Shell Socially responsible investors briefing in London, April 10, 2014
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Shell Socially responsible investors briefing in London, April 10, 2014

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Ben van Beurden, Chief Executive Officer and Chad Holliday, Non-Executive Director and Chairman of the Corporate and Social Responsibility Committee presented to Shell’s socially responsible ...

Ben van Beurden, Chief Executive Officer and Chad Holliday, Non-Executive Director and Chairman of the Corporate and Social Responsibility Committee presented to Shell’s socially responsible investors in London during the annual socially responsible investors briefing. The event also included a short presentation on Shell’s approach to Carbon.

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Shell Socially responsible investors briefing in London, April 10, 2014 Shell Socially responsible investors briefing in London, April 10, 2014 Presentation Transcript

  • 1Copyright of Royal Dutch Shell plc 10 April, 2014 SRI EVENT 10 APRIL 2014 ROYAL DUTCH SHELL PLC Quest construction, 2013
  • 2Copyright of Royal Dutch Shell plc 10 April, 2014 DEFINITIONS & CAUTIONARY NOTE 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 over which Royal Dutch Shell plc either directly or indirectly has control. Companies over which Shell has joint control are generally referred to “joint ventures” and companies over which Shell has significant influence but neither control nor joint control are referred to as “associates”. In this presentation, joint ventures and associates may also be 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’’, ‘‘goals’’, ‘‘intend’’, ‘‘may’’, ‘‘objectives’’, ‘‘outlook’’, ‘‘plan’’, ‘‘probably’’, ‘‘project’’, ‘‘risks’’, “schedule”, ‘‘seek’’, ‘‘should’’, ‘‘target’’, ‘‘will’’ 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 regulatory measures addressing climate change; (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 risk factors that may affect future results are contained in Royal Dutch Shell’s 20-F for the year ended December 31, 2013 (available at www.shell.com/investor and www.sec.gov ). These risk factors also expressly qualify all forward looking statements contained in this presentation and should be considered by the reader. Each forward-looking statement speaks only as of the date of this presentation, 10 April, 2014. Neither Royal Dutch Shell plc 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. We may have used certain terms, such as resources, in this presentation that United States Securities and Exchange Commission (SEC) strictly prohibits us from including in our 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 these forms from the SEC by calling 1-800-SEC-0330.
  • 3Copyright of Royal Dutch Shell plc 10 April, 2014 INVESTING FOR SUSTAINABLE GROWTH BEN VAN BEURDEN CHIEF EXECUTIVE OFFICER ROYAL DUTCH SHELL PLC
  • 4Copyright of Royal Dutch Shell plc 10 April, 2014 ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE  SRI Programme  SRI annual roundtable  Ongoing engagement  Corporate Governance  Remuneration committee roadshows  Chairman roadshows  www.shell.com/esg Shell’s approach to sustainability Helping to shape a more sustainable energy future Sharing wider benefits where we operate Running a safe, efficient, responsible and profitable business
