- Royal Dutch Shell reported its 2011 results and provided a company update.
- Upstream earnings increased to $5.1 billion in Q4 2011 from $3.4 billion in Q4 2010 due to higher oil and gas prices. Downstream earnings declined to -$0.3 billion from $0.5 billion.
- Shell focused on cost reductions, delivered 14 new projects, and declared $31 billion in dividends from 2009-2011 to improve performance and returns.
Analyst webcast presentation Royal Dutch Shell fourth quarter and full year 2011 results
1. ROYAL DUTCH SHELL
2011 RESULTS AND
COMPANY UPDATE
February 2, 2012
y
1 Copyright of Royal Dutch Shell plc 2 February 2012
2. ROYAL DUTCH SHELL
PETER VOSER
CHIEF EXECUTIVE OFFICER
2 Copyright of Royal Dutch Shell plc 2 February 2012
3. DEFINITIONS AND CAUTIONARY NOTE
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 or SEC proven mining
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 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. ‘‘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 Sh ll either di
l Dutch Shell i h directly or i di
l indirectly
l
has 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 control
are 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/or
indirect (for example, through our 24% 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
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 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’’, ‘‘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 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
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 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 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 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
p p yq y y y p
undue 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 the
date of this presentation, 2 February 2012. Neither Royal Dutch Shell 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. There can be no assurance that dividend payments will match or exceed those set out in this presentation 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 f
from including 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 website www.sec.gov. You can also
obtain 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
g y p
growth technology choices
4 Copyright of Royal Dutch Shell plc 2 February 2012
5. CONTINUED FOCUS ON HSSE PERFORMANCE
‘GOAL ZERO’ ON SAFETY
injuries – TRCF/million working hours million working hours
5 900
Focus on personal and process safety
l d f
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) TRCF
EMPLOYEES AND CONTRACTORS PER MILLION WORKING HOURS; SHELL OPERATED FACILITIES; PRELIMINARY ESTIMATE FOR 2011
5 Copyright of Royal Dutch Shell plc 2 February 2012
6. ENERGY INVESTMENT FUNDAMENTALS POSITIVE
ROBUST LONGER TERM FUNDAMENTALS MANAGING SHORT-TERM VOLATILITY
energy demand outlook in million boe/d $/bbl
140 12
400
120
10
300 100
8
80
6
200
60
4
40
100
2
20
0 0 0
1980 1990 2000 2010 2020 2030 2040 2050 2008 2009 2010 2011
OIL BIOMASS COAL BRENT (LHS)
GAS WIND NUCLEAR
HENRY HUB $/MMBTU (RHS)
SOLAR
SHELL ACTIVITIES
OTHER RENEWABLES WEIGHTED AVERAGE REFINING MARGIN $/BBL (RHS)
SOURCE: SHELL ANALYSIS
6 Copyright of Royal Dutch Shell plc 2 February 2012
7. STRATEGY AND CAPITAL ALLOCATION
STRATEGY CAPITAL INVESTMENT
$ billion
Upstream
p 30
Profitable growth; price upside
Exploration + resources plays
UP
20
Downstream STREAM
Optimize re-shaped portfolio
Selective growth
10
Climate change
Grow gas and biofuels DOWN DOWN
CCS and energy efficiency STREAM STREAM
0
'09-'11 2012 '09-'11 2012
Financial outlook average average
Investing for growth and competitive payout EUROPE
AFRICA, MIDDLE EAST,
Through-cycle returns and risk management CIS
