Media webcast presentation Royal Dutch Shell fourth quarter and full year 2011 results
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Media webcast presentation Royal Dutch Shell fourth quarter and full year 2011 results

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Peter Voser, Chief Executive Officer of Royal Dutch Shell will host a live video webcast of the Fourth quarter 2011 and Full year Results and Outlook on Thursday February 2 2012, 10:30 GMT (11:30......

Peter Voser, Chief Executive Officer of Royal Dutch Shell will host a live video webcast of the Fourth quarter 2011 and Full year Results and Outlook on Thursday February 2 2012, 10:30 GMT (11:30 CET / 05:30 EST).

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  • 1. ROYAL DUTCH SHELL 2011 RESULTS AND COMPANY UPDATE February 2, 2012 y1 Copyright of Royal Dutch Shell plc 2 February 2012
  • 2. ROYAL DUTCH SHELL PETER VOSER CHIEF EXECUTIVE OFFICER2 Copyright of Royal Dutch Shell plc 2 February 2012
  • 3. DEFINITIONS AND CAUTIONARY NOTEResources: 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 miningreserves. Resources are consistent with the Society of Petroleum Engineers 2P and 2C definitions.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 usedto 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 orcompanies. ‘‘S b idi i ’’ “Sh ll subsidiaries” and “Sh ll companies” as used i this presentation refer to companies i which R i ‘‘Subsidiaries’’, “Shell b idi i ” d “Shell i ” d in hi i f i in hi h Royal D h Sh ll either di l Dutch Shell i h directly or i di l indirectly lhas 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 controlare 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/orindirect (for example, through our 24% shareholding in Woodside Petroleum Ltd.) ownership interest held by Shell in a venture, partnership or company, after exclusion of allthird-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 forward looking condition, Shell.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 onmanagement’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differmaterially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of RoyalDutch Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statementsare 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 futureoperations 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 forward-looking presentation,(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 potentialacquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject tointernational sanctions; (j) legislative, fiscal and regulatory developments including potential litigation and regulatory measures as a result of climate changes; (k) economic andfinancial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmentalentities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; and (m) changes in trading conditions. All forward-lookingstatements 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 p p yq y y y pundue 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,2010 (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 thedate of this presentation, 2 February 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 inferred from theforward-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 thefuture, 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 f from including infilings 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 alsoobtain these forms from the SEC by calling 1-800-SEC-0330.3 Copyright of Royal Dutch Shell plc 2 February 2012
