Socially responsible investors presentation


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Shell hosted a socially responsible investors’ forum in New York on September 9, 2011, including a presentation led by Chief Executive officer Peter Voser and Chad Holliday, Chairman of the RDS Corporate and Social Responsibility Committee and Member of the RDS Remuneration committee.

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Socially responsible investors presentation

  1. 1. ROYAL DUTCH SHELL PLC INVESTING FOR SUSTAINABLE GROWTHNEW YORKSeptember 20111 Copyright of Royal Dutch Shell plc 9 September 2011
  2. 2. 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. ‘‘S b idi i ’’ “Sh ll subsidiaries” and “Sh ll companies” as used i this presentation refer to companies i which R i ‘‘Subsidiaries’’, “Shell b idi i ” d “Shell i ” d in hi i f i in hi h Royal D h Shell either di l Dutch Sh ll i h directly or i di l indirectly lhas 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 than forward looking condition, Shell.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 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’’, “scheduled”, ‘‘estimate’’, ‘‘expect’’, ‘‘goals’’, ‘‘intend’’, ‘‘may’’, ‘‘objectives’’,‘‘outlook’’, ‘‘plan’’, ‘‘probably’’, ‘‘project’’, ‘‘risks’’, ‘‘seek’’, ‘‘should’’, ‘‘target’’, ‘‘will’’ 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 forward-looking presentation,(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 regulatory measures addressing climate change; (k) economic and financial marketconditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays oradvancements in the approval of projects and delays in the reimbursement for shared costs; and (m) changes in trading conditions. All forward-looking statements contained inthis 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 p p yq y y y pforward-looking statements. Additional factors that may affect future results are contained in Royal Dutch Shell’s Annual Presentation / Form 20-F for the year ended December31, 2010 (available at and ). These factors also should be considered by the reader. Each forward-looking statement speaks only as ofthe date of this presentation, 9 September 2011. 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.We may have used certain terms 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 You can also obtain these f formsfrom the SEC by calling 1-800-SEC-0330.2 Copyright of Royal Dutch Shell plc 9 September 2011
  3. 3. ROYAL DUTCH SHELL PLCPETER VOSERCHIEF EXECUTIVE OFFICER3 Copyright of Royal Dutch Shell plc 9 September 2011
  5. 5. ACTIVITIES OF THE CSRCCSRC PRIORITIES 2011Nigeria LNG AOSP Muskeg River Mine Arctic and deepwater development Field trips completed: Sustained focus on Nigeria • Oil Sands, Canada Process safety y • Tight gas – Marcellus, Changbei g g g5 Copyright of Royal Dutch Shell plc 9 September 2011
  6. 6. ROYAL DUTCH SHELL PLCPETER VOSERCHIEF EXECUTIVE OFFICER6 Copyright of Royal Dutch Shell plc 9 September 2011
  7. 7. ENERGY OUTLOOKGLOBAL ENERGY MIXMln Boe/d Industry outlook400 Hydrocarbons do yd oca bo s dominate ou oo a e outlook Growth required in all sectors of energy mix300 Energy policy + sustained investment200 Shell Crude oil & oil products100 Natural gas & LNG Biofuels, wind, carbon capture + storage 0 1980 1990 2000 2010 2020 2030 2050 Petrochemicals OIL BIOMASS COAL GAS WIND NUCLEAR SOLAR SHELL ACTIVITIES OTHER RENEWABLESSHELL ESTIMATES7 Copyright of Royal Dutch Shell plc 9 September 2011
  8. 8. NATURAL GAS OUTLOOKNATURAL GAS DEMAND SHELL GAS CAPABILITIES BCM3,0003 0002,5002,000 1990 2000 2010SOURCE: IEA Inaugural cargo QatarGas 4 arriving at Hazira terminalNATURAL GAS ADVANTAGE: EXAMPLE CCGT ATTRACTIVE ECONOMICS FOR ELECTRICITY PRODUCERS $/MW hour GALLINA LNG SHIP - SINGAPORE Abundant, Affordable, Acceptable Solar Thermal Global gas resources ~250 years reserves at Wind current production Nuclear CCGT: gas-fired power compared to coal: Coal • 40% more energy efficient CCGT • 50-70% less CO2 0 50 100 150 200 • Better complements with wind power l h d CAPITAL COST LONG-RUN MARGINAL COSTCCGT: COMBINED CYCLE GAS TURBINE SOURCE: SHELL ANALYSIS BASED ON EU DATA8 Copyright of Royal Dutch Shell plc 9 September 2011
