DELIVERING INNOVATIVE & COMPETITIVE PERFORMANCE

Transcription

1 DELIVERING INNOVATIVE & COMPETITIVE PERFORMANCE SECOND QUARTER 2013 RESULTS ROYAL DUTCH SHELL PLC 1 AUGUST 2013 Copyright of Royal Dutch Shell plc 1 August, Lubricants Zhuhai blending and filling plant, China, 2009

2 DELIVERING INNOVATIVE & COMPETITIVE PERFORMANCE PETER VOSER CHIEF EXECUTIVE OFFICER ROYAL DUTCH SHELL PLC Copyright of Royal Dutch Shell plc 1 August, BC-10, offshore Floating Production Storage and Offloading facility, Brazil, 2013

3 DEFINITIONS AND CAUTIONARY NOTE 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 and ). These factors also should be considered by the reader. Each forward-looking statement speaks only as of the date of this presentation, 1 August, 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 , available on the SEC website You can also obtain this form from the SEC by calling SEC Copyright of Royal Dutch Shell plc 1 August,

4 SUMMARY Q results Q2 underlying earnings $4.6 billion; EPS -21% CFFO $12.4 billion Q 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 Mars-B platform sail-away to final location, July 2013 *$100/bbl Brent scenario (Kashagan phase 1, Mars-B, Gumusut-Kakap, Cardamom, Repsol LNG) Copyright of Royal Dutch Shell plc 1 August,

5 NIGERIA Illegal refinery, Krakrama; October 2012 Fire on the 24 TNP, Bodo West; April 2013 NLNG Blockade, June/July 2013 LARGE SCALE CRUDE THEFT AND ASSOCIATED DAMAGE LNG GAS SUPPLY DISRUPTION + BLOCKADE Copyright of Royal Dutch Shell plc 1 August,

6 DELIVERING INNOVATIVE & COMPETITIVE PERFORMANCE SIMON HENRY CHIEF FINANCIAL OFFICER ROYAL DUTCH SHELL PLC Copyright of Royal Dutch Shell plc 1 August, FLNG Prelude Keel laying, S Korea, 2013

7 PRICES & MARGINS SHELL OIL & GAS REALISATIONS INDUSTRY REFINING MARGINS INDUSTRY CHEMICALS MARGINS $/barrel $/mscf $/barrel $/tonne Q212 Q312 Q412 Q113 Q Q212 Q312 Q412 Q113 Q213 0 Q212 Q312 Q412 Q113 Q213 Oil Gas (RHS) US West Coast US Gulf Coast coking Rotterdam complex Singapore US ethane Western Europe naphtha NE/SE Asia naphtha Copyright of Royal Dutch Shell plc 1 August,

8 Q FINANCIAL PERFORMANCE EARNINGS Q TO Q $ billion 6 $ billion Q Q UPSTREAM DOWNSTREAM (CCS) (1.0) (0.1) (0.0) CORPORATE & MINORITIES CCS NET EARNINGS CCS EARNINGS, $ PER SHARE CASH FROM OPERATIONS SHARE BUY BACKS DIVIDENDS DIVIDEND, $ PER SHARE Earnings CCS basis; earnings and EPS excluding identified items Copyright of Royal Dutch Shell plc 1 August,

9 Q OPERATIONAL PERFORMANCE UPSTREAM million boe/day 4 2 million tonnes UPSTREAM Growth from Pearl GTL, Malaysia and Australia Nigeria sabotage Royalty reporting change Q2-Q2 underlying growth +2% 0 Q Q Q Q Q Oil Gas LNG Sales (RHS) 0 DOWNSTREAM % availability volume DOWNSTREAM Chemicals: planned downtime in Europe and North America Underlying volume decrease Q Q Q Q Q Refinery availability Chemicals availability Oil products sales (mln bbl/d) Chemicals sales (million tonnes) 3 Copyright of Royal Dutch Shell plc 1 August,