  • 4. SHELL Managing through extreme volatility Customer and Profitability & Updating our outlook partner focus performance Sustainability & Value added Through-cycle investment and portfolio g y p growth technology choices4 Copyright of Royal Dutch Shell plc 2 February 2012
  • 5. CONTINUED FOCUS ON HSSE PERFORMANCE‘GOAL ZERO’ ON SAFETYinjuries – TRCF/million working hours million working hours 5 900 Focus on personal and process safety l d f 4 800 3 700 Rigorous global standards 2 600 1 500 Industry leader in Sustainable Development 0 400 01 02 03 04 05 06 07 08 09 10 11 WORKING HOURS (RHS) TRCFEMPLOYEES AND CONTRACTORS PER MILLION WORKING HOURS; SHELL OPERATED FACILITIES; PRELIMINARY ESTIMATE FOR 20115 Copyright of Royal Dutch Shell plc 2 February 2012
  • 6. ENERGY INVESTMENT FUNDAMENTALS POSITIVEROBUST LONGER TERM FUNDAMENTALS MANAGING SHORT-TERM VOLATILITYenergy demand outlook in million boe/d $/bbl 140 12400 120 10300 100 8 80 6200 60 4 40100 2 20 0 0 0 1980 1990 2000 2010 2020 2030 2040 2050 2008 2009 2010 2011 OIL BIOMASS COAL BRENT (LHS) GAS WIND NUCLEAR HENRY HUB $/MMBTU (RHS) SOLAR SHELL ACTIVITIES OTHER RENEWABLES WEIGHTED AVERAGE REFINING MARGIN $/BBL (RHS)SOURCE: SHELL ANALYSIS6 Copyright of Royal Dutch Shell plc 2 February 2012
  • 7. STRATEGY AND CAPITAL ALLOCATIONSTRATEGY CAPITAL INVESTMENT $ billion Upstream p 30 Profitable growth; price upside Exploration + resources plays UP 20 Downstream STREAM Optimize re-shaped portfolio Selective growth 10 Climate change Grow gas and biofuels DOWN DOWN CCS and energy efficiency STREAM STREAM 0 09-11 2012 09-11 2012 Financial outlook average average Investing for growth and competitive payout EUROPE AFRICA, MIDDLE EAST, Through-cycle returns and risk management CIS ASIA PACIFIC AMERICAS Increasing our investment; 80 Upstream i i 80%7 Copyright of Royal Dutch Shell plc 2 February 2012
  • 8. IMPROVING OUR PERFORMANCEEARNINGS TOTAL SHAREHOLDER RETURN$ billion CCS %30 60% 40%10 20% 0% 2009 2010 2011 2006-2008 2009-2011-10 -20% UPSTREAM CORPORATE DOWNSTREAM DIVESTMENTS/OTHER SHELL OTHER MAJORSCASH FLOW FROM OPERATIONS VOLUMES$ billion kboe/day mtpa 3,300 2040 3,000 3 000 1020 0 2,700 0 2009 2010 2011 2009 2011 UPSTREAM DOWNSTREAM CORPORATE OIL & GAS 2010-11 2010 11 LNG (RHS) REFINING INTAKE ASSET SALES CHEMICALS (RHS)CFFO EXCLUDES WORKING CAPITAL MOVEMENTS8 Copyright of Royal Dutch Shell plc 2 February 2012
