Slide 1: Annual Roundtable for Socially Responsible Investors
ANNUAL ROUNDTABLE FOR SOCIALLY RESPONSIBLE INVESTORS ROYAL DUTCH SHELL PLC MAY 11, 2016 Copyright of Royal Dutch Shell plc May 11, 2016 1
Slide 2: Ben van Beurden, Chief Executive Officer
BEN VAN BEURDEN CHIEF EXECUTIVE OFFICER ROYAL DUTCH SHELL PLC Copyright of Royal Dutch Shell plc May 11, 2016 2
Slide 3: Definitions & Cautionary Note
DEFINITIONS & CAUTIONARY NOTE The New Lens Scenarios are part of an ongoing process used in shell for 40 years to challenge executives’ perspectives on the future business environment. We base them on plausible assumptions and quantification, and they are designed to stretch management to consider e
Slide 4: Ben van Beurden, Chief Executive Officer
BEN VAN BEURDEN CHIEF EXECUTIVE OFFICER ROYAL DUTCH SHELL PLC Copyright of Royal Dutch Shell plc May 11, 2016 4
Slide 5: Agenda
AGENDA 09:00 – 09:45 Ben van Beurden and Hans Wijers 09:45 – 10:15 Harry Brekelmans 10:15 – 11:00 Q+A 11:00 – 11:15 Coffee break 11:15 – 13:30 Panel sessions Q&A (40 min each, 5 minutes to rotate) 13:30 – 14:30 Lunch Copyright of Royal Dutch Shell plc May 11, 2016 5
Slide 6: Panels
PANELS Panel A: New Energies and low carbon technologies / Group HSSE: Harry Brekelmans (Director Projects and Technology), and Matthew Tipper (VP Alternative Energies). Panel B: Conventional oil + gas: Bart van de Leemput (EVP Upstream International Operated), Osagie Okunbor (Managing Director SPDC
Slide 7: Environmental, Social and Governance
ENVIRONMENTAL, SOCIAL AND GOVERNANCE SRI programme SRI annual roundtable Ongoing engagement + roadshows SRI themed site visits – Alaska and Oil Sands + Quest in 2015 Governance programme Remuneration committee roadshows Chairman roadshows AGM www.shell.com/esg Copyright of Royal Dutch Sh
Slide 8: Transparency
TRANSPARENCY Sustainability reporting 1997 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Portfolio resilience Revenue transparency Nigeria spills website Oil sands performance report Nigeria briefing notes CDP Sustainability report Copyright of Royal Dutch Shell plc May 11, 2016 8
Slide 9: Nigeria SPDC Joint Venture
NIGERIA SPDC JOINT VENTURE 2015 Overview SPDC JV* spills Restructuring onshore footprint Thousand tonnes 2010 – 2015 divested 13 OMLs Targeted investments: gas and pipelines Widespread oil theft remains a challenge 7 fatalities, 20 kidnappings in 2015 OML4 OML40 volume of operational spill
Slide 10: Groningen Earthquakes – Netherlands Gas
GRONINGEN EARTHQUAKES – NETHERLANDS GAS 2015 Key Milestones 2012-2015 Earthquakes Hazard and risk assessment submitted Set up of independent organisation for damage 0 10 20km Loppersum repairs and to make homes safer Multi-year initiative from National Coordinator Government decisions €1.2bn
Slide 11: Shareholder Resolutions
SHAREHOLDER RESOLUTIONS 2015 “Aiming For A” 2016 “Follow-this.org” Strategic resilience for 2035 and beyond Shell will become a renewable energy company Supported By Board + shareholders Not considered by Board to be in best interests of Builds on previous Shell disclosures Company and shareho
Slide 12: 2015 Shareholder Resolution Report Out
2015 SHAREHOLDER RESOLUTION REPORT OUT Ongoing reporting Annual report Sustainability www.shell.com/ Resolution Information Request and 20F report ghg CDP submission Ongoing emissions management Asset portfolio resilience to post- 2035 scenarios Low-carbon R&D and investment strategies
