Shell PLC · LSE:SHEL
Shell — Royal Dutch Shell — Investor Day (September 2011)
35 slides from Shell's investor day presentation, Sep 9, 2011
Slide 1: Royal Dutch Shell plc Investor Day, New York
ROYAL DUTCH SHELL PLC INVESTOR DAY NEW YORK SEPTEMBER 2011 1 Copyright of Royal Dutch Shell plc 9 September 2011
Slide 2: Peter Voser, Chief Executive Officer
ROYAL DUTCH SHELL PLC PETER VOSER CHIEF EXECUTIVE OFFICER 2 Copyright of Royal Dutch Shell plc 9 September 2011
Slide 3: Definitions and Cautionary Note
DEFINITIONS AND CAUTIONARY NOTE 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 or SEC proven mining reserves. Resources are consistent with the Society of Petroleum Engineers 2P and 2C definitio
Slide 4: Energy Outlook
ENERGY OUTLOOK GLOBAL ENERGY MIX Mln Boe/d Industry outlook 400 Hydrocarbons dominate outlook 300 Growth required in all sectors of energy mix Energy policy + sustained investment 200 Shell 100 Crude d oill & oill products d Natural gas & LNG 0 Biofuels, wind, carbon capture + storage 19
Slide 5: Leader in a Global Growing Gas Market
LEADER IN A GLOBAL GROWING GAS MARKET GAS DEMAND GROWTH SHELL Mln Boe/d 30 Traditional LNG +23% +189% gas 25 20 +29% 15 +89% 2035 10 008 86% +86% 20 5 Gas-to-liquids Tight gas 0 North Europe Asia Middle Other America Pacific East SOURCE: INTERNATIONAL ENERGY AGENCY; WORLD ENERGY OUTLOOK 2011 GOLDEN
Slide 6: Shell: Goal Zero on Safety
SHELL ‘GOAL ZERO’ ON SAFETY Injuries – TRCF per million working hours Million working hours 5 900 4 800 3 700 2 600 1 500 Customer and Profitability & 0 400 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 H1 partner focus performance WORKING HOURS (RHS) TRCF 11 Sustainability & Value added growth technology
Slide 7: Strategy & Capital Allocation
STRATEGY & CAPITAL ALLOCATION STRATEGY CAPITAL INVESTMENT $ Bln Upstream 150 Profitable P fi bl growth; h price i upside id >80% of total capital spending Sustained exploration investment 100 Downstream UPSTREAM Stable capital employed Fewer refineries; upgrade chemicals assets 50 More c
Slide 8: Financial Performance and Priorities
FINANCIAL PERFORMANCE AND PRIORITIES EARNINGS PRIORITIES $ Bln 35 30 PERFORMANCE FOCUS 25 20 15 NEW WAVE OF PRODUCTION GROWTH 10 5 0 MATURING NEXT GENERATION OF PROJECT OPTIONS -5 2007 2008 2009 2010 H1 '11 UPSTREAM CORPORATE DOWNSTREAM DIVESTMENTS/OTHER / CURRENT COST OF SUPPLY EARNINGS 8 Copyright
Slide 9: Performance Focus
ROYAL DUTCH SHELL PERFORMANCE FOCUS 9 Copyright of Royal Dutch Shell plc 9 September 2011
Slide 10: Performance Focus
PERFORMANCE FOCUS CONTINUOUS IMPROVEMENT EXAMPLE: CAPITAL EFFICIENCY Asset sales - $ Bln (cumulative) CORPORATE 30 UPSTREAM DOWNSTREAM Cost focus 20 10 0 Continuous Operational 07 08 09 10 1H11 Simplification improvement excellence EXAMPLE: WELLS MANUFACTURING JV WITH CNPC Capital efficiency 10 Copy
Slide 11: Downstream Value Chains
DOWNSTREAM VALUE CHAINS Retail Business-to- Refining Business Supply & Distribution Chemicals Lubricants Chemicals Trading 3 keys to winning Operational excellence – Concentrating the portfolio – Selective growth 11 Copyright of Royal Dutch Shell plc 9 September 2011
Slide 12: Global Marketing Performance
GLOBAL MARKETING PERFORMANCE MARKETING REFOCUS 100% Refocused portfolio + business model 50% Heartlands + selective growth • Brazil, Asia Pacific, others 0% Brand strength g +pproduct innovation '09 '10 '11 '12 '09 '10 '11 '12 '09 '10 '11 '12 '09 '10 '11 '12 YTD YTD YTD YTD Retail Lubricants A
