media webcast presentation royal dutch shell fourth quarter and full year 2011 results
DESCRIPTION
Peter Voser, Chief Executive Officer of Royal Dutch Shell will host a live video webcast of the Fourth quarter 2011 and Full year Results and Outlook on Thursday February 2 2012, 10:30 GMT (11:30 CET / 05:30 EST).TRANSCRIPT
ROYAL DUTCH SHELLROYAL DUTCH SHELL
2011 RESULTS AND COMPANY UPDATEFebruary 2, 2012y
1 Copyright of Royal Dutch Shell plc 2 February 2012
ROYAL DUTCH SHELLROYAL DUTCH SHELL
PETER VOSERCHIEF EXECUTIVE OFFICER
2 Copyright of Royal Dutch Shell plc 2 February 2012
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
i ‘‘S b idi i ’’ “Sh ll b idi i ” d “Sh ll i ” d i hi i f i i hi h R l D h Sh ll i h di l i di lcompanies. ‘‘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, 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 thanThis 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’’, ‘‘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 includingoperations 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 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 y q y y y pundue 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.
f
3 Copyright of Royal Dutch Shell plc 2 February 2012
We use certain terms in this presentation, such as resources, that the United States Securities and Exchange Commission (SEC) guidelines strictly prohibit us 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.
SHELL
Managing through extreme volatility
Customer and partner focus
Profitability & performance
Sustainability & Value added
Updating our outlook
Through-cycle investment and portfolio Sustainability & growth
Value added technology
g y pchoices
4 Copyright of Royal Dutch Shell plc 2 February 2012
CONTINUED FOCUS ON HSSE PERFORMANCE
injuries – TRCF/million working hours million working hours
‘GOAL ZERO’ ON SAFETY
9005l d f
600
700
800
2
3
4Focus on personal and process safety
Rigorous global standards
400
500
0
1
'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11
Industry leader in Sustainable Development
WORKING HOURS (RHS) TRCF
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EMPLOYEES AND CONTRACTORS PER MILLION WORKING HOURS; SHELL OPERATED FACILITIES; PRELIMINARY ESTIMATE FOR 2011
ENERGY INVESTMENT FUNDAMENTALS POSITIVE
ROBUST LONGER TERM FUNDAMENTALS MANAGING SHORT-TERM VOLATILITY
$/bblenergy demand outlook in million boe/d
400
12140
300
400
8
10
100
120
200
4
6
60
80
0
100
0
2
0
20
40
01980 1990 2000 2010 2020 2030 2040 2050
OILGAS
COALBIOMASSWIND
SOLARNUCLEAR
002008 2009 2010 2011
BRENT (LHS)
HENRY HUB $/MMBTU (RHS)
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SOURCE: SHELL ANALYSIS
OTHER RENEWABLESSHELL ACTIVITIES WEIGHTED AVERAGE REFINING MARGIN $/BBL (RHS)
