royal dutch shell plc capital markets day 2016

Royal Dutch Shell plc June 7, 2016

Capital markets day 2016 Re-shaping Shell, to create a world-class investment case

“Let’s make the future”

Royal Dutch Shell | June 7, 2016


Ben van Beurden Chief Executive Officer Royal Dutch Shell plc

Royal Dutch Shell | June 7, 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.

Resources and potential: Our use of the term “resources and potential” 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.

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, June 7, 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.


Key messages

Cash engines

today’s free cash flow

Growth priorities

deep water and chemicals

Future opportunities

2020+ shales and new energies

Create a world class investment case

Grow free cash flow per share, higher ROCE

More resilient and more focused company

RE-SHAPING SHELL

MANAGING THE DOWN-CYCLE

PORTFOLIO PRIORITIES Pulling levers to manage

financial framework

Re-set our costs

Reduce debt

BG acquisition enables and accelerates change


Breakout Q&A panels

Upstream + Projects & Technology

Andrew Brown – Upstream Director

Peter Sharpe – EVP Wells

Downstream

John Abbott – Downstream Director

Istvan Kapitany – EVP Retail

Integrated Gas

Maarten Wetselaar – Integrated Gas Director

Steve Hill – EVP Gas and Energy Marketing & Trading

Andrew Brown

Maarten Wetselaar

Peter Sharpe

John Abbott Istvan Kapitany

Steve Hill


Industry context

Substantial + long lasting shifts in energy landscape

2005 2010 Q1 2016

2000 2050

$

From 7 to 9 billion by 2050 75% will live in cities

Global energy demand to double between 2000 & 2050

World needs more energy; less CO2

New sources New energy carriers New business models

OPEC, shales, shorter price cycles Requires new value creation models

Global population Growth in oil & gas demand Energy system in transition

Customer choice Continued oil price volatility Changing resources access


“2 degree world” Global energy demand, million boe per day

0

100

200

300

2000 2013 2030IEA 450

Global energy mix IEA ‘450’ scenario

Primary energy supply

Oil 32%

Coal 29%

Gas 21%

Renewables 4%

Nuclear 4%

13.7 btoe

Energy consumption

9.4 btoe

4.3 btoe

Losses + transformation

Bio-energy 10%

Managing our emissions

Continued investing in gas

New energies business

Gas

Oil

Nuclear

Coal

Bio-energy

Hydro

Other renewables


Strategy “Let’s make the future”

Focus portfolio on resilient positions

Invest in advantaged projects

Unrelenting focus on HSSE and licence to operate

Value chain integration

First class execution projects + operations

Reset cost and capital spending

Strategic Operational

FCF/share + ROCE growth Conservative financial

management

Create a world-class

investment case

8

Shell ambition:

World-class investment case

Relevant in our industry +

growing value share

Reducing our carbon

intensity

Shared value

Considerationpaid

Today Pre-completion view


Re-shape Shell BG deal delivery

* The net asset value, in line with accounting standards, is determined by reference to oil and gas prices, as reflected in the prevailing market view on the day of completion. Oil and gas prices are based on the forward price curve for the first two years (2016: $38, 2017:$44), and subsequent years based on the market consensus price view @ 15 Feb 2016

Synergies: $4.5 billion 2018 Asset value ahead of

expectation Considerable upside potential: Oil price recovery Shell reset

Cash & shares Net debt

Portfolio NAV Synergies PV

Valuation based on forward curves / consensus @ 15 Feb 2016*

Shell reset

Oil price uplift >$10 billion


Track record

Significant changes delivered

ROACE on a clean CCS basis

0

100

200

300

Downstream

Upstream

Integrated Gas

Corporate

Downstream

Upstream

Integrated Gas

Corporate

$35 billion Free cash flow

8% ROACE

$35 billion Dividend & buybacks

$22 billion Divestments

2013-15 >>

2013 Today

Capital employed in $ billion, end 2013 / Q1 2016

BG acquisition: Deep water + LNG growth accelerated

Reduced and re-phased pre-FID options Cancelled Carmon Creek + Alaska Divested Woodside (part), Australia

downstream, proceeds from MLP, others

~500 kboed start-ups + 13 FIDs Restructured conv. oil + gas, Nigeria, shales

& oil products

Strong free cash flow and returns


Re-shape Shell Driving strategy in multiple time horizons

CONVENTIONAL OIL + GAS

CHEMICALS

OIL PRODUCTS

DEEP WATER INTEGRATED GAS

OIL SANDS MINING

SHALES NEW ENERGIES

11

Cash engines: today

Growth priorities: 2016+

Future opportunities: 2020+

Competitive + resilient

Funds dividends + balance sheet

FCF + ROACE pathway

Affordable growth in advantaged positions

Material value + upside

Managed exposure

Path to profitability

Cash engines 2020+

Relentless portfolio high-grading


Re-shape Shell

Cash flow performance 2013-15

Free cash flow $35 billion ROACE

8%

Interest & other $4 billion

Cash dividend $26 billion

Buybacks $9 billion

Cash Engines $140 billion

Growth Priorities $39 billion

Future Opportunities $15 billion

Corporate/other

Divestments

Capital Employed Cash flow Free cash flow + ROACE

$87 billion

$23 billion 12 % ROACE

$24 billion $0 billion 11 %

-$2 billion

$64 billion

-$13 billion -12 %

$22 billion

$3 billion $5 billion

$24 billion $11 billion

$2 billion Investment (cash)

