Simon Henry Deutschebank 23092010

8/6/2019 Simon Henry Deutschebank 23092010

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ROYAL DUTCH SHELL PLC

1 Copyright of Royal Dutch Shell plc 23/09/2010

10thANNUAL GLOBAL OIL & GAS CONFERENCEDEUTSCHE BANK LONDONSEPTEMBER 23, 2010

SIMON HENRY

CHIEF FINANCIAL OFFICER


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PRIORITIESEARNINGS

$ Bln

20

25

30

35

PROFITABLE GROWTH

COMPETITIVE PERFORMANCE

FINANCIAL PERFORMANCE AND PRIORITIES


CURRENT COST OF SUPPLY REPORTED EARNINGS

UPSTREAM

DOWNSTREAM

CORPORATE

DIVESTMENTS/OTHER

-5

0

5

10

2005 2006 2007 2008 2009 H1 2010

SHARPER DELIVERY


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0

40

80

120

1990 2000 2007 2020 2030

OIL & REFINING OUTLOOK

CRUDE OIL SUPPLY

Robust oil demand expected for mediumterm

Natural field decline drives sustainedindustry upstream investment

-

Global oil production million boe/d

NGLsUnconventional oil

Crude oil to be

developed or found

Currently producingfields


REFINING CAPACITY

range Refining industry excess capacity

0

24

6

8

0

5

10

15

2000 2002 2004 2006 2008 2010

Million bbl/d $/bbl

GLOBAL REFININGMARGINS (RHS)

SPARE REFINING CAPACITY

SOURCE: SHELL ANALYSIS

E


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HSSE & SUSTAINABLE DEVELOPMENT PRIORITY

STRENGTHENING DELIVERY & ACCOUNTABILITY

Injuries - TRCF per million working hours

FOCUS ON SAFETY: GOAL ZERO

1

2

3

4

'99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09

Projectprofitability

SafetyEnvironment Technology


mp oyees an contractors per m on wor ng ours; e operate ac t es

Operational Spills thousand tonnes

0

2

4

6

8

10

'00 '01 '02 '03 '04 '05 '06 '07 '08 '09

PARTNERSHIPS

Data 100% basis for companies and joint ventures where we are the operator

Social

OPERATIONAL SPILLS


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STRATEGY TIMELINE

NEW WAVE OF PRODUCTION

MATURING NEXT GENERATION

PROJECT OPTIONS


GROWTH

PERFORMANCE FOCUS

2009 2012 2015+


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MAINTAINING GROWTH INVESTMENTIN DOWN-CYCLE

GROWTH RETURNSPRUDENT BALANCE SHEET

0%

10%

20%

30%

Gearing range

0

10

20

30

40

0

50

100

150

200

2005 2006 2007 2008 2009 H1 2010

Gearing $ Bln %


Q205 Q206 Q207 Q208 Q209 Q210

OTHER

CAPITAL EMPLOYEDIN SERVICE

TOTAL

ROACEIN SERVICE

0-30% gearing range Net capital investment

2010: $33 billion2011-14: $25-27 billion

Selective acquisitions $7-8 billion asset sales 2010-11

MAINTAINING PRUDENT BALANCE SHEET

2009-12 cashflow from operations+50% at $60 bbl scenario+80% at $80 bbl scenario

Reduced costs + growth Surplus cashflow 2012 > $60 bbl after

dividends

FINANCIAL GROWTH


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PERFORMANCE FOCUS




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Previous structure. new top level structure 1stJuly 2009

UPSTREAMINTERNATIONAL

UPSTREAM AMERICAS

GAS & POWER

GROUP RESTRUCTURING COMPLETEDDELIVERY & EXCEEDING OUR TARGETS

E&P

Transition 2009

>$3.5 billion underlying cost savings

7,000 staff reduction

DELIVERING COST SAVINGS

$ BLN

MATURING NEXT GENERATIONPROJECT OPTIONS

NEW WAVE OF PRODUCTIONGROWTH

PERFORMANCE FOCUS


30

35

40

45DOWNSTREAM

PROJECTS &TECHNOLOGY

OIL SANDS

OIL PRODUCTS

CHEMICALS

FXPENSIONSPROVISIONS

COST SAVINGS

Q2 20104 QUARTERS ROLLING

2008

FASTER DECISIONS AND IMPLEMENTATION

CLEAR ACCOUNTABILITIES

COMPETITIVE FOCUS


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20

30

40



PERFORMANCE FOCUS

CONTINUOUS IMPROVEMENT:CAPTIAL EFFICIENCY

$7-8 BILLION

DIVESTMENTS 2010-11

CUMULATIVE DIVESTMENT PROCEEDS

$ BLN

DOWNSTREAM

UPSTREAM

CORPORATE

ASSET SALES TRACK RECORD DIVESTMENTS 2010


0

10

05 06 07 08 09 10-11E

EXIT FROM NON-CORE POSITIONS

CAPITAL EFFICIENCY

PORTFOLIO ENHANCEMENT

ON STREAMDOWNSTREAM UPSTREAM


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GROWTH DELIVERY




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NEW WAVE OF PRODUCTION GROWTH

KEY POST-FID PROJECTS

Kashagan Ph 1

Qatargas 4

Sakhalin II

Pearl GTL

Perdido

Corrib

Gjoa

Schoonebeek

AOSP-1

NATight gas

CaesarTon a

Iraq SAS

PortArthur

MATURING NEXT GENERATIONOF PROJECT OPTIONS


PERFORMANCE FOCUS

RESOURCE BASE

30

DESIGN

CONCEPTSELECTION

Longer-term upside


Gumusut

Pluto(Woodside)

