Shell PLC · LSE:SHEL
Shell — Royal Dutch Shell — Q2 2008 Earnings Presentation
20 slides from Shell's earnings presentation, Jul 31, 2008
Slide 1: Building New Heartlands: Second Quarter 2008 Results
ROYAL DUTCH SHELL PLC BUILDING NEW HEARTLANDS SECOND QUARTER 2008 RESULTS 31 JULY 2008
Slide 2: Jeroen van der Veer, Chief Executive
ROYAL DUTCH SHELL PLC BUILDING NEW HEARTLANDS 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: Q2 2008 Highlights
Q2 2008 HIGHLIGHTS COMPETITIVE RESULTS • CCS earnings $7.9 billion; EPS +15%* • Strong oil & gas prices; weaker downstream environment • Good operating performance INVESTING IN NEW ENERGY SUPPLIES • Building new capacity: 1mboe/d upstream, 0.3mb/d downstream • Increased spending in new growth option
Slide 5: Key Projects Under Construction
KEY PROJECTS UNDER CONSTRUCTION PERDIDO SPAR HULL SAKHALIN II LNG TRAIN 1 GJOA HALFDAN PHASE IV CORRIB KASHAGAN AOSP N AMERICA TIGHT GAS SAKHALIN II PORT ARTHUR PEARL GTL QATARGAS 4 PERDIDO GUMUSUT URSA/PRINCESS OMAN WATERFLOOD NIGERIA SINGAPORE CHEMICALS AFAM NORTH RANKIN B BC-10 PLUTO NWS T5 / ANG
Slide 6: Exploration & Business Development H1 2008 Update
EXPLORATION & BUSINESS DEVELOPMENT H1 2008 UPDATE CCS WEYBURN-MIDALE IOGEN BIOFUELS SWITZERLAND RETAIL CHINA REFINERY & CHUKCHI PETROCHEMICALS LOI VIRENT BIOFUELS TECHNOLOGY DUVERNAY OFFER USA HAYNESVILLE USA HYDROGEN LA STONES BRUNEI GULF OF MEXICO NIGERIA MLJ2-06 DEEPWATER AUSTRALIA COLOMBIA LLANO
Slide 7: Shell & Tight Gas
SHELL & TIGHT GAS PERFORMANCE: PINEDALE OPTIMISED SURFACE FACILITIES KBOE/DAY DAYS 50 60 40 50 SHARED > 4 KM DEPTH PRODUCTION 30 40 FACILITY ON SURFACE PAD: ~1 KM RADIUS 20 30 MULTIPLE WELLS FROM ONE PAD 10 20 SANDSTONE GAS RESERVOIRS 0 10 2002 2003 2004 2005 2006 2007 H1 2008 PRODUCTION PER DAY (KB
Slide 8: Peter Voser, Chief Financial Officer
ROYAL DUTCH SHELL PLC BUILDING NEW HEARTLANDS PETER VOSER CHIEF FINANCIAL OFFICER
Slide 9: Prices and Margins
PRICES AND MARGINS OIL & GAS PRICES REFINING MARGINS CHEMICALS MARGINS* $/BBL $/MMBtu $/BBL $/T 130 12 28 700 120 11 24 600 110 10 20 500 100 9 16 400 90 8 12 300 80 7 8 200 70 6 4 100 60 5 0 0 Q207 Q307 Q407 Q108 Q208 Q207 Q307 Q407 Q108 Q208 Q207 Q307 Q407 Q108 Q208 BRENT JCC* US WEST COAST ROTTER
Slide 10: Q2 2008 Financial Highlights
Q2 2008 FINANCIAL HIGHLIGHTS $ BLN EARNINGS ($ BLN) Q2 08 Q2 07 Q2 2008 VERSUS Q2 2007 ($ BILLION) - EXPL. & PRODUCTION 5.8 2.9 - GAS & POWER 0.6 0.5 10 - OIL SANDS 0.4 0.2 - OIL PRODUCTS 0.9 2.7 9 - CHEMICALS 0.1 0.5 BUSINESS SEGMENTS TOTAL 7.7 6.9 8 NET EARNINGS 7.8 6.9 7 EARNINGS PER SHARE ($) 1.
