Socially responsible investors briefing, London, April 18th 2012
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Socially responsible investors briefing, London, April 18th 2012

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Peter Voser, 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 ...

Peter Voser, 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.

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Socially responsible investors briefing, London, April 18th 2012 Socially responsible investors briefing, London, April 18th 2012 Presentation Transcript

  • ROYAL DUTCH SHELL PLC INVESTING FOR SUSTAINABLE GROWTH Annual SRI Event London April 18, 2012Copyright of Royal Dutch Shell plc 18 April, 2012 1
  • DEFINITIONS AND CAUTIONARY NOTEResources: Our use of the term “resources” in this announcement includes quantities of oil and gas not yet classified as Securities and Exchange Commission of theUnited States ("SEC") proved oil and gas reserves or SEC proven mining reserves. Resources are consistent with the Society of Petroleum Engineers 2P and 2Cdefinitions.The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate entities. In this announcement "Shell", "Shell Group" and "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 announcement refer to companies in whichShell 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 whichShell has significant influence but not control are referred to as "associated companies" or "associates" and companies in which Shell has joint control are referred toas "jointly controlled entities". In this announcement, associates and jointly controlled entities are also referred to as "equity-accounted investments". The term "Shellinterest" is used for convenience to indicate the direct and/or indirect (for example, through our 23 per cent shareholding in Woodside Petroleum Ltd.) ownershipinterest held by Shell in a venture, partnership or company, after exclusion of all third-party interest.This announcement contains forward looking statements concerning the financial condition, results of operations and businesses of Shell and the Shell Group. Allstatements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of futureexpectations that are based on managements current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actualresults, 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 Shell and the Shell Group 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", "seek", "should", "target", "will" and similar terms andphrases. There are a number of factors that could affect the future operations of Shell and the Shell Group and could cause those results to differ materially from thoseexpressed in the forward looking statements included in this announcement, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b)changes in demand for Shells products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industrycompetition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successfulnegotiation 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 andregions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in theapproval of projects and delays in the reimbursement for shared costs; and (m) changes in trading conditions. All forward looking statements contained in thisannouncement are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance onforward looking statements. Additional factors that may affect future results are contained in Shells 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 thisannouncement, 18 April 2012. Neither Shell nor any of its subsidiaries nor the Shell Group 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 inferredfrom the forward looking statements contained in this announcement.Shell may have used certain terms, such as resources, in this announcement that the SEC strictly prohibits Shell from including in its filings with the SEC. U.S. investorsare urged to consider closely the disclosure in Shells Form 20-F, File No 1-32575, available on the SEC website www.sec.gov. You can also obtain these forms fromthe SEC by calling 1-800-SEC-0330.Copyright of Royal Dutch Shell plc 18 April, 2012 2