$29 billion

Net debt movement & other $4 billion

Balancing cash-in & cash-out

Oil price ~$87

12

Slide shows end 2015 capital employed and 2013-15 cumulative CFFO and FCF


Re-shape Shell

Capital allocation

Excludes BG acquisition in 2016

0

25

50

2014 2016E 2017 - 20 avg

Reducing capital investment

More predictable development flow


Growth priorities

Cash engines

$ billion

Capital investment

-35%

Shell BG

30

25

$ billion 2016 2017-18

Oil products 3 3-4

Conventional oil + gas 5 5-6

Integrated gas 6 4-5

Oil sands mining <1 <1

Deep water 8 6-7

Chemicals 3 3-4

Shales 2 2-3

New energies <1 <1

Total ~29 25-30


Re-shape Shell

Cash engines Conventional oil + gas

Integrated Gas

Oil Products

Oil sands mining

High grade portfolio

Exploration to maintain running room

Moderate capacity growth rate

Prioritise for cash delivery

Strengthen the retained core

Selective marketing growth

Improve macro resilience

Capture price upside Name

0

15

30

45

2000 2005 2010 2015


Re-shape Shell

Integrated Gas from growth priority to cash engine

Period-end in million tonnes per annum

Liquefaction capacity

Million tonnes per annum

LNG liquefaction volumes

0

20

40

2000 2005 2010 2015Liquefaction (Shell) LNG offtake (BG)

LNG Peru

Nigeria

QG-4

Atlantic LNG Oman

Sakhalin

Malaysia

Sabine Pass

Equatorial Guinea

Pluto NWS

Brunei

QCLNG

Gorgon

Integrated gas is over 30% of Shell

13 mtpa liquefaction growth in Australia 2018

~75 mtpa liquefaction projects in growth funnel

~20 mtpa market access in growth funnel

Optimise for free cash flow growth

16Q1 extrapolated

2018

15

Liquefaction (BG)


Re-shape Shell

Growth priorities Deep water

Chemicals

Growth in advantaged geology

Brazil + GOM in focus

Multi-billion barrels potential

Advantaged feedstock + growth markets

USA + China growth

0

2

4

6

8

2015 2020


Re-shape Shell

Deliver profitable growth

Million tonnes per annum, ethylene

Advantaged feed stocks + Shell technology

Pennsylvania chemicals: polyethylene

Gulf Coast expansion: alpha olefins

China expansion: EOG, SMPO/POD

Chemicals capacity

Thousand boe per day

Deep water production

Building on GOM exploration + BG Brazil

Brazil pre-salt: 15 FPSOs ~2020

Gulf of Mexico: Stones + Appomattox developments

Growth outlook driven by discovered oil & gas and established chemicals positions

0

200

400

600

800

1000

2015 2020

Under construction On-stream FEED Under construction On-stream


Re-shape Shell


Shales

New energies

~12 billion barrels resources + potential

Mature to ‘growth priority’

Energy transition themes

Explore + invest for longer term


Future opportunities New energies

Hydrogen & biofuels

Wind & solar alongside gas

Customer solutions

New energies Investment context

Energy Transition

Digital platforms

Increasing electrification

Greater customer

choice

Renewables growth

Disruptive business models

Mobility transition

Integrated

energy solutions

New fuels

Connected customer


Re-shape Shell

Expectation: end of decade

2019-21: ~$60 scenario, mid-cycle Downstream

2013-15 ~$90

Capital employed

($ bln end ‘15)

Free cash flow ($ bln p.a)

ROACE

(%)

Oil products 5 12

Conventional oil + gas -1 13

Integrated gas 4 13

Oil sands mining 0 1

Cash engines ~65% 8 12

Deep water -1 10

Chemicals 1 15

Growth priorities ~20% 0 11

Shales -4 -12

New energies - -

Future opportunities ~5% -4 -12

Organic FCF 5

Divestments 7

Total (incl. Corporate) 223 12 8

2019-21 ~$60

Capital employed

($ bln)

Free cash flow ($ bln p.a.)

ROACE

(%)

>5 ~15

~5 ~10

>5 ~10

~1 ~5

~65% 15-20 ~10

~5 ~10

~0 ~10

~25% ~5 ~10

~0 <5

~0 <5

~5% ~0 <5

20-25

~5

270-290 20-30 ~10

GROWTH PRIORITIES

Deep water delivering free cash flow; Chemicals continues to grow

CASH ENGINES

Stable portfolio + step up in financial performance

FUTURE OPPORTUNITIES

Transitioning to growth businesses

Simon Henry Chief Financial Officer Royal Dutch Shell plc


CFFO + Divestments

Attractiveness,

resilience

Dividends + Buybacks

0 – 30% gearing

through cycle


Financial framework Cash Performance

Investment Pay-out

Balance Sheet

Creating value for shareholders through cycle

Pulling levers today to manage the financial framework

Multi-year timescales and planning

Positioning to cover dividends in down-cycle, and generate excess free cash flow in up-cycle


Integration with BG

Portfolio

* Shell’s reserves are calculated on a SEC basis and BG‘s 1P reserves are calculated on a PRMS basis, as published by the SPE

Equity liquefaction capacity in million tonnes per annum

0

25

50

Shell + BG Exxon Chevron Total BP

LNG

billion boe

0

10

20

30

Exxon BP Shell + BG* Total Chevron

Oil & gas proved reserves - 2015

Million boe per day

Oil and gas production

BG transaction accelerates our growth strategy

Increased scale and portfolio quality – an opportunity to re-set Shell

Liquids Gas 2015 2018

Shell BG

0

2

4

Exxon Shell + BG Chevron Total BP


Integration with BG

BG portfolio is delivering

Source: BG


BG production Q1 2016: 0.8 mboed (+25% Q1-Q1)

