Shell hosted a management day with investors in London (Wednesday 14th November 2012) and New York (Thursday 15th November 2012) focusing on global gas perspectives and Asia Pacific outlook. Presentations were lead by Chief Executive Officer, Peter Voser and Chief Financial Officer, Simon Henry followed by Andrew Brown (Director Upstream International) and Matthias Bichsel (Director Projects & Technology).
2012 Management Day London/New York - Global Gas Perspectives and Asia Pacific Outlook
1. ROYAL DUTCH SHELL PLC
INVESTOR UPDATE
LONDON
NOVEMBER 14, 2012
Copyright of Royal Dutch Shell plc 14 November, 2012 1
2. SHELL: INDUSTRY LEADER IN NATURAL GAS
LNG transport Malaysia: E11 platform supplying gas to Bintulu LNG/GTL plants
Qatar: Pearl GTL China: Changbei drilling platfrom
Copyright of Royal Dutch Shell plc 14 November, 2012 2
3. ROYAL DUTCH SHELL PLC
LEADERSHIP IN GLOBAL GAS
PETER VOSER
CHIEF EXECUTIVE OFFICER
Copyright of Royal Dutch Shell plc 14 November, 2012 3
4. DEFINITIONS AND CAUTIONARY NOTE
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, 14 November 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.
Copyright of Royal Dutch Shell plc 14 November, 2012 4
5. PROGRAMME TODAY
Gas markets & Shell integrated gas strategy
Simon Henry; Chief Financial Officer
Maarten Wetselaar; Executive Vice President
Upstream International
Asia Pacific portfolio + strategy
Andrew Brown; Upstream International Director
Ann Pickard; Executive Vice President Australia
HK Lim; Executive Chairman Shell China
Project development
Matthias Bichsel; Projects & Technology Director
Rob Kretzers; Executive Vice President Projects
India: Hazira LNG import terminal
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6. GLOBAL ENERGY OUTLOOK
DEMAND GROWTH
Energy demand outlook in million boe/d
400
Energy demand +60% 2010 – 2050
Hydrocarbons dominate outlook
Gas demand doubling 2010-2050
300
200
100
MAJOR OPPORTUNITY
FOR SHELL
0
1980 1990 2000 2010 2020 2030 2040 2050
Oil Solar
Shell Natural gas Other renewables
activities Biomas Nuclear
Wind Coal
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7. GAS: >250 YEARS GLOBAL SUPPLY
Positive global support for gas
Economic and jobs potential
Reliable Balanced tight/shale regulation
supply
Contribution to a low-carbon future
New supply chains emerging
Growing Cleanest
Fast & LNG from North America
resource hydro-
flexible
base carbon Tight/shale gas in Europe, Africa, Asia
Pacific
Competitive New market opportunities
Gas in transport
Replacing liquid fuels in industry
ABUNDANT
AFFORDABLE
ACCEPTABLE
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8. GAS DEMAND
DEMAND BY SECTOR GAS DEMAND BY REGION
Bcf/d % LNG Bcf/d Bcm/y
500 500
5,000
15%
400 400
4,000
300 300 3,000
10%
200 200 2,000
5%
100 100 1,000
0 0% 0 -
1990 2000 2010 2020 2030 1990 2000 2010 2020 2030
Power Transport Asia Europe
Industrial Other MENA Russia & Other
Residential & Commercial % LNG of total Americas
gas demand
GLOBAL GROWTH OF GAS
MARKET DEVELOPMENT STRONGLY DRIVEN BY REGIONAL THEMES
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9. SHELL GAS VALUE CHAINS
UPSTREAM Movable Modular
Liquefaction systems
Gas to
Chemicals
Converting gas
to liquid (GTL)
Liquefaction CHEMICAL PRODUCTS
plant For plastics, coatings,
detergents
Shipping &
Supply and
Trading Distribution
Regasifying LNG
LNG traditional
FUELS & LUBRICANTS
GTL Road, ship, aviation
LNG to transport
NATURAL GAS
Gas to Chemicals
For cooking, heating,
electrical power.