  • 9. PORTFOLIO + PROJECT PERFORMANCEDELIVERING NEW PROJECTS North America: Canada: Qatar: Australia Nigeria: tight gas i h AOSP-1 AOSP 1 QatarGas4 LNG Q G 4 (Woodside): Pl t (W d id ) Pluto Gbaran Ubie Ph 1 Russia: Sakhalin II Singapore: Netherlands: Qatar: USA: Chemicals Schoonebeek Pearl GTL Port Arthur Brazil: USA: Norway: Iraq: NA: Oman: Oman: BC-10 BC 10 Perdido Gjoa W Q G West Qurna tight gas h Qarn Al Q Alam Harweel H l 2009 2010 2011 Car Care Norway: Australia: USA: Mexico: UK: Indonesia: Statfjord Woodside GOM Altamira Stanlow Abadi (10%) Germany: y refinery e ey FLNG Greece: USA: Heide Cameroon Africa Chile Pakistan Australia: Downstream Eagle Ford refinery Nigeria: USA: Iraq: Basrah Bow Energy USA: OML Australia: South Brazil: Gas company Nigeria: Iraq: Majnoon East Resources 4/38/41 Arrow Energy Texas BS4/BMS8 OML 26/42 START UP DIVESTMENT ACQUISITION/NEGOTIATED ENTRY9 Copyright of Royal Dutch Shell plc 2 February 2012
  • 10. ROYAL DUTCH SHELL SIMON HENRY CHIEF FINANCIAL OFFICER10 Copyright of Royal Dutch Shell plc 2 February 2012
  • 11. DELIVERING OUR STRATEGY 2009 - 20112009+ PRIORITIES 2009-2011 DELIVERY Cost focus PERFORMANCE FOCUS Corporate reorganization Downstream portfolio reduction 14 project start-ups GROWTH DELIVERY Enhanced free cash flow $31 billion dividends declared Exploration + business development NEW OPTIONS Maturing new growth projects11 Copyright of Royal Dutch Shell plc 2 February 2012
  • 12. Q4 2011 FINANCIAL HIGHLIGHTSCCS EARNINGS CCS EARNINGS Q4 2010 TO Q4 2011$ billion $ billion 6 Q4 10 Q4 11 UPSTREAM 3.4 5.1 5 DOWNSTREAM (CCS) 0.5 (0.3) BUSINESS SEGMENTS TOTAL 3.9 4.8 4 CORPORATE & MINORITIES 0.2 0.0 CCS NET EARNINGS 4.1 4.8 3 CCS EARNINGS, $ PER SHARE 0.67 0.78 CCS EARNINGS, $ PER ADS EARNINGS 1.34 1 34 1.56 1 56 2 CASH FROM OPERATIONS 5.5 6.5 1 0EARNINGS CCS BASIS, EARNINGS AND EPS EXCLUDING IDENTIFIED ITEMS12 Copyright of Royal Dutch Shell plc 2 February 2012
  • 13. EARNINGS AND PERFORMANCE 2009-2011 UPSTREAM PRODUCTION OIL & GAS REALISATIONS UPSTREAM EARNINGS million boe/d mtpa $/barrel $/mscf $ billion 3 20 20 100 6 2 4 10 10 50 1 2 0 0 0 0 0 2009 2010 2011 2009 2010 2011 2009 2010 2011 OIL GAS 2010-11 ASSET SALES OIL GAS (RHS) OTHER UPSTREAM INTEGRATED GAS LNG SALES (RHS)DOWNSTREAM AVAILABILITY DOWNSTREAM MARGINS DOWNSTREAM EARNINGS % availability $/barrel $/tonne $ billion (CCS)100 500 2 4 95 1 250 2 90 85 0 0 0 2009 2010 2011 2009 2010 2011 2009 2010 2011 UNPLANNED DOWNTIME ROTTERDAM COMPLEX MARGIN OIL PRODUCTS CHEMICALS CHEMICALS AVAILABILITY REFINERY AVAILABILITY WESTERN EUROPE NAPHTHA (RHS) EARNINGS EXCLUDE IDENTIFIED ITEMS 13 Copyright of Royal Dutch Shell plc 2 February 2012
  • 14. RETURNS & CASHFLOW PERFORMANCE 2009-11RETURNS CASHFLOW 2009-2011$ billion $ billion SOURCES USES250 40% 120 100200 30% DOWNSTREAM 80150 DOWNSTREAM 20% 60100 40 UPSTREAM 10% UPSTREAM 50 20 0 0% 0 2007 2008 2009 2010 2011 2012E CAPITAL IN SERVICE CASH FLOW FROM OPERATIONS ACQUISITIONS CAPITAL UNDER CONSTRUCTION/OTHER ASSET SALES CAPEX + EQUITY ACC. RETURN ON CAPITAL IN SERVICE (RHS) INVESTMENTS RETURN ON CAPITAL EMPLOYED (RHS) DIVIDEND AND BUYBACK CFFO EXCLUDES NET MOVEMENTS IN WORKING CAPITAL14 Copyright of Royal Dutch Shell plc 2 February 2012