ASIA PACIFIC
AMERICAS
Increasing our investment; 80 Upstream
i i 80%
7 Copyright of Royal Dutch Shell plc 2 February 2012
8. IMPROVING OUR PERFORMANCE
EARNINGS TOTAL SHAREHOLDER RETURN
$ billion CCS %
30 60%
40%
10 20%
0%
2009 2010 2011 2006-2008 2009-2011
-10 -20%
UPSTREAM CORPORATE
DOWNSTREAM DIVESTMENTS/OTHER SHELL OTHER MAJORS
CASH FLOW FROM OPERATIONS VOLUMES
$ billion kboe/day mtpa
3,300 20
40
3,000
3 000 10
20
0 2,700 0
2009 2010 2011 2009 2011
UPSTREAM DOWNSTREAM CORPORATE OIL & GAS 2010-11
2010 11 LNG (RHS)
REFINING INTAKE ASSET SALES CHEMICALS (RHS)
CFFO EXCLUDES WORKING CAPITAL MOVEMENTS
8 Copyright of Royal Dutch Shell plc 2 February 2012
9. PORTFOLIO + PROJECT PERFORMANCE
DELIVERING NEW PROJECTS
North America: Canada: Qatar: Australia
Nigeria: tight gas
i h AOSP-1
AOSP 1 QatarGas4 LNG
Q G 4 (Woodside): Pl t
(W d id ) Pluto
Gbaran Ubie Ph 1
Russia: Sakhalin II
Singapore: Netherlands: Qatar: USA:
Chemicals Schoonebeek Pearl GTL Port Arthur
Brazil: USA: Norway: Iraq: NA: Oman: Oman:
BC-10
BC 10 Perdido Gjoa W Q
G West Qurna tight gas
h Qarn Al
Q Alam Harweel
H l
2009 2010 2011
Car
Care
Norway: Australia: USA: Mexico: UK: Indonesia:
Statfjord Woodside GOM Altamira Stanlow Abadi
(10%) Germany: y refinery
e ey FLNG
Greece: USA: Heide Cameroon Africa
Chile Pakistan Australia:
Downstream Eagle Ford refinery
Nigeria: USA: Iraq: Basrah Bow Energy
USA: OML Australia: South Brazil: Gas company Nigeria:
Iraq: Majnoon
East Resources 4/38/41 Arrow Energy Texas BS4/BMS8 OML 26/42
START UP DIVESTMENT ACQUISITION/NEGOTIATED ENTRY
9 Copyright of Royal Dutch Shell plc 2 February 2012
10. ROYAL DUTCH SHELL
SIMON HENRY
CHIEF FINANCIAL OFFICER
10 Copyright of Royal Dutch Shell plc 2 February 2012
11. DELIVERING OUR STRATEGY 2009 - 2011
2009+ PRIORITIES 2009-2011 DELIVERY
Cost focus
PERFORMANCE FOCUS Corporate reorganization
Downstream portfolio reduction
14 project start-ups
GROWTH DELIVERY Enhanced free cash flow
$31 billion dividends declared
Exploration + business development
NEW OPTIONS
Maturing new growth projects
11 Copyright of Royal Dutch Shell plc 2 February 2012
12. Q4 2011 FINANCIAL HIGHLIGHTS
CCS EARNINGS CCS EARNINGS Q4 2010 TO Q4 2011
$ billion $ billion
6
Q4 10 Q4 11
UPSTREAM 3.4 5.1 5
DOWNSTREAM (CCS) 0.5 (0.3)
BUSINESS SEGMENTS TOTAL 3.9 4.8
4
CORPORATE & MINORITIES 0.2 0.0
CCS NET EARNINGS 4.1 4.8
3
CCS EARNINGS, $ PER SHARE 0.67 0.78
CCS EARNINGS, $ PER ADS
EARNINGS 1.34
1 34 1.56
1 56
2
CASH FROM OPERATIONS 5.5 6.5
1
0
EARNINGS CCS BASIS, EARNINGS AND EPS EXCLUDING IDENTIFIED ITEMS
12 Copyright of Royal Dutch Shell plc 2 February 2012
13. EARNINGS AND PERFORMANCE 2009-2011
UPSTREAM PRODUCTION OIL & GAS REALISATIONS UPSTREAM EARNINGS
million boe/d mtpa $/barrel $/mscf $ billion
3 20
20 100 6
2 4
10
10 50
1 2
0 0 0 0 0
2009 2010 2011 2009 2010 2011 2009 2010 2011
OIL GAS 2010-11 ASSET SALES OIL GAS (RHS) OTHER UPSTREAM INTEGRATED GAS
LNG SALES (RHS)
DOWNSTREAM AVAILABILITY DOWNSTREAM MARGINS DOWNSTREAM EARNINGS
% availability $/barrel $/tonne $ billion (CCS)
100
500
2 4
95
1 250 2
90
85 0 0 0
2009 2010 2011 2009 2010 2011 2009 2010 2011
UNPLANNED DOWNTIME ROTTERDAM COMPLEX MARGIN OIL PRODUCTS CHEMICALS
CHEMICALS AVAILABILITY REFINERY AVAILABILITY WESTERN EUROPE NAPHTHA (RHS)
EARNINGS EXCLUDE IDENTIFIED ITEMS
13 Copyright of Royal Dutch Shell plc 2 February 2012
14. RETURNS & CASHFLOW PERFORMANCE 2009-11
RETURNS CASHFLOW 2009-2011
$ billion $ billion
SOURCES USES
250 40% 120
100
200
30% DOWNSTREAM
80
150
DOWNSTREAM
20% 60
100
40 UPSTREAM
10% UPSTREAM
50
20
0 0% 0
2007 2008 2009 2010 2011 2012E
CAPITAL IN SERVICE CASH FLOW FROM OPERATIONS ACQUISITIONS
CAPITAL UNDER CONSTRUCTION/OTHER ASSET SALES CAPEX + EQUITY ACC.
