shell in nigeria & spdc jv overview

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Copyright of Royal Dutch Shell plc 10 October 2012 1 SHELL IN NIGERIA PORT HARCOURT, NIGERIA OCTOBER 10, 2012 ROYAL DUTCH SHELL PLC

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Copyright of Royal Dutch Shell plc 10 October 2012 1

SHELL IN NIGERIA

PORT HARCOURT, NIGERIAOCTOBER 10, 2012

ROYAL DUTCH SHELL PLC

Copyright of Royal Dutch Shell plc 10 October 2012 2

IAN CRAIGEXECUTIVE VICE PRESIDENTSUB-SAHARAN AFRICA

SHELL IN NIGERIA

Copyright of Royal Dutch Shell plc 10 October 2012 3

Spill volumes, both due to operational and crude theft/sabotage activities, are estimates made during the regulated Joint investigation visits.

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 23% 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, 2011 (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, 10 October 2012. 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 use certain terms in this presentation, such as resources, 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.

CAUTIONARY NOTE

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NIGERIA

THE NIGER DELTA

~167 million people

20% of population live in the Niger Delta

Federal Republic

OPEC estimates oil reserves of ~35 billion barrels and ~185 tcf gas reserves*

Produces ~2.5 million barrels of oil per day

NIGERIA

MAJOR OIL AND GAS PROVINCESHELL PRESENCE SINCE 1950s

400 km

*Definition not consistent with SEC proved reserves

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ECONOMIC GROWTH

NIGERIA +3% p.a +9% p.a

1996-1999 2000-2010

BRAZIL +2% p.a +4% p.a

MALAYSIA +4% p.a +5% p.a

WORLDECONOMY +4% p.a +3% p.a

SUB-SAHARANAFRICA +3% p.a +5% p.a

Source: IMF real terms growth, WWM Global Insights

NIGERIA: ONE OF FASTEST GROWING ECONOMIES

GDP per capita ~ $1600-2600 (South Africa $8700 in 2011)

Oil & gas revenue account for 80% of government revenues, ~30% of GDP and 95% of export revenues

Annual inflation 12-14%

High unemployment: >20%

Copyright of Royal Dutch Shell plc 10 October 2012 6

TOP BUSINESS COMPLAINTS

NIGERIA ECONOMY

0 20 40 60 80 100

Access to land

Tax administration

Crime

Transportation

Corruption

Macro econ

Tax rates

Finance (cost)

Finance (access)

Electricity

Source: WB Investment Climate Assessment 2011

Burkina Faso

Cameroon

Senegal

Cabo Verde

Benin

Madagascar

Tanzania

South Africa

Kenya

Uganda

Malawi

Nigeria

43210% of GDP

Source: derived from Eberhard and others 2009

ECONOMIC COST OF POWER OUTAGES

% of respondents

Copyright of Royal Dutch Shell plc 10 October 2012 7

0.0

0.5

1.0

2008 2009 2010 2011 2012 (end Aug)

PERSONAL SAFETY INDICATORSper million man hours

Shell in Nigeria TRCF (total recordable case frequency)

KIDNAPPINGS#

WORKPLACE FATALITIES#

All data on a Shell operated basis

0

2

46

8

10

12

2008 2009 2010 2011 2012

SAFETY

Motor vehicle incidentWorksite hazard

DrowningSecurity

0

50

100

2008 2009 2010 2011 2012 (end August)

StaffFamily

Contractors

2 fatalities in 2012 to datearmed attack on an environmental survey

Kidnapping remains a real threat for staff and families

Iriama (7 fatalities)

Copyright of Royal Dutch Shell plc 10 October 2012 8

OFFSHORE AND ONSHORE

Long history of operations in country: >50 years

SPDC JV – Onshore/Shallow water production

SNEPCO – Deepwater production

NLNG – LNG JV

SHELL FOOTPRINT IN NIGERIA

Divested

In Process

ERHA/BOSI

GBARAN UBIE

OPL245

BONGA AFAM POWER STATION

NIGERIA LNG

OGONILAND

OML 4/38/41

2642 34

40

30

0

5

0

50

100

150

200

250

300

SPDC SNEPCO NLNG (RHS)

kboe per day mtpa capacity

PRODUCTION (SHELL SHARE 2011)

