Shell Plc · LSE:SHEL
Shell — Royal Dutch Shell — Investor Day (October 2017)
31 slides from Shell's investor day presentation, Oct 13, 2017
Slide 1: Re-shaping Shell, to create a world-class investment case
Re-shaping Shell, to create a world-class investment case Chemicals Investor Briefing John Abbott – Downstream Director Graham van’t Hoff – EVP Chemicals Royal Dutch Shell plc October 13, 2017 #makethefuture Royal Dutch Shell October 13, 2017
Slide 2: John Abbott, Downstream Director
John Abbott Downstream Director Royal Dutch Shell plc Royal Dutch Shell October 13, 2017
Slide 3: Definitions & cautionary note
Definitions & 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 consistent with t
Slide 4: 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 5: Let's make the future
Strategy “Let’s make the future” STRATEGIC Focus portfolio on resilient positions Invest in advantaged projects World-class Value chain integration investment case FCF/share + ROCE growth Leader: value Conservative financial + influence management OPERATIONAL Reducing our Shared carbon val
Slide 6: Driving strategy in multiple time horizons
Driving strategy Cash engines: today Growth priorities: 2016+ Future opportunities: 2020+ in multiple time horizons Funds dividends + balance sheet Cash engines 2020+ Material value + upside Affordable growth in Competitive + resilient Path to profitability advantaged positions Strong free cash flow
Slide 7: Downstream
Downstream Cash engine Growth priority Marketing Refining & Trading Chemicals Differentiated products Full integration with trading Advantaged feedstock from Further strengthen our Brand leverage + customer offer Improve retained assets Upstream and refining financial performance Selec
Slide 8: Graham van't Hoff, Executive Vice President - Chemicals
Graham van‘t Hoff Executive Vice President - Chemicals Royal Dutch Shell October 13, 2017
Slide 9: Agenda
Agenda 01 Chemicals demand 02 Position of Shell Chemicals within the industry 03 Shell Chemicals strategy 04 Execution 05 Financial performance 06 Growth projects 07 Q&A Royal Dutch Shell October 13, 2017 9
Slide 10: Solar Impulse: aircraft structure made from chemical technology
Solar impulse: 90% of the aircraft’s structure made from chemical technology Royal Dutch Shell October 13, 2017 10
Slide 11: Chemicals demand outlook
Chemicals Chemicals demand outlook Growth priority Petrochemicals* demand in kT per annum 500,000 400,000 300,000 Asia 52% 200,000 Shell produces key Asia 37% petrochemical building 100,000 blocks Limited impact of recycling Chemicals enabling CO2 0 reduction 2000 2005 2010 2015 2020 2025 2030
Slide 12: Eight core markets
Chemicals Eight core markets Share of chemicals volume, 2015 24% 23% 20% 10% Consumer Construction Packaging Agriculture Clothing, furniture, toys PVC pipes, plywood, insulation Bottles, food packaging, crates Fertiliser 7% 7% 6% 2% Diverse end-uses drive Electronics Transportation Durables & indust
Slide 13: Positioning in the competitive landscape
Chemicals Positioning in the competitive landscape Growth priority BASE CHEMICALS/ INTERMEDIATES PERFORMANCE SOLUTIONS CONSUMERS FEEDSTOCKS Add Differentiation Pure Chemical Companies Access to advantaged feedstock Customised solutions Process technologies Product-materials innovation Big
Slide 14: Chemicals value chains
FEEDSTOCKS BASE CHEMICALS INTERMEDIATES PERFORMANCE CONVERTER END PRODUCT Chemicals METHANE Value chains C1 Methanol Ammonia Acetic Acid / VAM Urea Agriculture EO/MEG Polyester Fibres Consumer ETHANE Ethylene Alpha olefins HODer Surfactants Consumer C2 Polyethylene Films Packaging BIO BASE FEED NAPH
Slide 15: Positioning in the competitive landscape
Chemicals Positioning in the competitive landscape Growth priority Competitors are actively acquiring or developing differentiation further down the value chains Active aggregation of technology and position Advantaged Established Integrated Oil FEEDSTO CK companies Moving towards Generic specialtie
Slide 16: Strategy
Chemicals Strategy Advantaged Feedstock First Class Footprint Strong Product & Customer Portfolio Excellence Every Day & HSSE Access Advantaged Feedstock Monetize With Competitive Advantage Technology A highly profitable hydrocarbon upgrader Royal Dutch Shell October 13, 2017 16
Slide 17: Organisational design
