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Royal Dutch Shell April 24, 2017
Royal Dutch Shell April 24, 2017
Annual roundtable Socially Responsible Investors Royal Dutch Shell - - PowerPoint PPT Presentation
Annual roundtable Socially Responsible Investors Royal Dutch Shell - - PowerPoint PPT Presentation
Annual roundtable Socially Responsible Investors Royal Dutch Shell plc April 24, 2017 #makethefuture Royal Dutch Shell April 24, 2017 Ben van Beurden Chief Executive Officer Royal Dutch Shell Royal Dutch Shell April 24, 2017 Cautionary
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Royal Dutch Shell April 24, 2017 3
Cautionary note
This presentation contains data from Shell’s New Lens Scenarios. The New Lens Scenarios are a part of an ongoing process used in Shell for 40 years to challenge executives’ perspectives on the future business environment. We base them on plausible assumptions and quantifications, and they are designed to stretch management to consider even events that may only be remotely possible. Scenarios, therefore, are not intended to be predictions of likely future events or outcomes and investors should not rely on them when making an investment decision with regard to Royal Dutch Shell plc securities. It is important to note that Shell’s existing portfolio has been decades in development. While we believe our portfolio is resilient under a wide range of outlooks, including the IEA’s 450 scenario, it includes assets across a spectrum of energy intensities including some with above-average intensity. While we seek to enhance our operations’ average energy intensity through both the development of new projects and divestments, we have no immediate plans to move to a net-zero emissions portfolio over our investment horizon of 10-20 years. The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate legal 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 over which Royal Dutch Shell plc either directly or indirectly has control. Entities and unincorporated arrangements over which Shell has joint control are generally referred to “joint ventures” and “joint operations” respectively. Entities over which Shell has significant influence but neither control nor joint control are referred to as “associates”. The term “Shell interest” is used for convenience to indicate the direct and/or indirect 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’’, ‘‘goals’’, ‘‘intend’’, ‘‘may’’, ‘‘objectives’’, ‘‘outlook’’, ‘‘plan’’, ‘‘probably’’, ‘‘project’’, ‘‘risks’’, “schedule”, ‘‘seek’’, ‘‘should’’, ‘‘target’’, ‘‘will’’ 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 regulatory measures addressing climate change; (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. No assurance is provided that future dividend payments will match or exceed previous dividend payments. 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 risk factors that may affect future results are contained in Royal Dutch Shell’s 20-F for the year ended December 31, 2016 (available at www.shell.com/investor and www.sec.gov ). These risk factors also expressly qualify all forward looking statements contained in this presentation and should be considered by the reader. Each forward-looking statement speaks only as of the date of this presentation, April 24, 2017. Neither Royal Dutch Shell plc 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. This presentation may contain references to Shell’s website. These references are for the readers’ convenience only. Shell is not incorporating by reference any information posted on
www.shell.com. We may have used certain terms, such as resources, in this presentation that United States Securities and Exchange Commission (SEC) strictly prohibits us from including in our 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.