Copyright of Royal Dutch Shell plc 10 October 2012 9

SHELL BUSINESSES IN NIGERIA

DOMESTIC GAS DISTRIBUTION

People: ~40Location: Niger DeltaDownstream gas supply

SPDC JV (55% NNPC, 30% SPDC Ltd, 10% Total, 5% Eni)

SNEPCo(100% Shell)

SNG(100% Shell)

NLNG(49% NNPC, 25.6% Shell, 15% Total, 10.4% Eni)

EXPLORATION & PRODUCTIONDeepwater

People: ~600Bonga & Erha productionOperated production capacity: 225,000 boe/d

LIQUEFIED NATURAL GAS

People: ~1,000LNG production capacity: 22 mtpa, Trains 1-6

EXPLORATION & PRODUCTIONOnshore/shallow offshore

People: 3,500 (30,000 contractors)Potential production: ~1 MM boe/d~1,000 wells, ~8000 km pipelines

Copyright of Royal Dutch Shell plc 10 October 2012 10

OML 118 - Bonga, Shell 55%Discovered 1995, on-stream 2005FPSO capacity: 200 kbbl/d & 150 MMscf/dSNEPCO operated

OML 133 – Erha/Bosi, Shell 44%, non-operatedOnstream : 2006FPSO Capacity: 190 kbbl/d

Bonga NW development (OML 118), Shell 55%45 kboe/d expansionTie back to Bonga; on-stream 2014/2015

OPL 245 – Zabazaba, Shell 50%, non operatedExisting discoveries with development potentialFurther exploration potential

SNEPCO: DEEPWATER

Erha FPSO (Shell 44%)

Bonga FPSO ( Shell 55%)

SHELL PRODUCTION 106 KBOE/D (2011)PSC CONTRACTS; 100% IOCGROWTH POTENTIAL

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Shell 25.6%, NNPC 49%, Total 15%, ENI 10.4%6 LNG trains, 22 mtpa capacity (plus 5 mtpa of NGLs)Train 1 and 2 on-stream 1999Train 6 on-stream 2007Expansion potential

NLNG: LNG EXPORT

NLNG T1 & 2 Construction (Shell 25.6%)

NLNG T6 construction

GROWTH TO 6 TRAINS SINCE 1999INCORPORATED JV; SELF-FINANCING

Copyright of Royal Dutch Shell plc 10 October 2012 12

MUTIU SUNMONUMANAGING DIRECTOR SPDC

SPDC JV OVERVIEW

Copyright of Royal Dutch Shell plc 10 October 2012 13

Unincorporated JV structure

Shell 30%, NNPC 55%, Total 10%, ENI 5%

Joint Operating Agreement defines rights & obligations of operator (SPDC Ltd) and non-operating partners

Decisions by unanimous vote of partners

All partners fund in proportion to their share

SPDC JV: ONSHORE/SHALLOW WATER JV

Sea Eagle platform

Bonny Terminal

Copyright of Royal Dutch Shell plc 10 October 2012 14

GBARAN UBIE

World class gas project; on-stream 2010Delivered in height of the security problems1 bcf/d & 70 kbbl/d liquids capacity$1 billion in local content 95% of construction workforce was Nigerian4 GMOUs in the area covering 44 local communities200,000 people benefiting from electrification projects.

AFAM VI

CCGT gas fired power plantFirst Power 2008, construction began 2005650 MW capacity14%-20% of the power contribution to the national gridGas provided by SPDC Okoloma facility (240 mmscf/d capacity)