  • 15. PERFORMANCE FOCUS 2009-2011CONTINUOUS IMPROVEMENT+ CAPITAL EFFICIENCYDIVESTMENTS 2009-2011 ACQUISITIONS 2009-2011 $17 $15 billion billion UPSTREAM UPSTREAM DOWNSTREAM DOWNSTREAM Retail, Af i R il Africa Biofuels, Brazil Bi f l B il Refocus Downstream: Growth oil + gas: • Europe; Africa; Latin-America • East Resources, Arrow, liquids-rich shales, Abadi, Basrah Gas Company , , p y Late life/non-strategic Upstream • New exploration acreage • Upstream ~120 kboe/d • Woodside (10%), South Texas, Growth Downstream: Cameroon, Pakistan, others C P ki h • Brazil biofuels, retail15 Copyright of Royal Dutch Shell plc 2 February 2012
  • 16. GROWTH DELIVERY 2009-2011CONVERTING RESOURCES TO PRODUCTIONbillion boe resources35 Longer-term upside Carmon Creek Geronggong BC-10 Ph. 3 (Massa)25 Prelude FLNG Tempa Rossa AOSP debottl. Fram NA tight gas / Malikai M lik i shales AOSP debottl. + Quest Clair Ph2 NA tight gas/shales15 Schiehallion Pearl GTL Pluto (Woodside) ( ) QatarGas-4 Harweel Schoonebeek NA tight gas/shales 5 Qarn Alam EOR Eagle Ford West Qurna 1 IPT-5 2008 2009 2010 2011 2012 ON-STREAM UNDER CONSTRUCTION STUDY PRODUCTION Growing opportunity funnel g pp y 12 bln boe on stream, maturing additional ~20 billion boe16 Copyright of Royal Dutch Shell plc 2 February 2012
  • 17. ROYAL DUTCH SHELL UPDATING OUR PRIORITIES17 Copyright of Royal Dutch Shell plc 2 February 2012
  • 18. 2012+ PRIORITIES 12 billion boe resources on stream CONTINUOUS IMPROVEMENT Drive D i new cashflow growth: hfl th GROWTH DELIVERY +30-50 % CFFO 2012-15 versus 2008-11* Maturing >60 projects; ~20 billion boe resources MATURE NEW OPTIONS Exploration + bolt-on deals PERFORMANCE FOCUS 2017-18 production potential ~4 mboe/d average* CFFO OUTLOOK @$80-$100/BBL BRENT AND ASSUMES IMPROVED US GAS AND DOWNSTREAM ENVIRONMENT FROM 2011; CFFO EXCLUDES WORKING CAPITAL MOVEMENTS18 Copyright of Royal Dutch Shell plc 2 February 2012
  • 19. 2012+ OUTLOOKCONTINUOUS IMPROVEMENTUNPLANNED DOWNTIME PROCESS EFFICIENCY OPPORTUNITIES % Offer to cash 9 Inventory management y g 6 Well and reservoir management Materials management 3 Asset maintenance and integrity CHEMICALS REFINING 0 2006 2007 2008 2009 2010 2011TIGHT GAS/SHALE DRILL TIME PROCUREMENT: LOW COST COUNTRIESIndexed Well Delivery Time per year since first production # of suppliers $ billion Pinedale - 2002 250 Early Deep Basin - 2006 BEING QUALIFIED100 SUPPLIERS 3 Deep Basin - 2008* 200 QUALIFIED 75 Haynesville - 2008 Groundbirch - 2008 150 SPEND 2 50 100 1 25 50 0 0 0 0 1 2 3 4 5 6 7 8 9 10 2008 2009 2010 2011 Years Performance focus19 Copyright of Royal Dutch Shell plc 2 February 2012
  • 20. ROYAL DUTCH SHELL 2012+ GROWTH PROJECTS20 Copyright of Royal Dutch Shell plc 2 February 2012
  • 21. GROWTH DELIVERY 2012+KEY PROJECTS UNDER CONSTRUCTION Schiehallion Redevelopment Clair Ph2 AOSP Debottlenecking Corrib Kashagan Ph1 North America tight gas Eagle Ford Port Arthur Majnoon FCP Mars B UAE Cardamom Amal SteamRESOURCES Harweel Gumusut-Kakap p Sabah Gasbillion boe Kebabangan Bonga NW30 Prelude FLNG Wheatstone LNG North Rankin 220 Pluto LNG T1 (Woodside) BC-10 Phase 2 Gorgon LNG T1-3 Under Greater Western Flank Ph 1 START-UP DATE10 Construction 2012-13 2014-15 2016+ 0 26 projects under construction21 Copyright of Royal Dutch Shell plc 2 February 2012