RETURN ON CAPITAL IN SERVICE (RHS) INVESTMENTS
RETURN ON CAPITAL EMPLOYED (RHS) DIVIDEND AND BUYBACK
CFFO EXCLUDES NET MOVEMENTS IN WORKING CAPITAL
14 Copyright of Royal Dutch Shell plc 2 February 2012
15. PERFORMANCE FOCUS 2009-2011
CONTINUOUS IMPROVEMENT+ CAPITAL EFFICIENCY
DIVESTMENTS 2009-2011 ACQUISITIONS 2009-2011
$17 $15
billion billion
UPSTREAM UPSTREAM
DOWNSTREAM DOWNSTREAM
Retail, Af i
R il Africa Biofuels, Brazil
Bi f l B il
Refocus Downstream: Growth oil + gas:
• Europe; Africa; Latin-America • East Resources, Arrow, liquids-rich
shales, Abadi, Basrah Gas Company
, , p y
Late life/non-strategic Upstream • New exploration acreage
• Upstream ~120 kboe/d
• Woodside (10%), South Texas, Growth Downstream:
Cameroon, Pakistan, others
C P ki h • Brazil biofuels, retail
15 Copyright of Royal Dutch Shell plc 2 February 2012
16. GROWTH DELIVERY 2009-2011
CONVERTING RESOURCES TO PRODUCTION
billion boe resources
35
Longer-term upside Carmon Creek
Geronggong
BC-10 Ph. 3 (Massa)
25 Prelude FLNG Tempa Rossa
AOSP debottl. Fram
NA tight gas / Malikai
M lik i
shales AOSP debottl. + Quest
Clair Ph2 NA tight gas/shales
15 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
g pp y
12 bln boe on stream, maturing additional ~20 billion boe
16 Copyright of Royal Dutch Shell plc 2 February 2012
17. GROWTH DELIVERY 2009-2011
DELIVERING OUR TARGETS
PRODUCTION CASH FLOW
million boe/day $ billion
50 50
2010-2011:
2010 2011
3.5 EXTERNAL /
CHOICE
40 40
30 30
3.0
20 20
10 10
2.5 0 0
2009 2010 2011 2012 * 2009 2010 2011 2012 *
PSC/OIL PRICE
EXTERNAL /
2010-11 ASSET SALES CHOICE CASH FLOW FROM OPERATIONS
GULF OF MEXICO MORATORIUM IMPACT DIVIDEND + BUYBACK
2010+2011 KEY PROJECT START UPS
START-UPS NET CAPITAL INVESTMENT
2009 BASE
* PRODUCTION TARGET SET IN MARCH 2010 SHOWN AT $80 BRENT / $6 HH CFFO EXCLUDES NET MOVEMENTS IN WORKING CAPITAL
* CFFO TARGET SET IN MARCH 2010 ASSUMED $60-$80 BRENT/$6 HH AND IMPROVED
17 Copyright of Royal Dutch Shell plc 2 February 2012 DOWNSTREAM ENVIRONMENT VERSUS 2009
18. ROYAL DUTCH SHELL
UPDATING OUR PRIORITIES
18 Copyright of Royal Dutch Shell plc 2 February 2012
19. 2012+ PRIORITIES
12 billion boe resources on stream
CONTINUOUS IMPROVEMENT
Drive
D i new cashflow growth:
hfl th
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 MOVEMENTS
19 Copyright of Royal Dutch Shell plc 2 February 2012
20. 2012+ OUTLOOK
CONTINUOUS IMPROVEMENT
UNPLANNED DOWNTIME PROCESS EFFICIENCY OPPORTUNITIES
%
Offer to cash
9
Inventory management
y g
6 Well and reservoir management
Materials management
3
Asset maintenance and integrity
CHEMICALS REFINING
0
2006 2007 2008 2009 2010 2011
TIGHT GAS/SHALE DRILL TIME PROCUREMENT: LOW COST COUNTRIES
Indexed Well Delivery Time per year since first production # of suppliers $ billion
Pinedale - 2002 250
Early Deep Basin - 2006 BEING QUALIFIED
100 SUPPLIERS 3
Deep Basin - 2008* 200 QUALIFIED
75 Haynesville - 2008
Groundbirch - 2008 150 SPEND 2
50 100
1
25 50
0 0 0
0 1 2 3 4 5 6 7 8 9 10 2008 2009 2010 2011
Years
Performance focus
20 Copyright of Royal Dutch Shell plc 2 February 2012