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10. SHELL INTEGRATED GAS PERFORMANCE
PRODUCTION AND SALES VOLUMES EARNINGS AND CASH FLOW
kboe/d mtpa $ Billion
800 25 10
600 20
5
15
400
10
0
200 5
0 0 -5
2008 2009 2010 2011 Q3 '12 2008 2009 2010 2011 Q3 '12
(4 quarters (4 quarters
Feedgas from non-integrated ventures Earnings CFFO excluding
rolling) rolling)
Integrated Production LNG sales volumes (RHS) Cash surplus Working Capital
RETURN ON CAPITAL IN SERVICE
$ Billion
50 30%
40
20%
30
20
10%
GROWTH DELIVERY + POTENTIAL
10 >$20 BLN INVESTMENT
POTENTIAL 2012-15
0 0%
2008 2009 2010 2011 Q3 '12
(4 quarters
Capital employed Capital in service
rolling)
Net capital investment ROCIS (RHS) Earnings exclude identified items
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11. SHELL LNG TRADING
GLOBAL LNG PORTFOLIO LNG DESTINATIONS (SHELL)
% of LNG sales volumes
100%
Sakhalin 75%
Cove Point
Dubai
Elba Spain QG-4
Baja
Oman Hazira
50%
Altamira
Nigeria
Shell LNG positions Malaysia
+ Brunei 25%
LNG regasification NWS
Pluto
Trading flows
0%
2007 2011 2015
Asia-Pac Europe Americas
2007 2011 2015
90% CONTRACTED; 10% TRADED
Long term
VALUE OPTIMIZATION BETWEEN contracts 90% 90% 90%
MARKETS % of LT
contracts - oil 90% 80% 80%
TREND TO PORTFOLIO GAS price linked
CONTRACTS, ENHANCING
Sales volumes
DIVERSION POTENTIAL (mtpa) 13.2 18.8
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12. SHELL LNG GROWTH + POTENTIAL
GLOBAL LNG PORTFOLIO
22 MTPA ON STREAM
7 MTPA UNDER
CONSTRUCTION + 33%
LNG Canada
20+ MTPA OPTIONS
US LNG
SHELL 7% GLOBAL
On stream MARKET SHARE
Abadi
Under construction Prelude Sunrise
Browse Arrow
Options
Wheatstone
2011-12 portfolio Gorgon
development
SHELL GLOBAL LNG CAPACITY GROWTH SHELL LNG LEADERSHIP
mtpa year end mtpa
50 30 ~90% long-term contracted
40
~80% of portfolio oil price linked
30 20
20
10
10
0 0
2007 2012 ~2020+ Shell Exxon Chevron BG Total BP
On stream Under construction Options 2011 2017
Copyright of Royal Dutch Shell plc 14 November, 2012 PROJECTS ON STREAM OR UNDER CONSTRUCTION
12
13. MANAGING OUR LNG PORTFOLIO + OPTIONS
Arrow 50-50% Canada LNG
acquisition with Indonesia: entry Browse +17%
project
Gorgon FID PetroChina Prelude FID in Abadi LNG acquisition from
announcement
Chevron
2010 2011 2012
Prelude 32.5%
Woodside dilution -10%
PetroChina 20% dilution to Inpex,
participation in Kogas and CPC
Groundbirch Canada
STRATEGIC PARTNERS AND
Acquisition
Divestment
SIZEABLE STAKES
PORTFOLIO DIVERSITY & CHOICES
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14. AMERICAS INTEGRATED GAS OPTIONS
LNG Canada Green corridor
Studying 12 mtpa at Kitimat gas-to-transport Shell’s integrated gas capabilities
Shell 40% + strategic partners 0.25 mtpa at Jumping Pound Equity + industry resources base
Natural hedge; oil/gas differential
Western Canada gas resources
Groundbirch resource potential Pennsylvania Gas-
increased from 6 tcfe to >12 tcfe to-Chemicals
Gas-to-
Shell 80% transport
GTL
NEW GAS VALUE
US LNG CHAINS
Canada LNG
US GTL US Gas-to- Gas-to- Green
US LNG Chemicals transport Corridor
Start-
Assess Select Define FID Execute up Operate
Feasibility Concept Project Ramp-up to
Construction
Study Selection Specifications full capacity
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15. LNG TO TRANSPORT
ROAD TRANSPORT SHIPPING FUTURE OPTIONS
Canada Green Corridor Offshore shipping Mining
US Gulf Coast and Great Lakes long Inland barges Rail
