Slide 1: Annual roundtable Socially Responsible Investors
Annual roundtable Socially Responsible Investors Royal Dutch Shell plc April 24, 2017 #makethefuture Royal Dutch Shell April 24, 2017
Slide 2: Ben van Beurden, Chief Executive Officer
Ben van Beurden Chief Executive Officer Royal Dutch Shell Royal Dutch Shell April 24, 2017
Slide 3: Cautionary note
Cautionary note This presentation contains data from Shell’s New Lens Scenarios. The New Lens Scenarios are a 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 quantifications, and
Slide 4: Agenda
Agenda 09:30 – 10:45 Presentation Ben van Beurden Donny Ching Hans Wijers Guy Outen 10:45 – 11:30 Q&A 11:30 – 12:00 Coffee break 12:00 – 14:00 Panel sessions Q&A (35 minutes each, 5 minutes to rotate) 14:00 – 14:45 Lunch Royal Dutch Shell April 24, 2017 4
Slide 5: Panels
Panels PANEL A PANEL B PANEL C Projects and Technology, Upstream Safety and Strategy including New Energies, climate Joint Ventures Environment change and CO2 management Harry Brekelmans Babs Omotowa Guy Outen Director Projects and Technology VP Safety & Environment Upstream EVP Strategy & Portfolio
Slide 6: Donny Ching, Legal Director
Donny Ching Legal Director Royal Dutch Shell Royal Dutch Shell April 24, 2017
Slide 7: Chronology of Events (1)
OPL 245 Phase 1 Chronology of 1998 - Malabu awarded licence for OPL 245 Events (1) March 2001 - Shell Nigeria Ultra Deep (“SNUD”) farms in Representations and warranties were provided on ownership of Malabu Federal Government Nigeria (“FGN”) consented Phase 2 July 2001 - FGN revokes the Ma
Slide 8: Chronology of Events (2)
OPL 245 Phase 2 (continued) Chronology of Various litigations follow: Events (2) May 2002 - SNUD commenced International Chamber of Commerce arbitration proceedings against Malabu. August 2002 - Malabu commenced proceedings against FGN, Shell Nigeria Exploration and Production Company (“SNEPCO
Slide 9: Chronology of Events (3)
OPL 245 Phase 3 Chronology of December 2006 - FGN settles litigation with Malabu and reallocates the licence to Malabu Events (3) Malabu and SNUD now have competing legal rights to the Block April 2007 - SNUD commences Bilateral Investment Treaty arbitration against the FGN for wrongful exprop
Slide 10: Chronology of Events (4)
OPL 245 Phase 4 Chronology of 2010 - negotiations now include ENI Events (4) Settlement with FGN - negotiations are conducted with Attorney General of FGN, the Minister of Petroleum Resources, the Minister of Finance and senior NNPC officials April 2011 - settlement is achieved. FGN receives $
Slide 11: Agreements of April 2011
OPL 245 Heads of Agreement between NAE and SNUD and SNEPCO: allocation of the payments due to FGN Agreements of Block 245 Resolution Agreement: FGN, NNPC, SNUD, SNEPCO and NAE April 2011 Payments to FGN and award of the licence FGN indemnifies SNEPCO and NAE against competing claims Key fi
Slide 12: Shell Review
OPL 245 Debevoise & Plimpton LLP, an international law firm, was retained by the Shell Group Shell Review Debevoise conducted and led an investigation which included staff from the law firm and Shell’s Business Integrity Department Periodic updates to senior management, Audit Committee and RDS
Slide 13: Shell response
OPL 245 “Given this matter is currently under investigation, it would be inappropriate to comment on specifics. However, Shell response based on our review of the Prosecutor of Milan's file and all of the information and facts available to Shell, we do not believe that there is a basis to prosecute
Slide 14: Ben van Beurden, Chief Executive Officer
Ben van Beurden Chief Executive Officer Royal Dutch Shell Royal Dutch Shell April 24, 2017
Slide 15: ESG Programme
ESG Programme SRI programme SRI annual roundtable Ongoing engagement + roadshows SRI themed site visits Governance programme Remuneration committee roadshows Chairman roadshows AGM 2016: ESG Board engagement day www.shell.com/esg Royal Dutch Shell April 24, 2017 15
Slide 16: Transition 2016 + delivery 2017+
Transition 2016 + delivery 2017+ Continued drive to re-shape Shell World-class Consolidated BG into Shell investment case Progressing 4 levers: cost reductions, capital FCF + ROCE growth Leader: value + Conservative financial spend, divestments and project start-ups influence management Fr
Slide 17: RDS Reporting
Leading in transparency 2017 update RDS Reporting A- in 2016 CDP Inclusion in the Dow Jones Sustainability Index Increased disclosure on Human Rights Revenue transparency reporting (June 2017) Engagement with Taskforce on Climate-related Financial Disclosures (TCFD) Royal Dutch Shell April
Slide 18: Health, Safety, Security & Environment
Health, Safety, Process safety is central in achieving Shell’s goal of zero harm to Security & people and the environment Environment Managed by combining asset integrity principles with a risk management approach, supported by visible safety leadership Asset Integrity Principles Risk Management
Slide 19: HSSE Performance
HSSE Goal Zero on safety Spills - operational Performance Injuries – TRCF/million working hours million working hours Volume in thousand tonnes Number of spills TRCF Working hours (RHS) Volume Number Energy intensity - refineries Process safety Energy Intensity Index (EEITM) Number of incidents HS
