Simon Henry - Credit Suisse conference in Vail Colorado, February 8, 2012
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Simon Henry - Credit Suisse conference in Vail Colorado, February 8, 2012

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Simon Henry, Chief Financial Officer of Royal Dutch Shell plc, presented the Shells updated strategy as laid out in February of 2012 and the financial and operational highlights of 2011.

Simon Henry, Chief Financial Officer of Royal Dutch Shell plc, presented the Shells updated strategy as laid out in February of 2012 and the financial and operational highlights of 2011.

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  • 1. ROYAL DUTCH SHELL COMPANY UPDATE February 8, 20121 Copyright of Royal Dutch Shell plc 2 February 2012
  • 2. ROYAL DUTCH SHELL SIMON HENRY CHIEF FINANCIAL 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. ‘‘Subsidiaries’’, “Shell subsidiaries” and “Shell companies” as used in this presentation refer to companies in which Royal Dutch Shell either directly or indirectlyhas 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 thanstatements 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(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 placeundue 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, 8 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 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 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 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. 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 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 12 bln boe on stream, maturing additional ~20 billion boe6 Copyright of Royal Dutch Shell plc 2 February 2012
  • 7. 2012+ PRIORITIES 12 billion boe resources on stream CONTINUOUS IMPROVEMENT Drive new cashflow growth: 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 MOVEMENTS7 Copyright of Royal Dutch Shell plc 2 February 2012
  • 8. ROYAL DUTCH SHELL 2012+ GROWTH PROJECTS8 Copyright of Royal Dutch Shell plc 2 February 2012
  • 9. 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 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 construction9 Copyright of Royal Dutch Shell plc 2 February 2012
  • 10. 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 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 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 UNDER CONSTRUCTION OPTIONS 10 ~20 mtpa on-stream ~8 mtpa under construction 0 Shell Exxon Chevron BG Total BP Assessing ~ 15 mtpa future options 2011 2017 PROJECTS ONSTREAM OR UNDER CONSTRUCTION10 Copyright of Royal Dutch Shell plc 2 February 2012
  • 11. GROWTH DELIVERY 2012+REGAINING MOMENTUM IN GULF OF MEXICO Vito Appomattox ~100 kboe/d potential ~100 kboe/d hub potential >200 million boe resources Appraisal drilling underway Shell 55% (operator) > 250 million boe resources Shell 80% (operator) Nakika Mars-B Mars W.Boreas, S. Deimos Ursa 100 km Mars-B, Olympus tension leg platform Brutus Cardamom Deep DISCOVERY FID START-UP Auger Caesar Tonga Perdido Mars B Holstein Caesar Tonga Cardamom Stones Stones 45 kboe/d potential Shell 35% (operator) Appomattox Vito ONSTREAM UNDER CONSTRUCTION OPTIONS 2005 2010 2015 2020 ~185 kboe/d 2011- ~350 kboe/d potential ~2017 Drilling 5+ exploration wells 201211 Copyright of Royal Dutch Shell plc 2 February 2012
  • 12. ROYAL DUTCH SHELL MATURING NEW GROWTH OPTIONS12 Copyright of Royal Dutch Shell plc 2 February 2012
  • 13. 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 brand13 Copyright of Royal Dutch Shell plc 2 February 2012
  • 14. MATURING NEW GROWTH OPTIONS2011 EXPLORATION + BUSINESS DEVELOPMENT2011 EXPLORATION & ACQUISITIONS RESOURCES MATURATION / POTENTIAL billion boe 4 Marcellus Clair Eagle Ford Groundbirch Abadi Iraq Liquids-rich Arrow shales Marcellus China tight gas Groundbirch 2 Eagle Ford Zaedyus 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 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)14 Copyright of Royal Dutch Shell plc 2 February 2012
  • 15. MATURING NEW GROWTH OPTIONSBUILDING WORLD-WIDE TIGHT GAS + LIQUIDS-RICHSHALES PORTFOLIO Canol Groundbirch Montney Deep Basin Germany Bakken Foothills 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 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/acre15 Copyright of Royal Dutch Shell plc 2 February 2012
  • 16. 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 oil pricing opportunity Canada Green Corridor FID 2011 FID for 0.3 mtpa LNG Edmonton Long distance truck fuel LNG retail infrastructure Assessing gas potential: Calgary 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 truck16 Copyright of Royal Dutch Shell plc 2 February 2012
  • 17. CAPITAL INVESTMENTSTRONG PROJECT FLOW DRIVES INVESTMENT GROWTHcapital investment $ billion Thematic Schiehallion Redevelopment 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 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 ~3017 Copyright of Royal Dutch Shell plc 2 February 2012
  • 18. 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 1003.0 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 MOVEMENTS18 Copyright of Royal Dutch Shell plc 2 February 2012
  • 19. SUMMARY2012+ PRIORITIES 12 billion boe resources on stream CONTINUOUS IMPROVEMENT Drive new cashflow growth: 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 MOVEMENTS19 Copyright of Royal Dutch Shell plc 2 February 2012
  • 20. ROYAL DUTCH SHELL Q&A20 Copyright of Royal Dutch Shell plc 2 February 2012