  • ROYAL DUTCH SHELL PLC INVESTING FOR SUSTAINABLE GROWTH PETER VOSER CHIEF EXECUTIVE OFFICERCopyright of Royal Dutch Shell plc 18 April, 2012 3
  • ROYAL DUTCH SHELL PLC INVESTING FOR SUSTAINABLE GROWTH CHAD HOLLIDAY NON EXECUTIVE DIRECTOR CHAIRMAN CORPORATE & SOCIAL RESPONSIBILITY BOARD COMMITTEECopyright of Royal Dutch Shell plc 18 April, 2012 4
  • ACTIVITIES OF THE CSRC 2011 FOCUS Field trips: Marcellus, China, Oil Sands Personal safety, environmental performance Asset integrity USA: MARCELLUS TIGHT GAS 2012 PRIORITIES Field trips: North Sea, Nigeria Sustained focus on Nigeria Process safety/asset integrity Arctic and deepwater development NIGERIA: AFAM VI POWER PLANTCopyright of Royal Dutch Shell plc 18 April, 2012 5
  • PARTNERSHIPS & BEST PRACTICEENVIRONMENTAL Wetlands International IUCN The Nature Conservancy EarthWatch InstituteHUMAN RIGHTS WORKING WITH SUPPLIERS Danish Institute for Human Rights Institute for Human Rights & Business Global Business Initiative IPIECA Professor Ruggie case studyCopyright of Royal Dutch Shell plc 18 April, 2012 6
  • ROYAL DUTCH SHELL PLC INVESTING FOR SUSTAINABLE GROWTH PETER VOSER CHIEF EXECUTIVE OFFICERCopyright of Royal Dutch Shell plc 18 April, 2012 7
  • ENERGY OUTLOOKROBUST DEMAND GROWTH INDUSTRY OUTLOOKEnergy demand outlook in million boe/d Hydrocarbons dominate outlook Growth required in all sectors of400 energy mix Renewable growth particularly strong Energy policy + sustained investment300 SHELL Crude oil & oil products Natural gas & LNG200 Biofuels, wind, carbon capture + storage Petrochemicals100 0 1980 1990 2000 2010 2020 2030 2040 2050 Oil Natural Gas Biomass Wind Coal Nuclear Solar Other renewables Shell activitiesShell estimatesCopyright of Royal Dutch Shell plc 18 April, 2012 8
  • LEADER IN A GLOBAL GROWING GAS MARKETGAS DEMAND GROWTH: REGIONAL OVERVIEW SHELL PRODUCTIONMillion boe/d Million boe/d30 +23% +189%25 HENRY HUB 3 ~25% hub priced/ OTHER spot +29%20 GAS 215 +89%10 ~75% oil +86% linked 1 OIL 5 2008 2035 2008 2035 2008 2035 2008 2035 2008 2035 0 0 North Europe Asia Middle Other Production Price America Pacific East Split Exposure 2011Copyright of Royal Dutch Shell plc 18 April, 2012 9
  • BIOFUELS GROWTHLOW CARBON TRANSPORT FUELS RAIZEN JOINT VENTUREWell to wheel CO2 intensity (COSAN) Cellulosic Ethanol -89% Leading Brazil ethanol player (Iogen) (Top 5 globally) Sugar cane capacity ~60 mtpa from Sugar Cane Ethanol -84% 24 mills ~ 2 bln litres ethanol production per year Hydrogen from Natural -40% Prioritising sustainability issues Gas Electricity-Coal -16% Conventional Diesel -11% RESEARCHING ADVANCED BIOFUELS Conventional Gasoline Hydrogen from Coal +34%Source: CONCAWE/JRC/EUCAR wtw report (version 3)Copyright of Royal Dutch Shell plc 18 April, 2012 10
  • WATER-ENERGY-FOOD ENERGY is needed to clean and FOOD transports (virtual) water transport water WATER is needed to WATER is needed to generate energy grow food WATER +30% DEMAND ENERGY is needed to produce food FOOD can be used to produce energy ENERGY FOOD +40% DEMAND +50% DEMAND% Increase in demand by 2030Copyright of Royal Dutch Shell plc 18 April, 2012 11
  • WATER USE FOR ENERGYSHELL ANALYSIS OF WATER USE IN ENERGY PRODUCTIONFreshwater intensity (litres/GJ Low heating value) 1,000,000 100,000 10,000Logarithmic scale 1,000 100 10 <1 Typical average Typical average Withdrawals Withdrawals Purely rain fed Global range (Biofuels) Consumption ConsumptionCopyright of Royal Dutch Shell plc 18 April, 2012 12