  9. 9. SUSTAINABLE DEVELOPMENT TRACK RECORD 1997 2000 2005 2010+ Renewables business established Renewables incorporated f l Biofuels: Social into main businesses First Shell Sustainability Report investment in Performance Iogen Manual launched Social performance GTL: Qatar project management unit Biodiversity construction started LNG established action plans capacity target Social Code of Conduct Performance launched included in HSSE & SP Control Goal Zero launched Sustainable development Framework part of staff score card HSSE performance Social performance GHG emissions indicators introduced Introduced biodiversity y p plans in place for p target g standard and commitments major facilities Carbon costs in Global investment decisions Shell Foundation environmental established standards launched Organisational Social Environmental Economic9 Copyright of Royal Dutch Shell plc 9 September 2011
  10. 10. PARTNERSHIPS + BEST PRACTICEGLOBAL AND LOCAL Restoring oyster beds in Gulf of Mexico Western gray whales at Sakhalin 210 Copyright of Royal Dutch Shell plc 9 September 2011
  12. 12. SAFETY IN SHELLSHELL SAFETY PERFORMANCE 2011 HSSE PRIORITIES AND FOCUSInjuries – TRCF8 Simplify & Comply76 One HSSE & SP Control Framework – Shell5 wide4 Life-Saving Rules321 Focus Areas0 99 00 01 02 03 04 05 06 07 08 09 10 11 Process Safety YTD Road Safety y Shell Sh ll IOC R Range Contractor HSSE Performance Cap & contain systems: global initiatives 2010 performance: Recordable injury frequency down 15% R d bl i j f d Sustain Lost time injury frequency down 25% Strong safety culture and leadership Fatal accident rate down 30%EMPLOYEES AND CONTRACTORS PER MILLION WORKING HOURS; SHELL OPERATED FACILITIES12 Copyright of Royal Dutch Shell plc 9 September 2011
  13. 13. PROCESS SAFETY SAFETY CASE ‘BOW TIE MODEL: BOW TIE’STANDARD ASSET INTEGRITY MANAGEMENT PREVENTION AND RECOVERY – INDUSTRY CES ONSEQUENC HAZARD Control Response & Incident & Barriers Recovery CO Minimize Mitigate Likelihood Consequences A safety case approach to risk identification and mitigation • Shell integrated the bowtie methodology 1990s • Systematic approach to risk management h k • Involve contracting companies • Full alignment & clear accountabilities between parties13 Copyright of Royal Dutch Shell plc 9 September 2011
  14. 14. ENVIRONMENTAL PERFORMANCE MEASURESEMISSIONS ENERGY EFFICIENCYMillion tonnes CO2 equivalent Upstream - gigajoules/tonne production Index105 1 105 95 100 85 0.5 95 75 90 65 0 85 00 01 02 03 04 05 06 07 08 09 10 02 03 04 05 06 07 08 09 10 Upstream excl. Oil Sands Refining Index (RHS) Chemicals Index (RHS)FLARING OPERATIONAL SPILLSMillion tonnes CO2 equivalent # of Operational spills Volume: thousand tonnes30 1000 1025 800 820 0 600 615 400 410 200 2 5 0 0 00 00 01 0 02 02 03 03 04 04 05 0 06 06 07 0 08 08 09 09 10 0 02 03 04 05 06 07 08 09 10 Number of spills Volume of spills (RHS) DATA 100% BASIS FOR COMPANIES / JOINT VENTURES WHERE WE ARE THE OPERATOR14 Copyright of Royal Dutch Shell plc 9 September 2011
  15. 15. NIGERIA: SPDC JOINT VENTUREPERFORMANCE ENVIRONMENT -SPILLS Oil spills, thousand tonnes # of oil spills 200 15 150 10 100 5 50 0 0 2006 2007 2008 2009 2010 Operational Operational Volume of Spills Sabotage g Number of Spills(RHS) Sabotage g Gbaran Ubi Gb Ubie ENVIRONMENT - FLARING Mtpa C02e flaring SPDC production kboe/d Improved security situation: challenges continue Gas Flared Production(RHS) 1000 Previously shut in p y production being brought g g 15 800 back on-stream 10 600 Gbaran Ubie plant on stream; 1 bcf/d 5 400 200 Progressing spills cleanup g g p p 0 0 2005 2006 2007 2008 2009 2010SPDC = 30% SHELL, 55% NNPC , 10% TOTAL, 5% AGIP ; ALL DATA ON 100% BASIS15 Copyright of Royal Dutch Shell plc 9 September 2011
