Slide 1: Responsible Investment Annual Briefing
Responsible Investment Annual Briefing Socially responsible investors Royal Dutch Shell plc April 16, 2018 #makethefuture Royal Dutch Shell April 16, 2018
Slide 2: Definitions and cautionary note
This presentation contains data and analysis from Shell’s new Sky Scenario. Unlike Shell’s previously published Mountains and Oceans exploratory scenarios, the Sky Scenario is targeted through the assumption that society Definitions and reaches the Paris Agreement’s goal of holding global average te
Slide 3: Panels
Panels PANEL 1 PANEL 2 Nigeria Net Carbon Footprint Osagie Okunbor Harry Brekelmans Managing Director SPDC Director Projects and Technology Monika Hausenblas Angus Gillespie EVP Safety and Environment VP CO2 (transitioning) Rupert Thomas John MacArthur VP Environment VP CO2 (transitioning) Royal Dut
Slide 4: Nigeria panel
Nigeria panel Clean-up and UNEP progress SPDC JV1 spills Collaboration and progress under MOU (Bodo) Thousand tonnes Number 20 200 HYPREP2 $10 million take-off grant, 15 150 and project coordinator appointed 10 100 Reduction of oil spilled to environment 5 50 from operational spills 0 0 Theft
Slide 5: Net Carbon Footprint panel
Net Carbon Ambition to reduce Net Carbon Footprint1 Ambition for Net Carbon Footprint1 Footprint panel of our energy products by around 20% by WtW gCO2e/MJ1 2035 Shell “business as usual” ~20% reduction by 2035 Covers full range of emissions from energy products (Scope 1, 2 and 33) In line with so
Slide 6: Royal Dutch Shell April 16, 2018
Royal Dutch Shell April 16, 2018
Slide 7: Responsible Investment Annual Briefing
Responsible Investment Annual Briefing Socially responsible investors Royal Dutch Shell plc April 16, 2018 #makethefuture Royal Dutch Shell April 16, 2018
Slide 8: Definitions and cautionary note
This presentation contains data and analysis from Shell’s new Sky Scenario. Unlike Shell’s previously published Mountains and Oceans exploratory scenarios, the Sky Scenario is targeted through the assumption that society Definitions and reaches the Paris Agreement’s goal of holding global average te
Slide 9: Donny Ching, Legal Director
Donny Ching Legal Director Royal Dutch Shell Royal Dutch Shell April 16, 2018
Slide 10: Fact recap
Year Event1 OPL 245 Fact recap 1998 Malabu awarded licence for OPL 245 2001 Shell Nigeria Ultra Deep (“SNUD”) farms in 2001 Federal Government of Nigeria (“FGN”) revokes the Malabu Licence SNUD bids for and is awarded OPL 245 by FGN and later signs a PSC with Nigerian National Petroleum 2002 Corpora
Slide 11: No case to answer
OPL 245 Shell media statement: No case “Based on our review of the Prosecutor of Milan's file and all of the information and facts available to us, we do to answer not believe that there is a basis to convict Shell or any of its former employees. If the evidence ultimately proves that improper payme
Slide 12: Criminal complaint
OML 42 Shell media statement: Criminal “Based on what we know now from an internal investigation, we suspect a crime may have been committed by complaint our former employee, Peter Robinson, against Shell in relation to the sale process for Oil Mining Lease (OML) 42 in Nigeria in 2011. We have filed
Slide 13: Ben van Beurden, Chief Executive Officer
Ben van Beurden Chief Executive Officer Royal Dutch Shell Royal Dutch Shell April 16, 2018
Slide 14: Strategic ambition
Strategic 2017 ambition Year of transformation Thrive in the energy Strong financial delivery and strengthened financial framework transition Growth momentum Resilient and relevant portfolio positioned long term Reduce the Net Carbon Footprint of our energy products in line World-class wit
Slide 15: ESG programme
ESG programme Key events Responsible Investment Annual Briefing (since 2006) 2018: Board engagement day Chairman roadshows Remuneration Committee roadshows Engagements with IIGCC1 (CA100+2) www.shell.com/esg 1 Institutional Investors Group on Climate Change, 2 Climate Action 100+ initiativ
Slide 16: RDS reporting
