royal dutch shell plc capital markets day 2016
TRANSCRIPT
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
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.
Royal Dutch Shell | June 7, 2016 4
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
Royal Dutch Shell | June 7, 2016 5
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
Royal Dutch Shell | June 7, 2016 6
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
Royal Dutch Shell | June 7, 2016 7
“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
Royal Dutch Shell | June 7, 2016
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
Royal Dutch Shell | June 7, 2016 9
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
Royal Dutch Shell | June 7, 2016 10
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
Royal Dutch Shell | June 7, 2016
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
Royal Dutch Shell | June 7, 2016
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
Royal Dutch Shell | June 7, 2016 13
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
Future opportunities
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
Royal Dutch Shell | June 7, 2016 14
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
Royal Dutch Shell | June 7, 2016
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)
Royal Dutch Shell | June 7, 2016 16
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
Royal Dutch Shell | June 7, 2016 17
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
Royal Dutch Shell | June 7, 2016 18
Re-shape Shell
Future opportunities
Shales
New energies
~12 billion barrels resources + potential
Mature to ‘growth priority’
Energy transition themes
Explore + invest for longer term
Royal Dutch Shell | June 7, 2016 19
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
Royal Dutch Shell | June 7, 2016 20
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
Royal Dutch Shell | June 7, 2016
CFFO + Divestments
Attractiveness,
resilience
Dividends + Buybacks
0 – 30% gearing
through cycle
Royal Dutch Shell | June 7, 2016 22
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
Royal Dutch Shell | June 7, 2016 23
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
Royal Dutch Shell | June 7, 2016 24
Integration with BG
BG portfolio is delivering
Source: BG
Thousand boe per day
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
Royal Dutch Shell | June 7, 2016 25
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
Royal Dutch Shell | June 7, 2016 26
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
Royal Dutch Shell | June 7, 2016 27
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
Royal Dutch Shell | June 7, 2016 28
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
Royal Dutch Shell | June 7, 2016 29
Manage down-cycle
Deliver new projects
* 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
Million tonnes per annum
Cash operating cost <$15/boe
Tax rate ~35%
0
5
10
15
0
400
800
1200
2014-15 2016-17 2018+
Royal Dutch Shell | June 7, 2016 30
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
Royal Dutch Shell | June 7, 2016 31
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
Royal Dutch Shell | June 7, 2016 32
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%
Royal Dutch Shell | June 7, 2016 33
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
Royal Dutch Shell | June 7, 2016 34
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
Deliver new projects
$ 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
Royal Dutch Shell | June 7, 2016
Royal Dutch Shell | June 7, 2016 36
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
Royal Dutch Shell | June 7, 2016 37
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
Royal Dutch Shell | June 7, 2016 38
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
Royal Dutch Shell | June 7, 2016 39
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
Royal Dutch Shell | June 7, 2016
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
Royal Dutch Shell | June 7, 2016
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
Royal Dutch Shell | June 7, 2016 42
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
Royal Dutch Shell | June 7, 2016 43
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
Royal Dutch Shell | June 7, 2016
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
Royal Dutch Shell | June 7, 2016
Royal Dutch Shell | June 7, 2016 46
Upstream Cash engine
‘Fit for future’ cost + uptime programme
Deliver profitable growth
Conventional oil & gas Deep water Shales
Future opportunities
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
Royal Dutch Shell | June 7, 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)
Royal Dutch Shell | June 7, 2016
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
Royal Dutch Shell | June 7, 2016 49
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
Royal Dutch Shell | June 7, 2016 50
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
Thousand boe per day
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
Royal Dutch Shell | June 7, 2016 51
Deep water Capital efficient + profitable growth
Thousand boe per day
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+
Royal Dutch Shell | June 7, 2016 52
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
Royal Dutch Shell | June 7, 2016 53
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
Thousand boe per day
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
Royal Dutch Shell | June 7, 2016 54
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:
Royal Dutch Shell | June 7, 2016 55
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
Royal Dutch Shell | June 7, 2016 56
Upstream Cash engine
‘Fit for future’ cost + uptime programme
Deliver profitable growth
Conventional oil & gas Deep water Shales
Future opportunities
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
Royal Dutch Shell | June 7, 2016
Royal Dutch Shell | June 7, 2016 58
Integrated Gas Cash engine
Focus on: Cash + returns Create + secure new
demand Moderate growth
New energies opportunities
Integrated Gas New energies
Future opportunities
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
Royal Dutch Shell | June 7, 2016
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
Royal Dutch Shell | June 7, 2016 60
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
Royal Dutch Shell | June 7, 2016 61
LNG: Shell + BG
Million tonnes per annum
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
Royal Dutch Shell | June 7, 2016 62
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
Royal Dutch Shell | June 7, 2016 63
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
Royal Dutch Shell | June 7, 2016 64
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
Royal Dutch Shell | June 7, 2016 65
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
Royal Dutch Shell | June 7, 2016
Royal Dutch Shell | June 7, 2016
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
Royal Dutch Shell | June 7, 2016
Royal Dutch Shell | June 7, 2016
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
Royal Dutch Shell | June 7, 2016
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
Royal Dutch Shell | June 7, 2016
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
Royal Dutch Shell | June 7, 2016 72
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
Royal Dutch Shell | June 7, 2016
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
Royal Dutch Shell | June 7, 2016 74
Permian Delaware Basin
%
Wolfcamp EUR improvement
$ million
Wolfcamp well cost improvement SHELL LEASES
TEXAS
NEW MEXICO
Drilling Completion Facilities Land + site prep
+130%
-60%
Royal Dutch Shell | June 7, 2016
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
Royal Dutch Shell | June 7, 2016 76
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
Royal Dutch Shell | June 7, 2016 77
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%
Royal Dutch Shell | June 7, 2016 78
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)
Royal Dutch Shell | June 7, 2016 79
Integration with BG
BG portfolio: Australia + Brazil
Source: BG
Thousand boe per day
Queensland LNG
Thousand boe per day
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 | June 7, 2016