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Socially responsible investors briefing in London, April 14, 2015

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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 investors in London during the annual socially responsible investors briefing. The event also included a short presentation on climate change.

Published in: Investor Relations
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Socially responsible investors briefing in London, April 14, 2015

  1. 1. 1Copyright of Royal Dutch Shell plc 14 April, 2015 ANNUAL ROUNDTABLE FOR SOCIALLY RESPONSIBLE INVESTORS 14 APRIL 2015 ROYAL DUTCH SHELL PLC
  2. 2. 2Copyright of Royal Dutch Shell plc 14 April, 2015 DEFINITIONS & 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 in which Royal Dutch Shell either directly or indirectly has control. Companies over which Shell has joint control are generally referred to as “joint ventures” and companies over which Shell has significant influence but neither control nor joint control are referred to as “associates”. The term “Shell interest” is used for convenience to indicate the direct and/or indirect 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, 2014 (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, 14 April, 2015. 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.
  3. 3. 3Copyright of Royal Dutch Shell plc 14 April, 2015 ANNUAL ROUNDTABLE FOR SOCIALLY RESPONSIBLE INVESTORS BEN VAN BEURDEN CHIEF EXECUTIVE OFFICER ROYAL DUTCH SHELL PLC
  4. 4. 4Copyright of Royal Dutch Shell plc 14 April, 2015 ENVIRONMENTAL, SOCIAL AND GOVERNANCE SRI programme  SRI annual roundtable  Ongoing engagement + roadshows  Learning events – hydraulic fracturing and CCS in 2014 Governance programme  Remuneration committee roadshows  Chairman roadshows  AGM www.shell.com/esg
  5. 5. 5Copyright of Royal Dutch Shell plc 14 April, 2015 SHELL 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 www.shell.com/sustainability
  6. 6. 6Copyright of Royal Dutch Shell plc 14 April, 2015 AGENDA Ben van Beurden and Chad Holliday Climate change: Harry Brekelmans and Angus Gillespie Q+A Coffee break Panel sessions Q&A (40 min each, 5 minutes to rotate): Drinks 13:00 – 13:45 13:45 – 14:00 14:00 – 14:45 14:45 – 15:10 15:15 – 17:30 17:30 – 18:00
  7. 7. 7Copyright of Royal Dutch Shell plc 14 April, 2015 PANELS Panel A: North America and Alaska update: Marvin Odum (Director Upstream Americas) and Ann Pickard (EVP Arctic). Panel B: Upstream International Operated assets and Nigeria: Bart van der Leemput (EVP Upstream International Operated), Osagie Okunbor (Managing Director SPDC), and Rupert Thomas (EVP Environment). Panel C: HSSE & SP Performance, Environmental policy, Water and CO2: Harry Brekelmans (Director Projects and Technology), Lorraine Mitchelmore (EVP Heavy Oil), and Angus Gillespie (VP CO2).
  8. 8. 8Copyright of Royal Dutch Shell plc 14 April, 2015 TRANSPARENCY Sustainability reporting Revenue transparency Nigeria spills website Oil sands performance report Nigeria briefing notes CDP Sustainability report 1997 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
  9. 9. 9Copyright of Royal Dutch Shell plc 14 April, 2015 SHAREHOLDER RESOLUTION: CLIMATE CHANGE DISCLOSURE RESOLUTION INFORMATION REQUEST 2013 2014 2015 Ongoing emissions management    Asset portfolio resilience to post-2035 scenarios   Low-carbon R&D and investment strategies   Strategic KPIs and executive incentives  Public policy position   Disclosed by Shell  Board decision to support shareholder resolution at the 2015 AGM
  10. 10. 10Copyright of Royal Dutch Shell plc 14 April, 2015 ANNUAL ROUNDTABLE FOR SOCIALLY RESPONSIBLE INVESTORS CHAD HOLLIDAY NON-EXECUTIVE DIRECTOR AND CHAIR OF THE CORPORATE AND SOCIAL RESPONSIBILITY COMMITTEE ROYAL DUTCH SHELL PLC