  • 5Copyright of Royal Dutch Shell plc 10 April, 2014 AGENDA Ben van Beurden and Chad Holliday Carbon management: Jeremy Bentham, Angus Gillespie and Lorraine Mitchelmore Q+A Coffee break Orientation Panel sessions Q&A (45 min each, 5 minute break): Group Lunch: Panel A: North America update: Marvin Odum (Director Upstream Americas) and Lorraine Mitchelmore (EVP Heavy Oil) Panel B: Upstream International Operated assets and Nigeria: Harry Brekelmans (EVP Upstream International Operated) and Mutiu Sunmonu (Managing Director SPDC) Panel C: HSSE & SP Performance, RDS environmental policy, Water, Partnerships and CO2: Michiel Kool (EVP Safety, Environment & Social Performance), Rupert Thomas (VP Environment) and Angus Gillespie (VP CO2) 09:00 – 09:35 09:35 – 09:55 09:55 – 10:35 10:35 – 11:05 11:05 – 11:10 11:10 – 13:35 13:35 – 14:30
  • 6Copyright of Royal Dutch Shell plc 10 April, 2014 INVESTING FOR SUSTAINABLE GROWTH CHAD HOLLIDAY NON EXECUTIVE DIRECTOR CHAIRMAN CORPORATE & SOCIAL RESPONSIBILITY BOARD COMMITTEE ROYAL DUTCH SHELL PLC
  • 7Copyright of Royal Dutch Shell plc 10 April, 2014 ACTIVITIES OF THE CSRC 2013 Activity Alaska  Safety + environment  Engagement with communities + government South Africa onshore  Stakeholder engagement  Local content + economic development 2014 Plans Western Canada  Onshore oil and gas  Oil sands operations  Canada LNG potential  Focus on how Social and Environmental considerations are incorporated through all stages of major projects Seismic survey, offshore CanadaAlaska, Northern slope
  • 8Copyright of Royal Dutch Shell plc 10 April, 2014 PARTNERSHIPS + ENGAGEMENT  Leverage outside expertise  Scientific organizations  NGOs  Governmental bodies  Long-term partnerships  Renewed partnership agreements Wetlands International IUCN The Nature Conservancy EarthWatch Institute
  • 9Copyright of Royal Dutch Shell plc 10 April, 2014 ENGAGEMENT – RESOURCES PLAYS Centre for Sustainable Shale Development (CSSD) recent developments  15 performance standards  Air + climate  Water + waste management  Shell anticipates applying for certification and verification in 2014 Environmental Defense Fund (EDF) studies  Phased studies  Shell participated in studies on production  Further EDF studies to come on  Gathering and processing  Transmission and storage  Local distribution  Natural gas vehicles and fuelling stations  Shell tight/shale oil + gas operating principles since 2011 Safety Water Air Footprint Community
  • 10Copyright of Royal Dutch Shell plc 10 April, 2014 TRANSPARENCY Sustainability reporting Investor field visit Operations briefing, Yang 203, China, 2013 Revenue transparency Nigeria Spills website Oil sands performance report Nigeria briefing notes Carbon Disclosure Project Sustainability report 1997 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
  • 11Copyright of Royal Dutch Shell plc 10 April, 2014 HUMAN RIGHTS  Founding member of UN Global Compact.  Collaboration with Danish Institute of Human Rights  Implementing Voluntary Principles on Human Rights since 2000 INDUSTRY COOPERATION Human Rights Due Diligence Human Rights & Impact Assessment Grievance Mechanisms POLICY COMMITMENT Business Principles Shell Code of Conduct HSSE & SP Control Framework Supplier Principles OBJECTIVE  Due diligence to avoid infringements of rights  Be able to ‘know and show’ systems are effective  Access to grievance mechanisms for stakeholders SHELL FOCUS AREAS Governance: HSSE SP Exec & Human Rights Working Group Contracting & Procurement Human Resources Security Social Performance Partnerships: Danish Institute for Human Rights, Consensus Building Institute
  • 12Copyright of Royal Dutch Shell plc 10 April, 2014 INVESTING FOR SUSTAINABLE GROWTH BEN VAN BEURDEN CHIEF EXECUTIVE OFFICER ROYAL DUTCH SHELL PLC