  • SAFETY IN SHELL 2012 HSSE PRIORITIES AND FOCUS SAFETY PERFORMANCE Injuries - TRCF SIMPLIFY & COMPLY 6 One HSSE & SP Control Framework Shell wide 4 Life-Saving Rules 2 FOCUS AREAS Process Safety 0 Road Safety 02 03 04 05 06 07 08 09 10 11 IOC Range Shell Contractor HSSE Performance Cap & contain systems: global Fatalities per 100 million working hours (employees and contractors) initiatives 8 900 SUSTAIN 6 800 Strong safety culture and leadership 700 4 600 2 500 0 400 02 03 04 05 06 07 08 09 10 11 Working Hours (RHS) ShellCopyright of Royal Dutch Shell plc 18 April, 2012 Employees and contractors per million working hours; Shell operated facilities 13
  • ENVIRONMENTAL PERFORMANCE MEASUREMENTEMISSIONS ENERGY INTENSITYMillion tonnes CO2 equivalent Upstream – gigajoules/tonnes production Index105 1 105 95 100 85 0.5 95 Upstream excl. Oil Sands & GTL 75 90 Refining Index Chemicals Index 65 0 85 02 03 04 05 06 07 08 09 10 11 02 03 04 05 06 07 08 09 10 11FLARING OPERATIONAL SPILLSMillion tonnes CO2 equivalent No. of Operational spills Volume: thousand tonnes 30 1000 10 25 800 8 20 600 6 15 400 4 10 200 Number of Spills 2 Volume of Spills (RHS) 5 0 0 02 03 04 05 06 07 08 09 10 11 02 03 04 05 06 07 08 09 10 11Copyright of Royal Dutch Shell plc 18 April, 2012 Data 100% basis for companies and joint venture where Shell is the operator 14
  • PROCESS SAFETY + ASSET INTEGRITYSTANDARD ASSET INTEGRITY MANAGEMENT SAFETY CASE ‘BOW TIE’ MODEL: PREVENTION AND RECOVERY - INDUSTRY Design Technical Integrity Integrity Consequences Hazard Integrity Control & Response & Leadership Barriers Incident Recovery Operating Minimize Mitigate Integrity likelihood consequences Promoting a culture of Chronic Unease among leaders A safety case approach to risk identification and to avoid complacency mitigation Established technical process safety discipline team Shell integrated the bow tie methodology in the 1990s Improving worksite hazard awareness to combat risk Systematic approach to risk management normalization Involve contracting companies Full alignment & clear accountabilities between partiesCopyright of Royal Dutch Shell plc 18 April, 2012 15
  • NIGERIA: SPDCENVIRONMENT: SPILLS PIPELINE REPLACEMENTOil spills, thousand tonnes 20015 NEMBE CREEK TRUNK LINE: COMPLETE 2010 150 97 km; $1.1 billion10 TRANS NIGER PIPELINE LOOP PROJECT 100 Around Ogoniland; major area of crude theft Pending approval by government partner 5 50 0 0 2006 2007 2008 2009 2010 2011 Sabotage Volume of Spills: Operational Operational Number of Spills (RHS): Sabotage2011 SPILL AND REMEDIATION PERFORMANCE 30% drop in operational spill volume 351 sites remediated (272 in 2010) Reduction in remediation backlog from 400 end 2010 to 274 sites end 2011 NEMBE CREEK TRUNK LINE REPLACEMENTCopyright of Royal Dutch Shell plc 18 April, 2012 SPDC = 30% Shell, 55% NNPC , 10% Total, 5% Agip ; all data on 100% basis 16
  • NIGERIA: SPDC FLARINGPERFORMANCE ASSESSING NEW INVESTMENT FOR GASBoe gas flared per barrel produced (2010 data) UTILIZATION Onshore Offshore Forcados Yokri & Southern Swamp AGG0.1 Completion in 2014/2015; ~ $4 billion investment Gas gathering, facility upgrades and new oil production0.0 After completion, SPDC flaring intensity will Nigeria SPDC Nigeria SNEPCO Industry Industry be below the current worldwide industry averageENVIRONMENT: FLARINGMtpa CO2e flaring SPDC production kboe/d 100015 80010 600 400 5 200 0 0 2005 2006 2007 2008 2009 2010 2011 Gas Flared Production FORKADOS YOKRI - SOUTH BANKCopyright of Royal Dutch Shell plc 18 April, 2012 SPDC = 30% Shell, 55% NNPC , 10% Total, 5% Agip ; all data on 100% basis 17