Slide 13: Hans Wijers, Senior Independent Director and Chair of the CSRC
HANS WIJERS SENIOR INDEPENDENT DIRECTOR AND CHAIR OF THE CSRC ROYAL DUTCH SHELL PLC Copyright of Royal Dutch Shell plc May 11, 2016 13
Slide 14: Corporate and Social Responsibility Committee
CORPORATE AND SOCIAL RESPONSIBILITY COMMITTEE CSRC MEMBERS HANS WIJERS SIR NIGEL SHEINWALD PATRICIA WOERTZ Chair of CSRC Responsibilities: Review policy and performance for Shell General Business Principles and Code of Conduct Review management of HSSE and social impacts of projects and operatio
Slide 15: CSRC Activity
CSRC ACTIVITY 2015 Activity 2016 Planned visits Gulf of Mexico Nigeria Brazil biofuels Groningen - NAM GoM operations Nigeria Separate visits: Moerdijk, Peterhead CCS Social and environmental considerations incorporated through all stages of major projects Special topics 2016: Climat
Slide 16: CSRC Input in Sustainability Metrics
CSRC INPUT IN SUSTAINABILITY METRICS Operational Spills Energy intensity – refineries (indexed to 2002)* Volume in thousand tonnes Total recordable case frequency (TRCF) Simple + make sense externally Injuries per million working hours Drive improvement – stretching over time Accommodate effec
Slide 17: Working with Others
WORKING WITH OTHERS Long-term environmental partnerships Energy transition Commission Leverage external expertise Focus on policy outcomes for energy transition Apply at a project level Broad industry participation Share best practice Copyright of Royal Dutch Shell plc May 11, 2016 17
Slide 18: Social Investment
SOCIAL INVESTMENT 2015 Social Investment campaigns Shell Foundation: Clean cookstoves Social investment programme on road safety Clean cookstoves programme $122 mln voluntary social investment Global Alliance for Clean Cookstoves partner $97 mln contractual social investment $12 mln financia
Slide 19: Ben van Beurden, Chief Executive Officer
BEN VAN BEURDEN CHIEF EXECUTIVE OFFICER ROYAL DUTCH SHELL PLC Copyright of Royal Dutch Shell plc May 11, 2016 19
Slide 20: Substantial + Long-Lasting Shifts in Energy Landscape
SUBSTANTIAL + LONG-LASTING SHIFTS IN ENERGY LANDSCAPE THE WORLD IN 2050 Population Vehicles Rising standards 9 billion people, 2 billion vehicles Many millions of people will rise 75% living in cities (~1.2 billion today) out of energy poverty; with higher (2 billion more than today) living standard
Slide 21: Energy Transitions Advocacy + Strategy
ENERGY TRANSITIONS ADVOCACY + STRATEGY Shell and IEA scenarios1 Energy transitions and portfolio resilience GtCO2/year Oceans Mountains IEA Current policies IEA New policies IEA 450 ppm Explore alternative views of the future Long-term trends in economics, energy supply and demand, geopolitical
Slide 22: Transitions in the Global Energy Mix
TRANSITIONS IN THE GLOBAL ENERGY MIX Copyright of Royal Dutch Shell plc May 11, 2016 22
Slide 23: Global Energy Mix
GLOBAL ENERGY MIX Oil 31% Coal 29% 13.7 9.4 btoe Gas 21% btoe Primary Biomass 10% Energy energy consumption supply Nuclear 5% Renewables 4% 4.3 Losses + btoe transformation Energy supply – 80% oil, gas + coal $55 trillion infrastructure invested Source: IEA World Energy Outlook 2015 Copyright of
Slide 24: Energy Infrastructure