  • 22. GROWTH DELIVERY 2012+MAINTAINING LNG LEADERSHIPAUSTRALIA – INDONESIA: 2011 PROGRESS SHELL GLOBAL LNG CAPACITY GROWTH Abadi entry mtpa • Inpex 60% • Shell 30% • EMPI 10% 40.0 Wheatstone Wh 2012 FEED Pluto T1 & Prelude (Woodside) Abadi FLNG 20.0 Gorgon Greater Sunrise T1-3 FIDs Prelude FLNG Browse 0.0 2011 ~2020+Wheatstone North West Shelf ONSTREAM CONSTRUCTION OPTIONS Pluto (Woodside) Gorgon G SHELL LNG LEADERSHIP Arrow Energy LNG: year end mtpa Bow Energy acquisition ~90% long-term contracted Shell-PetroChina 50/50 30 ~80% of portfolio oil price linked PRODUCTION 20 0 UNDER CONSTRUCTION OPTIONS 10 ~20 mtpa on-stream ~8 mtpa under construction p 0 Shell Sh ll Exxon E Chevron Ch BG Total T l BP Assessing ~ 15 mtpa future options 2011 2017 PROJECTS ONSTREAM OR UNDER CONSTRUCTION22 Copyright of Royal Dutch Shell plc 2 February 2012
  • 23. GROWTH DELIVERY 2012+REGAINING MOMENTUM IN GULF OF MEXICO Vito Appomattox ~100 kboe/d potential 100 ~100 kboe/d hub potential 100 >200 million boe resources Appraisal drilling underway Shell 55% (operator) > 250 million boe resources Shell 80% (operator) Nakika Mars-B Mars W.Boreas, S D i WB S. Deimos Ursa 100 km Mars-B, Olympus tension leg platform Brutus Cardamom Deep DISCOVERY FID START-UP Auger Caesar Tonga Perdido P did Mars B Holstein Caesar Tonga Cardamom Stones Stones 45 kboe/d potential Shell 35% (operator) ( p ) Appomattox A tt Vito ONSTREAM UNDER CONSTRUCTION OPTIONS 2005 2010 2015 2020 ~185 kboe/d 2011- ~350 kboe/d potential ~2017 p Drilling 5+ exploration wells 201223 Copyright of Royal Dutch Shell plc 2 February 2012
  • 24. GROWTH DELIVERY 2012+INVESTMENT IN UPSTREAM HEARTLANDSUK: ATLANTIC MARGIN AUSTRALIA: NWS LNG JV MALAYSIA 8 ºW 6º 4º 2º 0º 2ºE 0 50 S c a le km F a r o e Is la n d s F aro e C o n tine n ta l S h e lf W est of S h e tl nd tla d S lo p e C la i r S c h ie h a l l i o n F o in a v e n S h e t la n d I s la n d s W est of S he tla n d C on tin e nt al S h e lf O rkn ey Is l a n d s W e s te rn Is l e s S c o t la n d Schiehallion (Shell 36%) Operating since 1989 Sabah Gas Kebabangan • N FPSO New Delivered >3,000 LNG cargoes D li d 3 000 • IIntegrated production platform t t d d ti l tf • ~130 kboe/d Developing new gas resources: • ~130 kboe/d • North Rankin ~280 kboe/d • Shell 30% Clair Ph 2 (Shell 28%) • GWF Phase 1 ~110 kboe/d • ~120 kb /d 20 kboe/d Shell 2 % Sh ll 21% EOR O • Extending 2 PSCs with Petronas • ~100 kboe/d potential • Shell 40-50%24 Copyright of Royal Dutch Shell plc 2 February 2012
  • 25. PRODUCTION OUTLOOKPROJECTS UNDER CONSTRUCTION GROUP PRODUCTION OUTLOOK Region Theme 100% 100% 90% 80% Gorgon LNG, Australia 75% 70% 60% 50% 50% 40% Mars-B, USA 30% 25% 20% 10% 0% 0% 2011 2017 2011 2017 AOSP debottlenecking Canada debottlenecking, MIDDLE EAST, AFRICA, CIS HEAVY OIL & EOR EUROPE DEEPWATER ASIA PACIFIC TIGHT/SHALE OIL/GAS AMERICAS INTEGRATED GAS TRADITIONAL Bonga North West, Nigeria25 Copyright of Royal Dutch Shell plc 2 February 2012
  • 26. ROYAL DUTCH SHELL MATURING NEW GROWTH OPTIONS26 Copyright of Royal Dutch Shell plc 2 February 2012