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Royal Dutch Shell April 24, 2017
Agenda
09:30 – 10:45 Presentatio ion
Ben van Beurden
Donny Ching
Hans Wijers
Guy Outen
10:45 – 11:30 Q&A 11:30 – 12:00 Coffee break 12:00 – 14:00 Panel s sessio ions Q&A (35 35 m min inutes e each, , 5 m 5 min inutes to r rotate) 14:00 – 14:45 Lunch
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Royal Dutch Shell April 24, 2017
Panels
Pr Proj
- jec
ects ts and and Tec echno hnolo logy, , Joi Joint nt Ventur entures es Ups Upstr tream eam Safety afety a and nd Env Envir ironment
- nment
Str trategy ategy inc includi luding ng New New Ener Energies ies, , cli limate mate chan hange e and and C CO2 mana management ement
Ha Harry Brekelmans Director Projects and Technology Sami i Iskander EVP Joint Ventures Babs Omotowa VP Safety & Environment Upstream Osagie ie Okunbor Managing Director SPDC Rupert Thomas VP Environment Guy Outen EVP Strategy & Portfolio Angus Gil illespie ie VP CO2 David id Ho Hone Chief Climate Change Advisor
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PANEL A PANEL B PANEL C
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Royal Dutch Shell April 24, 2017
Donny Ching Legal Director
Royal Dutch Shell
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Royal Dutch Shell April 24, 2017 7
OPL 245
Chronology of Events (1)
Phase 1
1998 - Malabu awarded licence for OPL 245 March 2001 - Shell Nigeria Ultra Deep (“SNUD”) farms in Representations and warranties were provided on ownership of Malabu Federal Government Nigeria (“FGN”) consented
Phase 2
July 2001 - FGN revokes the Malabu Licence May 2002: SNUD bids for and is awarded OPL 245 by FGN and later signs a PSC with Nigerian National Petroleum
Corporation (“NNPC”)
Signature bonus ($209 million) is placed in escrow pending outstanding disputes with Malabu SNUD conducts exploration and appraisal work programme
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Royal Dutch Shell April 24, 2017 8
OPL 245
Chronology of Events (2)
Phase 2 (contin inued)
Various litigations follow: May 2002 - SNUD commenced International Chamber of Commerce arbitration proceedings against
Malabu.
August 2002 - Malabu commenced proceedings against FGN, Shell Nigeria Exploration and Production
Company (“SNEPCO”), SNUD and other Shell parties in New York federal court
May 2003 - (following a petition by Malabu), the Nigerian House of Representatives issued a report
concluding: (i) OPL 245 was legally awarded to Malabu, (ii) the revocation of Malabu’s licence should be set aside, (iii) SNUD should pay $550 million compensation to Malabu. SNUD appeals
September 2003 - Malabu commenced proceedings in Nigeria against FGN, NNPC and SNUD for a
declaration that the award of OPL 245 to Malabu was valid, a declaration that the award to SNUD was invalid, and damages of $100 million
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Royal Dutch Shell April 24, 2017 9
OPL 245
Chronology of Events (3)
Phase 3
December 2006 - FGN settles litigation with Malabu and reallocates the licence to Malabu Malabu and SNUD now have competing legal rights to the Block April 2007 - SNUD commences Bilateral Investment Treaty arbitration against the FGN for wrongful
expropriation
2008 - FGN seeks resolution, negotiations commence
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Royal Dutch Shell April 24, 2017 10
OPL 245
Chronology of Events (4)
Phase 4
2010 - negotiations now include ENI Settlement with FGN - negotiations are conducted with Attorney General of FGN, the Minister of Petroleum
Resources, the Minister of Finance and senior NNPC officials
April 2011 - settlement is achieved. FGN receives $1.3bln: Signature bonus ($207.96 million) is released by SNUD to FGN from 2003 escrow funds in return for the
licence
SNEPCO pays $110.40 million to ENI (Nigerian Agip Exploration (“NAE”) ) ($25.40 million interest on
the escrow, plus $85 million)
NAE pays $1,092.04 million to FGN for settling all outstanding claims on the Block FGN agrees to indemnify SNEPCO and NAE from any other claims on the Block SNEPCO and NAE hold the licence 50/50. NAE is operator
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Royal Dutch Shell April 24, 2017 11
OPL 245
Agreements of April 2011
Heads of Agreement between NAE and SNUD and SNEPCO: allocation of the payments due to FGN Block 245 Resolution Agreement: FGN, NNPC, SNUD, SNEPCO and NAE Payments to FGN and award of the licence FGN indemnifies SNEPCO and NAE against competing claims Key fiscal terms of future PSC Block 245 Resolution Agreement: FGN and Malabu. Payment to Malabu; settlement of claims Block 245 Resolution Agreement: FGN and SNUD. Settlement of claims Settlement submission to Court of Appeal, Abuja: SNUD, SNEPCO, Malabu and Nigerian House of