  • 13Copyright of Royal Dutch Shell plc 10 April, 2014 ENERGY SYSTEM Technology diffusion TJ/yr Energy demand outlook million boe/d 1.0E+03 1.0E+04 1.0E+05 1.0E+06 1.0E+07 1.0E+08 1.0E+09 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 ~1% of energy system Oil Gas Biomass Wind Coal Nuclear Other Renewables Solar Shell activities  ~30 years to grow a technology to ~1% in today’s energy system Total Nuclear Biofuels – 1st Gen Wind Oil LNG Solar Photovoltaic “Laws” Source: Shell analysis
  • 14Copyright of Royal Dutch Shell plc 10 April, 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
  • 15Copyright of Royal Dutch Shell plc 10 April, 2014  Balancing portfolio 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
  • 16Copyright of Royal Dutch Shell plc 10 April, 2014 Exploration + pre-FID Key growth projects Care + maintain Smaller growth projects 0 10 20 30 40 INVESTMENT PRIORITIES Organic capital investment 2014 Future opportunities Resources plays Deep-water Integrated gas Upstream engine Downstream (incl. Corporate) 25% Preparing new options 30% Driving new upstream growth 45% Maintaining competitive cash generation Longer term Growth priorities Engines  Credible, competitive, affordable  Investment choices driven on a global thematic basis $ billion
  • 17Copyright of Royal Dutch Shell plc 10 April, 2014 400 600 800 0 2 4 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 FOCUS ON SAFETY Goal Zero on safety Injuries – TRCF/million working hours Spills - operational Volume in thousand tonnesmillion working hours Working hours TRCF 0 5 10 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 0 10 20 30 40 50 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 Fatalities 0 200 400 2012 2013 Process safety trend Number of incidents Tier 1 incidents Tier 2 incidents
  • 18Copyright of Royal Dutch Shell plc 10 April, 2014 Monitor performance and delivery including gap closures agreed in the HSSE plan CONTRACTOR SAFETY + MANAGEMENT  Contractors represent 75% of working hours  Contractors included in:  Safety day  12 life saving rules  Three phases of HSSE in contracts:  HSSE Assessment (prequalification)  HSSE Evaluation (sourcing + award)  HSSE Management (post-award)  Gap closure programme for contractors who can’t immediately meet requirements Green Amber Red Technical HSSE Commercial Assessment Evaluation Contract Management
  • 19Copyright of Royal Dutch Shell plc 10 April, 2014 MANAGING WATER USE  Energy industry is a large industrial consumer  Working with World Business Council for Sustainable Development and IPIECA  New oil and gas may require increased water use  New locations may be in areas of water shortage  Water management plans essential Shell fresh water withdrawn 170 180 190 200 210 220 230 240 2007 2008 2009 2010 2011 2012 2013 Million cubic metres Reed bed filtration, Oman Water treatment plant, Dawson Creek, Canada Innovative solutions
  • 20Copyright of Royal Dutch Shell plc 10 April, 2014 NIGERIA: SPDC JOINT VENTURE OVERVIEW *SPDC = 30% Shell, 55% NNPC, 10% Total, 5% Agip; all data on 100% basis unless stated 2013 overview  Substantial increase in theft  NIMASA LNG blockade  Decision to sell assets in East onshore  16 kidnaps, no fatalities SPDC* production (Shell share) k boe/day Production impact of crude oil theft (SPDC) k boe/day Illegal theft and refining Niger Delta, 2013 0 100 200 300 2008 2009 2010 2011 2012 2013 0 50 100 150 200 250 300 350 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Oil theft allocated to SPDC Theft related deferment on export lines