10 Q clean Oil & Gas prices Ref. & Chem. Margins Marketing & Trading Nigeria Austr. Tax Liability FX Volume & Mix DD&A Exploration Cost Tax, Corp, Other Q clean Q EARNINGS EARNINGS Q TO Q $ billion Environment Choice Q OUTLOOK (0.3) (0.2) (0.4) (0.4) (0.5) (0.5) CONTINUED NIGERIA DOWNTIME INCREASED UPSTREAM MAINTENANCE: ~35 KBOE/D Q3-Q3 ~$1.3 BILLION EXPLORATION CHARGE 0 HIGHER CHEMICALS AVAILABILITY Q3-Q3 Copyright of Royal Dutch Shell plc 1 August,

11 12 MONTHS CASH PERFORMANCE GROUP UPSTREAM DOWNSTREAM/CORPORATE $ billion $ billion $ billion CFFO ex WC movements Working capital movements Asset Sales Capex Acquisitions Dividend Buybacks BALANCING CASH GENERATION, INVESTMENT + PAYOUT Copyright of Royal Dutch Shell plc 1 August,

12 UPSTREAM AMERICAS FINANCIALS BALANCE SHEET $ billion FINANCIAL PERFORMANCE (12 MONTHS ROLLING) $ billion pre-fid/arctic /Other Heavy oil Deep water 10 Resources plays - kboe/day Non productive leases Under construction Heavy oil / Arctic Deep water Earnings (clean) Capex Production (bottom axis scale) 2012 acquisitions On stream Resources plays GROWTH PORTFOLIO CASH GENERATION $5 BLN CFFO 12 MONTHS EARNINGS IMPACTED BY GROWTH COSTS Copyright of Royal Dutch Shell plc 1 August,

13 PORTFOLIO DEVELOPMENT Q FUTURE OPPORTUNITIES Acquisition / entry Notable discovery / option progress FID G/U Phase 2 (215 kboe/d) TNP loop-line (45 kboe/d) Start-ups Basrah Gas Company Divestment / (Project reframing) Nigeria onshore review RESOURCES PLAYS North America review DEEP-WATER Vicksburg discovery Zabazaba-4 appraisal Stones (50 kboe/d) INTEGRATED GAS Additional 5% equity: Abadi FLNG (35%) Repsol LNG anti-trust clearance FEED LNG import facility Philippines UPSTREAM ENGINE Bab Sour gas (40%) DOWNSTREAM ENGINE Poland: ~100 Retail stations 3 FINAL INVESTMENT DECISIONS; FURTHER PORTFOLIO PROGRESS Copyright of Royal Dutch Shell plc 1 August,

14 FINANCIAL FRAMEWORK FREE CASH FLOW AND PAYOUT $ billion OUTLOOK: CFFO $175-$200 BILLION NET CAPEX $ BILLION Q2 12 months rolling Free cash flow Dividend Buyback $ billion 2012-H Outlook* Cash flow from operations Net Capital Investment NET DEBT AND GEARING 30% 20% 10% 0% Gearing range Q2 Gearing (LHS) Net Debt (RHS) $ billion 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 * CFFO and capex Brent and assumes improved US gas and Downstream environment from 2012; CFFO excludes working capital movements Copyright of Royal Dutch Shell plc 1 August,

15 DELIVERING INNOVATIVE & COMPETITIVE PERFORMANCE PETER VOSER CHIEF EXECUTIVE OFFICER ROYAL DUTCH SHELL PLC Copyright of Royal Dutch Shell plc 1 August, BC-10, offshore Floating Production Storage and Offloading facility, Brazil, 2013

16 OUTLOOK 2013 ORGANIC CAPEX $ billion 30 FUTURE OPPORTUNITIES LONGER TERM RESOURCES PLAYS 20 DEEP-WATER GROWTH PRIORITY FINANCIAL MANAGEMENT OF STRONG PROJECT PIPELINE DIVIDEND COMMITMENT CAPITAL CEILING DRIVES HARD CHOICES INTEGRATED GAS 10 UPSTREAM ENGINES 0 DOWNSTREAM Copyright of Royal Dutch Shell plc 1 August,