  11. 11. 11Copyright of Royal Dutch Shell plc 14 April, 2015 CORPORATE AND SOCIAL RESPONSIBILITY COMMITTEE Responsibilities:  Review policy and performance for Shell General Business Principles and Code of Conduct.  Review management of HSSE and social impacts of projects and operations.  Monitor emerging environmental and social issues.  Input into the Shell Sustainability Report. CSRC MEMBERS CHARLES HOLLIDAY Chair of CSRC GERRIT ZALMPATRICIA WOERTZSIR NIGEL SHEINWALD
  12. 12. 12Copyright of Royal Dutch Shell plc 14 April, 2015 SITE VISITS 2014 Activity Western Canada  Onshore oil and gas  Oil sands operations  Canada LNG potential 2015 Plans  Brazil biofuels  GoM operations  Separate visits:  Moerdijk, Appalachian tight gas, Peterhead Kitimat Tight gas, Appalachia  Social and environmental considerations incorporated through all stages of major projects
  13. 13. 13Copyright of Royal Dutch Shell plc 14 April, 2015 STRATEGIC KPIS AND EXECUTIVE INCENTIVES 5% weight Personal Safety 5% weight Process Safety 30% weight CFFO 50% weight Operational Excellence 10% weight Safety 20% weight Sustainable Development 10% weight Sustainability 2% weight Water use 4% weight Oil Spill volumes 4% weight Energy Intensity 2015 EXECUTIVE BONUS STRUCTURE
  14. 14. 14Copyright of Royal Dutch Shell plc 14 April, 2015 PARTNERSHIPS + ENGAGEMENT  Leverage outside expertise  Scientific organizations  NGOs  Governmental bodies  Long-term partnerships  Strengthened governance Wetlands International IUCN The Nature Conservancy EarthWatch Institute
  15. 15. 15Copyright of Royal Dutch Shell plc 14 April, 2015 WORKING WITH OTHERS  $250 million endowment from Shell  Independent charity to support economic development  Example: Global Alliance for Clean Cookstoves  100 million households by 2020  3rd party certification  Collaboration with environmental organizations  Shell certified in 2015 Shell Foundation Center for Sustainable Shale Development
  16. 16. 16Copyright of Royal Dutch Shell plc 14 April, 2015 ANNUAL ROUNDTABLE FOR SOCIALLY RESPONSIBLE INVESTORS BEN VAN BEURDEN CHIEF EXECUTIVE OFFICER ROYAL DUTCH SHELL PLC
  17. 17. 17Copyright of Royal Dutch Shell plc 14 April, 2015 2050 outlook  Population increases from 7 to 9 billion  Enabled by cheap and reliable energy Realities  Requirement to mitigate climate change  Oil supply -70% by 2030 without new investment  Key role of gas & CCS ENERGY TRANSITIONS Long-term energy supply mix Million boe per day Gas Biomass Wind Coal Nuclear Other renewables Solar Shell activities Oil  Energy transitions underway +50% +50%
  18. 18. 18Copyright of Royal Dutch Shell plc 14 April, 2015 STRATEGY AND INVESTMENT PRIORITIES 1 Iraq, Nigeria onshore (SPDC), Kazakhstan, Arctic, heavy oil Grow cash flow + deliver competitive returns Competitive financial performance Project deliveryCapital efficiency ENGINES: Upstream + Downstream GROWTH PRIORITIES: Integrated gas + Deep water LONGER TERM: Resources plays + Future opportunities1 Restructuring + selective growth Leadership in LNG and deep water Balancing growth & non-technical risks Capital allocation by global themes
  19. 19. 19Copyright of Royal Dutch Shell plc 14 April, 2015 INVESTMENT PRIORITIES 1 Resources plays, Majnoon, infill drilling Growth priorities: 40% Longer term: 25% Engines: 35% 2015 organic capital investment 50% 40% Pre-FID large project options Base Short-cycle projects1 Post-FID large projects Conventional exploration 2015 organic capital investment 10%  Care and maintain activities form base of capital investment  Safe and reliable operations remain our priority