  • 21Copyright of Royal Dutch Shell plc 10 April, 2014 0 20 40 60 80 100 120 140 160 180 200 0 5 10 15 20 2006 2007 2008 2009 2010 2011 2012 2013 0 100 200 300 400 500 600 2005 2006 2007 2008 2009 2010 2011 2012 2013 NIGERIA: SHELL ENVIRONMENTAL PERFORMANCE All data on 100% basis SPDC JV flare volumes SPDC spills Thousand tonnes Remediation # of spills sites* Illegal tapping point at Ogidigben, 2013 *includes 125 sites from 1969-1993 in Ogoniland confirmed during decommissioning in 2013 All data on a Shell operated basis Million tonnes hydrocarbon flared volume of operational spills number of operational spills (RHS) volume of sabotage spills number of sabotage spills (RHS) # 0 5 10 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 -83% Sites requiring remediationNumber of spills in year (all causes)
  • 22Copyright of Royal Dutch Shell plc 10 April, 2014 2010-12 divestments SPDC licenses 2013 FIDs Gbaran Ubie Phase 2 TNPL NIGERIA: SPDC FOOTPRINT REFOCUS Onshore portfolio Portfolio development  2010 – 2012  Divested 8 OMLs  Proceeds $1.8bn (Shell)  FID Southern Swamp Associated Gas  FID Forcados Yokri Integrated Project  2014+  Asset sales in Eastern Delta  Potential sale of 80-100k boe/d  Concentrate on gas value chain  Selected growth investment 2012 FIDs Forcados Yokri Integrated project Southern Swamp Associated Gas 20 mi
  • 23Copyright of Royal Dutch Shell plc 10 April, 2014 IRAQ UPSTREAM  Shell 44%  Started up in 2013  Largest flare reduction project in the world  Processing capacity 500mmscf/d associated gas  2 billion scf/d potential  Shell 45%  Start-up Q3 2013 – currently processing >200kboe/d  2500 local employees  Training for local well engineers  Memorandum of Understanding with IUCN to conserve and restore Hawizeh marsh Basrah Gas Company Majnoon oil development Majnoon Central Processing FacilityBasrah Gas Company storage tanks
  • 24Copyright of Royal Dutch Shell plc 10 April, 2014 BRENT DECOMMISSIONING 2013 PROGRESS  Contract award for 4 Brent topsides and Brent Alpha jacket awarded to Allseas  Single lift mechanisms = less offshore hours Significant stakeholder engagement  Invited ~ 140 bodies to engage  Includes government agencies, environmental groups – including NGOs, academia and fishermen’s associations  Working towards submission of decommissioning plan to DECC  www.shell.co.uk/brentdecom Brent Alpha platform
  • 25Copyright of Royal Dutch Shell plc 10 April, 2014 0 10 20 30 40 50 60 0 2 4 6 8 10 12 14 2006 2007 2008 2009 2010 2011 2012 2013 GRONINGEN – NETHERLANDS GAS  NAM JV: 50% Shell, 50% Exxon  Discovered 1959  Groningen gas field operated by NAM (60%), Dutch state interest 40% (EBN)  300 wells across 20 sites  Produced 53.2 bn m3 2013 Government proposals:  Restrict overall production (42.5bn m3 2014)  Reduced production around Loppersum  €1.2bn made available over 5 years  Includes continued preventative strengthening + repair Groningen production and profit €bn bn m3 Profit Profit attributable to state Profit attributable to NAM Groningen volume (RHS) 10km Locations with reduced production Other production sites Source: Letter from the Minister for Economic Affairs, 5 February 2014
  • 26Copyright of Royal Dutch Shell plc 10 April, 2014 UPSTREAM AMERICAS  Major OECD growth potential for Shell  Managing non-technical risk 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
  • 27Copyright of Royal Dutch Shell plc 10 April, 2014 CLIMATE CHANGE + LOW CARBON FUTURE GAS INNOVATION: LNG FOR TRANSPORT ENERGY EFFICIENCY: REFINERIES BIOFUELS: RAIZEN JV CARBON CAPTURE + STORAGE: OIL SANDS
  • 28Copyright of Royal Dutch Shell plc 10 April, 2014 MongstadOtway Cansolv Offshore (50 MW net) Iogen cellulose ethanol (Raizen) H2 network (Germany) 2 B Energy Glasspoint Solar EOR Westhollow research centre “cellulosic biofuels” LOW CARBON PORTFOLIO FEED FID On stream CCS Biofuels Solar Gorgon (3-4 mtpa) Quest (>1 mtpa) Peterhead (1 mtpa) Raizen (sugar cane ethanol) Virent Onshore (450 MW net) Wind R&D Showa shell PV manufacture Alternative energy carriers Define Execute On streamTechnology Efforts Shell Technology Ventures Commercial operation Technology demonstration/research Future energy technologies