Slide 13: Chemicals Portfolio + Performance
CHEMICALS PORTFOLIO + PERFORMANCE EARNINGS CCS Earnings - $ Bln Base chemicals and derivatives portfolio 2 Plant l integration with h refineries f 1.5 Growth potential through advantaged 1 feedstock 05 0.5 Product innovation 0 2005 2006 2007 2008 2009 2010 H1 2011 INTEGRATED CHEMICALS USGC B
Slide 14: Refining Portfolio + Performance
REFINING PORTFOLIO + PERFORMANCE FOCUS ON LARGE INTEGRATED SITES IMPROVING PROCESS SAFETY Refinery capacity Kbbl/d (100%) # API process incidents 400 EXITS 2002-2011 YTD 300 200 100 0 2007 2008 2009 2010 H1 2011 LEAN MANUFACTURING PORTFOLIO REDUCTION Refining costs index Refinery capacity Mln bbl/d
Slide 15: Biofuels Growth: Brazil
GROWTH DELIVERY BIOFUELS GROWTH: BRAZIL GLOBAL BIOFUELS GROWTH POTENTIAL RAìZEN JOINT VENTURE Kboe/d production Marketing JV 3,000 SOYBEAN RAPESEED PALM OIL OTHER 4,500 retail sites; ~10% ~4,500 10% of Shell world world- 2,000 CORN SUGARCANE wide portfolio ~19% market share in Brazil 1,000 Reb
Slide 16: Growth Delivery
ROYAL DUTCH SHELL GROWTH DELIVERY 16 Copyright of Royal Dutch Shell plc 9 September 2011
Slide 17: Converting Resources to Production
GROWTH DELIVERY CONVERTING RESOURCES TO PRODUCTION Bln Boe resources Longer-term upside 35 NA tight gas Australia Cardamom Deep Appomattox Prelude 9 Prelude Vito AOSP debottleneck 9 25 10 8 Pearls (CMOC) 8 Schiehallion 9 Malikai NA tight gas 9 Gorgon Mars-B Clair Ph2 NA tight gas BC-10 Phase2 15 10
Slide 18: 2011 Start-ups
GROWTH DELIVERY 2011 START-UPS INNOVATIVE TECHNOLOGY, FULL VALUE CHAIN, LONG-LIFE RETURNS Canada - Scotford upgrader Qatar - Pearl Qatar – Qatargas 4 LNG shipment ~ $30 bln capital investment >400,000 boe/d* for Shell Underpins target for 3.1 - 3.5 mln boe/d 2009-12 * PEAK PRODUCTION; SHELL SHARE: $
Slide 19: Launching New Upstream Projects
GROWTH DELIVERY LAUNCHING NEW UPSTREAM PROJECTS 2010 + 2011 YEAR-TO-DATE INVESTMENT DECISIONS Cardamom – USA Sabah Gas Kebabangan (KBB) - Malaysia 50 kboe/d; 100% Shell 130 kboe/d; 30% Shell; PSC AOSP Debottlenecking Schiehallion 1st FID NA tight gas (various) Cardamom Mars-B Mars-B – USA Sabah Gas
Slide 20: Deepwater Under Construction
GROWTH DELIVERY DEEPWATER UNDER CONSTRUCTION MARS-B (GULF OF MEXICO) BC-10 PHASE 2 (CAMPOS, BRAZIL) CARDAMOM (GULF OF MEXICO) Development concept Phase 1 FPSO Surface System and Subsea View TLP capacity ~100 kboe/d Peak production ~30 kboe/d Peak production ~50 kboe/d West Boreas + South Dei
Slide 21: Australia LNG Under Construction
GROWTH DELIVERY AUSTRALIA LNG UNDER CONSTRUCTION PRELUDE FLOATING LNG GORGON LNG First FID ever on Floating LNG Greenfield LNG on Barrow Island 110 kboe/d peak production 3 x 5 MTPA LNG trains and domestic gas plant 3.6 mtpa LNG capacity + condensate/LPG Carbon capture and storage 4 mtpa
Slide 22: Maturing Next Generation Project Options
ROYAL DUTCH SHELL MATURING NEXT GENERATION PROJECT OPTIONS 22 Copyright of Royal Dutch Shell plc 9 September 2011
Slide 23: Adding New Resources
MATURING NEXT GENERATION OF PROJECT OPTIONS ADDING NEW RESOURCES EXPLORATION & BUSINESS DEVELOPMENT ADDING NEW RESOURCES AT LOW COST Bln boe 2008 Canada - Duvernay Kazahkstan - Auezov 2009 Australia – Iago 2 Nigeria - Offshore 6 GoM – Cardamom Australia – Libra 1 <$2/boe entry cost GoM - Vito GoM –
Slide 24: Drilling Technology Unlocks New Growth
