2011 strategy update - March 15, 2011
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    2011 strategy update - March 15, 2011 2011 strategy update - March 15, 2011 Presentation Transcript

    • ROYAL DUTCH SHELL PLC INVESTOR PRESENTATION LONDON MARCH 15, 20111 Copyright of Royal Dutch Shell plc 15/03/2011
    • ROYAL DUTCH SHELL PLC PETER VOSER CHIEF EXECUTIVE OFFICER2 Copyright of Royal Dutch Shell plc 15/03/2011
    • DEFINITIONS AND CAUTIONARY NOTEReserves: Our use of the term “reserves” in this presentation means SEC proved oil and gas reserves for all 2009 and 2010 data, and includes both SEC proved oil and gas reserves and SEC provenmining reserves for 2008 data.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 or SEC proven mining reserves. Resources areconsistent with the Society of Petroleum Engineers 2P and 2C definitions.Organic: Our use of the term Organic includes SEC proved oil and gas reserves and SEC proven mining reserves (for 2008) excluding changes resulting from acquisitions, divestments and year-average pricing impact.To facilitate a better understanding of underlying business performance, the financial results are also presented on an estimated current cost of supplies (CCS) basis as applied for the Oil Products andChemicals segment earnings. Earnings on an estimated current cost of supplies basis provides useful information concerning the effect of changes in the cost of supplies on Royal Dutch Shell‟s resultsof operations and is a measure to manage the performance of the Oil Products and Chemicals segments but is not a measure of financial performance under IFRS.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 forconvenience 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 thosewho 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 “Shellcompanies” 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 acontrolling 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 controlare 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 forconvenience to indicate the direct and/or indirect (for example, through our 24% 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 historicalfact 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 andassumptions 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 offactors 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 thispresentation, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for the Shell‟s products; (c) currency fluctuations; (d) drilling and productionresults; (e) reserve estimates; (f) loss of market share and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisitionproperties 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 countriesand 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 delaysin 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 cautionarystatements 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 RoyalDutch Shell‟s 20-F for the year ended 31 December, 2010 (available at www.shell.com/investor and www.sec.gov ). These factors also should be considered by the reader. Each forward-lookingstatement speaks only as of the date of this presentation, 15 March 2011. 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-lookingstatements 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.The United States Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actualproduction or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this presentation, such as resources andoil in place, that SECs 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 onthe SEC website www.sec.gov. You can also obtain these forms from the SEC by calling 1-800-SEC-0330. 3 Copyright of Royal Dutch Shell plc 15/03/2011
    • ROYAL DUTCH SHELL STRATEGY UPDATE4 Copyright of Royal Dutch Shell plc 15/03/2011
    • ENERGY OUTLOOKGLOBAL ENERGY MIXMln Boe/d Industry outlook400  Hydrocarbons dominate outlook300  Growth required in all sectors of energy mix  Energy policy + sustained investment200 Shell100  Crude oil & oil products  Natural gas & LNG 0  Biofuels, wind, carbon capture + storage 1980 1990 2000 2010 2020 2030 2050  Petrochemicals OIL BIOMASS COAL GAS WIND NUCLEAR SOLAR SHELL ACTIVITIES OTHER RENEWABLESSHELL ESTIMATES5 Copyright of Royal Dutch Shell plc 15/03/2011
    • SHELL ‘GOAL ZERO’ ON SAFETY Injuries – TRCF per million working hours 4 3 2 Customer and Profitability & 1 partner focus performance 0 99 00 01 02 03 04 05 06 07 08 09 10 Sustainability & Value added growth technology  Focus on personal and process safety  Industry leader in Sustainable Development EMPLOYEES AND CONTRACTORS PER MILLION WORKING HOURS; SHELL OPERATED FACILITIES6 Copyright of Royal Dutch Shell plc 15/03/2011
    • STRATEGY & CAPITAL ALLOCATIONSTRATEGY CAPITAL INVESTMENT $ BlnUpstream 150 Profitable growth; price upside >80% of total capital spending Sustained exploration investment 100Downstream UPSTREAM Stable capital employed Fewer refineries; upgrade chemicals assets 50 More concentrated marketing positions DOWNSTREAMFinancial outlook 0 2007-10 2011-14 Generating surplus cashflow through cycle Investing for growth; competitive payout Substantial cashflow growth GROWTH INVESTMENT – THROUGH CYCLE RETURNS7 Copyright of Royal Dutch Shell plc 15/03/2011
    • FINANCIAL PERFORMANCE AND PRIORITIESEARNINGS PRIORITIES$ Bln3530 PERFORMANCE FOCUS252015 NEW WAVE OF PRODUCTION GROWTH10 5 0 MATURING NEXT GENERATION OF PROJECT OPTIONS-5 2006 2007 2008 2009 2010 UPSTREAM CORPORATE DOWNSTREAM DIVESTMENTS/OTHERCURRENT COST OF SUPPLY EARNINGS8 Copyright of Royal Dutch Shell plc 15/03/2011
