North America Investor Day 2016 Re-shaping Shell, to create a world-class investment case Royal Dutch Shell plc November 8, 2016 Lets make the future Royal Dutch Shell November 8, 2016
Ben van Beurden Chief Executive Officer Royal Dutch Shell plc Royal Dutch Shell November 8, 2016
Upstream + Projects & Technology Breakout Q&A Andrew Brown Upstream Director panels Harry Brekelmans Projects & Technology Director Andrew Brown Harry Brekelmans Downstream John Abbott Downstream Director Graham van t Hoff EVP…
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…
HSSE Goal Zero on safety Spills - operational performance Injuries TRCF/million working hours million working hours Volume in thousand tonnes 2016 2016 Q3 Q3 TRCF Working hours (RHS) Energy intensity refineries Process…
Industry context Global population Growth in oil & gas demand Energy system in transition Substantial + long lasting shifts in energy landscape From 7 to 9 billion by 2050 Global energy demand to World needs more energy; 75% will live…
Strategy Lets make the future STRATEGIC Focus portfolio on resilient positions Invest in advantaged projects World-class Value chain integration investment case FCF/share + ROCE growth Leader: value + Conservative financial…
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…
Capital investment Re-shape Shell billion 2016E 2017-18 Capital billion Oil products 4 3-4 allocation -18 billion Conventional 5 5-6 oil + gas Cash engines Integrated gas 5 4-5 30 Oil sands…
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…
Re-shape Shell Deep water Chemicals Growth priorities Growth in advantaged geology Advantaged feedstock + growth markets Brazil + GOM in focus USA + China growth Multi-billion barrels potential Deep water production Chemicals…
Growth Priority Brazil pre-salt Gulf of Mexico Appomattox Deep water FPSO 7 + 8 on-stream (Shell 25%) Host 40% complete Each FPSO 150kboe/d capacity Well cost savings 20% cost reduction since FID Growth outlook driven by…
Growth priority Under construction Geographic balance Chemicals Million metric tonnes Ethylene and Propylene 425,000 tonnes additional Alpha Olefins capacity North America 2016 Europe Geismar, USA Asia Pacific & Middle East New…
Re-shape Shell Shales Future 12 billion boe discovered + prospective opportunities resources Mature to growth priority New energies Energy transition themes Explore + invest for longer term Discovered + prospective resources…
Maturing a new growth Resources option 2020+ 12 billion boe Americas shales Western Canada Western Canada Liquids rich shales 2P reserves Dry gas 465k net acres Contingent resources - Maximize existing Premier Duvernay development…
Exploring new opportunities New energies New fuels Integrated Connected energy customer solutions New fuels Integrated energy Connected customer solutions Cleaner transportation NL + USA wind Connected mobility Biofuels +…
Re-shape Shell 2013-15 90 2019-21 60 Expectation: Capital Free ROACE Capital Free ROACE end of decade employed cash flow employed cash flow ( bln end 15) ( bln p.a) (%) ( bln) ( bln p.a.) (%) Oil products 5 12 5 15 Conventional oil…
Maarten Wetselaar Integrated Gas & New Energies Director Royal Dutch Shell plc Royal Dutch Shell November 8, 2016
Integrated Gas Cash engine Future opportunities + new energies Integrated Gas New energies LNG Gas-to-Liquids Oil + gas production Sakhalin LNG Liquefaction Pearl GTL Qatargas 4 Marketing & trading Muscat LNG Regasification…
Integrated Gas Earnings Capital employed Financial billion 88 billion as at Q3 2016 performance In service Under construction Cash flow + ROACE LNG plant availability billion % % Cash flow ROACE (RHS) Earnings and ROACE…
LNG supply + Global LNG supply + demand outlook Overview of LNG FIDs demand Million tonnes per annum Million tonnes per annum In operation Under construction Demand forecasts Shell BG Peers 2015-20: 100 mtpa supply growth…