distance trucking options
Fraccing
TravelCenters of America
FAST MOVING LNG OPPORTUNITY Gate LNG
Green Corridor FID terminal HOA
GROWTH DRIVEN BY
PRICE
EMISSION ADVANTAGE 2011 2012
GAS AVAILABILITY
ASSESSING >5 MTPA LONG TERM Travelcentres of Gassnor
OPPORTUNITIES America MOU aquisition
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16. STRATEGIC PARTNERSHIPS: CHINA
CNPC/Petrochina
Sinopec
2011: Canada tight
gas/LNG 2010: China gas
exploration
2010: Qatar CNOOC
Retail 2005: Nanhai
exploration
Chemicals
2011:
2012 Deepwater Drilling JV
Gabon exploration
2010:
Arrow LNG
Nanhai – Chemicals plant
BROAD + LONG-TERM
COOPERATION:
CHINA DOWNSTREAM + LNG SALES
CHINA EXPLORATION
INTERNATIONAL PARTNERSHIPS
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17. TIGHT/SHALE GAS EXPLORATION
CHINA UKRAINE SOUTH AFRICA
Russia
Zitong
Jinqiu JAA Blocks Karoo
Fushun Ukraine
Yuzivska
0 100 km 0 100 km 0 100 km
3 blocks tight /shale Yuzivska : tight gas/shale: Karoo Basin; 90,000 km2
8,500 km2 7,800 km2 under application
Shell 50% Multi-tcf tight/shale gas Shell 100 %
potential Moratorium lifted September
Shell 50 % 2012
MAJOR EXPLORATION PLAYS FOR NEW GAS POTENTIAL
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18. LEADERSHIP IN GLOBAL GAS
International gas value chains
Deep relationships with key
customers
Global presence + portfolio
approach
SHELL POSITIONED FOR
RAPID + PROFITABLE GAS
GROWTH Nigeria LNG – Bonny Island
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19. ROYAL DUTCH SHELL PLC
LNG MARKETS
SIMON HENRY
CHIEF FINANCIAL OFFICER
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20. LNG MARKET DEVELOPMENT
LNG IMPORT COUNTRIES
Brunei LNG ship 1978
Nakilat LNG ship 2011
1990
2010
2020
LNG SUPPLY
mtpa No. of countries
QG4
North West Shelf
Prelude FLNG Pluto
Sakhalin Wheatstone
300 Gorgon
30 Importing Countries
Oman LNG
Nigeria LNG Malaysia Tiga 25 Exporting Countries
200 Malaysia Dua 20 Volumes sold
Estimate
15
FID Shell
100 10
On stream
5
0 0
1990 1995 2000 2005 2010 2011 FY Estimate
2012
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21. LNG SUPPLY AND DEMAND DYNAMICS
LNG DEMAND LNG SUPPLY*
Mtpa Mboe/d Mtpa Mboe/d
600 15 600 15
500 500
400 10 400 10
300 300
200 5 200 5
100 100
0 0 0 0
2000 2005 2010 2015 2020 2025 2000 2005 2010 2015 2020 2025
Japan/Korea/Taiwan SE Asia Asia ME & East Africa
Europe China Qatar Americas West coast
India Other West Africa Americas East coast
Australia Arctic
DEMAND DOUBLE 2010 – 2020
SUPPLY RESPONSE
>$700 BILLION IDUSTRY INVESTMENT 2010-2025
* Risked view of all LNG supply projects
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22. REGIONAL GAS DEMAND DEVELOPMENT
ASIA DEMAND NORTH AMERICA DEMAND
Bcf/d Bcf/d
120 Asia Supply 120
Other Asia
100 100
Other SE Asia
N.A. Supply
80 Malaysia 80
Residential &
60 India 60 Commercial
China Other
40 40
Taiwan Power
20 Korea 20 Industrial
0 Japan 0 Transport
2000 2010 2020 2030 2000 2010 2020 2030
EUROPE DEMAND MIDDLE EAST DEMAND
Bcf/d Bcf/d
120 120
100 100
UAE
80 80
Saudi Arabia
60 60 Iraq
Europe Supply Iran
40 40
Residential & Commercial Oman
20 Power 20 Israel
Industrial Other ME
0 0
2000 2010 2020 2030 2000 2010 2020 2030
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23. CHINA GAS – SUPPLY & DEMAND
CHINA GAS DEMAND GAS SUPPLY MIX
Bcf/d Bcf/d
60 60
50 50
40 40 Imports ~30%
30 30
20 20 Domestic ~70%
10 10
