Royal Dutch Shell plc 2014 Management Day analyst webcast
Upcoming SlideShare
Loading in...5
×

Like this? Share it with your network

Share

Royal Dutch Shell plc 2014 Management Day analyst webcast

  • 15,026 views
Uploaded on

Ben van Beurden, Chief Executive Officer of Royal Dutch Shell plc hosted a live video webcast of the 2014 management day presentation on Thursday March 13, 2014 at 13:00 GMT (14:00 CET / 09:00 EDT).

Ben van Beurden, Chief Executive Officer of Royal Dutch Shell plc hosted a live video webcast of the 2014 management day presentation on Thursday March 13, 2014 at 13:00 GMT (14:00 CET / 09:00 EDT).

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
No Downloads

Views

Total Views
15,026
On Slideshare
3,178
From Embeds
11,848
Number of Embeds
15

Actions

Shares
Downloads
172
Comments
0
Likes
3

Embeds 11,848

http://www.shell.com 11,813
http://www.companyspotlight.com 10
http://accessibility_checker.siteimprove.com 9
http://10.62.245.28 4
http://10.47.6.160 2
http://www.slideee.com 1
http://158.28.226.45 1
http://205.135.16.68 1
http://10.14.245.15 1
https://www.linkedin.com 1
http://158.35.226.33 1
http://158.28.226.50 1
https://twitter.com 1
http://192.168.182.115 1
http://translate.googleusercontent.com 1

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. 1Copyright of Royal Dutch Shell plc 13 March, 2014 BALANCING GROWTH & RETURNS MANAGEMENT DAY 2014 13 MARCH 2014 ROYAL DUTCH SHELL PLC
  • 2. 2Copyright of Royal Dutch Shell plc 13 March, 2014 DEFINITIONS & CAUTIONARY NOTE Reserves: Our use of the term “reserves” in this presentation means SEC proved oil and gas reserves. Resources: Our use of the term “resources” in this presentation includes quantities of oil and gas not yet classified as SEC proved oil and gas reserves. Resources are consistent with the Society of Petroleum Engineers 2P and 2C definitions. Organic: Our use of the term Organic includes SEC proved oil and gas reserves excluding changes resulting from acquisitions, divestments and year-average pricing impact. Resources plays: our use of the term ‘resources plays’ refers to tight, shale and coal bed methane oil and gas acreage. 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, 2013 (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, 13 March, 2014. 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.
  • 3. 3Copyright of Royal Dutch Shell plc 13 March, 2014 BEN VAN BEURDEN CHIEF EXECUTIVE OFFICER ROYAL DUTCH SHELL PLC
  • 4. 4Copyright of Royal Dutch Shell plc 13 March, 2014 EXECUTING A CONSISTENT, LONG-TERM STRATEGY  Unrelenting focus on HSSE  Technology, integration and scale  Disciplined capital investment by strategic theme  Growth in cash flow through-cycle  Competitive shareholder returns Shearwater platform North Sea, UK
  • 5. 5Copyright of Royal Dutch Shell plc 13 March, 2014 AGENDA Ben van Beurden Chief Executive Officer Simon Henry Chief Financial Officer John Abbott Downstream Director Marvin Odum Upstream Americas Director Question & answer session Panel break-outs: Projects & Technology + Upstream International Upstream Americas Downstream
  • 6. 6Copyright of Royal Dutch Shell plc 13 March, 2014 FOCUS ON SAFETY 2013 UPDATE Goal Zero on safety Injuries – TRCF/million working hours Spills - operational Volume in thousand tonnes Energy intensity - refineries Energy Intensity Index (EEITM) million working hours Working hours (RHS)TRCF  HSSE priority  Performance + transparency Process safety trend Number of incidents Tier 1 incidents Tier 2 incidents
  • 7. 7Copyright of Royal Dutch Shell plc 13 March, 2014  Balancing risk and reward  Strict investment hurdles and price screens drive returns ASPIRED PORTFOLIO ATTRACTIVENESS Growth & returns Opportunity scale RESILIENCE Risk, performance & uncertainty PORTFOLIO MANAGEMENT STRATEGIC INTENT RESULTS & PAY-OUT
  • 8. 8Copyright of Royal Dutch Shell plc 13 March, 2014 FUTURE OPPORTUNITIES RESOURCES PLAYS DEEP-WATERINTEGRATED GAS UPSTREAM DOWNSTREAM INVESTMENT PRIORITIES + STRATEGIC INTENT 1 Iraq, Nigeria onshore (SPDC), Kazakhstan, heavy oil, Arctic Engines  Free cash flow businesses  Maintain competitiveness  Asset integrity + selective growth Growth Priority  Global leadership established  High-grading our rich opportunity set Longer Term  Major potential; managing non-technical risks  Slower pace + capital allocation  Credible, competitive, affordable  Investment choices driven on a global thematic basis 1
  • 9. 9Copyright of Royal Dutch Shell plc 13 March, 2014 FINANCIAL PERFORMANCE TRACK RECORD Earnings $ billion CCS Cash flow from operations $ billion Total capital investment $ billion Payout $ billion Dividend declared BuybackOrganic capital investment Upstream Downstream Corporate Identified items Acquisitions
  • 10. 10Copyright of Royal Dutch Shell plc 13 March, 2014 FINANCIAL PERFORMANCE COMPETITIVE POSITION EPS on reported CCS basis Earnings per share growth – 3 years % growth 2010-2013 Cash flow per share growth – 3 years Total shareholder return – 3 years 2013 ROACE ROACE: earnings on reported local GAAP basis Shell Competitors % growth 2010-2013 % growth 2010-2013
  • 11. 11Copyright of Royal Dutch Shell plc 13 March, 2014  Changing emphasis in 2014 2014 PRIORITIES  Returns and cash flow  Competitive returns for shareholders  Take hard choices on new options  Increase asset sales  Reduce pace of growth investment  Major deep-water start-ups in 2014  Integrate 2013 acquisitions Deliver new projects Enhance our capital efficiency Improve our financial performance
