simon henry - credit suisse european oil & gas conference - june 9, 2011
Post on 09-May-2015
983 Views
Preview:
DESCRIPTION
TRANSCRIPT
1 Copyright of Royal Dutch Shell plc 9/06/2011
ROYAL DUTCH SHELL PLC
CREDIT SUISSEEUROPEAN OIL & GAS CONFERENCE
LONDONJUNE 9, 2011
2 Copyright of Royal Dutch Shell plc 9/06/2011
SIMON HENRYCHIEF FINANCIAL OFFICER
ROYAL DUTCH SHELL PLC
3 Copyright of Royal Dutch Shell plc 9/06/2011
DEFINITIONS AND CAUTIONARY NOTE
Reserves: Our use of the term “reserves” in this presentation means SEC proved oil and gas reserves for all 2009 and 2010 data, and includes both SEC proved oil and gas reserves and SEC proven mining reserves for 2008 data. 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 definitions.Organic: Our use of the term Organic includes SEC proved oil and gas reserves and SEC proven mining reserves (for 2008) excluding changes resulting from acquisitions, divestments and year-average pricing impact.
The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate entities. In this presentation “Shell”, “Shell group” and “Royal Dutch Shell” are sometimes used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, the words “we”, “us” and “our” are also used to refer to subsidiaries in general or to those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company or companies. ‘‘Subsidiaries’’, “Shell subsidiaries” and “Shell companies” as used in this presentation refer to companies in which Royal Dutch Shell either directly or indirectly has control, by having either a majority of the voting rights or the right to exercise a controlling influence. The companies in which Shell has significant influence but not control are referred to as “associated companies” or “associates” and companies in which Shell has joint control are referred to as “jointly controlled entities”. In this presentation, associates and jointly controlled entities are also referred to as “equity-accounted investments”. The term “Shell interest” is used for convenience to indicate the direct and/or indirect (for example, through our 24% shareholding in Woodside Petroleum Ltd.) ownership interest held by Shell in a venture, partnership or company, after exclusion of all third-party interest.
This presentation contains forward-looking statements concerning the financial condition, results of operations and businesses of Royal Dutch Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Royal Dutch Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as ‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’, ‘‘intend’’, ‘‘may’’, ‘‘plan’’, ‘‘objectives’’, ‘‘outlook’’, ‘‘probably’’, ‘‘project’’, ‘‘will’’, ‘‘seek’’, ‘‘target’’, ‘‘risks’’, ‘‘goals’’, ‘‘should’’ and similar terms and phrases. There are a number of factors that could affect the future operations of Royal Dutch Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this presentation, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for Shell’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developments including potential litigation and regulatory measures as a result of climate changes; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; and (m) changes in trading conditions. All forward-looking statements contained in this presentation are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional factors that may affect future results are contained in Royal Dutch Shell’s 20-F for the year ended 31 December, 2010 (available at www.shell.com/investor and www.sec.gov ). These factors also should be considered by the reader. Each forward-looking statement speaks only as of the date of this presentation, 9 June 2011. Neither Royal Dutch Shell nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this presentation. There can be no assurance that dividend payments will match or exceed those set out in this presentation in the future, or that they will be made at all.
We may use certain terms in this presentation, such as resources and oil in place, that the United States Securities and Exchange Commission (SEC) guidelines strictly prohibit us from including in filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC website www.sec.gov. You can also obtain these forms from the SEC by calling 1-800-SEC-0330.
