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Investor Day 2014 – Shell

Shell · Sep 5, 2014 · 64 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. Investor Day 2014 – Shell – slide 1
    BALANCING GROWTH & RETURNS NEW YORK INVESTOR DAY 5 SEPTEMBER 2014 ROYAL DUTCH SHELL PLC Copyright of Royal Dutch Shell plc 5 September, 2014 1
  2. Investor Day 2014 – Shell – slide 2
    BEN VAN BEURDEN CHIEF EXECUTIVE OFFICER ROYAL DUTCH SHELL PLC Copyright of Royal Dutch Shell plc 5 September, 2014 3
  3. Investor Day 2014 – Shell – slide 3
    AGENDA Ben van Beurden Chief Executive Officer Marvin Odum Upstream Americas Director John Abbott Downstream Director Simon Henry Chief Financial Officer Question & answer session Panel break-outs Downstream Upstream…
  4. Investor Day 2014 – Shell – slide 4
    EXECUTING A CONSISTENT, LONG-TERM STRATEGY Energy demand outlook Unrelenting focus on HSSE million boe per day Technology, integration and scale Disciplined capital investment by strategic theme Growth in cash flow…
  5. Investor Day 2014 – Shell – slide 5
    FOCUS ON SAFETY UPDATE Goal Zero on safety Spills - operational Volume in thousand tonnes million working hours Number of incidents 4Q rolling 4Q rolling TRCF Working hours (RHS) Energy intensity refineries Process safety trend…
  6. Investor Day 2014 – Shell – slide 6
    2014 PRIORITIES Returns and cash flow Improve our financial Competitive returns for shareholders performance Enhance our Take hard choices on new options capital efficiency Increase asset sales Reduce pace of growth…
  7. Investor Day 2014 – Shell – slide 7
    IMPROVE FINANCIAL PERFORMANCE H1 2014 OUTCOME Earnings + ROACE Cash flow billion billion billion Upstream Corporate/Other Downstream ROACE (RHS) CFFO CFFI Free cash flow (RHS) Dividend + buy-back billion Balancing returns +…
  8. Investor Day 2014 – Shell – slide 8
    DRIVING PERFORMANCE IN SHELL Performance units New shareholding requirements Drive bottom line focus Credible, competitive and affordable plans CEO 7 x base pay Drives decisions on spending + divestment Individual performance…
  9. Investor Day 2014 – Shell – slide 9
    INVESTMENT PRIORITIES + STRATEGIC INTENT Engines Free cash flow businesses Maintain competitiveness UPSTREAM DOWNSTREAM Asset integrity + selective growth Growth Priority Global leadership established High-grading our rich…
  10. Investor Day 2014 – Shell – slide 10
    IMPROVE FINANCIAL PERFORMANCE PORTFOLIO RESTRUCTURING North America resources plays Oil Products Gas supply for LNG Canada Downstream 10-12% ROACE + 10 billion p.a. LRS exploration: Permian + W.Canada CFFO potential Appalachia…
  11. Investor Day 2014 – Shell – slide 11
    ENHANCE CAPITAL EFFICIENCY Take hard choices on new options 2014+ Asset sales / license expiry More selectivity: FIDs 500 million Wheatstone LNG require CEO approval at FEED BC-10 dilution Maturing new projects: LNG, deep-water…
  12. Investor Day 2014 – Shell – slide 12
    DELIVER NEW PROJECTS UPSTREAM TRACK RECORD 2010-14 Consistent delivery of Growth from key start-ups new projects kboe per day billion Last 12 months CFFO from Repsol LNG 2010+ start-ups 11 billion Mars-B Key project…
  13. Investor Day 2014 – Shell – slide 13