  20. 20. 20Copyright of Royal Dutch Shell plc 14 April, 2015 HSSE + STRATEGY  No harm to people  No leaks  12 Life saving rules Goal Zero  Early identification of SD expertise required  Management framework for SD in new projects Opportunity realisation Strategy: balancing growth and returns Competitive financial performance Project deliveryCapital efficiency Health, safety, security and environment key to delivery of strategy
  21. 21. 21Copyright of Royal Dutch Shell plc 14 April, 2015 Identify & Assess Select Define Execute Operate Decommission & restore SUSTAINABILITY IN PROJECT LIFE CYCLE  Sustainability objectives  Initial HSE risk analysis  Baseline surveys  Local content strategy  Environmental, social & health management plan  HSE management system  Performance monitoring  Decommissioning plan FEED FID On streamExplore Feasibility study Ceased production  Environmental, social & health impact assessment e.g.  Greenhouse gas  Biodiversity  Water  Social performance  Safety design and construction studies  Local content plan Stakeholder management
  22. 22. 22Copyright of Royal Dutch Shell plc 14 April, 2015 2014 SAFETY PERFORMANCE Injuries – TRCF/million working hours Goal Zero on safety Injuries – TRCF/million working hours Spills - operational Volume in thousand tonnes Energy intensity – refineries Energy Intensity Index (EEITM) Process safety Number of incidents million working hours Working hours (RHS)TRCF  HSSE priority  Performance + transparency Tier 1 incidents Tier 2 incidents
  23. 23. 23Copyright of Royal Dutch Shell plc 14 April, 2015 CONTRACTOR SAFETY + MANAGEMENT Monitor performance and delivery including gap closures agreed in the HSSE plan Green Amber Red Technical HSSE Commercial Assessment Evaluation Contract Management Goal Zero Number of fatalities  Contractors represent 75% of working hours
  24. 24. 24Copyright of Royal Dutch Shell plc 14 April, 2015 ONGOING EMISSIONS MANAGEMENT * Indirect emissions were not recorded before 2009 Emissions Million tonnes CO2 equivalent Energy intensity Gj/tonne (energy required to produce a tonne of oil equivalent) Upstream excl. Oil sands Refining Chemicals index www.shell.com/ghg Million tonnes hydrocarbon flared  2015 endorsed the World Bank’s Initiative to Reduce Global Gas Flaring  "Zero Routine Flaring by 2030" Flaring performance
  25. 25. 25Copyright of Royal Dutch Shell plc 14 April, 2015 WATER MANAGEMENT Dawson Creek water reclamation, Groundbirch Shell fresh water withdrawn Million cubic metres  Water regulation evolving rapidly  Water management plans  water scarce areas  future water scarce areas Centre of Excellence in Bangalore:  Integrated project delivery  Technical support  Water R&D
  26. 26. 26Copyright of Royal Dutch Shell plc 14 April, 2015 REDUCING ONSHORE NIGERIA FOOTPRINT Restructuring onshore footprint  2010 – 2015 divested 11 OMLs Targeted investments: gas and pipelines  Forcados Yokri Integrated Project FID  Southern Swamp Associated Gas FID  Gbaran Ubie phase 2 FID  Trans Niger Pipeline Loopline (TNPL) FID Nigeria onshore portfolio Concessions – SPDC Legal Divested Concessions Major Rivers/Sea FIDs Legend OML4 OML40 OML41 OML38 OML42 OML34 OML30 OML26 OML21 OML20 OML79 OML43 OML27 OML28 OML31 OML35 OML46 OML32 OML36 OML23 OML11 OML29 OML18 OML72 OML24 OML33 OML25 OML77 OML74 OML71 Forcados Yokri Integrated project OML45 Southern Swamp Associated Gas Gbaran Ubie Phase 2 OML22 OML17 TNPL
  27. 27. 27Copyright of Royal Dutch Shell plc 14 April, 2015 NIGERIA: SPDC JOINT VENTURE PERFORMANCE *SPDC = 30% Shell, 55% NNPC, 10% Total, 5% Agip; all data on 100% basis unless stated 2014 overview  Widespread oil theft remains a challenge  0 fatalities, 19 kidnappings Production k boe/day (SPDC) Illegal fitting on NCTL at Opomakri, January 2015 SPDC* spills Thousand tonnes volume of operational spills number of operational spills >100kg (RHS) volume of sabotage spills number of sabotage spills >100kg (RHS) #