21. ROYAL DUTCH SHELL
2012+ GROWTH PROJECTS
21 Copyright of Royal Dutch Shell plc 2 February 2012
22. 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 Steam
RESOURCES Harweel Gumusut-Kakap
p
Sabah Gas
billion boe Kebabangan
Bonga NW
30
Prelude FLNG
Wheatstone LNG
North Rankin 2
20 Pluto LNG T1 (Woodside)
BC-10 Phase 2 Gorgon LNG T1-3
Under Greater Western Flank Ph 1
START-UP DATE
10
Construction
2012-13
2014-15
2016+
0
26 projects under construction
22 Copyright of Royal Dutch Shell plc 2 February 2012
23. GROWTH DELIVERY 2012+
MAINTAINING LNG LEADERSHIP
AUSTRALIA – INDONESIA: 2011 PROGRESS SHELL GLOBAL LNG CAPACITY GROWTH
Abadi entry mtpa
• Inpex 60%
• Shell 30%
• EMPI 10% 40.0
Wheatstone
Wh
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
G 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
0
UNDER CONSTRUCTION
OPTIONS
10
~20 mtpa on-stream
~8 mtpa under construction
p 0
Shell
Sh ll Exxon
E Chevron
Ch BG Total
T l BP
Assessing ~ 15 mtpa future options 2011 2017
PROJECTS ONSTREAM OR UNDER CONSTRUCTION
23 Copyright of Royal Dutch Shell plc 2 February 2012
24. GROWTH DELIVERY 2012+
REGAINING MOMENTUM IN GULF OF MEXICO
Vito Appomattox
~100 kboe/d potential
100 ~100 kboe/d hub potential
100
>200 million boe resources Appraisal drilling underway
Shell 55% (operator) > 250 million boe resources
Shell 80% (operator)
Nakika
Mars-B Mars
W.Boreas, S D i
WB S. Deimos Ursa
100 km
Mars-B, Olympus tension leg platform Brutus
Cardamom Deep DISCOVERY FID START-UP
Auger Caesar Tonga
Perdido
P did
Mars B
Holstein
Caesar Tonga
Cardamom
Stones
Stones
45 kboe/d potential
Shell 35% (operator)
( p )
Appomattox
A tt
Vito
ONSTREAM UNDER CONSTRUCTION OPTIONS 2005 2010 2015 2020
~185 kboe/d 2011- ~350 kboe/d potential ~2017
p
Drilling 5+ exploration wells 2012
24 Copyright of Royal Dutch Shell plc 2 February 2012
25. GROWTH DELIVERY 2012+
INVESTMENT IN UPSTREAM HEARTLANDS
UK: ATLANTIC MARGIN AUSTRALIA: NWS LNG JV MALAYSIA
8 ºW 6º 4º 2º 0º 2ºE
0 50
S c a le
km
F a r o e Is la n d s
F aro e
C o n tine n ta l
S h e lf
W est of
S h e tl nd
tla d
S lo p e
C la i r
S c h ie h a l l i o n
F o in a v e n S h e t la n d
I s la n d s
W est of
S he tla n d
C on tin e nt al
S h e lf
O rkn ey
Is l a n d s
W e s te rn
Is l e s
S c o t la n d
Schiehallion (Shell 36%) Operating since 1989 Sabah Gas Kebabangan
• N FPSO
New Delivered >3,000 LNG cargoes
D li d 3 000 • IIntegrated production platform
t t d d ti l tf
• ~130 kboe/d Developing new gas resources: • ~130 kboe/d
• North Rankin ~280 kboe/d • Shell 30%
Clair Ph 2 (Shell 28%) • GWF Phase 1 ~110 kboe/d
• ~120 kb /d
20 kboe/d Shell 2 %
Sh ll 21% EOR
O
• Extending 2 PSCs with Petronas
• ~100 kboe/d potential
• Shell 40-50%
25 Copyright of Royal Dutch Shell plc 2 February 2012
26. PRODUCTION OUTLOOK
PROJECTS UNDER CONSTRUCTION GROUP PRODUCTION OUTLOOK
Region Theme
100% 100%
90%
80%
Gorgon LNG, Australia 75%
70%
60%
50% 50%
40%
Mars-B, USA 30%
25%
20%
10%
0% 0%
2011 2017 2011 2017
AOSP debottlenecking Canada
debottlenecking,
MIDDLE EAST, AFRICA, CIS HEAVY OIL & EOR
EUROPE DEEPWATER
ASIA PACIFIC TIGHT/SHALE OIL/GAS