Representatives (“NHR”). Withdrawing SNUD and SNEPCO appeals against a 2003 NHR report in favour of Malabu
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Royal Dutch Shell April 24, 2017 12
OPL 245
Shell Review
Debevoise & Plimpton LLP, an international law firm, was retained by the Shell Group Debevoise conducted and led an investigation which included staff from the law firm and Shell’s Business
Integrity Department
Periodic updates to senior management, Audit Committee and RDS Board Final report to RDS Board in July 2016 Findings shared with authorities during 2016
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Royal Dutch Shell April 24, 2017 13
OPL 245
Shell response
“Given this matter is currently under investigation, it would be inappropriate to comment on specifics. However, based on our review of the Prosecutor of Milan's file and all of the information and facts available to Shell, we do not believe that there is a basis to prosecute Shell. Furthermore, we are not aware of any evidence to support a case against any former or current Shell employee. If the evidence ultimately proves that improper payments were made by Malabu or others to then current government officials in exchange for improper conduct relating to the 2011 settlement of the long standing legal disputes, it is Shell’s position that none of those payments were made with its knowledge, authorization or on its behalf. We are taking this matter seriously and are fully co-operating with the relevant authorities. This includes when appropriate having shared the key findings of an investigation led by Debevoise & Plimpton LLP, an independent international law firm. We have also accurately reported on OPL 245 in our annual reports. Shell attaches the greatest importance to business integrity. It’s one of our core values and is a central tenet of the Business Principles that govern the way we do business.”
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Royal Dutch Shell April 24, 2017
Ben van Beurden Chief Executive Officer
Royal Dutch Shell
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Royal Dutch Shell April 24, 2017 15
ESG Programme
SRI programme
SRI annual roundtable Ongoing engagement + roadshows SRI themed site visits
Governance programme
Remuneration committee roadshows Chairman roadshows AGM 2016: ESG Board engagement day
www.shell.com/esg
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Royal Dutch Shell April 24, 2017 16
Transition 2016 + delivery 2017+
Contin inued driv ive to re-shape Shell
Consolidated BG into Shell Progressing 4 levers: cost reductions, capital
spend, divestments and project start-ups
From 8 towards 7 strategic themes
Lea eader: val er: value ue + + infl fluen uence ce Red educ ucing g our ur carb carbon intens tensity ty Shared red val value ue with th socie ciety ty
World-class investment case
FCF + ROCE growth Conservative financial
management
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Royal Dutch Shell April 24, 2017 17
Leading in transparency
RDS Reporting
2017 2017 update
A- in 2016 CDP Inclusion in the Dow Jones Sustainability Index Increased disclosure on Human Rights Revenue transparency reporting (June 2017) Engagement with Taskforce on Climate-related Financial Disclosures (TCFD)
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Royal Dutch Shell April 24, 2017 18
Health, Safety, Security & Environment
Process safety is central in achieving Shell’s goal of zero harm to
people and the environment
Managed by combining asset integrity principles with a risk
management approach, supported by visible safety leadership Asset Integrity Principles Risk Management Approach Process Safety Performance
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Royal Dutch Shell April 24, 2017
Goal Zero on safety Energy in intensit ity - refin ineries Spil ills - operation ional Process safety
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HSSE Performance
Injuries – TRCF/million working hours Energy Intensity Index (EEITM) Volume in thousand tonnes Number of incidents
HS
HSSE Prio iority
Performance +
transparency
BG in
included from February 1, , 2016
million working hours Number of spills Working hours (RHS) TRCF Tier 1 incidents Tier 2 incidents Number Volume