LNG supply + LNG Supply development LNG Demand demand Million tonnes Million tonnes Supply growth led by Australia New buyers Royal Dutch Shell November 8, 2016 23
Global LNG footprint Sakhalin Sabine Pass QG-4 Oman Nigeria Brunei Atlantic LNG Equatorial Guinea Malaysia Equity capacity LNG Peru Long-term offtake agreement Gorgon NWS Spot offtake in 2015-16 YTD Pluto QCLNG Deliveries…
LNG pricing Shell LNG sales + pricing linkage Regional gas prices Million tonnes per annum (2015 basis, Shell +BG) per mmbtu Term contracts (2-20 years) 80% Continued demand for oil + Sources Deliveries 2016 Q3 gas hub…
Example: LNG Oil-parity slopes Oil linked with S-curve Oil and HH indexed prices pricing /MMBtu /MMBtu /MMBtu /bbl /bbl /bbl Complete oil-parity Typical Asian LNG contract (oil-indexed) Typical Asian LNG contract (oil-indexed)…
Developing new gas & LNG markets Existing capacity rights Under construction Business development Downstream LNG Gibraltar Growing and diversifying Asian market Million tonnes per annum Marketing LNG to new customers…
Downstream LNG Marine Heavy-duty road transport LNG to transport Economic and environmental benefits Cleaner than diesel and heavy fuel oil Reduce well-to-wheel GHG emissions Offers a compelling case to customers Long run…
Opportunity funnel Options FEED Under construction LNG liquefaction volumes Selective LNG on stream 9 MTPA 29 MTPA (2016E) growth Abadi Lake Charles Gorgon T3 NLNG T7 LNG Canada Prelude Sabine Pass T3-4* Browse Elba* Tanzania…
Simon Henry Chief Financial Officer Royal Dutch Shell plc Royal Dutch Shell November 8, 2016
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…
Integration with BG Increasing production Synergies BG BG portfolio Thousand boe per day billion 4.5 is delivering +26% 4.0 2.5 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2015 2016 Conventional oil + gas LNG Deep water Costs Exploration…
Manage down-cycle Cash flow priorities 2016-18 1 2 3 Priorities Buybacks Debt reduction Dividends for cash & capital investment Royal Dutch Shell November 8, 2016 33
Reduce Reduce Deliver Divestments capital investment operating costs new projects Manage down-cycle Divestment program Divestments billion 2016-2018 completed + announced billion MLP 0.8 Denmark marketing 0.3 N.Z.: Maui pipeline…
SHLX MLP focus: Leveraging the Fee-based, predictable cash flows midstream Insulated from commodity price exposure High growth 2.2 billion sold into the MLP in 2015 - 2016 10-15% of divestment target from MLP EBITDA million…
Reduce Reduce Deliver Divestments capital investment operating costs new projects Manage down-cycle Capital investment Lower & more billion 58 predictable capital 47 -35% investment 36 25-30 billion 28 29 25 4Q rolling…
Reduce Reduce Deliver Divestments capital investment operating costs new projects Manage down-cycle Reduce Substantial reductions delivered operating cost Lower for ever mindset + BG synergies Staff, supply chain + contractors…
Reduce Reduce Deliver Divestments capital investment operating costs new projects Manage down-cycle Significant oil & gas + chemicals production Deliver new under construction projects Capex to free cash flow High margin / price…
Reduce Reduce Deliver Divestments capital investment operating costs new projects Deliver new projects 2016-17 start-ups Schiehallion redevelopment Kashagan 125 kboe/d 300 kboe/d Shell 17% Shell 55% Scotford HCU debottleneck…
Ben van Beurden Chief Executive Officer Royal Dutch Shell plc Royal Dutch Shell November 8, 2016
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 +…
Questions & Answers Royal Dutch Shell November 8, 2016
North America Investor Day 2016 Re-shaping Shell, to create a world-class investment case Royal Dutch Shell plc November 8, 2016 Lets make the future Royal Dutch Shell November 8, 2016
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