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Capital Markets Day 2016 – Shell

Shell · Jun 7, 2016 · 78 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. Capital Markets Day 2016 – Shell – slide 1
    Capital markets day 2016 Re-shaping Shell, to create a world-class investment case Royal Dutch Shell plc June 7, 2016 Lets make the future Royal Dutch Shell June 7, 2016
  2. Capital Markets Day 2016 – Shell – slide 2
    Ben van Beurden Chief Executive Officer Royal Dutch Shell plc Royal Dutch Shell June 7, 2016
  3. Capital Markets Day 2016 – Shell – slide 3
    Key messages RE-SHAPING PORTFOLIO MANAGING THE SHELL PRIORITIES DOWN-CYCLE Create a world class Cash engines Pulling levers to manage investment case financial framework todays free cash flow Grow free cash flow per Re-set our costs…
  4. Capital Markets Day 2016 – Shell – slide 4
    Breakout Q&A Upstream + Projects & Technology panels Andrew Brown Upstream Director Peter Sharpe EVP Wells Andrew Brown Peter Sharpe Downstream John Abbott Downstream Director Istvan Kapitany EVP Retail John Abbott Istvan…
  5. Capital Markets Day 2016 – Shell – slide 5
    Industry context Global population Growth in oil & gas demand Energy system in transition Substantial + long lasting World needs shifts in energy more energy; less CO2 landscape 2000 2050 From 7 to 9 billion by 2050 Global energy…
  6. Capital Markets Day 2016 – Shell – slide 6
    2 degree Global energy mix IEA 450 scenario world Global energy demand, million boe per day 300 Other renewables Oil 32% Nuclear Coal 29% Bio-energy Hydro Gas 21% 200 13.7 9.4 Coal btoe btoe Bio-energy 10% Energy Primary…
  7. Capital Markets Day 2016 – Shell – slide 7
    Strategy Lets make the future Strategic Operational Focus portfolio on Reset cost and capital Shell ambition: resilient positions spending Create a World-class investment case world-class Relevant in our industry + Invest in…
  8. Capital Markets Day 2016 – Shell – slide 8
    Re-shape Shell BG deal delivery Shell reset Oil price uplift Synergies: 4.5 billion 2018 10 billion Asset value ahead of expectation Considerable upside potential: Oil price recovery Shell reset Consideration Today…
  9. Capital Markets Day 2016 – Shell – slide 9
    Track record 35 billion 8% 35 billion 22 billion 2013-15 Significant Free cash flow ROACE Dividend & buybacks Divestments changes delivered Capital employed in billion, end 2013 / Q1 2016 2013 Today 300 Corporate BG…
  10. Capital Markets Day 2016 – Shell – slide 10
    Re-shape Shell Cash engines: Growth priorities: Future opportunities: Driving strategy today 2016+ 2020+ in multiple time Funds dividends + balance sheet Cash engines 2020+ Material value + upside horizons Affordable growth in…
  11. Capital Markets Day 2016 – Shell – slide 11
    Capital Employed Cash flow Free cash flow + ROACE Re-shape Shell Cash Engines 23 billion Cash flow 140 billion 12 % ROACE performance 87 billion Net debt movement 2013-15 & other 4 billion Interest & other 4 billion Growth…
  12. Capital Markets Day 2016 – Shell – slide 12
    Capital investment Re-shape Shell billion 2016 2017-18 Capital billion 50 Oil products 3 3-4 allocation -35% Conventional 5 5-6 oil + gas Cash engines Integrated gas 6 4-5 30 Oil sands…
  13. Capital Markets Day 2016 – Shell – slide 13
    Re-shape Shell Conventional oil + gas Cash engines High grade portfolio Exploration to maintain running room Integrated Gas Moderate capacity growth rate Prioritise for cash delivery Oil Products Strengthen the retained core…