BC-10

Gbaran

Ubie Ph 1 HarweelQarn Alam

GorgonT1-3

Amal Steam North Rankin B

OIL & GAS

INTEGRATED GAS

2009

2012+

2010-11

START-UP DATE

BongaNW

ON STREAM

DOWNSTREAM

ONSTREAM

0

10

20

ONSTREAM

~11 billion Boe resources

12 start-ups 2010-11

5 already on stream

UNDERCONSTRUCTION


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START-UP OF OIL SANDS EXPANSION

AOSP PHASE 1 EXPANSION

JACKPINE MINE ON STREAM H2 2010UPGRADER EXPANSION 2011



PERFORMANCE FOCUS

AOSP net cash flows - $ Bln (Shell) Kbbl/d

-2.5

0

2.5

-0.3

0.0

0.3 Base projectstart up

Expansion 1start up

PRODUCTION AND PROFITABILITY

200

100

-1

1

2

-2

0


FORECAST AT $ 70/BBL OIL PRICE

2000 2002 200 2006 2008 2010 2012 201

CAPITAL INVESTMENTCASH FROM OPERATIONSPRODUCTION (RHS)

AOSP-1 mine expansion on stream

Upgrader expansion start-up 2011~250,000 b/d capacity built in ~10 years

Next focus: Optimization + debottlenecking


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QATAR: NEW HEARTLAND FOR SHELL

SHELL POSITIONS IN QATAR

RAS LAFFAN

Pearl GTL + Qatargas 4 LNG ~3 bcf/d offshore gas development

Significant onshore infrastructure GTL LNG NGLs/Ethane

QatarGas 3/4

Pearl GTL

PROJECTS UNDER CONSTRUCTION



PERFORMANCE FOCUS


GTLLNG LIQUEFACTION

PEARL

-600

-400

-200

0

200

400

600

-6

-3

0

3

6

2005 2010 2015 2020 2025 2030

Shell Qatar cash flow (Pearl + Qatargas 4) - $ Bln Production Kboe/d

PRODUCTION & PROFITABILITY

CASH FLOW

PRODUCTION (RHS)

$ 70/bbl oil price


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PROFITABLE GROWTH

OIL & GAS PRODUCTION GROWTH

Kboe/d

1,000

2,000

3,000

4,000



PERFORMANCE FOCUS


OIL & GASENTITLEMENT:

ENTITLEMENT SHOWN AT $70/BBL

ADD A SECOND COLOUR: 2010+ START-UPS,WHI CH IS DEFINED AS THE 2010-11 + 2012-13 + 2014+ BARS FROM SLIDE 24 MARCH

ADDING TO UPSTREAM UNIT CASH FLOWS

$/Boe

$60/BBL

$80/BBL

0

20

40

2009 2012 2009+ start ups: 2012impact

Courtesy of Qatargas


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STRENGTHENING PORTFOLIO

OF NEW OPTIONSCHINA TIGHT GAS Jinqiu PSC: 4,000 km2 tight gas Fushun JAA: 4,000 km2

shale gas

IRAQ MAJNOON OIL FIELD DPSC signed Targeting 175 kboe/d ~ 2012

MATURING NEXT GENERATIONOF PROJECT OPTIONS


PERFORMANCE FOCUS


ARROW ENERGY PetroChina and Shell joint bid 7-8 mtpa CBM-LNG potential

SHELL/COSAN JV 50/50, ~4500 Retail Stations Biofuels in Brazil Shell 2nd generation biofuels tech

EAST RESOURCES 4,250 km2 net acreage Marcellus shale

EAGLE FORD 1,000 km2 net acreage Condensate rich shale

2010 DEALS 2010 DISCOVERIES


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30

UPSTREAM: INVESTING FOR GROWTH +PROFITABILITY

DESIGN

CONCEPTSELECTION

Longer-term upside

> 8 billion Boe

~ 35 new projects

Growth potential to 2020

Investment decisions driven byPortfolio fit

AffordabilityProfitability


0

10

20

2009

UNDERCONSTRUCTION

ONSTREAM

~9 billion Boe

3.1 mboe/d

18.5 mtpa LNG capacity

~25 countries

~11 billion Boe

2009-12 production +11%

2009-15 LNG capacity +40%

Prelude - Australia


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BIOFUELS: SHELL AND COSAN

Retail and aviation

Worlds largest biofuelsdistributor

Advanced biofuels

SHELL COSAN JV (50/50)

Leading position in Brazil fuel

distribution: ~4,500 stations Fully integrated leader in the biofuel

sector

Growth potential in sustainable

~1,600 retail stations in Brazil

Leading producer of sugar andsugarcane ethanol (~2 billionlitres)

21 plants and 2 under


Automated sugarcane harvesting

technology: IOGEN and

Codexis

biofuels

Advanced biofuels technology inBrazil and USA/Canada

construction


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SUMMARY

Upstream growth potential to ~2020 8 billion Boe resources; 35 new projects Financial growth in focus

MATURING NEXT GENERATION

OF PROJECT OPTIONS

2009-12:


Competitive performance Profitable growth Sharper delivery

Oil & gas growth +11%; LNG ~20% Cashflow growth: +50-80%GROWTH

Continuous improvement + capital efficiency

$7-8 billion asset sales 2010-11 Downstream restructuringPERFORMANCE FOCUS


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Q&A



Documents

Simon Henry Deutschebank 23092010