  28. 28. 28Copyright of Royal Dutch Shell plc 14 April, 2015 ALASKA UPDATE Noble Discoverer Transocean Polar Pioneer 2015 Chukchi Sea  2 rig programme  28 support vessels  Pending Exploration Plan approval & drilling permits 2012 learnings + actions  Upgraded contractor management  Certified Arctic Containment System (ACS)  Improved incident command system and oil spill response
  29. 29. 29Copyright of Royal Dutch Shell plc 14 April, 2015 CANADA UPDATE  13 mtpa in FEED (100% capacity)  Community advisory group  First Nations visit Oman LNG 2014  Environmental Assessment Certificate application  Targets oil sands emissions  Expected start up 2015  1mtpa CO2 LNG Canada Quest Carbon Capture and Storage
  30. 30. 30Copyright of Royal Dutch Shell plc 14 April, 2015 CLIMATE CHANGE PUBLIC POLICY POSITION Pro-active advocacy  A robust price on carbon  Government support for early stage low carbon technologies  Explore plausible futures in Shell scenarios  Work with governments on energy transitions Member of / supported:  World Bank Carbon Pricing statement (2014)  World Bank Zero routine flaring initiative  International Emissions Trading Association  Prince of Wales Corporate Leaders Group  Zero Emissions Platform  WEF Oil & Gas Climate Initiative
  31. 31. 31Copyright of Royal Dutch Shell plc 14 April, 2015 CLIMATE CHANGE + LOW CARBON ACTIVITY Gas Energy Efficiency Biofuels Carbon Capture & Storage
  32. 32. 32Copyright of Royal Dutch Shell plc 14 April, 2015 CLIMATE CHANGE HARRY BREKELMANS DIRECTOR PROJECTS AND TECHNOLOGY ROYAL DUTCH SHELL PLC
  33. 33. 33Copyright of Royal Dutch Shell plc 14 April, 2015 PROJECTS AND TECHNOLOGY AT SHELL  Field development planning  Project execution  Technical Services  Research & Development  Safety & Environment  Contracting & Procurement Projects and Technology in numbers:  14,000 staff  323 patent applications  $1.2 billion R&D spend in 2014  Three dedicated technology centres  Amsterdam, Houston, Bangalore
  34. 34. 34Copyright of Royal Dutch Shell plc 14 April, 2015 SHELL ENERGY SCENARIOS Energy demand by 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
  35. 35. 35Copyright of Royal Dutch Shell plc 14 April, 2015 0 10 20 30 40 50 2000 2020 2040 2060 2080 2100 ENERGY-RELATED CARBON EMISSIONS: SCENARIOS 1: The New Lens Scenarios were based on 2011 IEA data, whereas the IEA World Energy Outlook 2014 scenarios are based on 2013 IEA data 2: IPCC Special Report on Renewable Energy Sources and Climate Change Mitigation, 2011 Shell and IEA scenarios1 Life-cycle CO2 intensity of electricity generation CO2 equivalent/ KWh2GtCO2/year Oceans Mountains Current policies New policies 450 ppm  Shell has to plan in a range of possible futures  IEA 2° C scenario is normative
  36. 36. 36Copyright of Royal Dutch Shell plc 14 April, 2015 ENERGY TRANSITIONS Example: Germany electricity consumption (by source) EJ/Year  Shift to lower carbon energy system  Dynamic, policy-driven changes  Local and global trends Oil Biomass Gasified Nuclear Natural Gas Biofuels Biomass/Waste Solids Hydro-electricity Coal Wind Solar Other renewables Geothermal
  37. 37. 37Copyright of Royal Dutch Shell plc 14 April, 2015 STRANDED ASSETS HYPOTHESIS IGNORES SUPPLY + DEMAND REALITIES Oil demand & supply million barrels of oil per day  Transport underpins oil demand, despite electric vehicle growth Natural decline Oceans Mountains IEA current policies IEA new policies IEA 450  Substantial supply gap  70 million barrels per day  80% replacement of today’s production  Equivalent to ~6 x Saudi Arabia or ~80 x UKCS  ~$15 trillion investment