    • 2010 PERFORMANCEPRIORITIES 2010 DELIVERY  CCS earnings $18 bln (+56% 2009-10) PERFORMANCE FOCUS  $2 bln underlying cost savings  $7 bln asset sales / $7 bln acquisitions  6 new project start-ups; oil & gas volumes + 5% NEW WAVE OF PRODUCTION  Launched 2 new deep water projects GROWTH  2010 organic reserves replacement ratio 133%  Exploration success; 9 new discoveries; 2.3 bln boe MATURING NEXT GENERATION OF PROJECT OPTIONS  Business development: tight gas, coal bed methane, Iraq  Brazil retail & biofuels joint venture CURRENT COST OF SUPPLY EARNINGS EXCLUDING IDENTIFIED ITEMS9 Copyright of Royal Dutch Shell plc 15/03/2011
    • ROYAL DUTCH SHELL PERFORMANCE FOCUS10 Copyright of Royal Dutch Shell plc 15/03/2011
    • PEFORMANCE FOCUSCOST IMPROVEMENTUPSTREAM COSTS (> $1.5 BLN 2008-10 COST SAVINGS) GROUP COSTS$/Bbl $ Bln FX 20 PENSIONS 45 PROVISIONS 40 COST SAVINGS 35 15 30 2009 2010 2008 2009 2010DOWNSTREAM COSTS (> $2.5 BLN 2008-10 COST SAVINGS) CONTINUOUS IMPROVEMENT$/Bbl $/Mt  Offshoring17 200 180  Global contracting & procurement 160  Simplification & standardization16 140 12015 100 2008 2009 2010 OIL PRODUCTS CHEMICALS (RHS)UNIT COST CHARTS SHOW UNDERLYING COSTS: EXCLUDES PENSIONS, FX, PROVISIONS11 Copyright of Royal Dutch Shell plc 15/03/2011
    • PEFORMANCE FOCUSDOWNSTREAMTHREE KEYS TO WINNING DOWNSTREAM EARNINGS CCS Earnings - $ Bln $/BblOperational Excellence 8 8 Brand 6 6 Cost discipline 4 4 2 2 Improving manufacturing availability 0 0 Asset integrity -2 -4 -2 03 04 05 06 07 08 09 10 -6 -4Concentrating the Portfolio GLOBAL INDUSTRY REFINING MARKETING & TRADING REFINING MARGIN Re-focused asset base CHEMICALS DIVESTMENT & OTHERS (RHS) Maximize value in heartlands DOWNSTREAM CAPITAL EMPLOYEDSelective Growth $67 Billion MARKETING & TRADING Marketing + selective manufacturing Product innovation CHEMICALS Brazil, Middle East and Asia Pacific 2010 REFINING GLOBAL REACH & FULL VALUE CHAINS12 Copyright of Royal Dutch Shell plc 15/03/2011
    • PEFORMANCE FOCUSDOWNSTREAM: COST + OPERATIONAL PERFORMANCEEXAMPLE: PROCESS EFFICIENCY COST REDUCTIONBusiness-2-Business: Unit margin & costs to serve150% 20 ~ $15  2009+10: > $2.5 billion underlying cost reduction 15100% • Headcount: - 5,000 ~ $8 10  2011-12: $1 billion underlying cost reduction 50% ~$3.5 5 • Headcount reduction 0% 0 • Efficiency gains + C&P 2005 2010 2015 E • Business model changes B2B unit margin Cost to Serve ($/transaction) [RHS]DOWNSTREAM AVAILABILITY LEAN MANUFACTURING95% Refining costs index 110% CHEMICALS -11% 100% 90% REFINING 80%90% 2008 2009 2010 2006 2007 2008 2009 2010 EXCLUDES PORTFOLIO EFFECTS13 Copyright of Royal Dutch Shell plc 15/03/2011
    • PEFORMANCE FOCUSDOWNSTREAM: REFOCUSING MANUFACTURINGFOCUS ON LARGE INTEGRATED SITES PORTFOLIO CHANGE*Shell refining capacity – Mln bbl/d Refinery capacity Kbbl/d (100%) 4.75 -30%4 3.33 400  > 700,000 bbl/d exited since end-20092  1.6 million bbl/d exited since 20021 300  Larger scale + increased sophistication0 2002 2006 2009 2011 YTD* 2012 EUROPE & AFRICA AMERICAS ASIA PACIFIC 200INCREASING REFINERY SCALEKbbl/d 100200150 0 EXITS 2002-2011 YTD100 2009-2012 exit programme completed 2002 2006 2010 2012 AVERAGE REFINERY SIZE On-going portfolio management * SUBJECT TO SUCCESSFUL COMPLETION OF ANNOUNCED DEALS14 Copyright of Royal Dutch Shell plc 15/03/2011
    • PEFORMANCE FOCUSDOWNSTREAM: REFOCUSING MARKETINGRETAIL GROWTH PORTFOLIO CHANGE SINCE END-2009*Retail sales volume - Bln litres135130125120 2007 2008 2009 2010MARKETING REFOCUS DIRECT INDIRECT/PART EXIT EXITS100% CHANGE SINCE 2009 2009-11 DIRECT TO INDIRECT/PART EXIT INDIRECT 50% DIRECT 0% 42 markets switched to indirect 09 10 11 12 09 10 11 12 09 10 11 12 09 10 11 12 YTD* YTD* YTD* YTD* structure/part exit Retail Lubricants Aviation Fuels Bulk Fuels sites markets markets markets Rationalization continues * SUBJECT TO SUCCESSFUL COMPLETION OF ANNOUNCED DEALS15 Copyright of Royal Dutch Shell plc 15/03/2011
    • PEFORMANCE FOCUSDOWNSTREAM: CASHFLOW AND RETURNSDOWNSTREAM CASH FLOW$ Bln40 Focus on cashflow  Free cashflow underpins Upstream growth + payout 830 2006-10  Business mix supports through-cycle performance ~$21 billion 6 201020  Growth potential 4 ~$6 billion10 2 0 0 2006-10 2010 CASH FLOW FROM OPERATIONS EX. WORKING CAPITAL NET CAPITAL INVESTMENTDOWNSTREAM RETURNS25% Enhancing returns20%  Sharp fall-off in profitability 2009-1015% • Weak refining environment10% 5%  Aiming for ROACE>WACC in downturns 0%  Enhancing returns through cycle 1992 1995 1998 2001 2004 2007 2010 • Availability, costs, portfolio change Annual 5 year averageCCS EARNINGS EXCLUDING IDENTIFIED ITEMS16 Copyright of Royal Dutch Shell plc 15/03/2011
    • ROYAL DUTCH SHELL GROWTH DELIVERY17 Copyright of Royal Dutch Shell plc 15/03/2011
    • GROWTH DELIVERYCONVERTING RESOURCES TO PRODUCTIONBln Boe resources Longer-term upside35 NA tight gas Australia Cardamom Deep Appomattox Prelude Prelude Vito Malikai25 10 8 Pearls (CMOC) 8 AOSP debottleneck NA tight gas Schiehallion Gorgon Mars-B Clair NA tight gas BC-10 Phase215 10 11 11 Pearl GTL AOSP-Exp 1 QG-4 Sakhalin Gjoa Oman EOR BC-10 Perdido Schoonebeek 5 9 9 Gbaran Ubie 10 Others NA tight gas-5 2008 2009 2010 ON-STREAM UNDER CONSTRUCTION STUDY PRODUCTION ~10 billion barrels on stream ~11 billion barrels under construction ~10 billion barrels new options18 Copyright of Royal Dutch Shell plc 15/03/2011