  14. Capital Markets Day 2016 – Shell – slide 14
    Re-shape Shell Liquefaction capacity Integrated Gas Period-end in million tonnes per annum from growth Sakhalin 45 2018 30 priority to cash 15 Sabine Pass engine QG-4 0 2000 2005 2010 2015 Nigeria Oman Brunei Equatorial Atlantic…
  15. Capital Markets Day 2016 – Shell – slide 15
    Re-shape Shell Deep water Growth priorities Growth in advantaged geology Brazil + GOM in focus Multi-billion barrels potential Chemicals Advantaged feedstock + growth markets USA + China growth Royal Dutch Shell June 7, 2016…
  16. Capital Markets Day 2016 – Shell – slide 16
    Re-shape Shell Chemicals capacity Deep water production Deliver Million tonnes per annum, ethylene Thousand boe per day profitable 8 1000 growth 800 6 600 4 400 2 200 0 0 2015 2020 2015 2020 On-stream Under construction…
  17. Capital Markets Day 2016 – Shell – slide 17
    Re-shape Shell Shales Future 12 billion barrels resources + potential opportunities Mature to growth priority New energies Energy transition themes Explore + invest for longer term Royal Dutch Shell June 7, 2016 18
  18. Capital Markets Day 2016 – Shell – slide 18
    Future opportunities New energies Investment context New energies Mobility Renewables transition growth New fuels Digital Energy Increasing platforms Transition electrification Integrated Connected energy customer solutions…
  19. Capital Markets Day 2016 – Shell – slide 19
    Re-shape Shell 2013-15 90 2019-21 60 Expectation: Capital Free ROACE Capital Free ROACE employed cash flow employed cash flow end of decade ( bln end 15) ( bln p.a) (%) ( bln) ( bln p.a.) (%) Oil products 5 12 5 15 Conventional oil +…
  20. Capital Markets Day 2016 – Shell – slide 20
    Simon Henry Chief Financial Officer Royal Dutch Shell plc Royal Dutch Shell June 7, 2016
  21. Capital Markets Day 2016 – Shell – slide 21
    Financial framework Cash Performance Creating value for shareholders through cycle CFFO + Divestments Pulling levers today to manage the financial framework Pay-out Investment Dividends + Attractiveness, Buybacks resilience…
  22. Capital Markets Day 2016 – Shell – slide 22
    Integration with BG LNG Oil and gas production Portfolio Equity liquefaction capacity in million tonnes per annum Million boe per day 50 4 25 2 0 0 Shell + BG Exxon Chevron Total BP Exxon Shell + BG Chevron Total BP 2015 2018…
  23. Capital Markets Day 2016 – Shell – slide 23
    Integration with BG BG production Q1 2016: 0.8 mboed (+25% Q1-Q1) BG portfolio is delivering Asset availability 93% Reducing capital spend Increasing production Reducing capital investment Thousand boe per day billion +25% 800…
  24. Capital Markets Day 2016 – Shell – slide 24
    Integration with BG Integration 15 February 2016 End 2016 timeline BG acquisition Integration completed completed August 2015 Day 30 Day 60 Day 90 Today Joint integration Deliver safe, efficient operations Combine best practices…
  25. Capital Markets Day 2016 – Shell – slide 25
    Integration with BG Synergies update Synergies Corporate, administrative, billion update SG&A organisation and IT operational efficiencies 4 Additional synergies Procurement Procurement spend1 3 Marketing & Reduced costs 2…
  26. Capital Markets Day 2016 – Shell – slide 26
    Manage down-cycle Cash flow 1 2 3 priorities 2016-18 Priorities Buybacks Debt reduction Dividends for cash & capital investment Reduce capital Reduce Deliver new Divestments investment operating costs projects Powerful levers…
