royal dutch shell plc delivering new growth - new york investor day september 9, 2011

ROYAL DUTCH SHELL PLC

INVESTOR DAY

NEW YORKSEPTEMBER 2011SEPTEMBER 2011

1 Copyright of Royal Dutch Shell plc 9 September 2011


PETER VOSERCHIEF EXECUTIVE OFFICERCHIEF EXECUTIVE OFFICER


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’’, “scheduled”, ‘‘estimate’’, ‘‘expect’’, ‘‘goals’’, ‘‘intend’’, ‘‘may’’, ‘‘objectives’’, ‘‘outlook’’, ‘‘plan’’, ‘‘probably’’, ‘‘project’’, ‘‘risks’’, ‘‘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 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 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 p p y q y y y pforward-looking statements. Additional factors that may affect future results are contained in Royal Dutch Shell’s Annual Presentation / Form 20-F for the year ended December 31, 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, 9 September 2011. 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.

We may have used certain terms in this presentation that United States Securities and Exchange Commission (SEC) strictly prohibits us from including in our filings with the SEC. f


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.

ENERGY OUTLOOK

400

Mln Boe/d

GLOBAL ENERGY MIX

Industry outlook

300

400

Hydrocarbons dominate outlook

Growth required in all sectors of energy mix

Energy policy + sustained investment

200

Energy policy + sustained investment

Shell

d l l d

0

100

1980 1990 2000 2010 2020 2030 2050

Crude oil & oil products

Natural gas & LNG

Biofuels, wind, carbon capture + storage1980 1990 2000 2010 2020 2030 2050

PetrochemicalsOILGAS

COALBIOMASSWIND

SOLAR

OTHER RENEWABLES

NUCLEAR

SHELL ACTIVITIES


OTHER RENEWABLES

SHELL ESTIMATES

LEADER IN A GLOBAL GROWING GAS MARKET

GAS DEMAND GROWTH

30

+189%+23%

Mln Boe/d

SHELL

LNGTraditional gas

20

25

+189%

+29%

gas

10

15

+89%

86%008 20

35

0

5

+86%20

Tight gasGas-to-liquids

0

North America

Europe Asia Pacific

Middle East

Other


SOURCE: INTERNATIONAL ENERGY AGENCY; WORLD ENERGY OUTLOOK 2011 GOLDEN AGE OF GAS

SHELL

Injuries – TRCF per million working hours Million working hours

‘GOAL ZERO’ ON SAFETY

9005

500

600

700

800

1

2

3

4

Customer and partner focus

Profitability & performance

400

500

0'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 H1

11WORKING HOURS (RHS) TRCF

Sustainability & growth

Value added technology

Focus on personal and process safetyIndustry leader in Sustainable Development y p


EMPLOYEES AND CONTRACTORS PER MILLION WORKING HOURS; SHELL OPERATED FACILITIES

STRATEGY & CAPITAL ALLOCATION

STRATEGY CAPITAL INVESTMENT

UpstreamP fi bl h i id 150

$ Bln

Profitable growth; price upside

>80% of total capital spending

Sustained exploration investment100

150

DownstreamStable capital employed

Fewer refineries; upgrade chemicals assets 50

UPSTREAM

More concentrated marketing positions

Financial outlookGenerating surplus cash flow through cycle

02007-10 2011-14

DOWNSTREAM

Generating surplus cash flow through cycle

Investing for growth; competitive payout

Substantial cash flow growth

h h h l


Growth Investment – Through Cycle Returns

FINANCIAL PERFORMANCE AND PRIORITIES

EARNINGS

$ Bln

35

PRIORITIES

25

30 PERFORMANCE FOCUS

10

15

20

NEW WAVE OF PRODUCTION GROWTH

0

5

MATURING NEXT GENERATION OF

UPSTREAM

DOWNSTREAM

CORPORATE

DIVESTMENTS/OTHER

-52007 2008 2009 2010 H1 '11

PROJECT OPTIONS


CURRENT COST OF SUPPLY EARNINGS

/

ROYAL DUTCH SHELLPERFORMANCE FOCUS


PERFORMANCE FOCUS

CONTINUOUS IMPROVEMENT EXAMPLE: CAPITAL EFFICIENCY

Asset sales - $ Bln (cumulative)