  • 27. MATURING NEW GROWTH OPTIONSDOWNSTREAM: SELECTIVE GROWTH 2012 CAPEX $ billion 6 UK Retail LNG to transport Lubes Russia Rhineland Connect 4 Gas-to- chemicals Port Arthur China Retail + Lubes 2 Qatar China refining chemicals and chemicals 0 CHEMICALS GROWTH Raízen REFINING BASE UNDER DEVELOPMENT OPTIONS MARKETING/OTHER 2011 DEALS Nanhai chemicals Singapore chemicals Raízen Port Arthur Qatar chemicals Gas-to-chemicals US China 2006 2010 2011 2012 FUTURE Value chains and leveraging our brand27 Copyright of Royal Dutch Shell plc 2 February 2012
  • 28. MATURING NEW GROWTH OPTIONS2011 EXPLORATION + BUSINESS DEVELOPMENT2011 EXPLORATION & ACQUISITIONS RESOURCES MATURATION / POTENTIAL billion boe 4 Marcellus Clair Cl i Eagle Ford E l F d Groundbirch Abadi Iraq Liquids-rich Arrow shales Marcellus China tight gas Groundbirch 2 Eagle Ford Zaedyus Z d Tologbene GAS OIL Acme West 0 Satyr-3 Vos Arrow 08 09 10 11 -2 DISCOVERY NEW EXPLORATION ACREAGE APPRAISAL RESOURCES PLAY ENTRY 2011 delivery: EXPLORATION/APPRAISAL 2.3 billion boe exploration + appraisal DISPOSALS >4 billion boe E&A + deals~; ~30% tight/shale gas PRODUCTION >140,000 km2 new acreage in 2011 RESOURCES-BASED DEALS 2008-11 delivery: ~13 billion boe at $2-3/boe (E&A + deals)28 Copyright of Royal Dutch Shell plc 2 February 2012
  • 29. MATURING NEW GROWTH OPTIONS2011 DRILLING SUCCESSFRENCH GUIANA – NEW PLAY OPENER WEST AUSTRALIA GAS FOR LNG French G i F h Guiana – Guyane Maritime Shell 45% Zaedyus (GM-ES-1) Satyr-3 Acme West 1&2 NWS LNG y Guyana – Stabroek Shell 50%* Vos-1 Gorgon LNG 0 100 200 Kilometers DISCOVERY >300 million boe (100% basis) in Zaedyus discovery; New gas discoveries in 2011 upside identified 23 discoveries since 2005 12+ tcf Sh ll di i i 2005; 12 f Shell 1 exploration well and Zaedyus appraisal 2H 2012 share added at <$1/boe finding cost Multiple targets across 63,000 km2 in French Guiana Shell average 40% & Guyana deepwater* INCREASE PENDING GOVERNMENT APPROVAL29 Copyright of Royal Dutch Shell plc 2 February 2012
  • 30. MATURING NEW GROWTH OPTIONSEXPLORATION: CONSISTENT DELIVERY OF NEWRESOURCES DISCOVERED RESOURCES POTENTIAL billion boe 3 2 Cardamom Deep Appomattox 1 Amal SEWest Boreas VitoSouth DeimosS hD i Zaedyus Z d Tologbene Geronggong G 0 02 03 04 05 06 07 08 09 10 11 Concerto Achilles Acme TRADITIONAL OIL/GAS INTEGRATED GAS Massa Vos Acme West 2009-2011 TIGHT/SHALE OIL/GAS KEY FINDS Satyr Brederode Gato do Mato Yellowglen Kentish Knock EXPLORATION PERFORMANCE % 100% ~15 billion boe discovered 2002-2011 Strategic shift to OECD 50% Stepped up spending in 2005 0% 01 02 03 04 05 06 07 08 09 10 11 Renewed spending + activity increase 2011-2012 e ewed spe d g ac v y c ease 0 0 % OECD SUCCESS RATEDISCOVERED RESOURCE POTENTIAL30 Copyright of Royal Dutch Shell plc 2 February 2012
  • 31. MATURING NEW GROWTH OPTIONSSTEPPING UP 2012 EXPLORATION PACEEXPLORATION SPEND 2012 EXPLORATION SPENDAlaskaN. America N. America liquids- Kazakhstan (1) tight gas rich shales Saudi Arabia (1) China Gulf of Mexico (5) Fr Guiana (2) Brunei (4) Gabon (1) & Nigeria (1) Australia offshore (5) Brazil (1) Australia onshore CBM New Zealand (1) 2012 DRILLING PLAN (# WELLS) INTEGRATED GAS DEEPWATER TRADITIONAL TIGHT / SHALE OIL/GAS 20 -25 key well & play tests in 2012 in Australia NWS, GoM, and tight/shale gas Frontier drilling weighted to deep water and liquids- rich shale plays i h h l l31 Copyright of Royal Dutch Shell plc 2 February 2012