4 Copyright of Royal Dutch Shell plc 9/06/2011
ROYAL DUTCH SHELLSTRATEGY UPDATE
5 Copyright of Royal Dutch Shell plc 9/06/2011
Injuries – TRCF per million working hours
‘GOAL ZERO’ ON SAFETY
EMPLOYEES AND CONTRACTORS PER MILLION WORKING HOURS; SHELL OPERATED FACILITIES
SHELL
Customer and partner focus
Profitability & performance
Sustainability & growth
Value added technology
Focus on personal and process safetyIndustry leader in Sustainable Development
6 Copyright of Royal Dutch Shell plc 9/06/2011
NATURAL GAS DEMAND
NATURAL GAS OUTLOOK
SHELL GAS CAPABILITIES
CCGT: COMBINED CYCLE GAS TURBINE
Abundant, Affordable, AcceptableGlobal gas resources ~250 years reserves at current productionCCGT: gas-fired power compared to coal:
• 40% more energy efficient• 50-70% less CO2• Better complements with wind power
BCM
SOURCE: IEA
ATTRACTIVE ECONOMICS FOR ELECTRICITY PRODUCERS
SOURCE: SHELL ANALYSIS BASED ON EU DATA
GALLINA LNG SHIP - SINGAPORE
CAPITAL COST
NATURAL GAS ADVANTAGE: EXAMPLE CCGT
Inaugural cargo QatarGas 4 arriving at Hazira terminal
$/MW hour
LONG-RUN MARGINAL COST
7 Copyright of Royal Dutch Shell plc 9/06/2011
STRATEGY FRAMEWORK
NEW WAVE OF PRODUCTION GROWTH
PERFORMANCE FOCUS
MATURING NEXT GENERATION PROJECT OPTIONS
8 Copyright of Royal Dutch Shell plc 9/06/2011
ROYAL DUTCH SHELLPERFORMANCE FOCUS
9 Copyright of Royal Dutch Shell plc 9/06/2011
CONTRACTING & PROCUREMENT DOWNSTREAM PORTFOLIO
CONTINUOUS IMPROVEMENT
OFFSHORING
# of staff in shared service centres
Shifting support functions to low cost shared service centres
Reducing headcount in higher cost locations
# of Retail sites ‘000
COSTS (RHS)
DIRECT SITES INDIRECT SITES
Low cost indirect operating model
Margin retention + enhancement
• Brand + customer focus + differentiated products
$1 billion cost savings target 2011-12
Procurement from emerging markets
$Mln # of Suppliers
Sourcing from China, India, Russia and Mexico
Up to 20 % savings versus market alternatives
High end specifications
SPENDQUALIFIED
BEING QUALIFIEDSUPPLIERS
10 Copyright of Royal Dutch Shell plc 9/06/2011
ASSET SALES + CAPITAL EFFICIENCY
>$30 BILLION DIVESTMENTS – 5 YEARS
$ Bln - cumulative
DOWNSTREAM
UPSTREAM
CORPORATE
ASSET SALES PROGRESS 2010 & 2011 YTD
Allocating capital to high impact growth
Exit from late-life + non-core positions
$5 billion 2011E
Divestment /Exit announced or proposed
Downstream
Stanlow
14 countriesAfrica
Chile
GOM Assets
Cano Sur
Wilcat Hills/Woodenhouse
Clyde
Pakistan South Texas
Upstream
U.S. Car CareUS retail
Nigeria
Finland & Sweden
Syria
StatfjordHeide & Harburg refineries
10 % Woodside
Deal Complete
LPG business worldwide
Panama & Costa Rica
El Salvador
New Zealand
Greece
11 Copyright of Royal Dutch Shell plc 9/06/2011
REFOCUSING DOWNSTREAM
REFOCUSING REFINERY PORTFOLIO
