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ROYAL DUTCH SHELL PLCINVESTING FOR SUSTAINABLE GROWTH
NEW YORKSeptember 2011
1 Copyright of Royal Dutch Shell plc 9 September 2011
DEFINITIONS AND CAUTIONARY NOTE
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.
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
i ‘‘S b idi i ’’ “Sh ll b idi i ” d “Sh ll i ” d i hi i f i i hi h R l D h Sh ll i h di l i di lcompanies. ‘‘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 thanThis 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’’, “scheduled”, ‘‘estimate’’, ‘‘expect’’, ‘‘goals’’, ‘‘intend’’, ‘‘may’’, ‘‘objectives’’, ‘‘outlook’’, ‘‘plan’’, ‘‘probably’’, ‘‘project’’, ‘‘risks’’, ‘‘seek’’, ‘‘should’’, ‘‘target’’, ‘‘will’’ 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 includingoperations 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 regulatory measures addressing climate change; (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 p p y q y y y pforward-looking statements. Additional factors that may affect future results are contained in Royal Dutch Shell’s Annual Presentation / Form 20-F for the year ended December 31, 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 September 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.
We may have used certain terms in this presentation that United States Securities and Exchange Commission (SEC) strictly prohibits us from including in our filings with the SEC. f
2 Copyright of Royal Dutch Shell plc 9 September 2011
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.
ROYAL DUTCH SHELL PLC
PETER VOSERCHIEF EXECUTIVE OFFICER
3 Copyright of Royal Dutch Shell plc 9 September 2011
ROYAL DUTCH SHELL PLC
CHAD HOLLIDAYNON EXECUTIVE DIRECTOR
CHAIRMAN CORPORATE & SOCIAL RESPONSIBILITY BOARD COMMITTEE, REMUNERATION COMMITTEE MEMBER
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ACTIVITIES OF THE CSRC
CSRC PRIORITIES 2011
Nigeria LNG AOSP Muskeg River Mine
Arctic and deepwater developmentSustained focus on NigeriaProcess safety
Field trips completed:• Oil Sands, Canada • Tight gas – Marcellus, Changbeiy g g g
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ROYAL DUTCH SHELL PLC
PETER VOSERCHIEF EXECUTIVE OFFICER
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ENERGY OUTLOOK
400
Mln Boe/d
GLOBAL ENERGY MIX
Industry outlook
Hydrocarbons dominate outlook
300
400 yd oca bo s do a e ou oo
Growth required in all sectors of energy mix
Energy policy + sustained investment
200 Shell
Crude oil & oil products
0
100
1980 1990 2000 2010 2020 2030 2050
Natural gas & LNG
Biofuels, wind, carbon capture + storage
Petrochemicals1980 1990 2000 2010 2020 2030 2050
OILGAS
COALBIOMASSWIND
SOLAR
OTHER RENEWABLES
NUCLEAR
SHELL ACTIVITIES
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SHELL ESTIMATES
OTHER RENEWABLES
NATURAL GAS OUTLOOK
NATURAL GAS DEMAND SHELL GAS CAPABILITIESBCM
3 000
2,500
3,000
SOURCE: IEA
ATTRACTIVE ECONOMICS FOR ELECTRICITY PRODUCERS
GALLINA LNG SHIP SINGAPORE
NATURAL GAS ADVANTAGE: EXAMPLE CCGT
Inaugural cargo QatarGas 4 arriving at Hazira terminal
$/MW hour
2,0001990 2000 2010
Abundant, Affordable, AcceptableGlobal gas resources ~250 years reserves at current production
GALLINA LNG SHIP - SINGAPORE$/MW hour
Nuclear
Wind
Solar Thermal
CCGT: gas-fired power compared to coal:• 40% more energy efficient• 50-70% less CO2
l h d0 50 100 150 200
CCGT
Coal
Nuclear
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CCGT: COMBINED CYCLE GAS TURBINE
• Better complements with wind powerSOURCE: SHELL ANALYSIS BASED ON EU DATA
CAPITAL COST LONG-RUN MARGINAL COST
0 50 100 150 200
SUSTAINABLE DEVELOPMENT TRACK RECORD
1997 2000 2005 2010+Renewables business established f l Renewables incorporatedRenewables business established
First Shell Sustainability Report
GTL: Qatar project construction started
Biofuels: investment in Iogen
Renewables incorporated into main businesses
Biodiversity action plans
Social performancemanagement unit established