17 DEEP WATER GULF OF MEXICO PROGRESS H MARS B TLP SECURED ON LOCATION Mars B extends Mars field life to Mars + satellites ~1 billion boe TLP towed to location in July Start-up on schedule for 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 kboe per day Shell 100% (operator) Mars-B TLP July 2013 Stones: FPSO model with disconnectable buoy Copyright of Royal Dutch Shell plc 1 August,

18 NORTH AMERICA RESOURCES PLAYS REFOCUSSING OUR SHALES PORTFOLIO CAPEX $ billion 10 LNG Canada LNG to Transport Gas-to-Chemicals 2 0 Gas Liquids Rich Shales Integration options/projects GTL Elba LNG -2 LRS Divestments PRODUCTION million boe per day H Dry gas Acquisitions bcfe per day PORTFOLIO WILL BE REFOCUSED MATERIALITY FEWER SHALES OPERATING THEATRES BEST INTEGRATION OPTIONS H 0 Liquids Gas Copyright of Royal Dutch Shell plc 1 August,

19 FUTURE OPPORTUNITIES IRAQ GAS JV; NEW SPDC NIGERIA INVESTMENTS BASRAH GAS COMPANY, IRAQ NIGERIA SPDC Divestment completed SPDC JV FIDs NLNG FYIP Gbaran-Ubie phase 2 Southern Swamp TNP loopline Khor Al Zubair NGL plant Basrah, Iraq, Q km JV commenced operations 1 st of May 13 Processing 450 million scfe/day gas 2 billion scfe/day potential Value driven; no volume entitlement $3.9 billion new 2013 investment in pipelines and LNG feed gas divestments $1.8 billion (Shell) Strategic review of eastern onshore licenses ~ kboe/d divestments potential (Shell) Shell Nigeria: focus on deep water + gas Copyright of Royal Dutch Shell plc 1 August,

20 KASHAGAN START-UP KASHAGAN DEVELOPMENT PHASE 1 OVERVIEW D ISLAND Train 2 Well heads Raw gas compressors Train 1 Utilities Living quarters 50km Bolashak onshore Offshore flare lit 07/13 D island 300 kboed average production Kashagan, D island facilities, April train development; 2 year ramp-up sequence Shell 16.81%; production operations delegated to Shell and KMG 2013 H2: START-UP OF PRODUCTION FACILITIES Copyright of Royal Dutch Shell plc 1 August,

21 TOP 5 PROJECT START-UPS FUTURE OPPORTUNITIES Kashagan phase 1 Commencing start-up 2013 H2 DEEP-WATER DEEP-WATER DEEP-WATER Gumusut-Kakap Mars-B Cardamom Platform loaded out to final location Topsides fitted TLP secured on location Installation of subsea manifold and umbilical completed Tie-in to Auger platform underway INTEGRATED GAS Repsol LNG Completion 2013 H2 >$4 BILLION/YEAR* CFFO POTENTIAL FOR SHELL *$100/bbl Brent scenario, Copyright of Royal Dutch Shell plc 1 August,

22 SUMMARY Q results Q2 underlying earnings $4.6 billion; EPS -21% CFFO $12.4 billion Q 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 Mars-B platform sail-away to final location, July 2013 *$100/bbl Brent scenario (Kashagan phase 1, Mars-B, Gumusut-Kakap, Cardamom, Repsol LNG) Copyright of Royal Dutch Shell plc 1 August,

23 QUESTIONS & ANSWERS SECOND QUARTER 2013 RESULTS Copyright of Royal Dutch Shell plc 1 August, Groundbirch and Gundy, Canada, Upstream Americas, 2013

24 DELIVERING INNOVATIVE & COMPETITIVE PERFORMANCE SECOND QUARTER 2013 RESULTS ROYAL DUTCH SHELL PLC 1 AUGUST 2013 Copyright of Royal Dutch Shell plc 1 August, Lubricants Zhuhai blending and filling plant, China, 2009