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Media webcast presentation Royal Dutch Shell plc second quarter 2013 results
 

Media webcast presentation Royal Dutch Shell plc second quarter 2013 results

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Peter Voser, CEO of Royal Dutch Shell plc, presented the Royal Dutch Shell plc second quarter 2013 results on August 1, 2013.

Peter Voser, CEO of Royal Dutch Shell plc, presented the Royal Dutch Shell plc second quarter 2013 results on August 1, 2013.

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    Media webcast presentation Royal Dutch Shell plc second quarter 2013 results Media webcast presentation Royal Dutch Shell plc second quarter 2013 results Presentation Transcript

    • Copyright of Royal Dutch Shell plc 1 August, 2013 1 DELIVERING INNOVATIVE & COMPETITIVE PERFORMANCE Lubricants Zhuhai blending and filling plant, China, 2009 SECOND QUARTER 2013 RESULTS ROYAL DUTCH SHELL PLC 1 AUGUST 2013
    • Copyright of Royal Dutch Shell plc 1 August, 2013 2 BC-10, offshore Floating Production Storage and Offloading facility, Brazil, 2013 PETER VOSER CHIEF EXECUTIVE OFFICER ROYAL DUTCH SHELL PLC DELIVERING INNOVATIVE & COMPETITIVE PERFORMANCE
    • Copyright of Royal Dutch Shell plc 1 August, 2013 3 The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate entities. In this presentation “Shell”, “Shell group” and “Royal Dutch Shell” are sometimes used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, the words “we”, “us” and “our” are also used to refer to subsidiaries in general or to those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company or companies. ‘‘Subsidiaries’’, “Shell subsidiaries” and “Shell companies” as used in this presentation refer to companies in which Royal Dutch Shell either directly or indirectly has control, by having either a majority of the voting rights or the right to exercise a controlling influence. The companies in which Shell has significant influence but not control are referred to as “associated companies” or “associates” and companies in which Shell has joint control are referred to as “jointly controlled entities”. In this presentation, associates and jointly controlled entities are also referred to as “equity-accounted investments”. The term “Shell interest” is used for convenience to indicate the direct and/or indirect (for example, through our 23% shareholding in Woodside Petroleum Ltd.) ownership interest held by Shell in a venture, partnership or company, after exclusion of all third-party interest. This presentation contains forward-looking statements concerning the financial condition, results of operations and businesses of Royal Dutch Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Royal Dutch Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as ‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’, ‘‘intend’’, ‘‘may’’, ‘‘plan’’, ‘‘objectives’’, ‘‘outlook’’, ‘‘probably’’, ‘‘project’’, ‘‘will’’, ‘‘seek’’, ‘‘target’’, ‘‘risks’’, ‘‘goals’’, ‘‘should’’ and similar terms and phrases. There are a number of factors that could affect the future operations of Royal Dutch Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this presentation, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for Shell’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developments including potential litigation and regulatory measures as a result of climate changes; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; and (m) changes in trading conditions. All forward-looking statements contained in this presentation are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional factors that may affect future results are contained in Royal Dutch Shell’s 20-F for the year ended 31 December, 2012 (available at www.shell.com/investor and www.sec.gov ). These factors also should be considered by the reader. Each forward-looking statement speaks only as of the date of this presentation, 1 August, 2013. Neither Royal Dutch Shell nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this presentation. There can be no assurance that dividend payments will match or exceed those set out in this presentation in the future, or that they will be made at all. We use certain terms in this presentation, such as discovery potential, that the United States Securities and Exchange Commission (SEC) guidelines strictly prohibit us from including in filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC website www.sec.gov. You can also obtain this form from the SEC by calling 1-800-SEC-0330. DEFINITIONS AND CAUTIONARY NOTE