Asset availability 93%

Reducing capital spend

Increasing production

$ billion

Reducing capital investment

0

200

400

600

800

0

1

2

3

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

LNG Deep water Conventional oil + gas Capital investment

Q1 Q2 Q3 Q4 Q3 Q4 Q1 2014 2015 2016

+25%

2014 2015 2016


Integration with BG

Integration timeline

Deliver safe, efficient operations

Management announcements + talent review

Understand BG business & practices

UK + US office footprint

Transition plan: resourcing, systems & processes

End 2016 Integration completed

15 February 2016 BG acquisition completed

Day 60 Day 30 Day 90

Combine best practices and retain best staff

Staffing of combined organisation

Integrated business plan

Transition teams move to business as usual

Today

Joint integration planning team established

Early preparation for successful integration

August 2015

2016 2017 2018

-1

0

1

2

3

4


Integration with BG

Synergies update

1 Synergies span operating, capital, and raw material cost areas

$ billion

Synergies update

2018 synergies increased from $3.5 bln to $4.5 billion

2017 delivery of prior 2018 target

Additional synergies

SG&A

Procurement

Marketing & shipping

Corporate, administrative, organisation and IT operational efficiencies

Reduced costs

Procurement spend1

Exploration Reduced activity via BG combination

Exploration synergies Costs synergies Synergies target as per

prospectus


Manage down-cycle

Cash flow priorities 2016-18

Powerful levers to underpin financial framework

Priorities for cash Debt reduction Dividends

Buybacks & capital

investment

1

2

3

Divestments Reduce capital investment

Reduce operating costs

Deliver new projects


Manage down-cycle Divestments

Integrated gas split out from Upstream from 2011 onwards

$ billion

2016-18

Portfolio simplification and

high-grading

Earmarked for disposal

Up to10% of oil + gas

production

~5-10 oil + gas countries

Selected mid-stream and

downstream

Divestments program

$30 billion 2016-18

Progressing $6-8 billion 2016

0

10

20

30

2007-09 2010-12 2013-15 2016-18

Downstream/Corporate High grading ‘tail’ Infrastructure + mature positions Refocus portfolio

2016-18 announced:

Showa Shell

Maui pipeline

Denmark marketing

Malaysia refining

Motiva JV end

Further divestments pending

completed

Upstream Integrated gas


Manage down-cycle


* BG organic growth from 1.1.2016

LNG volume includes offtake

Thousand boe per day*

Significant oil & gas +

Downstream production under

construction

Capex to free cash flow

High margin / price upside

barrels

2016-17 start-ups

2014-15 start-ups

LNG volume (RHS)

2018+ start-ups


Cash operating cost <$15/boe

Tax rate ~35%

0

5

10

15

0

400

800

1200

2014-15 2016-17 2018+


Track record

Significant reduction in project flow

2013 2014 2015 2016 2017+ Oil sands mining Carmon Creek Shales Shales Deep water Appomattox

Bonga South West Integrated Gas Arrow Greenfield LNG

Elba LNG Browse LNG US GTL Wheatstone LNG Abadi redesign MLNG Dua JVA LNG Canada Lake Charles Sakhalin Train 3

Conventional Bab oil + gas ADNOC Expiry

MLNG DUA PSC Bokor & Betty EOR Val d’Agri ph2 Majnoon FFD

Chemicals Al Karaana Geismar alpha olefins Pennsylvania cracker Nanhai 2nd cracker

Oil products Scotford de-bottleneck Pernis de-asphalting

~$45 billion spending mitigated 2014-2020

FID Cancelled/divest Potential FID Delay/deferral

Frontier

Material reduction in exploration spend

BG acquisition + recent Shell discoveries reduces our requirement for exploration

More emphasis on Shell’s producing basins

Reduced activity, restructuring, lower costs


Reduced exploration spend

$ billion

Exploration expenditure

0

2

4

6

8

2013 2014 2015 2016E 2017/18 avg

$3 billion reduction

BG Heartlands

~2.5

7

5 5.5

~2.5


Manage down-cycle

Lower & more predictable capital investment

$ billion; excludes BG acquisition in 2016

Capital investment

Planning for $25-$30 billion range

$30 billion/year ceiling

Trending low in range today

Options to further reduce below $25 billion if warranted

0

20

40

60

2013 2014 2015 2016E 2017 - 20 avg

Growth options/exploration Base + short cycle Committed growth projects BG

$25-30 billion

58

47

36

29

-35%


Manage down-cycle

Reduce operating cost

$ billion

Operating cost

0

20

40

60

2013 2014 2015 end-2016run-rate

$40 billion

-20%

Substantial reductions delivered

“Lower for ever” mindset + BG synergies

Staff, supply chain + contractors

Divestments , growth, FX impacts

Shell BG

48 50 46

40


Manage down-cycle

Pulling levers to manage financial framework

* $60 oil price scenario 2018

2016-18 levers

Reducing our cash break-even

Further options available

+/- $10 Brent = ~5 billion CFFO

Divestments Reduce capital

investment

Reduce operating

costs


$ billion 2015 baseline:

Shell + BG 2016 2017-2018

potential

Operating costs 46 Trend to 40 (underlying) Multi-billion p.a.