    • GROWTH DELIVERYSEC PROVED RESERVES POSITION2008-10 RESERVES ADDITIONS 2010 RESERVES PERFORMANCE  2010 organic3 RRR 133% Canada Denmark, Germany,UK Russia  Reserves life at end 2010 ~11 years USA 2008-10 RESERVES AVG. PERFORMANCE Oman Brunei  Organic additions ~2.0 billion boe Brazil Nigeria  Production ~1.2 billion boe Australia  Organic reserves replacement 164 % MAJOR RESERVES ADDITIONS NET RESERVES 1,2RESERVES REPLACEMENT 2008-10 2010 BILLION BOE 2008 2009 2010ORGANIC 3 164% 133% ORGANIC RESERVES ADDITIONS 1.1 3.2 1.7 PRODUCTION 1.2 1.2 1.2REPORTED 165% 110% NET RESERVES 11.9 14.1 14.21 Reserves attributable to Royal Dutch Shell shareholders2 Based on year end prices for 2008, and based on 12-month average price for 2009 and 2010 2008 reserves includes proven minable oil sands3 Excludes acquisitions, divestments and year-average price impact19 Copyright of Royal Dutch Shell plc 15/03/2011
    • GROWTH DELIVERYDELIVERING ON NEW PROJECTSKEY POST-FID PROJECTS RESOURCES 2010 - Bln boe Gjoa P 30 Study AOSP-1 P Schoonebeek P NA Port Arthur 20  ~11 billion BoeTight gas P Iraq FCP/IPT resources Perdido P Qatargas 4 P Pearl GtL Singapore Under  20 Upstream Chemicals P 10 Construction start-ups 2011-14 Mars B Qarn Alam Gumusut-Kakap Gbaran Ubie Ph 1 P planned Bonga Onstream NW Amal Steam North Rankin B 0 BC-10 Ph 2 Gorgon Pluto IMPACT OF KEY START-UPS T1-3 (Woodside) Kboe/d OIL & GAS 1000 START-UP DATE INTEGRATED GAS 2010-11 REFINING & CHEMICALS 2012-13 500 2014+ P ONSTREAM 0 2010 2011-2012 2013-2014 2015+ 11 billion boe resources under construction : „10-‟11 START UPS „12-‟13 START UPS > 800 kboe/d potential 2014 ‟14 + START UPS ENTITLEMENT AT $80/BBL20 Copyright of Royal Dutch Shell plc 15/03/2011
    • GROWTH DELIVERYINTEGRATED GASPEARL GTL (QATAR) QATARGAS 4 (QATAR) GORGON (AUSTRALIA)Pearl GtL plant under construction Inaugural Qatargas 4 cargo arriving at Shell Barrow Island Hazira Regasification Terminal Commissioning underway; ~12  7.8 mtpa LNG + 70 kboe/d  3 LNG trains; 15 mtpa months start-up condensates  Carbon capture & storage 1.6 bcf/d wet gas:  First gas into plant – Jan 2011  Exploration upside • 120 kboe/d NGL/ethane  First LNG export – Feb 2011  Shell 25% • 140 kboe/d GTL  Shell 30% 100% Shell in partnership with QP Part of Shell’s new integrated gas potential of ~500 kboe/d 201521 Copyright of Royal Dutch Shell plc 15/03/2011
    • GROWTH DELIVERYDEEPWATERMARS-B (GULF OF MEXICO) BC-10 PHASE 2 (CAMPOS, BRAZIL) GUMUSUT-KAKAP (MALAYSIA)Development concept Phase 1 FPSO Construction yard at Johor Bahru TLP capacity ~100 kboe/d  Peak production ~30 kboe/d  Peak production ~135 kboe/d New resources at Mars field  Argonauta O-North field  Semi submersible Floating West Boreas + South Deimos  Tie-back to Phase 1 FPSO Platform System Water depth 950 meters  Water depth 1,600 meters  Water depth 1,200 meters Shell 72% (operator)  Shell 50% (operator)  Shell 33% (operator) Part of Shell’s new deepwater potential of ~200 kboe/d 201522 Copyright of Royal Dutch Shell plc 15/03/2011
    • GROWTH DELIVERYHEAVY OIL & EORAOSP-1 (CANADA) SCHOONEBEEK (NETHERLANDS) PDO (OMAN)AOSP Jackpine mine Schoonebeek EOR development Qarn Alam steam development AOSP-1 mine expansion 2010 -  Started up Jan 2011  Qarn Alam steam injection adds ~100 kboe/d  Steam injection for 20 kboe/d  Harweel miscible gas flood Upgrader expansion H1-2011  ~120 mln bbls potential over  Amal Steam 255 kboe/d capacity built in 25 years  Increased recovery factors: ~10 years  Shell 30% (operator) <10% to >30% Next focus: optimization +  ~90 kboe/d 100% peak debottlenecking production potential Shell 60% (operator)  Shell 34% New heavy oil potential of ~90 kboe/d 2013-1423 Copyright of Royal Dutch Shell plc 15/03/2011
    • GROWTH DELIVERYNORTH AMERICA TIGHT GASPRODUCTION GROWTHKboe/d Mmscf/d 2011 investment: ~$3 billion; >400 wells 2,000300 Deep Basin Canada 1,500 Foothills200 Groundbirch 1,000 Pinedale100 Haynesville USA 500 Marcellus 0 0 Eagleford 2006 2007 2008 2009 2010 2011 2012SHELL ASSET BREAK EVEN PRICE Groundbirch 40 Tcfe resources potential$/mcfe – End 2010 Deep Basin8 Foothills Expected gas6 price range Pinedale42 Marcellus0 Eagle Ford Haynesville JV Mature plays Emerging plays Total BREAKEVEN PRICE ENTRY COST Growth potential: ~ 300 kboe/d 2012; >400 kboe/d potential 201524 Copyright of Royal Dutch Shell plc 15/03/2011
    • GROWTH DELIVERYUPSTREAM PROFITABILITY + PRODUCTIONOIL & GAS PRODUCTION GROWTH PRODUCTION SPLITKboe/d Regional Thematic4,000 100% 100% 90% 80% 75% 70% 60%3,500 50% 50% 40% 30% 25% 20% 10%3,000 0% 0% 2009 2010 2011 2012 2014 2010 2014 2010 2014 ASIA PACIFIC OTHER HEAVY OIL & EOR TIGHT GAS OIL & GAS 2010 ASSET SALES SOUR INTEGRATED GAS AMERICAS EUROPE DEEPWATER TRADITIONAL Continuing to high-grade portfolio through new investments + disposalsENTITLEMENT AT $80/BBL; OUTLOOK ASSUMES LICENSE EXTENSIONS + 2010 ANNOUNCED ASSET DISPOSALS25 Copyright of Royal Dutch Shell plc 15/03/2011
    • ROYAL DUTCH SHELL MATURING NEXT GENERATION PROJECT OPTIONS26 Copyright of Royal Dutch Shell plc 15/03/2011
    • MATURING NEXT GENERATION OF PROJECT OPTIONSADDING NEW RESOURCESEXPLORATION & ACQUISITIONS EXPLORATION SPEND $ Bln 3 AMERICAS OTHER 2 ASIA PACIFIC EUROPE 1 0 EAGLEFORD EAST RESOURCES 2010 2011 APPOMATTOX SOUTH DEIMOS AMAL SECARDAMOM DEEP 2010/11 average exploration spend GERONGGONG ACME BC-10 MASSA BREDERODE ARROW BMS-54: HEAVY OIL & EOR GATO-DO-MATO INTEGRATED GAS 2010 DEEPWATER DISCOVERY TRADITIONAL APPRAISAL TIGHT GAS NEW EXPLORATION/ RESOURCES ENTRY27 Copyright of Royal Dutch Shell plc 15/03/2011
    • MATURING NEXT GENERATION OF PROJECT OPTIONSEXPLORATION & BUSINESS DEVELOPMENTTOTAL POTENTIAL RESOURCES MOVEMENTS 2010 EXPLORATION RESOURCES ADDITIONBln boe resources/potential8 100% 100% 100% 80% 80%6 75% GAS EAST 60% 60%4 ARROW 50% IRAQ 40% 40%2 25% 20% 20% OIL0 0% 0% 0%-2 10 10 10 08 09 10 TIGHT GAS EXPLORATION KEY ACQUISITON/NEGOTIATED ENTRY AMERICAS DEEPWATER ASIA PACIFIC DISPOSALS PRODUCTION INTEGRATED GAS OTHER TRADITIONAL 2010 exploration & deals add ~6 bln boe potential  2010 exploration adds ~2.3 bln boe at < $2/boe 2010 exploration + acquisition cost < $2/boe  3 year average finding cost at < $2/boe Adding new resources at low cost – growth potential28 Copyright of Royal Dutch Shell plc 15/03/2011
