Webcast presentation Royal Dutch Shell plc third quarter 2013 results
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Webcast presentation Royal Dutch Shell plc third quarter 2013 results

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Simon Henry, CFO of Royal Dutch Shell plc, presented the Royal Dutch Shell plc third quarter 2013 results on October 31, 2013.

Simon Henry, CFO of Royal Dutch Shell plc, presented the Royal Dutch Shell plc third quarter 2013 results on October 31, 2013.

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  • 1. DELIVERING INNOVATIVE & COMPETITIVE PERFORMANCE THIRD QUARTER 2013 RESULTS ROYAL DUTCH SHELL PLC 31 OCTOBER 2013 Copyright of Royal Dutch Shell plc 31 October, 2013 1 Lubricants Zhuhai blending and filling plant, China, 2009
  • 2. DELIVERING INNOVATIVE & COMPETITIVE PERFORMANCE SIMON HENRY CHIEF FINANCIAL OFFICER ROYAL DUTCH SHELL PLC Copyright of Royal Dutch Shell plc 31 October, 2013 2 FLNG Prelude Keel laying, S Korea, 2013
  • 3. DEFINITIONS AND CAUTIONARY NOTE 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, 31 October, 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. Copyright of Royal Dutch Shell plc 31 October, 2013 3
  • 4. Q3 2013 OVERVIEW Q3 2013 results Q3 2012 Q3 2013 UPSTREAM 4.9 3.5 Higher exploration charges + maintenance DOWNSTREAM (CCS) 1.7 0.9 Nigeria security issues CORPORATE & MINORITIES 0.0 0.1 Integrated Gas + Chemicals growth CCS NET EARNINGS 6.6 4.5 CCS EARNINGS, $ PER SHARE 1.05 0.71 Industry refining headwinds $ billion Growth delivery 4 new production start-ups Carmon Creek final investment decision CASH FROM OPERATIONS 9.5 SHARE BUY BACKS 0.1 1.5 DIVIDENDS 2.8 2.8 DIVIDEND, $ PER SHARE 0.43 Winning bid for Libra 10.4 0.45 Capital discipline + long term approach 2013 announced acquisitions ~$10 billion >$4 billion buy-back completed; up to $5 billion ’13 Driving tough portfolio choices Earnings CCS basis, Earnings and EPS excluding identified items. Dividends distributed in the quarter Copyright of Royal Dutch Shell plc 31 October, 2013 4
  • 5. PRICES & MARGINS SHELL OIL & GAS REALISATIONS INDUSTRY REFINING MARGINS INDUSTRY CHEMICALS MARGINS $/barrel $/barrel $/tonne 12 1000 $/mscf 8 10 110 800 8 7 600 6 100 4 6 90 400 2 200 0 80 5 Q312 Q412 Q113 Q213 Q313 Oil Gas (RHS) Copyright of Royal Dutch Shell plc 0 -2 Q312 Q412 Q113 US West Coast US Gulf Coast coking Rotterdam complex Singapore 31 October, 2013 Q213 Q313 Q312 Q412 Q113 Q213 Q313 US ethane Western Europe naphtha NE/SE Asia naphtha 5
  • 6. Q3 2013 FINANCIAL HIGHLIGHTS EARNINGS Q3 2012 TO Q3 2013 EARNINGS Q3 2012 TO Q3 2013 $ billion $ billion Environment Choice 8 8 (0.3) (1.4) 6 6 (0.5) 0.1 (0.3) 0.5 (0.8) (0.8) (~0.9) 0.2 4 4 6.6 6.6 4.5 2 2 4.5 0 0 Earnings CCS basis, Earnings excluding identified items Copyright of Royal Dutch Shell plc 31 October, 2013 6
  • 7. Q3 2013 OPERATIONAL PERFORMANCE + OUTLOOK UPSTREAM UPSTREAM million boe/day million tonnes 4 6 4 2 Growth from Pearl GTL, Malaysia, US LRS 65 kboe/d Nigeria sabotage Q3-Q3 Q3-Q3 underlying growth 1% oil & gas; 4% LNG 2 0 0 Q3 2012 Q4 2012 Q1 2013 Oil Gas Q2 2013 DOWNSTREAM Q3 2013 LNG Sales (RHS) Improved Chemicals + Refinery availability Underlying volume increase DOWNSTREAM % availability volume 100 7 95 90 5 85 80 75 3 Q3 2012 Q4 2012 Refinery availability Chemicals availability Copyright of Royal Dutch Shell plc Q1 2013 Q2 2013 Q3 2013 Oil products sales (mln bbl/d) Chemicals sales (million tonnes) 31 October, 2013 Q4 2013 OUTLOOK CONTINUED NIGERIA DOWNTIME UPSTREAM MAINTENANCE - 60 KBOE/D Q4-Q4 - 0.9 MT LNG Q4-Q4 GTL CONTINUED HIGH EXPLORATION CHARGE 7