0 0
2005 2010 2015 2020 2025 2030 2005 2010 2020 2030
Residential & Commercial Transport Others LNG Pipeline Domestic Gas
Industrial Power
PRIMARY ENERGY MIX
% (2010 data)
100%
50%
DEMAND OUTLOOK REQUIRES BOTH
DOMESTIC & IMPORT GAS GROWTH
0%
China Japan South Korea US
Gas Oil Nuclear Other renewables
Coal Hydro Other solid fuels
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24. NORTH AMERICA LNG POTENTIAL
INDUSTRY LNG EXPORT PLANS NORTH AMERICAN LNG EXPORT
DEVELOPMENT
Kenai LNG mtpa Bcf/d
Valdez
Total NA application
Canada LNG USA GoM + East Sanctioned projects
Kitimat Coast potential
BC LNG 2025: ~130mtpa
Canada + US West
Coast potential 2025:
~30 mtpa Jordan Cove Sabine Pass
Oregon Lake Charles
Cameron Cove Point
Freeport Gulf LNG
Corpus Christi
Gulf Coast Port Arthur
LNG Production Lavaca Bay Elba Island
LNG export facility – application filed
Sanctioned
MAJOR OPPORTUNITY FOR AMERICA GAS INDUSTRY
PERMITTING
> $300 BLN INDUSTRY FINANCING REQUIREMENT
PRICE AND MARKET CONSIDERATIONS
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25. LNG PRICING CONSIDERATIONS
LNG PRICE DYNAMICS – US EXPORTS REGIONAL GAS PRICES
$/mmbtu $/mmbtu
25 25
20 Tokyo Bay UK 20
15 15
10 10
5 5
0 0
Cost structure Japan landed Cost structure UK NBP 2005 2006 2007 2008 2009 2010 2011 2012
LNG price 2010-12
2010-12
Henry Hub (US)
National Balancing Point (UK)
Liquefaction Landed Cost Brent
+ transport
costs Japan landed LNG price
HH
outlook
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26. ASIA LNG PRICING DYNAMICS
ASIA LNG PRICING HISTORY LNG CONTRACTS: OIL PRICE LINKED
$/mmbtu 2010/2011 LNG contracts (Industry)
25
$/mmbtu
20
20
15
15
10
90 100 110 120
Brent oil price - $/bbl
10
Industry Oil Price Parity
range
5 Brent-5 ($/mmbtu) LNG PRICED VS. OIL
Japan/Korea/Taiwan ($/mmbtu) RECENT CONTRACTS REFLECTING
CURRENT OIL MARKETS
Weighted Average Cost of LNG imports
Includes spot volumes
LEGACY CONTRACTS REVISED TO
0 NEW OIL PRICE WORLD
2000 2002 2004 2006 2008 2010 2012
Range includes contracts with S-curves.
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27. SHELL + LNG
SHELL PRODUCTION
Diverse + growing
Million boe/d
4
customer base
Sector requires sustained
3 GAS + large scale investment
~25%
GAS hub based to meet demand
pricing
2
OIL
OIL
PRICE
LNG pricing reflects
PRICE
LINKED
LINKED
capital intensity and
1 ~75% oil
OIL linked
OIL
supply security
0
Production Price Production Price
Split Exposure Split Exposure
2011 2017/18
2011
GROWTH IN GAS SHELL POSITIONED FOR RAPID
LOCKING IN OIL PRICE EXPOSURE + PROFITABLE LNG GROWTH
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28. ROYAL DUTCH SHELL PLC
ASIA PACIFIC GROWTH
OUTLOOK
ANDREW BROWN
DIRECTOR UPSTREAM INTERNATIONAL
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29. UPSTREAM ASIA PACIFIC
ASIA PACIFIC PRODUCTION
SUBSTANTIAL UNDEVELOPED
RESOURCES
GAS GROWTH OPPORTUNITY
EXPLORATION
LNG
TIGHT/SHALE
Philippines
Malaysia & Brunei
SUSTAINING PRODUCTION + ASSET
INTEGRITY
North West Shelf HEARTLANDS EXPLORATION
EXTENDING PRODUCTION LIFE
SELECTED HUB GROWTH
Traditional
Integrated Gas
Deepwater
Tight/shale
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30. ASIA PACIFIC HISTORY
2007
China Changbei
ASIA PACIFIC PRODUCTION start-up
Kboe/d 2001
1995 Philippines
Malaysia Malampaya
DUA LNG start-up
start-up
600 ~1890 Indonesia: Brunei LNG 1972 First ocean going LNG 1993