30 UPSTREAM

CORPORATE

Cost focus

10

20

30DOWNSTREAM

UPSTREAM

Continuous improvement

Operational excellenceSimplification

EXAMPLE: WELLS MANUFACTURING JV WITH CNPC

0

10

07 08 09 10 1H11

EXAMPLE: WELLS MANUFACTURING JV WITH CNPC

Capital efficiency


DOWNSTREAM VALUE CHAINS

Retail

RefiningBusiness-to-

Business

Chemicals

Supply & Distribution

Lubricants

Chemicals

3 keys to winning

Trading


Operational excellence – Concentrating the portfolio – Selective growth

GLOBAL MARKETING PERFORMANCE

100%

MARKETING REFOCUS

Refocused portfolio + business model

0%

50%

'09 '10 '11 YTD

'12 '09 '10 '11 YTD

'12 '09 '10 '11 YTD

'12 '09 '10 '11 YTD

'12

Heartlands + selective growth• Brazil, Asia Pacific, others

Brand strength + product innovation

BRAND STRENGTH #1 GLOBAL MARKETER

Aviation Fuelsmarkets

Lubricantsmarkets

Retailsites

Bulk Fuelsmarkets

DIRECT EXITSINDIRECT/PART EXIT

g p

15

20

% Global Brand Preference

RetailLargest IOC fuels retailer# 1 IOC brand preference

0

5

10

# 1 IOC brand preference

Lubricants# 1 global market share

Biofuels# 1 IOC Bi f l d di ib


SOURCE: GLOBAL BRAND TRACKER

Q2 2010 Q2 2011# 1 IOC Biofuels producer +distributor

CHEMICALS PORTFOLIO + PERFORMANCE

Base chemicals and derivatives portfolio

l h f

EARNINGS

CCS Earnings - $ Bln2

Plant integration with refineries

Growth potential through advantaged feedstock

0 5

1

1.5

USGC BASE CHEMICALS SHIFT TO GAS FEEDS

Product innovation

INTEGRATED CHEMICALS

0

0.5

2005 2006 2007 2008 2009 2010 H1 2011

150

250

350

450Evolution of USGC industry cash margins + feedstock slate

TotalMoerdijk/P i

SADAF Nanhai

MossmoranScotford

US

-50

50

2007 2008 2009 2010

Advantaged Gas EthaneLiquids USGC Ethane margin

Total feedslateUS Gulf

Coast

Pernis

Singapore

K it

Qatar China


Liquids USGC Ethane marginUSGC Naphtha marginAL JUBAIL PLANT – SAUDI ARABIA

CCS EARNINGS EXCLUDING IDENTIFIED ITEMS

Key siteOptions

REFINING PORTFOLIO + PERFORMANCE

400

FOCUS ON LARGE INTEGRATED SITES

Refinery capacity Kbbl/d (100%)

IMPROVING PROCESS SAFETY

# API process incidents

100

200

300EXITS 2002-2011 YTD

LEAN MANUFACTURING PORTFOLIO REDUCTION

0

100

2007 2008 2009 2010 H1 2011

2

3

4

5

Refinery capacity Mln bbl/d (100%)

100%

110%

Refining costs index

-11%

-30%4.7

3.3

0

1

2

2002 2006 2009 2011 YTD* 201280%

90%

2008 2009 2010 EUROPE & AFRICA ASIA PACIFICAMERICAS


SUBJECT TO SUCCESSFUL COMPLETION OF ANNOUNCED DEALS

Focus on larger, advantaged sites – Operating performance + costEXCLUDES PORTFOLIO EFFECTS

GROWTH DELIVERYBIOFUELS GROWTH: BRAZILGLOBAL BIOFUELS GROWTH POTENTIAL RAìZEN JOINT VENTURE

Kboe/d production

3,000 SOYBEAN RAPESEEDPALM OIL OTHER

Marketing JV~4,500 retail sites; ~10% of Shell world-

1,000

2,000

PALM OIL OTHERCORN SUGARCANE

4,500 retail sites; 10% of Shell worldwide portfolio~19% market share in BrazilRebranding and enhanced customer ff