    • Copyright of Royal Dutch Shell plc 1 August, 2013 4 Q2 2013 results  Q2 underlying earnings $4.6 billion; EPS -21%  CFFO $12.4 billion  Q2 2013 dividend $0.45 per share  Nigeria security challenges Growth delivery  Maturing new options  5 major start-ups to come in ‘13-’14:  >$4 billion/year CFFO potential* Capital discipline + long term approach  >$3 billion buy-back completed; $4-5 billion ’13  Pace of asset sales to increase  Refocusing in Nigeria and North America shales SUMMARY Mars-B platform sail-away to final location, July 2013 *$100/bbl Brent scenario 2015+ (Kashagan phase 1, Mars-B, Gumusut-Kakap, Cardamom, Repsol LNG)
    • Copyright of Royal Dutch Shell plc 1 August, 2013 5 NIGERIA Fire on the 24” TNP, Bodo West; April 2013 Illegal refinery, Krakrama; October 2012 NLNG Blockade, June/July 2013 LARGE SCALE CRUDE THEFT AND ASSOCIATED DAMAGE LNG GAS SUPPLY DISRUPTION + BLOCKADE
    • Copyright of Royal Dutch Shell plc 1 August, 2013 6 FLNG Prelude Keel laying, S Korea, 2013 SIMON HENRY CHIEF FINANCIAL OFFICER ROYAL DUTCH SHELL PLC DELIVERING INNOVATIVE & COMPETITIVE PERFORMANCE
    • Copyright of Royal Dutch Shell plc 1 August, 2013 7 Q2 2013 FINANCIAL PERFORMANCE Earnings CCS basis; earnings and EPS excluding identified items $ billion 5.7 4.6 (1.0) (0.1) (0.0) 0 2 4 6 Q2 2012 Q2 2013 $ billion UPSTREAM 4.5 3.5 DOWNSTREAM (CCS) 1.3 1.2 CORPORATE & MINORITIES -0.1 -0.1 CCS NET EARNINGS 5.7 4.6 CCS EARNINGS, $ PER SHARE 0.92 0.73 CASH FROM OPERATIONS 13.3 12.4 SHARE BUY BACKS 0.9 1.9 DIVIDENDS 2.8 2.8 DIVIDEND, $ PER SHARE 0.43 0.45 EARNINGS Q2 2012 TO Q2 2013
    • Copyright of Royal Dutch Shell plc 1 August, 2013 8 3 5 7 75 80 85 90 95 100 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 0 2 4 6 0 2 4 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 UPSTREAM million boe/day million tonnes Oil Gas LNG Sales (RHS) DOWNSTREAM % availability volume Refinery availability Chemicals availability Oil products sales (mln bbl/d) Chemicals sales (million tonnes) UPSTREAM  Growth from Pearl GTL, Malaysia and Australia  Nigeria sabotage  Royalty reporting change  Q2-Q2 underlying growth +2% DOWNSTREAM  Chemicals: planned downtime in Europe and North America  Underlying volume decrease Q2 2013 OPERATIONAL PERFORMANCE
    • Copyright of Royal Dutch Shell plc 1 August, 2013 9 GROUP UPSTREAM DOWNSTREAM/CORPORATE 12 MONTHS CASH PERFORMANCE 0 15 30 45 0 15 30 45 $ billion $ billion $ billion 0 15 30 45 CFFO ex WC movements Acquisitions Dividend Buybacks Capex Asset Sales Working capital movements BALANCING CASH GENERATION, INVESTMENT + PAYOUT
    • Copyright of Royal Dutch Shell plc 1 August, 2013 10 PORTFOLIO DEVELOPMENT Q2 2013 Acquisition / entry Notable discovery / option progress FID Start-ups Divestment / (Project re- framing)  G/U Phase 2 (215 kboe/d)  TNP loop-line (45 kboe/d)  Basrah Gas Company  Nigeria onshore review  North America review  Vicksburg discovery  Zabazaba-4 appraisal  Stones (50 kboe/d)  Additional 5% equity: Abadi FLNG (35%)  Repsol LNG anti-trust clearance  FEED LNG import facility Philippines  Bab Sour gas (40%)  Poland: ~100 Retail stations UPSTREAM ENGINE INTEGRATED GAS RESOURCES PLAYS DEEP-WATER FUTURE OPPORTUNITIES DOWNSTREAM ENGINE 3 FINAL INVESTMENT DECISIONS; FURTHER PORTFOLIO PROGRESS
    • Copyright of Royal Dutch Shell plc 1 August, 2013 11 - 10 20 30 0% 10% 20% 30% 2009 2010 2011 2012 13Q2 FREE CASH FLOW AND PAYOUT $ billion -10 0 10 20 2009 2010 2011 2012 13Q2 12 months rolling Free cash flow Dividend Buyback NET DEBT AND GEARING $ billion Gearing (LHS) Net Debt (RHS) FINANCIAL FRAMEWORK Gearing range 2012-15 OUTLOOK: CFFO $175-$200 BILLION NET CAPEX $120-130 BILLION * CFFO and capex outlook @$80-$100/bbl Brent and assumes improved US gas and Downstream environment from 2012; CFFO excludes working capital movements $ billion 2012-H1 2013 2012-15 Outlook* Cash flow from operations 70 175-200 Net Capital Investment 49 120-130  2013 net capex ~$40 billion  Repsol LNG closing H2 ‘13  New investments + options: Stones (100%), Elba, gas to transport, others  Includes ~$3 billion non-cash items