  • 12. 12Copyright of Royal Dutch Shell plc 13 March, 2014 IMPROVE FINANCIAL PERFORMANCE: RESPONDING TO NEW MARKET DYNAMICS North America resources plays Oil Products Geelong refinery, AustraliaGroundbirch, Canada  ~$80 billion capital employed  Financial performance not acceptable  Multi-year turn-around  Priorities:  Portfolio restructuring + potential write-downs  Cost reduction + margin improvement  Invest for financial resilience + selective growth
  • 13. 13Copyright of Royal Dutch Shell plc 13 March, 2014 IMPROVE FINANCIAL PERFORMANCE CONTINUED DRIVE ON COST EFFICIENCY Enterprise framework agreements (EFAs) cumulative # EFAs negotiated Price positioning of EFAs EFA prices vs. range of quotes received from market Supply chain efficiency: ~$65 billion / year spend Standardisation + replication: Platforms, subsea equipment, facilities Drilling efficiency: Rig contracts Repeatable wells + design EFA price %
  • 14. 14Copyright of Royal Dutch Shell plc 13 March, 2014 IMPROVE FINANCIAL PERFORMANCE IN UPSTREAM ENGINE  Production decline halted  focus on up-time  reservoir development  sub-surface dynamics  Innovative EOR schemes  2012-13 impacted by high levels of maintenance  2013 maintenance downtime 50 kboe per day (vs. 35 kboe per day downtime in 2012)  Address late life assets: fix or divest PDO Oman UK North Sea kboe per day, Shell sharekboe/day, Shell share 2012:117kboe/d 2013: 91kboe/d Actual production assumed production with continued decline
  • 15. 15Copyright of Royal Dutch Shell plc 13 March, 2014 IMPROVE FINANCIAL PERFORMANCE DRIVE TO FURTHER ENHANCE INTEGRATED GAS PROFITABILITY Includes LNG + GTL; earnings excluding identified items Increasing Shell’s managed sales Total LNG volumes in mtpa Shell’s LNG portfolio LNG Peru Altamira Baja Nigeria Hazira NWS Pluto QG-4 Elba Spain Prelude Gorgon Atlantic LNG Oman Sakhalin Malaysia Brunei Cove Point LNG supply Under construction Regasification Trading flows 2014 2013 >25 mtpa >30 mtpa 2017 ~40 mtpa $ billion Integrated Gas financial performance Earnings ~400% Earnings CFFO ROACE (RHS)JV marketed Shell directly managed QG4 Pearl GTL Pluto LNG North Rankin Repsol LNG Elba Gorgon T1-3 Prelude FLNG North West Shelf Sakhalin
  • 16. 16Copyright of Royal Dutch Shell plc 13 March, 2014 2014 PRIORITIES  Returns and cash flow  Competitive returns for shareholders  Take hard choices on new options  Increase asset sales  Reduce pace of growth investment  Major deep-water start-ups in 2014  Integrate 2013 acquisitions Deliver new projects Enhance our capital efficiency Improve our financial performance
  • 17. 17Copyright of Royal Dutch Shell plc 13 March, 2014 DECONSTRUCTING OUR PORTFOLIO 2013 $ billion CCS earnings CFFO Organic capital investment Capital employed ROACE Engines 5 8 5 64 7% 6 10 7 17 36% GrowthPriorities 9 12 6 57 17% 3 5 9 23 15% LongerTerm (4) 0 6 25 (12)% 1 3 5 32 3% FUTURE OPPORTUNITIES1 RESOURCES PLAYS DEEP-WATER INTEGRATED GAS UPSTREAM ENGINE DOWNSTREAM ENGINE Mature + drives free cash flow Profitable + growing Returns impacted by growth spend CCS earnings excluding identified items; ROACE based on CCS earnings excluding identified items 1 Iraq, Nigeria onshore (SPDC), Kazakhstan, Arctic, heavy oil
  • 18. 18Copyright of Royal Dutch Shell plc 13 March, 2014 ENHANCE CAPITAL EFFICIENCY TAKE HARD CHOICES FEED FID On stream Explore Feasibility study Identify & Assess Select Define Execute On stream 12 billion boe 7 billion boe 11 billion boe  Hard choices on growth projects:  US GTL  Alaska  LNG FID pause in Asia Pacific  AOSP debottlenecking  Wheatstone  Cove  others ~$8 billion capital investment ~$27 billion capital investment Low cost options + Early high-grading Increase predictability Flawless execution of major spend 2014
  • 19. 19Copyright of Royal Dutch Shell plc 13 March, 2014 ENHANCE CAPITAL EFFICIENCY MAKING OUR PLANS CREDIBLE, COMPETITIVE, AFFORDABLE ~150 performance units implemented  Targeted growth spend  Address underperforming assets  Increase divestment of non-core positions Sharpen our focus: Asset sales  Wheatstone LNG  BC-10 dilution  UA resources plays  Nigeria onshore  Norway DS  Italy DS  Australia DS  Others Resilience Attractiveness Keep and grow Fix or divest Exit $15 billion divestments 2014-15
  • 20. 20Copyright of Royal Dutch Shell plc 13 March, 2014 IDENTIFY/ASSESS US GTL  - CANCELLED Gorgon LNG T4 - PAUSE Sunrise LNG - PAUSE ENHANCE CAPITAL EFFICIENCY CAPITAL CEILINGS + OPTION SET DRIVE HARD CHOICES Integrated Gas EXECUTE Gorgon LNG T1-3 Prelude FLNG Wheatstone  - SOLD MMLS LNG (Elba) SELECT Arrow LNG - REDESIGN Browse LNG - REDESIGN Abadi LNG ph2 LNG Canada Sakhalin T3 DEFINE Abadi LNG ph1 ON STREAM Atlantic LNG Brunei LNG Malaysia LNG Nigeria LNG Northwest Shelf Oman LNG Peru LNG Pluto Qatargas 4 Sakhalin LNG MTPA: 17.6 MTPA: 0.9 MTPA: 7.5 MTPA: 26.1 START UP FID Shell share equity liquefaction capacity in mtpa
  • 21. 21Copyright of Royal Dutch Shell plc 13 March, 2014 ENHANCE CAPITAL EFFICIENCY 2013-14 CAPITAL SPENDING Total capital investment $ billion Future opportunities Resources plays Downstream (incl. Corporate) Europe Deep-water Africa/Middle East/CIS Asia Pacific Americas Upstream Integrated gas Upstream engine Downstream (incl. Corporate)  Strict capital ceilings  More competitive returns
  • 22. 22Copyright of Royal Dutch Shell plc 13 March, 2014 2014 PRIORITIES  Returns and cash flow  Competitive returns for shareholders  Take hard choices on new options  Increase asset sales  Reduce pace of growth investment  Major deep-water start-ups in 2014  Integrate 2013 acquisitions Deliver new projects Enhance our capital efficiency Improve our financial performance
  • 23. 23Copyright of Royal Dutch Shell plc 13 March, 2014 PROJECT MANAGEMENT + BENCHMARKING IPA – Independent Project Analysis by Industry Benchmarking Consortium IPA project benchmarkUpstream project status Construction time elapsed % 1Q 2Q 3Q 4th Quartile Upstream cost Downstream cost  Oversight and accountability  Track record Construction time elapsed %