    • MATURING NEXT GENERATION OF PROJECT OPTIONSLNG OUTLOOK: AUSTRALIA IN FOCUSPrelude Floating LNG 2007 discovery Arrow Energy LNG Targeting FID in 2011 Greater Sunrise • Environmental approval received • FEED progressing • Field Development Plan submitted Prelude 3.6 mtpa LNG, 0.4 mtpa LPG and 1.3 mtpa condensate Browse Shell 100% Arrow Energy LNG Project  2010 acquisition: coal bed methane Pluto (Woodside)  Currently supplying >20% of Queensland‟s gas North West Shelf  Targeting LNG FEED 2011 • 1st phase 2 trains ~8 mtpa LNG Gorgon  Shell-PetroChina 50-50% PRODUCTION UNDER CONSTRUCTION POTENTIAL ~11 mtpa potential new LNG capacity in Australia29 Copyright of Royal Dutch Shell plc 15/03/2011
    • MATURING NEXT GENERATION OF PROJECT OPTIONSMIDDLE EAST POTENTIAL & NOC PARTNERINGMAJNOON (IRAQ) QATAR CHEMICALS KIDAN (SAUDI-ARABIA)  ~38 billion boe oil in place  MOU signed in December  Multi-TCF sour gas opportunity  FCP ~2012: 175 kboe/d (Shell) 2010  New seismic + wells planned  Long-term production potential  Up to 1.5 mln tonnes mono-  Shell - Saudi Aramco 50-50% 1.8 mln boe/d ethylene glycol plant under Joint Venture consideration  Assessing full field options  Could yield up to 2 mln tonnes • Discrete, modular steps per annum finished product • First potential FID ~2013+30 Copyright of Royal Dutch Shell plc 15/03/2011
    • MATURING NEXT GENERATION OF PROJECT OPTIONSCHINA GROWTH + PARTNERSHIPSChina Changbei tight gas Daning CBM Jinqiu + Fushun tight gas Jinqiu drill-pad SHELL CHINA Nanhai – Chemicals Shell – Qatar Kboe/d Mtpa Petroleum-PetroChinaInternational refining proposal 60 Oil & gas 2 Oil products Syria : Shell – CNPC JV Chemicals (RHS) UPSTREAM PRODUCTION 40 Qatar: block D UPSTREAM POTENTIAL exploration Shell- 1 PetroChina DOWNSTREAM 20 2010 PROGRESS Arrow CBM to LNG Shell - PetroChina 0 0 2003 2004 2005 2006 2007 2008 2009 201031 Copyright of Royal Dutch Shell plc 15/03/2011
    • MATURING NEXT GENERATION OF PROJECT OPTIONSMATURING NEW PROJECTSOIL & GAS RESOURCES2010 Resources in Bln boe TIGHT GAS – N. AMERICA PRELUDE - AUSTRALIA Longer-term upside 30  >10 billion boe ARROW - AUSTRALIA APPOMATTOX - USA resources  > 30 new projects  > 1 mln boe/d STUDY potential 2018-20... 20  ... and maturing Long-term growth and investment UNDER further options  Options to flex annual spending with macro CONSTRUCTION 10  Capex and growth outcomes Investment decisions driven by ON  Portfolio fit STREAM  Affordability 0  Profitability Portfolio can support profitable growth to ~202032 Copyright of Royal Dutch Shell plc 15/03/2011
    • ROYAL DUTCH SHELL PLC FINANCIAL FRAMEWORK UPDATE SIMON HENRY CHIEF FINANCIAL OFFICER33 Copyright of Royal Dutch Shell plc 15/03/2011
    • CONTINUOUS IMPROVEMENTCONTRACTING & PROCUREMENT DOWNSTREAM PORTFOLIO OFFSHORINGProcurement from emerging markets # of Retail sites „000 # of staff in shared service centres$Mln # of Suppliers 120%3,000 160 40 8,000 120 302,000 6,000 100% 80 20 4,0001,000 40 10 2,000 0 0 0 80% 0 2008 2009 2010 2008 2009 2010 2006 2007 2008 2009 2010 BEING QUALIFIED DIRECT SITES INDIRECT SITES SPEND SUPPLIERS QUALIFIED COSTS (RHS) Sourcing from China, India,  Low cost indirect operating model  Shifting support functions to low Russia and Mexico  Margin retention + enhancement cost shared service centres Up to 20 % savings versus • brand  Reducing headcount in higher market alternatives cost locations • customer focus High end specifications • differentiated products34 Copyright of Royal Dutch Shell plc 15/03/2011
    • ASSET SALES + CAPITAL EFFICIENCYASSET SALES PROGRESS 2010 & 2011 YTD ~$30 BILLION DIVESTMENTS – 5 YEARS $ Bln Cumulative 30Upstream CORPORATE 85 kboe/d production UPSTREAM  Woodside reduction, South Texas, GOM, SPDC DOWNSTREAM licences, Statfjord 20Downstream > 700 kbbl/d refining capacity exit announced 10 Marketing switch to indirect structures/part exit Greece, New Zealand, Finland, Sweden, Central America, Africa, others 0 06 07 08 09 10 Allocating capital to high impact growth Exit from late-life + non-core positions35 Copyright of Royal Dutch Shell plc 15/03/2011
    • CONVERTING INVESTMENT TO CASHFLOW: 2009-12INVESTING FOR NEW GROWTH$ Bln $ Bln60 6050 5040 40 OTHER30 3020 20 CANADA 201110 10 START-UPS QATAR 0 0 2007 2008 2009 2010 2011E 2012E 2010 CAPITAL UNDER CAPITAL UNDER CONSTRUCTION EXPLORATION & EVALUATION CONSTRUCTION AOSP debottle ph-1 Pearl GtL Gumusut-Kakap Caesar Tonga Malakai AOSP Expansion I Port Arthur Mars-B Prelude FID / DEALS Clair Qatargas 4 Duvernay East Resources Schiehallion Singapore Chemicals Gorgon LNG BC-10 Phase 2 NA tight gas QatarGas 4 2012-13 Nigeria T6 NWS T5 Sakhalin Perdido Pearl GtL Corrib BC-10 Ph 2 Ormen Lange Afam Gas BC-10 AOSP mine AOSP upgrader Gumusut-Kakap 1.8 BAB/SAS START-UPS Changbei Ursa Princess Singapore Gbaran Ubie Schoonebeek Port Arthur Kashagan Ph 1 Waterflood Chemicals Ph 1 Oman EOR Majnoon FCP North Rankin 2ITALIC: PLANNED36 Copyright of Royal Dutch Shell plc 15/03/2011
    • REBALANCING THE FINANCIAL FRAMEWORKSURPLUS CASHFLOW THROUGH THE CYCLE2009 2010 2012E$ Bln $ Bln $ Bln 2009-12 targets ~50% @ $60 scenario 50 50 50 >80% @ $80 scenario SOURCES USES $80/bbl 40 40 $80/bbl 40 $60/bbl 30 30 30 $62/bbl 20 20 20 10 10 10 0 0 0 $/bbl BRENT FREE CASH FLOW CASH FLOW FROM OPERATIONS EXCL. NET ACQUISITIONS MOVEMENTS IN WORKING CAPITAL ASSET SALES CAPITAL INVESTMENT (2012 ON NET BASIS) TARGETS ASSUME IMPROVED DOWNSTREAM AND NATURAL GAS ENVIRONMENT 2009-201237 Copyright of Royal Dutch Shell plc 15/03/2011
