Shell PLC · LSE:SHEL
Shell — Royal Dutch Shell — Q4 2008 Earnings Presentation
20 slides from Shell's earnings presentation, Jan 29, 2009
Slide 1: Fourth Quarter & Full Year 2008 Results
ROYAL DUTCH SHELL PLC BUILDING NEW HEARTLANDS FOURTH QUARTER & FULL YEAR 2008 RESULTS 29TH JANUARY 2009
Slide 2: Jeroen van der Veer, Chief Executive
ROYAL DUTCH SHELL PLC FOURTH QUARTER & FULL YEAR 2008 RESULTS JEROEN VAN DER VEER CHIEF EXECUTIVE
Slide 3: Definitions and Cautionary Note
DEFINITIONS AND CAUTIONARY NOTE Reserves: Our use of the term “reserves” in this presentation means SEC proved oil and gas reserves and SEC proven mining reserves. Resources: Our use of the term “resources” in this presentation includes quantities of oil and gas not yet classified as SEC proved oil
Slide 4: 2008 Highlights
2008 HIGHLIGHTS 2008 PERFORMANCE SATISFACTORY • 2008 CCS EARNINGS $ 31.4 BLN, CCS EPS +16% • CAPITAL DISCIPLINE: $ 32 BLN NET CAPEX, $13 BLN RETURNED TO SHAREHOLDERS • GOOD OPERATING PERFORMANCE 2008 PORTFOLIO PROGRESS • NEW PROJECT START UPS • $ 7 BLN DISPOSALS, $ 9 BLN ACQUISITIONS • NEW UPSTREAM
Slide 5: Responding to the Changing Landscape
RESPONDING TO THE CHANGING LANDSCAPE OIL PRICE & INDUSTRY REFINING MARGIN $ Oil Price Refining Margin $ 120 12 80 8 • MANAGING COST & PRICE CYCLES • PROJECTS BASED ON LONG-RUN PRICE SCENARIOS 40 4 • MAJOR COSTS LOCKED IN AT FID 0 0 • FEWER PROJECTS LAUNCHED ACROSS CYCLE PEAK 2003 2004 2005 2006 2007
Slide 6: Key Projects 2008 Progress
KEY PROJECTS 2008 PROGRESS GJOA HALFDAN PHASE IV AOSP CORRIB N AMERICA TIGHT GAS KASHAGAN SAKHALIN II PORT ARTHUR URSA/PRINCESS QATARGAS 4 PEARL GTL PERDIDO WATERFLOOD GUMUSUT NIGERIA OMAN AFAM SINGAPORE CHEMICALS NORTH RANKIN B NWS T5 / ANGEL BC-10 PLUTO 2008 ON STREAM UNDER CONSTRUCTION 5 OIL & GA
Slide 7: Sakhalin II Start Up
SAKHALIN II START UP START PA-B PLATFORM LNG SITE YEAR ROUND OIL EXPORT LNG TRAIN 1 YEAR-ROUND OIL COMPLETE 1ST LNG CARGO 400 GAS ARRIVED AT LNG PLANT LNG TRAIN 2 200 COMPLETE KBOE/D EXPECTED RAMP-UP PROFILE PIPELINE ROUTE REINSTATEMENT: VAVARKA VALLEY 0 2008 2009 2010 6 SALES VOLUMES: OIL GAS
Slide 8: Returns to Shareholders
RETURNS TO SHAREHOLDERS PAY OUT TRACK RECORD (CUMULATIVE) DIVIDEND PERFORMANCE $ BILLION 80 400% 70 350% 60 300% 50 250% 40 200% 30 150% 20 100% 10 50% 0 0% 2004 2005 2006 2007 2008 1983 1988 1993 1998 2003 2008 DIVIDEND BUYBACK SHELL DIVIDEND GROWTH* INFLATION UK INFLATION US INFLATION NL 7 * RD €
Slide 9: Peter Voser, Chief Financial Officer
ROYAL DUTCH SHELL PLC FOURTH QUARTER & FULL YEAR 2008 RESULTS PETER VOSER CHIEF FINANCIAL OFFICER
Slide 10: Prices and Margins
PRICES AND MARGINS OIL & GAS PRICES INDUSTRY REFINING MARGINS INDUSTRY CHEMICALS MARGINS* $/BBL $/MMBtu $/BBL $/T 140 14 16 1500 14 1300 120 12 12 1100 900 100 10 10 8 700 80 8 6 500 4 300 60 6 2 100 40 4 0 -100 Q407 Q108 Q208 Q308 Q408 Q407 Q108 Q208 Q308 Q408 Q407 Q108 Q208 Q308 Q408 BRENT JCC* US
Slide 11: Q4 2008 Financial Highlights
Q4 2008 FINANCIAL HIGHLIGHTS $ BLN EARNINGS ($ BLN) Q4 08 Q4 07 Q4 2008 VERSUS Q4 2007 ($ BLN) - EXPL. & PRODUCTION 2.4 4.2 - GAS & POWER 1.0 0.6 6 - OIL SANDS 0.0 0.0 - OIL PRODUCTS 0.8 0.7 5 - CHEMICALS 0.0 0.4 BUSINESS SEGMENTS TOTAL 4.2 5.9 4 NET EARNINGS 3.9 5.7 3 EARNINGS PER SHARE ($) 0.64 0.