  • 24. 24Copyright of Royal Dutch Shell plc 13 March, 2014  Perdido  Singapore: Chemicals  North America: tight gas  Gbaran-Ubie  Gjoa  AOSP-1  West Qurna  Schoonebeek  Raízen  North America: tight gas  Qatargas 4 LNG  Pearl GTL  Qarn Alam  Harweel  Caesar Tonga ph1  Gumusut-Kakap (early production)  Pluto LNG  North America: tight gas  Eagle Ford  Majnoon FCP  BC-10 ph2  Kashagan  Basrah gas comp.  North Rankin  Amal steam  AOSP debottlenecking  Repsol LNG acquisition  Mars B  Petai  Cardamom  Gumusut-Kakap  others DELIVER NEW PROJECTS TRACK RECORD 2010-14 Gumusut-Kakap Raízen 2010 2011 2012 2013 2014 Key Upstream project start-ups: Pearl GTL  Consistent delivery of new projects  2013 impact: $9 billion CFFO from 2010+ start-ups Production growth from key start-ups kboe per day $ billion Production Cash flow from operations (RHS)
  • 25. 25Copyright of Royal Dutch Shell plc 13 March, 2014 CONVENTIONAL EXPLORATION PORTFOLIO + THEMES  Increased focus in our exploration spending Spend including deals ($ billion) Resources/potential added1 (billion boe) Oil & gas split (%) 2011-2013 2011-2013 2013 performance ARCTIC ~2 0 Alaska drilling pause FRONTIER Under explored basins ~4 0.9 (95% oil, 5% gas) Albania: Shpirag-2 Brazil: Libra access HEARTLANDS New plays in Shell producing basins ~8 2.6 (25% oil, 75% gas) GOM: Vicksburg Australia: Kentish Knock Nigeria: Zabazaba appraisal NEAR FIELD High value ~1 0.4 (35% oil, 65% gas) 19 near field discoveries Nigeria (SPDC), Oman, Egypt, Netherlands, Brunei, Australia Prospect size (million boe) Time to development (years) 15+ 10+ 3+ <3 5-50 50-250 >250 >500 1 includes acquisitions
  • 26. 26Copyright of Royal Dutch Shell plc 13 March, 2014 GLOBAL RESOURCES PLAYS BUILDING CAPABILITIES IN LONG TERM OPPORTUNITY Total resources plays capital investment E&A On stream Gas Liquids Rich  2013 production 0.3 mboe/d  2014 exploration spend $3 billion 2013 exploration and appraisal success  $ billion Resources + potential Future potential On stream Execute (under construction) Select/Define 14.4 billion boe Americas International Liquids rich shales (underlined) ACCESS Tunisia EXPLORATION Pembina Turkey Colombia Russia Sichuan Germany Ukraine APPRAISAL/PILOT Argentina Kaybob Permian Appalachia Changbei 2 Oman DEVELOPMENT Early Groundbirch Mature Pinedale Haynesville Foothills Deep Basin Changbei Western Canada Colombia Argentina Neuquen Lower 48 USA Germany Ukraine Turkey Oman Sichuan Changbei Arrow  Changbei 2 Russia Future potential = discovered + prospective resources Tunisia
  • 27. 27Copyright of Royal Dutch Shell plc 13 March, 2014 SIMON HENRY CHIEF FINANCIAL OFFICER ROYAL DUTCH SHELL PLC
  • 28. 28Copyright of Royal Dutch Shell plc 13 March, 2014 FINANCIAL FRAMEWORK AND PRIORITIES Priorities for cash 1. Debt service 2. Dividends: growth policy 3. Capital investment: disciplined through cycle growth 4. Return surplus cash: buy-backs CASH PERFORMANCE CFFO drives investment + payout INVESTMENT Affordability, profitability, portfolio PAY-OUT Dividend linked to business results BALANCE SHEET 0 – 30% gearing through cycle  Conservative balance sheet underpins financial framework
  • 29. 29Copyright of Royal Dutch Shell plc 13 March, 2014 UP STREAM DOWN STREAM CASH FLOW AND PAY-OUT Cash generation $ billion Dividend track record $ billion Strong balance sheet $ billion Cash flow from operations Asset sales Capex + equity acc. investments $ billion 2011-13 2013 UP STREAM DOWN STREAM Acquisitions Dividend and buy back Gearing range Net debt Dividends declared Gearing (RHS) 12 months rolling  Strong balance sheet  Generating surplus cash  Dividend track record
  • 30. 30Copyright of Royal Dutch Shell plc 13 March, 2014 CASH FLOW + RETURNS ROACE %, 4Q rolling Cash flow from operations $ billion, 4Q rolling Shell peer group peer group Shell ROACE: earnings on reported local GAAP basis
  • 31. 31Copyright of Royal Dutch Shell plc 13 March, 2014 DECONSTRUCTING OUR CAPITAL INVESTMENT 2014 organic capital investment $ billion  Balancing growth + returns Exploration + pre-FID Key growth projects Care + maintain Smaller growth projects Preparing new options Driving new upstream growth Maintaining competitive cash generation
  • 32. 32Copyright of Royal Dutch Shell plc 13 March, 2014 SEC PROVED RESERVES POSITION 1 Excludes acquisitions, divestments and price impacts 2 Reserves attributable to Royal Dutch Shell shareholders 2013 Reserves performance  2013 RRR 131%  2011-13 RRR 91%  Reserves life at end 2013 ~11.5 years 2011-13 Reserves average performance  Organic1 additions ~1.4 billion boe  Production ~1.2 billion boe  Organic reserves replacement 112% Reserves Replacement SEC proved reserves Major reserves additions 2011-13 Reserves additions 2011-13 2013 Organic 112% 123% Organic incl. price effects 95% 127% Net Reserves2 91% 131% (billion boe) 2011 2012 2013 Organic reserves additions 1.5 1.0 1.5 Production 1.2 1.2 1.2 Net Reserves2 14.2 13.6 13.9
  • 33. 33Copyright of Royal Dutch Shell plc 13 March, 2014 Carmon Creek ph1&2 Rabab Harweel Erha North ph2 BC-10 ph3 Stones Groundbirch billion boe RESOURCES UPDATE Longer-term upside 2009 2010 2011 2012 2013 On stream Execute (under construction) Select/Define Production NWS Gas NR2 BC-10 ph2 Amal Steam Majnoon FCP Vito BMS-54 Zabazaba Appomattox Permian Converting resources to production… 2013 resources by theme Deep-water Integrated gas Upstream engine Resources plays Future opportunities  Rebuilding on stream resources 2009-13
