2012 Management Day London/New York - Global Gas Perspectives and Asia Pacific Outlook
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2012 Management Day London/New York - Global Gas Perspectives and Asia Pacific Outlook

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Shell hosted a management day with investors in London (Wednesday 14th November 2012) and New York (Thursday 15th November 2012) focusing on global gas perspectives and Asia Pacific outlook.......

Shell hosted a management day with investors in London (Wednesday 14th November 2012) and New York (Thursday 15th November 2012) focusing on global gas perspectives and Asia Pacific outlook. Presentations were lead by Chief Executive Officer, Peter Voser and Chief Financial Officer, Simon Henry followed by Andrew Brown (Director Upstream International) and Matthias Bichsel (Director Projects & Technology).

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  • 1. ROYAL DUTCH SHELL PLCINVESTOR UPDATELONDONNOVEMBER 14, 2012Copyright of Royal Dutch Shell plc 14 November, 2012 1
  • 2. SHELL: INDUSTRY LEADER IN NATURAL GAS LNG transport Malaysia: E11 platform supplying gas to Bintulu LNG/GTL plants Qatar: Pearl GTL China: Changbei drilling platfromCopyright of Royal Dutch Shell plc 14 November, 2012 2
  • 3. ROYAL DUTCH SHELL PLCLEADERSHIP IN GLOBAL GASPETER VOSERCHIEF EXECUTIVE OFFICERCopyright of Royal Dutch Shell plc 14 November, 2012 3
  • 4. DEFINITIONS AND CAUTIONARY NOTEThe companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate entities. In this presentation “Shell”, “Shell group” and “RoyalDutch Shell” are sometimes used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, the words “we”, “us”and “our” are also used to refer to subsidiaries in general or to those who work for them. These expressions are also used where no useful purpose is served byidentifying the particular company or companies. ‘‘Subsidiaries’’, “Shell subsidiaries” and “Shell companies” as used in this presentation refer to companies in whichRoyal Dutch Shell either directly or indirectly has control, by having either a majority of the voting rights or the right to exercise a controlling influence. The companiesin which Shell has significant influence but not control are referred to as “associated companies” or “associates” and companies in which Shell has joint control arereferred to as “jointly controlled entities”. In this presentation, associates and jointly controlled entities are also referred to as “equity-accounted investments”. The term“Shell interest” is used for convenience to indicate the direct and/or indirect (for example, through our 23% shareholding in Woodside Petroleum Ltd.) ownershipinterest 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 otherthan statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that arebased on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance orevents to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning thepotential exposure of Royal Dutch Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections andassumptions. 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. Thereare 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 theforward-looking statements included in this presentation, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand forShell’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition; (g) environmentaland physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of suchtransactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developmentsincluding potential litigation and regulatory measures as a result of climate changes; (k) economic and financial market conditions in various countries and regions; (l)political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval ofprojects and delays in the reimbursement for shared costs; and (m) changes in trading conditions. All forward-looking statements contained in this presentation areexpressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-lookingstatements. Additional factors that may affect future results are contained in Royal Dutch Shell’s 20-F for the year ended 31 December, 2011 (available atwww.shell.com/investor and www.sec.gov ). These factors also should be considered by the reader. Each forward-looking statement speaks only as of the date of thispresentation, 14 November 2012. Neither Royal Dutch Shell nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-lookingstatement 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 inferredfrom the forward-looking statements contained in this presentation. There can be no assurance that dividend payments will match or exceed those set out in thispresentation in the future, or that they will be made at all.We use certain terms in this presentation, such as resources, that the United States Securities and Exchange Commission (SEC) guidelines strictly prohibit us fromincluding in filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC websitewww.sec.gov. You can also obtain these forms from the SEC by calling 1-800-SEC-0330.Copyright of Royal Dutch Shell plc 14 November, 2012 4
  • 5. PROGRAMME TODAY Gas markets & Shell integrated gas strategy Simon Henry; Chief Financial Officer Maarten Wetselaar; Executive Vice President Upstream International Asia Pacific portfolio + strategy Andrew Brown; Upstream International Director Ann Pickard; Executive Vice President Australia HK Lim; Executive Chairman Shell China Project development Matthias Bichsel; Projects & Technology Director Rob Kretzers; Executive Vice President Projects India: Hazira LNG import terminalCopyright of Royal Dutch Shell plc 14 November, 2012 5
  • 6. GLOBAL ENERGY OUTLOOKDEMAND GROWTHEnergy demand outlook in million boe/d400 Energy demand +60% 2010 – 2050 Hydrocarbons dominate outlook Gas demand doubling 2010-2050300200100 MAJOR OPPORTUNITY FOR SHELL 0 1980 1990 2000 2010 2020 2030 2040 2050 Oil Solar Shell Natural gas Other renewables activities Biomas Nuclear Wind CoalCopyright of Royal Dutch Shell plc 14 November, 2012 6
  • 7. GAS: >250 YEARS GLOBAL SUPPLY Positive global support for gas Economic and jobs potential Reliable Balanced tight/shale regulation supply Contribution to a low-carbon future New supply chains emerging Growing Cleanest Fast & LNG from North America resource hydro- flexible base carbon Tight/shale gas in Europe, Africa, Asia Pacific Competitive New market opportunities Gas in transport Replacing liquid fuels in industry ABUNDANT AFFORDABLE ACCEPTABLECopyright of Royal Dutch Shell plc 14 November, 2012 7
  • 8. GAS DEMANDDEMAND BY SECTOR GAS DEMAND BY REGIONBcf/d % LNG Bcf/d Bcm/y500 500 5,000 15%400 400 4,000300 300 3,000 10%200 200 2,000 5%100 100 1,000 0 0% 0 - 1990 2000 2010 2020 2030 1990 2000 2010 2020 2030 Power Transport Asia Europe Industrial Other MENA Russia & Other Residential & Commercial % LNG of total Americas gas demand GLOBAL GROWTH OF GAS MARKET DEVELOPMENT STRONGLY DRIVEN BY REGIONAL THEMESCopyright of Royal Dutch Shell plc 14 November, 2012 8
  • 9. SHELL GAS VALUE CHAINS UPSTREAM Movable Modular Liquefaction systems Gas to Chemicals Converting gas to liquid (GTL) Liquefaction CHEMICAL PRODUCTS plant For plastics, coatings, detergents Shipping & Supply and Trading Distribution Regasifying LNG LNG traditional FUELS & LUBRICANTS GTL Road, ship, aviation LNG to transport NATURAL GAS Gas to Chemicals For cooking, heating, electrical power.Copyright of Royal Dutch Shell plc 14 November, 2012 9
  • 10. SHELL INTEGRATED GAS PERFORMANCEPRODUCTION AND SALES VOLUMES EARNINGS AND CASH FLOWkboe/d mtpa $ Billion800 25 10600 20 5 15400 10 0200 5 0 0 -5 2008 2009 2010 2011 Q3 12 2008 2009 2010 2011 Q3 12 (4 quarters (4 quarters Feedgas from non-integrated ventures Earnings CFFO excluding rolling) rolling) Integrated Production LNG sales volumes (RHS) Cash surplus Working CapitalRETURN ON CAPITAL IN SERVICE$ Billion50 30%40 20%3020 10% GROWTH DELIVERY + POTENTIAL10 >$20 BLN INVESTMENT POTENTIAL 2012-15 0 0% 2008 2009 2010 2011 Q3 12 (4 quarters Capital employed Capital in service rolling) Net capital investment ROCIS (RHS) Earnings exclude identified itemsCopyright of Royal Dutch Shell plc 14 November, 2012 10
  • 11. SHELL LNG TRADINGGLOBAL LNG PORTFOLIO LNG DESTINATIONS (SHELL) % of LNG sales volumes 100% Sakhalin 75% Cove Point Dubai Elba Spain QG-4 Baja Oman Hazira 50% Altamira Nigeria Shell LNG positions Malaysia + Brunei 25% LNG regasification NWS Pluto Trading flows 0% 2007 2011 2015 Asia-Pac Europe Americas 2007 2011 2015 90% CONTRACTED; 10% TRADED Long term VALUE OPTIMIZATION BETWEEN contracts 90% 90% 90% MARKETS % of LT contracts - oil 90% 80% 80% TREND TO PORTFOLIO GAS price linked CONTRACTS, ENHANCING Sales volumes DIVERSION POTENTIAL (mtpa) 13.2 18.8Copyright of Royal Dutch Shell plc 14 November, 2012 11