Slide 20: Safety Leadership
Embedding a safety Our Commitment Brazil: Shell + Petrobras culture Visible leadership commitment at all levels Pro-active sharing of learnings Safety Collaboration with peers, partners, Joint support to implement well control assurance Leadership contractors, communities, and regulators too
Slide 21: Road Transport
Committed to reducing Our Approach Permian Petroleum Development Oman exposure Reduce number of journeys Infrastructure investment reduces Introduced centralized journey Road Transport Road safety requirements truck hauling control room Learn and share from incidents Formation of Permian
Slide 22: Contractor Safety Management
Contractor Contractors are critical to achieve Goal Zero Safety > 190,000 contractors Represent 65% of total exposure hours Management Perform most high risk activities Evolving contractor management strategy Number of fatalities Total recordable case frequency (TRCF) # Injuries per million
Slide 23: Ongoing emissions management
Ongoing Energy intensity Emissions emissions GJ/tonne1 Index Million tonnes CO2 equivalent management Upstream excl. oil sands, LNG, GTL Refining Chemicals Direct (scope 1) Indirect (scope 2)2 Flaring performance Million tonnes hydrocarbon flared "Zero Routine Flaring by 2030“ initiative Start-u
Slide 24: Nigeria HSSE performance
Nigeria Improved operational oil spill numbers and safety HSSE performance performance over 2016 Lower oil theft volumes and sabotage related spills despite resurgence in militant activity Progress on Nigerian government-led multi- stakeholder UNEP clean-up efforts 2016 beneficiaries ‘Cradle t
Slide 25: Hans Wijers, Chairman of the CSR Committee
Hans Wijers Chairman of the Corporate Social Responsibility Committee Royal Dutch Shell Royal Dutch Shell April 24, 2017
Slide 26: CSRC topics
CSRC topics 2016 areas of focus 2017 areas of focus A Shell technician conducting integrity checks on Shearwater, Aberdeen, Scotland Lula FPSO Cidade de Saquarema, Brazil (NOV) Nigeria Nigeria Greenhouse gas metrics in remuneration Process safety (including BG assets) Asset integrity and p
Slide 27: GHG metrics in Remuneration
Rewarding performance in CSRC input into updated Remuneration policy line with delivery of Bonus reflects progress in reducing GHG in 3 key businesses strategy CEO personal performance agreement includes progress in New Energies GHG metrics in Scorecard aligned for staff and Directors Remune
Slide 28: Board and future business environment
Board and future Beliefs Uncertainties business environment Mega Trends Macroeconomics Example: Example: Sustained era of transition & volatility Political tensions & regional instability Emerging markets drive Global GDP increases Impact of digital technology Market Example: Example: Hydr
Slide 29: Shell sustainability in action
Shell Safety and environmental performance in sustainability Karachaganak, Kazakhstan Shell Biofuels business and 2G biofuels in action technologies Shell Hydrogen projects in core markets in North West Europe and North America IH2 advanced biofuels demonstration facility, India Karachaganak P
Slide 30: Ben van Beurden, Chief Executive Officer
Ben van Beurden Chief Executive Officer Royal Dutch Shell Royal Dutch Shell April 24, 2017
Slide 31: Energy challenge
Energy challenge Growing population Global population will increase from around 7.4 billion today to nearly 10 billion by 2050, with 67% living in cities Rising demand Global energy demand will likely be almost 60% higher in 2060 than today, with 2 billion vehicles on the road (800 million today) On
Slide 32: Shell's activities in the energy transition
Shell’s activities in the energy transition World-class investment case Developing our gas business Biofuels business New Energies business Developing CCS R&D in low carbon technologies Shell Technology Ventures Advocate CO2 pricing Scenarios thought leadership Coalitions & government advisory Royal
Slide 33: Shareholder resolutions
Shareholder 2015 “Aiming For A” 2016 “Follow-this.org” 2017 “Follow-this.org” resolutions “Strategic resilience for “Shell will become a renewable “Shell will set targets to reduce 2035 and beyond” energy company” scope 1, 2 + 3 GHG emissions” Supported by Board + Not considered in best interest
Slide 34: Supporting the Paris agreement
Supporting the Examples how Shell’s activities can help work with others towards meeting the aspiration of the Paris agreement Paris agreement Supplying LNG to Pakistan, displacing liquid fuels used for power generation increases Shell’s Scope 3 emissions, but reduces the emissions from power genera
Slide 35: Portfolio resilience to energy transition
Portfolio IEA ‘450’ scenario Examples of resilience in strategic themes resilience to Global energy demand, million boe per day Oil products: By 2025, significantly increase low-emission energy transition Other renewables fuels Shell offers to customers Conventional oil and gas: Nuclear Drive for to
Slide 36: Integrated Gas
Supporting energy Supporting renewable generation growth Addressing local air quality concerns transition Average time required to come online, minutes lb/MWh gross Integrated Gas Negligible emissions from gas Negligible emissions from gas Coal Emissions, Supercritical Natural Gas CCGT Pulverized Co