    CONVENTIONAL EXPLORATION PORTFOLIO + THEMES Conventional exploration spend 2014 Time to Prospect 4 billion development size (years) (million boe) 15+ 500 Arctic Frontier 10+ 250 Under explored basins Heartlands 3+…
  14. Investor Day 2014 – Shell – slide 14
    EXPLORATION SUCCESS ADDING RESOURCES IN HEARTLANDS Gulf of Mexico Malaysia cumulative resources added in million boe cumulative resources added in million boe Rydberg Vicksburg Kaikias Stones Vito Appraisal West Boreas Appomattox…
  15. Investor Day 2014 – Shell – slide 15
    SHELL IN NORTH AMERICA Western LNG Canada Canada gas Carmon Creek AOSP LRS Production Refining capacity Scotford Proposed Energy East Pipeline Puget Sound Sarnia Appalachia North America Gas to Rest of the world…
  16. Investor Day 2014 – Shell – slide 16
    MARVIN ODUM UPSTREAM AMERICAS DIRECTOR ROYAL DUTCH SHELL PLC Copyright of Royal Dutch Shell plc 5 September, 2014 17
  17. Investor Day 2014 – Shell – slide 17
    UPSTREAM AMERICAS Deep-water Heavy oil Resources plays Integrated Gas Arctic Industry leadership Mining and in-situ Portfolio repositioning Monetizing gas Long-term potential Mars B start-up Carmon Creek under On-going…
  18. Investor Day 2014 – Shell – slide 18
    UPSTREAM AMERICAS PORTFOLIO Resources Resources plays Western Canada Deep-water 10.9 billion boe dry gas + LRS Heavy oil AOSP + in-situ Gas monetization options LNG Integration potential Canada Major undeveloped resources…
  19. Investor Day 2014 – Shell – slide 19
    IMPROVE FINANCIAL PERFORMANCE: UPSTREAM AMERICAS - FINANCIAL DRIVERS Earnings 2013 H1 2014 H1 Balance sheet Q214 billion billion Long term growth 0.1 1.3 0.1 0.5 - 0.3 0.2 0.2 - 0.1 0.5 3.2 billion GAS clean DD+A 0.1 2014…
  20. Investor Day 2014 – Shell – slide 20
    NORTH AMERICA RESOURCES PLAYS RESTRUCTURING SHELL PORTFOLIO Portfolio 10 billion boe resources + potential Dry gas: Maintain/Grow: Western Canada gas + Canada LNG supply integration plays Appalachia Appalachia appraisal Western…
  21. Investor Day 2014 – Shell – slide 21
    NORTH AMERICA RESOURCES PLAYS PROGRESS ON COSTS Drilling time reduction Staff reduction Unit operating expense % improvement /mcfe Pinedale Groundbirch -40% -10% Appalachia Eagle Ford Permian Kaybob Haynesville program…
  22. Investor Day 2014 – Shell – slide 22
    NORTH AMERICA RESOURCES PLAYS APPRAISING NEW POTENTIAL Appalachia Utica Permian Western Canada Loving Co Fox Creek Winkler Co Kaybob area Ward Co Tioga Pecos Tioga County Pembina area 0 25km 18km 18km 54km Rocky…
  23. Investor Day 2014 – Shell – slide 23
    NORTH AMERICA LNG PROGRESSING TO FID LNG Canada Elba LNG 2 x 6 mtpa first phase Two phased liquefaction project with up to 2.5 25-year export license for 24 mtpa in place mtpa capacity Joint venture agreement signed Joint venture…
  24. Investor Day 2014 – Shell – slide 24
    DEEP-WATER GULF OF MEXICO PROJECT FLOW Appomattox 150 kboe/d potential 600 million boe resources Kaikias Shell 80% (operator) Oil discovery; further appraisal required Ram Powell Vito Shell 100% (operator) 100 kboe/d potential…
  25. Investor Day 2014 – Shell – slide 25
    DEEP-WATER GULF OF MEXICO DRIVING PROFITABLE GROWTH Production Cardamom Cumulative resources added thousand boe/d start-up million boe Perdido Mars B start-up start-up Rydberg Stones Vicksburg Kaikias West Boreas Vito Appraisal…
  26. Investor Day 2014 – Shell – slide 26