  27. Capital Markets Day 2016 – Shell – slide 27
    Manage down-cycle 2016-18 Divestments program Divestments billion Portfolio simplification and 30 high-grading 2016-18 announced: Showa Shell Earmarked for disposal Maui pipeline 20 Denmark marketing Up to10% of oil + gas…
  28. Capital Markets Day 2016 – Shell – slide 28
    Manage down-cycle Significant oil & gas + Deliver new Downstream production under Thousand boe per day* Million tonnes per annum projects construction 1200 15 Capex to free cash flow 800 10 High margin / price upside 400 5…
  29. Capital Markets Day 2016 – Shell – slide 29
    2013 2014 2015 2016 2017+ Track record Oil sands mining Carmon Creek Significant Shales Deep water Shales Appomattox reduction in Integrated Gas Bonga South West Arrow Greenfield LNG project flow Elba LNG Browse LNG US GTL…
  30. Capital Markets Day 2016 – Shell – slide 30
    Reduced Exploration expenditure exploration billion 8 spend 7 6 5.5 5 3 billion reduction 4 2.5 2.5 2 0 2013 2014 2015 2016E 2017/18 avg Heartlands Frontier BG Material reduction in exploration spend BG…
  31. Capital Markets Day 2016 – Shell – slide 31
    Manage down-cycle Capital investment Lower & more billion; excludes BG acquisition in 2016 predictable 60 58 capital 47 -35% investment 40 36 25-30 billion 29 20 0 2013 2014 2015 2016E 2017 - 20 avg Base + short cycle…
  32. Capital Markets Day 2016 – Shell – slide 32
    Manage down-cycle Operating cost Reduce billion operating cost 60 50 48 46 -20% 40 40 20 40 billion 0 2013 2014 2015 end-2016 run-rate Shell BG Substantial reductions delivered Lower for ever mindset + BG…
  33. Capital Markets Day 2016 – Shell – slide 33
    Manage down-cycle 2016-18 levers Pulling levers to Reduce Reduce manage Divestments capital investment operating costs Deliver new projects financial framework 2015 baseline: 2017-2018 billion Shell + BG 2016 potential Trend…
  34. Capital Markets Day 2016 – Shell – slide 34
    John Abbott Downstream Director Royal Dutch Shell plc Royal Dutch Shell June 7, 2016
  35. Capital Markets Day 2016 – Shell – slide 35
    Downstream Cash engine Growth priority Marketing Refining & Trading Chemicals Improve our financial Differentiated products Full integration with trading Feedstock plays performance Brand leverage + customer offer Improve retained…
  36. Capital Markets Day 2016 – Shell – slide 36
    Downstream Earnings + ROACE Cash flow financial billion 10 % billion 15 20 performance 10 5 10 5 0 0 0 2012 2013 2014 2015 16Q1 2012 2013 2014 2015 16Q1 4Q rolling 4Q rolling Marketing Chemicals Cash flow excluding working…
  37. Capital Markets Day 2016 – Shell – slide 37
    Financial performance Stronger results from smaller portfolio Oil Products Million barrels/day billion per barrel Advantaged feedstock + supply 4 8 8 Asset sales -20% -30% +25% Products + brand 3 6 6 2 4 4 1 2 2 0 0…
  38. Capital Markets Day 2016 – Shell – slide 38
    Improving our Portfolio change Asset sales Downstream Backbone / grow: billion footprint and Chemicals China 4 Australia DS performance LNG for transport Premium fuels + lubes Italy DS Refinery crude flexibility MLP others…
  39. Capital Markets Day 2016 – Shell – slide 39
    Oil Products Motiva JV restructuring Showa Shell divestment Optimization Terminals (26) Saudi Aramco of footprint Terminals (9) Shell Ethanol Hub Refinery Showa Shell Sekiyu K.K. Kawasaki Refinery, Japan Port Norco Arthur…