STRATEGY AND CAPITAL ALLOCATION
Upstream 30
STRATEGY CAPITAL INVESTMENT
$ billion
pProfitable growth; price upsideExploration + resources plays
Downstream 20 UPSTREAM
Optimize re-shaped portfolioSelective growth
Climate change10
Grow gas and biofuelsCCS and energy efficiency
Financial outlook
0'09-'11 average
2012 '09-'11average
2012
DOWNSTREAM
DOWNSTREAM
Investing for growth and competitive payoutThrough-cycle returns and risk management
EUROPEAFRICA, MIDDLE EAST, CIS
AMERICASASIA PACIFIC
i i 80
7 Copyright of Royal Dutch Shell plc 2 February 2012
Increasing our investment; 80% Upstream
IMPROVING OUR PERFORMANCE
$ billion CCS
EARNINGS
30
%
TOTAL SHAREHOLDER RETURN
60%
10
0%
20%
40%
2009-2011
-102009 2010 2011
CASH FLOW FROM OPERATIONS VOLUMES
SHELL OTHER MAJORSUPSTREAMDOWNSTREAM
CORPORATEDIVESTMENTS/OTHER
-20%2006-2008
10
20
3 000
3,300
$ billion kboe/day
40
mtpa
0
10
2,700
3,000
2009 20110
20
2009 2010 2011
LNG (RHS)OIL & GAS 2010 11UPSTREAM DOWNSTREAM CORPORATE
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CFFO EXCLUDES WORKING CAPITAL MOVEMENTS
REFINING INTAKELNG (RHS)OIL & GAS 2010-11
ASSET SALES CHEMICALS (RHS)UPSTREAM DOWNSTREAM CORPORATE
PORTFOLIO + PROJECT PERFORMANCE
DELIVERING NEW PROJECTS
North America: i h
Canada: AOSP 1
Qatar:Q G 4 LNG
Australia(W d id ) Pl t
Oman:H l
Russia: Sakhalin II
Brazil: BC 10
Nigeria: Gbaran Ubie Ph 1
USA: Perdido
tight gas
Norway: G
AOSP-1
Netherlands: Schoonebeek
QatarGas4 LNG
Qatar: Pearl GTL
Oman:Q Al
Iraq:W Q
Singapore: Chemicals
NA: h
(Woodside): Pluto
USA: Port Arthur
Harweel
2009 2010 2011
BC-10 Perdido Gjoa Qarn AlamWest Qurna tight gas
USA: GOM
Indonesia:AbadiFLNG
Car Care
UK:Stanlowrefinery
Mexico:Altamira
Norway:Statfjord
Australia:Woodside
(10%) Germany:
Iraq: MajnoonNigeria:
OML 4/38/41
USA:East Resources
Australia: Arrow Energy
Brazil: BS4/BMS8
Australia:Bow Energy
Nigeria: OML 26/42
Iraq: BasrahGas company
USA: South Texas
Greece:Downstream
e e yChile PakistanUSA:
Eagle Ford
yHeide
refineryAfricaCameroon
9 Copyright of Royal Dutch Shell plc 2 February 2012
START UP DIVESTMENT ACQUISITION/NEGOTIATED ENTRY
ROYAL DUTCH SHELLROYAL DUTCH SHELL
SIMON HENRYCHIEF FINANCIAL OFFICER
10 Copyright of Royal Dutch Shell plc 2 February 2012
DELIVERING OUR STRATEGY 2009 - 2011
2009+ PRIORITIES 2009-2011 DELIVERY
Cost focus
PERFORMANCE FOCUS Corporate reorganization
Downstream portfolio reduction
GROWTH DELIVERY
14 project start-ups
Enhanced free cash flow
$31 billion dividends declared
NEW OPTIONSExploration + business development
Maturing new growth projects
11 Copyright of Royal Dutch Shell plc 2 February 2012
Q4 2011 FINANCIAL HIGHLIGHTS
6
CCS EARNINGS CCS EARNINGS Q4 2010 TO Q4 2011