Social Performance Manual launched
LNG capacity
target
Code of Conduct launched
target
Social Performance included in
GHG emissions targetIntroduced biodiversity
Social performance plans in place for
HSSE performance indicators introduced
HSSE & SP Control Framework
Goal Zero launched Sustainable development
part of staff score card
gystandard and commitments
Carbon costs in investment decisions
p pmajor facilities
Global environmental standards launched
Shell Foundation established
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Social Environmental EconomicOrganisational
PARTNERSHIPS + BEST PRACTICE
GLOBAL AND LOCAL
Restoring oyster beds in Gulf of Mexico
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Western gray whales at Sakhalin 2
SUSTAINABLE DEVELOPMENT REPORTING
TRANSPARENCY EXAMPLE: ON-LINE OIL SPILL TRACKING IN NIGERIA
www.shellnigeria.com/spills
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SAFETY IN SHELL
SHELL SAFETY PERFORMANCE 2011 HSSE PRIORITIES AND FOCUSInjuries – TRCF
7
8 Simplify & ComplyOne HSSE & SP Control Framework Shell
2
3
4
5
6 One HSSE & SP Control Framework – Shell wideLife-Saving Rules
0
1
'99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 11 YTD
Sh ll IOC R
Focus AreasProcess SafetyRoad Safety
Shell IOC Range
2010 performance:R d bl i j f d 15%
yContractor HSSE PerformanceCap & contain systems: global initiatives
Recordable injury frequency down 15%Lost time injury frequency down 25%Fatal accident rate down 30%
SustainStrong safety culture and leadership
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EMPLOYEES AND CONTRACTORS PER MILLION WORKING HOURS; SHELL OPERATED FACILITIES
SAFETY CASE ‘BOW TIE’ MODEL:
PROCESS SAFETY
STANDARD ASSET INTEGRITY MANAGEMENTSAFETY CASE BOW TIE MODEL: PREVENTION AND RECOVERY – INDUSTRY
CES
Control Control & Barriers& BarriersControl Control & Barriers& Barriers IncidentIncidentIncidentIncident
Response & Response & RecoveryRecoveryResponse & Response & RecoveryRecovery
Control Control & Barriers& Barriers IncidentIncident
Response & Response & RecoveryRecovery
HA
ZARD
ON
SEQ
UEN
C
Minimize Likelihood
Mitigate Consequences
CO
A safety case approach to risk identification and mitigation
• Shell integrated the bowtie methodology 1990sh k• Systematic approach to risk management
• Involve contracting companies• Full alignment & clear accountabilities between parties
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ENVIRONMENTAL PERFORMANCE MEASURES
1051
EMISSIONS ENERGY EFFICIENCYUpstream - gigajoules/tonne production Index
105
Million tonnes CO2 equivalent
90
95
100
0.5
75
85
95
850'02 '03 '04 '05 '06 '07 '08 '09 '10
OPERATIONAL SPILLSFLARING
65'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10
Refining Index (RHS)Upstream excl. Oil SandsChemicals Index (RHS)
# of Operational spills
6
8
10
600
800
1000
Volume: thousand tonnes
FLARING
20
25
30Million tonnes CO2 equivalent
0
2
4
6
0
200
400
600
'02 '03 '04 '05 '06 '07 '08 '09 '105
10
15
0
00 0 02 03 04 0 06 0 08 09 0
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'02 '03 '04 '05 '06 '07 '08 '09 '10
DATA 100% BASIS FOR COMPANIES / JOINT VENTURES WHERE WE ARE THE OPERATOR
Volume of spills (RHS)Number of spills'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10
NIGERIA: SPDC JOINT VENTURE
20015
ENVIRONMENT -SPILLSPERFORMANCEOil spills, thousand tonnes # of oil spills
50
100
150
5
10
0
50
02006 2007 2008 2009 2010
Gb UbiSabotageOperational
SabotageOperational
Volume of Spills Number of Spills(RHS)
Improved security situation: challenges continue
Previously shut in production being brought
ENVIRONMENT - FLARINGGbaran Ubie
g
800
100015
Mtpa C02e flaring SPDC production kboe/d
g
Gas Flared Production(RHS)y p g g
back on-stream
Gbaran Ubie plant on stream; 1 bcf/d
Progressing spills cleanup 200
400
600
800
5
10
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g g p p00
2005 2006 2007 2008 2009 2010SPDC = 30% SHELL, 55% NNPC , 10% TOTAL, 5% AGIP ; ALL DATA ON 100% BASIS