wooden derrick carrier “Methane Pioneer” Bintulu
GTL plant
start-up
1972 1983
Brunei MLNG
LNG First
400 start-up LNG
1955 plant
Brunei
Seria
crude oil
terminal
Indonesian
nationalisation
200 1929
Brunei
first oil
discovery
1910
Malaysia
first oil
discovery World
War II
0
1907 1917 1927 1937 1947 1957 1967 1977 1987 1997 2007
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31. ASIA PACIFIC
MAIN GROWTH ENGINE IN UPSTREAM INTERNATIONAL
CAPITAL INVESTMENT
$ Billion OIL & GAS PRODUCTION CAPITAL EMPLOYED
Prelude FID 531 kboe/d $24 bln
8
Abadi
Gorgon FID
6 Abadi
EARNINGS CASH FLOW FROM OPERATIONS
4 Arrow
$4.9 bln $5.7 bln
2
0
Prelude
Woodside
-2 Other Upstream Asia Pacific
Q3’12 (4Q rolling)
-4
2009 2010 2011 Q3'12 (4Q
rolling)
Acquisitions CONTINUED INVESTMENT IN
Organic HEARTLANDS
Divestments NEW INTEGRATED GAS PROJECTS
EXPLORATION OPPORTUNITIES
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32. ASIA PACIFIC PORTFOLIO DEVELOPMENT
UNDER CONSTRUCTION….. …. OPTIONS
Sabah Gas Kebabangan
Gumusut Kakap
Prelude
NWS Gas – GWF-Ph 1 North Rankin
Gorgon T1-3 Wheatstone
Traditional
Integrated Gas 365 KBOE/D*; 7 MTPA UNDER CONSTRUCTION
Deepwater 375 KBOE/D*; 11 MTPA OPTIONS
Exploration * Production on a Shell working interest basis
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33. INVESTING IN TRADITIONAL HEARTLANDS
MALAYSIA + BRUNEI
Barton
South Furious
Sabah Gas North Sabah
- KBB
St Joseph
Malikai
2B Gumusut-Kakap
CA2 Geronggong
M1 A Maharaja Lela Sabah
SK318 ML South
Champion
M3 Fairley Waterflood
F23 Cili Padi Ampa
BDO
F6 Brunei LNG
Bokor
Tukau Timur
SK319
E11 2012 Tukau Timur Deep
Gas Discovery
Sarawak
Malaysia LNG
Bintulu
On stream Exploration licenses NEAR-FIELD COMMERCIALISATION
Under construction 2010-12 license additions/extensions EXPLORATION REJUVENATION
Options Gas Oil pipelines GROWTH THROUGH TECHNOLOGY
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34. MALAYSIA + BRUNEI GROWTH HUBS
Gumusut-Kakap Champion Waterflood
Sabah gas Kebabangan Malikai ML South
5 MAJOR PROJECTS >350 KBOE/D (100%)
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35. ENHANCED OIL RECOVERY POTENTIAL
Locations of EOR projects NORTH SABAH AND BARAM DELTA
2011 agreement to extend PSCs
North Sabah
North Sabah Shell 50% (operator), Baram Delta
Shell 40%
Advanced technology offshore EOR
10% (Baram Delta) & 20% (North Sabah) recovery
Baram Delta factor increase
< 450 million boe new resources
0km 50
~100,000 BOE/D PRODUCTION
EXTENDED FIELD LIFE >2040
Using surfactants to improve recovery
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36. LNG PERFORMANCE
GLOBAL LNG PORTFOLIO RELIABILITY
100%
80%
60%
40%
2007 2008 2009 2010 2011 Year to
Brunei LNG Date
Q3/12
SAKHALIN LNG CAPACITY UTILIZATION
Production as % of nameplate capacity
120%
TOP QUARTILE GLOBAL LNG
RELIABILITY PERFORMANCE 100%
80%
60%
2010 2011 2012 estimate
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38. AUSTRALIA/INDONESIA
LNG GROWTH PORTFOLIO
Abadi FLNG GLOBAL LNG DEVELOPMENT OPTIONS
Sunrise FLNG Mtpa (Shell) nameplate capacity
Arrow
50
Browse
Prelude FLNG 40 Prelude &
North West Shelf Gorgon T1-3 Wheatstone
30
Pluto
20
Gorgon
10
0
Year to Date 2012 ~2020+
0km 500
Wheatstone On stream Under Construction Options
On stream Shell Interest
Under construction SHELL ASIA PACIFIC LNG VOLUMES
Million tonnes/year sales volumes
Options 52%
15
ASIA/PACIFIC LNG: 10
52% 52% 38%
9 MTPA ON STREAM 5