Capital investment 36 29 25-30

Divestments 6 + 5 6-8 in progress

30 over 2016-18

Projects start-up post-2014 (CFFO) n/a ~$2 billion ~10 billion

by 2018*

John Abbott Downstream Director Royal Dutch Shell plc



Downstream Cash engine

Improve our financial performance

Upgrading our portfolio

Returns + free cash flow improvement

Chemicals growth priority

Marketing Refining & Trading Chemicals

Growth priority

Differentiated products

Brand leverage + customer offer

Selective growth

Full integration with trading

Improve retained assets

Reducing refining capacity

Feedstock plays

Capacity growth


Downstream financial performance

Earnings and ROACE on CCS basis, excluding identified items

$ billion

Earnings + ROACE

$49 billion as at end Q116

Capital employed

$ billion

Cash flow

0

10

20

0

5

10

2012 2013 2014 2015 16Q14Q rolling

%

ROACE (RHS) Refining & trading

Chemicals Marketing

0

5

10

15

2012 2013 2014 2015 16Q14Q rolling

Working capital movements Cash flow excluding working capital

Free cash flow

Refining & trading

Chemicals

Marketing

Contribute sustainable and growing cash surplus

Deliver competitive returns

0

2

4

6

8

0

2

4

6

8

2007 2015

Million barrels/day

Stronger results from smaller portfolio


Financial performance

Oil Products

Earnings on CCS basis, excluding identified items

0

1

2

3

4

Refining capacity Marketing volumes

$ billion $ per barrel

2007 2015

Global weighted average refining margin (RHS)

Oil products earnings

-20% -30% +25%

Advantaged feedstock + supply

Asset sales

Products + brand


Improving our Downstream footprint and performance

Portfolio change

$ billion

Asset sales

Optimise footprint

Growth markets

Capital discipline and project delivery

Resilience

Attr

activ

enes

s

Backbone / grow: Chemicals China LNG for transport Premium fuels + lubes Refinery crude flexibility others

Fix: Netherlands +

Rheinland manufacturing

Singapore fuels Motiva JV restructuring others

Exit: Australia Denmark Harburg Italy LPG France Norway Selected UK retail sites Tongyi lubricants China Showa Shell Malaysia refining others completed 0

1

2

3

4

2011 2012 2013 2014 2015

Stanlow refinery Shell Chile LPG Northwest Europe others

Australia DS Italy DS MLP others

Norway UK retail sites LPG France MLP Tongyi others

2016 announced

Denmark MLP Showa Shell others


Oil Products Optimization of footprint

Motiva JV split is subject to ongoing negotiation

Exit from JV with Saudi Aramco

Integrate retained assets with Shell

Brand licensing agreement

Motiva JV restructuring

Sale of ~33% of Showa Shell Sekiyu KK to Idemitsu

~$1.4 billion

Lubricants and fuel brand licensing agreements

Completion expected in 2016

Showa Shell divestment

Terminals (26) – Saudi Aramco

Ethanol Hub

Terminals (9) – Shell

Showa Shell Sekiyu K.K. Kawasaki Refinery, Japan

Refinery

40

Norco

Convent

Port Arthur

No.1 market share in global retail + global lubricants

0%

10%

20%

30%

2012 2013 2014 2015 2016YTD

0%

10%

20%

30%

2012 2013 2014 2015 2016YTD

0

1

2

3

4

5

2012 2013 2014 2015 16Q14Q

rolling


Investing in selective growth Shell Oil Products – marketing

Shell V-Power is the world’s most widely sold premium fuel (68 markets)

#1 or #2 in high quality fuels across 90% of our markets

Leveraging GTL base oils with Pureplus®

Top 3 in critical markets, #1 in China.

Marketing - ROACE

0%

10%

20%

30%

2012 2013 2014 2015 16Q14Q

rolling

Marketing – free cash flow Global retail - premium product penetration

Global lubes - premium products penetration

$ billion % % %

41

ROACE on CCS basis, excluding identified items


Growth priority Chemicals

1Cracker base chemicals (Aromatic derivatives, Ethylene, Propylene and Isobutylene)

Million metric tonnes1

Chemicals demand outlook

Million metric tonnes Ethylene and Propylene

Geographic balance

North America

Asia Pacific & Middle East Europe 2016

Gas Liquid 2016

Million metric tonnes Ethylene and Propylene

Feedstock balance

0

100

200

300

400

2005 2015 2020

Strengthening our core

Growing our footprint

Crackers + derivatives

Rest of world Asia


Growth priority Chemicals Million metric tonnes

0

2

4

6

8

2000 2005 2010 2015 2020 2025

Under construction Ethylene capacity

Nanhai II

Pennsylvania cracker

Geismar, USA

Nanhai, China

Pennsylvania, USA

USGC restructuring

Nanhai I

Bukom start-up

425,000 tonnes additional Alpha Olefins capacity

New liquids cracker and derivatives units

Capacity: ~1.2 million tonnes ethylene per annum

50/50 JV CNOOC

Greenfield FID 2016

Capacity: ~1.5 million tonnes ethylene per annum and polyethylene derivatives

43 2006 Nanhai 2010 USGC go-light strategy 2010 Singapore 2016+ China + USA


Downstream competitive landscape

Downstream: Earnings on local GAAP basis adjusted for inventory valuation differences and excluding identified items; Peer group: Chevron, Total, BP, XOM, RDS Chemicals: Earnings excluding identified items; peer group: XOM, LBI, DOW, BP, RDS Source brand preference: Ipsos – Global Customer Tracker (covering 30+ markets)