CANADA: ATHABASCA OIL SANDS PROJECT
AOSP PERFORMANCE ENVIRONMENT
New Jackpine conveyor carrying oil sands ore to the crusher Muskeg River mine: reclaimed land
Base Project (2003): 155,000 boe/d
Expansion 1 (2010/11): 100,000 boe/d
Quest Carbon Capture and Storage project
Atmospheric fines drying - accelerated p ( / ) , /
Debottlenecking (2014+): 85,000 boe/d
• Phase 1 FID, 10,000 boe/d• 7-10 year programme
p y greclamation
Industry tailings collaboration
Jackpine ‘compensation’ lake
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7 10 year programme Jackpine compensation lake
AOSP = 60% Shell and 20% each Chevron & Marathon. Volumes on 100% basis
BIOFUELS GROWTH
RAÍZEN JOINT VENTURE
Leading Brazil and Top 5 global ethanol player
> 30 kbd ethanol production capacityp p y
> 80 kbd potential ~ 5 years
Shell world-wide trading opportunities
Next generation technologies
Brazil: harvesting sugarcane
GLOBAL POTENTIAL BIOFUELS GROWTH RESEARCHING ADVANCED BIOFUELSKboe/d production3,000 SOYBEAN RAPESEED
PALM OIL OTHERCORN SUGARCANE
1,000
2,000 CORN SUGARCANE
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02005 2010 2015 2020
ARCTIC TECHNOLOGIES
KEY TECHNOLOGY PROJECTS
Physical and structural challenges
Facilities/production in iceFacilities/production in ice
Pipeline protection
Personnel safety and evacuation
Footprint reduction
Seismic on ice
Sound reducing technologiesg g
Monitoring using unmanned aircraft
Spill Response Capability
Containment systems
Year-round spill response
Environmental assessment
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ROYAL DUTCH SHELL PLC
MARVIN ODUMMARVIN ODUMDIRECTOR UPSTREAM AMERICAS
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TIGHT GAS & COAL BED METHANE
GLOBAL SHELL POSITION
Tight gas operations – Groundbirch Canada
TIGHT GAS
COMMUNITY ISSUES
CBM
SHALE GAS
d fLand footprintWater use + disposalAir quality
d l f fl dHydraulic fracturing fluids
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Tight gas operations – Jinqui, China
SHELL & TIGHT GAS: 5 CORE PRINCIPLES
Safety & Well I i
FootprintSh ll k t d itIntegrity
Shell designs, constructs and operates wells and facilities in a safe and responsible way.
Shell works to reduce its operational footprint.
WaterShell conducts its operations to protect groundwater and reduce water use as reasonably
CommunityShell engages with local communities regarding socio-economic impacts that may arisewater use as reasonably
practicable.
Air
economic impacts that may arise from our operations.
Shell conducts its operations in order to protect air quality and control its fugitive emissions.
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TIGHT GASPAD DRILLING: REDUCING SURFACE FOOTPRINTPINEDALE: SHELL OPERATED JONAH: COMPETITOR
Adjacent gas fields, different development impactsSQUARE MILE OVERVIEW SQUARE MILE OVERVIEW
Up to 4 pads each pad having up to 32 wells Up to 64 pads with each pad having a single well
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j g p pShell setting new standards for surface footprint reduction
LNG FOR TRANSPORT
GREEN CORRIDOR - CANADA
Shell’s 1st large scale LNG for transportFt. McMurray
Shell s 1 large scale LNG for transport project
• Ft. McMurray - Calgary – Vancouver• 1st phase: 0.3 mtpa LNG plant
Edmonton
p p p
Hi h i t
Calgary
Jumping PoundVancouver
High res picture coming
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Canada: Jumping Pound Gas PlantLNG powered truck
ROYAL DUTCH SHELL PLC
PETER VOSERCHIEF EXECUTIVE OFFICER
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SHELL
COMMITMENT
“As part of the Shell Business Principles, we commit
Customer and Profitability &
p p
to contribute to sustainable development. This
requires balancing short and long term interests,
integrating economic, environmental and social Customer and partner focus
Profitability & performance
Sustainability & th
Value added t h l
considerations into business decision-making.”
