re-shaping shell to create a world-class investment …...brazil shareholder visit 2016 re-shaping...

Royal Dutch Shell November 9, 2016

Royal Dutch Shell plc November 9, 2016

Brazil Shareholder visit 2016 Re-shaping Shell to create a world-class investment case

“Let’s make the future”


Andrew Brown Upstream Director Royal Dutch Shell plc

Royal Dutch Shell November 9, 2016 3

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 (SPE) 2P + 2C definitions.

Discovered and prospective resources: Our use of the term “discovered and prospective resources” are consistent with SPE 2P + 2C + 2U 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.

Shales: Our use of the term ‘shales’ refers to tight, shale and coal bed methane oil and gas acreage.

Underlying operating cost is defined as operating cost less identified items. A reconciliation can be found in the quarterly results announcement.

The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate legal entities. In this release “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 release refer to companies over which Royal Dutch Shell plc either directly or indirectly has control. Entities and unincorporated arrangements over which Shell has joint control are generally referred to as “joint ventures” and “joint operations” respectively. Entities 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 release 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 release, 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. There can be no assurance that future dividend payments will match or exceed previous dividend payments. All forward-looking statements contained in this release 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, 2015 (available at www.shell.com/investor and www.sec.gov ). These risk factors also expressly qualify all forward looking statements contained in this release and should be considered by the reader. Each forward-looking statement speaks only as of the date of this release, November 9, 2016. 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 release.

With respect to operating costs synergies indicated, such savings and efficiencies in procurement spend include economies of scale, specification standardisation and operating efficiencies across operating, capital and raw material cost areas.

We may have used certain terms, such as resources, in this release 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.


Performance

Upstream

Cash engine: today

Conventional oil & gas Deep water Shales

Future opportunities:2020+ Growth priorities: 2016+

$44 billion

1.6 mboe/d

$5-6 billion

Capital employed:

Production:

Capital Investment:

$58 billion

0.6 mboe/d

$6-7 billion

$18 billion

0.3 mboe/d

$2-3 billion

Capital employed:

Production:

Capital Investment:

Capital employed:

Production:

Capital Investment:

4

Deliver profitable growth

Capital employed and production based on Q3 2016

Capital investment is in period 2017-2018

Maintain resilience

Drive continuous improvement

Advantaged growth Track record + competitive portfolio Lowering cost further

Large resource base

Future growth priority

Improve competitiveness

Insert picture Insert picture


Argentina Vaca Muerta shale

Early stage exploration

5

Upstream + IG in South America Integrated Gas

LNG – Trinidad & Tobago and Peru

Bolivia gas portfolio

Brazil Comgas

Mature assets – BJSA and BC-10

Growth assets – Santos Basin

Capital employed in South America Integrated Gas, deep water and shales: ~$40 billion

Production in South America Integrated Gas, deep water and shales: 10% of Group

Rest of the world South America

Rest of the world South America

Brazil

Argentina

Peru

Trinidad & Tobago

Bolivia

Brazil

Cash engine Future opportunities Growth priorities

Deep water Shales


Upstream financial performance

Earnings and ROACE on CCS basis, excluding identified items

$ billion

Earnings by strategic theme

$ billion

Cash flow + ROACE

Earnings by geography

Drive improvement + sustain cash delivery

“Fit for the future” cost + uptime

%

Cash flow ROACE (RHS)

6

Conventional oil + gas Shales Deep water Other

$ billion

Rest of the world Americas

$ per barrel

Brent (RHS)

Stones FPSO Turritella


“Fit for the future”

Upstream 2018 ASPIRATIONS

Operational excellence / Cost competitiveness / Profitable growth

Production

Availability

Total cost

Goal zero

No harm to people

and environment

Asset availability

improvement

>150 kboe/d

potential through

wells + reservoir

management

Embed discipline

Competitiveness

Process safety


“Fit for the future”

Uptime and costs

Upstream costs excludes identified items

Availability excludes impact of uncontrollable events such as security impacts in Nigeria, etc.

$ billion

Reduce costs & head count

>5,000 staff + contractor positions since 2014

Exit ‘tail’ assets

Potentially 5-10 country exits

Best of both – Shell + BG

Upstream costs

% $ per barrel

Operating costs Unit cost BG

-8% -15%

Upstream availability

“Lower for ever” mindset + BG synergies

Closing gap to potential


2016-17

Upstream start-ups

BC-10 Ph3 Shell 50%

Kashagan 300 kboe/d Shell 17%

Stones 50 kboe/d Shell 100%

7th FPSO 1st oil – ‘Maricá’ 150 kboe/d Shell 25%

8th FPSO – ‘Saquarema’ 150 kboe/d Shell 25%

9th FPSO – ‘Caraguatauba’ 100 kboe/d Shell 30%

ML South start-up 35 kboe/d Shell 35%

Start-up

Forcados Yokri 50 kboe/d Shell 30%

Gbaran Ubie ph2 150 kboe/d Shell 30%

Malikai 60 kboe/d Shell 35%

Schiehallion redevelopment 125 kboe/d Shell 55%

10th FPSO – Lula South 150 kboe/d Shell 25%

11th FPSO – Lula North 150 kboe/d Shell 25%


Significant cash engine Conventional oil + gas

$ billion

Capital investment Selective growth

Substantial growth ‘17-’19

Reduce cost

Drives improved free cash

flow

2016-17 2014-15 2018+ Start-ups:

Kashagan, Kazakhstan Schiehallion FPSO

Clair ph2 Tempa Rossa others

Corrib Sabah gas Knarr ML South

Start-up

2013-15 capital investment excludes BG

Thousand barrels per day

Kashagan Schiehallion G-U ph2 others

$5-6 billion


Capital efficient + profitable growth

Deep water

2013-15 capital investment excludes BG

Thousand boe per day

Capital investment

$ billion

Deep water growth

Delivering world class

development funnel Brazil Gulf of Mexico Other

2009 BC-10

2014 Mars B Gumusut-Kakap

2010 Perdido

2005 Bonga

2001 Brutus

1999 Ursa

1997 Ram Powell

1996 Mars

2016 Stones

1994 Auger

Under construction Malikai Coulomb Appomattox Brazil pre-salt

$6-7 billion

Cash capital investment


Production

12

Americas shales Maturing a new growth option 2020+

Discovered + prospective resources shown at year end 2015; consistent with the Society of Petroleum Engineers 2P (Proved + Probable Reserves) , 2C (Contingent Resources) and 2U (Prospective

Resources) definitions

Production excludes divested assets (2013-14) and includes BG Haynesville/Appalachia addition (2016); 2013-15 capital investment excludes BG

$ billion

Capital investment

Thousand boe per day

Western Canada Gas

Western Canada LRS

Appalachia

Permian Argentina

Haynesville

Material discovered + prospective resources ~12 billion boe

25% liquids, 75% gas

Reducing costs + improving capital efficiency

Liquids Gas

~12 billion boe

Resources

2P reserves

Contingent resources - other

Contingent resources - development pending

Prospective resources

$2-3 billion

Liquids rich

Dry gas


~280,000 core net acres

Multiple areas de-risked

Accelerating selective development

~$1 billion in 2017 to develop sweetspots

13

Permian Delaware Basin Premier LRS play in North America

EUR = estimated ultimate recovery of resources based on actual production performance from wells on-stream

%

Wolfcamp EUR improvement

$ million

Wolfcamp well cost improvement SHELL LEASES

TEXAS

NEW MEXICO

Drilling Completion Facilities Land + site prep

+130%

-60%


Argentina shales

1 based on initial production rates in first 30 days using regulator data

~168,000 net acres in 6 blocks ~300-600’ thick shale 2 blocks non-operated with Total 16 Shell operated wells drilled 3 Shell wells in basin’s top 10 performing wells1

Early exploration and appraisal phase

Shell operated Non-operated


Track record + exploration strategy

Prospect size

(million boe)

Time to production

(years)

FRONTIER Under-explored basins

HEART LANDS

Near field exploration and new plays

>250

1-250 1-5+

10+

2016 targets

Heartland Resources (billion boe)

Australia 1.4

Gulf of Mexico 1.2

Brazil 1.0

Malaysia 0.5

Nigeria 0.3

Brunei 0.3

Oman 0.2

Heartlands

Frontier

Resources added 2010-2015

Trinidad &Tobago

USA

Canada

Tanzania

Nigeria

Germany UK

Netherlands

Albania

Oman Egypt

Russia

China

Brunei Malaysia

Spend ~$2.5 billion/year

50% reduction 2015-16

Heartlands + near field focus

2016 discovery


Performance

Upstream

Cash engine: today

Conventional oil & gas Deep water Shales

Future opportunities:2020+ Growth priorities: 2016+

$44 billion

1.6 mboe/d

$5-6 billion

Capital employed:

Production:

Capital Investment:

$58 billion

0.6 mboe/d

$6-7 billion

$18 billion

0.3 mboe/d

$2-3 billion

Capital employed:

Production:

Capital Investment:

Capital employed:

Production:

Capital Investment:

16

Deliver profitable growth

Capital employed and production based on Q3 2016

Capital investment is in period 2017-2018

Maintain resilience

Drive continuous improvement

Advantaged growth Track record + competitive portfolio Lowering cost further

Large resource base

Future growth priority

Improve competitiveness

Insert picture Insert picture


Questions & Answers


Andrew Brown Upstream Director Royal Dutch Shell plc


Royal Dutch Shell plc November 9, 2016

Brazil Shareholder visit 2016 Re-shaping Shell to create a world-class investment case

“Let’s make the future”

re-shaping shell to create a world-class investment …...brazil shareholder visit 2016 re-shaping...

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