SPDC JV: GBARAN UBIE & AFAM VI

Afam VI power plant

Gbaran Ubie Integrated gas project

SPDC = 30% Shell, 55% NNPC, 10% Total, 5% Agip; all data on 100% basis

Copyright of Royal Dutch Shell plc 10 October 2012 15

Largest and most diverse of the IOC footprints onshore

Recent divestments help SPDC to manage its footprint

~2,200 km oil pipelines

~850 km gas pipelines

~4,600 km of flow lines

SPDC JV: FOOTPRINT MANAGEMENT

SPDC

3.5

4.5

5.5

6.5

4 5 6 7 8 9

WARRI

PHC

Deg E

Deg N

non-producingproducing

•Mobil

•3.5

•4.5

•5.5

•6.5

•4 •5 •6 •7 •8 •9

•WARRI

•PHC

•Deg E

•Deg N

•non-producing•producing

Chevron

3.5

4.5

5.5

6.5

4 5 6 7 8 9

WARRI

PHC

Deg E

Deg N

non-producingproducing

Agip

3.5

4.5

5.5

6.5

4 5 6 7 8 9

WARRI

PHC

Deg E

Deg N

non-producingproducing

SPDC JV Exxon Mobil

Agip (ENI) Chevron

Copyright of Royal Dutch Shell plc 10 October 2012 16

ONGOING CHALLENGES CRUDE THEFT AND ILLEGAL REFINING

SPDC JV – MAJOR CHALLENGES

FLARE REDUCTION - PROGRESS BEING MADE

Illegal refining of stolen crude

Large and small scale theft

Flare site in the Niger Delta

Copyright of Royal Dutch Shell plc 10 October 2012 17

Estimates of 150,000 bbl/d and upwards$ 6.1 bln revenue loss (2011 prices)Stolen crude exported

Imports & subsidy445,000 bbl/d refining capacity; underutilized in practiceImports of oil products + $ 8 blnsubsidies (2011)Stolen crude refined for local and regional market

CRUDE THEFT CAUSES

Fuel queue during January 2012 national strike

Crude Theft, Okololunch, Sept 2012

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SPDC: LARGE SCALE CRUDE THEFT

Niger Delta wide theft estimate of 150,000 bbl/d or~55,000,000 bbl/year

2011 Spills due to sabotage on SPDC rights of way or from SPDC facilities

11,806 bbl

2011 Operational Spills

3,595 bbl

0

75

150

kbbl per day

Measured as stolen from SPDC trunk lines:~40,000 bbl/d or ~15,000,000 bbl/year

72% recovery during cleanup in 2011

Copyright of Royal Dutch Shell plc 10 October 2012 19

NIGERIA: SPDC JV

2011 SPILL AND REMEDIATION PERFORMANCE

30% drop in operational spill volume

351 sites remediated (272 in 2010)

Reduction in remediation backlog from 400 end 2010to 274 sites end 2011

PIPELINE REPLACEMENT

Nembe Creek trunk line: complete 2010

97 km; $1.1 billion

Trans Niger Pipeline loop project

Around Ogoniland; major area of crude theft

Pending approval by government partner

0

50

100

150

200

0

5

10

15

2006 2007 2008 2009 2010 2011

SabotageOperationalOperationalSabotage

oil spills, thousand tonnesENVIRONMENT: SPILLS

volume of spills:

number of spills (RHS):

Nembe Creek trunk line replacement

#

SPDC = 30% Shell, 55% NNPC, 10% Total, 5% Agip; all data on 100% basis

Copyright of Royal Dutch Shell plc 10 October 2012 20

SPDC: PROGRESS ON FLARING

ASSESSING NEW INVESTMENT FOR GAS UTILIZATION

Forcados Yokri & Southern Swamp AGG/Dom gas

Completion in 2014/2015; ~ $4 billion investment

Gas gathering, facility upgrades and new oil production

After completion, SPDC flaring intensity is expected to be below the current worldwide industry average

Forcados Yokri - South bank

boe gas flared per barrel produced (2010 data)

0.0

0.1

Nigeria industry

SPDC JV Nigeria industry

SNEPCO

ENVIRONMENT: FLARINGmtpa CO2e flaring SPDC JV production kboe/d

0

200

400

600

800

1000

0

5

10

15

2005 2006 2007 2008 2009 2010 2011Gas Flared Production

PERFORMANCE

OffshoreOnshore

SPDC = 30% Shell, 55% NNPC, 10% Total, 5% Agip; all data on 100% basis

Copyright of Royal Dutch Shell plc 10 October 2012 21

IAN CRAIGEXECUTIVE VICE PRESIDENT SUB-SAHARAN AFRICA

SHELL IN NIGERIA OVERVIEW

Copyright of Royal Dutch Shell plc 10 October 2012 22

Shell’s portfolio & track record

Funding; security; PIB; organisational capability

2012 Progress:

2 FIDs of onshore associated gas projects

Deepwater appraisal planning

SHELL IN NIGERIA

Copyright of Royal Dutch Shell plc 10 October 2012 23

QUESTIONS & ANSWERS

NIGERIA FIELD TRIP