Shell refining capacity – Mln bbl/d
EUROPE & AFRICA ASIA PACIFICAMERICAS
-30%4.7
3.3
%
MARKETING REFOCUS
Aviation Fuelsmarkets
Lubricantsmarkets
Retailsites
Bulk Fuelsmarkets
DIRECT EXITSINDIRECT/PART EXIT
12 Copyright of Royal Dutch Shell plc 9/06/2011
ROYAL DUTCH SHELLGROWTH DELIVERY
13 Copyright of Royal Dutch Shell plc 9/06/2011
GROWTH DELIVERYCONVERTING RESOURCES TO PRODUCTIONBln Boe resources
Longer-term upside
GorgonNA tight gas
SakhalinBC-10
PreludePearls (CMOC)
ON-STREAM STUDYUNDER CONSTRUCTION
PreludeMalikai
AOSP debottleneckNA tight gasSchiehallion
Clair
Pearl GTLQG-4
Oman EORSchoonebeek
Others
~10 billion barrels on stream~11 billion barrels under construction
~10 billion barrels new options
Mars-BBC-10 Phase2
AOSP-Exp 1Gjoa
PerdidoGbaran UbieNA tight gas
NA tight gasAustralia
Cardamom DeepAppomattox
Vito
PRODUCTION
14 Copyright of Royal Dutch Shell plc 9/06/2011
GROWTH DELIVERY DELIVERING ON NEW PROJECTSKEY POST-FID PROJECTS
OIL & GAS
REFINING & CHEMICALS
INTEGRATED GAS 2010-11
2014+2012-13
START-UP DATE
Gumusut-Kakap
Pluto(Woodside)
Qatargas 4
BC-10 Ph 2
Gbaran Ubie Ph 1 Qarn Alam
Pearl GtL Perdido
Gjoa
SchoonebeekAOSP-1
NA Tight gas
Port Arthur
GorgonT1-3
Amal Steam North Rankin BBonga
NW
Mars B
Iraq FCP/IPT
ONSTREAM
~11 billion Boeresources
20 Upstream start-ups 2011-14 planned
Under Construction
Onstream
Study
RESOURCES
Kboe/d
2010 - Bln boe
OIL & GAS PRODUCTION GROWTH
11 billion boe resources under construction :
> 800 kboe/d potential 2014
ENTITLEMENT AT $80/BBL; OUTLOOK ASSUMES LICENSE EXTENSIONS + 2010 ANNOUNCED ASSET DISPOSALS
Singapore Chemicals
OIL & GAS 2010 ASSET SALES
15 Copyright of Royal Dutch Shell plc 9/06/2011
QATARGAS 4 (QATAR)
GROWTH DELIVERY 2011 KEY START-UPS
Inaugural Qatargas 4 cargo arriving at Shell Hazira Regasification Terminal
AOSP-1 (CANADA)
Part of ~600 kboe/d 2011-12 production growth for Shell
7.8 mtpa LNG + 70 kboe/d condensates
First gas into plant – Jan 2011
First LNG export – Feb 2011
Shell 30%
AOSP-1 mine expansion 2010 -adds ~100 kboe/d
Upgrader expansion H1-2011
255 kboe/d capacity built in ~10 years
Next focus: optimization + debottlenecking
Shell 60% (operator)
AOSP Jackpine mine Pearl GtL plant under construction
PEARL GTL (QATAR)
Commissioning underway; ~12 months start-up
1.6 bcf/d wet gas:
• 120 kboe/d NGL/ethane
• 140 kboe/d GTL
100% Shell in partnership with QP
16 Copyright of Royal Dutch Shell plc 9/06/2011
ROYAL DUTCH SHELLMATURING NEXT GENERATION PROJECT OPTIONS
17 Copyright of Royal Dutch Shell plc 9/06/2011
MATURING NEXT GENERATION OF PROJECT OPTIONS MATURING NEW PROJECTSOIL & GAS RESOURCES
2010 Resources in Bln boe
UNDER CONSTRUCTION
ON STREAM
Longer-term upside
>10 billion boe resources
> 30 new projects
> 1 mln boe/d potential 2018-20...