%

Downstream ROACE

%

Chemicals ROACE

%

Oil Products ROACE

Global brand preference

Brand

0

10

20

30

2011 2012 2013 2014 2015 Q1 20160

10

20

30

2011 2012 2013 2014 2015 Q1 2016

0%

5%

10%

15%

20%

2011 2012 2013 2014 20152011 2012 2013 2014 2015

Shell Peers

Shell Other majors

Q1 2016

44

0

10

20

30

Shell Chemicals peer group

Andrew Brown Upstream Director Royal Dutch Shell plc



Upstream Cash engine

‘Fit for future’ cost + uptime programme


Conventional oil & gas Deep water Shales


Maintain resilience

Drive improvement

Advantaged growth, Track record + competitive portfolio Lowering cost further

Large resource base

Future growth priority

Improve competitiveness

$45 billion

1.8 mboe/d

Growth priorities

Capital employed:

Production:

$55 billion

0.6 mboe/d

$17 billion

0.26 mboe/d

Capital employed:

Production:

Capital employed:

Production:

Capital employed and production based on Q1 2016


Upstream financial performance

Earnings and ROACE on CCS basis, excluding identified items

$ billion

Earnings by strategic theme

$ billion

Cash flow + ROACE

Earnings by geography

Capital investment 2016

Drive improvement + sustain cash delivery

%

-5

0

5

10

15

20

-5

0

5

10

15

20

2012 2013 2014 2015 16 Q14Q rolling

Cash flow ROACE (RHS)

47

Conventional oil + gas Shales Deep water Other

$ billion

Conventional oil + gas Deep water Shales

-5

0

5

10

2012 2013 2014 2015 16Q14Q rolling

Rest of the world Americas

-60

0

60

120

-5

0

5

10

2013 2014 2015 16Q14Q rolling

$ per barrel

Brent (RHS)


Reducing costs + improving performance Upstream

$ billion

Reduce costs + headcount 2014+

>5,000 staff + contractor positions

Exit ‘tail’ assets

Potentially 5-10 country exits

Upstream costs

$ per barrel

0

10

20

30

-

5

10

15

2014 2015 2016E

Operating costs Unit cost BG

-8%

-15%

48

40%

60%

80%

100%

0 10 20


Upstream “Fit for the future”

1Operated assets only

Availability

Conventional oil & gas

Availability

Deep water

Unit operating costs $/boe

Shales

40%

60%

80%

100%

0 15 30 45 60Direct unit operating costs $/boe1

0

10

20

2014 2015 2016E

-35%

Direct operating costs Direct overhead

Direct unit operating costs $/boe1

2014 2015

Targeting sustained improvement by 2018:

Asset availability improvement

>150 kboe/d potential through wells + reservoir management

Cost reduction

2016 Q1 2014 2015 2016 Q1

~12 billion boe

0

2

4

2013 2014 2015 2016E


Americas shales Maturing a new growth option 2020+

Production excludes divested assets (2013-14) and BG Haynesville addition (16Q1)

$ million per well

Average drill and complete costs – LRS wells

$ billion

Capital investment


Production

Western Canada Gas

Western Canada LRS

Appalachia

Permian Argentina

Haynesville

Material resource + potential ~12 billion boe

25% liquids, 75% gas

Reducing costs + improving capital efficiency

0

80

160

240

2013 2014 2015 16Q1

-60%

Liquids Gas

+35%

0

4

8

12

2013 2014 2015 2016 Q1

-50%

Resources

Reserves

Contingent resources - other

Contingent resources - development pending

Prospective resources

0

15

30

45

60

75

0

50

100

150

200


Deep water Capital efficient + profitable growth


Shell + BG deep water growth

0

200

400

600

800

1000

2015 2020

Brazil Gulf of Mexico Other

Lowering capital intensity

$ per boe break-even cost (examples)

Reducing drilling costs

0

250

500

750

# drilling days

2014 baseline Current

-30%

-40%

Current 2013/14 baseline

Variable spread rate + drilling materials cost

$ thousand

Delivering world class development funnel

Reducing break-even: new projects ~$45/bbl

2009 BC-10

2014 Mars B

Gumusut-Kakap

2010 Perdido

2005 Bonga

2001 Brutus

1999 Ursa

1997 Ram Powell

1996 Mars

1994 Auger

Brazil Pre-salt Coulomb Appo Vito Kaikias

Current estimate - under construction Previous estimate Current estimate - pre-FID

Example Gulf of Mexico

Under construction Malikai Stones

Coulomb Appomattox

Brazil pre-salt

2010-15 2016 2017 2018 2019 2020+


1 Operator’s view 2 The Berbigão, Sururu and Atapu accumulations subject to unitisation agreements

Strong partnership with Petrobras

Libra consortium continues appraisal work

High well productivity

Average 25,000 boe/d

Lula (25%)

Sapinhoá (30%)

Lapa (30%)

Pre-salt FPSOs delivery1

Iracema (25%)

6. Iracema N.

5. Iracema S.

4. Sapinhoá N.

3. Lula NE.

2. Sapinhoá S.

1. Lula 7. Lula Alto

Lula Central

Lapa

Lula S

Lula ext S.

Lula N

Atapu S.2

Atapu N.2

Berbigão /Sururu2 Lula W.

