with IONITY to install EV charging on major routes across 10 countries in Europe

Hydrogen in UK, Germany and California, USA

34

Hydrogen network development – UK, Germany and USA

500 ultra-fast charge posts with IONITY in next 2 years – Europe

20+ ‘recharge’ locations – UK & Netherlands

Integrated charging solutionsIH2® demonstration facility, India


Questions and Answers


Ben van BeurdenChief Executive Officer

Hans WijersChair of the CSRC

Harry BrekelmansProjects and Technology Director

Donny ChingLegal Director


Maarten WetselaarIntegrated Gas and New Energies DirectorRoyal Dutch Shell


Policy actions for clean energy

Global

G20 endorses role of gas in energy transition

IEA recognises CO2 emissions reductions from coal-to-gas switching and renewables (China, US and UK)

National

China favours gas and renewables and reforms gas market

South Korea prioritises renewables and gas

Germany supports public-private partnerships for Hydrogen refuelling network

Regional

EU policies supporting coal phase out: >10 countries announce ambitions

EU agreed to strengthen Emissions Trading Scheme

EU power market reforms: accommodate renewables and distributed energy

Local

Policymakers targeting air quality

Beijing meets ambitious 2017 air quality targets

Berlin closes local coal-fired power plants to improve air quality

Widespread policy support for Integrated Gas and new energies

37


Integrated Gas Cash engine

As of Q4 2017; capital employed includes new energies; average capital investment per annum in period 2018-20; Organic FCF by 2020: 2016 RT $60 per barrel

World leader Growing markets Differentiated

portfolio $8-10 billion organic

FCF by 2020

Creating & securing demand Optimisation Managing supply

LNG Gas and power Gas-to-liquids premium products

Marketing and trading Shipping and transport Regasification

Gas and liquids production Liquefaction Gas-to-liquids

Capital employed: $87.5 billion

Production: 0.9 mboe/d

Liquefaction volume: 33 mtpa

LNG sales volumes: 66 mtpa

Capital investment: $4-5 billion

38


Reducing methane emissionsProduct stewardship of gas

Methane guiding principles Oil and Gas Climate Initiative

Focus on entire gas value chain –from production to final consumer

39

Shell led development of principles; 8 companies initially signed and 3 more since

Collaborated with industry, academics, NGOs and multilateral organisations

Prioritise monitoring, measuring, reporting and reducing emissions

Shell now spearheading key actions to advancethe principles

Commitment to work towards near zero methane emissions – target to be announced end 2018

Improve understanding of global methane emissions sources

Financial support methane technology commercialisation


Focus areas: Biofuels Hydrogen Electric mobility

Work in partnerships and consortia Target downstream returns high teens %

New Energies New Fuels

Focus areas: Trading, marketing and customer access Low-carbon generation and storage

Investment in customer access Selective asset ownership Target equity returns of 8-12%

Power

Selective and opportunity driven investment

Capital investment $1-2 billion per annum average

NoordzeeWind, The NetherlandsWuppertal, Germany

40


Adjacencies to existing businesses

Value chain integrator

Demand-driven development

Power value chain

CUSTOMERS OPTIMISATION SUPPLY AND GENERATION

Secure demand in key markets

Commercial, industrial, and residential

Optimise intermittent demand and supply

Trading opportunities

Wind, solar, and selected gas and storage assets

Selective capacity ownership to create portfolio flexibility

Leverage portfolio flexibility and arbitrage opportunities

Multiple parties are active on the demand side

Not all products are supplied by Shell; some are purchased from third parties

41


Adjacencies to existing businesses

Value chain integrator

Demand-driven development

Power value chain

CUSTOMERS OPTIMISATION SUPPLY ANDGENERATION

Leverage portfolio flexibility and arbitrage opportunities

Multiple parties are active on the demand side

Not all products are supplied by Shell; some are purchased from third parties

New Motion

First Utility

MP2 Energy LLC

Shell Energy North America

Shell Energy Europe

Shell Energy Australia

Carbon credit trading

Silicon ranch

US onshore wind portfolio

NoordzeeWind offshore

The Netherlands

Borssele 3 and 4 offshore wind1

Solar and storage at Shell sites11 Projects shown are pre-FID

42


Delivering a profitable energy access business

1 United Nations Sustainable Development Goals

Technology company

Universal smart metering platform

Serving mini grid companies and other utilities

Focused in Africa and Asia

Mini-grid company

Hybrid solar PV and biomass gasification solution

Reliable electricity on a pay-as-you-go basis

Operations in India and Tanzania

Off-grid modular solar solutions for homes and businesses

Offers consumer financing

Operations in Uganda and Kenya

Steamaco Husk Power Systems SolarNow

Commercial response to UN SDG1 7: Affordable and clean energy

43


Maarten WetselaarIntegrated Gas and New Energies DirectorRoyal Dutch Shell


Questions and Answers


Maarten WetselaarIntegrated Gas and New Energies Director

Mark GainsboroughEVP New Energies


Additional information


2017 2018/19

NAMA 50:50 Joint Venture with Shell and ExxonMobil

August5 years since Huizingeearthquake (force 3.6)