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Royal Dutch Shell April 24, 2017 20
Embedding a safety culture
Safety Leadership
Our Commit itment
Visible leadership commitment at all levels Collaboration with peers, partners,
contractors, communities, and regulators
Emphasis on care
Responsibl ible Partner Brazil il: : Shell + Petrobras
Pro-active sharing of learnings Joint support to implement well control assurance
tool and integrity management system
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Royal Dutch Shell April 24, 2017
Permia ian
Infrastructure investment reduces
truck hauling
Formation of Permian road
safety coalition
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Committ tted to reducin cing exposur ure
Road Transport
Petroleum Development Oman
Introduced centralized journey
control room
Better able to monitor
performance and adherence
Ensurin
ing employees and driv ivers have the best safety skil ills possib ible
Investment in
in communit ity road safety programmes Our Approach
Reduce number of journeys Road safety requirements Learn and share from incidents PDO, O , Oman Drones in Australia Permian Central P Processing Facility
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Royal Dutch Shell April 24, 2017 22
Contractor Safety Management
Number of fatalit itie ies
Injuries per million working hours
Total recordable case frequency (TRCF) Contractors are crit itic ical to achie ieve Goal Zero
> 190,000 contractors Represent 65% of total exposure hours Perform most high risk activities Evolving contractor management strategy
Employees Contractors Contractors Employees #
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Royal Dutch Shell April 24, 2017 23
Ongoing emissions management
Data on a 100% operated basis unless otherwise specified
1 Energy required to produce a tonne of oil equivalent. 2 Indirect emissions were not recorded before 2009
GJ/tonne1
Energy in intensit ity
Million tonnes hydrocarbon flared Million tonnes CO2 equivalent
Emis issio ions
"Zero Routine Flaring by 2030“ initiative Start-up gas capturing at Majnoon, Iraq and
gas reinjection in Malaysia in 2016
2016 numbers in
include BG from February 1, , 2016
www.s
.shell.c .com
- m/ghg
g
Upstream excl. oil sands, LNG, GTL Refining Chemicals Index
- 34%
Flarin ing performance
Rest of World Nigeria Indirect (scope 2)2 Direct (scope 1)
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Royal Dutch Shell April 24, 2017 24
Nigeria
HSSE performance
Improved operational oil spill numbers and safety
performance over 2016
Lower oil theft volumes and sabotage related spills
despite resurgence in militant activity
Progress on Nigerian government-led multi-
stakeholder UNEP clean-up efforts
Reduced onshore footprin
int
Targeted in
investments: : domestic ic gas
Wid
idespread d oil il theft + sabotage remain ins a challenge
2016 beneficiaries ‘Cradle to Career’ Scholarship Workers inspecting g Koroama a Non Associated d Gas Facility
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Royal Dutch Shell April 24, 2017
Hans Wijers Chairman of the Corporate Social Responsibility Committee
Royal Dutch Shell
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Royal Dutch Shell April 24, 2017 26
CSRC topics
Nigeria Greenhouse gas metrics in remuneration Asset integrity and process safety Induced seismicity Kazakhstan
2016 areas of focus
Nigeria Process safety (including BG assets) CO2-related trends and developments Post-COP21 landscape Shared value Security
2017 areas of focus
Lula FPSO Cidade de Saquarema, , Brazil (NOV) V) A S Shell technician c conducting integrity checks on Shearwater, , Aberdeen, , Scotland
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Royal Dutch Shell April 24, 2017
Strategy driv
ives change
Remunerat
ation ion follows and supports strategy
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Rewarding performance in line with delivery of strategy
GHG metrics in Remuneration
* Solomon’s utilised equivalent distillation capacity
CSRC input into updated Remuneration policy Bonus reflects progress in reducing GHG in 3 key businesses CEO personal performance agreement includes progress in New Energies Scorecard aligned for staff and Directors
Annual bonus scorecard desig ign
Cash flow from operating activities Operational excellence Sustainable development
2016 2017 2% Water use 4% Oil spill volumes 4% Energy intensity 5% Process safety 5% Process safety 5% Personal safety 5% Personal safety 10% GHG management 10% Environment 10% Safety
Upstream flaring in million
tonnes CO2e
Refining GHG intensity