  • 32. MATURING NEW GROWTH OPTIONSBUILDING WORLD-WIDE TIGHT GAS + LIQUIDS-RICHSHALES PORTFOLIO Canol Groundbirch Montney Deep Basin Germany Foothills Bakken Ukraine Pinedale Utica Niobrara Marcellus Turkey Wells Manufacturing JV with CNPC Monterey Mississippi Lime Wolfcamp Haynesville Egypt China tight gas Eagle Ford Oman Colombia Neuquen N TIGHT GAS LIQUIDS POTENTIAL 2011 ENTRY Drilling rig – Alberta ~50,000 km2 (~12 million acres) acreage world wide ~12,000 km2 (~3 million acres) liquids-rich shales added 2011; ~$2 billion, ~$825/acre32 Copyright of Royal Dutch Shell plc 2 February 2012
  • 33. MATURING NEW GROWTH OPTIONSLIQUIDS-RICH SHALES AND TIGHT GAS OUTLOOK2012 PRIORITIES + OUTLOOK GLOBAL PRODUCTION POTENTIAL kboe/day bcfe/day 2.0 300 Annual investment decisions + flexibility y 1.5 15 200 1.0 Focus on lowest cost North America gas 100 0.5 Spending at low-end of potential range 0 0 2008 2010 2011 2012 Eagle Ford liquids-rich shales development GAS LIQUIDS SOUTH TEXAS DISPOSAL 2012 CAPEX* ~$6 billion Appraisal of new liquids-rich shale acreage liquids rich >250 kboe/d potential 2017 EXPLORATION + APPRAISAL NORTH AMERICA GAS INTERNATIONAL GAS DEVELOPMENT LIQUIDS-RICH SHALES * EXCLUDES ACREAGE PURCHASES33 Copyright of Royal Dutch Shell plc 2 February 2012
  • 34. MATURING NEW GROWTH OPTIONSNORTH AMERICA GAS VALUE CHAINSLEVERAGE SHELL INTEGRATION KNOW-HOW EXAMPLE: COMMERCIALISING LNG FOR TRANSPORT Fort St John Fort Mc Murray Grande Prairie Gas into il i i G i t oil pricing opportunity t it Canada Green Corridor FID 2011 FID for 0.3 mtpa LNG Edmonton Long distance truck fuel Assessing gas potential: LNG retail infrastructure Calgary C l Vancouver Jumping Pound • LNG-for transport Canada ENGINES MODIFIED FOR LNG • Western Canada LNG • Gas-to-chemicals in Appalachia • GTL options Canada: Jumping Pound Gas Plant LNG powered truck34 Copyright of Royal Dutch Shell plc 2 February 2012
  • 35. MATURING NEW GROWTH OPTIONSIRAQ OIL & GASWEST QURNA 1 + MAJNOON BASRAH GAS COMPANY (BGC) Majnoon West Qurna1 South Gas Processing Plants BASRAH Rumaila Zubair South Gas LPG Terminal Barge unloading pipe racks at th B l di i k t the OIL FIELDS WITH SHELL INTEREST Majnoon Jetty, Shat-al-Arab waterway GAS SUPPLIES FOR BGC West Qurna 1 November 2011 Joint Venture approved • Rehabilitation program progressing ~2 bcf/d wet gas feedstock • Cost recovery commenced Majnoon: ~ 700 msfc/day currently flared • Drilling programme under way for FCP Phased development approach 3-6 month conversion of capex to cash flow post- • Domestic gas, 35 kboe/d condensate, 5 mtpa LPG FCP/IPT • Long term LNG export p g p potential Shell 44%35 Copyright of Royal Dutch Shell plc 2 February 2012