  40. Capital Markets Day 2016 – Shell – slide 40
    Investing in selective growth Shell Oil Products marketing Marketing - ROACE Marketing free cash flow Global retail - Global lubes - premium product penetration premium products penetration % billion % % 30% 5 30% 30% 4 20% 20% 20%…
  41. Capital Markets Day 2016 – Shell – slide 41
    Growth priority Chemicals demand outlook Geographic balance Chemicals Million metric tonnes1 Million metric tonnes Ethylene and Propylene 400 North America 2016 Europe 300 Asia Pacific & Middle East 200 Feedstock balance…
  42. Capital Markets Day 2016 – Shell – slide 42
    Growth priority Ethylene capacity Under construction Chemicals Million metric tonnes Pennsylvania 425,000 tonnes additional cracker Alpha Olefins capacity Bukom 8 start-up Nanhai I USGC Nanhai II Geismar, USA restructuring 6…
  43. Capital Markets Day 2016 – Shell – slide 43
    Downstream Downstream ROACE Oil Products ROACE competitive % % 30 landscape 30 20 20 10 10 0 0 2011 2012 2013 2014 2015 Q1 2016 2011 2012 2013 2014 2015 Q1 2016 Shell Peers Chemicals ROACE Brand % Global brand preference…
  44. Capital Markets Day 2016 – Shell – slide 44
    Andrew Brown Upstream Director Royal Dutch Shell plc Royal Dutch Shell June 7, 2016
  45. Capital Markets Day 2016 – Shell – slide 45
    Upstream Cash engine Growth priorities Future opportunities Conventional oil & gas Deep water Shales Maintain resilience Advantaged growth, Large resource base Drive improvement Track record + competitive portfolio Future growth…
  46. Capital Markets Day 2016 – Shell – slide 46
    Upstream Earnings by strategic theme Earnings by geography financial billion per barrel 120 billion 10 10 performance 60 5 5 0 0 0 -5 -60 -5 2013 2014 2015 16Q1 2012 2013 2014 2015 16Q1 4Q rolling 4Q rolling Conventional oil +…
  47. Capital Markets Day 2016 – Shell – slide 47
    Reducing costs Upstream costs + improving billion 15 per barrel 30 -8% performance -15% Reduce costs + headcount 2014+ Upstream 5,000 staff + contractor positions 10 20 Exit tail assets Potentially 5-10 country exits 5…
  48. Capital Markets Day 2016 – Shell – slide 48
    Upstream Conventional oil & gas Deep water Shales Fit for the future Availability Availability Unit operating costs /boe 100% 100% 20 -35% 80% 80% 10 60% 60% 40% 40% 0 0 15 30 45 60 0 10 20 2014 2015 2016E Direct unit…
  49. Capital Markets Day 2016 – Shell – slide 49
    Americas shales Average drill and complete costs LRS wells Resources Maturing a new growth option million per well 12 billion boe -50% 2020+ 12 Western Canada Gas Western Canada LRS 8 Appalachia 4 Reserves Permian Contingent resources…
  50. Capital Markets Day 2016 – Shell – slide 50
    Deep water Reducing drilling costs Lowering capital intensity Shell + BG deep water growth Example Gulf of Mexico Capital efficient + profitable drilling days thousand per boe break-even cost (examples) Thousand boe per day growth…
  51. Capital Markets Day 2016 – Shell – slide 51
    Pre-salt FPSOs delivery1 Deep water Brazil: On-stream Pending development On-stream Replicant owned step change in Exploration 6. Iracema N. chartered Chartering under Chartered Shell position evaluation 5. Iracema S. 4.…
  52. Capital Markets Day 2016 – Shell – slide 52
    Kepler North Coulomb Appomattox Deep water Gulf Production Thousand boe per day 2016 discovery 20 kboe/d 175 kboe/d potential Drilling 300 Tie-back to Na Kika Tie-back to Na Kika 650 million boe resources of Mexico moratorium Shell…
