Media webcast presentation Royal Dutch Shell plc second quarter 2013 results
1. Copyright of Royal Dutch Shell plc 1 August, 2013 1
DELIVERING INNOVATIVE &
COMPETITIVE PERFORMANCE
Lubricants Zhuhai blending and filling plant, China, 2009
SECOND QUARTER 2013 RESULTS
ROYAL DUTCH SHELL PLC
1 AUGUST 2013
2. Copyright of Royal Dutch Shell plc 1 August, 2013 2
BC-10, offshore Floating Production Storage and Offloading facility, Brazil, 2013
PETER VOSER
CHIEF EXECUTIVE OFFICER
ROYAL DUTCH SHELL PLC
DELIVERING INNOVATIVE &
COMPETITIVE PERFORMANCE
3. Copyright of Royal Dutch Shell plc 1 August, 2013 3
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 companies. ‘‘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 23% 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
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’’,
‘‘intend’’, ‘‘may’’, ‘‘plan’’, ‘‘objectives’’, ‘‘outlook’’, ‘‘probably’’, ‘‘project’’, ‘‘will’’, ‘‘seek’’, ‘‘target’’, ‘‘risks’’, ‘‘goals’’, ‘‘should’’ 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, 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 potential litigation and regulatory measures as a result of climate changes; (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 forward-looking
statements. Additional factors that may affect future results are contained in Royal Dutch Shell’s 20-F for the year ended 31 December, 2012 (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, 1 August, 2013. 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. There can be no assurance that dividend payments will match or exceed those set out in this
presentation in the future, or that they will be made at all.
We use certain terms in this presentation, such as discovery potential, that the United States Securities and Exchange Commission (SEC) guidelines strictly prohibit us
from including in 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. You can also obtain this form from the SEC by calling 1-800-SEC-0330.
DEFINITIONS AND CAUTIONARY NOTE
4. Copyright of Royal Dutch Shell plc 1 August, 2013 4
Q2 2013 results
Q2 underlying earnings $4.6 billion; EPS -21%
CFFO $12.4 billion
Q2 2013 dividend $0.45 per share
Nigeria security challenges
Growth delivery
Maturing new options
5 major start-ups to come in ‘13-’14:
>$4 billion/year CFFO potential*
Capital discipline + long term approach
>$3 billion buy-back completed; $4-5 billion ’13
Pace of asset sales to increase
Refocusing in Nigeria and North America shales
SUMMARY
Mars-B platform sail-away to final location, July 2013
*$100/bbl Brent scenario 2015+
(Kashagan phase 1, Mars-B, Gumusut-Kakap, Cardamom, Repsol LNG)
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NIGERIA
Fire on the 24” TNP, Bodo West; April 2013
Illegal refinery, Krakrama; October 2012
NLNG Blockade, June/July 2013
LARGE SCALE CRUDE THEFT AND ASSOCIATED DAMAGE
LNG GAS SUPPLY DISRUPTION + BLOCKADE
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FLNG Prelude Keel laying, S Korea, 2013
SIMON HENRY
CHIEF FINANCIAL OFFICER
ROYAL DUTCH SHELL PLC
DELIVERING INNOVATIVE &
COMPETITIVE PERFORMANCE
8. Copyright of Royal Dutch Shell plc 1 August, 2013 8
3
5
7
75
80
85
90
95
100
Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013
0
2
4
6
0
2
4
Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013