  • 34. 34Copyright of Royal Dutch Shell plc 13 March, 2014 Start-up 2013 start-up 2014-2015 2016-2018  Bukom ECC debottleneck  Bukom cogeneration  Jack St.Malo pipeline  Singapore LOBP  Westward-Ho pipeline  Amal Steam  Corrib   Clair ph2  Schiehallion Redevelopment  Tempa Rossa  Rabab Harweel integrated project  North Rankin 2  Gorgon LNG T1-3  Prelude FLNG   MMLS LNG (Elba)   BC-10 ph2   Mars-B   Cardamom   Gumusut Kakap   Sabah Gas KBB  Bonga North West   Petai  BC-10 ph3   Malikai   Stones   Erha North ph2  North America tight gas + liquids rich shales  AOSP debottlenecking  Kashagan ph1  Majnoon FCP   Basrah Gas Company  Southern Swamp AG   Gbaran-Ubie ph2   Trans Niger loopline   Carmon Creek ph1+2  Forcados Yokri  Peak production (kboe/d) 200 335 560 NEW START-UPS 2013-2018  29 major projects  Strong project flow Production @ $80 Brent scenario; Shell share at peak Bonga North West Gumusut-Kakap  Shell operated FUTURE OPPORTUNITIES RESOURCES PLAYS DEEP-WATER INTEGRATED GAS UPSTREAM ENGINE DOWNSTREAM ENGINE
  • 35. 35Copyright of Royal Dutch Shell plc 13 March, 2014 BALANCING GROWTH + RETURNS Outlook assumes 2013 macro; ROACE CCS earnings excluding identified items  Positive outlook for ROACE + CFFO  Near-term growth: deep-water, upstream engines, future opportunities  Integrated gas growth 2016+  Restructure resources plays + downstream ROACE (%) Downstream engine Upstream engine Integrated gas Deep-water Resources plays Future opportunities Bubble size represents 2013 capital employed CFFO in billion $ 2013 ROACE 2013 2015/16 potential
  • 36. 36Copyright of Royal Dutch Shell plc 13 March, 2014 JOHN ABBOTT DOWNSTREAM DIRECTOR ROYAL DUTCH SHELL PLC
  • 37. 37Copyright of Royal Dutch Shell plc 13 March, 2014 DOWNSTREAM STRATEGY Developing and sustaining competitive advantage through… Advantaged feedstock + supply Improving our footprint Differentiated Products + Customer Offer Distinguished Brand  Priority to improve our financial performance
  • 38. 38Copyright of Royal Dutch Shell plc 13 March, 2014 DOWNSTREAM MACRO LANDSCAPE 1 Ethylene + propylene + benzene Oil Products  Structural refining overcapacity  Liquids rich shales changing the dynamics  Efficiency and mogas displacement in transportation fuels  Challenging competitive landscape Chemicals  Chemicals demand growth robust  Significant feedstock price movements  North America re-emerges as chemicals exporter  Growth opportunity Excess industry refining capacity million bpd Base1 chemicals growth potential Domestic demand in million tonnes per annum Spare capacity Global average refining margin (RHS) North America EuropeSouth America Middle East Asia Others $/bbl
  • 39. 39Copyright of Royal Dutch Shell plc 13 March, 2014 DOWNSTREAM OPERATIONAL EXCELLENCE CONTINUOUS IMPROVEMENT Port Arthur expansion included from 2013 Focus on HSSE continues Injuries – TRCF/million working hours Capital discipline $ billion Operating performance % unplanned downtime Brand Global brand preference million working hours Refining Working hours TRCF Chemicals Shell Other majors Source: Ipsos – Global Customer Tracker (covering 30+ markets) Non-growth Oil Products Growth Chemicals
  • 40. 40Copyright of Royal Dutch Shell plc 13 March, 2014 DOWNSTREAM FINANCIAL RESULTS CCS earnings excluding identified items Earnings + cash flow $ billion Capital employed + ROACE $ billion Free cash flow $ billion CFFO excl. WC movements Working capital movements Capital investment Acquisitions Free cash flow (RHS)  Improved Chemicals performance  Challenging Oil Products results  Priority to improve ROACE, CFFO & FCF 2012 2013201120102009 % $ billion Potential Potential Asset sales Earnings CFFO CFFO average 2011-13 Capital Employed ROACE (RHS) ROACE average 2011-13 (RHS)
  • 41. 41Copyright of Royal Dutch Shell plc 13 March, 2014 DOWNSTREAM COMPETITIVE LANDSCAPE Earnings excluding identified items; peer group: XOM, LBI, DOW, BP, RDS Downstream ROACE Chemicals ROACE 2009 2010 2011 2012 2013 Shell Chemicals Peer group range Earnings on local GAAP basis adjusted for inventory valuation differences and excluding identified items; peer group: Chevron, Total, BP, XOM, RDS Peer group rangeShell Downstream  Chemicals turn-around  Legacy asset positions  Complex competitive drivers
  • 42. 42Copyright of Royal Dutch Shell plc 13 March, 2014 CHEMICALS TURNAROUND Restated for IAS19, 2008 ROCE, CCS earnings excluding identified items  Investment in advantaged feedstock  Refocused on strong core + concentrated footprint  Performance units management  Returns recovery + growth opportunities Shift to advantaged feedstock Improving ROACE $ billion Capital employed Chemicals ROACE Chemicals (RHS) Advantaged liquids Advantaged gas Generic liquids Generic gas 2007 2013 % ROACE average 2011-13 (RHS) ~16% Shell Chemicals:  Base chemicals + derivatives  Advantaged feedstock  Bulk sales to industrial customers Major improvements delivered
  • 43. 43Copyright of Royal Dutch Shell plc 13 March, 2014 OIL PRODUCTS PERFORMANCE Restated for IAS19, 2008 ROCE, CCS earnings excluding identified items 2008 – 2013  Reduced footprint + costs  Port Arthur expansion  Added Brazil biofuels + East marketing growth  Returns remain under pressure Portfolio restructuring ROACE remains low $ billion Capital employed ROACE (RHS) Refining capacity Marketing -10% -20 % % ROACE average 2011-13 (RHS) Million b/d Million b/d ~6% -0.4 Mb/d -45 countries
  • 44. 44Copyright of Royal Dutch Shell plc 13 March, 2014 PORTFOLIO SEGMENTATION + PERFORMANCE Downstream businesses 2013 CFFO ($ billion) 2013 ROACE (%)  New segmentation into >80 performance units  Action plans to improve returns + CFFO or exit  Focus on cost efficiency  Targeted investment Bubble size = capital employed -5% 10% -20% >40%Chemicals Merchant refining Integrated refining + marketing value chain Fuels marketing Biofuels Lubricants ROACE based on CCS earnings excluding identified earnings