Q4 10 Q4 11
$ billion$ billion
4
5
Q4 10 Q4 11
UPSTREAM 3.4 5.1
DOWNSTREAM (CCS) 0.5 (0.3)
BUSINESS SEGMENTS TOTAL 3.9 4.8
3
4CORPORATE & MINORITIES 0.2 0.0
CCS NET EARNINGS 4.1 4.8
CCS EARNINGS, $ PER SHARE 0.67 0.78
CCS EARNINGS $ PER ADS 1 34 1 56
1
2
CCS EARNINGS, $ PER ADS 1.34 1.56
CASH FROM OPERATIONS 5.5 6.5
0
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EARNINGS CCS BASIS, EARNINGS AND EPS EXCLUDING IDENTIFIED ITEMS
EARNINGS AND PERFORMANCE 2009-2011
2020
36100
million boe/d mtpa
UPSTREAM PRODUCTION UPSTREAM EARNINGS
$ billion
OIL & GAS REALISATIONS
$/barrel $/mscf
10101
2
2
4
50
02009 2010 2011
002009 2010 2011
002009 2010 2011
DOWNSTREAM AVAILABILITY
LNG SALES (RHS)
GASOIL OTHER UPSTREAM INTEGRATED GAS
DOWNSTREAM EARNINGS
GAS (RHS)OIL
DOWNSTREAM MARGINS
2010-11 ASSET SALES
95
100
DOWNSTREAM AVAILABILITY% availability
4
$ billion (CCS)
DOWNSTREAM EARNINGS
5002
$/barrel $/tonne
DOWNSTREAM MARGINS
85
90
0
2
2009 2010 2011OIL PRODUCTS CHEMICALS
0
250
0
1
2009 2010 2011ROTTERDAM COMPLEX MARGIN
2009 2010 2011UNPLANNED DOWNTIME
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REFINERY AVAILABILITYCHEMICALS AVAILABILITY
OIL PRODUCTS CHEMICALSROTTERDAM COMPLEX MARGIN
WESTERN EUROPE NAPHTHA (RHS)
UNPLANNED DOWNTIME
EARNINGS EXCLUDE IDENTIFIED ITEMS
RETURNS & CASHFLOW PERFORMANCE 2009-11
120
RETURNS CASHFLOW 2009-2011
$ billion $ billionSOURCES USES40%250
80
100
30%
150
200DOWNSTREAM
40
6020%
100
150
UPSTREAM
DOWNSTREAM
0
20
0%
10%
0
50
UPSTREAM
UPSTREAM
00%02007 2008 2009 2010 2011 2012E
CAPITAL IN SERVICECAPITAL UNDER CONSTRUCTION/OTHERRETURN ON CAPITAL IN SERVICE (RHS)RETURN ON CAPITAL EMPLOYED (RHS)
CASH FLOW FROM OPERATIONS
DIVIDEND AND BUYBACK
ASSET SALES CAPEX + EQUITY ACC. INVESTMENTS
ACQUISITIONS
14 Copyright of Royal Dutch Shell plc 2 February 2012
RETURN ON CAPITAL EMPLOYED (RHS) DIVIDEND AND BUYBACK
CFFO EXCLUDES NET MOVEMENTS IN WORKING CAPITAL
PERFORMANCE FOCUS 2009-2011CONTINUOUS IMPROVEMENT+ CAPITAL EFFICIENCYDIVESTMENTS 2009-2011 ACQUISITIONS 2009-2011
$17 billion
$15billion
Bi f l B ilDOWNSTREAM
UPSTREAM
R il Af iDOWNSTREAM
UPSTREAM
Growth oil + gas:• East Resources, Arrow, liquids-rich
shales, Abadi, Basrah Gas Company
Refocus Downstream: • Europe; Africa; Latin-America
Biofuels, Brazil DOWNSTREAM
Retail, Africa DOWNSTREAM
, , p y• New exploration acreage
Growth Downstream:
Late life/non-strategic Upstream • Upstream ~120 kboe/d • Woodside (10%), South Texas,
C P ki h
15 Copyright of Royal Dutch Shell plc 2 February 2012
• Brazil biofuels, retailCameroon, Pakistan, others
GROWTH DELIVERY 2009-2011CONVERTING RESOURCES TO PRODUCTION
35
billion boe resources
Carmon CreekGeronggong
BC-10 Ph. 3 (Massa)
25
Longer-term upside
Prelude FLNGAOSP debottl.