RAìZEN: LARGEST IOC BIOFUELS PRODUCER

02005 2010 2015 2020

offeringSynergies + growth potential

Bi f l JV

lowest CO2

Brazilian sugarcane ethanol

Biofuels JVLeading Brazil and Top 5 global ethanol player

• > 30 kbd ethanol production capacity

2nd generation technology portfolio

most sustainable

most cost competitive

of today’s biofuelsp p y

• > 80 kbd potential ~ 5 years

Shell world-wide trading opportunities


2nd generation technology portfolio

ROYAL DUTCH SHELLGROWTH DELIVERY


GROWTH DELIVERYCONVERTING RESOURCES TO PRODUCTION

35

Bln Boe resources

Longer-term upsideNA tight gas

Australia

8 8 1025 PreludePearls (CMOC)

PreludeAOSP debottleneck

SchiehallionMalikai

NA tight gas

Cardamom DeepAppomattox

Vito

10 11 1115

GorgonNA tight gas

Sakhalin

NA tight gasClair Ph2

Pearl GTLQG-4

h b k

Mars-BBC-10 Phase2

AOSP-Exp 1Gjoa

P did9 9 10

5

5BC-10 Schoonebeek

Oman EOROthers

PerdidoGbaran UbieNA tight gas

-52008 2009 2010

M i t i i U t t

PRODUCTIONON-STREAM STUDYUNDER CONSTRUCTION2011 PROGRESS


Maintaining Upstream momentum

GROWTH DELIVERY2011 START-UPS

Canada - Scotford upgrader

INNOVATIVE TECHNOLOGY, FULL VALUE CHAIN, LONG-LIFE RETURNS

Qatar – Qatargas 4 LNG shipment

Qatar - Pearl

~ $30 bln capital investment>400,000 boe/d* for Shell


* PEAK PRODUCTION; SHELL SHARE: $80 OIL PRICE SCENARIO

Underpins target for 3.1 - 3.5 mln boe/d 2009-12

GROWTH DELIVERYLAUNCHING NEW UPSTREAM PROJECTS

Cardamom – USA50 kboe/d; 100% Shell

2010 + 2011 YEAR-TO-DATE INVESTMENT DECISIONS

Sabah Gas Kebabangan (KBB) - Malaysia130 kboe/d; 30% Shell; PSC

SchiehallionAOSP Debottlenecking SchiehallionAOSP Debottlenecking 1st FID

NA tight gas (various)

Mars-BCardamom

Prelude FLNG – Australia110 kboe/d; 100% Shell

Sabah Gas KBB

BC-10 Phase 2

Mars-B – USA100 kboe/d; 72% Shell

Prelude FLNG

Cardamom

14 FIDs taken ~400,000 boe/d* potential


, / pDriving 3.7 mln boe/d target 2014 and longer term growth

* PEAK PRODUCTION; SHELL SHARE ENTITLEMENT AT $80/BBL; 2014 OUTLOOK ASSUMES LICENCE EXTENSIONS + 2010 ANNOUNCED ASSET SALES

GROWTH DELIVERY DEEPWATER UNDER CONSTRUCTION

Development concept

MARS-B (GULF OF MEXICO) BC-10 PHASE 2 (CAMPOS, BRAZIL) CARDAMOM (GULF OF MEXICO)

Phase 1 FPSO Surface System and Subsea View

TLP capacity ~100 kboe/d

West Boreas + South Deimos

W t d th 950 t

Peak production ~30 kboe/d

Argonauta O-North field

W t d th 1 600 t

Peak production ~50 kboe/d

Tie back to Auger platform

W t d th 830 tWater depth 950 meters

Shell 72% (operator)