Slide 11: 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 Q207 Q307 Q407 Q108 Q208 Q207 Q307 Q407 Q108 Q208 EXPLORATION & PRODUCTION OIL SANDS OIL EQUITY LNG SALES (MLN TONNES) GAS & POWER GAS 10 Excluding Identified Items
Slide 12: Downstream Performance
DOWNSTREAM PERFORMANCE CCS EARNINGS AVAILABILITY AND SALES VOLUMES $ BILLION % AVAILABILITY VOLUME 4 100 7 3 95 6 2 90 5 1 85 4 0 80 3 Q207 Q307 Q407 Q108 Q208 Q207 Q307 Q407 Q108 Q208 OIL PRODUCTS CHEMICALS REFINERY AVAILABILITY OIL PRODUCT SALES (MLN BBLS/D) CHEMICALS CHEMICALS SALES (MLN TONNES)
Slide 13: Disposals Strategy on Track: H1 2008 Update
DISPOSALS STRATEGY ON TRACK H1 2008 UPDATE CUMULATIVE DIVESTMENT PROCEEDS H1 2008 PERFORMANCE $ BILLION 30 RAINBOW EUROPE UPSTREAM PIPELINE 25 BEB 20 FRENCH 15 REFINERIES BOOMVANG 10 NIGERIA OFFSHORE NWS OIL ASSETS 5 0 2004 2005 2006 2007 H108 UPSTREAM DOWNSTREAM OTHER ANNOUNCED COMPLETED UPSTREAM D
Slide 14: Cash Performance
CASH PERFORMANCE BUSINESS CASH GROUP CASH $ BILLION $ BILLION UPSTREAM DOWNSTREAM 40 60 SOURCES USES SOURCES 35 ASSET SALES 50 CORPORATE 30 DOWNSTREAM ACQUISITIONS USES 40 25 PAYOUT 20 30 SOURCES 15 20 UPSTREAM ORGANIC 10 CAPITAL SPENDING USES 10 5 0 0 EXPLORATION & :PRODUCTION OIL PRODUCTS ASSET SA
Slide 15: Capital Spending Update
CAPITAL SPENDING UPDATE NET CAPITAL SPENDING ($ BLN) DEBT RATIOS (%) 2007 H1 2008 2008E 20% ORGANIC 25.5 13.4 ~30-31 ACQUISITIONS 8.2 2.7 ~10 15% DISPOSALS (9.9) (2.7) ~ (5) NET CAPITAL SPENDING 23.8 13.4 ~35-36 10% •INCREASED A&D 5% •2008 DRILLING OPPORTUNITIES 0% 2005 2006 2007 H108 •INDUSTRY INFL
Slide 16: Delivering Strong Returns
DELIVERING STRONG RETURNS COMPETITIVE PAY-OUT (CUMULATIVE) COMPETITIVE GROWTH & RETURNS $ BILLION $ BLN RETURN % 70 35 35% 60 30 30% 50 25 25% 40 20 20% 30 15 15% 20 10 10% 10 5 5% 0 0 0% 2004 2005 2006 2007 H1 '08 2004 2005 2006 2007 H1'08 CAPITAL UNDER CONSTRUCTION DIVIDEND SHARE BUY-BACK ROACE UP
Slide 17: Q2 2008 Highlights
Q2 2008 HIGHLIGHTS COMPETITIVE RESULTS • CCS earnings $7.9 billion; EPS +15%* • Strong oil & gas prices; weaker downstream environment • Good operating performance INVESTING IN NEW ENERGY SUPPLIES • Building new capacity: 1mboe/d upstream, 0.3mb/d downstream • 2008-09 capacity increase >250kboe/d +
Slide 18: Q&A
ROYAL DUTCH SHELL PLC BUILDING NEW HEARTLANDS Q&A
Slide 19: Building New Heartlands: Second Quarter 2008 Results
ROYAL DUTCH SHELL PLC BUILDING NEW HEARTLANDS SECOND QUARTER 2008 RESULTS 31 JULY 2008
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