Libra pilot

On-stream chartered

Chartered

Replicant owned

Chartering under evaluation

Libra EWT

0 15 30 45

Iracema #1 Iracema #2

Sapinhoá #1 Iracema #3 Sapinhoá #2

Jubarte Lula #1

Iracema #4 Sapinhoá #3

Lula #2

Top 10 pre-salt producer wells - ANP

Strong flow rates and performance

Shell equity No Shell equity Flow rate in kboe per day

Berbigão/ Sururu/Atapu2

(25%)

Libra (20%) BM-S-54

(80%) Sagitário

(20%)

Pending development On-stream

Exploration

100 km

Deep water Brazil: step change in Shell position


Deep water Gulf of Mexico Established + profitable basin

1 Block MC943

Auger

Mars

Ursa

Na Kika

Brutus

Appomattox ~175 kboe/d potential ~650 million boe resources Shell 79% (operator)

Caesar Tonga

Cardamom

Mars B

100 km

Ram Powell Kaikias >100 million boe resources Tie-back option Shell 100% (operator)

Perdido Stones ~50 kboe/d FPSO >250 million boe resources Shell 100% (operator) 2016 start-up

Vito Re-scoping to a regional

production facility >300 million boe resources Shell 51.33% (operator) Powernap1

Potential integration with Vito Shell 50% (operator)

Drilling moratorium

Production

0

100

200

300

09 10 11 12 13 14 15 Q116


Rydberg Shell ~57% (operator) >100 million boe resources

Kepler North 2016 discovery Tie-back to Na Kika Shell 50%

Coulomb ~20 kboe/d Tie-back to Na Kika Shell 100% (operator)

Stones and Appomattox under construction

New options: focus on capital efficient tie-backs + low cost hosts

Selective exploration

Under construction On stream

Option 2014-16 exploration success

0

100

200

300

2014-15 2016-17 2018-19 ~2020


Conventional oil + gas Significant cash engine for Shell

Thousand barrels per day

Selective growth

$ billion

0

5

10

2013-2015 2016-18

Capital investment

Substantial growth ‘17-’19

Drives improved free cash flow

Clair ph2 Tempa Rossa others

Kashagan Schiehallion G-U ph2 others

Corrib Sabah gas Knarr

Kashagan, Kazakhstan

2016-17 2014-15 2018+

-30%

Schiehallion FPSO Start-ups:


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


Upstream Cash engine

‘Fit for future’ cost + uptime programme


Conventional oil & gas Deep water Shales


Maintain resilience

Drive improvement

Advantaged growth, Track record + competitive portfolio Lowering cost further

Large resource base

Future growth priority

Improve competitiveness

$45 billion

1.8 mboe/d

Growth priorities

Capital employed:

Production:

$55 billion

0.6 mboe/d

$17 billion

0.26 mboe/d

Capital employed:

Production:

Capital employed:

Production:

Capital employed and production based on Q1 2016

Maarten Wetselaar Integrated Gas Director Royal Dutch Shell plc



Integrated Gas Cash engine

Focus on: Cash + returns Create + secure new

demand Moderate growth

New energies opportunities

Integrated Gas New energies


Oil + gas production

Liquefaction

Regasification

Gas-to-Liquids

Marketing & trading

IOC leadership in growing market

BG integration benefits

Moderate growth

Qatargas 4

Muscat LNG

Pearl GTL

Sakhalin LNG

Hazira, India: LNG jetty

LNG

Operational excellence

Building GTL product premium

Energy transition

Leverage adjacencies

Explore + invest


Integrated Gas financial performance

$ billion

0

5

10

2012 2013 2014 2015 2016 Q14Q rolling

Earnings

$ billion

Cash flow + ROACE

$91 billion as at Q1 2016

Capital employed

%

LNG plant availability

%

In service Under construction

Cash flow ROACE (RHS)

0

10

20

30

0

5

10

15

2012 2013 2014 2015 2016 Q14Q rolling

59

70

80

90

100

Q115 Q215 Q315 Q415 Q116


LNG supply + demand Million tonnes per annum

Global LNG supply + demand outlook Demand growth drivers 2015-2030

2015-20: >100 mtpa supply growth Predominantly contracted volumes Supply driven market till end of decade

2020 to 2030 Asia continues as main growth area Majority of new supplies from North America and potentially East Africa

Supply gap emerging early 2020s

0

100

200

300

400

500

2000 2005 2010 2015 2020 2025 2030

In operation Under construction Demand forecasts

~55%

~10%

Established LNG markets

~15% New LNG markets

Downstream LNG

2015

~20%

2030

Newly importing LNG markets*

* Markets importing LNG less than 5 years


LNG: Shell + BG


LNG volumes

Capacity at year-end in million tonnes per annum

LNG Peru

QG-4

Atlantic LNG

Oman

Sakhalin

Malaysia

Sabine Pass

Equatorial Guinea

Pluto NWS

Brunei

QCLNG

Gorgon

0

25

50

2011 2013 20150

20

40

Exxon BP Total Chevron

2015 Shell LNG liquefaction volumes Shell LNG sales volumes

Shell + BG

16Q1 extrapolated IOC leadership position

Global footprint

Value from optionality

Liquefaction capacity

Nigeria

Equity capacity Long-term offtake agreement

Spot offtake in 2015 Deliveries in 2015

0

5

10

15

20

25

2005 2007 2009 2011 2013 2015


LNG pricing Million tonnes per annum (2015 basis, Shell +BG)

Shell LNG sales + pricing linkage

$ per mmbtu

Regional gas prices

0

10

20

30

40

50

60

Short-term ‘spot’ Gas hubs (e.g. NBP, HH) Oil linked: 3-6 months lag

Term contracts (2-20 years)

~80%

Continued demand for oil + gas hub linked LNG pricing

Oil-price linkage reinforced Japan landed LNG price National balancing point (UK)