  • 45. 45Copyright of Royal Dutch Shell plc 13 March, 2014 SHARPER FOCUS ON UPGRADING OUR PORTFOLIO Downstream asset sales $ billion Portfolio change Resilience Attractiveness Selective Growth:  Chemicals  China  LNG for transport  Premium fuels + lubes  Biofuels  Refinery crude flexibility and product slate  others Fix:  Motiva  Singapore fuels  Pernis + Rheinland  others Exit:  Italy  Norway  Australia  others  Optimise footprint + potential impairments  Integrated value capture  Selective investment in growth markets  Capital discipline and project delivery agreements year-to-date
  • 46. 46Copyright of Royal Dutch Shell plc 13 March, 2014 IMPROVING PERFORMANCE OF KEY ASSETS Bukom – performance turnaround Scotford – building on sustained performance Refinery unplanned downtime in %  High margin refinery  Integrated upstream + downstream  Integration value: $4/bbl upstream + $3/bbl chemicals  New debottlenecking potential  Over-supplied fuels market  Improving efficiency; advantaged liquids feedstock; energy costs  Cogeneration + cracker debottlenecking projects 2015 Unplanned downtime 3-year rolling average
  • 47. 47Copyright of Royal Dutch Shell plc 13 March, 2014 OIL PRODUCTS GROWTH IN KEY MARKETS  Largest IOC retail network in China  > 1000 sites in multiple joint ventures  Largest IOC by lubricants market share  Shell’s 2nd largest lubes market globally  Leading lubes brand among IOCs, with #1 brand share preference for Shell Helix and Rimula  Growth potential  Shell branded retail network ~4800 sites  Brazil’s #1 sugar-ethanol player  Global #1 sugar-ethanol player (sugarcane based)  Growth opportunities  Operational excellence  Brown field expansions  Production of 2nd generation ethanol China marketing growth Brazil - Raízen JV billion litres million tonnes billion R$ (local curr)# Number of operating sites Fuels volume Volume (million litres) Fuels volume sold Sugarcane crushed NIBIAT
  • 48. 48Copyright of Royal Dutch Shell plc 13 March, 2014 DOWNSTREAM STRATEGY Developing and sustaining competitive advantage through…  Priority to improve our financial performance  Renewed focus on upgrading our portfolio  Returns + free cash flow improvement Advantaged feedstock + supply Improving our footprint Differentiated Products + Customer Offer Distinguished Brand
  • 49. 49Copyright of Royal Dutch Shell plc 13 March, 2014 MARVIN ODUM UPSTREAM AMERICAS DIRECTOR ROYAL DUTCH SHELL PLC
  • 50. 50Copyright of Royal Dutch Shell plc 13 March, 2014 UPSTREAM AMERICAS STRATEGY Major OECD growth potential for Shell Substantial and diverse resources base Deep-water Industry leadership Heavy Oil Mining and in-situ Resources Plays Portfolio repositioning Integrated Gas Monetizing gas Arctic Long-term potential Profitable + competitive today Potential  Priorities to deliver our deep-water and heavy oil growth projects  Establish resources plays and integrated gas profitability  Drive sharper cost focus and capital efficiency across our operations
  • 51. 51Copyright of Royal Dutch Shell plc 13 March, 2014 UPSTREAM AMERICAS PORTFOLIO SUBSTANTIAL UNDEVELOPED UPSTREAM RESOURCES Resources Deep-water Resources plays Heavy oil On stream Execute (under construction) Select/Define 11.7 billion boe Production million boe per day Deep-waterResources plays Heavy oil Capital investments $ billion Deep-water Resources plays Heavy oil Pre-FID/other +2% -20% Resources Plays Deep-water Gas monetization options Heavy Oil Western Canada dry gas Appalachia dry gas Carmon Creek In Situ Stones, Appomattox, Vito Libra LNG Canada Gas-to-chemicals Elba LNG Major undeveloped resources
  • 52. 52Copyright of Royal Dutch Shell plc 13 March, 2014 UPSTREAM AMERICAS PORTFOLIO FINANCIALS DIVERSE BUSINESSES & MATURITY 2013 $ billion Earnings1 CFFO Organic capital investment Capital employed ROACE 1 3 6 15 10% 2 3 2 19 9% (3) (0) 5 24 (10)% (1) (1) 1 3 n.a. (0) (0) 0 0 n.a. RESOURCES PLAYS DEEP-WATER HEAVY OIL INTEGRATED GAS ARCTIC 1 Earnings excluding identified items; ROACE based on earnings excluding identified items Growing + competitive  Delivering new growth 2014+ Future Potential  Restructuring resources plays  Growth options
  • 53. 53Copyright of Royal Dutch Shell plc 13 March, 2014 UPSTREAM AMERICAS FINANCIAL DRIVERS Earnings excluding identified items Earnings 2011 to 2013 Balance sheet $ billion On stream Under construction Resources plays Deep-water Non productive leases Heavy oil/Arctic LRS $3.7 billion clean DD+A 2013 $ billion GAS  2013 CFFO $5.3 billion  Earnings + balance sheet impacted by growth portfolio  2013 clean DD&A Upstream Americas $6.3 billion, of which $3.7 billion in resources plays 20132011 - 0.9 -1.4 0.5 - 0.5 - 0.3 - 0.6 - 0.8 3.4 - 0.9 Long term growth - 0.3
  • 54. 54Copyright of Royal Dutch Shell plc 13 March, 2014 NORTH AMERICA RESOURCES PLAYS PORTFOLIO & STRATEGY North Americas capital investment $ billion Dry gas AcquisitionsLRS Divestments -50% -20%  Portfolio  Established in gas plays  Liquids rich shales exploration  Restructuring and redefining growth  Portfolio and spending reduction  Exploration & appraisal in LRS sweetspots  Define gas monetization opportunities Resources + potential Future potential On stream Execute (under construction) Select/Define 11.5 billion boe Future potential = discovered + prospective resources Haynesville Elba LNG LNG Canada Groundbirch Deep Basin/Kaybob Foothills/Pembina Pinedale Gas-to-chemicals Appalachia Liquids rich shales Announced divestment Gas monetization options Rockies LRS Permian Eagle Ford Mississippi Lime Dry gas Gas/LRS