    • CAPITAL SPENDING + OUTLOOKUPSTREAM NET CAPITAL INVESTMENT% Capital investment $ Bln 30100% EXPLORATION 80% OTHERS HEAVY OIL & EOR 20 TIGHT GAS EUROPE SOUR 60% ASIA PACIFIC DEEPWATER 10 40% AMERICAS INTEGRATED GAS 20% 0 TRADITIONAL 2009 2010 2011 2012-14 0% 2007-10 2011-14 2007-10 2011-14 NET CAPITAL INVESTMENTDOWNSTREAM 2012-14 INVESTMENT CHOICES & FLEXIBILITY% Capital investment100% 80%  Divestments up to $3 bn/year; capital efficiency 60% MARKETING  FID pace + industry costs drive capex range 40% REFINING  Tight gas + exploration spend flexibility 20% CHEMICALS 0% 2007-10 2011-14 2012-14 CAPITAL INVESTMENT EXCLUDES IRAQ FULL FIELD DEVELOPMENTS38 Copyright of Royal Dutch Shell plc 15/03/2011
    • MATURING NEW PROJECTS: 2011-12 Linnorm Schiehallion Redev Clair Phase 2 AOSPDebottlenecking Canada Fram Quest CCS Kazakhstan Tempa Rossa Syria China US Onshore CMOC Appomattox Majnoon & West Qurna FFD Gulf of Mexico Cardamom Deep Oman Saudi Arabia Stones Fr Guiana Philippines Vito Rabab/Harweel Erha North Ph3 Bonga SW Sabah Gas KBB Malikai Prelude Sunrise NWS - GWF Arrow Energy LNG Brazil Australia 2011 2011-12 2011-12 EXPLORATION FEED TARGET FID TARGET39 Copyright of Royal Dutch Shell plc 15/03/2011
    • FINANCIAL FRAMEWORK CASH PERFORMANCE  ~50-80% CFFO increase 2009-12 ($60-$80 oil price scenarios)  Surplus cash flow 2012 at $60/bbl INVESTMENT PAY-OUT  $25-27 bln net capex /year  Dividend linked to results  Up to $3 bln asset sales/year  Scrip dividend option 2012+  ~$10 billion expected 2011  Affordability, profitability, portfolio BALANCE SHEET  0 – 30% gearing through cycle  Balance sheet underpins investment  Capital employed grows steadily Competitive returns – cash generation – growth investmentCFFO TARGETS ASSUME IMPROVED DOWNSTREAM AND NATURAL GAS ENVIRONMENT 2009-201240 Copyright of Royal Dutch Shell plc 15/03/2011
    • ROYAL DUTCH SHELL PLC PETER VOSER CHIEF EXECUTIVE OFFICER41 Copyright of Royal Dutch Shell plc 15/03/2011
    • OUTLOOKPRIORITIES 2011-12 OUTLOOK  $1 billion Downstream cost savings PERFORMANCE FOCUS  Continuous improvement embedded in Shell  Up to $8 bln asset sales; capital efficiency  >20 projects under construction NEW WAVE OF PRODUCTION  +6% production 2010-12 GROWTH  On track for 2012 cashflow targets  Studying > 30 new projects; 10 FIDs planned 2011-12 MATURING NEXT GENERATION OF PROJECT OPTIONS  Upstream growth potential to ~2020  Selective Downstream growth Competitive performance – Profitable growth – Sharper delivery42 Copyright of Royal Dutch Shell plc 15/03/2011
    • ROYAL DUTCH SHELL STRATEGY UPDATE Q&A43 Copyright of Royal Dutch Shell plc 15/03/2011
    • ROYAL DUTCH SHELL STRATEGY UPDATE APPENDIX RESERVES & PROJECTS44 Copyright of Royal Dutch Shell plc 15/03/2011
    • 2008-2010 RESERVES SUMMARYRESERVES IN MLN BOEMovements 2008 2009 2010Organic1 reserves additions 1,132 3,158 1,653Year end price effect 19 260 -198Production -1,189 -1,187 -1,242Acquisition & divestment 13 2 -85Total subsidiaries and affiliates movements 1,164 3,420 1,370Year end positionsTotal subsidiaries and affiliates reserves 11,912 14,145 14,273Minority interests 12 13 24RESERVES REPLACEMENT RATIOSNet Shell reserves2 11,900 14,132 14,249 2008 2009 2010 2008-10 RRR Organic 95% 266% 133% 164% RRR Organic incl. price effects 97% 288% 117% 167% RRR Reported 98% 288% 110% 165%1 Excludes acquisitions, divestments and year-average price impact2 Reserves attributable to Royal Dutch Shell shareholdersBased on year end prices for 2008, and based on 12-month average price for 2009 and 20102008 proved volumes include reserves from Minable Oil Sands45 Copyright of Royal Dutch Shell plc 15/03/2011
    • KEY PROJECTS UNDER CONSTRUCTIONStart up Project Country Shell Share Peak Production LNG 100% Products Category Shell % kboe/d Capacity Operated mtpa2010-11 AOSP EXP 1 P CANADA 60 100  GBARAN UBIE PH 1 P NIGERIA 30 250  GJOA P NORWAY 12 105 NORTH AMERICA TIGHT GAS P USA/CANADA Various ~150 *  PEARL GTL QATAR 100 320 140 kbbl/d GTL  PERDIDO P USA 35 100  PLUTO LNG T1 (WOODSIDE) AUSTRALIA 22 140 4.3 QARN ALAM EOR OMAN 34 40 QATARGAS 4 LNG P QATAR 30 280 7.8 SCHOONEBEEK P NETHERLANDS 30 20  SHELL EASTERN PETROCHEMICALS P SINGAPORE 100 800 kta ehtylene DS 2012-13 AMAL STEAM OMAN 34 20 1.8 BAB THG & HB2 UAE 9.5 80 BC-10 PH 2 BRAZIL 50 30  CORRIB IRELAND 45 55  GUMUSUT-KAKAP MALAYSIA 33 135  HARWEEL OMAN 34 40 KASHAGAN PHASE 1 KAZAKHSTAN 16.8 300 MAJNOON FCP/WEST QURNA IPT IRAQ 45/15 > 30 *  NORTH RANKIN 2 AUSTRALIA 21 268 PORT ARTHUR REFINERY EXPANSION USA 50 325 DS SAS ABU DHABI 9.5 1152014+ BONGA NW NIGERIA 55 45  MARS-B, W. BOREAS & S. DEIMOS USA 72 100  GORGON LNG T1-3 AUSTRALIA 25 440 15 DEEPWATER TIGHT GAS SOUR TRADITIONAL INTEGRATED GAS HEAVY OIL &* SHELL SHARE EORMAJNOON + W. QURNA VOLUMES REFLECT FCP/IPT46 Copyright of Royal Dutch Shell plc 15/03/2011