  16. 16. CANADA: ATHABASCA OIL SANDS PROJECTAOSP PERFORMANCE ENVIRONMENT New Jackpine conveyor carrying oil sands ore to the crusher Muskeg River mine: reclaimed land Base Project (2003): 155,000 boe/d Quest Carbon Capture and Storage project Expansion 1 (2010/11): p ( / ) 100,000 boe/d , / Atmospheric fines drying - accelerated p y g Debottlenecking (2014+): 85,000 boe/d reclamation • Phase 1 FID, 10,000 boe/d Industry tailings collaboration • 7-10 year programme 7 10 Jackpine ‘compensation’ lake compensationAOSP = 60% Shell and 20% each Chevron & Marathon. Volumes on 100% basis16 Copyright of Royal Dutch Shell plc 9 September 2011
  17. 17. BIOFUELS GROWTH RAÍZEN JOINT VENTURE Leading Brazil and Top 5 global ethanol player > 30 kbd ethanol production capacity p p y > 80 kbd potential ~ 5 years Shell world-wide trading opportunities Next generation technologies Brazil: harvesting sugarcaneGLOBAL POTENTIAL BIOFUELS GROWTH RESEARCHING ADVANCED BIOFUELSKboe/d production3,000 SOYBEAN RAPESEED PALM OIL OTHER CORN SUGARCANE2,0001,000 0 2005 2010 2015 202017 Copyright of Royal Dutch Shell plc 9 September 2011
  18. 18. ARCTIC TECHNOLOGIESKEY TECHNOLOGY PROJECTS Physical and structural challenges Facilities/production in ice Pipeline protection Personnel safety and evacuation Footprint reduction Seismic on ice Sound reducing technologies g g Monitoring using unmanned aircraft Spill Response Capability Containment systems Year-round spill response Environmental assessment1818 Copyright of Royal Dutch Shell plc 9 September 2011
  19. 19. ROYAL DUTCH SHELL PLC MARVIN ODUM DIRECTOR UPSTREAM AMERICAS19 Copyright of Royal Dutch Shell plc 9 September 2011
  20. 20. TIGHT GAS & COAL BED METHANEGLOBAL SHELL POSITION Tight gas operations – Groundbirch Canada TIGHT GAS SHALE GAS CBMCOMMUNITY ISSUES Land footprint df Water use + disposal Air quality Hydraulic f d l fracturing fluids fl d Tight gas operations – Jinqui, China20 Copyright of Royal Dutch Shell plc 9 September 2011
  21. 21. SHELL & TIGHT GAS:5 CORE PRINCIPLES Safety & Well Footprint Integrity I i Shell Sh ll works t reduce it k to d its operational footprint. Shell designs, constructs and operates wells and facilities in a safe and responsible way. Water Community Shell conducts its operations to Shell engages with local protect groundwater and reduce communities regarding socio- water use as reasonably economic impacts that may arise practicable. from our operations. Air Shell conducts its operations in order to protect air quality and control its fugitive emissions.21 Copyright of Royal Dutch Shell plc 9 September 2011
  22. 22. TIGHT GASPAD DRILLING: REDUCING SURFACE FOOTPRINTPINEDALE: SHELL OPERATED JONAH: COMPETITOR Up to 4 pads each pad having up to 32 wells Up to 64 pads with each pad having a single wellSQUARE MILE OVERVIEW SQUARE MILE OVERVIEW Adjacent g j gas fields, different development impacts p p Shell setting new standards for surface footprint reduction22 Copyright of Royal Dutch Shell plc 9 September 2011
  23. 23. LNG FOR TRANSPORTGREEN CORRIDOR - CANADA Ft. McMurray Shell s Shell’s 1st large scale LNG for transport project Edmonton • Ft. McMurray - Calgary – Vancouver • 1st phase: 0.3 mtpa LNG plant p p p Calgary Vancouver Jumping Pound High Hi h res picture i t coming LNG powered truck Canada: Jumping Pound Gas Plant23 Copyright of Royal Dutch Shell plc 9 September 2011
  24. 24. ROYAL DUTCH SHELL PLC PETER VOSER CHIEF EXECUTIVE OFFICER24 Copyright of Royal Dutch Shell plc 9 September 2011
  25. 25. SHELL COMMITMENT “As part of the Shell Business Principles, we commit p p to contribute to sustainable development. This requires balancing short and long term interests, Customer and Profitability & integrating economic, environmental and social partner focus performance considerations into business decision-making.” Shell General Business Principles Sustainability & Value added growth th technology t h l25 Copyright of Royal Dutch Shell plc 9 September 2011
  26. 26. ROYAL DUTCH SHELL PLC Q&A NEW YORK SEPTEMBER 201126 Copyright of Royal Dutch Shell plc 9 September 2011
  27. 27. ROYAL DUTCH SHELL PLC APPENDIX SUPPORTING SLIDES27 Copyright of Royal Dutch Shell plc 9 September 2011