measured in tonne CO2e per UEDC *
Chemicals GHG Intensity
measured in tonne CO2e per tonne of chemicals production
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Royal Dutch Shell April 24, 2017
Energy Transit itio ion
Board and future business environment
Div iverse in input in in Board meetin ings to stretch thin inkin ing and in inform decis isio ion makin ing Belie iefs Uncertain inties Mega Trends Macroeconomic ics Market Dig igit italisation Industry
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Example:
Sustained era of transition & volatility Emerging markets drive Global GDP increases
Example:
Political tensions & regional instability Impact of digital technology
Example:
Hydrocarbon demand growth + supply required Renewables contribution increases significantly
Example:
Key pricing mechanisms Energy transitions impact
Example:
Technology & scale alone insufficient
Example:
Winning business models & capabilities
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Royal Dutch Shell April 24, 2017 29
Shell sustainability in action
Safety and environmental performance in
Karachaganak, Kazakhstan
Shell Biofuels business and 2G biofuels
technologies
Shell Hydrogen projects in core markets in North
West Europe and North America
Karachaganak Processing Complex, , KPO, , Kazakhstan Retail s station offering hydrogen, G , Germany IH IH2 advanced b biofuels demonstration facility, I , India
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Royal Dutch Shell April 24, 2017
Ben van Beurden Chief Executive Officer
Royal Dutch Shell
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Royal Dutch Shell April 24, 2017 31
Energy challenge
Source: UN Population Fund; UN World population Prospects (2015 revision); World Urbanisation Prospects (2014 revision); IEA, Energy Technology Perspectives 2015; Shell New Lens Scenarios
Growin ing populatio ion Global population will increase from around 7.4 billion today to nearly 10 billion by 2050, with 67% living in cities Ris isin ing demand Global energy demand will likely be almost 60% higher in 2060 than today, with 2 billion vehicles on the road (800 million today) Ongoin ing supply Renewable energy could triple by 2050, but we will still need large amounts
- f oil and gas to provide the full range of energy products we need
Mit itig igatin ing g clim imate change Net-zero emissions is a potentially achievable societal ambition Growin ing global demand for energy as populatio ion and liv ivin ing standards in increase
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Royal Dutch Shell April 24, 2017 32
Shell’s activities in the energy transition
World-class investment case
Developing our gas busin iness Bio iofuels busin iness Advocate CO2 pric icin ing Scenarios ios thought leadership Coalit itio ions & g government advis isory New Energie ies busin iness Developing CCS R&D in in low carbon technologie ies Shell Technology Ventures
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Royal Dutch Shell April 24, 2017
Not considered in best interests
- f Company
Engaged with Follow This on
timeline for energy transition ahead of resolution filing
Majority of shareholders voting
voted against
Resolution ignored timescale
and impact for profitability
Unwise to tie Shell to any single
mandate
Shareholder resolutions
* Notice of Meeting for the 2017 AGM with full response to the Shareholder Resolution published on www.shell.com/agm on April 20, 2017
“Strategic resilience for 2035 and beyond” 2015 2015 “Aiming For A” “Shell will become a renewable energy company” 2016 2016 “Follow-this.org” “Shell will set targets to reduce scope 1, 2 + 3 GHG emissions” 2017 2017 “Follow-this.org”
Supported by Board +
shareholders
Builds on previous Shell
disclosures
Report-out in full in 2016 Ongoing engagement with
IIGCC resolution sub-group
Not considered in best interests
- f Company *
Shell supports the aspiration of
transitioning towards a net- zero emissions world by 2050
Shell’s strategy is resilient to the
envisaged implementation of the Paris agreement
Participating in the energy
transition e.g. through gas
Targeting a single supplier will
not accelerate transition
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Royal Dutch Shell April 24, 2017 34
Supporting the Paris agreement