ENERGY INFRASTRUCTURE Average Infrastructure Turnover In Years Copyright of Royal Dutch Shell plc May 11, 2016 24
Slide 25: Avoiding Emissions Growth
AVOIDING EMISSIONS GROWTH To avoid 1 gigatonne of CO2 equivalent of annual emissions growth: About 2/3 of the coal plants in the United States DOUBLING the current number of installed turbines worldwide Nearly DOUBLE the number of passenger vehicles in the US Source: IHS Energy © 2015. Illustrations
Slide 26: Portfolio Management
PORTFOLIO MANAGEMENT RESILIENCE THEMES Risk, performance & uncertainty RESULTS & PORTFOLIO PAY-OUT ATTRACTIVENESS Growth & returns Opportunity scale Copyright of Royal Dutch Shell plc May 11, 2016 26
Slide 27: Portfolio Resilience: Shell Emissions Outlook
PORTFOLIO RESILIENCE: SHELL EMISSIONS OUTLOOK 2016E 2030E CO2 price High Zero Regular forecasting of emissions Outlook on CO2 price Area shows Shell’s estimated annual direct and indirect CO2 emissions (equity basis). Copyright of Royal Dutch Shell plc May 11, 2016 27
Slide 28: Portfolio Resilience: Shell Strategic Themes
PORTFOLIO RESILIENCE: SHELL STRATEGIC THEMES Conv Conv. Integrated Oil Sands Oil Deep Chemicals Shale Shale New Oil Gas Gas Mining Products Water Oil Gas Energies Demand shift in existing markets New markets for low carbon products Technology innovation Copyright of Royal Dutch Shell plc May 11, 201
Slide 29: Shell Strategy + Energy Transitions
SHELL STRATEGY + ENERGY TRANSITIONS Long-term energy supply mix Million boe per day +20% +50% Managing emissions Gas in Shell’s energy mix Increased emphasis on New Energies Gas Coal Oil Nuclear Shell activities Biomass Other renewables Wind Solar Energy transitions underway Source: Shell an
Slide 30: Ongoing Emissions Management
ONGOING EMISSIONS MANAGEMENT Energy intensity Emissions GJ/tonne (energy required to produce a tonne of oil equivalent) index Million tonnes CO2 equivalent Upstream excl. Oil sands and GTL Refining Chemicals Flaring performance 2015 endorsed the World Bank’s Initiative to Million tonnes hydrocarbo
Slide 31: Growing Natural Gas in Shell
GROWING NATURAL GAS IN SHELL Example: deep water and LNG Malampaya phase 3 Queensland LNG Meets 30% of The Philippines’ energy needs 8.5 mtpa capacity Shell share 45% Shell share: train 1- 50%, train 2- 97.5% (Operated) Started up Oct 2015 Train 1 startup Dec 2014 Sustained production
Slide 32: New Energies – Investment Context
NEW ENERGIES – INVESTMENT CONTEXT FUTURE OPPORTUNITIES Mobility Renewables transition growth Digital Energy Increasing platforms Transition electrification Disruptive Greater business models customer choice Copyright of Royal Dutch Shell plc May 11, 2016 32
Slide 33: Shell: Opportunities in New Energies
SHELL: OPPORTUNITIES IN NEW ENERGIES FUTURE OPPORTUNITIES Material value + upside New Energies Assessing options + technologies Capped exposure New Fuels Integrated Connected Energy Customer Solutions Capital employed $1.75 bln : biofuels, wind, solar, hydrogen $200 mln estimated 2016 spen
Slide 34: Shell: New Fuels
SHELL: NEW FUELS Biofuels – Raízen Joint Venture - Brazil Hydrogen Leading Brazilian producer of sugar and ethanol Testing new markets + R&D potential Shell branded fuels business Transport opportunity ~900 MW bio-power generation Germany Joint Venture: 400 stations by 2023 2015 earnin
Slide 35: Shell: Integrated Energy Solutions