UPSTREAM
million boe/day million tonnes
Oil
Gas
LNG Sales (RHS)
DOWNSTREAM
% availability volume
Refinery availability
Chemicals availability
Oil products sales (mln bbl/d)
Chemicals sales (million tonnes)
UPSTREAM
Growth from Pearl GTL, Malaysia and Australia
Nigeria sabotage
Royalty reporting change
Q2-Q2 underlying growth +2%
DOWNSTREAM
Chemicals: planned downtime in Europe and
North America
Underlying volume decrease
Q2 2013 OPERATIONAL PERFORMANCE
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GROUP UPSTREAM DOWNSTREAM/CORPORATE
12 MONTHS CASH PERFORMANCE
0 15 30 45 0 15 30 45
$ billion $ billion $ billion
0 15 30 45
CFFO ex WC movements Acquisitions
Dividend
Buybacks
Capex
Asset Sales
Working capital movements
BALANCING CASH GENERATION, INVESTMENT + PAYOUT
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PORTFOLIO DEVELOPMENT Q2 2013
Acquisition / entry
Notable discovery /
option progress
FID Start-ups
Divestment /
(Project re-
framing)
G/U Phase 2
(215 kboe/d)
TNP loop-line
(45 kboe/d)
Basrah Gas
Company
Nigeria
onshore review
North America
review
Vicksburg discovery
Zabazaba-4 appraisal
Stones
(50 kboe/d)
Additional 5%
equity: Abadi
FLNG (35%)
Repsol LNG
anti-trust clearance
FEED LNG import
facility Philippines
Bab Sour gas
(40%)
Poland: ~100
Retail stations
UPSTREAM
ENGINE
INTEGRATED
GAS
RESOURCES
PLAYS
DEEP-WATER
FUTURE
OPPORTUNITIES
DOWNSTREAM
ENGINE
3 FINAL INVESTMENT DECISIONS; FURTHER PORTFOLIO PROGRESS
11. Copyright of Royal Dutch Shell plc 1 August, 2013 11
-
10
20
30
0%
10%
20%
30%
2009 2010 2011 2012 13Q2
FREE CASH FLOW AND PAYOUT
$ billion
-10
0
10
20
2009 2010 2011 2012 13Q2
12 months
rolling
Free cash flow Dividend
Buyback
NET DEBT AND GEARING
$ billion
Gearing (LHS) Net Debt (RHS)
FINANCIAL FRAMEWORK
Gearing
range
2012-15 OUTLOOK:
CFFO $175-$200 BILLION
NET CAPEX $120-130 BILLION
* CFFO and capex outlook @$80-$100/bbl Brent and assumes improved US gas and
Downstream environment from 2012; CFFO excludes working capital movements
$ billion 2012-H1 2013 2012-15 Outlook*
Cash flow from operations 70 175-200
Net Capital Investment 49 120-130
2013 net capex ~$40 billion
Repsol LNG closing H2 ‘13
New investments + options: Stones
(100%), Elba, gas to transport, others
Includes ~$3 billion non-cash items
12. Copyright of Royal Dutch Shell plc 1 August, 2013 12
BC-10, offshore Floating Production Storage and Offloading facility, Brazil, 2013
PETER VOSER
CHIEF EXECUTIVE OFFICER
ROYAL DUTCH SHELL PLC
DELIVERING INNOVATIVE &
COMPETITIVE PERFORMANCE
13. Copyright of Royal Dutch Shell plc 1 August, 2013 13
OUTLOOK
LONGER TERM
GROWTH
PRIORITY
ENGINES
0
10
20
30
FUTURE
OPPORTUNITIES
RESOURCES
PLAYS
DEEP-WATER
INTEGRATED
GAS
UPSTREAM
DOWNSTREAM
$ billion
2013 ORGANIC CAPEX
FINANCIAL MANAGEMENT OF STRONG
PROJECT PIPELINE
DIVIDEND COMMITMENT
CAPITAL CEILING DRIVES HARD CHOICES
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MARS B TLP SECURED ON LOCATION
Mars B extends Mars field life to 2050+
Mars + satellites ~1 billion boe
TLP towed to location in July
Start-up on schedule for 2014
100 kboe per day
Shell 71.5% (operator)
STONES FINAL INVESTMENT DECISION MAY 2013
Gulf of Mexico Lower Tertiary reservoir
>250 million boe
FPSO design
Start-up 2016 -17
50 kboe per day
Shell 100% (operator)
