Shell PLC · LSE:SHEL
Shell — Royal Dutch Shell — Barclays CEO Energy-Power Conference 2015
28 slides from Shell's conference presentation, Sep 8, 2015
Slide 1: Company Update: Barclays CEO Energy-Power Conference
COMPANY UPDATE BARCLAYS CEO ENERGY-POWER CONFERENCE ROYAL DUTCH SHELL 8 SEPTEMBER 2015 Copyright of Royal Dutch Shell plc 8 September, 2015 1
Slide 2: Ben van Beurden, Chief Executive Officer
BEN VAN BEURDEN CHIEF EXECUTIVE OFFICER ROYAL DUTCH SHELL PLC Copyright of Royal Dutch Shell plc 8 September, 2015 2
Slide 3: Definitions & Cautionary Note
DEFINITIONS & CAUTIONARY NOTE NOT FOR RELEASE, PRESENTATION, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISIDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION. The information set out in this presentation is not intended to form
Slide 4: Summary
SUMMARY Integrated business + performance drive supporting results: 12 months CCS earnings $16.2 billion; CFFO $35.6 billion; dividend + buy-back $14 billion Dividend + buy-back commitment $1.88/share 2015; at least $1.88/share 2016 At least $25 billion buy-back expected 2017-2020 Pullin
Slide 5: Oil Price + Outlook
OIL PRICE + OUTLOOK Oil prices OPEC policy change and non-OPEC growth Brent in $ per barrel 120 Medium-term supply/demand fundamentals remain positive 100 Responding with urgency + determination 80 Resilience in today’s oil prices 60 Addressing Shell’s cost structure 40 Global OPEC financi
Slide 6: H1 2015 Delivery
H1 2015 DELIVERY Earnings + ROACE Cash flow $ billion % $ billion $ billion 30 15 50 25 40 20 20 10 30 15 10 5 20 10 10 5 0 0 0 0 2011 2012 2013 2014 H1 2015 2011 2012 2013 2014 H1 2015 4Q rolling 4Q rolling -10 -5 Upstream Corporate/Other CFFO CFFI Free cash flow (RHS) Downstream ROACE (RHS) Divide
Slide 7: Shell Integrated Gas Performance
SHELL INTEGRATED GAS PERFORMANCE 2014 Shell LNG* sales + pricing linkage Integrated gas earnings Million tonnes per annum $ billion $ per unit 3.5 3.5 120 120 45 Short-term 10-15% ‘spot’ 40 30 3 100 100 Gas hubs 20-25% 35 (e.g. NBP, 80 HH) 80 30 20 2 60 25 Oil 60 linked: Term contracts 0 40 20 65% 3
Slide 8: Financial Framework and Priorities
FINANCIAL FRAMEWORK AND PRIORITIES Priorities for cash Financial framework 1. Debt reduction Cash performance 2. Dividends 3. Buy-backs + capital investment Pay-out Investment Grow cash flow from operations + free cash flow Balance sheet Credit rating a priority: debt pay-down Dividend policy
Slide 9: Pulling Levers to Manage Shell in the Downturn
PULLING LEVERS TO MANAGE SHELL IN THE DOWNTURN Cash performance Pulling our financial levers $ billion 50 25 Balance sheet 0 2010 2011 2012 2013 2014 15Q2 4Q rolling CFFO Reduce operating costs Pay-out Investment $ billion $ billion 14 40 Reduce capital investment 7 20 0 0 2010 2011 2012 2013
Slide 10: Balance Sheet
BALANCE SHEET Cash flow surplus Competitive gearing position $ billion, 4Q rolling Q2 2015 % 50 30 20 25 10 0 0 -10 2011 2012 2013 2014 2015 Cash flow from operations Capex + equity acc. invest. + acq Shell Peer group Asset sales Dividend and buy back Implementing a competitive balance sheet strat
Slide 11: Reduce Operating Costs
REDUCE OPERATING COSTS Operating costs + outlook Continuous improvement drive $ billion 50 Supply chain re-set -10% Targeted programmes: Oil Products, North- America onshore, North Sea, others 25 Lower overheads: finance, commercial + IT 0 2013 2014 H115 2015 E 4Q rolling Full year actual 20
Slide 12: Reduce Capital Investment
REDUCE CAPITAL INVESTMENT Capital investment - sector Capital investment $ billion, 4Q rolling $ billion Project re-phasing / deferral 60 60 Supply chain savings Dilutions + exits 40 40 -20% -20% 20 20 0 0 2011 2012 2013 2014 2015 2013 2014 2015E 2016E Shell Peer group Shell BG Combination R
Slide 13: Taking Steps to Manage Capital Investment
TAKING STEPS TO MANAGE CAPITAL INVESTMENT 2013 2014 2015 2016 2017+ Majnoon FFD Carmon Creek ph1-2 FUTURE OPPORTUNITIES Carmon Creek ph3-4 RESOURCES PLAYS Appomattox Vito DEEP WATER Bonga South West Arrow greenfield LNG Elba LNG Browse LNG INTEGRATED GAS Wheatstone LNG Abadi – redesign US
Slide 14: Driving Lower Cost in New Developments
DRIVING LOWER COST IN NEW DEVELOPMENTS Launched P&T change programme Example: Appomattox FID July 2015 Standardise: Shell’s 7th 4-column host in GOM 20% cost reduction into FID Upfront planning; fewer wells; supply chain Goal zero: ~$55 per barrel NPV break-even No harm, no leaks Improve c
