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Q4 2014 Earnings Call – Shell

Shell · Jan 29, 2015 · 46 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Q4 2014 Earnings Call – Shell – slide 1
    FOURTH QUARTER 2014 RESULTS BALANCING GROWTH & RETURNS 29 JANUARY 2015 ROYAL DUTCH SHELL PLC Copyright of Royal Dutch Shell plc 29 January, 2015 1
  2. Q4 2014 Earnings Call – Shell – slide 2
    BEN VAN BEURDEN CHIEF EXECUTIVE OFFICER ROYAL DUTCH SHELL PLC Copyright of Royal Dutch Shell plc 29 January, 2015 3
  3. Q4 2014 Earnings Call – Shell – slide 3
    FOCUS ON HSSE 2014 UPDATE Goal Zero on safety Spills - operational Injuries TRCF/million working hours million working hours Volume in thousand tonnes TRCF Working hours (RHS) Energy intensity refineries Process safety Energy…
  4. Q4 2014 Earnings Call – Shell – slide 4
    EXECUTING A CONSISTENT, LONG-TERM STRATEGY Unrelenting focus on HSSE Total shareholder returns growth 10 years Index 1/1/2005 =100 Technology, integration and scale Disciplined capital investment by strategic theme Growth in…
  5. Q4 2014 Earnings Call – Shell – slide 5
    ENERGY TRANSITIONS Long-term energy supply mix 2050 outlook Million boe per day Population increases from 7 to 9 billion +50% Enabled by cheap and reliable energy +50% Realities Requirement to mitigate climate change Oil supply…
  6. Q4 2014 Earnings Call – Shell – slide 6
    OIL MARKET + SHELL RESPONSE Oil supply Oil market downturn Million barrels of oil per day Entering 2015 with low oil prices Requirement for 500 billion industry investment in upstream oil during 2014-20 Under-spending amplifies…
  7. Q4 2014 Earnings Call – Shell – slide 7
    FINANCIAL PERFORMANCE 2014 DELIVERY Earnings + ROACE Cash flow billion % billion billion Upstream Corporate/Other CFFO CFFI Free cash flow (RHS) Downstream ROACE (RHS) Dividend, buyback + gearing billion Gearing % range…
  8. Q4 2014 Earnings Call – Shell – slide 8
    2014 DELIVERY BALANCING GROWTH AND RETURNS Improve our financial performance CCS earnings 22.6 billion; CFFO 45.0 billion Dividend growth + buyback Restructuring in Oil Products + North America resources plays Enhance our…
  9. Q4 2014 Earnings Call – Shell – slide 9
    CHANGING EMPHASIS IN 2014+ SHARPER PORTFOLIO MANAGEMENT + APPRAISAL More rigorous portfolio management Taking hard choices on funnel RESILIENCE STRATEGIC Risk, performance FEED INTENT & FID On-stream uncertainty ASPIRED RESULTS…
  10. Q4 2014 Earnings Call – Shell – slide 10
    PRIORITIES 2015+ Competitive financial Capital efficiency Project delivery performance Returns and cash flow Choices on new options Continued ramp-up of 2014 start-ups Competitive returns for Supply chain management…
  11. Q4 2014 Earnings Call – Shell – slide 11
    COMPETITIVE FINANCIAL PERFORMANCE PORTFOLIO RESTRUCTURING Resources plays Oil Products Upstream engine Capital investment in billion billion billion kboe per day (Shell share) -30% CFFO Production (RHS) LRS Dry gas…
  12. Q4 2014 Earnings Call – Shell – slide 12
    COMPETITIVE FINANCIAL PERFORMANCE RESTRUCTURING RESOURCES PLAYS PORTFOLIO W. Canada gas Russia Germany Ukraine Turkey Changbei W. Canada LRS Algeria Changbei 2 Appalachia Tunisia Oman Sichuan Colombia Permian Arrow CBM…
  13. Q4 2014 Earnings Call – Shell – slide 13
    COMPETITIVE FINANCIAL PERFORMANCE DOWNSTREAM ENGINE Cash flow + ROACE Earnings 2013 to 2014 billion % billion Cash flow ROACE (RHS) Operating performance % unplanned downtime Self-help + improved joint venture performance…
  14. Q4 2014 Earnings Call – Shell – slide 14
    COMPETITIVE FINANCIAL PERFORMANCE PORTFOLIO RESTRUCTURING: OIL PRODUCTS Portfolio change Refining capacity Million b/d of refineries Selective Growth: China -20% LNG for transport Premium fuels + lubes Refinery crude flexibility…
  15. Q4 2014 Earnings Call – Shell – slide 15