DEEP WATER GULF OF MEXICO
PROGRESS H1 2013
Mars-B TLP July 2013 Stones: FPSO model with disconnectable buoy
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NORTH AMERICA RESOURCES PLAYS
REFOCUSSING OUR SHALES PORTFOLIO
0
1
2
0.0
0.2
0.4
2010 2011 2012 2013 1H
CAPEX
$ billion
PRODUCTION
million boe per day bcfe per day
LRS Dry gas
Divestments Acquisitions
Liquids Gas
PORTFOLIO WILL BE REFOCUSED
MATERIALITY
FEWER SHALES OPERATING THEATRES
BEST INTEGRATION OPTIONS
Gas
Liquids Rich Shales
-2
0
2
4
6
8
10
2010 2011 2012 2013 1H
Integration options/projects
GTL
Elba LNG
Gas-to-Chemicals
LNG to
Transport
LNG Canada
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BASRAH GAS COMPANY, IRAQ NIGERIA SPDC
$3.9 billion new 2013 investment in pipelines
and LNG feed gas
2008-2012 divestments $1.8 billion (Shell)
Strategic review of eastern onshore licenses
~80-100 kboe/d divestments potential (Shell)
Shell Nigeria: focus on deep water + gas
JV commenced operations 1st of May ‘13
Processing 450 million scfe/day gas
2 billion scfe/day potential
Value driven; no volume entitlement
FUTURE OPPORTUNITIES
IRAQ GAS JV; NEW SPDC NIGERIA INVESTMENTS
Divestment completed
SPDC JV
Khor Al Zubair NGL plant Basrah, Iraq, Q2 2013
2012-13 FIDs
TNP loopline
Gbaran-Ubie phase 2
FYIP
Southern Swamp
NLNG
50 km
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KASHAGAN DEVELOPMENT PHASE 1 OVERVIEW D ISLAND
300 kboed average production
2 train development; 2 year ramp-up sequence
Shell 16.81%; production operations delegated
to Shell and KMG
KASHAGAN START-UP
Train 2
Train 1
Raw gas
compressors
Well heads
Living quartersUtilities
2013 H2: START-UP OF PRODUCTION FACILITIES
Kashagan, D island facilities, April 2013
D islandBolashak onshore Offshore flare lit 07/13
50km
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Kashagan phase 1 Commencing start-up 2013 H2
Gumusut-Kakap Platform loaded out to final location
Mars-B
Topsides fitted
TLP secured on location
Cardamom
Installation of subsea manifold and
umbilical completed
Tie-in to Auger platform underway
Repsol LNG Completion 2013 H2
TOP 5 PROJECT START-UPS ‘13-’14
INTEGRATED
GAS
FUTURE
OPPORTUNITIES
DEEP-WATER
DEEP-WATER
DEEP-WATER
*$100/bbl Brent scenario, 2015+
>$4 BILLION/YEAR* CFFO POTENTIAL FOR SHELL
19. Copyright of Royal Dutch Shell plc 1 August, 2013 19
Q2 2013 results
Q2 underlying earnings $4.6 billion; EPS -21%
CFFO $12.4 billion
Q2 2013 dividend $0.45 per share
Nigeria security challenges
Growth delivery
Maturing new options
5 major start-ups to come in ‘13-’14:
>$4 billion/year CFFO potential*
Capital discipline + long term approach
>$3 billion buy-back completed; $4-5 billion ’13
Pace of asset sales to increase
Refocusing in Nigeria and North America
SUMMARY
Mars-B platform sail-away to final location, July 2013
*$100/bbl Brent scenario 2015+
(Kashagan phase 1, Mars-B, Gumusut-Kakap, Cardamom, Repsol LNG)
20. Copyright of Royal Dutch Shell plc 1 August, 2013 20
Groundbirch and Gundy, Canada, Upstream Americas, 2013
SECOND QUARTER 2013 RESULTS
QUESTIONS & ANSWERS
21. Copyright of Royal Dutch Shell plc 1 August, 2013 21
DELIVERING INNOVATIVE &
COMPETITIVE PERFORMANCE
Lubricants Zhuhai blending and filling plant, China, 2009
SECOND QUARTER 2013 RESULTS
ROYAL DUTCH SHELL PLC
1 AUGUST 2013