AprilProduction cut by 10% to 21.6bcm

MarchNAM at a distance

NovemberRaad van State announces judgment appeals against Ministry of Economic Affairs’ amended decision on gas extraction Groningen

NovemberNAM submits updated Hazard and Risk Assessment to SodM1

JanuaryEarthquake Zeerijp with a force of 3.4 on the scale of Richter

JanuarySodM advice to minister on gasproduction level. Gasproduction locations Loppersum shut down

MarchDamage claims public desk opened (‘NAM at a distance’)

47

JanuaryMinister Wiebes announces new damage protocol

MarchMinistry of Economic Affairs announces “Groningen to zero” by 2030

Source: www.nam.nl, 1 State Supervision of the Mines


Nigeria environmental performance

1 SPDC JV = 30% Shell, 55% NNPC, 10% Total, 5% Agip; all data on 100% basis unless otherwise stated

Clean-up & UNEP progress

Commenced Bodo spill clean-up under Bodo Mediation Initiative

HYPREP2 $10 million take-off grant, and project coordinator appointed

Oil spill prevention & remediation

Theft protection mechanisms improved

Daily overflights + surveillance continue

IUCN collaboration on remediation standards and practices

Remediation and certification efforts ongoing (92 sites out of 251 remediated in 2017)

Social performance initiatives to address underlying cause (Livewire training programmes)

Theft and sabotage continues (25% increase in numbers in 2017 following Forcados terminal outage in 2016), long-term trend improving

2017 >70% reduction operational spills (volume) from 2016

www.shell.com.ng/briefingnotes

2 Hydrocarbon Pollution Restoration Project – this body was established under the Nigerian Ministry of Environment, aimed at the sustainable clean-up of Ogoniland

0

50

100

150

200

0

5

10

15

20

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Thousand tonnes

SPDC JV1 spills

Volume of operational spillsVolume of sabotage spills

Operational spills >100kgSabotage spills >100kg

Production and theft

0

200

400

600

800

0

20

40

60

80

2012 2013 2014 2015 2016 2017

Production (SPDC JV) (RHS)

Thousand barrels per day Thousand barrels of oil equivalent per day

Theft

Number


Case study: Brent decommissioning

Contractor management

1 In today’s money

Brent decommissioning

Platforms and infrastructure retirement

~1,000 people

>97% planned to be recycled

Brent-Delta platform lift

Single lift

Coordination with >100 companies

Extensive contractor collaboration

Brent createdjobs and contributed >£20 billion in tax revenue1

Brent, United Kingdom

49


Human rights Integrated approach

Informed by Universal Declaration of Human Rights, core conventions of International LabourOrganization and UN Guiding Principles on Business and Human Rights

Example: Worker Welfare – Singapore

Example: Voluntary Principles on Security and Human Rights (VPSHR) – Tunisia

50

Malampaya, Philipines


Directors’ remuneration policy

Long t

erm

Long Term Incentive Plan(LTIP)

Annual bonus

Fixed remuneration

Shareholding & holding periods

Malus + clawback

Short

ter

m

Short-term operational delivery targets

50% bonus in shares, subject to 3-year holding period which remains in force post-leaving

Shareholding requirement: CEO: 7 x base salary; CFO: 4 x base salary

Malus and clawback provision apply to bonus and LTIP

Benchmarked against 4 oil majors and 15 European companies

World-class investment financial metrics

3-year performance + 3-year holding period which remains in force post-leaving

30% CFFO

20% Sustainable development

10% Safety10% GHG

50% Operational excellence

12.5% Project delivery12.5% Production12.5% LNG sales12.5% DS availability

25% TSR

25% ROACE

25% FCF

25% CFFO

50% cash

50% shares

51


Health, Safety, Security & Environment

Process safety is central in achieving Shell’s goal of zero harm to people and the environment

Managed by combining asset integrity principles with a risk management approach, supported by visible safety leadership

52

Asset integrity principles

Risk management approach

Process safety performance

Threats Consequences

CONTROLS, BARRIERS RECOVERY MEASURES

TOPEVENT

Design Integrity

TechnicalIntegrity

OperatingIntegrity

IntegrityLeadership

GOALZERO

NOHARM

NOLEAKS

NO HARMTO PEOPLE

NO LEAKSFROM OUROPERATIONS


Shareholder resolution –response

Follow This resolution Shell response

Set and publish targets that are aligned with the goal of the

Paris Climate Agreement to limit global warming to well

below 2°C. They need to include long-term (2050) and

intermediate objectives, to be quantitative, and to be

reviewed regularly

Already announced Net Carbon Footprint1 ambition (November 2017)

Around 50% reduction of Net Carbon Footprint of our energy products by 2050, around

20% by 2035 (gCO2e/MJ)