    • STUDYING STRONG PORTFOLIO OF PRE-FID OPTIONSPOTENTIAL 2014-2020 START-UPSPhase Project Country Shell share Peak production LNG (100%) Theme Shell operated 100% capacity Kboe/d mtpaCONCEPT Appomattox USA 80 100 SELECTION Bonga North Nigeria 55 105  Bonga South West Nigeria 44 200  Bosi Field Development Nigeria 44 130 Stones USA 35 45  DEEPWATER Vito USA 48 100  HEAVY OIL & AOSP Debottlenecking Ph2&3 Canada 60 50  EOR Carmon Creek Ph1 Canada 100 40  Rabab/Harweel Oman 34 40 INTEGRATED GAS Arrow Energy LNG Australia 50 160 ~8 TIGHT GAS Browse (BCT) LNG Australia 21 310 > 10 NLNG Train 7 Nigeria 26 220 8.4 TRADITIONAL NWS Gas- GWF- Phase A Australia 21 110 SOUR Sunrise LNG Australia 35 120 ~4 Fram UK 28 35  Majnoon FFD/West Qurna FFD Iraq 45/15 >150*  Linnorm Norway 30 50  Pearls -Khazar Kazakhstan 55 50 Kashagan Ph2 Kazakhstan 17 530DESIGN Erha North Ph3 Nigeria 44 40 Malikai Malaysia 35 60  Cardamom Deep USA 100 30  Sabah Gas: KBB/KME Malaysia 30 130 AOSP Debottlenecking Ph1 Canada 60 35  Prelude Australia 100 110 3.6  Gbaran Ubie Ph2 Nigeria 30 200  North American tight gas USA/Canada Various >500 ** Various Clair Ph2 UK 28 105 Schiehallion Redevelopment UK 36 130 Tempa Rossa Italy 25 45* SHELL SHARE** TOTAL SHELL PORTFOLIO; SUBJECT TO INVESTMENT PACE47 Copyright of Royal Dutch Shell plc 15/03/2011
    • 2008-2010 DRILLING PERFORMANCEStart up Well name Country Shell Share Location Water depth Oil/Gas Shell % Operated2008 Auezov-1 Kazakhstan 55 Offshore ~10m O Deep Basin West, BCG Canada ~ 70% Onshore - G  Groundbirch Canada 100 Onshore - G  Haynesville US, Louisiana 50 Onshore - G  Libra-1 Australia 65 Offshore ~120m OG  ML-J206T1 Malaysia 35 Offshore ~65m OG2009 Achilles-1 Australia 25 Offshore ~4535m G Cardamon Deep US, GoM 100 Offshore ~870m OG  Concerto Australia 100 Offshore ~280m G  Gro Norway 50 Offshore ~1380m G  Kentish Knock Australia 50 Offshore ~1220m G Satyr Australia 25 Offshore ~1100m G Vito US, GoM 55 Offshore ~1,200m O  West Boreas US, GoM 100 Offshore ~960m O 2010 Acme-1 Australia 33 Offshore ~878m G Amal SE Oman 33 Onshore - O Appomattox US, GoM 80 Offshore ~2200m O  Brederode-1 Australia 50 Offshore ~1387m G Cardamon Deep US, GoM 100 Offshore ~870m OG  Gato do Mato Brazil 80 Offshore ~2000m O  Geronggong-2 Brunei 50 Offshore ~1000m O  Massa Brazil 50 Offshore ~1600m O  South Deimos US, GoM 100 Offshore ~960m O 48 Copyright of Royal Dutch Shell plc 15/03/2011
    • ROYAL DUTCH SHELL STRATEGY UPDATE APPENDIX SUPPORTING SLIDES UPSTREAM49 Copyright of Royal Dutch Shell plc 15/03/2011
    • UPSTREAM STRATEGYTECHNOLOGY, INTEGRATION AND SCALE Build Resource Base  Global exploration  Focused acquisitions  Continued portfolio high grading Accelerate Resources to Value  Grow profitable production  Top Quartile project delivery 2010  Operational excellence & cost leadership  3.3 million boe/d production (+5%)  ~14 billion boe reserves Competitive Differentiation  ~25 countries  Integrated Gas leadership  $25 billion cashflow  Technology + partnerships  $21 billion net capital investment50 Copyright of Royal Dutch Shell plc 15/03/2011
    • UPSTREAM GLOBAL OVERVIEWKEY ASSET OVERVIEW Ormen Lange Groundbirch West Shetland Salym North Sea Athabasca Oil Sands Corrib Netherlands Kashagan Sakhalin Tempa Rossa Marcellus Changbei Aera Haynesville Egypt Iraq Qatar Gulf of Mexico UAE Oman MLNG PhilippinesREPORTING SEGMENT Nigeria Malakai / Sabah Nigeria SPDC Brunei, BLNG AMERICAS Gabon Gumusut-Kakap Deepwater EUROPE ASIA PACIFIC OTHERS: Deepwater Brazil RUSSIA/CIS/MIDDLE EAST/AFRICA Prelude Arrow Energy LNG Gorgon KEY FIELDS/PROVINCES/LNG VENTURES NWS UNDER CONSTRUCTION DESIGN51 Copyright of Royal Dutch Shell plc 15/03/2011
    • UPSTREAM REGIONAL OUTLOOK - EUROPEKEY PROJECTS FINANCIALS $ Bln 10 CFFO CAPEX 5 0 2006 2007 2008 2009 2010Gjoa Platform, Norway OIL & GAS PRODUCTION Kboe/d 1000 2011+ • Schoonebeek • Corrib 500 • Clair Phase 2 • Tempa Rossa 0 2009 2010Oil production - Schoonebeek UNITED KINGDOM NORWAY DENMARK NETHERLANDS ITALY OTHERThe Netherlands52 Copyright of Royal Dutch Shell plc 15/03/2011
    • UPSTREAM REGIONAL OUTLOOK - AMERICASKEY PROJECTS FINANCIALS $ Bln 20 CFFO CAPEX 10 0 2006 2007 2008 2009 2010 OIL & GAS PRODUCTION Kboe/d 1000 2011+ • AOSP Exp 1 • Perdido 500 • Onshore gas • Mars B • BC10 Ph2 0 2009 2010Tight Gas drilling Espirito Santo FPSO USA CANADA BRAZIL ARGENTINA OTHERGroundbirch Canada BC-10 Brazil53 Copyright of Royal Dutch Shell plc 15/03/2011
    • UPSTREAM REGIONAL OUTLOOK – ASIA PACIFICKEY PROJECTS FINANCIALS $ Bln 10 CFFO CAPEX 5 0 Changbei – Tight Gas 2006 2007 2008 2009 2010 China OIL & GAS PRODUCTION Kboe/d 1000 2011+ • Pluto (Woodside) • Gumusut-Kakap 500 • Gorgon T1-3 • Prelude • Arrow Energy LNG • Malakai 0 2009 2010 AUSTRALIA MALAYSIA BRUNEI CHINA OTHER Prelude FLNG54 Copyright of Royal Dutch Shell plc 15/03/2011
    • UPSTREAM REGIONAL OUTLOOK – MIDDLE EAST,RUSSIA, CIS, AFRICAKEY PROJECTS FINANCIALS $ Bln 20 CFFO CAPEX 10 0 Pearl GTL 2006 2007 2008 2009 2010 Qatar OIL & GAS PRODUCTION Kboe/d 1500 2011+ 1000 • Qatargas 4 • Pearl GtL • Oman EOR 500 • Bonga NW • Majnoon • West Qurna 1 0 2009 2010 Gbaran Ubie NIGERIA OMAN ABU DHABI OTHER Nigeria55 Copyright of Royal Dutch Shell plc 15/03/2011
    • LEADERSHIP IN GLOBAL LNGSHELL LNG DESTINATIONS SHELL LNG LEADERSHIP Year end mtpa 30 20 10 2008 2010 0 Shell Exxon BG BP Total Chevron 2010 2016 PROJECTS IN OPERATION OR UNDER CONSTRUCTION SHELL GLOBAL LNG CAPACITY GROWTH AMERICAS EUROPE ASIA PACIFIC/ MIDDLE EAST Mtpa Arrow Others QG4 Energy 40 Gorgon LNG Pluto Prelude (Woodside) Shell ventures delivered >30% of global LNG 20 volumes produced in 2010. 18.2 mtpa on stream (end 2010) 0 7.6 mtpa under construction 2010 2011-16 ~2020 ~11 mtpa of further LNG options ONSTREAM CONSTRUCTION DESIGN OPTIONS56 Copyright of Royal Dutch Shell plc 15/03/2011
    • OPERATING PERFORMANCEDEVELOPMENT TECHNOLOGY IN ACTION PROJECT START-UP: LNGExample: “Fish hook wells”, Brunei: Seria North Flank 2010 LNG capacity utilization 110% 100% 90% 80% 70% 60% 50% Asia Africa Europe Asia Sakhalin Middle South Pacific Pacific East America (2006) (2007) (2007) (2009) (2009) (2009) (2010) COMPETITOR PROJECT (START-UP) Small, complex reservoirs; near-shore Sakhalin LNG: Low cost solution  Ramped up to full capacity in 2010 50% reduction in drill time 2008+  Expected to produce ~5% of the world‟s LNG 20 kboe/d with 50 kboe/d potential  Delivered its 200th LNG cargo in Oct 2010 GREENFIELD PLANTS ONLY57 Copyright of Royal Dutch Shell plc 15/03/2011