  38. 38. 38Copyright of Royal Dutch Shell plc 14 April, 2015 DIRECT EMISSIONS MANAGEMENT  GHG emissions plans in both design phase and operation of assets  New projects include energy efficient design  Amal steam using renewables for enhanced oil recovery  Glasspoint Design and operations Future energy technology
  39. 39. 39Copyright of Royal Dutch Shell plc 14 April, 2015 INDIRECT EMISSIONS MANAGEMENT FLNG Clean fuels CCS LNG for transport
  40. 40. 40Copyright of Royal Dutch Shell plc 14 April, 2015 SHELL RESEARCH + DEVELOPMENT Total R+D spend $mln Shell Peer group Significant R+D spend  >$1bn year since 2007  Averaging ~15% low-carbon R+D Full size hydraulic test rig, The Netherlands
  41. 41. 41Copyright of Royal Dutch Shell plc 14 April, 2015 Mongstad OtwayCansolv Offshore (50 MW net) Raizen 2G Iogen cellulose ethanol H2 network (Germany) 2 B Energy Glasspoint Solar EOR Westhollow research centre “cellulosic biofuels” LOW CARBON R+D AND INVESTMENT STRATEGIES FEED FID On streamCCS Biofuels Solar Gorgon (3-4 mtpa) Quest (>1 mtpa) Peterhead (1 mtpa) Raizen 1G (sugar cane ethanol) Onshore (450 MW net) Wind R&D Showa shell PV manufacture Alternative energy carriers Define Execute OperateTechnology Efforts Shell Technology Ventures Technology demonstration/research Future energy technologies Used in Shell operations Solar PV Commercial operation* Gas LNG 24mtpa GTLLNG 7.4mtpa LNG 6.5mtpa LNG 7.7mtpa Exploration B C A * Volumes in Shell share
  42. 42. 42Copyright of Royal Dutch Shell plc 14 April, 2015 CLIMATE CHANGE ANGUS GILLESPIE VICE PRESIDENT CO2 ROYAL DUTCH SHELL PLC
  43. 43. 43Copyright of Royal Dutch Shell plc 14 April, 2015 SHELL GROUP CO2 Group CO2 function – what we do CO2 research and analysis Policy and advocacy Implementation  Includes CCS CO2 strategy CO2 management framework Regular assessment of CO2 exposure since 2007 Competitive CO2 positioning Portfolio CO2 emissions, intensity, costs CO2 screening value of $40 per tonne base case Long-term assessment of where mitigation or adaptation might be required
  44. 44. 44Copyright of Royal Dutch Shell plc 14 April, 2015 PROJECT ECONOMICS EXAMPLE 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
  45. 45. 45Copyright of Royal Dutch Shell plc 14 April, 2015 SHELL AND IEA PRICE ASSUMPTIONS Europe CO2 cost $/tonne Oil price $/barrel Shell Planning IEA “Current Policies” IEA “New Policies” Shell base case IEA “450”
  46. 46. 46Copyright of Royal Dutch Shell plc 14 April, 2015 ASSET PORTFOLIO POTENTIAL RESILIENCE TO SCENARIOS Oil price effect % difference in NPV vs Shell $90 scenario CO2 cost effect % difference in NPV vs Shell $40/ tonne scenario Combined cost effect % difference in NPV Strategic theme Downstream Engine Upstream Engine Integrated Gas Deep Water Resource Plays Future Opportunities IEA “Current Policies” IEA “New Policies” IEA “450” *The final outcome will include factors such as actual energy and CO2 prices, and portfolio choices made by Shell
  47. 47. 47Copyright of Royal Dutch Shell plc 14 April, 2015 ANNUAL ROUNDTABLE FOR SOCIALLY RESPONSIBLE INVESTORS BEN VAN BEURDEN CHIEF EXECUTIVE OFFICER ROYAL DUTCH SHELL PLC
  48. 48. 48Copyright of Royal Dutch Shell plc 14 April, 2015 Q&A 14 APRIL 2015 ROYAL DUTCH SHELL PLC
  49. 49. 49Copyright of Royal Dutch Shell plc 14 April, 2015 14 APRIL 2015 ROYAL DUTCH SHELL PLC BACKUP
  50. 50. 50Copyright of Royal Dutch Shell plc 14 April, 2015 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
  51. 51. 51Copyright of Royal Dutch Shell plc 14 April, 2015 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
  52. 52. 52Copyright of Royal Dutch Shell plc 14 April, 2015 BRENT FIELD DECOMMISSIONING  Brent Delta Topside plan submitted  Consultation + resubmission  Target date single lift: summer 2016  Full field decommissioning plan to follow  8 year stakeholder engagement  ~ 180 bodies  Includes environmental groups and NGOs www.shell.co.uk/brentdecomm