In step with society’s drive to align with the Paris goals

Reassess every five-years aligned to NDC process

Explicit target would need to predict society & government future actions

Gives the flexibility to continue to thrive in whatever world society moves towards;

recognizes need for action by all society

The company base these targets on tangible metrics such as

greenhouse gas intensity metrics (GHG emissions per unit of

energy produced) or to use other metrics that the company

finds suitable to align its targets with a well-below-2°C

pathway

GHG metrics in executive bonus scorecard (since 2017)

Reporting aligned to TCFD recommendations

Ambition in step with society’s drive to align with the Paris goals

These targets need to cover the GHG emissions of Shell’s

operations and the use of its energy products (*),(*) Scope 1,

Scope 2, and category 11 of Scope 3 (emissions from use of

Shell’s refinery fuel and natural gas products, and sold CO2

transfers), excluding emissions from use and disposal of non-

fuel products

Shell’s Net Carbon Footprint Ambition well beyond scope 1, 2 and 3 emissions of our

energy products

Includes emissions produced by customers when they use the energy products we sell

Includes emissions from elements of energy products life-cycle not owned by Shell, such as:

Oil and gas processed - but not produced - by Shell

Oil products and electricity marketed by Shell not processed or generated at a

Shell facility


Footprint of the energy system is modelled using Shell methodology aggregating lifecycle emissions of energy products on a fossil-equivalence basis. The methodology will be further reviewed and validated in collaboration with external experts.

The Board recommends voting against the Follow This resolution

53


OPL 245

Chronology of events (1)

Phase 1

1998 – Malabu awarded licence for OPL 245

March 2001 – Shell Nigeria Ultra Deep (“SNUD”) farms in

Representations and warranties were provided on ownership of Malabu

Federal Government Nigeria (“FGN”) consented

Phase 2

July 2001 – FGN revokes the Malabu Licence

May 2002:

SNUD bids for and is awarded OPL 245 by FGN and later signs a PSC with Nigerian National Petroleum Corporation (“NNPC”)

Signature bonus ($209 million) is placed in escrow pending outstanding disputes with Malabu

SNUD conducts exploration and appraisal work programme

54


OPL 245


Phase 2 (continued)

Various litigations follow:

May 2002 – SNUD commenced International Chamber of Commerce arbitration proceedings against Malabu

August 2002 – Malabu commenced proceedings against FGN, Shell Nigeria Exploration and Production Company (“SNEPCO”), SNUD and other Shell parties in New York federal court

May 2003 – (following a petition by Malabu), the Nigerian House of Representatives issued a report concluding: (i) OPL 245 was legally awarded to Malabu, (ii) the revocation of Malabu’s licenceshould be set aside, (iii) SNUD should pay $550 million compensation to Malabu. SNUD appeals

September 2003 – Malabu commenced proceedings in Nigeria against FGN, NNPC and SNUD for a declaration that the award of OPL 245 to Malabu was valid, a declaration that the award to SNUD was invalid, and damages of $100 million

55


OPL 245


Phase 3

December 2006 – FGN settles litigation with Malabu and reallocates the licence to Malabu

Malabu and SNUD now have competing legal rights to the Block

April 2007 – SNUD commences Bilateral Investment Treaty arbitration against the FGN for wrongful expropriation

2008 – FGN seeks resolution, negotiations commence

56


OPL 245


Phase 4

2010 – negotiations now include ENI

Settlement with FGN – negotiations are conducted with Attorney General of FGN, the Minister of Petroleum Resources, the Minister of Finance and senior NNPC officials

April 2011 – settlement is achieved. FGN receives $1.3bln:

Signature bonus is released by SNUD to FGN from 2003 escrow funds in return for the licence

SNEPCO pays $110.40 million to ENI (Nigerian Agip Exploration (“NAE”)) ($25.40 million interest on the escrow, plus $85 million)

NAE pays $1,092.04 million to FGN for settling all outstanding claims on the Block

FGN agrees to indemnify SNEPCO and NAE from any other claims on the Block

SNEPCO and NAE hold the licence 50/50. NAE is operator

57


OPL 245

Agreements of April 2011

Heads of Agreement between NAE and SNUD and SNEPCO: allocation of the payments due to FGN

Block 245 Resolution Agreement: FGN, NNPC, SNUD, SNEPCO and NAE

Payments to FGN and award of the licence

FGN indemnifies SNEPCO and NAE against competing claims

Key fiscal terms of future PSC

Block 245 Resolution Agreement: FGN and Malabu. Payment to Malabu; settlement of claims

Block 245 Resolution Agreement: FGN and SNUD. Settlement of claims

Settlement submission to Court of Appeal, Abuja: SNUD, SNEPCO, Malabu and Nigerian House of Representatives (“NHR”). Withdrawing SNUD and SNEPCO appeals against a 2003 NHR report in favour of Malabu

58


OPL 245

Shell review Debevoise & Plimpton LLP, an international law firm, was retained by the Shell Group

Debevoise conducted and led an investigation which included staff from the law firm and Shell’s Business Integrity Department

Periodic updates to senior management, Audit Committee and RDS Board

Final report to RDS Board in July 2016

Findings shared with authorities during 2016

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