SHELL: INTEGRATED ENERGY SOLUTIONS Wind Solar Mount Storm wind project, West Virginia, USA [Glasspoint] Glasspoint solar EOR, Oman c. 500MW capacity in USA + Netherlands Solar steam for EOR operational in Oman Venture capital support for technology Expansion plans up to 1GW Assessing new o
Slide 36: Shell: Connected Customer
SHELL: CONNECTED CUSTOMER Connected Mobility Connected Energy Enabled by data and connectivity Capture value from power market disruption Reducing inefficiencies in mobility Shell today: Branded fuels and lubricants No. 2 wholesale power marketer in USA Participates in most organized p
Slide 37: Harry Brekelmans, Director Projects and Technology
HARRY BREKELMANS DIRECTOR PROJECTS AND TECHNOLOGY ROYAL DUTCH SHELL PLC Copyright of Royal Dutch Shell plc May 11, 2016 37
Slide 38: Asset Integrity and Process Safety
ASSET INTEGRITY AND PROCESS SAFETY PREVENTING AND MITIGATING MAJOR SAFETY INCIDENTS Goal Zero: No Harm, No Leaks Assets are safe and we know it 1 Control barriers Recovery measures 2 Leadership Effective behaviours design and CONSEQUENCES application of barriers THREATS TOP EVENT 3 4 5 Standards and
Slide 39: Shell + BG HSSE Integration
SHELL + BG HSSE INTEGRATION Safety remains priority Many similarities Combination to follow Shell’s safety requirements by end 2016 Goal Zero Zero Injuries No harm to people Incident and injury free workplace No leaks One Team 12 Life saving rules 10 Life savers Copyright of Royal
Slide 40: Contractor Safety Management
CONTRACTOR SAFETY MANAGEMENT Contractors are critical to achieve Goal Zero Number of fatalities > 240,000 contractors Represent 75% of total exposure hours Perform most high risk activities Involvement in most incidents Total recordable case frequency (TRCF) Contractor performance is impro
Slide 41: Contractor Safety Management: Construction Site Standardisation
CONTRACTOR SAFETY MANAGEMENT EXAMPLE: CONSTRUCTION SITE SAFETY STANDARDISATION Standardised approach Make working easier and safer Reduce HSE exposure Deliver consistency across projects Improve experience and learnings transfer Toolbox talk kit Arabic French Bahasa Malay Hindi B
Slide 42: Contractor Safety Management: Korean Shipyard Standardisation
CONTRACTOR SAFETY MANAGEMENT EXAMPLE: KOREAN SHIPYARD SAFETY STANDARDISATION What: Single standard safety approach Used at all projects and assets Continuous improvement of safety culture Why: Workers often short term tenure Construction of Prelude FLNG, Korea Workers move frequently Saf
Slide 43: HSSE Performance
HSSE PERFORMANCE Goal Zero on safety Spills - operational Injuries – TRCF/million working hours million working hours Volume in thousand tonnes TRCF Working hours (RHS) Energy intensity – refineries Process safety Energy Intensity Index (EEITM) Number of incidents HSSE priority Tier 1 incidents Ti
Slide 44: Managing Emissions
MANAGING EMISSIONS Examples Carbon Capture and Storage: Canada Cogeneration: Singapore Oil Sands upgrader Bukom refinery Singapore Quest start-up 2016 ~68 MW cogeneration unit installed in 2015 Recovering waste heat to generate steam ~1 mtpa CO2 sequestered Copyright of Royal Dutch Shell
Slide 45: Low Carbon Opportunities (2015)
LOW CARBON OPPORTUNITIES (2015) EXPLORATION LNG LNG (6.5 MTPA) QATAR LNG (6.3 MTPA) LNG (24.2 MTPA) CARBONATES ADSORPTION AND CARBON STORAGE CENTRE TECHNOLOGY CCS ALTERNATIVE PETERHEAD (1MTPA) GORGON TECHNOLOGY CENTRE MONGSTAD OTWAY BASIN PROJECT CANSOLV QUEST TECHNOLOGY