Henry hub (US) Brent

Sources Deliveries

Term purchase Liquefaction volumes

Spot purchase


Developing new LNG markets Million tonnes per annum

Portfolio of opportunities to

market LNG

Regas terminals

Create a new value chain in

LNG to transport

Growing and diversifying market: Asia

0

100

200

300

2000 2005 2010 2015 2020 2025

Japan Korea

Taiwan India

China Indonesia

Malaysia Others

Hazira

Spain

UK The Netherlands

Philippines Myanmar

Gibraltar China

Singapore

Vietnam

Capacity rights Proposed LNG for transport project

LNG truck re-fuelling station Rotterdam, Netherlands

Kakinada

Regasification Transport

Qatar


Moderating our growth rate: Shell + BG LNG

* Offtake rights

FEED On stream LNG sales Options Under construction

Reduce FID pace

Focus on project cost competitiveness

Prelude

Gorgon T2-3 Arrow

Gorgon T4

NLNG T7 Sakhalin T3

Browse

LNG Canada

Lake Charles

Tanzania LNG

Prince Rupert

Abadi

Elba*

QCLNG T3 others*

Sabine Pass T2-4*

Option recycled

Prelude 2018

Gorgon 2016


New energies Exploring new opportunities

Cleaner transportation

Biofuels + hydrogen

NL + USA wind

Solar for EOR Oman

Connected mobility

Connected energy

Winning company in the energy transition

Established credentials: exploring options

Integrated energy

solutions

New fuels

Connected customer

New fuels Integrated energy solutions

Connected customer

Ben van Beurden Chief Executive Officer Royal Dutch Shell plc



Transformation

CREATE A WORLD CLASS INVESTMENT CASE

Improved capital efficiency: reduced investment/FCF ratio

Energy transition: CO2 footprint & new energies strategy

Simpler company: Exit ~10% production; 5-10 countries

Less cost + fewer people with BG than Shell stand-alone: 12,500 fewer staff

Capital efficiency: 2013 spending halved & $45 billion mitigated

Improving our metrics: FCF/share; ROCE; net debt

$30bn divestments: Innovative deals like Motiva, Showa and MLP

Portfolio growth: 1 mboe/d adds $10 bln cash flow

2019-2021 average

2013-2015 average

Brent

ROACE

~$60

~10%

~$90

8%

Organic free cash flow $20-25 billion p.a. $5 billion p.a.

67

Questions & Answers



Projects under construction

Conventional oil + gas Integrated Gas Oil sands mining

Oil Products

Deep water Chemicals

Shales New energies

69

Start up Project Country Shell share (direct &

indirect) %

Peak Production

100% kboe/d

LNG 100% Capacity

mtpa

Products Legend Theme Shell Operated

2016-17 Forcados Yokri Interagted Project (FYIP) Nigeria 30 50 Conventional oil + gas Gbaran-Ubie Ph2 Nigeria 30 150 Conventional oil + gas Geismar AO4 United States 100 425 kta alpha olephins Chemicals Kashagan ph1 Kazakhstan 17 300 Conventional oil + gas

Lapa Brazil 30 79 Deep water

Lula Central Brazil 25 131 Deep water

Lula Extreme South Brazil 25 142 Deep water

Lula South Brazil 25 145 Deep water

Malikai Malaysia 35 60 Deep water ML South Brunei 35 35 Conventional oil + gas

NA LRS / tight gas USA/Canada various 82 Shales Pernis solvent deasphalting Netherlands 100 7.2 kbpd Oil Products Schiehallion Redevelopment United Kingdom 55 125 Conventional oil + gas

Scotford HCU debottleneck Canada 100 14 kbpd Oil Products Stones United States 100 50 Deep water

2018+ Appomattox United States 79 175 Deep water Atapu North** Brazil 25 148 Deep water

Atapu South** Brazil 25 147 Deep water

Baronia / Tukau Timur Malaysia 40 65 Conventional oil + gas

Berbigão/Sururu** Brazil 25 134 Deep water

Clair Ph2 United Kingdom 28 100 Conventional oil + gas

Coulomb United States 100 20 Deep water Lula North Brazil 25 147 Deep water

Nanhai China Chemicals China 50 1200 kta C2 Chemicals

Pennsylvania cracker United States 100 1500 kta C2 Chemicals Prelude FLNG Australia 68 110 3.6 1.7 mtpa NGLs Integrated gas Rabab Harweel Integrated Project Oman 34 40 Conventional oil + gas

Southern Swamp AG Nigeria 30 30 Conventional oil + gas Tempa Rossa Italy 25 45 Conventional oil + gas

** The Berbigão, Sururu and Atapu accumulations subject to unitisation agreements


Pre-FID options

70

Conventional oil + gas Integrated Gas Oil sands mining Oil Products Deep water Chemicals Shales New Energies

Phase Project Country Shell share (direct &

indirect) %

Peak Production

100% kboe/d

LNG 100% Capacity

mtpa

Products Legend Theme Shell Operated

SELECT Kaikias United States 100 40 Deep water Libra pilot FPSO Brazil 20 150 Deep water

LNG Canada T3-4 Canada 50 13 Integrated gas

DEFINE Bonga South West Nigeria 43 205 Deep water Bokor Malaysia 40 12 Conventional oil + gas

Changbei II China 50 57 Integrated gas Deer Park OP3 United States 100 ~800 kta C2 Oil Products Lake Charles United States 100 15 Integrated gas LNG Canada T1-2 Canada 50 13 Integrated gas

Penguins Redevelopment United Kingdom 50 40 Conventional oil + gas Sakhalin T3 Russia 28 ~5 Integrated gas