7 MTPA UNDER CONSTRUCTION
0
2007 2009 2011 2017/18
Brunei Malaysia Australia
% = Asia Pacific of total Shell sales volumes
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39. FLOATING LNG: PORTFOLIO DEVELOPMENT
Sunrise FLNG
4.1 mtpa (Woodside operator)
FLOATING LNG
~5 tcf + 200 mln bbls NGL’s
resources LEADERSHIP
Shell 34%
2011: FIRST INDUSTRY FID
Abadi FLNG
ON FLNG ON PRELUDE
2.5 mtpa (Inpex operator)
~15 tcf resources CONSTRUCTION SOUTH
Shell 30% KOREA: OPTIONS FOR
FURTHER PROJECTS
TARGETING NEW
EXPLORATION FOR FLNG
Prelude FLNG
5.3 mtpa: 3.6 mtpa LNG + 1.7
mtpa liquids (Shell operator) SHELL FLOATING LNG
110 kboed; ~3 tcf
Shell 67.5% + strategic partners
Abadi
Sunrise Prelude
Start-
Assess Select Define FID Execute up Operate
Feasibility Concept Project Ramp-up to
Construction
Study Selection Specifications full capacity
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40. ABADI LNG: INDONESIA
Phase 1: FLNG development 2.5 mtpa of LNG
Preparations for FEED on going
East Timor
2013: drilling ~ 3 wells
Abadi
Peak production Phase 1 ~65 kboe/d
Indonesia
Sunrise
Major gas field >15 Tcf resources
Evans Shoal
400-700m water depth
Australia
0km 200
Shell Interest
ABADI: SHELL ENTRY 2011 (30%)
Abadi development concept
(courtesy of Inpex) FLNG OPPORTUNITY
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41. ARROW ENERGY: AUSTRALIA
Surat Co-Existence Engagement
Bowen Basin
Surat Basin
Bow Acreage Addition
0km 300
Shell Interest Gas Pipelines
______
Curtis Island Shell 50%
Currently supplying >15% of Queensland’s
domestic gas ~ 70 mmscf/day
FEED on 2 x 4 mtpa LNG project
Development decisions timed versus local labour
& contracting market
Assessing options with third parties
ASSESSING LNG OPPORTUNITY Resources ~ 8 tcf (100%)
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42. EXPLORATION ASIA
MALAYSIA + BRUNEI EXPLORATION CHINA OFFSHORE
Geronggong
2B
CA2
A
SK318
Yinggehai
SK319
62/02
Tukau Timur Deep 62/17
0km 50 0km 50
Gas Oil pipelines Recent Exploration Success Exploration licenses 2010-12 license / extensions
~17,500 km2 new acreage in 2010-12 6,000 km2 in two offshore blocks in 2012
Large scale 2D and 3D seismic programmes Shallow water depths, proven gas province
> 20 wells in Brunei+ Malaysia in 2013 CNOOC partnership
3D seismic acquisition planned for 2013
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43. EXPLORATION – AUSTRALIA NORTH WEST SHELF
Sunrise FLNG
12+ Tcf Shell share
Evans Shoal 2012
added since 2005
<$1/boe
Browse LNG
Outer Browse 2012 33,000 km2 new
Prelude FLNG
acreage added in
Canning 2011
2011-12: Canning and
Pluto LNG Browse
Gorgon
NWS
2 new gas discoveries
in 2012: Satyr 2/4
Satyr
Wheatstone
0km 200
On stream Under construction Options
Shell licenses 2011-12 additions Exploration success
Shell gas pipeline
CONSISTENT DELIVERY
CONTINUED PORTFOLIO BUILD
Copyright of Royal Dutch Shell plc 14 November, 2012 43
44. SHELL CHINA UPSTREAM PORTFOLIO
ACREAGE BUILD-UP
Km2 (000)
20
10
0
< '10 '10 '11 '12
Changbei +
extension
Zitong Jinqiu
Fushun
GAS PRODUCTION
EXPLORATION
ONSHORE/OFFSHORE
LNG IMPORTS > 2 MTPA
On stream Tight/shale gas ~1 BLN/YEAR INVESTMENT
Offshore CBM
Yinggehai
Copyright of Royal Dutch Shell plc 14 November, 2012 44
45. CHINA: CHANGBEI GAS FIELD
Changbei: drilling site CHANGBEI GAS
2005: PSC (Shell 50%, PetroChina 50%)
2007: commercial gas production
2009: Achieved ~300 mmscf/d production
