Royal Dutch Shell plc CFO Simon Henry - Barclays conference in New York, September 5, 2012

  • 4,664 views
Uploaded on

Simon Henry, Chief Financial Officer of Royal Dutch Shell plc presented Shell’s strategy and portfolio at the Barclays conference in New York.

Simon Henry, Chief Financial Officer of Royal Dutch Shell plc presented Shell’s strategy and portfolio at the Barclays conference in New York.

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

Views

Total Views
4,664
On Slideshare
0
From Embeds
0
Number of Embeds
4

Actions

Shares
Downloads
53
Comments
0
Likes
0

Embeds 0

No embeds

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. ROYAL DUTCH SHELL PLCBARCLAYS NEW YORKNEW YORKSEPTEMBER 5, 2012Copyright of Royal Dutch Shell plc 5 September 2012 1
  • 2. ROYAL DUTCH SHELL PLCBARCLAYS NEW YORKSIMON HENRYCHIEF FINANCIAL OFFICERCopyright of Royal Dutch Shell plc 5 September 2012 2
  • 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 provenmining reserves. 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 entities. Shell Shell group RoyalDutch Shell” are sometimes used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, the words “we”, “us”and “our” are also used to refer to subsidiaries in general or to those who work for them. These expressions are also used where no useful purpose is served byidentifying the particular company or companies. ‘‘Subsidiaries’’, “Shell subsidiaries” and “Shell companies” as used in this presentation refer to companies in whichRoyal Dutch Shell either directly or indirectly has control, by having either a majority of the voting rights or the right to exercise a controlling influence. The companiesin which Shell has significant influence but not control are referred to as “associated companies” or “associates” and companies in which Shell has joint control are g p p jreferred to as “jointly controlled entities”. In this presentation, associates and jointly controlled entities are also referred to as “equity-accounted investments”. The term“Shell interest” is used for convenience to indicate the direct and/or indirect (for example, through our 23% shareholding in Woodside Petroleum Ltd.) ownershipinterest held by Shell in a venture, partnership or company, after exclusion of all third-party interest.This presentation contains forward-looking statements concerning the financial condition, results of operations and businesses of Royal Dutch Shell. All statements otherthan statements of historical fact are or may be deemed to be forward-looking statements Forward-looking statements are statements of future expectations that are are, be, statements.based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance orevents to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning thepotential exposure of Royal Dutch Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections andassumptions. These forward-looking statements are identified by their use of terms and phrases such as ‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’,‘‘intend’’, ‘‘may’’, ‘‘plan’’, ‘‘objectives’’, ‘‘outlook’’, ‘‘probably’’, ‘‘project’’, ‘‘will’’, ‘‘seek’’, ‘‘target’’, ‘‘risks’’, ‘‘goals’’, ‘‘should’’ and similar terms and phrases. Thereare a number of f f factors that could affect the f ff future operations of Royal Dutch Shell and could cause those results to differ materially f f ff from those expressed in theforward-looking statements included in this