    COMPETITIVE FINANCIAL PERFORMANCE PORTFOLIO RESTRUCTURING: UPSTREAM ENGINE Upstream engine portfolio Managed decline of legacy positions kboe per day (Shell share) Selective growth: Schiehallion Clair Ph2 Val d Agri ph2 95 Tempa…
  16. Q4 2014 Earnings Call – Shell – slide 16
    INVESTMENT PRIORITIES + PERFORMANCE Engines (Downstream, Upstream engine) CFFO in billion Free cash flow businesses Maintain competitiveness Integrated gas Asset integrity + selective growth Downstream engine Growth priority…
  17. Q4 2014 Earnings Call – Shell – slide 17
    COMPETITIVE, CREDIBLE + AFFORDABLE PLANS MODERATING OUR SPENDING + GROWTH OUTLOOK billion total capital investment billion organic capital investment -15% Project re-phasing / deferral Supply chain savings Dilutions +…
  18. Q4 2014 Earnings Call – Shell – slide 18
    SIMON HENRY CHIEF FINANCIAL OFFICER ROYAL DUTCH SHELL PLC Copyright of Royal Dutch Shell plc 29 January, 2015 19
  19. Q4 2014 Earnings Call – Shell – slide 19
    FINANCIAL PERFORMANCE ROYAL DUTCH SHELL PLC Copyright of Royal Dutch Shell plc 29 January, 2015 20
  20. Q4 2014 Earnings Call – Shell – slide 20
    Q4 2014 FINANCIAL HIGHLIGHTS Earnings Q4 2013 to Q4 2014 billion Q4 Q4 2013 2014 billion Environment Choice UPSTREAM 2.5 1.7 DOWNSTREAM (CCS) 0.6 1.6 CORPORATE & MINORITIES (0.1) (0.0) CCS NET EARNINGS 2.9 3.3 CCS EARNINGS, PER…
  21. Q4 2014 Earnings Call – Shell – slide 21
    Q4 2014 PERFORMANCE Upstream earnings + cash flow Oil and gas production billion billion million boe/d million tonnes per annum Upstream International Upstream Americas Gas Oil LNG Sales volumes (RHS) Cash flow from operations…
  22. Q4 2014 Earnings Call – Shell – slide 22
    PRELIMINARY RESULTS SEC PROVED RESERVES POSITION 2014 Reserves performance 2012-14 Reserves additions 2014 RRR 26% 2012-14 RRR 67% Reserves life at end 2014 11.2 years 2012-14 Reserves average performance Organic1 additions 1.0…
  23. Q4 2014 Earnings Call – Shell – slide 23
    OIL + GAS RESOURCES FUNNEL Converting resources to production Billion boe Longer-term upside Appomattox Browse resources plays Val dAgri ph2 Vito Baronia EOR / others Tukau Timur Bonga Main ph3 Coulomb ph2 Bonga North…
  24. Q4 2014 Earnings Call – Shell – slide 24
    CONVENTIONAL EXPLORATION EXECUTING A CONSISTENT AND SUCCESSFUL EXPLORATION STRATEGY Time to Prospect development size 2015 spend (years) (million boe) Long-term potential for ARCTIC 15+ 500 industry Build-up of acreage in…
  25. Q4 2014 Earnings Call – Shell – slide 25
    EXPLORATION: 2014 PERFORMANCE Improved delivery in 2014 10 frontier + heartlands successes GOM deep-water heartlands 41 near-field finds 2014: Rydberg, Kaikias, Power Nap + Gettysburg discoveries 1300 mmboe for Shell 2009+…
  26. Q4 2014 Earnings Call – Shell – slide 26
    2015 OUTLOOK 2014 asset sales + license expiries (2015 vs. 2014 impact) -100 kboe/d; -0.3 mtpa LNG -75 kbpd refining capacity; -145 kbpd marketing -1 billion divestment tax charge impacting CFFO Maintenance downtime / other (2015 vs.…
  27. Q4 2014 Earnings Call – Shell – slide 27
    CAPITAL EFFICIENCY FINANCIAL FRAMEWORK AND PRIORITIES Priorities for cash Cash performance billion 1. Debt service 2. Dividends: growth policy 3. Capital investment: disciplined through-cycle growth CFFO 4. Return surplus cash:…
  28. Q4 2014 Earnings Call – Shell – slide 28
    CONSISTENT DELIVERY OF COST REDUCTION PROGRAMMES MULTI-BILLION OPPORTUNITY IN SHELL + SUPPLY CHAIN North America resources plays Supply chain million 2014 savings (opex + capex) Strategic Short term Medium term long term Price…
  29. Q4 2014 Earnings Call – Shell – slide 29
    CAPITAL EFFICIENCY EARLY DELIVERY OF 2014-15 15 BILLION DIVESTMENT PLAN Asset sales add focus Divestment/exit billion 2014 Early delivery of 2014-15 Woodside 9.5% target Australia upstream Wheatstone LNG refocus Australia…
  30. Q4 2014 Earnings Call – Shell – slide 30
    PORTFOLIO CHOICES DRIVING PROFITABILITY Production Upstream CFFO* million boe per day billion +25% Underlying +2% * CFFO excludes working capital + oil & gas price effects Enhancing profitability Copyright of Royal…