2 years ahead of schedule
Production Reliability > 95%
NEW CHANGBEI
PSC amendment signed July 2012
Same acreage, new reservoirs
Appraisal drilling 2013, FID planned 2014
CHANGBEI PRODUCTION POTENTIAL
Mmscf/d (100%) New potential
400 Changbei
200
0km 50
0
2006 2009 2012 2015 2018
Exploration license
Copyright of Royal Dutch Shell plc 14 November, 2012 45
46. CHINA – TIGHT/SHALE GAS EXPLORATION
EARLY SUCCESS: JINQIU AND FUSHUN SICHUAN BASIN ACREAGE + ACTIVITY
Km2 (000) Cumulative # wells
10
40
5
20
0 0
09 10 11 12 13
Acreage (km2) # wells
Quilin -3 (Jinqiu) Yang (Fushun)
Acquisition of Zitong block October 2012
24 wells 2010-12; 20 planned for 2013
STRATEGIC PARTNERSHIPS WITH
CNPC Drilling results
DRILLING JOINT VENTURE WITH Exploration narrowing down on sweet spots
GREAT WALL (SIRIUS) Good quality shale + positive test results
3 LICENSES: ~ 8,500 KM2 (2.1 Extended flowback testing planned
MILLION ACRES)
Copyright of Royal Dutch Shell plc 14 November, 2012 46
47. DEVELOPMENT PACE
CANADA: GROUNDBIRCH CHINA: JINQIU
0 20 km 0 20 km
Shell wells Shell interest Shell pipelines
7 years in development – good geology understanding ~2 years in exploration phase of development
~ 1,500 industry wells ~10 industry wells
Well developed pipeline infrastructure Densely populated & developing legal framework
Developed rig and fraccing support industry Developing rig and fraccing support industry
Clear regulatory framework (water supply & disposal) Water treatment solutions in development
Limited gas transport infrastructure developed
Copyright of Royal Dutch Shell plc 14 November, 2012 47
48. GROWTH POTENTIAL – ASIA PACIFIC
PRODUCTION + OUTLOOK
Kboe/d
800
SUBSTANTIAL UNDEVELOPED
RESOURCES
700
GAS GROWTH OPPORTUNITY
NEW
600
GROWTH EXPLORATION
LNG
500
TIGHT/SHALE
400
300
SUSTAINING PRODUCTION + ASSET
200 TRADITIONAL INTEGRITY
HEARTLANDS HEARTLANDS EXPLORATION
100 EXTENDING PRODUCTION LIFE
SELECTED HUB GROWTH
0
2000 2011 2017/18
Brunei Thailand
Malaysia China
Australia Philippines
New Zealand
Copyright of Royal Dutch Shell plc 14 November, 2012 48
49. ROYAL DUTCH SHELL PLC
PROJECTS & TECHNOLOGY
MATTHIAS BICHSEL
DIRECTOR PROJECTS & TECHNOLOGY
Copyright of Royal Dutch Shell plc 14 November, 2012 49
50. SAFETY IN SHELL
‘GOAL ZERO’ ON SAFETY SAFE AND RELIABLE OPERATIONS
Injuries – TRCF/mln working hours million working hours
Consequences
5 900
Hazard
Control & Response &
Barriers Incident Recovery
4 800
Minimize Mitigate
3 700
likelihood consequences
2 600
SAFETY PERFORMANCE
1 500
Personal and process safety
Rigorous global standards
0 400
'03 '04 '05 '06 '07 '08 '09 '10 '11 Q3
'12
12 months
Million working hours (RHS) rolling
TRCF
Copyright of Royal Dutch Shell plc 14 November, 2012 50
51. INTEGRATED PROJECTS & TECHNOLOGY
ORGANISATION
CONTRACTING &
PROCUREMENT TECHNOLOGY
INNOVATION PROJECT
SOLUTIONS &
SAFETY & R&D EXECUTION
DEPLOYMENT
ENVIRONMENT
Right Right concept Design one –
technology Build many
Implementation
Performance and replication Top quartile
management performance
SAFE & RELIABLE
Copyright of Royal Dutch Shell plc 14 November, 2012 51
52. DELIVERING TOP-QUARTILE PROJECTS
TOP QUARTILE PROJECTS
CONTRACTING & PROCUREMENT
On time, on budget
TALENT
TECHNOLOGY Safe and reliable
Production
TOOLS /
PROCESSES
DISCIPLINED
Value
EXECUTION
INTEGRATION
STANDARDISATION
INNOVATION
REPLICATION
Assess Select Define Execute
Copyright of Royal Dutch Shell plc 14 November, 2012 52