  • 29Copyright of Royal Dutch Shell plc 10 April, 2014 INVESTING FOR SUSTAINABLE GROWTH BEN VAN BEURDEN CHIEF EXECUTIVE OFFICER ROYAL DUTCH SHELL PLC
  • 30Copyright of Royal Dutch Shell plc 10 April, 2014 CARBON MANAGEMENT JEREMY BENTHAM Vice President Global Business Environment Angus Gillespie Vice President CO2 Lorraine Mitchelmore Executive Vice President Heavy Oil ROYAL DUTCH SHELL PLC
  • 31Copyright of Royal Dutch Shell plc 10 April, 2014 0 250 500 750 1,000 SHELL ENERGY SCENARIOS Energy demand/source Exajoules  40 years of scenarios  Designed to stretch management thinking  Testing business models  Contrasting plausible views of the future  Are not a forecast of likely events Oil Gas Biomass/Biofuels Wind Coal Nuclear Other Renewables Solar 2000 2030 2060
  • 32Copyright of Royal Dutch Shell plc 10 April, 2014 0 10 20 30 40 50 2000 2010 2020 2030 0 10 20 30 40 50 2000 2020 2040 2060 2080 2100 ENERGY-RELATED CARBON EMISSIONS: SCENARIOS IEA scenarios (2012) Gt CO2 /yr Shell scenarios (2013) Gt CO2 /yr Oceans Mountains Current policies New policies 2° C increase (450 ppm)  Shell has to plan in a range of possible futures  IEA 2° C scenarios are normative
  • 33Copyright of Royal Dutch Shell plc 10 April, 2014 CARBON MANAGEMENT Jeremy Bentham Vice President Global Business Environment ANGUS GILLESPIE Vice President CO2 Lorraine Mitchelmore Executive Vice President Heavy Oil ROYAL DUTCH SHELL PLC
  • 34Copyright of Royal Dutch Shell plc 10 April, 2014 0 1,000 2,000 3,000 4,000 5,000 1990 2000 2010 2020 2030 2040 0 1,000 2,000 3,000 4,000 5,000 1990 2000 2010 2020 2030 2040 DEMAND OUTLOOK + RESERVES Energy demand: IEA current policies Energy demand: IEA 450 scenario Mtoe /yrMtoe /yr Oil Coal Gas Biomass/Biofuels Nuclear Hydro Other Renewables Shell SEC proved reserves Resources* Shell  Reserves life at end 2013: ~11.5 years  Further 2P +2C resources  Oil and gas portfolio relevant in IEA 450 scenario  Coal demand is most impacted Shell SEC proved reserves Resources* * Resources shown includes only resources in select or define phases (post feasibility study or in FEED) or are under execution or on stream.
  • 35Copyright of Royal Dutch Shell plc 10 April, 2014 PROJECT ECONOMICS: SCHEMATIC NPV analysis: example NPV sensitivities: example Shell project screening values  $40 / tonne CO2e  $70-$110 / bbl Brent oil  $3-$5 / mmbtu Henry Hub gas  Future oil, gas and carbon price sensitivities are incorporated in project economics for all Shell projects -16 -12 -8 -4 0 4 8 12 -4 -3 -2 -1 0 1 2 3 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 $ /yr $ cumulative Undiscounted Cumulative cashflow Discounted Cumulative cashflow Annual cashflow Base NPV (inc $40/t CO2) Oil Price CO2 price Capex Opex Recovery factor + impact- impact
  • 36Copyright of Royal Dutch Shell plc 10 April, 2014 0 20 40 60 80 100 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 CARBON EMISSIONS Shell CO2 emissions Energy intensity 85 90 95 100 105 0 0.5 1 '04 '05 '06 '07 '08 '09 '10 '11 '12 "13 million tonnes / yr Gj/tonne (energy required to produce a tonne of oil equivalent) index  Positive long term trends but future progress more difficult  CCS key role in future Upstream excl. Oil sands Refining index Chemicals index
  • 37Copyright of Royal Dutch Shell plc 10 April, 2014 CARBON MANAGEMENT Jeremy Bentham Vice President Global Business Environment Angus Gillespie Vice President CO2 LORRAINE MITCHELMORE Executive Vice President Heavy Oil ROYAL DUTCH SHELL PLC