Supplying LNG to Pakistan, displacing liquid fuels used for power generation increases Shell’s Scope 3 emissions, but reduces the emissions from power generation with a net saving of an estimated 2 mt CO2 equivalents per annum per 1mt of LNG sold Supplying 60 kt LNG per annum as a power source for two cruise ships, replacing liquid fuels, increases Shell’s Scope 3 emissions, but saves emissions of an estimated 48 kt CO2 equivalents per annum Basrah Gas Company, by gathering and processing gas otherwise flared by other producers, increases Shell’s Scope 1 and Scope 3 emissions, but reduces Scope 1 emissions from gas flaring by other producers by up to an estimated 10 mt CO2 equivalents per annum Examples how Shell’s activities can help work with others towards meeting the aspiration of the Paris agreement
We wil
ill work together wit ith governments and stakeholders towards meetin ing this is aspir iration ion
We commit
it to report on steps taken
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Royal Dutch Shell April 24, 2017
Portfolio resilience to energy transition
Global energy demand, million boe per day
IEA ‘450’ scenario GHG HG and energy management plans at asset level
Oil p products: By 2025, significantly increase low-emission fuels Shell offers to customers Conventional oil a and gas: Drive for top quartile CO2 efficiency and lowest cost per barrel Integrated gas: Working across the value chain to unlock demand for cleaner and cost-competitive fuel Deep water: Target lowest break-even price projects for resilient production Chemicals: Shell's output could be used in products that enable CO2 savings Shales: An advantaged asset base with short cycle investment New e energies: Exploring, de-risking and establishing portfolio positions with a clear path to profitability
Gas Oil Coal Bio-energy Hydro Other renewables Nuclear
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Examples of resil ilie ience in in strategic ic themes
Source: World Energy Outlook 2016 After the Oil Sands divestment the number of strategic themes will be reduced from 8 to 7
IEA 450
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Royal Dutch Shell April 24, 2017 36
Supporting energy transition
Integrated Gas
http://www.shell.com/energy-and-innovation/natural-gas/liquefied-natural-gas-lng/lng-outlook.html OCGT: Open cycle gas turbine. CCGT: Closed cycle gas turbine.
Average time required to come online, minutes
- Gas emits around 50% less CO2 than coal
- LNG emits around 40% less CO2 than coal
- Air pollution benefits by using gas over coal
Supportin ing renewable generation growth
lb/MWh gross
Addressin ing local air ir qualit ity concerns Shell publis ished d LNG outlook February 2017
Negligible emissions from gas
Coal Emissions, Supercritical Pulverized Coal Boiler Natural Gas CCGT
Negligible emissions from gas
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Royal Dutch Shell April 24, 2017
Retail’s 5 ambitions for 2025
Oil Products
37
50% Increase margin in share from convenie ience retail il to 50% 20% 20% Fuels margin in from low-emis ission energy solutio ions LOW LOWER ER CA CARBON BON Reduce carbon in intensit ity of our retail il outlets by at least 50% EV EVER ERY CUST CUSTOMER OMER Treated lik ike a guest on sit ite & i in the dig igit ital world 100% 100% Sit ites commit itted to local communit ities unif ifie ied by a global socia ial cause
1 2 3 4 5
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Royal Dutch Shell April 24, 2017
Chemicals
Petrochemicals are the key ingredients for thousands of essential products Faster growth than GDP Shell produces important petrochemical building blocks Some products made from petrochemicals can enable CO2 savings over their lifetime
Increasing g standards of liv ivin ing driv ivin ing growth Innovativ ive solutio ions that support a lower carbon future Petrochemicals play a vit ital role in in meetin ing the growin ing population’s demands
Col
- ld w
wash laundry detergents Mod
- dern hom
- me
in insulation ion Lig ightweig ight plastic ics in in c cars
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Royal Dutch Shell April 24, 2017
Delivering resilient production
Upstream
CO CO2 effic icie ient productio ion wit ith the lowest unit it cost, , from an advantaged asset base
Drive top q quartile operational performance
- “Fit for the Future” drive for top quartile CO2 intensity and cost
competitiveness
- Target low break-even price projects for future development
- New projects to deliver top quartile CO2 intensity and zero
flared/vented associated gas
- De-prioritise developments with high CO2 intensity
GHG energy m management p plans to be in p place for a all assets
- Deliver energy optimisation
- Reduce methane contribution and fugitive emissions