    • BRAZIL GROWTH POTENTIALOVERVIEW SHELL POSITIONS SHELL BRAZIL PRODUCTION Kboe/d Kbbl/d Raizen (Cosan) JV OIL & GAS Espirito Raizen (Cosan) JV Marketing & 100 ETHANOL 300 Biofuels (50%) Santo Basin OIL PRODUCTS Sao Francisco (RHS) exploration 200 Parque das Conchas BC-10 50 • Start-up phase -1 2009 Massa discovery – • Phase 2 FID 2010 100 potential for BC-10 phase 3 Bijupira- 0 0Gato de Mato BMS-54 Salema Camposdiscovery 2005 2010 ~2015 Basin• Drilling 2011 to assess commerciality Santos Basin UPSTREAM PRODUCTION UPSTREAM POTENTIAL 2010 PROGRESS Raizen (Cosan) – Sugarcane harvesting58 Copyright of Royal Dutch Shell plc 15/03/2011
    • ROYAL DUTCH SHELL STRATEGY UPDATE APPENDIX SUPPORTING SLIDES PROJECTS & TECHNOLOGY59 Copyright of Royal Dutch Shell plc 15/03/2011
    • PROJECTS & TECHNOLOGY PROJECT DELIVERY OPERATIONAL EXCELLENCE SAFE & RELIABLE OPERATIONS Control Incident Response & Sakhalin & Barriers Recovery Refining plant maintenance Sakhalin WELL & RESERVOIR MANAGEMENT TECHNOLOGY & INNOVATION Pinedale SUSTAINABLE DEVELOPMENT Subsurface imaging Pearl GTL - Qatar60 Copyright of Royal Dutch Shell plc 15/03/2011
    • SAFETY IN SHELLSHELL SAFETY PERFORMANCE 2011 HSSE PRIORITIES AND FOCUSInjuries – TRCF8 Simplify & Comply7  One HSSE & SP Control Framework – Shell wide65  Life-Saving Rules432 Focus Areas1  Process Safety0  Road Safety 99 00 01 02 03 04 05 06 07 08 09 10  Contractor HSSE Performance Shell IOC Range  Cap & contain systems: global initiatives Sustain 2010 performance:  Strong safety culture and leadership  Recordable injury frequency down 15%  Lost time injury frequency down 25%  Fatal accident rate down 30%EMPLOYEES AND CONTRACTORS PER MILLION WORKING HOURS; SHELL OPERATED FACILITIES61 Copyright of Royal Dutch Shell plc 15/03/2011
    • SAFE & RELIABLE OPERATIONS SAFETY CASE ‘BOW TIE’ MODEL:STANDARD ASSET INTEGRITY MANAGEMENT PREVENTION AND RECOVERY – INDUSTRY CONSEQUENCES HAZARD Control Response & Incident & Barriers Recovery Minimize Mitigate Likelihood Consequences  A safety case approach to risk identification and mitigation • Shell integrated the bowtie methodology 1990s • Systematic approach to risk management • Involve contracting companies • Full alignment & clear accountabilities between parties62 Copyright of Royal Dutch Shell plc 15/03/2011
    • BLOWOUT PREVENTION & CONTAINMENT CAPABILITYSTANDARD ASSET INTEGRITY MANAGEMENT INTERNATIONAL RESPONSE Founding & permanent Board Member of the  International Association of Oil & Gas Producers Marine Well Containment Company (MWCC) (OGP) MWCC will own & deploy the system in US GOM  Industry position on capping & containment for Subsea containment equipment designed for GOM areas outside GoM • Interim system available Feb 2011  3 Key focus areas • Expanded system available 2012 • Well engineering and design • Capping and containment capability • Oil spill response63 Copyright of Royal Dutch Shell plc 15/03/2011
    • OPERATING PERFORMANCEBC-10 (PARQUE DAS CONCHAS) PHASE 1 TECHNOLOGY IN ACTIONKboe/d (100%)100 Actual Plan 75 50 25 0 Jan Apr Jul Oct 2010  Nine wells onstream in Q1 2010  Ultra Deepwater development with advanced  FID on second phase taken in 2010 technology firsts applied  Deepwater low API oil  Project delivery as planned  Shell 50%  Production from Phase 1 exceeded Plan in 2010  Outstanding operational safety performance  BC-10 Phase 2 now in progress64 Copyright of Royal Dutch Shell plc 15/03/2011
    • PROJECT MANAGEMENT + PERFORMANCEPROJECT STATUS PROJECT PERFORMANCE AGAINST INDUSTRY BENCHMARKSConstruction time elapsed % 1Q DOWNSTREAM Singapore Chemicals Cost Effectiveness 2Q Perdido Gbaran Ubie Ph1 3Q Gjoa 4Q Schoonebeek Qatargas 4 2006 2007 2008 2009 2010 AOSP Expansion 1 Pearl GTL UPSTREAM Pluto LNG Component Cost 1Q Harweel 2Q Qarn Alam Steam Port Arthur 3Q Corrib 4Q Kashagan Ph 1 Bonga NW North Rankin 2 2006 2007 2008 2009 2010 Gumusut-Kakap WELLS SAS Component Cost 1Q Amal Steam Gorgon T1-3 2Q BC-10 Ph2 3Q Mars B 4Q 0% 50% 100% END 2010 2006 2007 2008 2009 2010FID TO FIRST PRODUCTION (TIME) IPA RESULTS65 Copyright of Royal Dutch Shell plc 03/02/2011
    • APPLYING NEW TECHNOLOGYTECHNOLOGY DEVELOPMENT AND DEPLOYMENT SUSTAINED INNOVATION  LNG, GTL  Enhanced oil recovery PROPRIETARY Today  Smart Fields TECHNOLOGY  Deepwater  Unconventional gas  Differentiated fuels  Floating LNG  CCS Emerging  Arctic SHELL  Advanced gas separation INTEGRATION  Coal bed methane to LNG Shaping the future  Next gen. biofuels 3RD PARTY SHELL PRODUCTS CAPABILITIES  Next gen. seismic Future  Maximized recovery  Efficient & clean fuels  Low Carbon Energy66 Copyright of Royal Dutch Shell plc 03/02/2011
    • WELL & RESERVOIR MANAGEMENT TECHNOLOGY2005 TODAY EMERGING Deepwater 4D Well Manufacturing Systems Radar, GPS Smart Wells Global DevelopmentSmart Wells Advanced EOR 4D Seismic Technologies Collaborative Work Environment Step Change in Seismic Imaging TECHNOLOGY PROGRESS ~200 Kboe/d of new production added from 2008-201067 Copyright of Royal Dutch Shell plc 03/02/2011
    • WELLS & RESERVOIR MANAGEMENT DELIVERY LEARNING CURVE ACCELERATION NA TIGHT GAS WELL AND RESERVOIR MANAGEMNTIndexed Well Delivery Time per year since first production Example: decline rate management UKCS: choke and injection optimization Kboe/d120 20100 80 15 60 40 Pinedale - 2002 Early Deep Basin - 2006 10 20 Deep Basin - 2008 Haynesville - 2008 Groundbirch - 2008 0 0 1 2 3 4 5 6 7 8 9 5 Years Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10  World-wide focus to maximize recovery and reduce cost  >90% operated assets now assessed for intervention  WRM added ~200 kboed 2008-2010 for Shell 68 Copyright of Royal Dutch Shell plc 15/03/2011