Leading in transparency 2017 RDS reporting Announcement of Net Carbon Footprint ambition (November 2017) 2017 CDP Climate change score: “B” Inclusion in the Dow Jones Sustainability Index 2018 progress Disclosures aligned to Task Force on Climate-related Financial Disclosures (TCFD) “Shell
Slide 17: Hans Wijers, Chair of the CSRC
Hans Wijers Chair of the CSRC Royal Dutch Shell Royal Dutch Shell April 16, 2018
Slide 18: Corporate and Social Responsibility Committee
Corporate and Social Responsibility Committee Hans Wijers1 Sir Nigel (Chair) Sheinwald2 Linda G. Catherine Stuntz3 J. Hughes 1 Hans Wijers stands down as a Director of the Company at the close of business of the 2018 Annual General Meeting to be held on May 22, 2018 2 On March 14, 2018, the Board ap
Slide 19: CSRC topics
Areas of focus 2017 2018 CSRC topics Pernis refinery site visit, The Netherlands Afam VI power plant, Nigeria Approach to the energy transition Net Carbon Footprint Methane Nature based solutions Greenhouse gas (GHG) metrics in remuneration Ethics and compliance Nigeria Groningen G
Slide 20: GHG metrics in remuneration
Rewarding performance in The GHG metrics in the 2018 scorecard have evolved and coverage has increased to close to 90% of the line with delivery of strategy Scope 1 and 2 operated emissions, compared to 60% in 2017 GHG metrics in CEO personal performance agreement includes strategy and progress
Slide 21: How the CSRC looks at climate change
How the CSRC Fully support the Paris agreement looks at climate “We believe that the need to reduce GHG emissions, which are largely caused by burning fossil fuels, will transform the energy system in this century.” (RDS Annual Report 2017) change Management of risks and opportunities Managed in a
Slide 22: Ben van Beurden, Chief Executive Officer
Ben van Beurden Chief Executive Officer Royal Dutch Shell Royal Dutch Shell April 16, 2018
Slide 23: HSSE performance
HSSE Goal Zero on safety Operational spills performance Injuries – TRCF/million working hours million working hours Volume in thousand tonnes 10 Number of spills 500 800 4 600 400 5 250 2 200 0 0 0 0 2007 2009 2011 2013 2015 2017 2007 2009 2011 2013 2015 2017 TRCF Working hours Volume Number Upstrea
Slide 24: Culture of care
Embedding a Golden rules: comply, intervene and respect Culture of care Protecting our reputation and driving competitive advantage Care Human Care for people Physical Safety leadership performance in projects environment Behavioural and and care road safety Caring for individuals and Programmat
Slide 25: Nigeria
Performance Operational spill volume reduction >70% Nigeria Increased number of sabotage-related spills Commenced Bodo spill clean-up under Bodo Mediation Initiative The SPDC JV Afam VI power plant supplied ~15% of the nation’s grid-connected electricity in 2017 Livewire alternative liveliho
Slide 26: Societal challenge
Thrive in the energy transition 2015 2070 Societal challenge Increasing population 7 billion >10 billion Increasing energy demand 570 Exajoules 1000 Exajoules Challenge for more and cleaner energy Need to reduce CO2 emissions Reduction required in the carbon 32 gt CO2e CO 2 Net Zero intensity of
Slide 27: Sky – Meeting the goals of the Paris agreement
Sky – Meeting New scenario launched World primary World total CO2 emissions March 2018 energy by source from energy the goals of the Paris agreement EJ/year GT CO2 /year 1,200 40 1,000 35 800 30 25 600 20 400 15 200 10 0 5 2015 2030 2040 2050 2060 2070 Oil Biofuels 0 Natural Gas Biomass -5 Coal Nucl
Slide 28: Driving to resilience and ambition
Thrive in the energy transition Demonstrating Shell’s approach across multiple time horizons Driving to TIME HORIZON resilience and 1-3 YEARS 5-10 YEARS >10 YEARS ambition SHORT TERM MEDIUM TERM LONG TERM GHG Strategic positioning and Net Carbon Footprint management portfolio resilience methodology
Slide 29: Financial framework
Resilience CFFO excluding working capital Capital investment flexibility Financial $ billion $ billion (per annum) 2018 – 2020 framework $99 $52 $44 $54 Oil products 4-5 40 Conventional oil + gas 4-5 30 Integrated gas 4-5 Deep water 5-6 20 Chemicals 3-4 10 Shales 2-3 New energies 1-2 0 Total 25-30 2