  • 12. SHELL LNG GROWTH + POTENTIALGLOBAL LNG PORTFOLIO 22 MTPA ON STREAM 7 MTPA UNDER CONSTRUCTION + 33% LNG Canada 20+ MTPA OPTIONS US LNG SHELL 7% GLOBAL On stream MARKET SHARE Abadi Under construction Prelude Sunrise Browse Arrow Options Wheatstone 2011-12 portfolio Gorgon developmentSHELL GLOBAL LNG CAPACITY GROWTH SHELL LNG LEADERSHIPmtpa year end mtpa50 30 ~90% long-term contracted40 ~80% of portfolio oil price linked30 2020 1010 0 0 2007 2012 ~2020+ Shell Exxon Chevron BG Total BP On stream Under construction Options 2011 2017Copyright of Royal Dutch Shell plc 14 November, 2012 PROJECTS ON STREAM OR UNDER CONSTRUCTION 12
  • 13. MANAGING OUR LNG PORTFOLIO + OPTIONS Arrow 50-50% Canada LNG acquisition with Indonesia: entry Browse +17% project Gorgon FID PetroChina Prelude FID in Abadi LNG acquisition from announcement Chevron 2010 2011 2012 Prelude 32.5% Woodside dilution -10% PetroChina 20% dilution to Inpex, participation in Kogas and CPC Groundbirch Canada STRATEGIC PARTNERS AND Acquisition Divestment SIZEABLE STAKES PORTFOLIO DIVERSITY & CHOICESCopyright of Royal Dutch Shell plc 14 November, 2012 13
  • 14. AMERICAS INTEGRATED GAS OPTIONSLNG Canada Green corridor Studying 12 mtpa at Kitimat gas-to-transport Shell’s integrated gas capabilities Shell 40% + strategic partners 0.25 mtpa at Jumping Pound Equity + industry resources base Natural hedge; oil/gas differentialWestern Canada gas resources Groundbirch resource potential Pennsylvania Gas- increased from 6 tcfe to >12 tcfe to-Chemicals Gas-to- Shell 80% transport GTL NEW GAS VALUE US LNG CHAINS Canada LNG US GTL US Gas-to- Gas-to- Green US LNG Chemicals transport Corridor Start- Assess Select Define FID Execute up Operate Feasibility Concept Project Ramp-up to Construction Study Selection Specifications full capacityCopyright of Royal Dutch Shell plc 14 November, 2012 14
  • 15. LNG TO TRANSPORTROAD TRANSPORT SHIPPING FUTURE OPTIONS Canada Green Corridor Offshore shipping Mining US Gulf Coast and Great Lakes long Inland barges Rail distance trucking options Fraccing TravelCenters of America FAST MOVING LNG OPPORTUNITY Gate LNG Green Corridor FID terminal HOA GROWTH DRIVEN BY PRICE EMISSION ADVANTAGE 2011 2012 GAS AVAILABILITY ASSESSING >5 MTPA LONG TERM Travelcentres of Gassnor OPPORTUNITIES America MOU aquisitionCopyright of Royal Dutch Shell plc 14 November, 2012 15
  • 16. STRATEGIC PARTNERSHIPS: CHINA CNPC/Petrochina Sinopec 2011: Canada tight gas/LNG 2010: China gas exploration 2010: Qatar CNOOC Retail 2005: Nanhai exploration Chemicals 2011: 2012 Deepwater Drilling JV Gabon exploration 2010: Arrow LNG Nanhai – Chemicals plant BROAD + LONG-TERM COOPERATION:  CHINA DOWNSTREAM + LNG SALES  CHINA EXPLORATION  INTERNATIONAL PARTNERSHIPSCopyright of Royal Dutch Shell plc 14 November, 2012 16
  • 17. TIGHT/SHALE GAS EXPLORATIONCHINA UKRAINE SOUTH AFRICA Russia Zitong Jinqiu JAA Blocks Karoo Fushun Ukraine Yuzivska 0 100 km 0 100 km 0 100 km 3 blocks tight /shale Yuzivska : tight gas/shale: Karoo Basin; 90,000 km2 8,500 km2 7,800 km2 under application Shell 50% Multi-tcf tight/shale gas Shell 100 % potential Moratorium lifted September Shell 50 % 2012 MAJOR EXPLORATION PLAYS FOR NEW GAS POTENTIALCopyright of Royal Dutch Shell plc 14 November, 2012 17
  • 18. LEADERSHIP IN GLOBAL GAS International gas value chains Deep relationships with key customers Global presence + portfolio approach SHELL POSITIONED FOR RAPID + PROFITABLE GAS GROWTH Nigeria LNG – Bonny IslandCopyright of Royal Dutch Shell plc 14 November, 2012 18
  • 19. ROYAL DUTCH SHELL PLCLNG MARKETSSIMON HENRYCHIEF FINANCIAL OFFICERCopyright of Royal Dutch Shell plc 14 November, 2012 19
  • 20. LNG MARKET DEVELOPMENTLNG IMPORT COUNTRIES Brunei LNG ship 1978 Nakilat LNG ship 2011 1990 2010 2020LNG SUPPLYmtpa No. of countries QG4 North West Shelf Prelude FLNG Pluto Sakhalin Wheatstone 300 Gorgon 30 Importing Countries Oman LNG Nigeria LNG Malaysia Tiga 25 Exporting Countries 200 Malaysia Dua 20 Volumes sold Estimate 15 FID Shell 100 10 On stream 5 0 0 1990 1995 2000 2005 2010 2011 FY Estimate 2012Copyright of Royal Dutch Shell plc 14 November, 2012 20