  31. Q4 2014 Earnings Call – Shell – slide 31
    CAPITAL EFFICIENCY INVESTMENT PRIORITIES Investment themes Organic capital investment Conventional 10% exploration Longer term: 25% Pre-FID large project options 50% Post-FID large projects Growth priorities: 40%…
  32. Q4 2014 Earnings Call – Shell – slide 32
    CASH PERFORMANCE + PAY-OUT Cash flow Dividend track record billion billion 2012-2014 2014 Cash flow from operations Cash flow from investments1 Pay-out Dividends announced 1 Includes MLP proceeds Gearing and pay-out billion %…
  33. Q4 2014 Earnings Call – Shell – slide 33
    BEN VAN BEURDEN CHIEF EXECUTIVE OFFICER ROYAL DUTCH SHELL PLC Copyright of Royal Dutch Shell plc 29 January, 2015 34
  34. Q4 2014 Earnings Call – Shell – slide 34
    PROJECT DELIVERY ROYAL DUTCH SHELL PLC Copyright of Royal Dutch Shell plc 29 January, 2015 35
  35. Q4 2014 Earnings Call – Shell – slide 35
    PROJECTS UNDER CONSTRUCTION Production Shell-operated started up kboe per day (Shell share) million tonnes per annum 2014 Mars B Gumusut-Kakap Bonga NW Petai Cardamom Sabah gas KBB 2015-16 2017-19 BC-10 ph3 Baronia /Tukau…
  36. Q4 2014 Earnings Call – Shell – slide 36
    PROJECT DELIVERY MANAGING OUR OPPORTUNITY SET 2015-16 FID options 17 potential FIDs 2015-16 Options deferred / FID choices 700 kboe/d cancelled 2015-16 12 mtpa LNG 2.7 mtpa chemicals Carmon Creek ph3+4 Majnoon full field postponed…
  37. Q4 2014 Earnings Call – Shell – slide 37
    COMPETITIVE PERFORMANCE: BALANCING GROWTH AND RETURNS Cash flow from operations Free cash flow billion billion Shell Peer group ROACE underlying Total shareholder return (2012-2014) % % Shell competitors Free cash flow:…
  38. Q4 2014 Earnings Call – Shell – slide 38
    PRIORITIES 2015+ Competitive financial Capital efficiency Project delivery performance Returns and cash flow Choices on new options Continued ramp-up of 2014 start-ups Competitive returns for Supply chain management…
  39. Q4 2014 Earnings Call – Shell – slide 39
    QUESTIONS & ANSWERS FOURTH QUARTER 2014 RESULTS Copyright of Royal Dutch Shell plc 29 January, 2015 40
  40. Q4 2014 Earnings Call – Shell – slide 40
    KEY UPSTREAM PROJECTS UNDER CONSTRUCTION Upstream engine Deep water Resources plays Integrated gas Future opportunities Copyright of Royal Dutch Shell plc 29 January, 2015 41
  41. Q4 2014 Earnings Call – Shell – slide 41
    PRE-FID OPTIONS POTENTIAL 2015-2016 FEEDS AND FIDS Downstream engine Deep water Resources plays Upstream engine Integrated gas Future opportunities Copyright of Royal Dutch Shell plc 29 January, 2015 42
  42. Q4 2014 Earnings Call – Shell – slide 42
    2014 CONVENTIONAL EXPLORATION: EXAMPLES Frontier: Gabon deep water Heartland: GOM NFE: Oman, Lekhwair campaign Appomattox Ram Powell Nakika Ursa Mars Mars B Vito Rydberg Gettysburg Brutus Kaikias Power Nap On-stream FEED…
  43. Q4 2014 Earnings Call – Shell – slide 43
    DELIVER NEW PROJECTS PROJECT MANAGEMENT Upstream project status Construction time elapsed % photo Corrib gas: national grid into Bellanaboy facility Oversight and accountability Track record Construction time elapsed…
  44. Q4 2014 Earnings Call – Shell – slide 44
    DECONSTRUCTING OUR PORTFOLIO 2014 organic 2014 Capital CCS earnings CFFO capital ROACE billion employed investment 6 11 6 49 11% DOWNSTREAM Engines ENGINE Mature + drives free cash flow 5 8 7 18 27% UPSTREAM…
  45. Q4 2014 Earnings Call – Shell – slide 45
    CONVENTIONAL EXPLORATION + APPRAISAL: KEY WELLS 2015-2016 Alaska Denmark Albania Turkey Canada Egypt US GOM China Brunei Nigeria Malaysia Gabon Australia 15 16 Brazil: Libra Namibia Frontier Heartlands New…
  46. Q4 2014 Earnings Call – Shell – slide 46
    FOURTH QUARTER 2014 RESULTS BALANCING GROWTH & RETURNS 29 JANUARY 2015 ROYAL DUTCH SHELL PLC Copyright of Royal Dutch Shell plc 29 January, 2015 47

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