  • 38Copyright of Royal Dutch Shell plc 10 April, 2014 CARBON CAPTURE AND STORAGE (CCS) QUEST CCS  FID Q3 2012  1 mln tonnes/yr CO2 capture potential  Safe storage certification by DNV (1st time for a CCS project)  Expected on stream 2015 PETERHEAD CCS  Aims to capture 10mln tonnes CO2 over 10 years  Would provide enough clean energy for 500,000 houses  FEED agreement with UK government signed February 2014 Quest CCS project, test injection well, Canada oil sands
  • 39Copyright of Royal Dutch Shell plc 10 April, 2014 CARMON CREEK: IN-SITU HEAVY OIL  2013 FID on 80 kboe/d  1.5 billion barrels of resources  Vertical steam drive integrated with cogen  100% produced water re-cycled  100% Shell Development overview Transportation options Central Processing Facilities Site Preparation Carmon Creek Quebec To USGC Hardisty Proposed and existing pipelines Proposed East Energy pipeline conversion Tankers Edmonton 200 miles US$ 1.8/t (Current local regulation) US$ 15/t (strengthened local regulations) US$ 40/t (base) Proxy LCFS with bio-fuel blending US$ 110/t NPV carbon price sensitivity + impact - impact
  • 40Copyright of Royal Dutch Shell plc 10 April, 2014 INVESTING FOR SUSTAINABLE GROWTH BEN VAN BEURDEN CHIEF EXECUTIVE OFFICER ROYAL DUTCH SHELL PLC
  • 41Copyright of Royal Dutch Shell plc 10 April, 2014 Q&A 10 APRIL 2014 ROYAL DUTCH SHELL PLC
  • 42Copyright of Royal Dutch Shell plc 10 April, 2014 APPENDICES 10 APRIL 2014 ROYAL DUTCH SHELL PLC
  • 43Copyright of Royal Dutch Shell plc 10 April, 2014 REVENUE TRANSPARENCY  Commitment to transparency  Voluntary country-level tax disclosure since 2012  EITI board position and founder  Encourage government transparency www.shell.com/payments  ~$24 bln taxes & royalties paid  ~$81 bln excise tax collected in 2013  Leadership in tax transparency
  • 44Copyright of Royal Dutch Shell plc 10 April, 2014 ASSET INTEGRITY AND PROCESS SAFETY PREVENTING AND MITIGATING MAJOR SAFETY INCIDENTS Goal Zero: No Harm, No Leaks Assets are safe and we know it TOP EVENT THREATS CONSEQUENCES Leadership behaviours Effective design and application of barriers Standards and processes Motivated, competent people Continuous improvement Control barriers Recovery measures Plan Do Act Check 1 3 4 5 2
  • 45Copyright of Royal Dutch Shell plc 10 April, 2014  Overhaul procedures for oil spill clean-up and remediation  Improve on contracting and supervision.  Review of SPDC assets in Ogoniland and develop a decommissioning programme  Work with regulators to clarify the legislation governing remedial intervention and target values Government recommendations  Create of an Ogoniland Environmental Restoration Authority  Create an Ogoni environmental restoration fund  Create a centre of excellence for environmental restoration  Mount a campaign against environmental degradation/ oil theft NIGERIA: UNEP REPORT UPDATE SPDC specific recommendations Fire on the 24” TNP, Bodo West, April 2013
  • 46Copyright of Royal Dutch Shell plc 10 April, 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
  • 47Copyright of Royal Dutch Shell plc 10 April, 2014 Raizen: Brazil  JV formed 2011, 50-50 Shell/Cosan  ~4,500 retail sites  2.2 bln litres ethanol capacity/yr Shell biofuels  Sold 9 bln litres of biofuels in 2013  99% of suppliers signed Shell’s sustainability clauses  32% independently certified BIOFUELS Bonsucro Certified Mills 2011 2012 Bonsucro Certification of mills 2013