    • Copyright of Royal Dutch Shell plc 1 August, 2013 12 BC-10, offshore Floating Production Storage and Offloading facility, Brazil, 2013 PETER VOSER CHIEF EXECUTIVE OFFICER ROYAL DUTCH SHELL PLC DELIVERING INNOVATIVE & COMPETITIVE PERFORMANCE
    • Copyright of Royal Dutch Shell plc 1 August, 2013 13 OUTLOOK LONGER TERM GROWTH PRIORITY ENGINES 0 10 20 30 FUTURE OPPORTUNITIES RESOURCES PLAYS DEEP-WATER INTEGRATED GAS UPSTREAM DOWNSTREAM $ billion 2013 ORGANIC CAPEX  FINANCIAL MANAGEMENT OF STRONG PROJECT PIPELINE  DIVIDEND COMMITMENT  CAPITAL CEILING DRIVES HARD CHOICES
    • Copyright of Royal Dutch Shell plc 1 August, 2013 14 MARS B TLP SECURED ON LOCATION  Mars B extends Mars field life to 2050+  Mars + satellites ~1 billion boe  TLP towed to location in July  Start-up on schedule for 2014  100 kboe per day  Shell 71.5% (operator) STONES FINAL INVESTMENT DECISION MAY 2013  Gulf of Mexico Lower Tertiary reservoir  >250 million boe  FPSO design  Start-up 2016 -17  50 kboe per day  Shell 100% (operator) DEEP WATER GULF OF MEXICO PROGRESS H1 2013 Mars-B TLP July 2013 Stones: FPSO model with disconnectable buoy
    • Copyright of Royal Dutch Shell plc 1 August, 2013 15 NORTH AMERICA RESOURCES PLAYS REFOCUSSING OUR SHALES PORTFOLIO 0 1 2 0.0 0.2 0.4 2010 2011 2012 2013 1H CAPEX $ billion PRODUCTION million boe per day bcfe per day LRS Dry gas Divestments Acquisitions Liquids Gas PORTFOLIO WILL BE REFOCUSED  MATERIALITY  FEWER SHALES OPERATING THEATRES  BEST INTEGRATION OPTIONS Gas Liquids Rich Shales -2 0 2 4 6 8 10 2010 2011 2012 2013 1H Integration options/projects GTL Elba LNG Gas-to-Chemicals LNG to Transport LNG Canada
    • Copyright of Royal Dutch Shell plc 1 August, 2013 16 BASRAH GAS COMPANY, IRAQ NIGERIA SPDC  $3.9 billion new 2013 investment in pipelines and LNG feed gas  2008-2012 divestments $1.8 billion (Shell)  Strategic review of eastern onshore licenses  ~80-100 kboe/d divestments potential (Shell)  Shell Nigeria: focus on deep water + gas  JV commenced operations 1st of May ‘13  Processing 450 million scfe/day gas  2 billion scfe/day potential  Value driven; no volume entitlement FUTURE OPPORTUNITIES IRAQ GAS JV; NEW SPDC NIGERIA INVESTMENTS Divestment completed SPDC JV Khor Al Zubair NGL plant Basrah, Iraq, Q2 2013 2012-13 FIDs TNP loopline Gbaran-Ubie phase 2 FYIP Southern Swamp NLNG 50 km
    • Copyright of Royal Dutch Shell plc 1 August, 2013 17 KASHAGAN DEVELOPMENT PHASE 1 OVERVIEW D ISLAND  300 kboed average production  2 train development; 2 year ramp-up sequence  Shell 16.81%; production operations delegated to Shell and KMG KASHAGAN START-UP Train 2 Train 1 Raw gas compressors Well heads Living quartersUtilities 2013 H2: START-UP OF PRODUCTION FACILITIES Kashagan, D island facilities, April 2013 D islandBolashak onshore Offshore flare lit 07/13 50km
    • Copyright of Royal Dutch Shell plc 1 August, 2013 18 Kashagan phase 1  Commencing start-up 2013 H2 Gumusut-Kakap  Platform loaded out to final location Mars-B  Topsides fitted  TLP secured on location Cardamom  Installation of subsea manifold and umbilical completed  Tie-in to Auger platform underway Repsol LNG  Completion 2013 H2 TOP 5 PROJECT START-UPS ‘13-’14 INTEGRATED GAS FUTURE OPPORTUNITIES DEEP-WATER DEEP-WATER DEEP-WATER *$100/bbl Brent scenario, 2015+ >$4 BILLION/YEAR* CFFO POTENTIAL FOR SHELL
    • Copyright of Royal Dutch Shell plc 1 August, 2013 19 Q2 2013 results  Q2 underlying earnings $4.6 billion; EPS -21%  CFFO $12.4 billion  Q2 2013 dividend $0.45 per share  Nigeria security challenges Growth delivery  Maturing new options  5 major start-ups to come in ‘13-’14:  >$4 billion/year CFFO potential* Capital discipline + long term approach  >$3 billion buy-back completed; $4-5 billion ’13  Pace of asset sales to increase  Refocusing in Nigeria and North America SUMMARY Mars-B platform sail-away to final location, July 2013 *$100/bbl Brent scenario 2015+ (Kashagan phase 1, Mars-B, Gumusut-Kakap, Cardamom, Repsol LNG)
    • Copyright of Royal Dutch Shell plc 1 August, 2013 20 Groundbirch and Gundy, Canada, Upstream Americas, 2013 SECOND QUARTER 2013 RESULTS QUESTIONS & ANSWERS
    • Copyright of Royal Dutch Shell plc 1 August, 2013 21 DELIVERING INNOVATIVE & COMPETITIVE PERFORMANCE Lubricants Zhuhai blending and filling plant, China, 2009 SECOND QUARTER 2013 RESULTS ROYAL DUTCH SHELL PLC 1 AUGUST 2013