  • 8. PORTFOLIO DEVELOPMENT Q3 2013 Acquisition / entry Notable discovery / option progress FID Carmon Creek FID (80 kboe/d) FUTURE OPPORTUNITIES Start-ups Majnoon (175 kboe/d) Kashagan (300 kboe/d) Nigeria asset sales underway Eagle Ford, Niobrara , Mississippi Lime, assets for sale RESOURCES PLAYS DEEP-WATER Divestment / (Project reframing) Coulomb North increased equity (to 100%) BC-10 pre-emption 23% Libra entry INTEGRATED GAS BC-10 Massa Phase 3 (28 kboe/d) Browse FLNG concept selection BC-10 Phase 2 (35 kboe/d) North Rankin Redevelopment UPSTREAM ENGINE Harburg refinery sale EU approved DOWNSTREAM ENGINE 2 FINAL INVESTMENT DECISIONS; 165 KBOE/D START UPS; CAPITAL DISCIPLINE DRIVING PORTFOLIO CHOICES Copyright of Royal Dutch Shell plc 31 October, 2013 8
  • 9. TOP 5 PROJECT START-UPS ‘13-’14 Kashagan phase 1 Ramp-up challenges Gumusut-Kakap Commissioning is progressing Mars-B Commissioning is progressing Cardamom Auger top-side work for Cardamom completed Repsol LNG Progressing to completion Auger platform for Cardamom tie-back Copyright of Royal Dutch Shell plc 31 October, 2013 Mars-B – Oct 2013 Hook-up of risers to the Gumusat-Kakap FPS – Q3 2013 9
  • 10. PORTFOLIO DEVELOPMENT CARMON CREEK; LIBRA CARMON CREEK FID, CANADA LIBRA ENTRY, DEEP WATER BRASIL Parque das Conchas (BC-10) Bijupirá/Salema LIBRA 80 kboe/day in-situ heavy oil project Shell 20% partner in giant Libra field Bitumen export options to existing refineries Signature bonus $1.4 billion ~2017 start-up Potential for 1.4 million barrels per day and Shell 100% 8 -12 billion barrels of oil resources* Minimum work commitment – 3D seismic, 2 wells and extended well test by 2018 * Agência Nacional do Petróleo (ANP) estimates Copyright of Royal Dutch Shell plc 31 October, 2013 10
  • 11. BALANCING LONG TERM INVESTMENT + COMPETITIVE PAYOUT GROUP 12 MONTHS CASH PERFORMANCE BUSINESS 12 MONTH CASH PERFORMANCE $ billion $ billion 60 40 Uses Sources Sources Uses 30 40 20 20 0 Uses 10 0 Sources Asset sales Acquisitions CFFO excl. WC movements Working capital movements Capex Dividend $ billion % 20 30 10 15 0 0 2009 -10 2010 Free cash flow Gearing (RHS) Copyright of Royal Dutch Shell plc 2011 2012 Dividend Buyback 31 October, 2013 13Q3 12 months rolling Upstream Downstream Buy-backs CASH GENERATION + CAPITAL DISCIPLINE NET SPENDING REDUCTION 2014: ~$10 BLN ACQUISITIONS ANNOUNCED 2013 DIVESTMENTS TO INCREASE 2014 - 2015 11
  • 12. SUMMARY Q3 2013 results Industry refining headwinds Higher exploration charges + maintenance Nigeria security issues Integrated Gas + Chemicals growth Growth delivery 4 new production start-ups Carmon Creek final investment decision Winning bid for Libra Capital discipline + long term approach 2013 announced acquisitions ~$10 billion >$4 billion buy-back completed; up to $5 billion ’13 Driving tough portfolio choices Mars-B platform on final location Copyright of Royal Dutch Shell plc 31 October, 2013 12
  • 13. QUESTIONS & ANSWERS THIRD QUARTER 2013 RESULTS Copyright of Royal Dutch Shell plc 31 October, 2013 13 Groundbirch and Gundy, Canada, Upstream Americas, 2013
  • 14. DELIVERING INNOVATIVE & COMPETITIVE PERFORMANCE THIRD QUARTER 2013 RESULTS ROYAL DUTCH SHELL PLC 31 OCTOBER 2013 Copyright of Royal Dutch Shell plc 31 October, 2013 14 Lubricants Zhuhai blending and filling plant, China, 2009