    DEEP-WATER GULF OF MEXICO MARS B DEVELOPMENT Olympus in Kiewit shipyard Ingleside, Texas Summer 2013 Olympus on-site February 2014 Olympus platform competitors FID September 2010 FID 2010 First Oil February 2014 Mars B…
  27. Investor Day 2014 – Shell – slide 27
    DEEP-WATER BRAZIL PROJECT DELIVERY AND NEW POTENTIAL BC-10 Bijupira Salema Libra Update picture Phase 2 water injection complete Redevelopment complete First well spudded in August 2014 Injection above target plan First oil…
  28. Investor Day 2014 – Shell – slide 28
    UPSTREAM AMERICAS Deep-water Heavy oil Resources plays Integrated Gas Arctic Industry leadership Mining and in-situ Portfolio repositioning Monetizing gas Long-term potential Mars B start-up Carmon Creek under On-going…
  29. Investor Day 2014 – Shell – slide 29
    JOHN ABBOTT DOWNSTREAM DIRECTOR ROYAL DUTCH SHELL PLC Copyright of Royal Dutch Shell plc 5 September, 2014 30
  30. Investor Day 2014 – Shell – slide 30
    DOWNSTREAM STRATEGY Developing and sustaining competitive advantage through Advantaged Improving our Differentiated Leveraging the feedstock + footprint Products + Brand supply Customer Offer Priority to improve our financial…
  31. Investor Day 2014 – Shell – slide 31
    DOWNSTREAM OPERATIONAL EXCELLENCE CONTINUOUS IMPROVEMENT Focus on HSSE continues Injuries TRCF/million working hours million working hours 4Q rolling Working hours TRCF Pernis refinery, The Netherlands Operating performance %…
  32. Investor Day 2014 – Shell – slide 32
    DOWNSTREAM COMPETITIVE LANDSCAPE Downstream ROACE Cash flow performance billion billion billion Shell Downstream Peer group range 2010 2011 2012 2013 14Q2 Earnings on local GAAP basis adjusted for inventory valuation differences…
  33. Investor Day 2014 – Shell – slide 33
    UPGRADING OUR PORTFOLIO Portfolio change Downstream asset sales billion Announced divestments 2014 ytd: 180,000 b/d refining Selective Growth: Chemicals 300,000 b/d marketing China LNG for transport Premium fuels + lubes Refinery…
  34. Investor Day 2014 – Shell – slide 34
    IMPROVE FINANCIAL PERFORMANCE: NORTH AMERICA DOWNSTREAM Share of Shell portfolio 1.2 million b/d refinery capacity Global refining capacity Global branded retail stations 3.2 million boed total 43,000 stations total 15,400 retail…
  35. Investor Day 2014 – Shell – slide 35
    MLP PROPOSAL SHELL MIDSTREAM ASSETS Colonial system SEC S-1 filing 18th June, 2014 Targeting 750 million initial fund raising Drop-down potential Initial MLP drop-down %: Zydeco (Ho-Ho) 43% Mars 28.6% Bengal 49% Colonial…
  36. Investor Day 2014 – Shell – slide 36
    ACCESSING ADVANTAGED FEEDSTOCK NORTH AMERICA LIGHT TIGHT OIL + CANADIAN HEAVY North America - Advantaged crude processing Scotford, Edmonton Canada Crude runs kbbl/day % of equity capacity High margin refinery Processes 100% advantaged…
  37. Investor Day 2014 – Shell – slide 37
    MOTIVA JOINT VENTURE Supply and distribution Port Arthur refinery ADVANTAGED CRUDE LOGISTICS CANADIAN HEAVY + BAKKEN SHALE EXPORTS 50-50 JV Shell-Saudi Aramco Largest refinery in US Manufacturing: 1.1 million b/d refining…
  38. Investor Day 2014 – Shell – slide 38
    MOTIVA JV IMPROVEMENT PLAN Aligned with partner Saudi Aramco on improvement plan, covering: Refocused delivery strategy Reliability, crude advantage, unit yields, E2E optimization Management structure + leadership team changes…