Tempa RossaFram
M lik i
15
NA tight gas /shales
Clair Ph2Schiehallion
Pearl GTL Pluto (Woodside)
MalikaiAOSP debottl. + QuestNA tight gas/shales
5
Pearl GTLQatarGas-4Schoonebeek
Qarn Alam EORWest Qurna 1 IPT
( )Harweel
NA tight gas/shalesEagle Ford
2010 2011-5
2008 2009
Growing opportunity funnelPRODUCTIONON-STREAM STUDYUNDER CONSTRUCTION
2012
16 Copyright of Royal Dutch Shell plc 2 February 2012
g pp y12 bln boe on stream, maturing additional ~20 billion boe
ROYAL DUTCH SHELLROYAL DUTCH SHELLUPDATING OUR PRIORITIES
17 Copyright of Royal Dutch Shell plc 2 February 2012
2012+ PRIORITIES
12 billion boe resources on stream
D i hfl thCONTINUOUS IMPROVEMENT
Drive new cashflow growth:
+30-50 % CFFO 2012-15 versus 2008-11*
Maturing >60 projects; ~20 billion boe resources
GROWTH DELIVERY
MATURE NEW OPTIONS
Exploration + bolt-on deals
2017-18 production potential ~4 mboe/d average
MATURE NEW OPTIONS
PERFORMANCE FOCUS
18 Copyright of Royal Dutch Shell plc 2 February 2012
* CFFO OUTLOOK @$80-$100/BBL BRENT AND ASSUMES IMPROVED US GAS AND DOWNSTREAM ENVIRONMENT FROM 2011; CFFO EXCLUDES WORKING CAPITAL MOVEMENTS
2012+ OUTLOOKCONTINUOUS IMPROVEMENTUNPLANNED DOWNTIME
Offer to cashInventory management
PROCESS EFFICIENCY OPPORTUNITIES
9
%
y gWell and reservoir managementMaterials managementAsset maintenance and integrity3
6
CHEMICALS REFINING
Indexed Well Delivery Time per year since first production
TIGHT GAS/SHALE DRILL TIME
02006 2007 2008 2009 2010 2011
CHEMICALS REFINING
PROCUREMENT: LOW COST COUNTRIES
# of suppliers $ billion
50
75
100Pinedale - 2002Early Deep Basin - 2006Deep Basin - 2008*Haynesville - 2008Groundbirch - 2008 2
3
100
150
200
250
SPEND
QUALIFIED
BEING QUALIFIEDSUPPLIERS
0
25
0 1 2 3 4 5 6 7 8 9 10Years
0
1
0
50
100
2008 2009 2010 2011
19 Copyright of Royal Dutch Shell plc 2 February 2012
Performance focus
ROYAL DUTCH SHELLROYAL DUTCH SHELL2012+ GROWTH PROJECTS
20 Copyright of Royal Dutch Shell plc 2 February 2012
GROWTH DELIVERY 2012+KEY PROJECTS UNDER CONSTRUCTION
North America tight gas
AOSPDebottlenecking
Clair Ph2Schiehallion
Redevelopment
CorribKashagan Ph1
Eagle FordMars B
Cardamom
North America tight gas
Majnoon FCP
Harweel
Amal Steam
UAE
Gumusut-KakapSabah Gas
Port Arthur
RESOURCES
Bonga NW
BC-10 Phase 2
pSabah Gas Kebabangan
Pluto LNG T1 (Woodside) Gorgon LNG T1-3
North Rankin 2
Prelude FLNGWheatstone LNG
20
30
billion boe
2012-13
2016+2014-15
START-UP DATE Greater Western Flank Ph 1
0
10
Under Construction
21 Copyright of Royal Dutch Shell plc 2 February 2012
26 projects under construction
GROWTH DELIVERY 2012+ MAINTAINING LNG LEADERSHIP
40.0
SHELL GLOBAL LNG CAPACITY GROWTH
Wh
mtpa
AUSTRALIA – INDONESIA: 2011 PROGRESS
Abadi entry• Inpex 60%• Shell 30%• EMPI 10%
20.0
Wheatstone& Prelude
Gorgon T1-3
Pluto T1 (Woodside)
Prelude FLNG
Abadi FLNG
Greater Sunrise
EMPI 10%2012 FEED
FIDs
Browse 0.02011 ~2020+
SHELL LNG LEADERSHIP
ONSTREAM CONSTRUCTION OPTIONS
Pluto (Woodside)
Prelude FLNG
Wheatstone
G
North West Shelf
FIDs
20
30
year end mtpa~90% long-term contracted~80% of portfolio oil price linked