  53. 53. 53Copyright of Royal Dutch Shell plc 14 April, 2015 GRONINGEN EARTHQUAKES – NETHERLANDS GAS force: 0.1–1.0 3.5 and higher Key focus areas Study work and hazard risk assessments Innovative collaboration Intensive stakeholder management and dialogues Government decisions taken Production restriction €1.2bn Mitigation programme Loppersum 2012-2014 Earthquakes 0 10 20km www.namplatform.nl
  54. 54. 54Copyright of Royal Dutch Shell plc 14 April, 2015 NIGERIA: SHELL ENVIRONMENTAL PERFORMANCE Remediation # of spills sites* *includes 125 sites from 1969-1993 in Ogoniland confirmed during decommissioning in 2013 All data on a Shell operated basis Sites requiring remediationNumber of spills in year (all causes) Illegal fitting on 28” TNP at Bodo West, Feb 2015
  55. 55. 55Copyright of Royal Dutch Shell plc 14 April, 2015 IRAQ UPSTREAM  Shell 44%, started up in 2013  Largest flare reduction project in the world  Avoided 14 million tonnes of CO2 from flaring (100% basis)  Processing capacity 550mmscf/d associated gas  2 billion scf/d potential  Shell 45%, started up in 2013  Flaring increased with production  Flaring reduction programme under construction  To provide power for domestic market late 2015 Basrah Gas Company Majnoon oil development MajnoonBasrah Gas Company storage tanks
  56. 56. 56Copyright of Royal Dutch Shell plc 14 April, 2015 REVENUE TRANSPARENCY  Voluntary country-level tax disclosure since 2012  EITI board position and founder  Encourage government transparency  Preparation for reporting 2015 payments in 2016  No country exemptions may cause conflict in law  Shell is actively engaging with host governments including UK www.shell.com/payments  ~$18 bln taxes & royalties paid 2014  ~$73 bln excise tax collected in 2014  Leadership in tax transparency
  57. 57. 57Copyright of Royal Dutch Shell plc 14 April, 2015 RESTRUCTURING RESOURCES PLAYS + REDUCING EXPOSURE Capital investment $ billion E&A On-stream Gas Liquids Rich Colombia Argentina Neuquen Oman China Arrow CBM Russia Americas International Permian Appalachia W. Canada LRS W. Canada gas Algeria -30% ` Germany Tunisia Turkey  North America restructured in 2014  International portfolio restructuring underway
  58. 58. 58Copyright of Royal Dutch Shell plc 14 April, 2015 TIGHT GAS OPERATIONS: EMISSIONS MANAGEMENT IN ACTION  Air emissions specifically covered in onshore operating principles  Green completions in UA onshore operations  Infrared cameras to identify fugitive methane  Studies with University of Texas and EDF  Shell conducts its operations in a manner that protects air quality and controls fugitive emissions as reasonably practicable
  59. 59. 59Copyright of Royal Dutch Shell plc 14 April, 2015 DEMAND OUTLOOK AND RESERVES * Resources shown includes only resources in select or define phases (post feasibility study or in FEED) or are under execution or on stream. New policies scenario Mtoe/d Oil Coal Gas Nuclear Hydro Bioenergy Other renewables Mtoe/d 450 Scenario Resources*Shell SEC proved reserves Shell SEC proved reserves Resources*  Oil and gas portfolio relevant in IEA 450 scenario  Coal demand is most impacted Shell  Reserves life at end 2014: ~11 years  Further 2P +2C resources
  60. 60. 60Copyright of Royal Dutch Shell plc 14 April, 2015 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
  61. 61. 61Copyright of Royal Dutch Shell plc 14 April, 2015 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 has 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%
  62. 62. 62Copyright of Royal Dutch Shell plc 14 April, 2015 ANNUAL ROUNDTABLE FOR SOCIALLY RESPONSIBLE INVESTORS 14 APRIL 2015 ROYAL DUTCH SHELL PLC

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