  • NIGERIA: OIL THEFT + ILLEGAL REFINING IMO RIVER – SEPTEMBER 2011Copyright of Royal Dutch Shell plc 18 April, 2012 18
  • NORTH AMERICA – SUSTAINABLE DEVELOPMENTALASKA TIGHT GAS OIL SANDS QUEST CARBON CAPTURE & STORAGE DISCOVERER DRILL SHIP NANUK OIL SPILL RESPONSE VESSEL Drilling plans for 2012 Global tight gas operating AOSP-1 ramp-up Extensive preparations: principles launched in 2011 Debottlenecking opportunities Community engagements Working with industry & Quest CCS project FID expected in regulators on consistent/robust 2012 Science program standards Oil spill responseCopyright of Royal Dutch Shell plc 18 April, 2012 19
  • SHELL CUSTOMER AND PROFITABILITY & PARTNER FOCUS PERFORMANCE “As part of the Shell Business Principles, we commit to contribute to sustainable development. This requires balancing short and long term interests, integrating economic, environmental and social considerations into business decision- making.” SUSTAINABILITY & VALUE ADDED Shell General Business Principles GROWTH TECHNOLOGYCopyright of Royal Dutch Shell plc 18 April, 2012 20
  • INVESTING FORSUSTAINABLE GROWTHQUESTIONS& ANSWERSCopyright of Royal Dutch Shell plc 18 April, 2012 21
  • INVESTING FORSUSTAINABLE GROWTHAPPENDICESCopyright of Royal Dutch Shell plc 18 April, 2012 22
  • NIGERIA SPDC ASSET SALE ONGOING Completed Ongoing 40 Over 2010 and 2011, 8 onshore OML 4/38/41 blocks were put up for sale ERHA/BOSI 42 34 30 26 5 completed, 3 ongoing GBARAN UBIE Part of a normal portfolio optimization BONGA AFAM POWER STATION OGONILAND Shell is committed to the onshore and NIGERIA LNG near shore in Nigeria OPL245 Security situation still tenuous 2 Fatalities YTD 2012 Attack on an environmental survey Increase in oil theft and illegal refining Estimates of 150 kboe/d of oil theft BONNY TERMINALCopyright of Royal Dutch Shell plc 18 April, 2012 23
  • WATER USE FOR ENERGYFRESH WATER WITHDRAWAL FOR ENERGY FRESH WATER CONSUMPTION FOR ENERGYBillion m3/year Billion m3/year 800 300 700 600 200 500 400 300 100 200 100 0 0 1980 1990 2000 2010 2020 2030 2040 2050 1980 1990 2000 2010 2020 2030 2040 2050 Fossils production Biofuels production Fossils production Biofuels production Refining, GTL & CTL Elec. & Heat - Coal Refining, GTL & CTL Elec. & Heat - Coal Elec. & Heat - Oil Elec. & Heat - Gas Elec. & Heat - Oil Elec. & Heat - Gas Elec. & Heat - Biomass Elec. & Heat - Nuclear Elec. & Heat - Biomass Elec. & Heat - Nuclear Elec. & Heat - CSP Elec. & Heat - CSPCopyright of Royal Dutch Shell plc 18 April, 2012 Shell estimates 24
  • CANADA: ATHABASCA OIL SANDS PROJECT 2011 PROGRESS Ramping up of production from Jackpine mine + Upgrader started (+100 kbbl/d) Joined new Canadian Oil Sands Innovation Alliance Industry tailings collaboration ORE HAULING AT AOSP QUEST CCS PROJECT Capture CO2 at the Scotford Upgrader from 3 Hydrogen Units - >1 mtpa CO2 Government of Alberta and Government of Canada funding for ~C$865 million Regulatory applications and project scoping progressing - FID target in 2012 DNV certification of Quest storage reservoirCopyright of Royal Dutch Shell plc 18 April, 2012 25
  • SHELL & TIGHT GAS: 5 CORE PRINCIPLESCopyright of Royal Dutch Shell plc 18 April, 2012 26
  • ALASKA OFFSHORE DRILLING PLANS SHELL PREPAREDNESS ~100 offshore wells drilled by industry Low pressure reservoirs; shallow water Shell unique response preparations: Arctic specific rig Oil spill response vessels Cap and contain system Redundant rig capability Backup BOP Over 450 community engagements NANUK OIL SPILL RESPONSE VESSEL since 2006 Extensive science program 2012 ACTIVITIES Permitting on track Drilling expected mid 2012 KULLUK CONICAL RIGCopyright of Royal Dutch Shell plc 18 April, 2012 27