  39. Investor Day 2014 – Shell – slide 39
    NORTH AMERICA FUELS MARKETING + LUBRICANTS North American sales leader in fuels & lubricants Synthetic Lubricants volume growth North America Indexed Premium volume mix (2011 = 100) Strategy focused on premium brands & services,…
  40. Investor Day 2014 – Shell – slide 40
    DOWNSTREAM STRATEGY Developing and sustaining competitive advantage through Advantaged Improving our Differentiated Leveraging the feedstock + footprint Products + Brand supply Customer Offer Priority to improve our financial…
  41. Investor Day 2014 – Shell – slide 41
    SIMON HENRY CHIEF FINANCIAL OFFICER ROYAL DUTCH SHELL PLC Copyright of Royal Dutch Shell plc 5 September, 2014 42
  42. Investor Day 2014 – Shell – slide 42
    FINANCIAL FRAMEWORK AND PRIORITIES CASH PERFORMANCE Priorities for cash billion 1. Debt service 2. Dividends: growth policy 3. Capital investment: disciplined 4Q rolling through cycle growth CFFO 4. Return surplus cash:…
  43. Investor Day 2014 – Shell – slide 43
    CASH FLOW AND PAY-OUT Cash generation Dividend track record billion billion billion Q214 Last 3 years 4Q rolling DOWN STREAM DOWN STREAM UP UP STREAM STREAM Cash flow from operations Cash flow from investments 4Q rolling…
  44. Investor Day 2014 – Shell – slide 44
    INVESTMENT PRIORITIES Organic capital investment 2014 billion Longer term Exploration 25% + pre-FID Preparing new options Key growth 30% projects Driving new Upstream growth Growth priorities Smaller growth projects 45%…
  45. Investor Day 2014 – Shell – slide 45
    FINANCIAL FRAMEWORK KEY DRIVERS Organic free cash flow drives dividend A+D supports portfolio growth billion (cash basis) billion Organic free cash flow Cumulative organic FCF surplus (deficit) Divestments Cumulative cash surplus…
  46. Investor Day 2014 – Shell – slide 46
    FINANCIAL FRAMEWORK TRACK RECORD Balancing financial framework over time billion Free cash flow Cumulative surplus (deficit) of free cash flow over dividend and buybacks Cash dividend and buybacks Free cash flow: cash flow…
  47. Investor Day 2014 – Shell – slide 47
    BALANCING GROWTH + RETURNS CFFO in billion Q214 4Q rolling ROACE Strong + diverse portfolio Priority to restructure NA resources plays + Oil Products ROACE (%) Bubble size represents Q214 capital employed 2015/16…
  48. Investor Day 2014 – Shell – slide 48
    COMPETITIVE PERFORMANCE: BALANCING GROWTH AND RETURNS 4Q ROLLING Cash flow from operations Free cash flow billion billion Shell Peer group ROACE underlying % Driving competitive performance Free cash flow: cash flow…
  49. Investor Day 2014 – Shell – slide 49
    BEN VAN BEURDEN CHIEF EXECUTIVE OFFICER ROYAL DUTCH SHELL PLC Copyright of Royal Dutch Shell plc 5 September, 2014 50
  50. Investor Day 2014 – Shell – slide 50
    2014 PRIORITIES Returns and cash flow Improve our financial Competitive returns for shareholders performance Enhance our Take hard choices on new options capital efficiency Increase asset sales Reduce pace of growth…
  51. Investor Day 2014 – Shell – slide 51
    QUESTIONS & ANSWERS NEW YORK INVESTOR DAY Copyright of Royal Dutch Shell plc 5 September, 2014 52
  52. Investor Day 2014 – Shell – slide 52