  • 55. 55Copyright of Royal Dutch Shell plc 13 March, 2014 LIQUIDS RICH SHALES EXPLORATION AND APPRAISAL  Frontier exploration program since 2010  Move to more focused & segmented de- risking  Positive early results in Duvernay (Kaybob) and Wolfcamp (Permian)  Exit from non-material acreage LRS production Thousand boe/day Drilling focus in sweet spots Cumulative # of wells >1000boe/d potential Rig count Number of rigs Duvernay Permian OtherLiquids Associated gas Permian Canada Announced divestments Groundbirch Kaybob Pembina Rockies LRS Permian Eagle Ford Mississippi Lime Liquids rich shale Announced divestments
  • 56. 56Copyright of Royal Dutch Shell plc 13 March, 2014 DRY GAS ASSESSING MONETIZATION OPPORTUNITIES Gas production Rig count  Major resources position  Drill to maximize use of existing infrastructure  Addressing underperforming assets  Acquisition overhang  Scale & cost reduction  Retaining portfolio with cost and integration advantage thousand boe/day Number of rigs Gas Associated liquids Pinedale Groundbirch Appalachia Deep Basin Haynesville Foothills LNG Canada Groundbirch Deep Basin Foothills Pinedale Gas-to-chemicals Appalachia Gas Gas monetization options Haynesville Elba LNG
  • 57. 57Copyright of Royal Dutch Shell plc 13 March, 2014 Resilience Attractiveness 0% 20% 40% 60% 80% 100% 0 20 40 60 80 100 RESOURCES PLAYS MAJOR REVIEW OF PORTFOLIO UNDERWAY Staff reduction Drilling cost learning curve Drilling costs -30% 2013 2014E Shell employees Contractor  Reduction in Shell + contractor staff  Field office closures  Supply chain + drilling performance Portfolio Exit:  Eagle Ford  Mississippi Lime  Rockies LRS Fix or Divest:  Appalachia  Deep Basin  Pinedale  Haynesville  Foothills Grow: Permian Kaybob Pembina Argentina – Vaca Muerta Groundbirch LRS Plays Groundbirch Eagle Ford Duvernay (Kaybob)Haynesville Number of wells drilled
  • 58. 58Copyright of Royal Dutch Shell plc 13 March, 2014 LNG CANADA PROGRESSING TO FID  2 x ~6 mtpa first phase  Kitimat site agreement  25-year export license secured (24 mtpa)  Environmental assessment process initiated  Joint venture: Shell (40%), Kogas, Mitsubishi, PetroChina  TransCanada Pipelines (TCPL) to build, own & operate  ~700km pipeline  Filed environmental assessment application  Public consultation and open houses underway  Access to competitive supply LNG Canada Coastal GasLink pipeline
  • 59. 59Copyright of Royal Dutch Shell plc 13 March, 2014 HEAVY OIL DELIVERY & GROWTH  Delivery of production + financial step-up  Cost focus + footprint management  AOSP: Quest CCS development  In Situ: Carmon Creek FID 80 kboe/d Oil Sands unit cost $/bbl Net Production kboe/d Cash operating cost excluding energy Energy Oil sands In Situ Aera Assets AOSP – JV  ~225 kboe/d  Shell 60% In Situ – Shell  ~20 kboe/d  Shell 100% Aera – JV  ~135 kboe/d  Shell 52% -17% +22%
  • 60. 60Copyright of Royal Dutch Shell plc 13 March, 2014 UPSTREAM AMERICAS INTEGRATION & POTENTIAL Refinery/ chemical plant Upstream positions Midstream positions/capacity Refinery with LTO capability Gas monetization options LNG Canada Carmon Creek LRS AOSP Scotford Western Canada gas Proposed Energy East Pipeline Sarnia Appalachia Gas to chemicals Elba LNG Ho-Ho Motiva refineries Deer Park Permian Permian Express Martinez Puget Sound Proposed midstream positions/capacity  End to end value chain linkage  Efficient evacuation route to market  Advantaged refining position Mobile
  • 61. 61Copyright of Royal Dutch Shell plc 13 March, 2014 2013 downtime Mars Corridor Auger Brazil LEADING POSITION IN DEEP-WATER Deep water unit operating cost (Gulf of Mexico) $/bbl Capital investment $ billion Production Kboe/d Gulf of Mexico Brazil Other Base Exploration*  Track record of delivery + cost performance  2014 project start-ups drive new growth DivestmentsGrowth Source: Rystad *2013 includes Libra $1.3 billion Unit cost range Shell unit cost
  • 62. 62Copyright of Royal Dutch Shell plc 13 March, 2014 DEEP-WATER GULF OF MEXICO PROJECT DELIVERY  Payback achieved February 2014  First producer in the Paleogene (Lower Tertiary)  100 kboe/d (Shell ~34% operator)  First oil more than 6 months ahead of schedule  Shell’s 6th and largest TLP in GOM  100 kboe/d by 2016 (Shell 71.5% operator) Perdido – 2010 start-up Mars B – February 2014 start-up 0 150 kboed 100 50 ’10 ’11 ’12 ’13 ’14
  • 63. 63Copyright of Royal Dutch Shell plc 13 March, 2014 DEEP-WATER GULF OF MEXICO NEW PROJECTS Execute (under construction) On stream Select/Define Auger Mars Ursa Nakika Brutus Perdido Vito  ~100 kboe/d potential  >300 million boe resources  Shell 51.33% (operator) Appomattox  ~150 kboe/d hub potential  Integrating Vicksburg A discovery  Resources increased 100mmboe to >600 million boe  Shell ~80% (operator)  FEED started late 2013 Stones  ~50 kboe/d FPSO  >250 million boe resources  Shell 100% (operator)  FPSO under construction  2016 start-up Caesar Tonga Cardamom Deep Mars B W.Boreas, S. Deimos 100 km Cardamom Deep ~50 kboe/d Shell 100% (operator) Tie back to Auger 2014 start-up Stones FPSO Growth outlook1:  178 kboe/d on stream in 2013 + Mars B start-up 2014  100 kboe/d under construction  170 kboe/d new options FIDDiscovery Cardamom Stones Appomattox/Vicksburg Vito Start-up 1 Shell share
  • 64. 64Copyright of Royal Dutch Shell plc 13 March, 2014 Project flow 2013 2014 2015 2016/2017 Heavy Oil Deep-water Resources Plays Integrated Gas UPSTREAM AMERICAS OUTLOOK SCarmon Creek S Elba LNG S SStones SVito Cardamom FF Appomatox BC-10 ph3 LRS asset sales SF Start-upFID – final investment decision F Carmon Creek LNG Canada LRS de-risking S Mars B FEED – front end engineering & design phase 1 F LNG Canada Cost repositioning Gas integration decisions Pathways to growth for each strategic theme S BC-10 ph2