Shell General Business Principles
growth technology
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ROYAL DUTCH SHELL PLC
Q&A
NEW YORKSEPTEMBER 2011
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ROYAL DUTCH SHELL PLC
APPENDIXSUPPORTING SLIDES
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BUILDING GLOBAL CCS CAPABILITIES
SHELL CCS PORTFOLIO QUESTSHELL CCS PORTFOLIO QUEST
MONGSTAD
QUEST
LONGANNETPETERHEAD
WEYBURN MIDALEWESTCARB
QUEST
GORGONShell is also a
b f lti l
Demonstration / research projectsIndustrial scale (>100 KTPA) projects in design
OTWAYGORGONmember of multiple
CCS research partnerships
Industrial scale projects under construction
Capture CO2 at the Scotford Upgrader from 3 Hydrogen Units
>1 mtpa CO2 will be transported by pipeline and stored over
DRIVING UNIT CCS COST DOWN
Industry developing technology and capabilities
Government financial support for large scale demonstration projects and infrastructure
2 km underground
Letters of intent with Government of Alberta and Government of Canada for ~C$865 million have been signed
Regulatory applications and project scoping progressing
projects and infrastructure
Cap & trade framework, liability issues resolved, fast track planning permission process
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g y pp p j p g p g g
FID target in 2012
NIGERIA OVERVIEW
SHELL’S OPERATIONS IN NIGERIA GBARAN UBIE PROJECT
Shell 30%
Multi field developmentp• ~250 kboe/d peak production
Flaring expected to reduce by 30 mmscf/d
High local content90% Ni i
ERHA/BOSI
GBARAN UBIE
BONGAAFAM POWER STATION
NIGERIA LNG
OGONILAND
GBARAN UBIE PHASE 1
• ~90% Nigerian manpower
Significant social investment programme
Gbaran Ubie kboe/d (100%) Nigeria
START-UP PERFORMANCE
OPL245
NIGERIA LNG
150
200
ACTUALPLAN
Gbaran Ubie kboe/d (100%), Nigeria
Long history of operations in country; >50 years
OPL245
0
50
100y
Growth options
Operating challenges
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LOCAL CONTENT: PRESSURE VESSELS IN TRANSIT TO SITE0May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11
IRAQ: PROGRESSING KEY OPPORTUNITIES
MAJNOON PROGRESS IRAQ SOUTH GAS POTENTIAL
Armored vehicles clearing explosive remnants of war Well pad construction
Well integrity review Camps constructed Initialing of the Basrah Gas Company Joint Venture Contracts
~38 billion boe oil in place
Long-term production potential 1.8 mln boe/d
Assessing full field options
Di t d l t
Basrah Gas Company Joint Venture Contracts initialed in July 2011; final Government approval pending
Reduces gas flaring• Discrete, modular steps
Shell 45%Domestic gas and export opportunities
Shell 44%
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BLOWOUT PREVENTION & CONTAINMENT CAPABILITY
STANDARD ASSET INTEGRITY MANAGEMENT INTERNATIONAL RESPONSE
Fo nding & permanent Board Member of the 9 participating members Shell operatorFounding & permanent Board Member of the Marine Well Containment Company (MWCC)
MWCC will own & deploy the system in US GOM
Subsea containment equipment designed for GOM
9 participating members, Shell operator
Near term the project team will:
• Design a capping toolbox & additional hardware for the subsea injection of dispersantSubsea containment equipment designed for GOM
• Interim system available Feb 2011
• Expanded system available 2012
hardware for the subsea injection of dispersant
• Further assess the need for and feasibility of a containment system for shared use
• Assess deployment options
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IMPROVING MANUFACTURING PERFORMANCE
5%95%PLANNED DOWNTIME
RELIABILITY PERFORMANCE REFINING AVAILABILITY
Availability100%Refineries in TQ reliability
3%90% AVAILABILITY 50%
1%85%2008 2009 2010 H1 2011
“LEAN” TO REDUCE COST “LEAN” FOR MORE EFFICIENT TURNAROUNDS
Manufacturing index Refining Turnaround costs index
0%2008 2009 2010 H1 2011
100%
110%
-11%
Manufacturing index
90%
100%
Refining Turnaround costs index-14%
80%
90%
2008 2009 201070%
80%
2008 2009 2010
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2008 2009 2010
Excludes portfolio effects Excludes portfolio effects2008 2009 2010
DOWNSTREAM GROWTH: DIFFERENTIATED TECHNOLOGYLUBES TECHNOLOGY - ENABLING OEM PARTNERSHIPS
Shell concept lubricant achieves 6.5% fuel economy benefit through technical partnership with Gordon Murray Design
NEW GROWTH WITH SULPHUR TECHNOLOGY
Managing all Shell’s sulphur as a value added commodity
UP TO10% FUEL & CO2 REDUCTIONFUELS TECHNOLOGY - CREATING ADDITIONAL VALUE
F l h l i h l i Sh ll d d i f l Sh ll F lS P i h f l l iFuels technology is helping Shell to decommodotize fuels enabling additional margin capture
Vehicle Performance
Shell FuelSave Partner is the new fuel management solution for commercial transport fleets
“I d f
Performance
Shell Fuel Card Data
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“Save up to 1 Litre per tank”“Improved performance advanced technology” Driver Behaviour