AMERICAS INTEGRATED GAS
TRADITIONAL
Bonga North West, Nigeria
26 Copyright of Royal Dutch Shell plc 2 February 2012
27. ROYAL DUTCH SHELL
MATURING NEW GROWTH
OPTIONS
27 Copyright of Royal Dutch Shell plc 2 February 2012
28. MATURING NEW GROWTH OPTIONS
DOWNSTREAM: 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 brand
28 Copyright of Royal Dutch Shell plc 2 February 2012
29. MATURING NEW GROWTH OPTIONS
2011 EXPLORATION + BUSINESS DEVELOPMENT
2011 EXPLORATION & ACQUISITIONS RESOURCES MATURATION / POTENTIAL
billion boe
4
Marcellus
Clair
Cl i Eagle Ford
E l F d
Groundbirch Abadi
Iraq
Liquids-rich
Arrow
shales
Marcellus China tight gas Groundbirch
2
Eagle Ford Zaedyus
Z d
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 boe 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)
29 Copyright of Royal Dutch Shell plc 2 February 2012
30. MATURING NEW GROWTH OPTIONS
2011 DRILLING SUCCESS
FRENCH GUIANA – NEW PLAY OPENER WEST AUSTRALIA GAS FOR LNG
French G i
F h Guiana –
Guyane Maritime
Shell 45%
Zaedyus (GM-ES-1) Satyr-3 Acme West 1&2
NWS LNG
y
Guyana – Stabroek
Shell 50%* Vos-1 Gorgon LNG
0 100 200
Kilometers DISCOVERY
>300 million boe (100% basis) in Zaedyus discovery; New gas discoveries in 2011
upside identified
23 discoveries since 2005 12+ tcf Sh ll
di i i 2005; 12 f Shell
1 exploration well and Zaedyus appraisal 2H 2012 share added at <$1/boe finding cost
Multiple targets across 63,000 km2 in French Guiana Shell average 40%
& Guyana deepwater
* INCREASE PENDING GOVERNMENT APPROVAL
30 Copyright of Royal Dutch Shell plc 2 February 2012
31. MATURING NEW GROWTH OPTIONS
EXPLORATION: CONSISTENT DELIVERY OF NEW
RESOURCES DISCOVERED RESOURCES POTENTIAL
billion boe
3
2
Cardamom
Deep Appomattox 1
Amal SE
West Boreas Vito
South Deimos
S hD i Zaedyus
Z d Tologbene Geronggong
G
0
'02 '03 '04 '05 '06 '07 '08 '09 '10 '11
Concerto
Achilles Acme TRADITIONAL OIL/GAS INTEGRATED GAS
Massa
Vos Acme West
2009-2011 TIGHT/SHALE OIL/GAS
KEY FINDS Satyr Brederode
Gato do Mato
Yellowglen Kentish Knock
EXPLORATION PERFORMANCE
%
100%
~15 billion boe discovered 2002-2011
Strategic shift to OECD 50%
Stepped up spending in 2005
0%
'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11
Renewed spending + activity increase 2011-2012
e ewed spe d g ac v y c ease 0 0
% OECD SUCCESS RATE
DISCOVERED RESOURCE POTENTIAL
31 Copyright of Royal Dutch Shell plc 2 February 2012
32. MATURING NEW GROWTH OPTIONS
STEPPING UP 2012 EXPLORATION PACE
EXPLORATION SPEND 2012 EXPLORATION SPEND
Alaska
N. America N. America liquids- Kazakhstan (1)
tight gas rich shales
Saudi Arabia (1) China
Gulf of Mexico (5)
Fr Guiana (2)
Brunei (4)
Gabon (1) &
Nigeria (1) Australia
offshore (5)
Brazil (1) Australia onshore CBM
New Zealand (1)
2012 DRILLING PLAN (# WELLS) INTEGRATED GAS
DEEPWATER
TRADITIONAL
TIGHT / SHALE OIL/GAS
20 -25 key well & play tests in 2012 in Australia
NWS, GoM, and tight/shale gas
Frontier drilling weighted to deep water and liquids-
rich shale plays
i h h l l
32 Copyright of Royal Dutch Shell plc 2 February 2012
33. MATURING NEW GROWTH OPTIONS