    NORTH AMERICA LIQUIDS RICH SHALES EXPLORATION FOCUSSING ON WESTERN CANADA + PERMIAN BASIN Frontier exploration program since 2010 Acreage Exit from non-material acreage following early well Groundbirch results (1 billion 2013-14)…
  53. Investor Day 2014 – Shell – slide 53
    NORTH AMERICA ONSHORE DRY GAS FOCUSSING ON WESTERN CANADA + APPALACHIA Addressing underperforming assets Acreage Announced divestments Partial divestment Acquisition cost overhang LNG Gas Canada Groundbirch Scale & cost reduction…
  54. Investor Day 2014 – Shell – slide 54
    APPALACHIA UTICA LARGE DRY GAS OPPORTUNITY Production update: SHELL UTICA FOCUS AREA Gee peak rate: 11 mmscf/d Neal Discovery well in the Utica Gee Tioga play in N.E. Pennsylvania 3,100 lateral with 13 frac stages 430 k acres…
  55. Investor Day 2014 – Shell – slide 55
    PERMIAN LIQUIDS GROWTH BASIN Low cost, early Wolfcamp entry Production growth and profitability Thousand boe per day Gas Condensate Volatile Oil NEW MEXICO Loving Co TEXAS Avalon appraisal and development Winkler Co Ward…
  56. Investor Day 2014 – Shell – slide 56
    WESTERN CANADA KAYBOB + PEMBINA INDUSTRY LEADING POSITION IN DUVERNAY PLAY Duvernay play thermal maturity map Drilling focus in sweet spots Cumulative of exploration wells 1000 boe/d potential Kaybob 34 wells online through Q2…
  57. Investor Day 2014 – Shell – slide 57
    ARGENTINA VACA MUERTA LIQUIDS RICH POTENTIAL Vaca Muerta thermal maturity map Comparative shale thickness section Non-operated La Escalonada Shell operated Vaca Muerta Aguila Mora guila Mora Vaca Rincon de la Ceniza Muerta Karnes…
  58. Investor Day 2014 – Shell – slide 58
    DEEP-WATER GULF OF MEXICO APPOMATTOX HUB Norphlet play Development concept Appomattox Vicksburg 80% Shell 75% Shell 20% Nexen 25% Nexen Planned Gettysburg Appomattox 80% Shell Host 20% Nexen Shell Leasehold Discovery…
  59. Investor Day 2014 – Shell – slide 59
    LNG PRICING CONSIDERATIONS LNG price dynamics US exports Regional gas prices /mmbtu /mmbtu Tokyo Bay UK 2010-14 2010-14 Liquefaction Landed cost + transport costs HH outlook Copyright of Royal Dutch Shell plc 5…
  60. Investor Day 2014 – Shell – slide 60
    LNG SUPPLY AND DEMAND DYNAMICS LNG demand LNG supply* N.A. LNG export development million tonnes per annum million boe/d million tonnes per annum million boe/d million tonnes per annum Japan/Korea/Taiwan SE Asia Asia North America…
  61. Investor Day 2014 – Shell – slide 61
    SHELL ARCTIC & NEAR ARCTIC SAKHALIN CHUKCHI UNITED STATES Alaska, Chukchi Russia, Sakhalin NIGLINTGAK BEAUFORT CANADA NORTH POLE RUSSIA SALYM BAFFIN BAY KANUMAS Greenland, Baffin Bay GREENLAND KAZAKHSTAN Russia,…
  62. Investor Day 2014 – Shell – slide 62
    DOWNSTREAM PORTFOLIO SEGMENTATION + PERFORMANCE Downstream businesses 2013 CFFO ( billion) Integrated -20% refining Chemicals 40% + marketing value chain Fuels marketing Lubricants -5% 10% Merchant refining Biofuels 2013…
  63. Investor Day 2014 – Shell – slide 63
    IMPROVING PERFORMANCE OF KEY ASSETS Bukom performance turnaround Scotford building on sustained performance Refinery unplanned downtime in % Unplanned downtime Over-supplied fuels market High margin refinery Improving…
  64. Investor Day 2014 – Shell – slide 64
    BALANCING GROWTH & RETURNS NEW YORK INVESTOR DAY 5 SEPTEMBER 2014 ROYAL DUTCH SHELL PLC Copyright of Royal Dutch Shell plc 5 September, 2014 65

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