Water depth 1,600 meters


Water depth 830 meters



Part of >250 kboe/d deepwater production under construction

GROWTH DELIVERYAUSTRALIA LNG UNDER CONSTRUCTIONPRELUDE FLOATING LNG GORGON LNG

First FID ever on Floating LNG

110 kboe/d peak production

Greenfield LNG on Barrow Island

3 x 5 MTPA LNG trains and domestic gas plant

3.6 mtpa LNG capacity + condensate/LPG

2007 discovery; 2011 FID


Carbon capture and storage 4 mtpa

First LNG in 2014

Shell 25%


Part of 8.3 mtpa under construction

ROYAL DUTCH SHELLMATURING NEXT GENERATION PROJECT OPTIONS


MATURING NEXT GENERATION OF PROJECT OPTIONSADDING NEW RESOURCESEXPLORATION & BUSINESS DEVELOPMENT ADDING NEW RESOURCES AT LOW COST

Bln boe2008

Canada - Duvernay Kazahkstan - Auezov

4

62009

GoM – Cardamom

GoM - Vito

Norway Fram

Canada Duvernay Kazahkstan Auezov

Nigeria - Offshore

Brunei – ML-J206T1

Australia – Iago 2

Australia – Libra 1

US Haynesville

GoM – West Boreas

<$2/boe entry cost

DISCOVERY

2

Norway – Fram

Canada – Groundbirch

Australia - Concerto

Australia - Arrow

ACQUISITION

US - Haynesville

0GoM – South Deimos

Brazil – Massa

US - East Resources

US - Eagle Ford

EXPLORATION PROSPECT

-2'08 '09 '10

EXPLORATION ACQUISITION/NEGOTIATED ENTRY2010

2011/12

GoM – Appomattox

Brazil – Gato do Matto

Brunei - Geronggong Alaska

China – Tight gas

USA - GoM

French Guyana

Brazil - DW

Brunei

Australia - NWS


DISPOSALS PRODUCTION

DRILLING TECHNOLOGY UNLOCKS NEW GROWTH

GroundbirchDeep BasinFoothills

CHINA + AUSTRALIA JVs WITH PETROCHINANORTH AMERICA

Changbei tight gas

North

Pinedale

Marcellus

Foothills

Daning CBM

North Shilou CBM

hHaynesville JVEagle Ford

Jinqiu tight gas

Fushun tight gas

ACREAGE

TIGHT GAS

COAL BED METHANE

Arrow Energy LNG

COAL BED METHANE


China: Changbei drilling rig

MATURING NEXT GENERATION OF PROJECT OPTIONS MATURING NEW PROJECTSINVESTMENT OPTIONS

Long-term growth and investmentArrow - Australia Appomattox - USA

Options to flex annual spending with macroCapex and growth outcomes

Investment decisions driven by

Portfolio fitAffordability

Tight Gas – N. America Qatar Chemicals

AffordabilityProfitability

Vito - USA Gbaran Ubie Ph2 - Nigeria


Portfolio can support profitable growth to ~2020


FINANCIAL FRAMEWORK UPDATE

SIMON HENRYCHIEF FINANCIAL OFFICERCHIEF FINANCIAL OFFICER


INVESTMENT PROGRAMME

100% 100%100%

UPSTREAM

% Capital investment

DOWNSTREAM

% Capital investment

75% 75%

60%

80%

EXPLORATION

HEAVY OIL & EOR

TIGHT GAS

SOUR

25%

50%

25%

50%

20%

40%

INTEGRATED GAS

DEEPWATER

0%2007-10 2011-14

0%2007-10 2011-14

0%2007-10 2011-14

TRADITIONAL

AMERICASOTHERSREFININGCHEMICALS MARKETING

Sustained growth investment$25 - $27 bln net capex 2011-2014

ASIA PACIFICEUROPE


Capital discipline2012-14 CAPITAL INVESTMENT EXCLUDES IRAQ FULL FIELD DEVELOPMENTS

CONVERTING INVESTMENT TO CASHFLOW

50$ Bln

INVESTING FOR NEW GROWTH DELIVERING CASHFLOW GROWTH

$/bbl BRENT

$80/bbl60

30

40$80/bbl

$96/bbl

$60/bbl

40

50

60

10

20

$62/bbl

20

30

0

10

0

10

2007 2008 2009 2010 2011E 2012E 2009 2012target

H1’11(12 months rolling)

CASH FLOW FROM OPERATIONS EXCL. NET MOVEMENTS IN WORKING CAPITAL

NET CAPITAL INVESTMENT

(2009-12 average)