BUILDING WORLD-WIDE TIGHT GAS + LIQUIDS-RICH
SHALES PORTFOLIO
Canol Groundbirch
Montney Deep Basin
Germany
Foothills
Bakken 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
N 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/acre
33 Copyright of Royal Dutch Shell plc 2 February 2012
34. MATURING NEW GROWTH OPTIONS
LIQUIDS-RICH SHALES AND TIGHT GAS OUTLOOK
2012 PRIORITIES + OUTLOOK GLOBAL PRODUCTION POTENTIAL
kboe/day bcfe/day
2.0
300
Annual investment decisions + flexibility
y 1.5
15
200
1.0
Focus on lowest cost North America gas
100 0.5
Spending at low-end of potential range
0 0
2008 2010 2011 2012
Eagle Ford liquids-rich shales development GAS LIQUIDS SOUTH TEXAS DISPOSAL
2012 CAPEX* ~$6 billion
Appraisal of new liquids-rich shale acreage
liquids rich
>250 kboe/d potential 2017
EXPLORATION + APPRAISAL
NORTH AMERICA GAS
INTERNATIONAL GAS DEVELOPMENT
LIQUIDS-RICH SHALES
* EXCLUDES ACREAGE PURCHASES
34 Copyright of Royal Dutch Shell plc 2 February 2012
35. MATURING NEW GROWTH OPTIONS
NORTH AMERICA GAS VALUE CHAINS
LEVERAGE SHELL INTEGRATION KNOW-HOW EXAMPLE: COMMERCIALISING LNG FOR TRANSPORT
Fort St John Fort Mc Murray
Grande Prairie
Gas into il i i
G i t oil pricing opportunity
t it
Canada Green Corridor FID 2011
FID for 0.3 mtpa LNG Edmonton
Long distance truck fuel
Assessing gas potential: LNG retail infrastructure
Calgary
C l
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 truck
35 Copyright of Royal Dutch Shell plc 2 February 2012
36. MATURING NEW GROWTH OPTIONS
IRAQ OIL & GAS
WEST QURNA 1 + MAJNOON BASRAH GAS COMPANY (BGC)
Majnoon
West Qurna1
South Gas Processing Plants BASRAH
Rumaila Zubair
South Gas LPG Terminal
Barge unloading pipe racks at th
B l di i k t the OIL FIELDS WITH SHELL INTEREST
Majnoon Jetty, Shat-al-Arab waterway GAS SUPPLIES FOR BGC
West Qurna 1 November 2011 Joint Venture approved
• Rehabilitation program progressing ~2 bcf/d wet gas feedstock
• Cost recovery commenced
Majnoon: ~ 700 msfc/day currently flared
• Drilling programme under way for FCP Phased development approach
3-6 month conversion of capex to cash flow post- • Domestic gas, 35 kboe/d condensate, 5 mtpa LPG
FCP/IPT • Long term LNG export p
g p potential
Shell 44%
36 Copyright of Royal Dutch Shell plc 2 February 2012
37. MATURING NEXT GROWTH OPTIONS
MATURING NEW PROJECTS 2012+
Long-term growth and investment
TIGHT GAS – N. AMERICA CARMON CREEK - CANADA
Options to flex annual spending with macro
Capex and growth outcomes
Investment decisions driven by
ARROW - AUSTRALIA APPOMATTOX - USA
Portfolio fit
o o o
Affordability
Profitability
y
Maturing 36 project options
Portfolio can support profitable growth to ~2020
37 Copyright of Royal Dutch Shell plc 2 February 2012
38. ROYAL DUTCH SHELL
FINANCIAL FRAMEWORK
38 Copyright of Royal Dutch Shell plc 2 February 2012
39. CAPITAL INVESTMENT
STRONG PROJECT FLOW DRIVES INVESTMENT GROWTH
capital investment $ billion
Thematic
Schiehallion
Redevelopment
R d l t
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 Ford
UPSTREAM
Mars-B
M 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 ~30