SHELL LNG LEADERSHIPArrow Energy LNG:Bow Energy acquisitionShell-PetroChina 50/50
PRODUCTION
Gorgon
0
10
0
Sh ll E Ch BG T l BP
~20 mtpa on-stream ~8 mtpa under construction
UNDER CONSTRUCTION
OPTIONS
22 Copyright of Royal Dutch Shell plc 2 February 2012
Shell Exxon Chevron BG Total BPp
Assessing ~ 15 mtpa future options 2011 2017
PROJECTS ONSTREAM OR UNDER CONSTRUCTION
GROWTH DELIVERY 2012+ REGAINING MOMENTUM IN GULF OF MEXICO
Vito~100 kboe/d potential
Appomattox~100 kboe/d hub potential
Mars
Nakika
100 kboe/d potential>200 million boe resourcesShell 55% (operator)
100 kboe/d hub potential Appraisal drilling underway> 250 million boe resourcesShell 80% (operator)
Mars-BW B S D i
Auger
Ursa
Brutus
P did
Cardamom Deep
W.Boreas, S. Deimos
Caesar TongaFID START-UPDISCOVERY
100 km
Mars-B, Olympus tension leg platform
HolsteinPerdido
Stones45 kboe/d potentialShell 35% (operator)
Caesar TongaMars B
Cardamom
Stones
A tt
UNDER CONSTRUCTIONONSTREAM OPTIONS
( p )
2005 2010 2015 2020
Appomattox
Vito
~185 kboe/d 2011- ~350 kboe/d potential ~2017
23 Copyright of Royal Dutch Shell plc 2 February 2012
pDrilling 5+ exploration wells 2012
GROWTH DELIVERY 2012+ INVESTMENT IN UPSTREAM HEARTLANDS
F a r o e Is l a n d s
8ºW 6º 4 º 2 º 0º 2ºE
0 50S cale
km
F aroeC on tinen ta l
S he lfW est o f
S h tl d
UK: ATLANTIC MARGIN AUSTRALIA: NWS LNG JV MALAYSIA
S h e t la n dIs la n d s
O r k n e yIs la n d s
F o in a v e n
C la irS c h ie h a l l io n
W est ofS hetla nd
C ontin entalS he lf
S hetla ndS lope
W e s t e r nIs le s
S c o t la n d
Schiehallion (Shell 36%)• N FPSO
Operating since 1989D li d 3 000 LNG
Sabah Gas Kebabangan• I t t d d ti l tf• New FPSO
• ~130 kboe/d
Clair Ph 2 (Shell 28%)20 kb /d
Delivered >3,000 LNG cargoesDeveloping new gas resources:• North Rankin ~280 kboe/d• GWF Phase 1 ~110 kboe/dSh ll 2 %
• Integrated production platform • ~130 kboe/d• Shell 30%
O• ~120 kboe/d Shell 21% EOR• Extending 2 PSCs with Petronas• ~100 kboe/d potential• Shell 40-50%
24 Copyright of Royal Dutch Shell plc 2 February 2012
PRODUCTION OUTLOOK
PROJECTS UNDER CONSTRUCTION GROUP PRODUCTION OUTLOOK
100%Region Theme
100%
75%Gorgon LNG, Australia
60%
70%
80%
90%
25%
50%
Mars-B, USA
20%
30%
40%
50%
0%2011 2017
AOSP debottlenecking Canada
0%
10%
20%
2011 2017
AMERICASASIA PACIFICEUROPEMIDDLE EAST, AFRICA, CIS HEAVY OIL & EOR
TIGHT/SHALE OIL/GASINTEGRATED GAS
DEEPWATER
AOSP debottlenecking, Canada
25 Copyright of Royal Dutch Shell plc 2 February 2012
AMERICAS INTEGRATED GASTRADITIONAL
Bonga North West, Nigeria
ROYAL DUTCH SHELLROYAL DUTCH SHELLMATURING NEW GROWTH OPTIONSOPTIONS
26 Copyright of Royal Dutch Shell plc 2 February 2012
MATURING NEW GROWTH OPTIONSDOWNSTREAM: SELECTIVE GROWTH
6
2012 CAPEX
UK Retail
$ billion
2
4
Qatarchemicals
Gas-to-chemicals
UK Retail
Port Arthur
Lubes RussiaLNG to transport
Rhineland Connect
China Retail + LubesChina refining and chemicals
0CHEMICALS
MARKETING/OTHER
REFINING
GROWTH
BASERaízen
UNDER DEVELOPMENTOPTIONS2011 DEALS
and chemicals
Qatar chemicalsSingapore chemicals Raízen Port ArthurNanhai chemicals
Gas-to-chemicals US
China