presentation, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand forShell’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition; (g) environmentaland physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of suchtransactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developmentsincluding potential litigation and regulatory measures as a result of climate changes; (k) economic and financial market conditions in various countries and regions; (l)political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval ofprojects and delays in the reimbursement for shared costs; and (m) changes in trading conditions. All forward-looking statements contained in this presentation areexpressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-lookingstatements. Additional factors that may affect future results are contained in Royal Dutch Shell’s 20-F for the year ended 31 December, 2011 (available atwww.shell.com/investor and www.sec.gov ). These factors also should be considered by the reader. Each forward-looking statement speaks only as of the date of thispresentation, 5 S September 20 2 N h Royal Dutch Sh ll nor any of its subsidiaries undertake any obligation to publicly update or revise any f b 2012. Neither l h Shell f b d d k bl bl l d forward-looking dl kstatement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferredfrom the forward-looking statements contained in this presentation. There can be no assurance that dividend payments will match or exceed those set out in thispresentation in the future, or that they will be made at all.We use certain terms in this presentation, such as resources, that the United States Securities and Exchange Commission (SEC) guidelines strictly prohibit us fromincluding in filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC websitewww.sec.gov. You can also obtain these forms from the SEC by calling 1-800-SEC-0330.Copyright of Royal Dutch Shell plc 5 September 2012 3
  • 4. OVERVIEW Performance focus H1 ‘12 earnings $13 bln; EPS unchanged g g H1 ’12 asset sales $4 bln CONTINUOUS IMPROVEMENT Growth d li G th delivery GROWTH DELIVERY H1 ‘12 underlying production growth 4% >20 projects under construction p j MATURE NEW OPTIONS PERFORMANCE FOCUS New growth options Expanding our opportunity funnel E di i f l Frontier exploration build New integrated gas optionsEarnings CCS basis, earnings and EPS excluding identified itemsCopyright of Royal Dutch Shell plc 5 September 2012 4
  • 5. ENERGY INVESTMENT FUNDAMENTALSROBUST LONGER TERM FUNDAMENTALS MANAGING SHORT-TERM VOLATILITYenergy demand outlook in million boe/d gy $/bbl $ per unit of measurement p 140 12400 120 10 100300 8 80 6200 60 4 40100 2 20 0 0 0 1980 1990 2000 2010 2020 2030 2040 2050 2008 2009 2010 2011 2012 Oil Biomass Coal Brent (LHS) Gas Wind Nuclear Henry Hub $/mmbtu (RHS) Solar Weighted average refining margin $/bbl (RHS) Shell activities Other RenewablesSource: Shell analysisCopyright of Royal Dutch Shell plc 5 September 2012 5
  • 6. CONTINUOUS IMPROVEMENTDOWNSTREAM: MINIMIZING UNPLANNED DOWNTIME UPSTREAM: WELL AND RESERVOIR MANAGEMENT% Oil production in ‘000 boe per day10 95 5 85 75 0 Implementation 2006 2007 2008 2009 2010 2011 1H2012 of structured WRM process Oil Products 20,000 bpd Chemicals 65 55 EXTRACTING MORE VALUE 2002 2004 2006 2008 2010 2012 FROM OUR ASSETS Example: OmanCopyright of Royal Dutch Shell plc 5 September 2012 6