39 Copyright of Royal Dutch Shell plc 2 February 2012
40. GROWTH DELIVERY 2012+
UPDATING OUR GROWTH OUTLOOK
OIL & GAS PRODUCTION + OUTCOMES SUSTAINED CASH FLOW GROWTH
million boe/day $ billion
4.0
200 200 $100/bbl
$80/bbl
3.5 150 150
$87/bbl Brent
100 100
3.0
30
50 50
2.5 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 EXPIRIES
PRODUCTION OUTLOOK @ $80/BBL BRENT. CFFO OUTLOOK ASSUMES IMPROVED US GAS AND DOWNSTREAM ENVIRONMENT FROM 2011; CFFO EXCLUDES WORKING CAPITAL MOVEMENTS
40 Copyright of Royal Dutch Shell plc 2 February 2012
41. UPSTREAM GROWTH OUTLOOK
UPSTREAM REGIONAL CASH FLOW SCENARIO PRODUCTION POTENTIAL
$ billion billion boe
Middle East,
2008 -2011
2011
Africa, CIS
f
2012 – 2015
Americas POTENTIAL
3.5 4.0 4.5 5.0 5.5
Europe TOTAL PRODUCTION (BILLION BOE)
Outlook for enhanced cash growth
Asia Pacific
Cash flow growth > production growth
0 5 10
2011 CFFO
Growth investment led by Americas and Asia
AVERAGE CAPEX 2008-11
Pacific
AVERAGE CAPEX 2012-15
CFFO EXCLUDES WORKING CAPITAL MOVEMENTS
41 Copyright of Royal Dutch Shell plc 2 February 2012
42. FINANCIAL FRAMEWORK
CASH PERFORMANCE
+30 50%
+30-50% CFFO 2012 15 versus
2012-15
2008-11
Growth free cash flow
CFFO drives investment + payout
PAY-OUT INVESTMENT
Dividend linked to business results
~$30 billi net capex 2012
$30 billion t
Scrip dividend with buy back offset
Affordability, profitability, portfolio
~$10.5 billion 2011
BALANCE SHEET
0 – 30% gearing through cycle
Balance sheet underpins investment
Capital employed g
p p y grows steadily y
* CFFO OUTLOOK @$80-$100/BBL BRENT AND ASSUMES IMPROVED US GAS AND DOWNSTREAM ENVIRONMENT FROM 2011; CFFO EXCLUDES WORKING CAPITAL MOVEMENTS
42 Copyright of Royal Dutch Shell plc 2 February 2012
43. ROYAL DUTCH SHELL
SUMMARY
43 Copyright of Royal Dutch Shell plc 2 February 2012
44. SUMMARY
2012+ PRIORITIES
12 billion boe resources on stream
CONTINUOUS IMPROVEMENT
Drive
D i new cashflow growth:
hfl th
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 MOVEMENTS
44 Copyright of Royal Dutch Shell plc 2 February 2012
45. ROYAL DUTCH SHELL
Q&A
45 Copyright of Royal Dutch Shell plc 2 February 2012
46. KEY PROJECTS UNDER CONSTRUCTION
Phase Project Country Shell share Peak pro- LNG (100%) Products Theme Shell
(direct & indirect) duction 100% capacity operated
% kboe/d mtpa
2012-13 AMAL STEAM OMAN 34 20
AOSP DEBOTTLENECKING CANADA 60 10
BAB THAMAMA G and BAB HABSHAN-2 UAE 9.5 80
BC-10 PHASE 2 BRAZIL 50 35
CAESAR TONGA PHASE 1 USA 22 40
EAGLE FORD USA 100 45
GUMUSUT-KAKAP MALAYSIA 33 135
HARWEEL OMAN 34 40
KASHAGAN PHASE 1 KAZAKHSTAN 17 300
MAJNOON FCP IRAQ 45 >30+
NORTH AMERICA TIGHT GAS * USA / CANADA Various ~125
NORTH RANKIN AUSTRALIA 21 280
PLUTO LNG T1 (WOODSIDE) AUSTRALIA 21 140 4.3
PORT ARTHUR REFINERY EXPANSION USA 50 325 kboe/d DS
SAS UAE 9.5
95 115
2014-15 BONGA NORTH WEST NIGERIA 55 45
CARDAMOM USA 100 50
CORRIB IRELAND 45 45
GORGON LNG T1-3 AUSTRALIA 25 440 15
MARS B, W. BOREAS & S. DEIMOS
, USA 72 100
SABAH GAS KEBABANGAN (KBB) MALAYSIA 30 130
2016+ CLAIR PH2 UK 28 120
NWS GAS - GWF - PHASE 1 AUSTRALIA 21 110