  53. Capital Markets Day 2016 – Shell – slide 53
    Conventional oil Selective growth + gas Thousand barrels per day 300 Clair ph2 Tempa Rossa others Significant cash engine for Shell 200 Corrib Kashagan Sabah gas Schiehallion 100 Knarr G-U ph2 others 0 2014-15 2016-17 2018-19…
  54. Capital Markets Day 2016 – Shell – slide 54
    2016 targets Track record + Heartlands UK Russia exploration Netherlands Germany Frontier Canada Albania strategy USA Egypt Oman China Trinidad &Tobago Nigeria Brunei Malaysia Tanzania Prospect Time to size production…
  55. Capital Markets Day 2016 – Shell – slide 55
    Upstream Cash engine Growth priorities Future opportunities Conventional oil & gas Deep water Shales Maintain resilience Advantaged growth, Large resource base Drive improvement Track record + competitive portfolio Future growth…
  56. Capital Markets Day 2016 – Shell – slide 56
    Maarten Wetselaar Integrated Gas Director Royal Dutch Shell plc Royal Dutch Shell June 7, 2016
  57. Capital Markets Day 2016 – Shell – slide 57
    Integrated Gas Cash engine Future opportunities Integrated Gas New energies LNG Gas-to-Liquids Oil + gas production Sakhalin LNG Liquefaction Pearl GTL Qatargas 4 Marketing & trading Muscat LNG Regasification Focus on:…
  58. Capital Markets Day 2016 – Shell – slide 58
    Integrated Gas Earnings Capital employed financial billion 91 billion as at Q1 2016 performance 10 5 In service Under construction 0 2012 2013 2014 2015 2016 Q1 4Q rolling Cash flow + ROACE LNG plant availability…
  59. Capital Markets Day 2016 – Shell – slide 59
    LNG supply + Global LNG supply + demand outlook Demand growth drivers 2015-2030 demand Million tonnes per annum 2030 10% Downstream LNG 500 15% New LNG markets 400 300 20% Newly importing LNG markets* 200 100 55% Established…
  60. Capital Markets Day 2016 – Shell – slide 60
    LNG: Shell + BG Sakhalin Sabine Pass QG-4 Oman Nigeria Brunei Atlantic LNG Equatorial Guinea Malaysia Equity capacity LNG Peru Gorgon Long-term offtake agreement NWS Pluto QCLNG Spot offtake in 2015 Deliveries in 2015…
  61. Capital Markets Day 2016 – Shell – slide 61
    LNG pricing Shell LNG sales + pricing linkage Regional gas prices Million tonnes per annum (2015 basis, Shell +BG) per mmbtu 60 25 50 20 40 15 30 Term contracts 10 20 (2-20 years) 80% 5 10 0 0 Continued demand for oil…
  62. Capital Markets Day 2016 – Shell – slide 62
    Developing new Portfolio of opportunities to Growing and diversifying market: Asia LNG markets market LNG Million tonnes per annum 300 Regas terminals 200 Create a new value chain in 100 LNG to transport 0 2000 2005 2010 2015…
  63. Capital Markets Day 2016 – Shell – slide 63
    Moderating our Options FEED Under construction On stream LNG sales growth rate: Shell + BG LNG Abadi Arrow Lake Charles Gorgon T2-3 Gorgon T4 LNG Canada Prelude NLNG T7 Sabine Pass T2-4* Sakhalin T3 Prince Rupert Elba* Browse…
  64. Capital Markets Day 2016 – Shell – slide 64
    New energies Exploring new opportunities New fuels Integrated Connected energy customer solutions New fuels Integrated energy Connected customer Winning company in the solutions energy transition Cleaner transportation NL…
  65. Capital Markets Day 2016 – Shell – slide 65
    Ben van Beurden Chief Executive Officer Royal Dutch Shell plc Royal Dutch Shell June 7, 2016
  66. Capital Markets Day 2016 – Shell – slide 66