  • 65. 65Copyright of Royal Dutch Shell plc 13 March, 2014 UPSTREAM AMERICAS STRATEGY Major OECD growth potential for Shell Substantial and diverse resources base Deep-water Industry leadership Heavy Oil Mining and in-situ Resources Plays Portfolio repositioning Integrated Gas Monetizing gas Arctic Long-term potential Profitable + competitive today Potential  Priorities to deliver our deep-water and heavy oil growth projects  Establish resources plays and integrated gas profitability  Drive sharper cost focus and capital efficiency across our operations
  • 66. 66Copyright of Royal Dutch Shell plc 13 March, 2014 BEN VAN BEURDEN CHIEF EXECUTIVE OFFICER ROYAL DUTCH SHELL PLC
  • 67. 67Copyright of Royal Dutch Shell plc 13 March, 2014 2014 PRIORITIES  Returns and cash flow  Competitive returns for shareholders  Take hard choices on new options  Increase asset sales  Reduce pace of growth investment  Major deep-water start-ups in 2014  Integrate 2013 acquisitions Deliver new projects Enhance our capital efficiency Improve our financial performance
  • 68. 68Copyright of Royal Dutch Shell plc 13 March, 2014 QUESTIONS & ANSWERS MANAGEMENT DAY
  • 69. 69Copyright of Royal Dutch Shell plc 13 March, 2014 KEY UPSTREAM PROJECTS UNDER CONSTRUCTION Deep-water Integrated gas Resources plays Future opportunities Upstream engine
  • 70. 70Copyright of Royal Dutch Shell plc 13 March, 2014 PRE-FID UPSTREAM OPTIONS POTENTIAL 2014-2020 START-UPS Deep-water Integrated gas Resources plays Future opportunities Upstream engine
  • 71. 71Copyright of Royal Dutch Shell plc 13 March, 2014 IDENTIFYING NEW CHEMICALS GROWTH POTENTIAL Qatar chemicals Gas-to-chemicals US Saudi Arabia Iraq others… 2006 Nanhai 2010 USGC go-light strategy Future options… Current Potential 2010 Singapore Portfolio + options North America Asia Europe Middle East Al-Karaana petrochemicals complex (2050 ktpa) 2015+ Derivatives expansion in Jurong and USGC Pennsylvania cracker + PE Jurong derivatives (380 ktpa) Shell Base Chemicals 2013 capacity  Strengthening our core  Growing our footprint  Crackers + derivatives Scotford HCU debottleneck China refining + chemicals Sadaf expansion
  • 72. 72Copyright of Royal Dutch Shell plc 13 March, 2014 DELIVER NEW PROJECTS 2014 START-UPS Mars B, Shell 72%, 100 kboe/d Cardamom, Shell 100%, 50 kboe/d Gumusut-Kakap, Shell 33%, 135 kboe/dRepsol LNG acquisition, 4.2 mtpa
  • 73. 73Copyright of Royal Dutch Shell plc 13 March, 2014  Production decline halted  focus on up-time  reservoir development  sub-surface dynamics  Innovative EOR schemes IMPROVE PERFORMANCE IN UPSTREAM ENGINES OPERATIONAL EXCELLENCE: OMAN PDO Oman kboe/day, Shell share Qarn-Alam: enhanced oil recovery project: on stream 2011 Actual production assumed production with continued decline
  • 74. 74Copyright of Royal Dutch Shell plc 13 March, 2014 IMPROVE PERFORMANCE IN UPSTREAM ENGINES IMPACT OF MAINTENANCE IN UK NORTH SEA UK ‘000 boe per day, Shell share  2012-13 impacted by high levels of maintenance  2013 maintenance downtime 50 kboe per day (vs. 35 kboe per day downtime in 2012)  Address late life assets: fix or divest 2013 Clair, Pierce, Schiehallion, Brent, Gannet, Curlew 2012 Nelson, Anasuria, Shearwater, Pierce, Brent/Penguin, Curlew, Clair, Guillemot 2014 start-ups: Pierce, Gannet, Shearwater 2012: 117kboe/d 2013: 91kboe/d
  • 75. 75Copyright of Royal Dutch Shell plc 13 March, 2014 ROBUST LNG MARKET DYNAMICS Source: HH-Nymex, NBP-Argus, Brent-ICE, Japan Landed-CERA LNG import countries Regional gas prices $/mmbtu LNG supply $/mmbtu 1990 2013 2020 Japan landed LNG price National balancing point (UK) Henry hub (US) Brent Importing countries (RHS) Exporting countries (RHS) Volumes sold FID On stream Shell Nigeria LNG Oman LNG Malaysia Tiga North West Shelf Sakhalin Prelude FLNG Pluto Malaysia Dua Gorgon North Rankin 2  Diverse and growing market  Regional price variations QG4
  • 76. 76Copyright of Royal Dutch Shell plc 13 March, 2014 INTEGRATED GAS PORTFOLIO LEVERAGING SHELL’S SCALE AND MARKET GROWTH * Includes feed gas from non-integrated ventures Priorities  Integrate Repsol LNG acquisition  Deliver Prelude + Gorgon  Hard choices on next options  2013: ~0.7* mboe/d; 20 mtpa LNG Capital investment $ billion Shell global LNG growth Equity liquefaction capacity in mtpa Year end equity liquefaction capacity in mtpa Liquefaction Regas GTL Hazira Gorgon Prelude On stream Under construction 2013 ~2020+2007 Under construction Options On stream Repsol LNG acquisition Repsol LNG acquisitionRepsol LNG acquisition Organic capital investment Shell LNG leadership 2014 2013 2017 Repsol acquisition (2014+) Elba (MMLS)
  • 77. 77Copyright of Royal Dutch Shell plc 13 March, 2014 INTEGRATED GAS DEVELOPMENTS UNDER CONSTRUCTION: AUSTRALIA  3.6 mtpa LNG + 1.7 mtpa NGLs  Development drilling commenced Sep 2013  Hull afloat Nov 2013  Darwin supply base > 50% complete  Shell 67.5% (operator)  ~15 mtpa: 3 trains  Expansion potential  Shell 25% (Chevron operator) Prelude Floating LNG Gorgon
  • 78. 78Copyright of Royal Dutch Shell plc 13 March, 2014 GLOBAL DEEP-WATER LEADING IOC DEEP-WATER PORTFOLIO  Established production leadership  Standardized developments & production technology  Frontier exploration potential  2013: 0.3 mboe/d Organic capital investment $ billion Perdido Spar, Gulf of Mexico On stream Under development Exploration Gulf of Mexico  Cardamom  Stones Brazil  BC-10 ph3 Nigeria  Bonga NW  Erha North ph2 Malaysia/Brunei  Gumusut-Kakap  Malikai  Sabah Gas Kebabangan KBB  Petai
  • 79. 79Copyright of Royal Dutch Shell plc 13 March, 2014 IDENTIFY/ASSESS Libra ENHANCE CAPITAL EFFICIENCY MANAGING PROJECT FLOW Deep-water EXECUTE Bonga NW Cardamom Sabah gas-KBB Gumusut-Kakap Erha North ph2 Stones BC-10 ph3 Malikai SELECT BMS-54 Bosi field development Vito Zabazaba DEFINE Appomattox Bonga Main ph3 Bonga North Bonga Southwest Geronggong ON STREAM Brazil Gulf of Mexico Nigeria deep-water Brunei deep-water Malaysia deep-water ~235 kboe/d at peak 2013: ~300 kboe/d START UP FID