Slide 37: Oil Products
Retail’s 5 ambitions for 2025 Oil Products 1 2 3 4 5 50% 20% LOWER EVERY 100% CARBON CUSTOMER Increase margin Fuels margin from Reduce carbon Treated like a Sites committed to share from low-emission intensity of our guest on site & in local communities convenience retail energy solutions retail out
Slide 38: Chemicals
Chemicals Increasing standards of living driving growth Innovative solutions that support a lower carbon future Cold wash laundry Modern home Lightweight detergents insulation plastics in cars Petrochemicals are the key ingredients for thousands of essential products Faster growth than GDP She
Slide 39: Upstream
Delivering resilient Drive top quartile operational performance production “Fit for the Future” drive for top quartile CO2 intensity and cost Upstream competitiveness Target low break-even price projects for future development New projects to deliver top quartile CO2 intensity and zero flared/
Slide 40: Methane emissions
Methane Shell methane management: emissions Working to better detect methane emissions Range of initiatives to reduce methane emissions Detect and repair programmes Flaring and venting reduction Methane <5% of Shell’s emissions Collaborating on methane: Climate and Clean Air Coalition (C
Slide 41: Guy Outen, EVP Strategy & Portfolio
Guy Outen EVP Strategy & Portfolio Royal Dutch Shell Royal Dutch Shell April 24, 2017
Slide 42: Shell scenarios
Shell scenarios Identifying emerging challenges to guide us Globalisation, liberalisation, Social fragmentation & Era of volatile Changing sources of through change technology diffusion; environmental cohesion dilemmas; re- energy influence & decision Trends pressures; Asian growth emergence of Stat
Slide 43: Beliefs and uncertainties
Beliefs and Beliefs Uncertainties uncertainties Mega Trends Macroeconomics Example: Example: Sustained era of transition & volatility Political tensions & regional instability Emerging markets drive Global GDP increases Impact of digital technology Market Example: Example: Hydrocarbon dema
Slide 44: Shell strongly positioned
Leverage brand, reach Changing landscape Global Retail and core competences Global #1 Retailer Shell strongly Energy Transition & Mobility Shifts One of the largest B2B payment player positioned Global Commercial Global #1 Lubricants marketer Strong OEM relationships Digitalization & other d
Slide 45: Shell's strategy
Shell’s strategy #makethefuture Aspired Future Leader: World-class value + investment case World-class investment case influence Leader: value + influence Reducing our carbon intensity Shared Reducing value Shared value with society our carbon with intensity society Aspired Winning Portfolio
Slide 46: New energies strategy
New energies Advanced Biofuels Hydrogen strategy Emerging strategy Renewable Power Customer Solutions Opportunity dependent Aim to grow investment to up to $1 bln by 2020 Royal Dutch Shell April 24, 2017 46
Slide 47: Ben van Beurden, Chief Executive Officer
Ben van Beurden Chief Executive Officer Royal Dutch Shell Royal Dutch Shell April 24, 2017
Slide 48: Questions & Answers
Questions & Answers Ben van Beurden Hans Wijers Chief Executive Officer Chair of the CSRC Royal Dutch Shell April 24, 2017 48
Slide 49: Additional information
Additional information Royal Dutch Shell April 24, 2017
Slide 50: Low carbon opportunities
Low carbon opportunities Royal Dutch Shell April 24, 2017 50
Slide 51: Nigeria environmental performance
Nigeria Clean-up + UNEP progress: SPDC JV* spills environmental Niger-delta kick-off event Thousand tonnes # Governance structure progress and initial SPDC JV performance payment for restoration fund done Cooperation with ICUN on remediation volume of operational spills number of operational s
Slide 52: NAM
NAM 2017 progress: A 50:50 JV with Shell & Damage claims handling now managed by the ExxonMobil “Nationaal Coordinator Groningen”. NAM at arm’s length and focusing on its core activities NAM is working hard to ensure safe gas production, mitigate the impacts of gas production and offering new pe
Slide 53: Brent decommissioning
Brent 10 year stakeholder engagement, plans shared decommissioning with 180 organisations, including environmental groups and NGOs Brent Delta Topside plan approved: Target date single lift: May 2017 Over 97% planned to be recycled Full Brent Field Decommissioning Programme: 60 day public cons
Slide 54: Water management
Water Water management plans in water scarce areas management Describing the long-term risks to water availability Describe and define measures to minimise use of fresh water or recommend alternatives Involved in working groups with organisations such as the World Business Council for Sustai
Slide 55: Connected car
Connected car Pay for fuel from your Jaguar or Land Rover Example dashboard True world first (scale) amongst super majors. OEMs are reaching out to Shell as a preferred partner due to our digital capability and 43,000 retail outlets globally Launched February 2017 at 600 stations in UK Royal
Slide 56: Royal Dutch Shell April 24, 2017
Royal Dutch Shell April 24, 2017