  • 21. LNG SUPPLY AND DEMAND DYNAMICSLNG DEMAND LNG SUPPLY*Mtpa Mboe/d Mtpa Mboe/d600 15 600 15500 500400 10 400 10300 300200 5 200 5100 100 0 0 0 0 2000 2005 2010 2015 2020 2025 2000 2005 2010 2015 2020 2025 Japan/Korea/Taiwan SE Asia Asia ME & East Africa Europe China Qatar Americas West coast India Other West Africa Americas East coast Australia Arctic DEMAND DOUBLE 2010 – 2020 SUPPLY RESPONSE >$700 BILLION IDUSTRY INVESTMENT 2010-2025 * Risked view of all LNG supply projectsCopyright of Royal Dutch Shell plc 14 November, 2012 21
  • 22. REGIONAL GAS DEMAND DEVELOPMENTASIA DEMAND NORTH AMERICA DEMANDBcf/d Bcf/d120 Asia Supply 120 Other Asia100 100 Other SE Asia N.A. Supply 80 Malaysia 80 Residential & 60 India 60 Commercial China Other 40 40 Taiwan Power 20 Korea 20 Industrial 0 Japan 0 Transport 2000 2010 2020 2030 2000 2010 2020 2030EUROPE DEMAND MIDDLE EAST DEMANDBcf/d Bcf/d120 120100 100 UAE 80 80 Saudi Arabia 60 60 Iraq Europe Supply Iran 40 40 Residential & Commercial Oman 20 Power 20 Israel Industrial Other ME 0 0 2000 2010 2020 2030 2000 2010 2020 2030Copyright of Royal Dutch Shell plc 14 November, 2012 22
  • 23. CHINA GAS – SUPPLY & DEMANDCHINA GAS DEMAND GAS SUPPLY MIXBcf/d Bcf/d60 6050 5040 40 Imports ~30%30 3020 20 Domestic ~70%10 10 0 0 2005 2010 2015 2020 2025 2030 2005 2010 2020 2030 Residential & Commercial Transport Others LNG Pipeline Domestic Gas Industrial PowerPRIMARY ENERGY MIX% (2010 data)100% 50% DEMAND OUTLOOK REQUIRES BOTH DOMESTIC & IMPORT GAS GROWTH 0% China Japan South Korea US Gas Oil Nuclear Other renewables Coal Hydro Other solid fuelsCopyright of Royal Dutch Shell plc 14 November, 2012 23
  • 24. NORTH AMERICA LNG POTENTIALINDUSTRY LNG EXPORT PLANS NORTH AMERICAN LNG EXPORT DEVELOPMENT Kenai LNG mtpa Bcf/d Valdez Total NA application Canada LNG USA GoM + East Sanctioned projects Kitimat Coast potential BC LNG 2025: ~130mtpaCanada + US WestCoast potential 2025:~30 mtpa Jordan Cove Sabine Pass Oregon Lake Charles Cameron Cove Point Freeport Gulf LNG Corpus Christi Gulf Coast Port Arthur LNG Production Lavaca Bay Elba Island LNG export facility – application filed Sanctioned MAJOR OPPORTUNITY FOR AMERICA GAS INDUSTRY PERMITTING > $300 BLN INDUSTRY FINANCING REQUIREMENT PRICE AND MARKET CONSIDERATIONSCopyright of Royal Dutch Shell plc 14 November, 2012 24
  • 25. LNG PRICING CONSIDERATIONSLNG PRICE DYNAMICS – US EXPORTS REGIONAL GAS PRICES$/mmbtu $/mmbtu25 2520 Tokyo Bay UK 2015 1510 10 5 5 0 0 Cost structure Japan landed Cost structure UK NBP 2005 2006 2007 2008 2009 2010 2011 2012 LNG price 2010-12 2010-12 Henry Hub (US) National Balancing Point (UK) Liquefaction Landed Cost Brent + transport costs Japan landed LNG price HH outlookCopyright of Royal Dutch Shell plc 14 November, 2012 25
  • 26. ASIA LNG PRICING DYNAMICSASIA LNG PRICING HISTORY LNG CONTRACTS: OIL PRICE LINKED$/mmbtu 2010/2011 LNG contracts (Industry)25 $/mmbtu 2020 1515 10 90 100 110 120 Brent oil price - $/bbl10 Industry Oil Price Parity range 5 Brent-5 ($/mmbtu) LNG PRICED VS. OIL Japan/Korea/Taiwan ($/mmbtu) RECENT CONTRACTS REFLECTING CURRENT OIL MARKETS Weighted Average Cost of LNG imports Includes spot volumes LEGACY CONTRACTS REVISED TO 0 NEW OIL PRICE WORLD 2000 2002 2004 2006 2008 2010 2012 Range includes contracts with S-curves.Copyright of Royal Dutch Shell plc 14 November, 2012 26
  • 27. SHELL + LNGSHELL PRODUCTION Diverse + growingMillion boe/d4 customer base Sector requires sustained3 GAS + large scale investment ~25% GAS hub based to meet demand pricing2 OIL OIL PRICE LNG pricing reflects PRICE LINKED LINKED capital intensity and1 ~75% oil OIL linked OIL supply security0 Production Price Production Price Split Exposure Split Exposure 2011 2017/18 2011 GROWTH IN GAS SHELL POSITIONED FOR RAPID LOCKING IN OIL PRICE EXPOSURE + PROFITABLE LNG GROWTHCopyright of Royal Dutch Shell plc 14 November, 2012 27
  • 28. ROYAL DUTCH SHELL PLCASIA PACIFIC GROWTHOUTLOOKANDREW BROWNDIRECTOR UPSTREAM INTERNATIONALCopyright of Royal Dutch Shell plc 14 November, 2012 28
  • 29. UPSTREAM ASIA PACIFICASIA PACIFIC PRODUCTION SUBSTANTIAL UNDEVELOPED RESOURCES GAS GROWTH OPPORTUNITY EXPLORATION LNG TIGHT/SHALE Philippines Malaysia & Brunei SUSTAINING PRODUCTION + ASSET INTEGRITY North West Shelf HEARTLANDS EXPLORATION EXTENDING PRODUCTION LIFE SELECTED HUB GROWTH Traditional Integrated Gas Deepwater Tight/shaleCopyright of Royal Dutch Shell plc 14 November, 2012 29