CAPITAL UNDER CONSTRUCTION EXPLORATION & EVALUATION

gg

Rebalancing financial framework into surplus cashflow


Maintaining growth investment and competitive payoutCASH FLOW TARGETS ASSUME IMPROVED DOWNSTREAM AND NATURAL GAS ENVIRONMENT 2009-2012

CASH FLOW AND BALANCE SHEET

CASH PERFORMANCE 12 MONTHS TO H1 2011 GEARING

30%

$ Bln %

60SOURCES USES

20%Gearing range40

50

10%20

30

0%0

10

Q206 Q207 Q208 Q209 Q210 Q211

CAPEX + EQUITY ACC. INVESTMENTS ACQUISITIONS

CASH FLOW FROM OPERATIONS EXCL. NET MOVEMENTS IN WORKING CAPITALASSET SALES


PAY-OUT

COMPETITIVE PAYOUT

1850

MAJORS DIVIDEND PAYOUT RATIOS

$ Bln

SHELL PAYOUT

%

14

16

35

40

45

8

10

12

25

30

35

4

6

10

15

20

0

2

2006 2007 2008 2009 2010 2011 H10

5

COMPETITORS

DIVIDENDS DECLARED of which: SCRIP


CLEAN EPS, 4 QUARTERS ROLLING TO H1 2011DIVIDENDS DECLARED, of which: SCRIP

BUYBACKS

MATURING NEW PROJECTS: 2011-12

LinnormAlaska

Clair Phase 2AOSP Debottlenecking

1st FID Fram

Schiehallion Redev

Linnorm

Quest CCSCanadaCarmon Creek

Pearls-KhazarTempa Rossa

Appomattox

VitoCardamom Deep

Gulf of Mexico

Fr Guiana Saudi ArabiaOman

Kazakhstan

Philippines

China

Majnoon & West Qurna FFD

Stones

China refining/chemicalsQatar Chemicals

US Onshore

Sabah Gas KBB

Prelude

Rabab/Harweel

BrowseMalikai

Vito

Erha North Ph3

Bonga SW

PhilippinesBrunei

Wheatstone

FID TARGETFEED TARGET

2011-12 2011-12EXPLORATION

Arrow Energy LNGBrazil Australia

NWS - GWF

2011-12


FID TARGETFEED TARGETEXPLORATION2011 DELIVERY

FINANCIAL FRAMEWORK

CASH PERFORMANCE

~50-80% CFFO increase 2009-12 ($60 $80 oil price scenarios)($60-$80 oil price scenarios)Surplus cash flow 2012 at $60/bbl

INVESTMENTPAY-OUT$25-27 bln net capex /year Up to $3 bln asset sales/year 2012+Affordability, profitability, portfolio

Dividend linked to resultsScrip dividend option~$10 billion expected 2011

BALANCE SHEET

0 – 30% gearing through cycleB l h t d iBalance sheet underpins investmentCapital employed grows steadily


CFFO TARGETS ASSUME IMPROVED DOWNSTREAM AND NATURAL GAS ENVIRONMENT 2009-2012

Competitive returns – cash generation – growth investment


PETER VOSERCHIEF EXECUTIVE OFFICERCHIEF EXECUTIVE OFFICER


OUTLOOK

2011-12 OUTLOOK

PERFORMANCE FOCUS

PRIORITIES

Continuous improvement embedded in ShellPERFORMANCE FOCUS

2011 start-ups: >400kboe/d*; $30bn

Up to $8 billion asset sales; capital efficiency

NEW WAVE OF PRODUCTION GROWTH

investment

Selective Downstream growth

On track for 2012 cashflow and production

MATURING NEXT GENERATION OF PROJECT OPTIONS

>400kboe/d* new projects launched 2010-11

U t th t ti l t 2020

targets

PROJECT OPTIONS Upstream growth potential to ~2020


Competitive performance – Profitable growth – Sharper delivery* PEAK PRODUCTION; SHELL SHARE: $80 OIL PRICE SCENARIO

ROYAL DUTCH SHELLNEW YORK INVESTOR DAY

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royal dutch shell plc delivering new growth - new york investor day september 9, 2011

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