    2013-2015 2019-2021 Transformation average average ROACE 8% 10% CREATE A WORLD CLASS INVESTMENT CASE Organic free cash flow 5 billion p.a. 20-25 billion p.a. Brent 90 60 Improved capital Capital efficiency: Less cost +…
  67. Capital Markets Day 2016 – Shell – slide 67
    Questions & Answers Royal Dutch Shell June 7, 2016
  68. Capital Markets Day 2016 – Shell – slide 68
    Start up Project Country Shell share Peak LNG 100% Products Legend Theme Shell Projects under (direct & Production Capacity indirect) % 100% mtpa Operated construction kboe/d 2016-17 Forcados Yokri Interagted Project (FYIP)…
  69. Capital Markets Day 2016 – Shell – slide 69
    Phase Project Country Shell share Peak LNG 100% Products Legend Theme Shell Pre-FID options (direct & Production Capacity indirect) % 100% mtpa Operated kboe/d SELECT Kaikias United States 100 40 Deep water Libra pilot FPSO…
  70. Capital Markets Day 2016 – Shell – slide 70
    HSSE Goal Zero on safety Spills - operational performance Injuries TRCF/million working hours million working hours Volume in thousand tonnes 10 4 800 5 2 600 0 400 0 '05 '07 '09 '11 '13 '15 16Q1 '05 '07 '09 '11 '13 '15E 16Q1…
  71. Capital Markets Day 2016 – Shell – slide 71
    Manage down-cycle Earnings + ROACE Cash flow Financial billion % billion billion performance 30 15 45 45 20 10 30 30 10 5 15 15 0 0 0 0 2012 2013 2014 2015 16Q1 2012 2013 2014 2015 16Q1 -10 4Q rolling -5 -15 4Q rolling -15…
  72. Capital Markets Day 2016 – Shell – slide 72
    Deliver new Project status projects Construction time elapsed % Pennsylvania cracker Project management Geismar AO4 Pernis solvent de-asphalting Appomattox Baronia/Tukau Timur Coulomb Rabab Harweel Integrated Project Nanhai China…
  73. Capital Markets Day 2016 – Shell – slide 73
    NEW MEXICO Permian Wolfcamp EUR improvement Delaware Basin % 300 +130% 200 100 0 2013 2014 2015 TEXAS Wolfcamp well cost improvement SHELL LEASES million 20 Premier LRS play in North America -60% 300,000 net acres…
  74. Capital Markets Day 2016 – Shell – slide 74
    Oil products: Marketing led growth Europe 9,000 North America 16,000 Retail presence Marketing growth Retail sites Marketing led growth Africa 2,000 Growth in China, India, East 9,000 Indonesia, Russia and Latin America…
  75. Capital Markets Day 2016 – Shell – slide 75
    Refining projects Canada - Scotford NW Europe Pernis Improving our refining footprint Scotford, Canada Pernis, The Netherlands Quest carbon capture + storage (CCS) start-up 2015 Pernis: aromatics project High return projects…
  76. Capital Markets Day 2016 – Shell – slide 76
    Oil sands mining Energy intensity Canada AOSP Shell unit operating costs GJ per tonne produced per barrel 60 6 40 -50% 4 20 2 0 0 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015 Q116 Cash operating cost excl.…
  77. Capital Markets Day 2016 – Shell – slide 77
    LNG: Australia North West Shelf (1989) Queensland Curtis (2015) Gorgon LNG (2016) Prelude FLNG (2018) 16.3 mtpa LNG 8.5 mtpa LNG 15.6 mtpa LNG 5.3 mtpa LNG + NGLs First Australian LNG 2010: FID 2009: FID 2011: FID Operating since…
  78. Capital Markets Day 2016 – Shell – slide 78
    Integration with BG Queensland LNG Brazil pre-salt BG portfolio: Thousand boe per day Thousand boe per day FPSO Cidade de Maric Cidade Itagua Q1 2016 Australia + Brazil 200 T2 start up Nov 2015 40 200 Q3 2015 150 30 150 1st LNG…

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