  • 30. ASIA PACIFIC HISTORY 2007 China ChangbeiASIA PACIFIC PRODUCTION start-upKboe/d 2001 1995 Philippines Malaysia Malampaya DUA LNG start-up start-up 600 ~1890 Indonesia: Brunei LNG 1972 First ocean going LNG 1993 wooden derrick carrier “Methane Pioneer” Bintulu GTL plant start-up 1972 1983 Brunei MLNG LNG First 400 start-up LNG 1955 plant Brunei Seria crude oil terminal Indonesian nationalisation 200 1929 Brunei first oil discovery 1910 Malaysia first oil discovery World War II 0 1907 1917 1927 1937 1947 1957 1967 1977 1987 1997 2007Copyright of Royal Dutch Shell plc 14 November, 2012 30
  • 31. ASIA PACIFICMAIN GROWTH ENGINE IN UPSTREAM INTERNATIONALCAPITAL INVESTMENT$ Billion OIL & GAS PRODUCTION CAPITAL EMPLOYED Prelude FID 531 kboe/d $24 bln 8 Abadi Gorgon FID 6 Abadi EARNINGS CASH FLOW FROM OPERATIONS 4 Arrow $4.9 bln $5.7 bln 2 0 Prelude Woodside-2 Other Upstream Asia Pacific Q3’12 (4Q rolling)-4 2009 2010 2011 Q312 (4Q rolling) Acquisitions CONTINUED INVESTMENT IN Organic HEARTLANDS Divestments NEW INTEGRATED GAS PROJECTS EXPLORATION OPPORTUNITIESCopyright of Royal Dutch Shell plc 14 November, 2012 31
  • 32. ASIA PACIFIC PORTFOLIO DEVELOPMENTUNDER CONSTRUCTION….. …. OPTIONS Sabah Gas Kebabangan Gumusut Kakap Prelude NWS Gas – GWF-Ph 1 North Rankin Gorgon T1-3 Wheatstone Traditional Integrated Gas 365 KBOE/D*; 7 MTPA UNDER CONSTRUCTION Deepwater 375 KBOE/D*; 11 MTPA OPTIONS Exploration * Production on a Shell working interest basisCopyright of Royal Dutch Shell plc 14 November, 2012 32
  • 33. INVESTING IN TRADITIONAL HEARTLANDSMALAYSIA + BRUNEI Barton South Furious Sabah Gas North Sabah - KBB St Joseph Malikai 2B Gumusut-Kakap CA2 Geronggong M1 A Maharaja Lela Sabah SK318 ML South Champion M3 Fairley Waterflood F23 Cili Padi Ampa BDO F6 Brunei LNG Bokor Tukau Timur SK319 E11 2012 Tukau Timur Deep Gas Discovery Sarawak Malaysia LNG Bintulu On stream Exploration licenses NEAR-FIELD COMMERCIALISATION Under construction 2010-12 license additions/extensions EXPLORATION REJUVENATION Options Gas Oil pipelines GROWTH THROUGH TECHNOLOGYCopyright of Royal Dutch Shell plc 14 November, 2012 33
  • 34. MALAYSIA + BRUNEI GROWTH HUBS Gumusut-Kakap Champion Waterflood Sabah gas Kebabangan Malikai ML South 5 MAJOR PROJECTS >350 KBOE/D (100%)Copyright of Royal Dutch Shell plc 14 November, 2012 34
  • 35. ENHANCED OIL RECOVERY POTENTIAL Locations of EOR projects NORTH SABAH AND BARAM DELTA 2011 agreement to extend PSCs North Sabah North Sabah Shell 50% (operator), Baram Delta Shell 40% Advanced technology offshore EOR 10% (Baram Delta) & 20% (North Sabah) recovery Baram Delta factor increase < 450 million boe new resources 0km 50 ~100,000 BOE/D PRODUCTION EXTENDED FIELD LIFE >2040 Using surfactants to improve recoveryCopyright of Royal Dutch Shell plc 14 November, 2012 35
  • 36. LNG PERFORMANCE GLOBAL LNG PORTFOLIO RELIABILITY 100% 80% 60% 40% 2007 2008 2009 2010 2011 Year to Brunei LNG Date Q3/12 SAKHALIN LNG CAPACITY UTILIZATION Production as % of nameplate capacity 120% TOP QUARTILE GLOBAL LNG RELIABILITY PERFORMANCE 100% 80% 60% 2010 2011 2012 estimateCopyright of Royal Dutch Shell plc 14 November, 2012 36
  • 37. NON-OPERATED LNG DEVELOPMENTSPLUTO LNG GORGON LNG WHEATSTONE LNG FID 2009, Shell 21%* FID 2009, Shell 25% FID 2011, Shell 6.4% Production 140 kboe/d Production 440 kboe/d Production 260 kboe/d 4.3 mtpa LNG facility 15.6 mtpa LNG facility (3 8.9 mtpa LNG facility (2 trains) Start-up Q2 2012 trains) Chevron operated Woodside operated CO2 injection project (> 3 mtpa) Chevron operated* Indirect stake via WoodsideCopyright of Royal Dutch Shell plc 14 November, 2012 37
  • 38. AUSTRALIA/INDONESIALNG GROWTH PORTFOLIO Abadi FLNG GLOBAL LNG DEVELOPMENT OPTIONS Sunrise FLNG Mtpa (Shell) nameplate capacity Arrow 50 Browse Prelude FLNG 40 Prelude & North West Shelf Gorgon T1-3 Wheatstone 30 Pluto 20 Gorgon 10 0 Year to Date 2012 ~2020+ 0km 500 Wheatstone On stream Under Construction Options On stream Shell Interest Under construction SHELL ASIA PACIFIC LNG VOLUMES Million tonnes/year sales volumes Options 52% 15 ASIA/PACIFIC LNG: 10 52% 52% 38% 9 MTPA ON STREAM 5 7 MTPA UNDER CONSTRUCTION 0 2007 2009 2011 2017/18 Brunei Malaysia Australia % = Asia Pacific of total Shell sales volumesCopyright of Royal Dutch Shell plc 14 November, 2012 38