PRELUDE FLNG AUSTRALIA 100 110 3.6 +1.7 mtpa NGLs
SCHIEHALLION REDEVELOPMENT UK 36 130
WHEATSTONE LNG AUSTRALIA 6.4 260 8.9
* SHELL SHARE: SUBJECT TO INVESTMENT PACE
+ SHELL ENTITLEMENT AT $80 TRADITIONAL DEEPWATER INTEGRATED GAS
HEAVY OIL & EOR TIGHT/SHALE OIL/GAS
46 Copyright of Royal Dutch Shell plc 2 February 2012
47. STRONG PORTFOLIO OF PRE-FID UPSTREAM OPTIONS
POTENTIAL 2014-2020 START-UPS
Phase Project Country Shell share Peak pro- LNG (100%) Theme Shell
(direct & indirect) duction 100% capacity operated
% kboe/d mtpa
CONCEPT ABADI FLNG PHASE 1 INDONESIA 30 65 2.5
SELECTION AOSP DEBOTTLENECKING CANADA 60 55
APPOMATTOX USA 80 100
BASRAH GAS COMPANY REHAB & REJUVENATION IRAQ 44 0
BC-10
BC 10 MASSA (PHASE 3) BRAZIL 50 20
BONGA NORTH NIGERIA 55 200
BOSI FIELD DEVELOPMENT NIGERIA 44 130
CARMON CREEK EXPANSION PHASE 2 CANADA 100 40
GERONGGONG BRUNEI 50
GORGON T4 EXPANSION AUSTRALIA 25 250 5
MAJNOON FFD/WEST QURNA FFD IRAQ 45/15 100-200
NIGERIA NLNG TRAIN 7 NIGERIA 26 220 8.4
PEARLS - KHAZAR KAZAKHSTAN 55 50
SUNRISE LNG AUSTRALIA 34 120 4.1
TUKAU TIMUR MALAYSIA 50 40
VITO USA 55 100
ZABAZABA NIGERIA 50 135
ZAEDYUS FRENCH GUIANA 45
DESIGN AOSP DEBOTTLENECKING CANADA 60 20
ARROW ENERGY LNG AUSTRALIA 50 170 8
BONGA SOUTH WEST NIGERIA 44 200
BOKOR PHASE 3 MALAYSIA 40 30
BROWSE (BCT) LNG AUSTRALIA 20 310 >10
CARMON CREEK EXPANSION PH 1 CANADA 100 40
ERHA NORTH PH 3 NIGERIA 44 40
FORCADOS YOKRI INTEGRATED PROJECT (FYIP) NIGERIA 30 100
FRAM UK 28 35
GBARAN UBIE PH 2 NIGERIA 30 200
LINNORM NORWAY 30 50
MALIKAI MALAYSIA 35 60
NORTH AMERICAN TIGHT GAS* USA/CANADA Various >400 Various TRADITIONAL
NORTH AMERICAN LIQUIDS RICH SHALES* USA/CANADA Various ~175 DEEPWATER
RABAB HARWEEL INTEGRATED PROJECT OMAN 34 40 HEAVY OIL & EOR
STONES
N USA
A 35 45
4
INTEGRATED GAS
SOUTHERN SWAMP AG NIGERIA 30 85
TEMPA ROSSA ITALY 25 45 TIGHT/SHALE OIL/GAS
* SHELL SHARE: SUBJECT TO INVESTMENT PACE
+ SHELL ENTITLEMENT AT $80
47 Copyright of Royal Dutch Shell plc 2 February 2012
48. 2009-2011 DRILLING PERFORMANCE
Start up Well name Country Shell Share Location Water depth Oil/Gas Shell
% Operated
2009 Achilles-1 Australia 25% Offshore ~1150m G
Cardamon Deep US, GoM 100% Offshore ~870m OG
Concerto Australia 100% Offshore ~280m G
Yellowglen Australia 25% Offshore ~1300m G
Kentish Knock Australia 50% Offshore ~1220m G
Satyr Australia 25% Offshore ~1100m G
Vito US,
US GoM 55% Offshore ~1200m O
West Boreas US, GoM 100% Offshore ~960m O
2010 Brederode-1 Australia 50% Offshore ~1387m G
Acme-1 Australia 33% Offshore ~878m G
Geronggong-2 Brunei 50% Offshore ~1000m O
Amal SE Oman 34% Onshore - O
Gato do Mato Brazil 80% Offshore ~2000m O
Massa Brazil 50% Offshore ~1600m O
South Deimos US, GoM 100% Offshore ~960m O
Cardamon Deep s/t US, GoM 100% Offshore ~870m
870m OG
Appomattox US, GoM 80% Offshore ~2200m O
2011 Tologbene Nigeria 30% Onshore - G
Acme West Australia 33% Offshore ~925m G
Zaedyus French Guiana 45% Offshore ~2048m O
Vos Australia 50% Offshore ~1484m G
Satyr-3 Australia 25% Offshore ~1124m G
48 Copyright of Royal Dutch Shell plc 2 February 2012