  • 36. MATURING NEXT GROWTH OPTIONSMATURING NEW PROJECTS 2012+ Long-term growth and investment TIGHT GAS – N. AMERICA CARMON CREEK - CANADA Options to flex annual spending with macro Capex and growth outcomes Investment decisions driven by ARROW - AUSTRALIA APPOMATTOX - USA Portfolio fit o o o Affordability Profitability y Maturing 36 project options Portfolio can support profitable growth to ~202036 Copyright of Royal Dutch Shell plc 2 February 2012
  • 37. ROYAL DUTCH SHELL FINANCIAL FRAMEWORK37 Copyright of Royal Dutch Shell plc 2 February 2012
  • 38. CAPITAL INVESTMENTSTRONG PROJECT FLOW DRIVES INVESTMENT GROWTHcapital investment $ billion Thematic Schiehallion Redevelopment R d l t AOSP Debottlenecking EXPLORATION 30 Clair Ph2 LNG for transport UK Retail HEAVY OIL & EOR North America NA LRS tight gas TIGHT/SHALE OIL/GAS US chemicals Basrah Gas Company Eagle FordUPSTREAM Mars-B M B Qatar chemicals Cardamom Sabah Gas Kebabangan DEEPWATER 20 Abadi FLNG Raízen INTEGRATED GAS NWS GWF Ph1 Prelude FLNG BC-10 Ph2 Wheatstone LNG TRADITIONAL 10 FID 2010-2011 DOWNSTREAM 2011 PORTFOLIO GROWTH 2011 2012 $ billion 2010 Target 2011 Target 0 Organic investment 24 28 26 ~32 2012 Acquisitions 7 2.5 5 Disposals (7) (5) (7) (~2-3) Net Capital Investment 24 25-27 24 ~3038 Copyright of Royal Dutch Shell plc 2 February 2012
  • 39. GROWTH DELIVERY 2012+UPDATING OUR GROWTH OUTLOOKOIL & GAS PRODUCTION + OUTCOMES SUSTAINED CASH FLOW GROWTHmillion boe/day $ billion4.0 200 200 $100/bbl $80/bbl3.5 150 150 $87/bbl Brent 100 1003.030 50 502.5 0 0 2009 2010 2011 2017-18 2008 -2011 2012 – 2015 average POTENTIAL PRODUCTION + POTENTIAL CASH FLOW FROM NET CAPITAL INVESTMENT 2010-11 ASSET SALES OPERATIONS DIVIDENDS AND BUYBACKS FUTURE ASSET SALES AND LICENSE EXPIRIESPRODUCTION OUTLOOK @ $80/BBL BRENT. CFFO OUTLOOK ASSUMES IMPROVED US GAS AND DOWNSTREAM ENVIRONMENT FROM 2011; CFFO EXCLUDES WORKING CAPITAL MOVEMENTS39 Copyright of Royal Dutch Shell plc 2 February 2012
  • 40. FINANCIAL FRAMEWORK CASH PERFORMANCE +30 50% +30-50% CFFO 2012 15 versus 2012-15 2008-11 Growth free cash flow CFFO drives investment + payout PAY-OUT INVESTMENT Dividend linked to business results ~$30 billi net capex 2012 $30 billion t Scrip dividend with buy back offset Affordability, profitability, portfolio ~$10.5 billion 2011 BALANCE SHEET 0 – 30% gearing through cycle Balance sheet underpins investment Capital employed g p p y grows steadily y* CFFO OUTLOOK @$80-$100/BBL BRENT AND ASSUMES IMPROVED US GAS AND DOWNSTREAM ENVIRONMENT FROM 2011; CFFO EXCLUDES WORKING CAPITAL MOVEMENTS40 Copyright of Royal Dutch Shell plc 2 February 2012
  • 41. ROYAL DUTCH SHELL SUMMARY41 Copyright of Royal Dutch Shell plc 2 February 2012
  • 42. SUMMARY2012+ PRIORITIES 12 billion boe resources on stream CONTINUOUS IMPROVEMENT Drive D i new cashflow growth: hfl th GROWTH DELIVERY +30-50 % CFFO 2012-15 versus 2008-11* Maturing >60 projects; ~20 billion boe resources MATURE NEW OPTIONS Exploration + bolt-on deals PERFORMANCE FOCUS 2017-18 production potential ~4 mboe/d average* CFFO OUTLOOK @$80-$100/BBL BRENT AND ASSUMES IMPROVED US GAS AND DOWNSTREAM ENVIRONMENT FROM 2011; CFFO EXCLUDES WORKING CAPITAL MOVEMENTS42 Copyright of Royal Dutch Shell plc 2 February 2012
  • 43. ROYAL DUTCH SHELL Q&A43 Copyright of Royal Dutch Shell plc 2 February 2012