Examples
- Flaring reduction projects in Nigeria, Malaysia and Iraq
- Investments in venting reduction for EOR in Bokor Malaysia
Gumusut-Kakap, , Malaysia
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Royal Dutch Shell April 24, 2017 40
Methane emissions
Advocate for polic icie ies to support economy-wide ide methane reductio ion
Staff using Infrared camera to check for m methane l leaks
Shell methane management:
Working to better detect methane emissions Range of initiatives to reduce methane emissions
Detect and repair programmes Flaring and venting reduction
Methane <5% of Shell’s emissions
Collaboratin ing g on methane:
Climate and Clean Air Coalition (CCAC) EPA Natural Gas STAR programme Eurogas Natural and bio Gas Vehicle Association Oil and Gas Climate Initiative (OGCI)
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Royal Dutch Shell April 24, 2017
Guy Outen EVP Strategy & Portfolio
Royal Dutch Shell
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Royal Dutch Shell April 24, 2017
Shell scenarios
Identifying emerging challenges to guide us through change
Scenarios ios stretch our perspectiv ives and help us to make crucia ial choic ices in in uncertain in tim imes
‘13: New Lens Scenarios ‘13
New Lenses on Future
Cities ‘14
A Better Life with a
Healthy Planet: Pathways to Net-Zero Emissions ‘16
Changing sources of influence & decision making power Era of volatile energy transitions Social fragmentation & cohesion dilemmas; re- emergence of State impact ‘01: Energy Needs, Choices a and Possibilities: : Scenarios to 2 205 050 ‘08: Shell energy scenarios to 20 2050 50 ‘92: Global Scenarios ‘92-’20 ‘95: Global Scenarios ‘96-’20 ‘95: Long Term Energy Scenarios ‘98: Global Scenarios ‘98-’20 ‘02: People and Connections Scenarios ‘05: Global Scenarios to 2 202 025 1965 1965-19 1980 First scenarios
Trends
‘07: Signals & Signposts Globalisation, liberalisation, technology diffusion; environmental pressures; Asian growth ‘11: Signals & Signposts
Publications
Internal unpublished scenarios focused on specific developments and challenges
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Royal Dutch Shell April 24, 2017
Beliefs and uncertainties
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Energy Transit itio ion Belie iefs Uncertain inties Mega Trends Macroeconomic ics Market Dig igit italisation Industry
Example:
Sustained era of transition & volatility Emerging markets drive Global GDP increases
Example:
Political tensions & regional instability Impact of digital technology
Example:
Hydrocarbon demand growth + supply required Renewables contribution increases significantly
Example:
Key pricing mechanisms Energy transitions impact
Example:
Technology & scale alone insufficient
Example:
Winning business models & capabilities
Scenarios ios in influence belie iefs that in inform strategy and busin iness decis isio ions
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Royal Dutch Shell April 24, 2017
Leverage brand, reach and core competences
Shell strongly positioned
Changin ing g landscape Energy Transition & Mobility Shifts Digitalization & other disruptors Shifts in Demographics & Consumer behaviours Global Retail il
Global #1 Retailer One of the largest B2B payment player
Global Commercial ial
Global #1 Lubricants marketer Strong OEM relationships
Tradin ing and New Energie ies
Leading, global energy & carbon trader Biofuels and Hydrogen mobility
Brand, , capabil ilit ity and scale
#1 energy brand Financial capability Innovation and partnering Global footprint and local experience
Key trends potentia ially re re-shape several in industries
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Royal Dutch Shell April 24, 2017
Lead ader: : val alue ue + inf influe luenc nce Re Reduc ducing ing
- ur
- ur c
car arbo bon n inte intens nsity ity Shar hared d val alue ue with ith soc
- cie
iety ty World-class investment case
Shell’s strategy
#makethefuture
45
People and safety
Win innin ing Capabil ilit itie ies Aspir ired Future Aspir ired Portfolio io
World-class investment case Leader: value + influence Reducing our carbon intensity Shared value with society Customer Centricity Commercial Value Delivery Technology Commercialisation Project Delivery Operational Excellence Cash Engines Future
Opportunities Growth Priorities
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Royal Dutch Shell April 24, 2017 46
New energies strategy
Emerging strategy
Advanced Bio iofuels Renewable Power Hy Hydrogen Customer Solutio ions
Opportunit
ity dependent
Aim