2006 2010 2011 2012 FUTURE
27 Copyright of Royal Dutch Shell plc 2 February 2012
Value chains and leveraging our brand
MATURING NEW GROWTH OPTIONS 2011 EXPLORATION + BUSINESS DEVELOPMENT 2011 EXPLORATION & ACQUISITIONS
4
RESOURCES MATURATION / POTENTIAL
Cl i
billion boe
MarcellusE l F d
2
Z d
Clair
Marcellus
Eagle Ford
Groundbirch
China tight gas
Eagle FordIraq
Arrow
AbadiLiquids-rich
shalesGroundbirch
0
'08 '09 '10 '11
Zaedyus
Acme West
Vos
TologbeneEagle Ford
Arrow
Satyr-3OIL
GAS
-2
2011 delivery:
APPRAISALDISCOVERY NEW EXPLORATION ACREAGE
RESOURCES PLAY ENTRY
Arrow
2011 delivery:2.3 billion boe exploration + appraisal>4 billion boe E&A + deals~; ~30% tight/shale gas
>140,000 km2 new acreage in 2011
EXPLORATION/APPRAISAL
DISPOSALS
PRODUCTION
RESOURCES-BASED DEALS
28 Copyright of Royal Dutch Shell plc 2 February 2012
2008-11 delivery: ~13 billion boe at $2-3/boe (E&A + deals)
MATURING NEW GROWTH OPTIONS 2011 DRILLING SUCCESS
WEST AUSTRALIA GAS FOR LNGFRENCH GUIANA – NEW PLAY OPENER
F h G i
Satyr-3 Acme West 1&2
Guyana – Stabroek
French Guiana –Guyane Maritime
Shell 45%
Zaedyus (GM-ES-1)NWS LNG
Vos-1y
Shell 50%* Gorgon LNG
>300 million boe (100% basis) in Zaedyus discovery; upside identified
New gas discoveries in 2011
23 di i i 2005 12 f Sh ll
DISCOVERY0 100 200
Kilometers
1 exploration well and Zaedyus appraisal 2H 2012
Multiple targets across 63,000 km2 in French Guiana & Guyana deepwater
23 discoveries since 2005; 12+ tcf Shell share added at <$1/boe finding cost
Shell average 40%
29 Copyright of Royal Dutch Shell plc 2 February 2012
* INCREASE PENDING GOVERNMENT APPROVAL
MATURING NEW GROWTH OPTIONS EXPLORATION: CONSISTENT DELIVERY OF NEW RESOURCES
3
RESOURCES DISCOVERED RESOURCES POTENTIAL
billion boe
1
2
Z d
Cardamom Deep
VitoWest BoreasG
Amal SE
S h D i
Appomattox
0'02 '03 '04 '05 '06 '07 '08 '09 '10 '11
TRADITIONAL OIL/GAS INTEGRATED GAS2009-2011 KEY FINDS
TIGHT/SHALE OIL/GAS
Zaedyus
Acme WestVos
Tologbene
Satyr
AchillesConcerto
Yellowglen Kentish KnockBrederode
Acme
Geronggong
Gato do Mato
Massa
South Deimos
EXPLORATION PERFORMANCE%
~15 billion boe discovered 2002-2011100%
Yellowglen Kentish Knock
Strategic shift to OECD
Stepped up spending in 2005
Renewed spending + activity increase 2011-20120%
50%
'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11
30 Copyright of Royal Dutch Shell plc 2 February 2012
DISCOVERED RESOURCE POTENTIAL
e ewed spe d g ac v y c ease 0 0% OECD SUCCESS RATE
MATURING NEW GROWTH OPTIONS STEPPING UP 2012 EXPLORATION PACEEXPLORATION SPEND
Alaska
2012 EXPLORATION SPEND
Gulf of Mexico (5)Saudi Arabia (1)
Kazakhstan (1)
China
Alaska
N. America tight gas
N. America liquids-rich shales
Brazil (1)
Fr Guiana (2)
Australia offshore (5)
Gabon (1) &Nigeria (1)
Brunei (4)
Australia onshore CBM
2012 DRILLING PLAN (# WELLS)New Zealand (1)
INTEGRATED GASDEEPWATERTRADITIONAL
TIGHT / SHALE OIL/GAS20 -25 key well & play tests in 2012 in Australia NWS, GoM, and tight/shale gas
Frontier drilling weighted to deep water and liquids-i h h l l
31 Copyright of Royal Dutch Shell plc 2 February 2012