Slide 30: Portfolio
Resilience Diverse business segments Geographic diversity Active portfolio management Portfolio Marketing earnings Projects waiting FID: average Cash engines break-even <$30 DEEP WATER OIL INTEGRATED CONVENTIONAL PRODUCTS GAS OIL + GAS Permian direct field Growth expenses -33% in 2017 Chemicals earn
Slide 31: Ambition – Net Carbon Footprint
Thrive in the energy transition Ambition to reduce Net Ambition for Net Carbon Footprint1 Ambition – Net Carbon Footprint1 of our WtW gCO2e/MJ1 Carbon Footprint energy products by around 20% by 2035 Shell “business as usual” Covers full range of emissions from energy products (Scope 1, 2 and 33) ~
Slide 32: Scope of our Net Carbon Footprint
Scope of our Net Emissions from energy products included within the Net Carbon Footprint framework Carbon Footprint Third-party Key2 Emissions from bringing own products products to the market (Scope 1,2) Third-party crude Emissions from bringing third-party products to the market (Scope 1,2) Emissi
Slide 33: Shareholder resolution – response
Shareholder Shell’s approach goes further than Our Net Carbon Footprint ambition resolution – shareholder resolution requests moves in line with society response We include emissions from: Shell cannot predict society and government (The production of) Shell’s energy products future actions
Slide 34: Case studies
Thrive in the energy transition Biofuels R&D: IH2® Adapting our retail network Case studies Hydrogen network development – UK, Germany and USA 20+ ‘recharge’ locations – UK & Netherlands IH2® demonstration facility, India 500 ultra-fast charge posts with IONITY in next 2 years – Europe Integrated ch
Slide 35: Questions and Answers
Questions and Answers Ben van Beurden Hans Wijers Harry Brekelmans Donny Ching Chief Executive Officer Chair of the CSRC Projects and Technology Director Legal Director Royal Dutch Shell April 16, 2018
Slide 36: Maarten Wetselaar, Integrated Gas and New Energies Director
Maarten Wetselaar Integrated Gas and New Energies Director Royal Dutch Shell Royal Dutch Shell April 16, 2018
Slide 37: Policy actions for clean energy
Policy actions Global National for clean energy G20 endorses role of gas in energy transition China favours gas and renewables and reforms gas market IEA recognises CO2 emissions South Korea prioritises renewables reductions from coal-to-gas and gas switching and renewables (China, Germany
Slide 38: Integrated Gas
Integrated Gas Cash engine Creating & securing demand Optimisation Managing supply LNG Marketing and trading Gas and liquids production Gas and power Shipping and transport Liquefaction World leader Gas-to-liquids premium products Regasification Gas-to-liquids Growing markets C
Slide 39: Reducing methane emissions
Reducing Methane guiding principles Oil and Gas Climate Initiative methane emissions Product stewardship of gas Shell led development of principles; Commitment to work towards near zero methane 8 companies initially signed and 3 more since emissions – target to be announced end 2018 Focus on ent
Slide 40: New Energies
New Energies New Fuels Power Wuppertal, Germany NoordzeeWind, The Netherlands Focus areas: Focus areas: Selective and opportunity Biofuels Trading, marketing and customer access driven investment Hydrogen Low-carbon generation and storage Capital investment Electric mobility Inve
Slide 41: Power value chain
Power value chain SUPPLY AND CUSTOMERS OPTIMISATION GENERATION Multiple parties are active on Leverage portfolio flexibility and Not all products are supplied by Shell; the demand side arbitrage opportunities some are purchased from third parties Adjacencies to existing businesses Secure demand
Slide 42: Power value chain
Power value chain SUPPLY AND CUSTOMERS OPTIMISATION GENERATION Multiple parties are active on Leverage portfolio flexibility and Not all products are supplied by Shell; the demand side arbitrage opportunities some are purchased from third parties Adjacencies to existing businesses New Motion S
Slide 43: Delivering a profitable energy access business