DRILLING TECHNOLOGY UNLOCKS NEW GROWTH NORTH AMERICA CHINA + AUSTRALIA JVs WITH PETROCHINA Groundbirch Deep Basin Changbei tight gas Foothills North Shilou CBM Pinedale Marcellus Daning CBM Jinqiu tight h gas Eagle Ford Haynesville JV Fushun tight gas ACREAGE TIGHT GAS COAL BED METHANE Arrow Energy
Slide 25: Maturing New Projects
MATURING NEXT GENERATION OF PROJECT OPTIONS MATURING NEW PROJECTS INVESTMENT OPTIONS Appomattox - USA Arrow - Australia Long-term growth and investment Options to flex annual spending with macro Capex and growth outcomes Tight Gas – N. America Qatar Chemicals Investment decisions driven by Por
Slide 26: Financial Framework Update: Simon Henry, CFO
ROYAL DUTCH SHELL PLC FINANCIAL FRAMEWORK UPDATE SIMON HENRY CHIEF FINANCIAL OFFICER 26 Copyright of Royal Dutch Shell plc 9 September 2011
Slide 27: Investment Programme
INVESTMENT PROGRAMME UPSTREAM DOWNSTREAM % Capital investment % Capital investment 100% 100% 100% EXPLORATION 80% HEAVY OIL & EOR 75% 75% TIGHT GAS SOUR 60% DEEPWATER 50% 50% 40% INTEGRATED GAS 25% 25% 20% TRADITIONAL 0% 0% 0% 2007-10 2011-14 2007-10 2011-14 2007-10 2011-14 OTHERS AMERICAS CHEMICALS
Slide 28: Converting Investment to Cashflow
CONVERTING INVESTMENT TO CASHFLOW INVESTING FOR NEW GROWTH DELIVERING CASHFLOW GROWTH $ Bln 50 $/bbl BRENT 60 $80/bbl $96/bbl 40 $60/bbl 50 30 40 $62/bbl 30 20 20 10 10 0 0 2007 2008 2009 2010 2011E 2012E 2009 H1’11 2012 (12 months rolling) g target g CAPITAL UNDER CONSTRUCTION EXPLORATION & EVALUAT
Slide 29: Cash Flow and Balance Sheet
CASH FLOW AND BALANCE SHEET CASH PERFORMANCE 12 MONTHS TO H1 2011 GEARING $ Bln % 60 SOURCES USES 30% 50 Gearing range 40 20% 30 20 10% 10 0 0% CASH FLOW FROM OPERATIONS EXCL. NET Q206 Q207 Q208 Q209 Q210 Q211 MOVEMENTS IN WORKING CAPITAL ASSET SALES ACQUISITIONS CAPEX + EQUITY ACC. INVESTMENTS PAY-
Slide 30: Competitive Payout
COMPETITIVE PAYOUT MAJORS DIVIDEND PAYOUT RATIOS SHELL PAYOUT % $ Bln 50 18 45 16 40 14 35 12 30 10 25 8 20 6 15 4 10 5 2 0 0 COMPETITORS 2006 2007 2008 2009 2010 2011 H1 DIVIDENDS DECLARED DECLARED, of which: SCRIP CLEAN EPS, 4 QUARTERS ROLLING TO H1 2011 BUYBACKS 30 Copyright of Royal Dutch Shell
Slide 31: Maturing New Projects: 2011-12
MATURING NEW PROJECTS: 2011-12 Alaska Linnorm AOSP 3 Schiehallion Redev 3 Debottlenecking Carmon Creek Clair Phase 2 1st FID Canada Fram Quest CCS Kazakhstan Tempa Rossa China 3 US Onshore Pearls-Khazar Appomattox Majnoon & West Qurna FFD Gulf of Mexico Qatar Chemicals China refining/chemicals 3 Car
Slide 32: Financial Framework
FINANCIAL FRAMEWORK CASH PERFORMANCE ~50-80% CFFO increase 2009-12 ($60 $80 oil price scenarios) ($60-$80 Surplus cash flow 2012 at $60/bbl INVESTMENT PAY-OUT $25-27 bln net capex /year Dividend linked to results Up to $3 bln asset sales/year Scrip dividend option 2012+ ~$10 billion ex
Slide 33: Peter Voser, Chief Executive Officer
ROYAL DUTCH SHELL PLC PETER VOSER CHIEF EXECUTIVE OFFICER 33 Copyright of Royal Dutch Shell plc 9 September 2011
Slide 34: Outlook
OUTLOOK PRIORITIES 2011-12 OUTLOOK Continuous improvement embedded in Shell PERFORMANCE FOCUS Up to $8 billion asset sales; capital efficiency 2011 start-ups: >400kboe/d*; $30bn investment NEW WAVE OF PRODUCTION GROWTH Selective Downstream growth On track for 2012 cashflow and production t
Slide 35: New York Investor Day Q&A
ROYAL DUTCH SHELL NEW YORK INVESTOR DAY Q&A 35 Copyright of Royal Dutch Shell plc 9 September 2011