    • ROYAL DUTCH SHELL STRATEGY UPDATE APPENDIX SUPPORTING SLIDES DOWNSTREAM69 Copyright of Royal Dutch Shell plc 15/03/2011
    • DOWNSTREAM STRATEGYTHREE KEYS TO WINNING Operational Excellence  Brand  Cost discipline  Improving manufacturing availability  Asset integrity Concentrating the Portfolio  Re-focused asset base 2010  Maximize value in heartlands  3.2 mb/d refining & 6.0 mtpa chemicals Selective Growth capacity  Marketing + selective manufacturing  ~43 thousand retail sites, 79 countries  Product innovation  $2.4 billion asset sales  Brazil, Middle East and Asia Pacific  $8 billion cashflow  $2.4 billion net capital investment GLOBAL REACH & FULL VALUE CHAINS  $ 2 billion cost reduction 2009-1070 Copyright of Royal Dutch Shell plc 15/03/2011
    • IMPROVING MANUFACTURING PERFORMANCEIMPROVING PROCESS SAFETY UNPLANNED DOWNTIME# API process incidents150 Chemicals100 Refining 50 Excluding operational problems Pernis/Port Arthur 0 2007 2008 2009 2010 2006 2007 2008 2009 2010LEAN MANUFACTURING REFINING PORTFOLIORefining costs index Refinery capacity Kbbl/d110% 400 -11% 300100% 200 90% 100 80% 0 2008 2009 2010Excludes portfolio effects DIVESTMENTS 2002-2011 YTD* * SUBJECT TO SUCCESSFUL COMPLETION OF ANNOUNCED DEALS71 Copyright of Royal Dutch Shell plc 15/03/2011
    • LEADING BRAND & GROWTH POTENTIALMARKETING GROWTH GLOBAL BRAND PREFERENCE % 20 15 Trading Retail 10 5 0 Q3 2009 Q3 2010 Lubricants Aviation SOURCE: GLOBAL BRAND TRACKERDIFFERENTIATED FUELS GLOBAL LUBES MARKET LEADER% of total sales in V-Power markets Market share % 1416%14% 1212% 1010% 8 8% 6% 6 2005 2006 2007 2008 2009 2010 2002 2003 2004 2005 2006 2007 2008 2009 SOURCE: KLINE72 Copyright of Royal Dutch Shell plc 15/03/2011
    • DOWNSTREAM: MARKETING & TRADINGPERFORMANCEMARKETING EARNINGS TRADING EARNINGSCCS Earnings - $ Bln Indexed5 3004 20032 10010 0 2004 2005 2006 2007 2008 2009 2010 2004 2005 2006 2007 2008 2009 2010CCS EARNINGS EXCLUDING IDENTIFIED ITEMS CCS EARNINGS EXCLUDING IDENTIFIED ITEMSUS WHOLESALE CONVERSION INCREASES VOLUME LUBES GROWTH MARKETSUS Brandshare % Indexed12 50010 400 300 8 200 6 100 0 4 2005 2006 2007 2008 2009 2010 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 SHELL BP CHEVRON EXXON MOBIL Volume Margin before overheadsSOURCE: NPD BRAZIL, RUSSIA, INDIA, INDONESIA, CHINA73 Copyright of Royal Dutch Shell plc 15/03/2011
    • SELECTIVE DOWNSTREAM GROWTHPORT ARTHUR REFINERY EXPANSION, US GULF RAÍZEN (COSAN) BIOFUELS JV, BRAZILSINGAPORE CHEMICALS START-UP 2010 MARKETING: CHINA, BRAZIL, SE ASIA, RUSSIA74 Copyright of Royal Dutch Shell plc 15/03/2011
    • DOWNSTREAM GROWTH: DIFFERENTIATEDTECHNOLOGYLUBES TECHNOLOGY - ENABLING OEM PARTNERSHIPS NEW GROWTH WITH SULPHUR TECHNOLOGY Shell concept lubricant achieves 6.5% fuel economy benefit Managing all Shell‟s sulphur as a value added commodity through technical partnership with Gordon Murray DesignFUELS TECHNOLOGY - CREATING ADDITIONAL VALUE UP TO10% FUEL & CO2 REDUCTION Fuels technology is helping Shell to decommodotize fuels Shell FuelSave Partner is the new fuel management solution enabling additional margin capture for commercial transport fleets Vehicle Performance Shell Fuel Card Data “Improved performance“Save up to 1 Litre per tank” Driver Behaviour advanced technology”75 Copyright of Royal Dutch Shell plc 15/03/2011
    • INTEGRATED VALUE CHAINS – GLOBAL REACHINTEGRATED VALUE CHAIN UPSTREAM – DOWNSTREAM: CRUDE SUPPLY MAKE MOVE SELL Retail Heavy oil from Canadian oil sands Refining Business-to- Supply & Business Distribution Lubricants Chemicals Heavy oil from Brazilian Chemicals offshore fields TradingGTL PRODUCT PLACEMENT MAJOR INTEGRATED SITES NWE Gas Oil Hub Hamburg Base Oil Hub China Moerdijk/Pernis US Gulf Base Oil Hub Base Oil Hub AG Hub Gas Oil US Gulf Coast Nanhai, CN Pearl GTL Plant SADAF GTL Base Oils Singapore AG Hub GTL Gas Oil Jet Fuel GTL Jet Fuel GTL Paraffin Integrated chemical/refinery key site GTL Naphtha Key chemicals site 3rd Party Hub76 Copyright of Royal Dutch Shell plc 15/03/2011
    • CHEMICALS STRATEGYSTRATEGY EARNINGS CCS Earnings - $ Bln Weighted average margins $/t  Base chemicals and derivatives portfolio 2 500 (global #5 *) 400  Plant integration 300 1 200  Growth through accessing advantaged feedstock 100  Ethylene growth expected ahead of GDP 0 0 2005 2006 2007 2008 2009 2010 CCS EARNINGS EXCLUDING IDENTIFIED ITEMS USGC BASE CHEMICALS SHIFT TO GAS FEEDS Evolution of USGC industry cash margins + feedstock slate 450 350 250 150 Total feedslate 50 -50 2007 2008 2009 (end) 2010 Advantaged Gas Ethane CSPCL Nanhai, China Liquids USGC Ethane margin USGC Naphtha margin* ETHYLENE CAPACITY – 2010 CMAI77 Copyright of Royal Dutch Shell plc 15/03/2011
    • RAÍZEN (COSAN) JV: BRAZIL MARKETING ANDBIOFUELSSHARE OF BRAZILIAN RETAIL FUELS DISTRIBUTION% 40  Leading Brazil marketing player  4,470 retail sites, 53 depots30  Fuel sales volume ~18 billion litres per year20  Retail, commercial fuels10  JV synergies + growth potential 0 Petrobras Ultra Raízen AleSat OthersBRAZILIAN SUGARCANE PRODUCERSMln tonnes (estimate 2010/2011)60  Leading Brazil ethanol player40  Sugar cane capacity~60 mtpa from 23 mills  ~ 2 bln litres ethanol production capacity per year,20 growth aspiration to more than double volumes  Top 5 global ethanol player 0  Shell world-wide trading synergiesSOURCE: SINDICOM 2009 AND ANP78 Copyright of Royal Dutch Shell plc 15/03/2011