Slide 12: Upstream Performance
UPSTREAM PERFORMANCE EARNINGS OIL & GAS PRODUCTION $ BILLION MLN BOE/D MLN TONNES 7 4 4 6 3 3 5 4 2 2 3 2 1 1 1 0 0 0 Q407 Q108 Q208 Q308 Q408 Q407 Q108 Q208 Q308 Q408 EXPLORATION & PRODUCTION OIL SANDS OIL LNG SALES (MLN TONNES) GAS & POWER GAS 11 Excluding Identified Items
Slide 13: Downstream Performance
DOWNSTREAM PERFORMANCE CCS EARNINGS AVAILABILITY AND SALES VOLUMES $ BILLION % AVAILABILITY VOLUME 2.5 100 7 2.0 95 6 1.5 90 5 1.0 85 4 0.5 0.0 80 3 Q407 Q108 Q208 Q308 Q408 Q407 Q108 Q208 Q308 Q408 OIL PRODUCTS CHEMICALS REFINERY AVAILABILITY OIL PRODUCT SALES (MLN BBLS/D) CHEMICALS CHEMICALS SALES
Slide 14: Disposals Update
DISPOSALS UPDATE 2008 CUMULATIVE DIVESTMENT PROCEEDS 2008 DISPOSALS $ BILLION 35 RAINBOW EUROPE UPSTREAM PIPELINE 30 NOGAT PIPELINE BEB 25 20 FRENCH BOOMVANG REFINERIES 15 BIG FOOT DOMINICAN REFINERY NIGERIA AFRICA 10 OFFSHORE DOWNSTREAM TRANSREDES BLOCKS NWS OIL ASSETS 5 0 2004 2005 2006 2007 2008
Slide 15: Cash Performance 12M
CASH PERFORMANCE 12M BUSINESS GROUP $ BILLION $ BILLION 45 UPSTREAM DOWNSTREAM 60 SOURCES USES SOURCES 40 50 WORKING 35 USES ACQUISITIONS CAPITAL 30 40 ASSET SALES DOWNSTREAM PAYOUT 25 30 20 UPSTREAM 15 SOURCES 20 ORGANIC CAPITAL 10 SPENDING USES 10 5 0 0 EXPLORATION & PRODUCTION OIL PRODUCTS ASSET
Slide 16: Investment and Choices
INVESTMENT AND CHOICES CAPITAL SPENDING ($ BLN) CAPITAL UNDER CONSTRUCTION / ROACE 2006 2007 2008 2008 2009 E $ BLN RETURN % TARGET ACTUAL 35 35% ORGANIC 20 26 30-31 30 31-32 ACQUISITIONS 3 8 10 9 30 30% DISPOSALS (2) (10) (5) (7) NET CAPEX 21 24 35-36 32 ~31-32 25 25% 20 20% • STABILISING ORGANIC S
Slide 17: 2008 Highlights
2008 HIGHLIGHTS 2008 PERFORMANCE SATISFACTORY • 2008 CCS EARNINGS $ 31.4 BLN, CCS EPS +16% • CAPITAL DISCIPLINE: $ 32 BLN NET CAPEX, $13 BLN RETURNED TO SHAREHOLDERS • GOOD OPERATING PERFORMANCE 2008 PORTFOLIO PROGRESS • NEW PROJECT START UPS • $ 7 BLN DISPOSALS, $ 9 BLN ACQUISITIONS • NEW UPSTREAM
Slide 18: Q&A
ROYAL DUTCH SHELL PLC BUILDING NEW HEARTLANDS FOURTH QUARTER & FULL YEAR 2008 RESULTS Q&A
Slide 19: Fourth Quarter & Full Year 2008 Results
ROYAL DUTCH SHELL PLC BUILDING NEW HEARTLANDS FOURTH QUARTER & FULL YEAR 2008 RESULTS 29TH JANUARY 2009
Slide 20: Appendix: Key Projects
APPENDIX: KEY PROJECTS START UP PROJECT COUNTRY SHELL PEAK LNG 100% PRODUCTS CATEGORY SHELL SHARE PRODUCTION CAPACITY OPERATED % kboe/d mtpa 2008- 2009 AFAM GAS SUPPLY NIGERIA 30 46 BC 10 BRAZIL 50 100 NW SHELF LNG T5 /ANGEL AUSTRALIA 22.3 145 4.4 PERDIDO USA 35.4 130 SAKHALIN II /LNG T1-2 RUSSIA 27