Shell Plc · LSE:SHEL
Shell — Royal Dutch Shell — Barclays CEO Energy-Power conference 2016
20 slides from Shell's conference presentation, Sep 7, 2016
Slide 1: Barclays CEO Energy-Power conference
Barclays CEO Energy-Power conference Royal Dutch Shell plc Ben van Beurden Chief Executive Officer September 7, 2016
Slide 2: Ben van Beurden, Chief Executive Officer
Ben van Beurden Chief Executive Officer Royal Dutch Shell plc
Slide 3: Definitions & cautionary note
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 c
Slide 4: Let's make the future
Strategy “Let’s make the future” STRATEGIC Focus portfolio on resilient positions Invest in advantaged projects World-class investment case Value chain integration FCF/share + ROCE growth Leader: value + Conservative financial influence management OPERATIONAL Reducing our Shared value Re
Slide 5: Substantial + long lasting shifts in energy landscape
Industry context Substantial + long lasting shifts in energy landscape Global population Growth in oil & gas demand Energy system in transition World needs more energy; less CO2 2000 2050 From 7 to 9 billion by 2050 Global energy demand to 75% will live in cities double between 2000 & 2050 Customer
Slide 6: Driving strategy in multiple time horizons
Re-shape Shell Driving strategy in multiple time horizons Cash engines: today Growth priorities: 2016+ Future opportunities: 2020+ Funds dividends + balance sheet Cash engines 2020+ Material value + upside Affordable growth in Competitive + resilient Path to profitability advantaged positions Strong
Slide 7: Example: Oil Products
Cash engines Example: Oil Products Stronger results from smaller portfolio Million barrels/day $ billion $ per barrel Advantaged feedstock + supply -20% +25% -30% Asset sales Products + brand 2007 2015 Oil products earnings Global weighted average refining margin (RHS) Earnings on CCS basis, e
Slide 8: Example: Integrated Gas
Cash engines Example: Integrated Gas Sakhalin Sabine Pass QG-4 Nigeria Oman Equatorial Brunei Atlantic LNG Guinea Malaysia LNG Peru Equity capacity Gorgon NWS Long-term offtake agreement Pluto QCLNG Spot offtake in 2015 Deliveries in 2015 LNG volumes Liquefaction capacity Million tonnes per annum Sh
Slide 9: Example: deep water
Growth priorities Example: deep water Reducing drilling costs Lowering capital intensity Shell + BG deep water growth Example Gulf of Mexico $ per boe break-even cost (examples) Thousand boe per day # drilling days $ thousand Variable spread rate + drilling -30% materials cost -40% 2014 2013/14 Braz
Slide 10: Example: shales
Future opportunities Example: shales Average drill and complete costs – LRS wells Resources $ million per well ~12 billion boe -50% Western Canada Gas 12 Western Canada LRS 8 Appalachia 4 Permian Argentina Reserves 0 Contingent resources - 2013 2014 2015 2016H1 Haynesville development pending Contin
Slide 11: Financial performance
Manage down-cycle Financial performance Earnings + ROACE Cash flow $ billion % $ billion % 30 15 45 45 20 10 30 30 10 5 15 15 0 0 0 0 2012 2013 2014 2015 16Q2 2012 2013 2014 2015 16Q2 -10 4Q rolling -5 -15 4Q rolling -15 Upstream Downstream CFFO Integrated gas Corporate/Other ROACE (RHS) Cash invest
Slide 12: Pulling levers to manage financial framework
Manage down-cycle Pulling levers to manage financial framework 2016-18 levers Reduce Reduce Deliver new Divestments capital operating projects investment costs 2015 baseline: 2017-2018 2016 $ billion Shell + BG potential Trend to 40 Reducing our cash break-even Operating costs 46 Multi-billion p.a
Slide 13: Divestments
Reduce capital Reduce Deliver new Divestments investment operating costs projects Manage down-cycle Divestments 2016-2018 completed + announced $ billion Divestment program Completed – MLP 0.8 – Denmark marketing 0.3 $ billion – N.Z.: Maui pipeline 0.2 30 – MGL IPO 0.1 – Others 0.1 20 Total complete
Slide 14: Lower & more predictable capital investment
Reduce capital Reduce Deliver new Divestments investment operating costs projects Manage down-cycle Lower & more predictable capital investment Capital investment $ billion 60 60 58 53 47 43 41 -25% 40 40 37 36 33 31 29 ~29 $25-30 billion ~26 20 20 0 0 2013 2013 2014 2014 15Q2 15Q2 2015 2015 16Q216Q
Slide 15: Reduce operating cost
Reduce capital Reduce Deliver new Divestments investment operating costs projects Manage down-cycle Reduce operating cost Operating cost $ billion 50 49 Substantial reductions delivered -$4 billion 46 44 42 ~40 40 “Lower for ever” mindset + BG synergies 30 Staff, supply chain + contractors 20
Slide 16: Deliver new projects
Reduce capital Reduce Deliver new Divestments investment operating costs projects Manage down-cycle Deliver new projects Significant oil & gas + Downstream production under Thousand boe per day* Million tonnes per annum construction Capex to free cash flow High margin / price upside barrels 20
Slide 17: Financial dashboard
Financial dashboard Gearing Free cash flow per share % $/share 30 10 20 5 10 0 0 -5 -10 Q211 Q212 Q213 Q214 Q215 Q216 -10 Q211 Q212 Q213 Q214 Q215 Q216 ROACE Total shareholder return % % 3 years to Q2 2016 12 months to Q2 2016 30 0 20 20 -15 10 10 0 -30 0 Q211 Q212 Q213 Q214 Q215 Q216 Shell Peer gro
Slide 18: Transformation
Transformation 2013-2015 2019-2021 average average ROACE 8% ~10% CREATE A WORLD CLASS Organic free cash flow $5 billion p.a. $20-25 billion p.a. INVESTMENT CASE Brent ~$90 ~$60 Improved capital Capital efficiency: Less cost + fewer Portfolio growth: efficiency: reduced 2013 spending people with BG t
Slide 19: Questions & Answers
Questions & Answers
Slide 20: Barclays CEO Energy-Power conference
Barclays CEO Energy-Power conference Royal Dutch Shell plc Ben van Beurden Chief Executive Officer September 7, 2016
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