Val d'Agri Ph2 Italy 39 60 Conventional oil + gas

Vito United States 51 100 Deep water


HSSE performance

Excludes BG

Injuries – TRCF/million working hours

Goal Zero on safety

Energy Intensity Index (EEITM)

Energy intensity – refineries

Volume in thousand tonnes

Spills - operational

Number of incidents

Process safety

HSSE priority

Performance + transparency

400

600

800

0

2

4

'05 '07 '09 '11 '13 '150

5

10

'05 '07 '09 '11 '13 '15E

Working hours (RHS) TRCF

16Q1 16Q1

0

200

400

2013 2014 2015 16Q192

96

100

104

'05 '07 '09 '11 '13 '15

Tier 1 incidents Tier 2 incidents

million working hours

71

16Q1


Manage down-cycle Financial performance

$ billion

-5

0

5

10

15

-10

0

10

20

30

2012 2013 2014 2015 16Q14Q rolling

Earnings + ROACE

$ billion

0

10

20

30

0

10

20

2012 2013 2014 2015 16Q14Q rolling

Dividend, buyback + gearing

$ billion

-15

0

15

30

45

-15

0

15

30

45

2012 2013 2014 2015 16Q14Q rolling

Cash flow

CFFO Cash investment

Free cash flow (RHS)

Dividend declared Buyback

End period gearing (RHS)

$ billion

%

Upstream Integrated gas

Downstream ROACE (RHS) Corporate/Other

%

Integrated business + results

Lower oil prices


Deliver new projects Project management

Construction time elapsed %

Project status

Oversight and accountability

Track record

0 50 100

ML SouthStones

Lula CentralLapa NE

Lula SouthGbaran Ubie Ph2B

Schiehallion RedevelopmentForcados Yokri Integrated Project (FYIP)

MalikaiLula Extreme South

Lula NorthScotford HCU Debottleneck

Atapu NorthAtapu South

Gbaran Ubie Ph2AClair Ph2Berbigao

Prelude FLNGTempa Rossa

Southern SwampNanhai China Chemicals

Rabab Harweel Integrated ProjectCoulomb

Baronia/Tukau TimurAppomattox

Pernis solvent de-asphaltingGeismar AO4

Pennsylvania cracker

73

0

10

20

2013 2014 2015 2016 Q1

0

100

200

300

2013 2014 2015

Premier LRS play in North America

~300,000 net acres with >5,000 well locations

Multiple areas de-risked + ready for development

Moving to longer laterals + well-pad activity


Permian Delaware Basin

%

Wolfcamp EUR improvement

$ million

Wolfcamp well cost improvement SHELL LEASES

TEXAS

NEW MEXICO

Drilling Completion Facilities Land + site prep

+130%

-60%


Oil products: Marketing led growth

Marketing led growth

Growth in China, India, Indonesia, Russia and Mexico

Retail presence in 70 countries + 43,000 sites

Marketing growth

North America 16,000

Europe 9,000

East 9,000

Africa 2,000

Latin America 7,000

Retail presence

Retail sites #

75


Refining projects

Improving our refining footprint

Canada - Scotford NW Europe – Pernis

High return projects improving site competitiveness

Scotford, Canada

Quest carbon capture + storage (CCS) start-up 2015

Hydrocracker debottlenecking

Expansion 14 kbbl/d

Start-up Q4 2016

Pernis: aromatics project

Pernis: solvent de-asphalting

Pernis: base-oil plant closure

Pernis, The Netherlands


Oil sands mining GJ per tonne produced

Energy intensity Canada AOSP

$ per barrel

Shell unit operating costs

0

2

4

6

2010 2011 2012 2013 2014 20150

20

40

60

2010 2011 2012 2013 2014 2015 Q116

Focus on emissions management

Aiming for equivalent intensity to average barrel

refined in US

Progress over a number of years:

Integrated mine planning

Start up of Quest CCS – 1 mtpa CO2

Successful turnarounds in 2015 and 2016

Significant focus on cost

Staff and contractor reductions of >700

Cash operating cost excl. energy Energy

DD&A (clean)

-50%


LNG: Australia

16.3 mtpa LNG

First Australian LNG

Operating since 1970s

Shell 16.67%

8.5 mtpa LNG

2010: FID

2014: first LNG

2015: commercial operations T1&T2

2016:100th cargo

Shell 50% T1 + 97.5% T2 (operator)

15.6 mtpa LNG

2009: FID

2016 : first LNG

Shell 25%

5.3 mtpa LNG + NGLs

2011: FID

LNG vessel under construction

Drilled and completed all wells

Shell 67.5% (operator)

North West Shelf (1989) Queensland Curtis (2015) Prelude FLNG (2018) Gorgon LNG (2016)


Integration with BG

BG portfolio: Australia + Brazil

Source: BG


Queensland LNG


0

50

100

150

200

2014-Jan 2015-Jan 2016-Jan

Brazil pre-salt

0

10

20

30

40

0

50

100

150

200

2015-Jan 2016-Jan

QCLNG terminal, Curtis island, Australia FPSO Cidade de Itaguaí, Brazil

1st LNG Train 1 Dec 2014

T2 start up Nov 2015

#

production Number of cargoes delivered in the quarter (RHS)

Cidade Itaguaí Q3 2015

FPSO Cidade de Maricá Q1 2016

Royal Dutch Shell plc June 7, 2016

Capital markets day 2016 Re-shaping Shell, to create a world-class investment case

“Let’s make the future”


royal dutch shell plc capital markets day 2016

Investor Relations