  • 39. FLOATING LNG: PORTFOLIO DEVELOPMENT Sunrise FLNG 4.1 mtpa (Woodside operator) FLOATING LNG ~5 tcf + 200 mln bbls NGL’s resources LEADERSHIP Shell 34% 2011: FIRST INDUSTRY FID Abadi FLNG ON FLNG ON PRELUDE 2.5 mtpa (Inpex operator) ~15 tcf resources CONSTRUCTION SOUTH Shell 30% KOREA: OPTIONS FOR FURTHER PROJECTS TARGETING NEW EXPLORATION FOR FLNGPrelude FLNG 5.3 mtpa: 3.6 mtpa LNG + 1.7 mtpa liquids (Shell operator) SHELL FLOATING LNG 110 kboed; ~3 tcf Shell 67.5% + strategic partners Abadi Sunrise Prelude Start- Assess Select Define FID Execute up Operate Feasibility Concept Project Ramp-up to Construction Study Selection Specifications full capacityCopyright of Royal Dutch Shell plc 14 November, 2012 39
  • 40. ABADI LNG: INDONESIA Phase 1: FLNG development 2.5 mtpa of LNG Preparations for FEED on going East Timor 2013: drilling ~ 3 wells Abadi Peak production Phase 1 ~65 kboe/d Indonesia Sunrise Major gas field >15 Tcf resources Evans Shoal 400-700m water depth Australia 0km 200 Shell Interest ABADI: SHELL ENTRY 2011 (30%) Abadi development concept (courtesy of Inpex) FLNG OPPORTUNITYCopyright of Royal Dutch Shell plc 14 November, 2012 40
  • 41. ARROW ENERGY: AUSTRALIA Surat Co-Existence Engagement Bowen Basin Surat Basin Bow Acreage Addition 0km 300 Shell Interest Gas Pipelines ______Curtis Island Shell 50% Currently supplying >15% of Queensland’s domestic gas ~ 70 mmscf/day FEED on 2 x 4 mtpa LNG project Development decisions timed versus local labour & contracting market Assessing options with third parties ASSESSING LNG OPPORTUNITY Resources ~ 8 tcf (100%)Copyright of Royal Dutch Shell plc 14 November, 2012 41
  • 42. EXPLORATION ASIAMALAYSIA + BRUNEI EXPLORATION CHINA OFFSHORE Geronggong 2B CA2 A SK318 Yinggehai SK319 62/02 Tukau Timur Deep 62/17 0km 50 0km 50 Gas Oil pipelines Recent Exploration Success Exploration licenses 2010-12 license / extensions ~17,500 km2 new acreage in 2010-12 6,000 km2 in two offshore blocks in 2012 Large scale 2D and 3D seismic programmes Shallow water depths, proven gas province > 20 wells in Brunei+ Malaysia in 2013 CNOOC partnership 3D seismic acquisition planned for 2013Copyright of Royal Dutch Shell plc 14 November, 2012 42
  • 43. EXPLORATION – AUSTRALIA NORTH WEST SHELF Sunrise FLNG 12+ Tcf Shell share Evans Shoal 2012 added since 2005 <$1/boe Browse LNG Outer Browse 2012 33,000 km2 new Prelude FLNG acreage added in Canning 2011 2011-12: Canning and Pluto LNG Browse Gorgon NWS 2 new gas discoveries in 2012: Satyr 2/4 Satyr Wheatstone 0km 200 On stream Under construction Options Shell licenses 2011-12 additions Exploration success Shell gas pipeline CONSISTENT DELIVERY CONTINUED PORTFOLIO BUILDCopyright of Royal Dutch Shell plc 14 November, 2012 43
  • 44. SHELL CHINA UPSTREAM PORTFOLIOACREAGE BUILD-UPKm2 (000) 20 10 0 < 10 10 11 12 Changbei + extension Zitong Jinqiu Fushun GAS PRODUCTION EXPLORATION ONSHORE/OFFSHORE LNG IMPORTS > 2 MTPA On stream Tight/shale gas ~1 BLN/YEAR INVESTMENT Offshore CBM YinggehaiCopyright of Royal Dutch Shell plc 14 November, 2012 44
  • 45. CHINA: CHANGBEI GAS FIELDChangbei: drilling site CHANGBEI GAS  2005: PSC (Shell 50%, PetroChina 50%)  2007: commercial gas production  2009: Achieved ~300 mmscf/d production 2 years ahead of schedule  Production Reliability > 95% NEW CHANGBEI  PSC amendment signed July 2012  Same acreage, new reservoirs  Appraisal drilling 2013, FID planned 2014 CHANGBEI PRODUCTION POTENTIAL Mmscf/d (100%) New potential 400 Changbei 200 0km 50 0 2006 2009 2012 2015 2018 Exploration licenseCopyright of Royal Dutch Shell plc 14 November, 2012 45
  • 46. CHINA – TIGHT/SHALE GAS EXPLORATIONEARLY SUCCESS: JINQIU AND FUSHUN SICHUAN BASIN ACREAGE + ACTIVITY Km2 (000) Cumulative # wells 10 40 5 20 0 0 09 10 11 12 13 Acreage (km2) # wells Quilin -3 (Jinqiu) Yang (Fushun) Acquisition of Zitong block October 2012 24 wells 2010-12; 20 planned for 2013 STRATEGIC PARTNERSHIPS WITH CNPC Drilling results DRILLING JOINT VENTURE WITH Exploration narrowing down on sweet spots GREAT WALL (SIRIUS) Good quality shale + positive test results 3 LICENSES: ~ 8,500 KM2 (2.1 Extended flowback testing planned MILLION ACRES)Copyright of Royal Dutch Shell plc 14 November, 2012 46
  • 47. DEVELOPMENT PACECANADA: GROUNDBIRCH CHINA: JINQIU 0 20 km 0 20 km Shell wells Shell interest Shell pipelines 7 years in development – good geology understanding  ~2 years in exploration phase of development ~ 1,500 industry wells  ~10 industry wells Well developed pipeline infrastructure  Densely populated & developing legal framework Developed rig and fraccing support industry  Developing rig and fraccing support industry Clear regulatory framework (water supply & disposal)  Water treatment solutions in development  Limited gas transport infrastructure developedCopyright of Royal Dutch Shell plc 14 November, 2012 47