  • 80. 80Copyright of Royal Dutch Shell plc 13 March, 2014 IRAQ Majnoon Basrah Gas company  First major green field development in Iraq in 30 years  Start-up in Q3 2013 - currently producing >200 kboe per day  Cost recovery triggered, following the successful completion of 90 day test run in 2013  BGC: largest flare reduction project in the world delivering gas to domestic market  On stream1 May 2013; 320 mmscf/day  Current processing capacity 500 mmscf/day  2 billion scf/day potential
  • 81. 81Copyright of Royal Dutch Shell plc 13 March, 2014 NIGERIA  Bonga + Erha fields  Nov 2005: Bonga start-up; Nigeria’s first deep-water project  ~90 kboe/day (Shell 2013)  2014: Bonga NW start-up  Shell 55%  Jan ‘14: delivered 3000th LNG cargo  4.4 mtpa (Shell 2013)  Atlantic markets with Asian optionality  80-100 kboe/d divestment program underway  Focus on gas  ~180 kboe/day (Shell 2013)  Focados Yokri, Southern Swamp, Gbaran-Ubie ph2 and TNP loopline under construction Deep-water Nigeria LNG Onshore (SPDC JV) 2010-12 divestments SPDC OMLs
  • 82. 82Copyright of Royal Dutch Shell plc 13 March, 2014 IN-SITU HEAVY OIL GROWTH CARMON CREEK  2013 FID on 80 kboe/d  1.5 billion barrels of resources  Vertical steam drive integrated with cogen  100% produced water re-cycled  100% Shell Development overview Transportation options Central Processing Facilities Site Preparation Carmon Creek Quebec To USGC Hardisty Proposed and existing pipelines Proposed East Energy pipeline Tankers Edmonton 200 miles
  • 83. 83Copyright of Royal Dutch Shell plc 13 March, 2014 SHELL ARCTIC & NEAR ARCTIC CANADA RUSSIA KAZAKHSTAN NORWAY GREENLAND UNITED STATES SALYM KASHAGAN SAKHALIN NORTH POLE ORMEN LANGE BAFFIN BAY NIGLINTGAK CHUKCHI BEAUFORT KANUMAS NORWAY BARENTS Alaska, Chukchi Greenland, Baffin Bay Norway, Ormen Lange Russia, Sakhalin Russia, Salym Kazakhstan, Kashagan
  • 84. 84Copyright of Royal Dutch Shell plc 13 March, 2014 UPSTREAM AMERICAS HSSE 2013 performance:  Personal injury rate reduced by 30%  Process safety incidents reduced by ~50% Add photo Focus on HSSE continues Process safety Number of incidentsInjuries – TRCF/million working hours million working hours Working hours (RHS)TRCF Tier 1 incidents Tier 2 incidents
  • 85. 85Copyright of Royal Dutch Shell plc 13 March, 2014 0 1 2 2009 2010 2011 2012 2013 2014 2015 PROJECTS + TECHNOLOGY: COMPETITIVE PROJECTS Cost benchmarking from IPA Upstream International & International benchmarking consortium Standardization lead time: subsea trees Upstream/ Downstream IPA cost benchmark $ billion cumulative Value through standardization: subsea components UA subsea spend w/o standardization UA subsea spend Realized savings ~$200 million or 20% 1Q 2Q 3Q 4th Quartile Upstream facilities cost Index Downstream cost effectiveness  Current mandatory benchmarking for major projects  Standardization and replication to hold down cost  Improvement in front end loading  Transfer of knowledge  Competitive projects performance Peers EFA Standardization effect months 6-12 months acceleration
  • 86. 86Copyright of Royal Dutch Shell plc 13 March, 2014 0 25 50 75 0 5000 10000 15000 PROJECTS + TECHNOLOGY: WELLS Rushmore data  Average age of Shell fleet ~10 years  Declining to ~5 years by 2016  High technology fleet (dual BOP’s, Bully rig)  BOP R&D with Transocean ‘000 $/day Ultra deep-water rig ratesExample: Malaysia drilling cost Major IOC competitorsShell contracts  Competitive drilling costs Well costs in $ million Depth (ft) 4th quartile 3rd quartile 2nd quartile Top quartile Best in class Competitors 2000-2012Shell 2010 Shell 2013
  • 87. 87Copyright of Royal Dutch Shell plc 13 March, 2014 CONVENTIONAL EXPLORATION PORTFOLIO + SPEND Reloading our acreage portfolio ‘000 km2 Exploration spend $ billion  Substantial dry hole costs in 2013  Exploration spend ~$4 billion 2014  Drilling 16 basins in 2014  2014 key frontier tests  Albania, Benin, Brazil, China offshore, Gabon Exploration & Appraisal Acreage/deals Turkey Black Sea Australia Norway Brazil BruneiNova Scotia South Africa Albania Benin China Tanzania New Zealand Indonesia Malaysia French Guiana GOM Greenland Guyana Italy NorwayAlaska Colombia Australia Albania, Shpirag -2 discovery
  • 88. 88Copyright of Royal Dutch Shell plc 13 March, 2014 2013 CONVENTIONAL EXPLORATION HIGHLIGHTS  2013 entry into giant pre-salt discovery  2014: spudding 2 wells  Extended well test by end-2016  Shell 20%  Deep-water oil discovery  >100 million boe  Shell 75%  Part of a future Appomattox development  > 600 million boe (was 500 million boe)  ~30 mln boe discovered  Single well with 6 sidetracks  On-stream in 2013  Shell 50% Frontier: Brazil, Libra entry Heartland: GOM, Vicksburg “A” NFE: Brunei, Iron Duke
  • 89. 89Copyright of Royal Dutch Shell plc 13 March, 2014 EXPLORATION + APPRAISAL: KEY WELLS 2014-2015 Albania: follow- up exploration US GoM: Mars Basin, Mesozoic, Miocene, Paleogene plays Brunei Nigeria Outer Canning + Exmouth Neuquen LRS China Gabon: pre-salt Ukraine North America LRS ‘14 ‘15 Turkey Black Sea Yinggehai Malaysia Tanzania New Zealand Oman LRS Russia LRS Arrow CBM South Africa Orange Basin Canada: Nova Scotia deepwater Denmark Benin: transform margin Egypt Indonesia Norway Netherlands Frontier Heartlands Turkey LRS Brazil including Libra  2014 drilling in 16 conventional basins + 9 resources plays  2014 conventional spend $4.2* billion (2013 $5.8 billion)  2014 resources plays spend $3.1 billion (2013 $3.5 billion) Conventional Resources plays * Includes Alaska
  • 90. 90Copyright of Royal Dutch Shell plc 13 March, 2014 BALANCING GROWTH & RETURNS MANAGEMENT DAY 2014 13 MARCH 2014 ROYAL DUTCH SHELL PLC