im to g grow in investment to up to $ $1 bln by 2020
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Royal Dutch Shell April 24, 2017
Ben van Beurden Chief Executive Officer
Royal Dutch Shell
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Royal Dutch Shell April 24, 2017 48
Questions & Answers
Ben van Beurden Chief Executive Officer Hans Wijers Chair of the CSRC
Royal Dutch Shell April 24, 2017
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Royal Dutch Shell April 24, 2017
Additional information
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Royal Dutch Shell April 24, 2017 50
Low carbon
- pportunities
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Royal Dutch Shell April 24, 2017 51
Nigeria environmental performance
*SPDC JV = 30% Shell, 55% NNPC, 10% Total, 5% Agip; all data on 100% basis unless stated
Thousand tonnes
Clean-up + UNEP progress:
Niger-delta kick-off event Governance structure progress and initial SPDC JV
payment for restoration fund done
Cooperation with ICUN on remediation
Oil il spil ill prevention ion + remedia iation:
Theft protection mechanisms improved Daily overflights + surveillance via GMoUs Remediation and certification efforts ongoing (92
sites remediated in 2016)
Social performance initiatives to address
underlying cause (Livewire training programmes, alternative livelihood initiatives) SPDC JV* V* spil ills
k boe/day
Shell share of S SPDC productio ion 2016 vs 2 2015
52
52% declin ine in in number sabotage-related d spil ills
56% reductio
ion in in number
- peratio
ional spil ills
volume of operational spills number of operational spills >100kg (RHS) volume of sabotage spills number of sabotage spills >100kg (RHS)
#
SLIDE 52
Royal Dutch Shell April 24, 2017
NAM
A 50:50 JV with Shell & ExxonMobil
2017 progress:
Damage claims handling now managed by the
“Nationaal Coordinator Groningen”. NAM at arm’s length and focusing on its core activities
NAM is working hard to ensure safe gas production,
mitigate the impacts of gas production and offering new perspective to the residents of the region www.n .nam.n .nl Government decis isio ions
Current cap: 24 bcm per year. The government
will review production on an annual basis
The Minister of Economic Affairs announced on
April 19, 2017 that he will prepare measures to reduce gas production by a further 10% for the gas-year 2017/2018
NAM must submit a new production plan before
1 Oct 2020
Opening of earthquake proof school in Loppersum Damage repair in Westeremden
52
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Royal Dutch Shell April 24, 2017 53
Brent decommissioning
* In today’s money
10 year stakeholder engagement, plans shared with 180 organisations, including environmental groups and NGOs Brent D Delta T Topsid ide plan a approved:
Target date single lift: May 2017 Over 97% planned to be recycled
Full Brent Fie ield D Decommis issio ionin ing Programme: :
60 day public consultation closed April 10,
2017
Next steps: review and respond to the
comments received
The science that underpins Shell’s conclusions
has been validated by an Independent Review Group
Brent has created and sustain ined thousands of jo jobs, , contrib ibuted more than £20bn in in tax revenue* and provid ided the UK wit ith a substantia ial amount of it its oil il and gas. .
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Royal Dutch Shell April 24, 2017 54
Water management
Water management plans in water scarce areas
Describing the long-term risks to water
availability
Describe and define measures to minimise use of
fresh water or recommend alternatives
Involved in working groups with organisations such
as the World Business Council for Sustainable Development and IPIECA
Million cubic metres
Fresh water wit ithdrawn by Shell
Agriculture remains the primary source of global
water demand
In 2014, primary energy production and power
generation were responsible for:
Around 10% of total water withdrawal Less than 4% of total water consumption
Source: IEA World Energy Outlook 2016 figure 9.1 and table 9.1.
Global water use
Nimr Reed waterplant, Oman
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Royal Dutch Shell April 24, 2017 55
Connected car
Example
Pay for fuel from your Jaguar or Land Rover
dashboard
True world first (scale) amongst super majors. OEMs are reaching out to Shell as a preferred
partner due to our digital capability and 43,000 retail outlets globally
Launched February 2017 at 600 stations in UK
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Royal Dutch Shell April 24, 2017