  • 7. RECYCLING CAPITAL INTO NEW GROWTHDIVESTMENTS 2011-2012 YTD ACQUISITIONS 2011-2012 YTD ~$12 ~$6 billion billion Upstream Upstream Downstream Downstream Exit non-core positions Liquids-rich shales Strategic partnering; Prelude, Groundbirch Frontier exploration plays Refinery-to-terminal conversions LNG optionality RIGOROUS FOCUS ON CAPITAL EFFICIENCY 2012 DIVESTMENTS >$4 BLN $4Copyright of Royal Dutch Shell plc 5 September 2012 7
  • 8. GROWTH DELIVERYRAMPING UP NEW PROJECTSATHABASCA OIL SANDS, QATARGAS 4, PEARL GTL PEARL GTL PRODUCT SLATE BUILD-UP$ billion thousand boe/day 400 100% LPG NAPHTHA NAPHTHA NAPHTHA NAPHTHA GASOLINE GAS OIL NAPHTHA 200 GAS OIL 50% GAS OIL GAS OIL KEROSENE GAS OIL 0 0 BASE OIL BASE OIL BASE OIL KEROSENE PARAFFIN PARAFFIN BASE OIL 0% Typical complex -1 refinery -2 2009 2010 2011 2012 FOCUS SHIFTS FROM Capex DEVELOPMENT TO Production (RHS) COMMERCIAL PERFORMANCEShell shareCopyright of Royal Dutch Shell plc 5 September 2012 8
  • 9. MAINTAINING GROWTH MOMENTUM UPSTREAM KEY PROJECTS UNDER CONSTRUCTION UPSTREAM INVESTMENT 2012 % Schiehallion AOSP Debottlenecking Redevelopment Clair Ph2 Corrib Kashagan Ph1 as agaNorth America tight gas h h Tempa Rossa Eagle Ford Mars B Majnoon FCP UAE Caesar Tonga Cardamom Harweel Amal Steam Forcados Yokri Southern Swamp p Sabah Gas Gumusut-Kakap Kebabangan K b b Europe Asia Pacific Bonga NW Prelude FLNG Wheatstone LNG Americas Other Pluto LNG T1 (Woodside) North Rankin 2 BC-10 Phase 2 Greater Western Flank Ph 1 Gorgon LNG T1-3 On stream H1 2012 Under construction 2012 H1 FID ROBUST PROJECT FLOW + GROWTH OUTLOOK 8 BILLION BOE UNDER CONSTRUCTION ~4 MILLION BOED 2017-18 Copyright of Royal Dutch Shell plc 5 September 2012 9
  • 10. GROWTH DELIVERY 2012+MAINTAINING LNG LEADERSHIPAUSTRALIA – INDONESIA SHELL GLOBAL LNG CAPACITY + GROWTH million tonnes per annum p Abadi FLNG 40 Greater Sunrise Prelude FLNG Wheatstone Browse & Prelude Pluto (Woodside) l (W d d ) North West Shelf Gorgon T1 3 G T1-3 Arrow Wheatstone Gorgon 20 Production Under Construction Options p 0 2012 1H ~2020+ ~21 MTPA ON-STREAM 21 ON STREAM Onstream ~7 MTPA UNDER CONSTRUCTION Construction ~15 MTPA FUTURE OPTIONS OptionsCopyright of Royal Dutch Shell plc 5 September 2012 10
  • 11. PRELUDE FLOATING LNGCopyright of Royal Dutch Shell plc 5 September 2012 11
  • 12. SHELL UPSTREAM AMERICAS GROWTH TIGHT/SHALE DEEP-WATER AOSP Debottlenecking Carmon Creek North America North America tight gas Liquids rich shales Lowest cost gas + Growth focus Eagle Ford integration plays Under Construction Mars B M Mars-B development + M Bd l t Cardamom Appomattox Eagleford development new options Options Stones Vito + new plays2011 PRODUCTION HEAVY OIL BC-10 Phase 2 BC-10 Massa Ph 3 Debottlenecking mining options Deep water Tight/shale In-situ growth opportunities Heavy oil lCopyright of Royal Dutch Shell plc 5 September 2012 12
  • 13. MARS-B DEVELOPMENT Mars-B Construction, South Korea 1989 1996 2000 2007 2009 2010 ~2015 1989 discovery; ~900 meters water depth > 200,000 boe per day peak production Mars First Oil First Oil First Oil West South Mars-B Start-up Mars-B FID September 2010: Disco- Mars King & Deimos Boreas Deimos FID 100 kb /d TLP kboe/d very Europa S b Subsea Disco- Disco- South Deimos and West Boreas tie-backs Tie-Back very very Shell 71.5%, operatorCopyright of Royal Dutch Shell plc 5 September 2012 13