  • 48Copyright of Royal Dutch Shell plc 10 April, 2014 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 2008 2009 2010 2011 As originally reported in the National Inventory As reported in 2013 using revised methods ENVIRONMENTAL IMPACT: FUGITIVE METHANE Study by the University of Texas at Austin in collaboration with the Environmental Defense Fund and 9 operators Reason for the study:  Wide variation in EPA national inventories  Limited measured data  Data better informs scientifically sound policies and regulations Key findings:  Measurements from 190 onshore natural gas sites in the US  Total emissions similar to 2011 EPA national inventory  Well completion emissions lower than previously estimated  Emissions from pneumatic controllers and equipment leaks higher than EPA national emission projections EPA production sector methane emissions 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 2010 EPA (313 bcf) 2011 EPA (133 bcf) UT/EDF (119 bcf) MethaneEmissions(Gg) -636 225 80 34 -1000 -500 0 500 Completions withHF Pneumatic Controllers Equipment Leaks Chemical Pumps MethaneEmissions Difference(Gg/yr) Gg/yr
  • 49Copyright of Royal Dutch Shell plc 10 April, 2014 0% 1% 2% 3% 4% 5% 6% 7% 8% EPA 2011 UT/EDF NPC NETL ANL NREL IDA Cornell (High) Cornell (Low) Critical methane leakage gas vs. coal (3%) based on a 20 year time-frame ENVIRONMENTAL IMPACT: LIFE CYCLE BENEFITS OF GAS OVER COAL  Current data supports the policy arguments on climatic benefit of gas over coal; though most research have been based on the 2009-2010 EPA inventories with higher system-wide emissions  Definitive answer once EDF series is completed for other segments of the natural gas value chain Source: US EPA, UT/EDF Study, NPC (George et al), NREL (Logal et al), IDA (Weber et al), Cornell (Howarth et al), ANL (Burnham et al), NETL (Skone et al) and IEA Methaneleakagerates(%of grossproduction) Estimatevs.threshold Critical methane leakage gas vs. coal (8%) based on a 100 year time-frame EPA NG sector total = 1.26% NG Production Other NG Sector 0.79% 0.47% 0.43% 1.3% 0.69% 1.81% 1.39% 0.34% 0.87% 0.43% 0.73% 1.2% 0.9% 4.11% 3.79% 2.2% 1.4%
  • 50Copyright of Royal Dutch Shell plc 10 April, 2014 -100 -50 0 50 100 150 200 250 CARBON CAPTURE AND STORAGE (CCS) Source: GCCSI (Oct 2013, “Global status of CCS”) Relative cost of CO2 mitigation $ /tonne abated  CCS to play an important part in low carbon options; relevant scope/scale Quest CCS, Canada.
  • 51Copyright of Royal Dutch Shell plc 10 April, 2014 SHELL CCS: COMPETENCE BASED PROGRAM Shell operated Non operated GorgonQuest TCM Onshore storage   Offshore storage  Saline aquifer storage   Depleted reservoir storage  Pre-combustion capture  Post-combustion capture   Contaminated gas  Heavy oil  Refining  Gas fired power  In FEED Peterhead
  • 52Copyright of Royal Dutch Shell plc 10 April, 2014 0 50 100 150 200 2012 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2013 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 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 0 100 200 300 2001 2003 2005 2007 2009 2011 2013 2012:117kboe/d 2013: 91kboe/d Actual production assumed production with continued decline
  • 53Copyright of Royal Dutch Shell plc 10 April, 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
  • 54Copyright of Royal Dutch Shell plc 10 April, 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 0.0 0.2 0.4 0.6 0.8 2011 2012 2013 Production million boe per day Deep-waterResources plays Heavy oil 0 5 10 15 2011 2012 2013 2014E 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
  • 55Copyright of Royal Dutch Shell plc 10 April, 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
  • 56Copyright of Royal Dutch Shell plc 10 April, 2014 -2 0 2 4 6 8 10 2010 2011 2012 2013 2014E 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
  • 57Copyright of Royal Dutch Shell plc 10 April, 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
  • 58Copyright of Royal Dutch Shell plc 10 April, 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 conversion 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