Slide 46: New Energies R+D Investments – Biofuels
NEW ENERGIES R+D INVESTMENTS- BIOFUELS Raízen advanced biofuels Reversible acid pre-treatment & Integrated hydropyrolysis and ensiling energy crops hydroconversion Advanced ethanol mill Woody biomass into fuels Converts waste into fuels Bolt-on to the Costa Pinto mill Shell proprietary sys
Slide 47: Ben van Beurden, Chief Executive Officer
BEN VAN BEURDEN CHIEF EXECUTIVE OFFICER ROYAL DUTCH SHELL PLC Copyright of Royal Dutch Shell plc May 11, 2016 47
Slide 48: Questions and Answers
QUESTIONS AND ANSWERS ROYAL DUTCH SHELL PLC MAY 11, 2016 Copyright of Royal Dutch Shell plc May 11, 2016 48
Slide 49: Additional Information
ADDITIONAL INFORMATION ROYAL DUTCH SHELL PLC MAY 11, 2016 Copyright of Royal Dutch Shell plc May 11, 2016 49
Slide 50: Human Rights
HUMAN RIGHTS Objectives Due diligence to avoid infringements of rights Effective systems Grievance mechanisms POLICY Shell General Shell Code of HSSE & SP Control Supplier Principles COMMITMENT Business Principles Conduct Framework Governance: HSSE SP Exec & Human Rights Working Group Contract
Slide 51: Alaska Exploration
ALASKA EXPLORATION 2015 Burger J well completed; water-bearing Operated exceptionally well Exploration halted for “forseeable future” Demobilised staff, rigs and support vehicles 2016 Ongoing demobilisation Final removal of equipment Copyright of Royal Dutch Shell plc May 11, 2016 51
Slide 52: Brent Field Decommissioning
BRENT FIELD DECOMMISSIONING Brent Delta Topside plan submitted Consultation + resubmission Target date single lift: 2017 Full field decommissioning plan to follow 8 year stakeholder engagement ~ 180 bodies Includes environmental groups and NGOs www.shell.co.uk/brentdecomm Copyright of
Slide 53: Oil Sands Update
OIL SANDS UPDATE Canada AOSP emissions update Economic update Cash operating costs $/bbl Cash operating cost excl. energy Energy DD&A (clean) Focus on emissions management Turnarounds in 2015 well managed Aspire to have equivalent intensity to average Significant focus on cost barrel refined
Slide 54: Water Management
WATER MANAGEMENT Water regulation evolving rapidly Centre of Excellence in Bangalore: Water management plans Integrated project delivery water scarce areas Technical support future water scarce areas Water R&D Shell fresh water withdrawn Million cubic metres Dawson Creek water reclamat
Slide 55: Strategic KPIs and Executive Incentives
STRATEGIC KPIS AND EXECUTIVE INCENTIVES 2015 EXECUTIVE BONUS STRUCTURE 30% weight 50% weight CFFO Operational Excellence 20% weight Sustainable Development 10% weight 10% weight Safety Sustainability 5% weight 5% weight 4% weight 4% weight 2% weight Personal Safety Process Safety Energy Intensity Oi
Slide 56: New Energies R+D Investments – Other Examples
NEW ENERGIES R+D INVESTMENTS – OTHER EXAMPLES Growing Energy Labs Inc (Geli) Kite Power Solutions Aquion Energy Internet of Energy Accessing high altitude wind Develop high-performance Software applications which is less intermittent batteries Link with energy storage Aim to reduce the c
Slide 57: Annual Roundtable for Socially Responsible Investors
ANNUAL ROUNDTABLE FOR SOCIALLY RESPONSIBLE INVESTORS ROYAL DUTCH SHELL PLC MAY 11, 2016 Copyright of Royal Dutch Shell plc May 11, 2016 57