53. STANDARDISATION : BRUNEI SHELF
FROM BESPOKE… …TO STANDARDISATION
West Pelaut drilling on
Champion West platform Mampak platform Installation of Bugan Topsides Sail-away of SKID topsides
2005: 2008: 2009: 2010/2011:
Champion West Mampak Block 4 Bugan Phase 2 Selangkir Ironduke (SKID)
Water depth: 43m Water depth: 43m Water depth: 35m Water depth: 51m
FID to 1st HC: 36 months FID to 1st HC: 28 months FID to 1st HC: 22 months FID to 1st HC: 13 months
Facilities costs: -7% Facilities costs: -24% Facilities cost: -15%
PERFORMANCE
Schedule improvement
STANDARDISATION THROUGH:
2005:
Champion West Framework agreements
2008: In-house feed
Mampak FASTER
2009: One fabrication yard and
Bugan installation contractor
2010/11:
SKID
Copyright of Royal Dutch Shell plc 14 November, 2012 53
54. REPLICATION AND REPEAT EXECUTION
REPLICATION AND SIMPLIFICATION SHELL TENSION LEG PLATFORMS – SCHEDULE
IMPROVEMENT
Mars-A Olympus
(Mars-B) Design and Fabrication
Year Execution 2
1 3 4 5 6
Auger
Mars- B
REPEAT EXECUTION
Continuity of staff
One design and subsea contractor
In-house engineering
BEST IN CLASS BY LEVERAGING REPLICATION
1993 1996 1997 1999 2001 OLYMPUS MALIKAI
AUGER MARS-A RAM-POWELL URSA BRUTUS
Copyright of Royal Dutch Shell plc 14 November, 2012 54
55. BENCHMARKING & CONTINUOUS IMPROVEMENT
DRILLING LEARNING CURVE DRILLING BENCHMARKING
Indexed well delivery time per year since first production Quartile performance curves – days versus measured depth
Pinedale Deep Basin
Pinedale & Haynesville
Groundbirch Magnolia Groundbirch
100% 100
Eagle Ford Appalachia
Arrowhead SWAN Marcellus
75% Jiniqui
50% 50
25% Efficiency (drill days) improving with each new
global asset
0
0%
7000 12000 17000 Depth (feet)
0 1 2 3 4 5 6 7 8 9 10 11 12
2011/2012 data Shell wells Industry wells 1st quartile
UPSTREAM FACILITIES COMPONENT COST (IPA)
CONTINUOUS IMPROVEMENT IN
FRONT-END LOADING
TRANSFER OF KNOWLEDGE AND
INNOVATIONS
2006 2007 2008 2009 2010 2011 DISCIPLINED DELIVERY
1Q 2Q 3Q 4Q
Copyright of Royal Dutch Shell plc 14 November, 2012 55
56. CONTRACTING & PROCUREMENT
COSTS
LOW COST COUNTRY SOURCING
# of suppliers (Brazil, China, India, Mexico) $ billion Shell no.1 IOC in sourcing from China
200 5
20 to 25% savings
150 4
3 14 global agreements awarded in China
100
2 and 2 in India
50 1
Example: fabrication agreements demonstrate
0 0
20 to 40% savings
2008 2009 2010 2011 2012E
Qualified suppliers Spend
GLOBAL PURCHASING AGREEMENTS
% spend through global purchasing agreements
60% Significant value opportunities
40% External benchmarking confirming price
competitiveness of global purchasing agreements
20%
Example: metal pipes 15% to 50% below market
0%
2010 2011 Q3 2012
Shell managed 3rd party contracting & procurement spend
Copyright of Royal Dutch Shell plc 14 November, 2012 56
57. COST MANAGEMENT IN AUSTRALIA
MITIGATE COST INFLATION IN AUSTRALIA INDUSTRY COST INFLATION: AUSTRALIA
% Cumulative inflation (end 2009 = 100)
Off-shoring: 50%
Floating LNG
40%
Project phasing: 30%
Arrow LNG 20%
Technology: 10%
New onshore drilling concepts for Arrow 0%
2010 2011 2012 2013 2014
Contract management: Land Rigs Equipment Construction Labor
Leveraging global purchasing agreements Subsea Yards - Fabrication
Source: IHS/CERA
Noble Clyde Boudreaux rig arriving in Australia Arrow Australia: compression station
Copyright of Royal Dutch Shell plc 14 November, 2012 57