rich shale plays
MATURING NEW GROWTH OPTIONS BUILDING WORLD-WIDE TIGHT GAS + LIQUIDS-RICH SHALES PORTFOLIOSHALES PORTFOLIO
Pinedale
GroundbirchDeep BasinFoothills
Utica
Turkey
Bakken
Niobrara
GermanyMontney
Canol
Ukraine
Wells Manufacturing JV with CNPCMarcellus
EgyptWolfcamp
Turkey
Oman
Colombia
Mississippi Lime
Eagle Ford
MontereyHaynesville
China tight gas
Wells Manufacturing JV with CNPCMarcellus
N
Colombia
TIGHT GAS
Drilling rig – Alberta
~50,000 km2 (~12 million acres) acreage world wide
NeuquenLIQUIDS POTENTIAL
2011 ENTRY
TIGHT GAS
32 Copyright of Royal Dutch Shell plc 2 February 2012
~12,000 km2 (~3 million acres) liquids-rich shales added 2011; ~$2 billion, ~$825/acre
MATURING NEW GROWTH OPTIONS LIQUIDS-RICH SHALES AND TIGHT GAS OUTLOOK2012 PRIORITIES + OUTLOOK GLOBAL PRODUCTION POTENTIAL
Annual investment decisions + flexibility
kboe/day bcfe/day
3001 5
2.0
y
Focus on lowest cost North America gas Spending at low-end of potential range
0
100
2001.0
0
0.5
1.5
Eagle Ford liquids-rich shales development
Appraisal of new liquids-rich shale acreage
GAS SOUTH TEXAS DISPOSALLIQUIDS
2012 CAPEX* ~$6 billion
02008 2010 2011 2012
0
Appraisal of new liquids rich shale acreage>250 kboe/d potential 2017
NORTH AMERICA GASINTERNATIONAL GAS
EXPLORATION + APPRAISAL
DEVELOPMENT
LIQUIDS-RICH SHALES
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* EXCLUDES ACREAGE PURCHASES
MATURING NEW GROWTH OPTIONSNORTH AMERICA GAS VALUE CHAINSLEVERAGE SHELL INTEGRATION KNOW-HOW
G i t il i i t it
Fort Mc MurrayFort St John
Grande Prairie
EXAMPLE: COMMERCIALISING LNG FOR TRANSPORT
Gas into oil pricing opportunity
Assessing gas potential:
Canada Green Corridor FID 2011FID for 0.3 mtpa LNGLong distance truck fuelLNG retail infrastructure
Edmonton
C l
Grande Prairie
• LNG-for transport Canada
• Western Canada LNG
Calgary
Jumping PoundVancouver
ENGINES MODIFIED FOR LNG• Western Canada LNG
• Gas-to-chemicals in Appalachia
• GTL options• GTL options
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Canada: Jumping Pound Gas Plant LNG powered truck
MATURING NEW GROWTH OPTIONSIRAQ OIL & GAS
Majnoon
BASRAH GAS COMPANY (BGC)WEST QURNA 1 + MAJNOON
BASRAHSouth Gas Processing PlantsRumaila Zubair
West Qurna1
South Gas LPG Terminal
B l di i k t th OIL FIELDS WITH SHELL INTEREST
November 2011 Joint Venture approved
~2 bcf/d wet gas feedstock
Barge unloading pipe racks at the Majnoon Jetty, Shat-al-Arab waterway
West Qurna 1 • Rehabilitation program progressing• Cost recovery commenced
OIL FIELDS WITH SHELL INTERESTGAS SUPPLIES FOR BGC
~ 700 msfc/day currently flared
Phased development approach• Domestic gas, 35 kboe/d condensate, 5 mtpa LPG• Long term LNG export potential
Cost recovery commencedMajnoon: • Drilling programme under way for FCP3-6 month conversion of capex to cash flow post-FCP/IPT
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g p p
Shell 44%
MATURING NEXT GROWTH OPTIONS MATURING NEW PROJECTS 2012+
Long-term growth and investmentTIGHT GAS – N. AMERICA CARMON CREEK - CANADA
Options to flex annual spending with macro
Capex and growth outcomes