... and maturing further options
STUDY
Portfolio can support profitable growth to ~2020
Long-term growth and investment
Options to flex annual spending with macro
Capex and growth outcomes
Investment decisions driven by
Portfolio fit
Affordability
Profitability
TIGHT GAS – N. AMERICA PRELUDE - AUSTRALIA
ARROW - AUSTRALIA APPOMATTOX - USA
18 Copyright of Royal Dutch Shell plc 9/06/2011
2011 investment: ~$3 billion; >400 wells
PRODUCTION GROWTH
Growth potential: ~ 300 kboe/d 2012; >400 kboe/d potential 2015
Mmscf/dKboe/d
Haynesville JV
Pinedale
Groundbirch
Eagle Ford
Marcellus
Deep Basin
Foothills
40 Tcfe resources potentialSHELL ASSET BREAK EVEN PRICE
BREAKEVEN PRICE ENTRY COST
$/mcfe – End 2010
Canada
USA
MATURING NEXT GENERATION OF PROJECT OPTIONS NORTH AMERICA TIGHT GAS
19 Copyright of Royal Dutch Shell plc 9/06/2011
USA – MARS-B
MATURING NEXT GENERATION OF PROJECT OPTIONS RECENT PROJECT FINAL INVESTMENT DECISIONS
AUSTRALIA – PRELUDE FLNG
TLP capacity ~100 kboe/d
New resources at Mars field
West Boreas + South Deimos
Water depth 950 meters
Shell 72% (operator)
First FID ever on Floating LNG
Largest floating operating facility in the world
110 kboe/d production; 3.6 mtpa LNG capacity
Fast development from Prelude discovery (2007) to FID
Shell 100% (operator)
20 Copyright of Royal Dutch Shell plc 9/06/2011
FIRST FID ON FLNG IN THE INDUSTRY
PRELUDE FLOATING LNG
21 Copyright of Royal Dutch Shell plc 9/06/2011
FINANCIAL FRAMEWORK
ROYAL DUTCH SHELL PLC
22 Copyright of Royal Dutch Shell plc 9/06/2011
INVESTING FOR NEW GROWTH
ITALIC: PLANNED
CONVERTING INVESTMENT TO CASHFLOW: 2009-12
CAPITAL UNDER CONSTRUCTION EXPLORATION & EVALUATION
OTHER
CANADA
QATAR
$ Bln
START-UPS
FID / DEALSPearl GtL
Qatargas 4AOSP Expansion I
Caesar Tonga
Gorgon LNG
Mars-B
BC-10 Phase 2Singapore Chemicals
Gumusut-Kakap
DuvernayPort Arthur
Sakhalin
BC-10
Perdido
AOSP mine
East Resources
Gbaran Ubie Ph 1
Singapore Chemicals
2011START-UPS
Nigeria T6
Afam GasUrsa Princess Waterflood
NWS T5
Ormen LangeChangbei
QatarGas 4Pearl GtL
AOSP upgrader
PreludeMalakai
NA tight gas
AOSP debottle ph-1
SchoonebeekOman EOR
Port Arthur
ClairSchiehallion
$ Bln
2010CAPITAL UNDER CONSTRUCTION
2012-13Corrib
Gumusut-Kakap
Majnoon FCP
BC-10 Ph 21.8 BAB/SASKashagan Ph 1
North Rankin 2
23 Copyright of Royal Dutch Shell plc 9/06/2011
Divestments up to $3 bn/year; capital efficiency
FID pace + industry costs drive capex range
Tight gas + exploration spend flexibility
EXPLORATION
2012-14 CAPITAL INVESTMENT EXCLUDES IRAQ FULL FIELD DEVELOPMENTS
CAPITAL SPENDING + OUTLOOK
UPSTREAM
% Capital investment
DOWNSTREAM
% Capital investment
REFINING
CHEMICALS
MARKETING
HEAVY OIL & EOR
TIGHT GAS
INTEGRATED GAS
DEEPWATER
TRADITIONAL
SOUR
ASIA PACIFIC
EUROPE
AMERICAS
OTHERS
NET CAPITAL INVESTMENT
$ Bln
NET CAPITAL INVESTMENT
2012-14 INVESTMENT CHOICES & FLEXIBILITY
24 Copyright of Royal Dutch Shell plc 9/06/2011
SIMON HENRYCHIEF FINANCIAL OFFICER
ROYAL DUTCH SHELL PLC
25 Copyright of Royal Dutch Shell plc 9/06/2011
2011-12 OUTLOOK
PERFORMANCE FOCUS
NEW WAVE OF PRODUCTION GROWTH
MATURING NEXT GENERATION OF PROJECT OPTIONS
PRIORITIES
Studying > 30 new projects; 10 FIDs planned2011-12
Upstream growth potential to ~2020
Selective Downstream growth
>20 projects under construction
+6% production 2010-12
On track for 2012 cashflow targets
$1 billion Downstream cost savings
Continuous improvement embedded in Shell
Up to $8 bln asset sales; capital efficiency
OUTLOOK
Competitive performance – Profitable growth – Sharper delivery
26 Copyright of Royal Dutch Shell plc 9/06/2011
ROYAL DUTCH SHELLCREDIT SUISSEEUROPEAN OIL & GAS CONFERENCE
Q&A
top related