Organisational Board design CEO Downstream Director EVP Chemicals Downstream integration Refining Chemicals Projects & Technology Upstream & Integrated Sites Trading & Supply Integrated Gas Royal Dutch Shell October 13, 2017 17
Slide 18: Balanced feed portfolio - enhanced
Strong product Excellence Advantaged First class footprint & customer every day & Feedstock portfolio HSSE Balanced feed Base chemicals cycles Feedstock portfolio has shifted to portfolio - Indicative industry margins ($/mT) advantaged feed and more gas enhanced Oil Gas Oil Gas Feed Feed Parity Pari
Slide 19: Focused and balanced footprint
Strong product Excellence Advantaged First class & customer every day & Feedstock footprint portfolio HSSE Chemicals Portfolio consolidated from 133 locations in 1998 to 15 today Focused and balanced FEP & footprint Scotford Stanlow Rheinland Sarnia Shell-CNOOC JV – Petrochemical complex Moerdijk, P
Slide 20: Market-leading process technologies
Strong product Excellence Advantaged First class & customer every day & Feedstock footprint portfolio HSSE Chemicals Shell has been active in petrochemicals since 1929 Market-leading Long history of product & technology development process ~1,000 customers: technologies Annual product sales:
Slide 21: Operating and safety performance
Strong product Excellence Advantaged First class & customer every day & Feedstock footprint portfolio HSSE Chemicals Chemicals plants – unplanned downtime Operating % and safety 12 performance 10 8 6 4 2 0 2012 2013 2014 2015 2016 Unplanned downtime without “big-hits” Unplanned downtime “big-hits” i
Slide 22: Financial and competitive performance
Chemicals Earnings Competitive performance – ROACE 4Q rolling Financial and $ billion $/barrel % competitive 3 120 30 Average: $104 25 performance 2 80 20 15 1 Average: $49 40 10 5 0 0 0 2010 2011 2012 2013 2014 2015 2016 17Q2 13Q1 14Q1 15Q1 16Q1 17Q1 4Q Rolling Earnings Average Brent oil price (RHS
Slide 23: Growth projects
Chemicals Ethylene capacity Under construction Growth projects Million metric tonnes Pennsylvania 425,000 metric tonnes cracker additional Alpha Olefins Bukom capacity 8 start-up Nanhai I USGC Nanhai II Geismar, USA restructuring 6 New liquids cracker and derivatives units Capacity: ~1.2 milli
Slide 24: Growth projects: AO4 Geismar expansion
Chemicals Fourth Alpha Olefins (AO4) unit - Growth projects: 425,000 tonnes additional capacity AO4 Geismar expansion Capacity increases to 1.3 million mt Integrated with ethylene crackers at Deer Park and Norco Geismar, LA Based on Shell’s proprietary technology Start up H2 2018 Leading A
Slide 25: Growth projects: CNOOC & Shell Petrochemicals
Chemicals CSPC’s Petrochemicals complex Heilongjiang Growth projects: CSPC: 50/50 JV Shell & CNOOC CNOOC & Shell Jilin Inner Mongolia Liaoning Xinjiang Petrochemicals Ethylene cracker unit: 1 million mt current Beijing Tianjin Company (CSPC) capacity Qinghai Shaanxi Shandong Jiangsu Tibet Sichua
Slide 26: Growth projects: Pennsylvania Chemicals
Chemicals Growth projects: Facility Cracker bottom streams Pennsylvania Ethane Falcon Pipeline 1.5 mtpa (C3+) Chemicals Ethylene Cracker Ethylene Rail logistics 3 polyethylene Catalyst, Shell Units Polyethylene Comonomer Steam & Power Truck logistics Natural Gas Co- generator Surplus power export (1
Slide 27: Growth projects: Pennsylvania Chemicals
Chemicals Components of competitive advantage: Growth projects: Locally sourced and long-term contracted ethane with supply cost advantage Pennsylvania > 70% of the North American polyethylene market sits within 700-mile radius Chemicals Economic development, job creation and investment incent
Slide 28: Organic growth
Chemicals Earnings + ROACE Organic growth $ billion % 4 20 Improve base business 15 Expand current base portfolio 2 10 Adding to portfolio – growth 5 Targets aspiration per year mid-’20s: Earnings: ~$3.5 - 4 billion 0 0 Cash flow: ~$5 - 6 billion 2009 2010 2011 2012 2013 2014 2015 2016 17Q
Slide 29: Chemicals - Key messages
Chemicals - Key messages Putting safety first Strong heritage, scale and performance World-class Leader: value investment case World-scale assets in strategic locations + influence Process technology advantages Reducing our Shared carbon value with intensity society Royal Dutch Shell October
Slide 30: Questions & Answers
Questions & Answers John Abbott Graham van’t Hoff Director Downstream Executive Vice President - Chemicals Royal Dutch Shell October 13, 2017
Slide 31: Royal Dutch Shell October 13, 2017
Royal Dutch Shell October 13, 2017