  • 14. MATURING NEW OPTIONS:EXPLORATION & BUSINESS DEVELOPMENT Miss. Lime BUILDING NEW ACREAGE Bakken Eagle Ford Wolfcamp Fox Creek ‘000 km2 cumulative gross acreage g g cumulative spend $ billion p LRS S Neuquen Exshaw 400 15 Niobrara Colombia Tight / Shale Canol Utica Turkey Montney/Gundy Entry cost Jin Qiu 10 Gas Fushun Queensland Ukraine Marcellus 200 Yinggehai Greenland Fr Guiana Turkey Albania 5 Acreage g Nova Scotia N S ti Frontier Iraq I Abadi Ab di Tanzania Kalmykia New Zealand South Africa DW Conventional Timan Pechora Qatar (block D) GOM Brunei DW 0 0 UK 2009 2010 2011 1H 2012 artlands GOM Australia Canning Malaysia KEY WELLS IN H2 2012 Hea Nile Delta Philippines ALASKA GOM 2010 2011 2012 1H FRENCH GUIANA AUSTRALIA NWS Building new acreageCopyright of Royal Dutch Shell plc 5 September 2012 14
  • 15. NEW EXPLORATION POSITIONSCONTINUED BUILD IN GULF OF MEXICOGULF OF MEXICO: EAST GULF OF MEXICO: APPOMATTOX APPRAISAL MC 347 MC 348 MC 393 Ram-Powell R P ll NW Appraisal NE Appraisal Appomattox H2 ‘12 MC 348 & st Vicksburg Discovery Mars Ursa SW Appraisal Appomattox Vicksburg y Discovery Appraisal Vito MC 391 MC 392 MC 393 H1 ‘13 DC 353 Well Penetrations 2012 Appraisal Shell Leases Oil Success S 2012 Shell access Wet 0 1 Shell Production 0 50 Shell Leases Miles Hubs miles DISCOVERY FID START-UP Caesar Tonga C T Mars B Cardamom Stones LEADING DEEP WATER PLAYER Appomattox Vito Vi GROWTH POTENTIAL 2005 2010 2015 2020Copyright of Royal Dutch Shell plc 5 September 2012 15
  • 16. MATURING NEW OPTIONSNEW NORTH AMERICA INTEGRATED GAS POTENTIALLNG Canada Green corridor gas-to-transport Studying 12 mtpa at Kitimat 0.3 mtpa at Jumping Pound Shell’s integrated gas capabilities Shell 40% + strategic partners Equity + industry resources base Natural hedge; oil/gas differential MOVABLE MODULAR LIQUEFACTION SYSTEM (MMLS)Western Canada gas resources Groundbirch resource potential increased from 6 tcfe to >12 tcfe (Shell 80%) Gas-to Chemicals Gas-to- transport GTL+ LNG Options Assess Select Define FID Execute Start- up Operate NORTH AMERICA GAS MONETIZATION Feasibility Concept Project Construction C t ti Ramp up Ramp-up to OPTIONS Study Selection Specifications full capacityCopyright of Royal Dutch Shell plc 5 September 2012 16
  • 17. FINANCIAL FRAMEWORKNET DEBT AND GEARING CAPITAL INVESTMENT $ billion $ billion30% 3020% 2010 2011 H1 2012 20 Organic Investment 24 26 1410% 10 Acquisitions 7 5 1 0% 0 Disposals (7) (7) (4) 2005 2006 2007 2008 2009 2010 2011 2012 Gearing (LHS) YTD Net Capital Investment 24 24 11 Net Debt (RHS)RDS VERSUS FTSE 100Total dividend growth rate versus 2006 ~$32 BLN ORGANIC CAPEX 30% 2012 20% 10% MAINTAINING PRUDENT 0% BALANCE SHEET 2006 2007 2008 2009 2010 2011 2012 -10% YTD SELECTIVE PORTFOLIO BUILD -20% RDS dividend growth FTSE100 dividend growthCopyright of Royal Dutch Shell plc 5 September 2012 17
  • 18. SUMMARY Performance focus H1 ‘12 earnings $13 bln; EPS unchanged g g H1 ’12 asset sales $4 bln CONTINUOUS IMPROVEMENT Growth d li G th delivery GROWTH DELIVERY Underlying production growth 4% >20 projects under construction p j MATURE NEW OPTIONS PERFORMANCE FOCUS New growth options Expanding our opportunity funnel E di i f l Frontier exploration build New integrated gas optionsEarnings CCS basis, earnings and EPS excluding identified itemsCopyright of Royal Dutch Shell plc 5 September 2012 18
  • 19. ROYAL DUTCH SHELL PLCBARCLAYS NEW YORKQUESTIONS & ANSWERSCopyright of Royal Dutch Shell plc 5 September 2012 19
  • 20. ROYAL DUTCH SHELL PLCBARCLAYS NEW YORKNEW YORKSEPTEMBER 5, 2012Copyright of Royal Dutch Shell plc 5 September 2012 20