Slide 15: Portfolio Restructuring
PORTFOLIO RESTRUCTURING Resources plays Oil Products Upstream engine Restructuring $77 billion capital employed Copyright of Royal Dutch Shell plc 8 September, 2015 15
Slide 16: Progress with Restructuring
PROGRESS WITH RESTRUCTURING Downstream Resources plays $ billion % $ billion 15 15 -30% 6 10 10 -35% 4 5 5 2 0 0 0 2011 2012 2013 2014 Q215 2013 2014 2015E 4Q rolling Cash flow ROACE (RHS) Americas International Potential for sustained 10-12% ROACE + $10 2013-14: restructure Americas billion p.a
Slide 17: Asset Sales
ASSET SALES Progressing divestments in 2015 despite weaker market Woodside 9.5% Haynesville + Pinedale Elba LNG Australia DS Italy DS UK retail Wheatstone LNG MLP others Asset sales add focus BC-10 dilution Nigeria onshore $ billion 20 Woodside 10% LPG NWE Stanlow refin
Slide 18: Deliver New Projects + Free Cash Flow
DELIVER NEW PROJECTS + FREE CASH FLOW Top 10 Shell project start-ups 2014+ Potential cash flow in $ billion 10 Appomattox Bonga NW 5 0 Cardamom Clair ph2 -5 -10 Gorgon Gumusut-Kakap 2010 2010 2012 2012 2014 2014 2016 2016 2018 2018 2020 2020 $70 oil price $90 oil price Capex Kashagan ph1 Mars B Pote
Slide 19: Deep Water Gulf of Mexico
DEEP WATER GULF OF MEXICO INVESTING IN ATTRACTIVE GROWTH Stones FID 2013 Appomattox FID 2015 ~50 kboe/d FPSO delivery to Gulf in Q1 2016 ~175 kboe/d Initial two subsea wells drilled to TD 650 million boe resources 2016 start-up Start-up end of decade Upside potential with Rydberg + Get
Slide 20: Shell + BG Summary
SHELL + BG SUMMARY Further reduces our cash breakeven Enhanced free cash flow Enhances dividend potential + delivers buy-backs Accelerates our strategy LNG & deep water leader Value uplift from Shell capabilities at larger scale ‘Grow to simplify’ Springboard to change Shell More resilie
Slide 21: Shell + BG: Transaction Update
SHELL + BG: TRANSACTION UPDATE US FTC Transaction approval Announcement CADE approval Early 2016 Complete transaction Q2 Q3 Q4 Q1 << 2015 2016 >> Integration Portfolio + planning team divestment established planning Market strategy update On track for completion in early 2016, as planned Good pr
Slide 22: Springboard to Change Shell: 'Grow to Simplify'
SPRINGBOARD TO CHANGE SHELL: ‘GROW TO SIMPLIFY’ Longer term 1 $ billion CFFO/potential Shell Combination Simpler, more in $ billion 2014 2020 200 focused company Other Longer term 1 ~$10 billion p.a. More resilient + 150 Deep Water competitive Shell 100 Predictable + Integrated Gas 3 pillars ~
Slide 23: Shell + BG: Deep Water and LNG
SHELL + BG: DEEP WATER AND LNG Deep water: Brazil LNG thousand boe per day 600 400 200 0 2014 Combined potential ~end of decade Shell BG Combination QCLNG Shell and Petrobras: leading global deep-water New LNG supply: Atlantic basin + Australia companies Strategic + profitable position in gian
Slide 24: Dividend Track Record + Commitment
DIVIDEND TRACK RECORD + COMMITMENT Dividend track record Managing dividend through cycle $ billion 12 Balance sheet capacity 8 Dividend commitment: More levers to pull if macro conditions 2015 $1.88 per share deteriorate 2016 at least $1.88 per share Shell portfolio development to drive brea
Slide 25: Continued Drive to Improve Financial Performance
CONTINUED DRIVE TO IMPROVE FINANCIAL PERFORMANCE Cash flow from operations Free cash flow $ billion $ billion 60 40 30 40 20 20 10 0 0 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Q215 -10 Q215 Shell Peer group 4Q rolling 4Q rolling ROACE - underlying % 20 10 Driving competitive performance 0
Slide 26: Summary
SUMMARY Integrated business + performance drive supporting results: 12 months CCS earnings $16.2 billion; CFFO $35.6 billion; dividend + buy-back $14 billion Dividend + buy-back commitment $1.88/share 2015; at least $1.88/share 2016 At least $25 billion buy-back expected 2017-2020 Pullin
Slide 27: Questions & Answers
QUESTIONS & ANSWERS BARCLAYS CEO ENERGY-POWER CONFERENCE ROYAL DUTCH SHELL 8 SEPTEMBER 2015 Copyright of Royal Dutch Shell plc 8 September, 2015 27
Slide 28: Company Update: Barclays CEO Energy-Power Conference
COMPANY UPDATE BARCLAYS CEO ENERGY-POWER CONFERENCE ROYAL DUTCH SHELL 8 SEPTEMBER 2015 Copyright of Royal Dutch Shell plc 8 September, 2015 28
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