Delivering Steamaco Husk Power Systems SolarNow a profitable energy access business Technology company Mini-grid company Off-grid modular solar solutions Universal smart metering Hybrid solar PV and biomass for homes and businesses platform gasification solution Offers consumer financing
Slide 44: Maarten Wetselaar, Integrated Gas and New Energies Director
Maarten Wetselaar Integrated Gas and New Energies Director Royal Dutch Shell Royal Dutch Shell April 16, 2018
Slide 45: Questions and Answers
Questions and Answers Maarten Wetselaar Mark Gainsborough Integrated Gas and EVP New Energies New Energies Director Royal Dutch Shell April 16, 2018
Slide 46: Additional information
Additional information Royal Dutch Shell April 16, 2018
Slide 47: NAM
NAM January A 50:50 Joint Venture with Earthquake Zeerijp with a force Shell and ExxonMobil of 3.4 on the scale of Richter November August NAM submits 5 years updated January since Hazard SodM advice to minister March Huizinge and Risk on gasproduction level. NAM at a earthquake Assessment Gasproduc
Slide 48: Nigeria environmental performance
Nigeria Clean-up & UNEP progress SPDC JV1 spills environmental Commenced Bodo spill clean-up Thousand tonnes 20 Number 200 performance under Bodo Mediation Initiative 15 150 HYPREP2 $10 million take-off grant, 10 100 and project coordinator appointed 5 50 Oil spill prevention & remediation 0 0
Slide 49: Contractor management
Case study: Brent Brent decommissioning decommissioning Platforms and infrastructure retirement Contractor ~1,000 people management >97% planned to be recycled Brent-Delta platform lift Single lift Coordination with >100 companies Extensive contractor collaboration Brent created jobs and
Slide 50: Human rights
Human rights Integrated approach Informed by Universal Declaration of Human Rights, core conventions of International Labour Organization and UN Guiding Principles on Business and Human Rights Example: Worker Welfare – Singapore Example: Voluntary Principles on Security and Human Rights (VPSHR)
Slide 51: Directors’ remuneration policy
Benchmarked against 4 oil majors Directors’ Fixed and 15 European companies remuneration remuneration policy Short term Short-term operational delivery 30% 50% Operational CFFO 50% cash targets excellence Annual 50% bonus in shares, subject to 20% Sustainable 12.5% Project delivery 3-year hold
Slide 52: Health, Safety, Security & Environment
Health, Safety, Process safety is central in achieving Shell’s goal of zero harm to people and the environment Security & Managed by combining asset integrity principles with a risk management approach, supported by visible safety leadership Environment Asset integrity Risk management Process sa
Slide 53: Shareholder resolution – response
Shareholder Follow This resolution Shell response resolution – Set and publish targets that are aligned with the goal of the Paris Climate Agreement to limit global warming to well Already announced Net Carbon Footprint1 ambition (November 2017) Around 50% reduction of Net Carbon Footprint of our
Slide 54: Chronology of events (1)
OPL 245 Phase 1 Chronology 1998 – Malabu awarded licence for OPL 245 of 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 55: Chronology of events (2)
OPL 245 Phase 2 (continued) Chronology Various litigations follow: of 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 56: Chronology of events (3)
OPL 245 Phase 3 Chronology December 2006 – FGN settles litigation with Malabu and reallocates the licence to Malabu of 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 57: Chronology of events (4)
OPL 245 Phase 4 Chronology 2010 – negotiations now include ENI of 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 58: Agreements of April 2011
OPL 245 Heads of Agreement between NAE and SNUD and SNEPCO: allocation of the payments due to FGN Agreements Block 245 Resolution Agreement: FGN, NNPC, SNUD, SNEPCO and NAE of April 2011 Payments to FGN and award of the licence FGN indemnifies SNEPCO and NAE against competing claims Key fi
Slide 59: 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 60: Royal Dutch Shell April 16, 2018
Royal Dutch Shell April 16, 2018