  • 48. GROWTH POTENTIAL – ASIA PACIFICPRODUCTION + OUTLOOK Kboe/d 800 SUBSTANTIAL UNDEVELOPED RESOURCES 700 GAS GROWTH OPPORTUNITY NEW 600 GROWTH EXPLORATION LNG 500 TIGHT/SHALE 400 300 SUSTAINING PRODUCTION + ASSET 200 TRADITIONAL INTEGRITY HEARTLANDS HEARTLANDS EXPLORATION 100 EXTENDING PRODUCTION LIFE SELECTED HUB GROWTH 0 2000 2011 2017/18 Brunei Thailand Malaysia China Australia Philippines New ZealandCopyright of Royal Dutch Shell plc 14 November, 2012 48
  • 49. ROYAL DUTCH SHELL PLCPROJECTS & TECHNOLOGYMATTHIAS BICHSELDIRECTOR PROJECTS & TECHNOLOGYCopyright of Royal Dutch Shell plc 14 November, 2012 49
  • 50. SAFETY IN SHELL‘GOAL ZERO’ ON SAFETY SAFE AND RELIABLE OPERATIONSInjuries – TRCF/mln working hours million working hours Consequences5 900 Hazard Control & Response & Barriers Incident Recovery4 800 Minimize Mitigate3 700 likelihood consequences2 600 SAFETY PERFORMANCE1 500 Personal and process safety Rigorous global standards0 400 03 04 05 06 07 08 09 10 11 Q3 12 12 months Million working hours (RHS) rolling TRCFCopyright of Royal Dutch Shell plc 14 November, 2012 50
  • 51. INTEGRATED PROJECTS & TECHNOLOGYORGANISATION CONTRACTING & PROCUREMENT TECHNOLOGY INNOVATION PROJECT SOLUTIONS & SAFETY & R&D EXECUTION DEPLOYMENT ENVIRONMENT Right Right concept Design one – technology Build many Implementation Performance and replication Top quartile management performance SAFE & RELIABLECopyright of Royal Dutch Shell plc 14 November, 2012 51
  • 52. DELIVERING TOP-QUARTILE PROJECTS TOP QUARTILE PROJECTS CONTRACTING & PROCUREMENT On time, on budget TALENT TECHNOLOGY Safe and reliable Production TOOLS / PROCESSES DISCIPLINEDValue EXECUTION INTEGRATION STANDARDISATION INNOVATION REPLICATION Assess Select Define ExecuteCopyright of Royal Dutch Shell plc 14 November, 2012 52
  • 53. STANDARDISATION : BRUNEI SHELFFROM BESPOKE… …TO STANDARDISATION West Pelaut drilling on Champion West platform Mampak platform Installation of Bugan Topsides Sail-away of SKID topsides 2005: 2008: 2009: 2010/2011: Champion West Mampak Block 4 Bugan Phase 2 Selangkir Ironduke (SKID) Water depth: 43m Water depth: 43m Water depth: 35m Water depth: 51m FID to 1st HC: 36 months FID to 1st HC: 28 months FID to 1st HC: 22 months FID to 1st HC: 13 months Facilities costs: -7% Facilities costs: -24% Facilities cost: -15%PERFORMANCESchedule improvement STANDARDISATION THROUGH: 2005: Champion West Framework agreements 2008: In-house feed Mampak FASTER 2009: One fabrication yard and Bugan installation contractor 2010/11: SKIDCopyright of Royal Dutch Shell plc 14 November, 2012 53
  • 54. REPLICATION AND REPEAT EXECUTIONREPLICATION AND SIMPLIFICATION SHELL TENSION LEG PLATFORMS – SCHEDULE IMPROVEMENT Mars-A Olympus (Mars-B) Design and Fabrication Year Execution 2 1 3 4 5 6 Auger Mars- B REPEAT EXECUTION Continuity of staff One design and subsea contractor In-house engineering BEST IN CLASS BY LEVERAGING REPLICATION1993 1996 1997 1999 2001 OLYMPUS MALIKAIAUGER MARS-A RAM-POWELL URSA BRUTUSCopyright of Royal Dutch Shell plc 14 November, 2012 54
  • 55. BENCHMARKING & CONTINUOUS IMPROVEMENTDRILLING LEARNING CURVE DRILLING BENCHMARKINGIndexed well delivery time per year since first production Quartile performance curves – days versus measured depth Pinedale Deep Basin Pinedale & Haynesville Groundbirch Magnolia Groundbirch100% 100 Eagle Ford Appalachia Arrowhead SWAN Marcellus 75% Jiniqui 50% 50 25% Efficiency (drill days) improving with each new global asset 0 0% 7000 12000 17000 Depth (feet) 0 1 2 3 4 5 6 7 8 9 10 11 12 2011/2012 data Shell wells Industry wells 1st quartileUPSTREAM FACILITIES COMPONENT COST (IPA) CONTINUOUS IMPROVEMENT IN FRONT-END LOADING TRANSFER OF KNOWLEDGE AND INNOVATIONS 2006 2007 2008 2009 2010 2011 DISCIPLINED DELIVERY 1Q 2Q 3Q 4QCopyright of Royal Dutch Shell plc 14 November, 2012 55
  • 56. CONTRACTING & PROCUREMENTCOSTSLOW COST COUNTRY SOURCING# of suppliers (Brazil, China, India, Mexico) $ billion Shell no.1 IOC in sourcing from China 200 5 20 to 25% savings 150 4 3 14 global agreements awarded in China 100 2 and 2 in India 50 1 Example: fabrication agreements demonstrate 0 0 20 to 40% savings 2008 2009 2010 2011 2012E Qualified suppliers SpendGLOBAL PURCHASING AGREEMENTS% spend through global purchasing agreements60% Significant value opportunities40% External benchmarking confirming price competitiveness of global purchasing agreements20% Example: metal pipes 15% to 50% below market 0% 2010 2011 Q3 2012 Shell managed 3rd party contracting & procurement spendCopyright of Royal Dutch Shell plc 14 November, 2012 56