Investment decisions driven by
Portfolio fitARROW - AUSTRALIA APPOMATTOX - USA
o o o
Affordability
Profitability
Maturing 36 project options
y
36 Copyright of Royal Dutch Shell plc 2 February 2012
Portfolio can support profitable growth to ~2020
ROYAL DUTCH SHELLROYAL DUTCH SHELLFINANCIAL FRAMEWORK
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CAPITAL INVESTMENT
capital investment $ billion
SchiehallionR d l t
Thematic
STRONG PROJECT FLOW DRIVES INVESTMENT GROWTH
30 Clair Ph2AOSP Debottlenecking Redevelopment
North America tight gas
Basrah Gas CompanyUS chemicals
NA LRS
Eagle Ford
U TIGHT/SHALE OIL/GAS
HEAVY OIL & EOR
EXPLORATION
UK RetailLNG for transport
M B20
Wheatstone LNG
Cardamom Sabah Gas Kebabangan
Prelude FLNGRaízen
Abadi FLNG
Qatar chemicalsEagle Ford
NWS GWF Ph1
PSTREAM
INTEGRATED GAS
DEEPWATER
BC-10 Ph2
Mars-B
10
Wheatstone LNG
FID 2010-2011
2011 PORTFOLIO GROWTH
TRADITIONAL
DOWNSTREAM
BC-10 Ph2
20120 $ billion 2010
2011 Target 2011
2012 Target
Organic investment 24 28 26 ~32
Acquisitions 7 2.5 5
Disposals (7) (5) (7) (~2-3)
38 Copyright of Royal Dutch Shell plc 2 February 2012
Net Capital Investment 24 25-27 24 ~30
GROWTH DELIVERY 2012+UPDATING OUR GROWTH OUTLOOK
200
$ billion
4.0
million boe/day
OIL & GAS PRODUCTION + OUTCOMES SUSTAINED CASH FLOW GROWTH
$100/bbl200
150
200
$87/bbl Brent
$80/bbl
3.5
$100/bbl
150
200
100
3 0
100
50
3.0
50
02008 -2011 2012 – 2015
POTENTIAL
2.52009 2010 2011 2017-18
average
PRODUCTION + POTENTIAL
2010-11 ASSET SALES
CASH FLOW FROM OPERATIONS
NET CAPITAL INVESTMENT
DIVIDENDS AND BUYBACKS
0
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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
FINANCIAL FRAMEWORK
CASH PERFORMANCE
+30-50% CFFO 2012-15 versus+30 50% CFFO 2012 15 versus 2008-11Growth free cash flowCFFO drives investment + payout
INVESTMENT
$30 billi t 2012
PAY-OUT
Dividend linked to business results ~$30 billion net capex 2012Affordability, profitability, portfolioScrip dividend with buy back offset
~$10.5 billion 2011
BALANCE SHEET
0 – 30% gearing through cycleBalance sheet underpins investmentCapital employed grows steadily
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* CFFO OUTLOOK @$80-$100/BBL BRENT AND ASSUMES IMPROVED US GAS AND DOWNSTREAM ENVIRONMENT FROM 2011; CFFO EXCLUDES WORKING CAPITAL MOVEMENTS
p p y g y
ROYAL DUTCH SHELLROYAL DUTCH SHELLSUMMARY
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SUMMARY
2012+ PRIORITIES
12 billion boe resources on stream
D i hfl thCONTINUOUS IMPROVEMENT
Drive new cashflow growth:
+30-50 % CFFO 2012-15 versus 2008-11*
Maturing >60 projects; ~20 billion boe resources
GROWTH DELIVERY
MATURE NEW OPTIONS
Exploration + bolt-on deals
2017-18 production potential ~4 mboe/d average
MATURE NEW OPTIONS
PERFORMANCE FOCUS
42 Copyright of Royal Dutch Shell plc 2 February 2012
* CFFO OUTLOOK @$80-$100/BBL BRENT AND ASSUMES IMPROVED US GAS AND DOWNSTREAM ENVIRONMENT FROM 2011; CFFO EXCLUDES WORKING CAPITAL MOVEMENTS
ROYAL DUTCH SHELLROYAL DUTCH SHELLQ&A
43 Copyright of Royal Dutch Shell plc 2 February 2012