  28. 28. BUILDING GLOBAL CCS CAPABILITIESSHELL CCS PORTFOLIO QUEST MONGSTAD LONGANNET PETERHEAD QUESTWESTCARB WEYBURN MIDALE Shell is also a member of multiple b f lti l GORGON CCS research OTWAY partnerships Demonstration / research projects Industrial scale (>100 KTPA) projects in design Industrial scale projects under constructionDRIVING UNIT CCS COST DOWN Capture CO2 at the Scotford Upgrader from 3 Hydrogen Industry developing technology and capabilities Units Government financial support for large scale demonstration >1 mtpa CO2 will be transported by pipeline and stored over projects and infrastructure 2 km underground Cap & trade framework, liability issues resolved, fast track Letters of intent with Government of Alberta and Government planning permission process of Canada for ~C$865 million have been signed Regulatory applications and project scoping p g g y pp p j p g progressing g FID target in 201228 Copyright of Royal Dutch Shell plc 9 September 2011
  29. 29. NIGERIA OVERVIEWSHELL’S OPERATIONS IN NIGERIA GBARAN UBIE PROJECT Shell 30% p Multi field development ERHA/BOSI • ~250 kboe/d peak production Flaring expected to reduce by 30 mmscf/d GBARAN UBIE AFAM POWER STATION BONGA OGONILAND High local content NIGERIA LNG • ~90% Ni i manpower 90% Nigerian Significant social investment programmeGBARAN UBIE PHASE 1 START-UP PERFORMANCE OPL245 Gbaran Ubie kboe/d (100%), Nigeria (100%) 200 ACTUAL Long history of operations in country; >50 150 PLAN y years 100 Growth options 50 Operating challenges 0LOCAL CONTENT: PRESSURE VESSELS IN TRANSIT TO SITE May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-1129 Copyright of Royal Dutch Shell plc 9 September 2011
  30. 30. IRAQ: PROGRESSING KEY OPPORTUNITIESMAJNOON PROGRESS IRAQ SOUTH GAS POTENTIALArmored vehicles clearingexplosive remnants of war Well pad constructionWell integrity review Camps constructed Initialing of the Basrah Gas Company Joint Venture Contracts ~38 billion boe oil in place Basrah Gas Company Joint Venture Contracts Long-term production potential 1.8 mln boe/d initialed in July 2011; final Government approval pending Assessing full field options Reduces gas flaring • Di Discrete, modular steps t d l t Domestic gas and export opportunities Shell 45% Shell 44%30 Copyright of Royal Dutch Shell plc 9 September 2011
  31. 31. BLOWOUT PREVENTION & CONTAINMENT CAPABILITYSTANDARD ASSET INTEGRITY MANAGEMENT INTERNATIONAL RESPONSE Founding Fo nding & permanent Board Member of the 9 participating members, Shell operator members Marine Well Containment Company (MWCC) Near term the project team will: MWCC will own & deploy the system in US GOM • Design a capping toolbox & additional Subsea containment equipment designed for GOM hardware for the subsea injection of dispersant • Interim system available Feb 2011 • Further assess the need for and feasibility of a • Expanded system available 2012 containment system for shared use • Assess deployment options31 Copyright of Royal Dutch Shell plc 9 September 2011
  32. 32. IMPROVING MANUFACTURING PERFORMANCEREFINING AVAILABILITY RELIABILITY PERFORMANCEAvailability Refineries in TQ reliability95% 5% 100% PLANNED DOWNTIME90% AVAILABILITY 3% 50%85% 1% 0% 2008 2009 2010 H1 2011 2008 2009 2010 H1 2011“LEAN” TO REDUCE COST “LEAN” FOR MORE EFFICIENT TURNAROUNDSManufacturing index Refining Turnaround costs index -14%110% 100% -11%100% 90% 90% 80% 80% 70% 2008 2009 2010 2008 2009 2010Excludes portfolio effects Excludes portfolio effects32 Copyright of Royal Dutch Shell plc 9 September 2011
  33. 33. DOWNSTREAM GROWTH: DIFFERENTIATEDTECHNOLOGYLUBES TECHNOLOGY - ENABLING OEM PARTNERSHIPS NEW GROWTH WITH SULPHUR TECHNOLOGY Shell concept lubricant achieves 6.5% fuel economy benefit Managing all Shell’s sulphur as a value added commodity through technical partnership with Gordon Murray DesignFUELS TECHNOLOGY - CREATING ADDITIONAL VALUE UP TO10% FUEL & CO2 REDUCTION F l technology i h l i Sh ll to d Fuels h l is helping Shell decommodotize f l d i fuels Shell FuelSave P Sh ll F lS Partner i the new f l management solution is h fuel l i enabling additional margin capture for commercial transport fleets Vehicle Performance Shell Fuel Card Data “Improved performance “I d f“Save up to 1 Litre per tank” Driver Behaviour advanced technology”33 Copyright of Royal Dutch Shell plc 9 September 2011