  • 57. COST MANAGEMENT IN AUSTRALIAMITIGATE COST INFLATION IN AUSTRALIA INDUSTRY COST INFLATION: AUSTRALIA % Cumulative inflation (end 2009 = 100) Off-shoring: 50% Floating LNG 40% Project phasing: 30% Arrow LNG 20% Technology: 10% New onshore drilling concepts for Arrow 0% 2010 2011 2012 2013 2014 Contract management: Land Rigs Equipment Construction Labor Leveraging global purchasing agreements Subsea Yards - Fabrication Source: IHS/CERA Noble Clyde Boudreaux rig arriving in Australia Arrow Australia: compression stationCopyright of Royal Dutch Shell plc 14 November, 2012 57
  • 58. CONTRACTING & PROCUREMENTCOMPETITIVENESS: DEEPWATER RIGSCOMPETITIVE DEEPWATER RIG RATES ULTRA DEEPWATER RIG MARKET (CONTRACTS > 3 YEAR) Operating day rate ($000) 650 600 550 Transocean contract 500 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Deployment of Bully-1 and Globetrotter-1 rigs Shell Industry Source: IHS Petrodata, drilling contractor investor news itemsDEEPWATER RIGS COMPETITIVE POSITIONDay rate in ‘000 USD 550 COMPETITIVE DEEPWATER RIG RATES 500 Long-term demand management: 23 rigs 450 under contract New rig technology; selective ownership 400 2012 2013 2014 2015 2016 Standardization Shell all UDW contracts CVX, XOM, TOT, BPCopyright of Royal Dutch Shell plc 14 November, 2012 58
  • 59. WELLS MANUFACTURING JV: SIRIUSTIGHT/SHALE/CBM DRILLING 50/50 CNPC/SHELL JOINT VENTURE  Drilling efficiency  Contracts signed with Arrow, Australia in August 2012; Opportunities in China and North America  Staff: 200 in 2012 expected to increase to 1,900 by 2016  Purpose-built :  2012: 6 automated drilling rigs and 1 fracturing unit  2013 – 2015: ~50 rigs and fracturing units TARGET HIGH DENSITY DRILLING & RESOURCE-INTENSIVE PLAYS  Achieve ultra low-cost wells Movable rig design  Leveraging capabilities both partnersCopyright of Royal Dutch Shell plc 14 November, 2012 59
  • 60. PRELUDE FLNG PROJECT –UPDATE Subsea and wells AUSTRALIA Technip Oceania Well heads First well (offshore installation) first steel cut expected to September spud January Noble Clyde 2011 2013 Boudreaux (drilling rig) NORWAY FMC Technologies (subsea control module) Turret mooring MALAYSIA system FMC Technologies (subsea Xmas trees first steel cut FLNG substructure & subsea manifolds May 2012 first steel cut wellheads) October 2012 FLNG detailed design Turret Mooring System FLNG substructure and FLNG boilers and engineering construction topsides construction construction FRANCE, DUBAI KOREA JAPAN MALAYSIA SBM Samsung Heavy Kawasaki Heavy AND INDIA Subcontracted to Industries shipyard Industries Technip Samsung DryDocks World (Marine steam boilers) ConsortiumCopyright of Royal Dutch Shell plc 14 November, 2012 60
  • 61. PROJECT PROGRESS IN MALAYSIAGUMUSUT-KAKAP SABAH GAS KEBABANGAN MALIKAI Floating Production System Integrated oil & gas production 1st Tension Leg Platform (TLP) oil & gas facility platform hub in Malaysia Early production opportunity Gas/oil exported via KBB pipelines 17 wells, oil producers & (Q4 2012): 2-well subsea tie back to to the Petronas Carigali Sabah water injectors the Kikeh FPSO facilities Oil & Gas Terminal FID pending Topsides and hull fabrication Pipelay installation completed 60 kboe/d; Shell 35% (operator) MMHE yard September 2012 135 kboe/d; Shell 33% (operator) Jacket fabrication Kencana HL yard Topsides fabrication MMHE yard 130 kboe/d; Shell 30%Copyright of Royal Dutch Shell plc 14 November, 2012 61
  • 62. DELIVERING NEW TECHNOLOGY SMART Fields® Technology Micro-electro-mechanical systems (MEMS) Flying nodes Solar Steam for EORCopyright of Royal Dutch Shell plc 14 November, 2012 62
  • 63. INNOVATING FOR THE FUTURE GLOBAL REACH AND CAPABILITIES China Norway Canada Germany UK Netherlands USA Qatar Oman India FLEXIBLE ORGANISATION AND PEOPLE CAPABILITY DISCIPLINED DELIVERY…WITH INNOVATION EMBEDDED DIFFERENTIATING TECHNOLOGIES DEPLOYMENT OF TECHNOLOGY AT SCALECopyright of Royal Dutch Shell plc 14 November, 2012 63
  • 64. ROYAL DUTCH SHELL PLCINVESTOR UPDATELONDONNOVEMBER 14 2012 14,Copyright of Royal Dutch Shell plc 14 November, 2012 68